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Let's Imagine a Sudden Oil Shortage
Posted by Phil Hart on August 29, 2009 - 10:55am in The Oil Drum: Australia/New Zealand
This is a guest post from Mark Reynolds, a supply chain and sustainability consultant in Sydney.
Let's imagine world oil supply suddenly drops by 10, 20 or 30 percent, more or less overnight, for several weeks or months to come. Don't worry about how or why – we can all think of ways a sudden oil shortage could arise. The more interesting questions are how we respond and what local impacts would follow. At the international level there is sure to be argy-bargy among countries over who gets what from where and how much we pay. It is hard to predict how these global issues may play out. In the case of a serious shortage the ways we share the remaining oil supply and set global prices will be a matter of life or death for some countries, particularly the smaller and poorer ones, so let us hope the international community surprises us with fairness.
At the national level I expect most countries will have to do their best with 10, 20 or 30 percent less oil all of a sudden. What happens next? There's no time for you and me to make plans so if we're lucky we will find that our public servants have already done it for us, and heaven knows they've had enough warnings since 1973.
Here in Australia we have the Liquid Fuel Emergency Act which comes with significant powers to override State responsibilities and impose emergency national control over fuel supply. There have been planning sessions and desktop exercises held by our various Governments on how this legislation will work so we can assume that some thought has been given to allocation and rationing rules. It would be helpful for the responsible bodies to take the next step and make their plans public to guide the thinking of businesses and local authorities. Other countries may have similar arrangements in place, and if they don't they can always refer to the IEA's handy guide Saving Oil in a Hurry.
I expect the emergency rules will work quite well after the first week or two when everyone gets used to having less fuel available. From my experience living through the oil crises of 1973 and 1980 we can look out for some truly dazzling exercises in special pleading from those who believe their own personal car use is more indispensable to the nation than anyone else's. Seriously though, how would you like to try withholding fuel from Meals on Wheels or other charities? And what about volunteer firefighters, school teachers, nurses, doctors, train drivers, priests or policemen? The list gets pretty long and we should feel sympathy for the administrators who have to take a stand and do the cutting.
Placing some facts on the table
At this point I would like to bring numbers into the discussion. Australian authorities publish good data on national energy usage – enough for us to work out where the fuel is used today and what might have to happen if we run short. The numbers are huge of course and could be expressed in millions of litres or barrels of oil. I have chosen to present them in petajoules or PJ, a unit of energy which happens to be convenient for comparing oil with gas, coal and other fuels. The units are not as important as the relative size of the numbers between different sectors of the economy.
Here's the big picture and it's all about transport which is responsible for 72% of Australia's petroleum products consumption.
Australian liquid petroleum end-uses for 2006-07, including LPG and biofuels
Source: Energy in Australia 2009, Australian Bureau of Agriculture and Resource Economics
Why does Agriculture use so much fuel? Think tractors and harvesters. Why Mining then? Again the answer is mainly mobile equipment – Australian mines use large amounts of diesel for excavators, dump trucks and the like, which is why our diesel consumption has dropped a bit since a number of large mines went quiet last year due to the financial crisis. Industry also uses a lot of diesel, especially in the Chemicals, Non-ferrous metals and Construction sectors.
Road transport uses 55% of our liquid fuels and it's the sector that most directly affects each of us day to day. Fortunately there are so many organisations involved in road use that a great deal of interesting data is available on fuel consumption and travel purposes. Here is the breakdown of road transport fuel usage according to the Australian Bureau of Statistics' annual Survey of Motor Vehicle Use, with litres converted to petajoules based on the respective energy contents of diesel, petrol and LPG.
Australian liquid petroleum road transport uses for 2006-07 including LPG and biofuels
In this we can begin to see the outline of a problem. Look at that number for Passenger vehicles – in other words our cars. To make any serious savings in fuel use that number has to come down a lot.
The petroleum fingerprint
We now have too many numbers in front of us for easy comprehension. To integrate these tables of data we can use a graphical presentation called a Marimekko after the Finnish textiles design firm that inspired the concept. What the Marimekko shows is a series of vertical slices whose horizontal width is proportional to the fuel used by each sector in petajoules. The vertical dimension shows the share of each sector's consumption between Personal, Commuting and Business use. Area on the chart represents total volume usage.
Australian liquid petroleum products – end-uses for 2006-07 including LPG and biofuels (petajoules)
Click for larger image
Personal or Leisure usage is shown white and makes up 26% of the total. Commuting (driving to and from work) is shown in a light colour and totals 11%. The remaining 63% coloured in a dark shade is Business usage.
You could regard this diagram as the fingerprint of petroleum fuel consumption for a country. I can say for certain that Australia's fingerprint is distinctively different from other countries. Without even doing the numbers I know that anywhere else will have very different shares for sectors like Buses, Air transport, Mining, Agriculture and Residential. For example some cold regions in the northern hemisphere still use large amounts of heating oil for houses in winter. On the other hand few other countries use as much fuel as Australia for mining. In some countries the military would need a sector of its own. Most low-income countries will use less air transport and more buses, trucks or rail. Each change will shift the picture and alter the local opportunities for savings if oil runs short. Note that Australia's rail sector shows hardly any commuting use of petroleum products. That's because all of Australia's significant commuter rail lines are electrified.
Surprising insights for me from the Marimekko include how much fuel air transport uses in Australia and how little buses use – only one tenth as much as air. When you consider that one bus lane on the Sydney Harbour Bridge carries more passengers per day (in one direction) than all seven car lanes in both directions you realise what an inefficient choice cars can be for moving large numbers of people.
So what?
OK, I've set the scene. You can scan the Marimekko and see where our fuel goes today. Now what might we expect to happen if Australia experiences an oil supply shortage? There are all sorts of technical estimates made in publications like Saving Oil in a Hurry but I prefer to look at the data and think about what is really likely to play out in a country that I know.
I expect that business lobby groups will be pretty good at presenting the case that their activities are essential to everyone's well-being in today's world and should continue regardless. And I expect that most people like you and I will be pretty good at going along with emergency restrictions, as long as the rules are seen to be fair and affect everybody in the same way, and as long as food keeps turning up in the shops. In the face of drought Australians have responded well to the water restrictions introduced over the last few years. Water savings have been in the 15 - 25% range, and I think it is reasonable to expect a similar spirit of positive personal response to emergency fuel restrictions.
My estimating guidelines for short-term emergency fuel savings are as follows:
- Businesses will save only a little to start with though some mining, industrial and road transport operators can work out ways to reduce fuel use by 10% or more if pushed on the matter
- Light commercial vehicles – all those white vans and other tool-of-trade vehicles – will generally want to keep doing what they do and will provide smaller fuel savings than passenger cars
- Public transport will use slightly more fuel off a low base and then reach a capacity limit at about 10% increase
- Air transport will try to keep the status quo going (those businesses again) but will quickly accept reality and reduce leisure flights
- People are smart. Most of us are adaptable and can soon learn to cut back on personal driving or share rides for commuting to make large savings.
