Tuesday, July 18, 2006

The End of Suburbia

The End of Suburbia

The world oil supply isn’t like a gas tank, it doesn’t just run out.  Production of an oil well is much like a bell curve.  The light crude is on top and isn’t worth much because it has to be refined so much, then once the light crude is sucked up there is the “black gold” which is causes the production level of an oil field to go up quite a lot.  But at a certain point the oil companies have to start pumping things down the hole to displace the gas so they can extract it.  Or, extract it under high pressure, which doesn’t work as well as displacement.  The point is that once a certain level of production is reached it plateaus for a while then it starts to decrease.  

So the good news is that we have only used about half of the world’s total oil supply.  The problem is that the next half will be exponentially difficult and expensive to extract.  What is the consequences to a global oil economy?  
Well, the US supply of oil hit this plateau in the 1970s and 80s and there was a recession that affected most of the world.  This sent the US hunting the world for oil.  The thesis of this movie is that in about the next five years or so we will be hitting the plateau for the global oil supply.  

One quote that struck me was “Without oil we will lose seven trillion dollars out of the economy.  There will be no more middle class.”  I thought that this is a bit of an exaggeration, there will still be a middle class but everyone will be a lot poorer, but it gets the point across.  A little more accurate prediction was the prediction that for a couple years after we start to decline we will have a recession then we will recover for a little while, but the recessions will keep coming and their intensity will increase and the time between them will decrease until we are left with a Great Depression.  It will happen this way because the government subsidizes the suburban lifestyle (gas prices compared with Europe where they are twice as much) and for a while they will continue the subsidy, but it will get harder and harder until they can’t do it anymore.  

The movie also looked at alternatives, the argument was that we could probably think about replacing 25% of our current use with wind or hydro electric or nuclear if we had another fifty years, but we don’t.  And everyone brings hydrogen up as a solution.  Their response was that hydrogen doesn’t generate energy, it just stores it.  It is created using water and electricity, but where does the electricity come from?  

The title is the End of Suburbia because after the industrial revolution cities were just big slums and the wealthy started moving into acreages a little ways outside of the cities.  Once the second world war was over the US decided to spend its post war wealth on moving its population into suburbs to “return to country living”  the idea was great but it didn’t deliver on its promise.  Now houses were still built close together and the benefits of living in nature weren’t really enjoyed, but now they added a commute to getting to work, so basically the suburbs were a place that enjoyed the worst of the country (the commute) and the worst of the city (crowding) without the best of the country (nature) or the city (community).  

North America is designed around the consumption of cheap oil - getting from the suburbs to the city and back again.  In Calgary this point is particularly poignant with the example of Deerfoot Meadows.  It is a shopping mall so huge that you have to drive from one store to another, there isn’t even walkways between the stores.  What will happen to our economy when it costs one hundred dollars to drive for an hour?  Especially when all our consumer goods are trucked.  Imagine a world where it costs fifty dollars to pay for gas to drive to the grocery store to buy your weeks worth of groceries for fifteen hundred dollars.  And you are only making six years worth of pay raises.  It just isn’t going to work.  We are going to have to get a whole lot more local in how we live.  

Maybe this is the end of economic globalization and the beginning of social globalization as we help each other through the tough times ahead.  

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