Applying these guidelines to current fuel usage numbers leads to the two scenarios below, one for 10% less fuel use and the other for 20% less. The 20% scenario is confronting enough to put me off thinking about what 30% might look like. You may wish to try some different guidelines but I will be surprised if you can come up with an answer that doesn't depend on a big cut in passenger vehicle usage.
Two petroleum supply shortfall scenarios
A startlingly simple rule of thumb emerges from this scenario analysis. For Australia;
A 5% cut in fuel supply requires a 10% drop in car usage
A 10% cut in fuel supply requires a 20% drop in car usage
A 20% cut in fuel supply requires a 40% drop in car usage
Just keep doubling the numbers until you run out of options.
The cruelty of averages
Something else to think about is what it actually takes to achieve an average 40% drop in car usage. An average implies that some people will have to do more because others will do less. Once you factor in all the necessary exemptions for worthy causes like charities and public service occupations I suspect the rest of us will be facing cuts quite a bit deeper than 40% if the nation is to save enough. Perhaps that is why I remember startlingly empty roads, long petrol queues and a surge in motorcycle sales back in 1973.
How would commuters cope?
A sudden shortage means we need to manage with what we have. Public transport is not a magic pudding that can just expand overnight to service extra demand. Nobody keeps very many spare buses lying around just in case, and most peak-hour rail services are already close to capacity. There is some useful capacity to be gained from time-shifting where a percentage of workers start their day an hour or two earlier or later than usual. This spreads peak loads over a broader time period and increases the total numbers who can be carried by public transport each day. However public transport is practically absent in country areas and doesn't run to every place that people want to go in cities. What other options are there besides staying home, walking or cycling?
When you think about it our most under-utilised transport resource is all those cars driving round with one person in them. If you can double average car occupancy from the typical 1.2 people to 2.4 you've halved fuel usage instantly. The logic of ride-sharing is compelling if there is enough pressure to force us into sharing the cosy private spaces we enjoy inside our cars. Ride-sharing used to be common practice for commuters and was a rich source of humour about social interactions – anyone remember Dagwood cartoons?
The western world has never had a fuel crisis in the age of iPhones and Twitter. I expect that simple mobile-phone-based ride-sharing facilitation schemes will spread like a virus around cities and suburbs if the need emerges. Some localities already have ride-share websites which link up passengers and drivers. The software community is working on more sophisticated "Dynamic Ridesharing" tools which may come in useful one day.
So there are some predictable consequences of a sudden oil shortage. Some of them might even be fun. Let's see when such an event happens. I hope these thoughts encourage you to consider the local and personal angles and think about what you and your family would be able to do. Good general advice is perhaps to buy a sturdy bicycle, get to know your neighbours better and ponder about how you can get around with much less fuel.
Thanks to Mark Reynolds for this thought provoking guest post.
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One of the other measures that was taken in the 70s was reduced speed limits on highways. Everyone complained but in reality a small overall sacrifice of journey time yields a disproportionate fuel saving.
For a 10% shortage, I'd be in favour of letting the price mechanism work it out. The alternative "rationing" type approach (even odd-and-even numberplate days etc.)requires enormous organisation, enforcement, and leads to special pleading, corruption, ...and fistfights at the fuel pump just like last time.
(Better still, raise the fuel excise *now* and build up some funds to construct the renewables infrastructure and Public Transport that will be needed...)
Penetrating.
I would assume air travel to drop much more dramatically.
And under 'general guidelines', add gardening and nut trees (on top of rapid acquisition of truly usable skills).
Welcome to the 'new normal'. Really...
Stuart Staniford was surprised to learn, in one of his pieces for this site, that the reduction in speed limit actually seemed to have little impact on US demand. The Oil Drum | The Auto Efficiency Wedge
I don't know about total demand, but it certainly increases mpg, which logically allows us to get the same amount done with less fuel. Try it with your own car and see... seems like a no-brainer.
Stuart figured lack of compliance eradicated its benefits, since repealing the limit in 1995 had no apparent effect on demand, nor did instituting it in 1973. For one's own sake, sure; optimal MPG according to some is ca. 45 mph; one can always imagine the government instituting something truly draconian like the 35 mph used in WWII, or making onboard GPS mandatory and taxing mileage, which some states are considering already.
Lately I've been curious about Stuart's findings anyway; 1979/1980 had severe cutbacks in gasoline supplied, but the ensuing years showed advances in demand - from this lower level set by those first two years. We've curtailed demand, will we slowly eat away the gains; if so, over what time scale?
The impact on the economy of the Colonial pipeline shutting down post Hurricane Ike last fall was going to be investigated by one of the SE states, too; that would provide some additional data on what impact shortages have.
I don't buy this. It is an assumption, and a rather bad one. Any proof? Isn't it FAR more likely that it was Javon's Paradox? The point of the fuel rationing wasn't to save fuel for later; it was to use what little we had more efficiently. Javons's Paradox will still hold true--it will not reduce demand--but it doesn't keep more getting done with what we fuel we have, like I said above.
And anyway, even if it were true, it doesn't have to be the case. First Offense: $300, second offense $1000, third $3000, fourth $5000 and a month in jail. Would you speed in that scenario?
The only reason you don't buy it is because you don't have the data. The "double nickle" was one of the most hated and flouted laws in the history of the USA, rivalling Prohibition. Radar detectors and CB radios were widely used to evade detection, and the song "Convoy" became a hit because of popular resentment.
If you think any pol would vote for such outrageous penalties, you're dreaming. It would be political suicide. We'd have a several-dollar-a-gallon gas tax or rationing first.
We will engage in all sorts of looking busy ,doing nothing really useful behavior until such time as an emergency pops up-most likely out of thin air,as far as the public is concerned.
If the shortage is likely to be temporary,as one brought about by a political crisis or perhaps a tanker or two sunk in just the wrong spot,all the rationing /get by schemes as discussed in the first fifty or so are realistic,except for one thing.
THE EFFECT OF SUCH AN EMERGENCY ON THE OVERALL ECONOMY has barely been mention ed.
And if it is not temporary,I would double the size of the caps and repeat that line.
There is an underappreciated loss of employment associated with a sharp reduction of energy use over any relatively short period of time,especially in an economy such as ours here in the US.
Just what are all the people who work at airlines and resorts supposed to live on with business down fifty percent or more?
The ones who work at garages servung cars driven half as much?
The convenience store employees whose jobs depend on traffic counts?
Even people who earn very little buy some stuff that is discretion ary such as cable tv,cell phone service,the occasional fast food meal,etc.
A ten or fifteen percent drop in monthly revenues might result in some sharly curtailed employment figures at the phone company.
There will be positive feedback loops that may gut entire sectors of the US economy if fuel supplies decline really fast.
Civil war or wars associated with uncontrolled and uncontrollable migration in many smaller countries may well be a foregone conclusion,but if we are lucky maybe it won't escalate to the major powers.
While I agree that peaking oil will lead to harsh market signals that will leave a lot of people unemployed, I don't see why this has to be permanent.
What will the boat man do when they start shipping by rail? What will the rail man do when they start shipping by truck? What will the cotton picker do now that we have the cotton gin? What will the dictator do now that there is word processing? What will the Detroit worker do when his job goes to Japan? What will the computer tech do when his job goes to India? Etc,etc...
If they are smart and lucky, they will adjust and retrain for another position. Maybe it won't pay as good, maybe it eventually will.
The sharp reduction has never been permanent because the energy reduction has never been permanent... so there's never been a need for longterm adjustment. And anyway it isn't permanent this time either. There are other energy sources. Suburbia is not necessary for economic growth.
Andrew,
I must agree with your comments in principle but in practice we are in a precarious spot already as far as bau is concerned.
Any major problem resulting in a panic now could be fatal to good olebau.
And we have never been in such a tight spot before in regard to the need for a fast change over to another energy source.
Hmmm...eat cake perhaps!
Of course it didn't. Cars are designed to cruise at a certain speed. Increasing the speed beyond that level will increase fuel consumption, but reducing speed will not necessarily reduce fuel consumption. If you reduce it too much, the car will shift into a lower gear (most American cars are automatics) and fuel consumption will increase.
In order to improve fuel economy, you have to redesign the car - make it smaller (most of the cars were 6 passenger), use a smaller engine (most of the cars were V8s), add gears to the transmission (many of the cars had two-speed automatics). And above all, drive less.
What happened in subsequent years was that Americans started driving pickup trucks and SUV's with big V8 engines, and began commuting longer and longer distances to work. This, of course, drastically increased fuel consumption and resulted in much more fuel consumption.
So, let's take Iranian action as the trigger. Expect 10% decrease in flow, 100% increase per barrel. Hornet's nest syndrome brings EMP event, taking care of the twitter car pooling gambit.
If the Governors of each state would re-commission the Army/Guard Railroad Operating And Maintenance Battalions, whatever comes next is doable. This could be done as an executive order. The size and number of units would depend on number of critical dormant rail branchlines (AG, commute corridor, manufacturing/ resource extraction, etc.
The electric cars and fuel cell designs are heavy on electronics and EMP will shut down much of motor traffic. Railway is more prepared, much railway equipment has "Farraday Cages" to route surge voltages around critical solid state electronics, etc. Aircraft also, as lightening protection. Satellite communications, therefore the twitter and Blackberry generation dependence on same, is probably early casualty.
Pages can be written on railway rehab as crucial component in Peaking Oil Plan B, but not here and now. See Swan's ELECTRIC WATER", and (peakoil.net) articles 374 & 1037. See (spv.co.uk) for US Rail Map Atlas volumes.
ANYONE thinking they have some rubber tire angle to squeek thru the real thing is deluding themselves. With all due haste, deliberate and methodical US Rail matrix rehab, expansion & extension, the Union of States may, just may, maintain Societal and Commercial Cohesion.
I, my girlfriend, and my mother (different houses) could drop our direct fuel useage to exactly zero tomorrow. My step-father is in construction, so I suspect his fuel useage would drop dramatically as work dries up almost overnight. My girlfriends mother drives to a local bus depot and works one of the school bus runs. Her options are limited, as there is no PT near their house, but could ride a motorbike (I'm putting this in the 'not ever going to happen' category. She'll probably just switch to one of the families 4 cyclinder cars - and still use the accelerator as an on/off switch). The girlfriends father does almost no personal car use as well, but works in commercial transport, and already does the most efficient route he can (he even starts two hours early to beat the peak rush into town, and parks under a tree and catnaps while waiting for all the businesses to open up. The flipside is that he also avoids the afternoon crush on the way home). His work would likely dry up pretty quickly as well.
In all, two unstable jobs, one stable but uses maybe 5L/day fuel for commuting to and from, and two stable (people still gotta eat) and requires no or <2L/day fuel combined. Collectivly, we've got enough bicycles to go around as well, but all need some sort of servicing before use.
I reckon that under a 20% or more shortfall, that air transport and travel will drop by considerably more than 20%, and that passenger rail will increase to beyond crush loads, alleviated somewhat by time-shifting work hours. We'd probably see subsidies for long-distance rail travel cut altogether as demand increases due to increasing air travel costs. If the crisis was prolonged, I also expect that long-distance Heavy Trucks could cut their useage by 50% by simply moving containers to rail, and rail operators would bring old rolling stock back into servicable condition relativly quickly (and also re-purpose servicable rolling stock. Turning a coal hopper into a makeshift skeletal flatcar for containers looks to be relativly straightforward exercise).
Do it now or join the queue around the block at the local bike shop when it happens. I have a brand new bike in storage for each family member, with $500 of spares for each one. I pray to jeebus every day to bring on the oil crisis and smite the ICE-dependent.
Read a study years age about travel time of bicycles vs car. When you consider the time spend working to fund the cost of and added that time into total travel time the bicycle came out faster that the car.
In some situations, you have at least part of a point. I remember some of us budding physicists amusing ourselves back in student days by guesstimating net effective speeds for various modes of transport. We added the time required to earn the fare or other costs to estimated wait time (which by the way utterly rubbishes most municipal buses) and actual travel time. From that point of view, there was no very quick way to make any trip at typical hourly pay levels.*
However, our guesstimates were no more than idle amusement since there's a great big catch, at least in the richer countries where the cost of running a car is actually of widespread interest. Of course the huge interpersonal variation in hourly pay level makes an utter nonsense of any generalization, but it's down to more than that.
The real catch is that virtually all "jobs" paying at a worthwhile rate come in one and only one choking "size", referred to as "full-time". Oh, it's true they can be had in smaller sizes, called "part-time", but the pay rate is almost always derisory and the benefits even more so, with the deleterious effects further amplified by the quasi-fixed nature of many of the costs of living. The upshot is that nearly everyone is desperate for time, especially in the USA and Japan, but elsewhere as well.
So there's a powerful incentive to buy time at almost any cost, even to the point of absurdity. That generally puts bicycles completely out of the picture even before we consider the snow and ice abundant in some regions during winter.
* note - airlines were still a highly regulated oligopoly charging ruinous fares. Nowadays, there is the ultra-discount lottery - but you must win three times. You must actually win a seat at the heavily-advertised but essentially-unavailable fare. You must actually win a flight that runs somewhat close to time so you arrive before it's time to leave again. You must also win by avoiding having a week of your time killed by some illness you caught from the person crammed in next to you in the nearly unventilated space. Should you be so lucky as to win on all three points, then your net speed computed our way might not be too awful.
Lots of these studies out there: Commuting Cost Analysis: Bus vs Bike vs Car | Work | My Family's Money
Cost Analysis Everything Included Without Time and Credits Without Credits Bike Commuting $ 6.23 $27.67 $585.76 Bus Commuting $369.50 $64 $1072.60 Car Commuting $517.97 $181.77 $517.97And that one does a fine job of illustrating a point I've sometimes made, that transit exists in most places mainly to serve as ruinously expensive bling for mayoral oneupmanship at "conferences".
We were physicists, so we didn't delve as deeply into subjective exotica as he does. But the only way he can show the bus cheaper than the car in the summary you reproduce is to give an utterly exorbitant credit for "reading time" and a rather excessive one for "exercise time". The main absurdity in both cases is to value time that is severely restricted as to its use at a higher rate than unrestricted time (!) It seems especially insane to value time spent jammed into a smelly overheated bus, bursting with people coughing unknown germs all over the place, at a higher rate than time during which one is free to do as one likes in a nice comfortable uncrowded place with low risk of contracting disease. I wouldn't have given that one more than a 10% credit, certainly not the laughable 106% he gave it.
Then, too, his stated car expense is elevated relative to the bus because car drivers in the USA, where he lives, are taxed to help pay for roads - and to help pay for buses (and trains) for somebody else. Drivers pay fuel tax, registration and other "fees" i.e. taxes, and, in some states, property tax. His bus expense is depressed relative to the car because transit buses, which inflict far greater road damage due to their tremendous axle loads, are usually municipal vehicles, so riders pay none of these taxes. In addition, gargantuan subsidies leave riders to pay a mere 1/3 of only a narrowly defined "operating cost", a magic Enronesque figure that excludes major costs.
Plug "Scandinavian fares" into his chart to partially correct for that distortion (socialism has been said to reach its limit when you run out of other people's money, and the Scandinavians seem to have done just that), make the "credits" reasonable, and the bus is a huge loser. Which goes to show how most transit even in the transit-poor USA would be dead and buried with the grave too overgrown with weeds ever to be found, save for massive governmental life-support.
Paul: The population density such that mass transit is as attractive a means of transport as the auto only exists in a couple places in North America. The main problem for drivers in these few places is the cost of parking the car-the fuel cost is minimal. It doesn't matter what gasoline costs-the urban auto isn't going anywhere-people will just move closer to the urban centre and keep their cars. Her in midtown Toronto, steps from the subway, many own three cars they attempt to squeeze onto their small lot-again, parking is the issue, fuel costs are meaningless. We have been well over $4.00 gallon US and there was no affect at all on urban congestion.
That's a rather vague statement. Gauged by what? Gasoline use was down then, meaning VMT was down.
And anyway, I would suspect that $147 a barrel priced poor countries out of the market first. Eventually it will catch up with the rich countries, either as the price goes higher, or as sustained high prices and inaction make us poorer.
You cannot logically say that price will never be an issue. In a market constrained by supply, the price will go as high as it needs to to bring demand down to supply. Sky is the limit on price; though in actuality it is probably going to be contained by 1) the economic destruction it will wreak, softening demand and 2) substitution.
So I agree that some people will keep on motoring, but it will probably be less, andovertime, they will have to be more efficient, in smaller vehicles, and/or switching to electric, nat gas, etc. You can't put gasoline into a car if it isn't there, no matter what you are willing to pay for it.
Yup. That's about right. The real constraint is parking. Even to get into Manhattan - repeat, Manhattan, the worst place in the country, with its 1mph (sic) crosstown traffic - it's usually quicker to use a company van pool than to use any competing combination of the slovenly-run public transit services!
Equally to the point of these discussions, there's a constant pattern of ignoring the extensive suburban rings surrounding European cities (e.g. Paris) held up as models by would-be social engineers. I speculate that at least for the USA, that's because junketing mayoral entourages, state legislators, Congresscritters, urban-"studies" professors, authors, and so on, can easily avoid noticing them.
They land at the airport and are whisked by train - possibly underground - to a $300/night downtown hotel containing or very near to a convention hall. In the short intervals between bouts of dreadful speeches, they might walk a couple of blocks from the hotel or hall. Or maybe they visit a local pub before retiring but by then it's dark so there's little they can see. If they're really lucky they might even get a quick tour-bus trip past some well-known in-city tourist sites.
Then, armed with the vast knowledge and wisdom so facilely accumulated, they whisk home bearing grandiose one-size-fits-all plans founded upon fairy-tale memories of a few extraordinarily exceptional city blocks.
Well, consider the alternative: 12 lanes of concrete for as far as the eye can see. You know, an aesthetic choice, for which you can grant yourself imaginary financial credits, as in that bike study, which I agree is the very definition of subjectivity, I just threw it out as an example. The $$$$ is what interests me first and foremost, which is why I rode nothing but bike and MT when I lived in a major city. The inconveniences weren't that bad, bit of a walk to the stops, read or listen to music while waiting; I very much enjoyed the free time for reading when onboard, too. Usual caveats applied, of course, sardine can mode being the worst of it. I also found that, despite Portland being world renowned for its MT system, in a couple of cases it would prove infeasible to make it to a job on time, unless I was willing to sprint half a mile in 5 minutes - from a stop on the light rail line, no less. Very inconvenient, as were paying the county taxes that made up the bulk of the funds for said MT. But, all in all, the benefits were worth it; traffic was bad enough but I've been in towns where things were much worse.
Define inconvenience, after all. Biking is "inconvenient" physically compared to just yanking on a steering wheel and pushing pedals; but those who bike regularly live longer, too, the exercise advantage outweighing the risk of getting killed by impacts etc.
Thanks for Public transport in NSW | Transport infrastructure | Andrew West, that's interesting - is there a study that compares MT fares globally, like that nifty poster of gasoline prices the world over?
Hi Dude,
From my POV, 98% of all people living in western countries are delusional. This mass phenomenon called the “car culture” has seduced nearly all citizens of these countries into believing that it is perfectly “normal” to encase your body in a ton of natural resources and then propel it down a path provided by many more tons of natural resources and, in the process, consume fossil resources that took millions of years to create. Very few of these folks see any problem with 7 billion humans causing the atmosphere to contain 385 ppm of greenhouse gases, or an unprecedented die off of other species. The god believing people seen no moral problem in the disparity between the planet’s rich and poor as we enjoy “happy motoring and all you can eat”.
The idea of a “time” penalty for riding a bike is simply proof of our totally distorted cultural values. We believe it is better to dash about in a fashion that destroys our environment (so we can afford an iPhone) than it is to slow down and live in a fashion that is both eco-friendly and health-friendly. Just the thought of all the school children that should be riding a bike to school (that are in a bus) should be enough to question our value system. I guess obesity and diabetes are less important than the inconvenience of dealing with unruly kids bouncing their bikes around on public roads.
Given the delusions of religion, the car culture, so-called conservatism, etc. it is really hard to see how the US and most other western nations can come to grips with the real issues that will face us in the remainder of this century.
I dunno a lot about global fares, I've never found something good but have traveled enough not to be motivated to look hard; it must be out there. Here's an example, but showing a single number is an intolerable oversimplification when many systems charge according to distance. However, New York is certainly one of the developed world's hypersubsidized bargain basements, since the value shown is the usual maximum as well as the minimum - one flat fare in most cases regardless of distance, which can exceed 35km - while the slightly lesser value shown for Tokyo is the minimum.
Which reminds me that MT was fairly expensive in the Tokyo area, with the per-km fare approaching the direct cost of driving a car as in the NSW example. Indeed, the US IRS standard rate for driving is 55 US cents/mile or about 34 cents/km, so the NSW bus at 38 US cents, absurdly enough, costs more just in fare alone, never mind subsidies, which only reinforces my point about what seems to be a fundamental futility of transit.
On top of that, hardly any bus gets you from door to door, and on top of that one can waste vast gobs of time waiting since there is often negligible discipline about schedule, with results such as getting three or four buses at lengthy random intervals when it was advertised as one bus every 7½ minutes. Oh, and on top of that, when I'm on the way somewhere on a hot steamy day, I place a substantial negative value on getting sweaty and stinky with exercise when, as is normal, there will be no place and no time to wash up properly.
Anyway, in Tokyo, IIRC, it was ¥160 to go up to about two stops - not very far, maybe 2 to 4 km, on the urban JR East, and it went up to ¥540 within the urban zone, which is not very many km in extent. I also rode the Tokyo Metro but since I transferred from JR I don't recall the Metro fare if you used it alone (might have been ¥130.) The Tokyo Monorail to Narita was shockingly expensive but I don't recall the number. However, unlike transit in a lot of places, and certainly unlike buses in more places, those Japanese modes were all very punctual and reliable.
As to concrete, I was rather surprised by the quantity of concrete on the periphery of Tokyo - again that fatuous romanticism of "conference"-going junketeers who see only the photogenic touristy bits of city cores - though it assuredly had nothing on Los Angeles or the portion of New Jersey across the river from New York City. In visiting LA, I don't recall anyone who seemed terribly bothered by the aesthetics of their huge freeways, though I know some are - which only reinforces another point I like to make, that people seem to fixate on the world as it was around them when they were aged about seventeen, and they often seem to expect that as a natural or even immutable state of affairs for the remainder of their lives.
Hello The Dude,
Thxs for the table of bike/bus/car commuting-cost statistics. I can already forsee some govt officials thinking about charging a bicyclist $365/year or much more $$$ to raise funds for asphalt repaving.
After paying for your bike-registration: it will probably be some kind of RFID chip that can somehow be welded to your bicycle frame, then remotely sensed on roadways. If you fail to renew your registration on time, I expect the sensor to trip some kind of road device that will constantly puncture your tires [spike sticks?], or make you crash constantly***. The cops will be too busy doing other things to chase down bicyclists.
**** The govt. could install a road panel of intersecting steels bars that every biker would have to pedal across. If your 'tags' are paid up-- no problem traversing across. If your tags are expired: half the bars instantly drop lower so that you drop between the parallel bars, then bust your nuts and more. Do that once: you will make sure to keep your tags current after that unpleasant experience.
In the olden days in Phoenix: some of the storm sewer drain gates were just parallel bars that aligned in the same direction as an oncoming biker. Thus, your bicycle tires would instantly drop between the bars. Yep, it was painful:
http://home.swbell.net/mpion/images/oldgratelw.jpg
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Imagine this storm drain without the crossflow steel bars
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IMO, even the drain in this photo looks dangerous for a biker to hit in the dark!
Man, Bob, you've got a career ahead of you in Orwell's Outer Party with that kind of...outside the box thinking; now, is doing anything outside the box kosher on Airstrip 1?
On a slightly less insidious note, we could always have mandatory governors installed in cars - no going > 35 mph unless you've got a damn good reason; or a rationing card stamped 'A'. Far as I know those would be a snap to remove, but checks
Meanwhile, in my neck of the woods, following up the governor's idea to use GPS to tax mileage, this is in the works: Mandatory bike registration bill introduced in Salem (updated). Courtesy some ex-state cop living on the coast; perhaps you remember the lone state cop patrolling the entire OR coast in Farenheit 9/11...dunno if it's the same.
Dude Says: No.
Dude Says: You're a God**** Moron. My reps aren't going near this one, despite typical budget woes. Or the average duration of a stimulus job here being 35 hours: Oregon 'Help Wanted' counting stimulus jobs.
In Switzerland and elsewhere the bars snake like an S so you can't get your tires stuck. In the US the round grates can be rotated to make them dangerous.
I would get J.H. Kunstler to rewrite the legislation so it becomes The Liquid Fuel Long Emergency Act. Remember in Australia the aluminium and brown coal industries suffer so much more terribly than everybody else so they will need special clauses.
Hello Phil Hart,
Great work on this keypost! I'm ready for extreme postPeak car-pooling with my old pickup: I figure I can carry 8-10, plus maybe 20 more with a towed behind trailer.
The trick will be if my Phoenix city officials decide to allow this when crunchtime hits. My guess is that they would outlaw my idea. Instead, they will prefer to jack fares sky-high on our very, very limited buses, taxis, and single trolley line [then probably be funneled cash by underhand methods from these operators].
I then expect the angry crowds to eventually burn the buses, trains, and trolleys, as has been done elsewhere. Here are some examples:
http://www.dailypioneer.com/196754/Briefly.html
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[Aug. 19, 2009]:Patna: A mob of [ticketless] students burnt four bogies of Shramjeevi Express at Bihta station after securitymen prevented them from forcibly occupying reserved seats.
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http://news.sky.com/skynews/Home/World-News/Argentina-Angry-Commuters-in...
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Angry Passengers Set Train Alight
September 05, 2008
Fed up with morning rush hour delays, angry commuters in Argentina have set a train on fire and pelted it with rocks.
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http://www.thaindian.com/newsportal/uncategorized/autorickshaw-operators...
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Autorickshaw operators set buses ablaze in Kolkata [Jan 3, 2009]
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I like this last one best of all because those offering personal transport service rioted against mass-transit. I could easily see 'Murkan taxi drivers sabotaging or burning trains and buses to protect, even enhance their market share. It won't help in the long run, but the taxi drivers can make good cash for the short run.
IMO, full-on Peak Outreach is the best way to keep people from destroying infrastructure; a little knowledge could save billions in transport from being prematurely trashed.
You have rioting students in one example and rickisters who are in direct competition with the buses in the other; not what I'd expect from 'Merikanz freaked out about empty pumps for the first time in many of their lives, or in decades in other cases, barring the few who dealt with the fallout from hurricanes in recent years. No, my expectation would be that us in the USSA would cooperate all the way, through the first round anyway.
But then I don't live in God's own toaster oven like you do, toto. Went for a walk in the rain this evening, after an unendurable 7 weeks of real summer, much of it punctuated with drizzle and clouds.
Hello TheDude,
God's own toaster oven--LOL! Take a look at this photo and imagine the poor people being cooked around the train's hot & lethal diesel exhaust:
http://www.joe-ks.com/archives_jun2004/TrainOverload.jpg
I bet this train gets really impressive passenger miles/gal!
Here is an image of an African pickup truck probably getting better than 75 MPG and/or 200 passenger miles/gal:
http://ayumilove.files.wordpress.com/2009/04/inventions-from-africa-pick...
Gotta hate the lack of safety features if they crash! EDIT: I would at least put on some better shoes as I can't imagine 'road rash' on my feet-yikes!
That's some bicyclebarrow. (Patent pending!)
That train is completely nuts! Got to be some kind of record, ya think? I see that's from a comedy site, here's the same attempted with a VW or the like: http://www.joe-ks.com/WhiteHouseVisit_small.jpg I'm booking mark his Travel section, too much to take in at once. Couple pics of overloaded two wheelers that are definitely worthy of the Lords of the Logistic. Also these poor tykes: Indian School Bus.
Here's a puzzler: Happy Hour Bike Club. Maybe they're pedaling to drive a gasification process? Note small tank next to keg. Which, perhaps, patrons are priming. Harder you pedal the bigger the buzz!
I remember as a high school senior working at a Chevron during the 74 oil shortage. What made it so difficult was the high percentage of driver's that came in only needing a gallon or two to fill up. I would say only 10-15% of the customers got the standard fill up of 10-16 gallons. Panic was on the faces of every customer. The line for gas at its height was an 1/8th of a mile long, even during odd/even rationing. (Depending on the last digit on your license plate, odd or even, you could get gas every other day. E.g. Thursday was an even day, Friday odd, etc.)
One evening we were closing at 10pm, and this guy was 30 minutes late, so we couldn't serve him (it was the law). He talked to the manager like a crazed maniac for twenty straight minutes until we gave in and gave him some gas. I couldn't get any gas into his tank - it was already full! Everytime I tried, the nozzle clicked off and this guy would say, try again. Then gas poured out and down the side of the car! He still wasn't happy and complained there must be an air pocket in the tank. He finally drove off.
We didn't have any fights, but on the news around the country there were lots of fights. Some guy pulled a knife on another customer. There was a riot in one town where people burned cars with gasoline in a huge bonfire. It started to get real chaotic, then just as suddenly the embargo started it was over, and the gas supply was back on full tap.
I guess we can expect the same kind of behavior next time there are shortages.
Became curious about seeing some footage from that; here's a fun 1974 Mobil Oil "Round the Clock Drilling" Commercial, featuring roughnecks, spinning chain, and a pump jack that grinds to halt to illustrate how fields eventually die. "And that's why there's an oil shortage in the world today." Uh huh.
California Gov. Jerry Brown and the Gasoline Shortage. Don't have time to view it now, tell me if he polishes his mood ring etc.
Saw lots of these last fall: Gas Shortage in Asheville, NC Sept 24, 2008. Think this is the one with the guy pushing his compact car across the street, with yelling in the back ground. 2008 gasoline shortage - Google Videos
Ah, yes...preview to the poccy-clypse. I didn't particularly like it. I saw the feces about to impact the fan when the hurricane was barreling down and filled up my car and tried to convince a few friends to do the same at the time. The evil part about it is that you have to start looking early, because you may wait for hours trying to get gas, and come up goose egg. One of my friends did that at least once...luckily he got in line uphill and simply coasted in line - he was quite literally the first to NOT get any gas but he hadn't spent any waiting in line so it was just a wash. Another friend ran out of gas and had to get his car towed home - he'd visited 10 different station, a few more than once, and finally just ran out. There were a couple of stations that caution-taped off early and were serving law enforcement/EMT and Mountain Mobility. There was some amazing retardation, of course...people waiting in line for HOURS IDLING FOR THE AIR CONDITIONING IN SUVs. Every mile I drove brought me closer to being one of those people in the lines. One day I was re-routed by an accident and wound up in Weaverville so I decided it would be a good time to pick up a few gallons, I was getting down but still had a bit left if necessary. I lucked out and got a line that only took about 45 minutes to get through but they were rationing to 5 gallons - that was plenty enough for me, two weeks worth since I was only going to work and back (and that managed to last me to the point where supply started coming back to normal). Of course getting to that line, I passed four stations that were completely out. There were people at work that would keep calling stations and if one of them was due a shipment soon, they would take time to leave work and get in line. While in that line I couldn't help but notice that while I'd probably get about 200 miles off of those 5 gallons, there were some trucks that without a doubt had never, and would never, haul anything in their bed would only be going 50 miles on the same amount. In all everyone was pretty courteous, there were a few skirmishes that I'd heard or read about, but nothing too serious...I can't help but think that things wouldn't have been so nice if there wasn't a sense that "things will be back to normal soon." Approximately one year later - pretty much no one remembers.
I posted this early last year, but it seems on-topic here.
On the northeast corner of Nineteenth Avenue and Ortega in San Francisco is a Standard (Chevron) gas-station. I worked at that gas-station from January, 1972 to October, 1976; I was at San Francisco State at this time, so I worked weekends during the school year and full-time for most of the summer.
When I first started working there, gasoline fluctuated between 25.9 and 35.9 cents per gallon, (for Premium, or Ethyl, as it was then often known, Regular was a three or four cents a gallon cheaper) as, if I recall correctly, they had for the past decade or more. The price fluctuation was due to the ongoing “gas wars” conducted by local gas-stations. I could come to work one weekend and gas prices would be at the bottom of the range, and we would be quite busy, the next weekend the prices would have gone up a few cents, and the weekend after that we would be at or near the top or the scale, and business was quite slow. Then, the next week, prices would have plunged down to the bottom of the scale again, and the whole cycle would continue.
But, although none of us working at the gas station were aware of Peak Oil, or the fact that the US had hit its peak back in 1970, this last fact undoubtedly was behind the unexplained minor shortages that started appearing in mid to late 1972, the first of the long lines at the station, and the price (temporarily, as I recall) rising to an unprecedented 40 cents a gallon. But the optimism of that era was deeply entrenched, I recall at the time gas hit the 40 cent mark sitting around with four or five co-workers at the gas-station on a slow day, and asking how long it would take gas to reach a buck a gallon. Everyone looked around, thought, then the unanimous verdict was: “Naah, never happen.”
Anyway, I don’t know if we made arrangements with the Saudis or others for increased imports, because, as I recall, this 1972 mini-crisis seemed to melt away after a few months. But this didn’t last long, as the Arab Oil Embargo came down in mid-October of 1973, and its effects begin to be felt at the pumps only several weeks later. At first this consisted of price rises, to what were for the times, unprecedented levels. I recall going out to service a car, and the old guy in it looked at the price on the pump, a mind-boggling 50 cents a gallon. He looked at me and said “F**k you, I’m not paying you rip-offs” He started to drive off, but before he left, I snarled back at him, “Well, good luck Asshole, you’ll run out of gas before you find anything cheaper, the price is the same everywhere.” And the price WAS the same everywhere, from now on it would only move upward or at best hang steady, the era of the “gas-wars” between service-stations was over, forever.
And the gas-wars were not the only long-standing business practice to end, forever. Before the Arab Oil Embargo, gas-stations, grocery stores of all sizes, and other retail outlets gave away trading stamps. People born this side of the late ‘60’s probably have never seen these, but they were a regular feature at retail outlets throughout my childhood and teenage years. On the West Coast, the trading stamps were Blue Chip Stamps and S&H Green Stamps, with Blue Chip being by far the more widely offered. Each stamp had printed on it “Cash Value One Mill.” (A mill is one tenth of one cent.) These were actual stamps, about two-thirds the size of an ordinary postage stamp, and gummed on the back, and you pasted them into booklets which, when a sufficient quantity was amassed, could be redeemed for stuff like toasters, vacuum cleaners, etc., mostly household appliances and stuff, as I recall. Anyway, these vanished from the entire retail scene, not just the gas stations shortly after the Arab Oil Embargo really started kicking in. Gas-stations in general, as far back as I remember, also offered free state and local highway maps that they gave away to their customers. Maps didn’t disappear, but they were no longer free as a price-tag of from 50 cent to a buck was now charged. And, of course, the Embargo was the beginning of the end for the true “service-station”, before, “self-service” was rare, but from this point in time on, it expanded, while the full service stations continued to diminish in numbers over the years.
When the Oil Embargo was first announced, the first effect were the price rises. Most people must have (incredibly, naively, from to-day’s vantage point) thought all this would be quite temporary, as for the first week or two of the Embargo, business was slow, as, I suppose people, like the guy who buzzed me off over 50-cent gas must have thought that prices would soon come down. It takes about six weeks for a tanker to sail from Saudi Arabia to the U.S., so six weeks after the Embargo was announced, the effect became quite noticeable, and the real gas lines became an everyday feature. This was when the government installed the odd-even (based on your car’s license number) sort of “Rationing Lite” system. And the oil companies practiced their own rationing, as each service station received a specific monthly allotment of gasoline. Scotty (Scotty Petrie, the operator of the 19th and Ortega station at this time) calculated that if he sold every car all the gas they wanted, that he would exhaust the monthly allotment that Standard Oil granted him in slightly more than two weeks. So Scotty instituted a limit of 8 gallons to every car coming into the pumps. Business hours were also cut back, and this created problems with the long lines of waiting autos, which backed out of the station and went up the street, frequently curling around the block and extend up most of that block. So, a couple of hours before closing time, we would take a large cardboard sign that said “Last Car”, go out to the last car an the line and inform the driver he was lucky, as he would be the last getting gas here to-day, then hang the sign on the back of his car. One day, I went out with the sign, and as it turned out, the last car sort of stood out, an almost overwhelmingly bright yellow VW Bug. I put the sign on the car, and returned to the gas-station and continued pumping gas. A couple hours later the yellow VW comes up and I sell it its gas, and went on to service the next car after the VW departed. It wasn’t until three or four cars had bought their eight gallons that I flashed on the fact that the VW was supposed to be the last car for the day. There were several cars still in line with the sign now on the last of them. It turned out that after I left the sign on the VW, the next car came up, and offered the driver of the VW $5 to take the sign and put it on his own car; he then sold the sign to the next car coming behind him, and so on. Ever after that, an employee of the gas-station had to simply stand by the last car, and slowly walk with it as it inched towards the station, and waving off all would-be customers.
After five months, King Faisal of Saudi Arabia felt he had wrested as much as he could out of the US and the West insofar as seriously addressing the (at the time) 25 year old Arab-Israel conflict. So the Embargo was lifted, and the oil flow resumed. But before the Embargo, the Saudis were getting something like $2.80 per barrel, afterward, as part of the price for restoring production, Faisal insisted on, and got a price of $11.65 per barrel. And the era of 25-35 cent gasoline, along with free maps and trading stamps, was over….Forever.
Anyway, thanks for the trip down Memory Lane. A lot of it just seems unbelievable now, free maps and trading stamps and getting cussed out behind 50 cent gas. Definitely, it was another era.
Antoinetta III
Excellent first-person historical narrative. You really nailed my general impressions from the era. The lines would be ad hoc affairs and often very chaotic...the American character does not tolerate waiting patiently in line. Rationing was welcomed by most people if the option was the anarchy of the lines.
Also, my personal experience in Washington State was that there was a high level of voluntary compliance with 55 mph speed limit for as long as there was perceived to be a crisis. I think people generally underestimate the public need to feel a shared sense of sacrifice when a crisis such as fuel shortages occur.
I lived through it and there was absolutely no peaceful acceptance, we got by because we thought it was temporary and there was just enough to keep things ticking along.
The shortages were dealt with by using public transport, carpooling and scrounging. The fact is we could have adjusted to the lesser amount of fuel quite easily, probably because the restricted amount wasn't great enough to affect the economy or food production and jobs. It was just an inconvenience.
I remember getting calls at work and the middle of the night saying such and such a gas station had fuel or will have fuel. Or a business that had fuel for its fleet was selling a bit to friends and friends of friends.
I would in turn call my parents or sister or friends. Everyone thought their needs were greater than the next person. I was sometimes quite excited by the chase, I was disappointed sometimes but filling my tank was a real rush.
Everyone and I mean everyone was willing and ready to jump the queue and obtain fuel wherever and whenever it was offered. I even bought black-market fuel and thought I was privileged to be able to do so.
IMO at a 10% reduction in availability protests would be common and sometimes unruly. At 15% protests would be violent and at 20% riots would be commonplace.
I guess the breaking point will be tested eventually.
Will a shortage of fuel stuff the economy and negate the reason to drive?
Will the economy stuff the fuel shortages and there will be no reason to drive?
Will the inability to drive stuff the economy and shortages not matter?
According to the current Google Street View, the station is still there and is still a Chevron station. It must be a very good location for a gas station to have that kind of longevity with the same location and brand.
On a recent trip to the Seattle area, I noticed that the majors, especially Chevron, have pulled out of many of the smaller towns and rural locations since my last trip to the area in February of this year, with the stations becoming independents.
Hi Westcoaster, yeah, the station is still there and still a Chevron; I went by it a few months ago. It's on Nineteenth Avenue, which is also California Hiway 1, and it is a constant 6-lane river of autos, so it's a good place for gas stations.
Antoinetta III
That is a great story. Lots of people are obsessive/compulsive about their fuel. The need for gasoline as a psychological disorder?
I would say it's not the gasoline itself, but what it represents. The gasoline is a symbol of independence/mobility, an extension of your personality through your automobile. To take that away is to take away your perceived independence by reducing your mobility. Since a car has come to represent a part of yourself, a proxy or externalization of your personality, an inability to acquire fuel for your personality is like taking away your freedom.
I think that's a bit extreme.
Transp. Fuel is simply the coin of the realm. It's a currency required with the setup we have for getting through many aspects of 'regular' (or unleaded) life today. For someone who has not sought out other ways to get things done, this is effectively telling them they'll become amputees.
If we do not have price controls we will not have lines.
The key issue here is whether and to what extent governments will try to prevent high oil prices from translating into high gasoline prices. With high gasoline prices people will have incentives to walk, bike, and otherwise find ways to drastically reduce their gasoline usage.
Nonsense.
If there were a shortage and lines developed... let's say you have two vendors in relative proximity...
Vendor A charges $4 per gallon and recovers his standard profit margin...and has lines around the block...
Vendor B responds to public desire to avoid lines and charges $8 per gallon, or whatever price point turns away the marginal customer that would result in a line...
Price gouging.
Citizens in a republic tend to take a very harsh view of price gouging in times of crisis. The safety of employees and owners would have to be insured by extra police protection and police would have their hands full trying to handle the anarchy of the lines.
Then there is the question of retaining market share once supplies have been restored. Any vendor risking the unpopularity of catering to the rich during a time of crisis will lose market share permanently. Price gouging is a bad business strategy long-term.
Nonsense yourself. The "gouger" will have no business until the others are dry... and then will have the only supplies. Having anything available regardless of the price is better than having none.
Forcing suppliers to sell cheaply in times of shortage just encourages hoarding without penalizing waste. Letting prices rise, or better yet, TAXING fuel to slap a price tag on hoarding and encourage conservation of the scarce resource, helps bring demand in line with supply. If the difference went to taxes the public could benefit from it; this is much better than going to pay for bomb vests.
It's nonsense because it is located in Libertarian la-la land. The premise of the original post was a thought experiment along the lines of a sudden dramatic drop in supply.
Since we have experienced that in the not too distant past it seems fruitful to recall how society responded at that time.
So...if in fact allocation by price is the preferred method, why were there no advocates for it at the time?
I recall a public hyper-sensitive to price gouging and on the alert for it.
I recall corporations and vendors bending over backwards to burnish their credentials as good public citizens.
I don't recall a lobby for "let's just let the price rise to the point where only the wealthy can afford to drive"
When shortages develop in critical commodities such as food or fuel fear will trump greed, social cohesion will increase as a rule (of course there are outliers) and people will prefer what they consider a 'fair' allocation system over a rigged 'market' system.
When Asheville experienced its supply hiccup there were many, many people crying "price gouging!" and wanting to bring some sort of legal action against the gas stations. There were a few that were charged with "price gouging" and heavily fined. As a result, the stations would sometimes be selling at a LOSS to avoid being charged with "price gouging" and prices basically stayed so low that people kept driving like there was absolutely no problem...then the stations started running out, and the lines began to form. Well, there were other places that were farther away than the normal terminals that still had some supply that the gas stations could get gas from. The catch, is that it would cost extra to ship it that far. The unlucky stations that actually did do this, and charged the 10 CENTS extra to cover their expense got THOUSANDS of calls to the police for "price gouging" because the station across the street was ten cents less (oh, and taped off because they had nothing to sell!). This act of actually charging what it cost them to get the gas, and bring in supply, cost them several weeks in the courts defending against "price gouging" and having their records gone over with a fine toothed comb. Needless to say, the stations caught on quickly and realized that it was easier to shut the doors and turn off the pumps than charge money to actually acquire supply.
Yup, that's exactly why anti-gouging laws are so stupid. Not that the public isn't stupid enough to support them, of course....
Lines occur where there are restrictions on price increases. Yes, even now we have states where price increases are limited when supplies drop sharply. So we saw lines where those laws exist. We did not see lines where those laws do not exist.
So, again, we'll see lines where prices are restricted. We won't see lines where prices are not restricted.
A lot depends upon the level of public cooperation. After hurricane Katrina we saw people voluntarily conserving, but thae percieved the problem to be an act of good. Other petrol shortages/price spikes whose public perception was that they were manmade recieved no such voluntary cutbacks.
In any case a speed decrease to say 45-50 mph on the highway, if you could get public buyin would save a great deal (especially as miles driven per day is also reduced by this measure). Then throw in a little car pooling and getting people to combine trips, and you could probably cover even your 30% shortfall. I'm sure you could get Japanese to co-operate, Muricans would be a really-really tough sell however.
I could do a lot by bicycle and motorbike if it was made easier. For example I have a $500 unregistered dirt bike that would cost $600 a year for plates. If large vehicles were less common on the road perhaps they could pass two wheelers on another lane, not scrape by with millimetres to spare. In rural areas home delivery of groceries would help. Maybe some kind of lockable roadside icebox would needed for perishables.
As an objective excercise I'm going to take the 6.50 a.m. college bus into the big smoke (Hobart, Tasmania). I'll hide my bicycle in a hedge and hopefully it will be still there at 6 p.m. A lot of the day, maybe 50%, will be spent changing rides, not actually doing much.
Converting the various refined products to Joules distorts the situation. Reducing gasoline consumption by 40% does not make more diesel fuel available allowing a lesser reduction in diesel usage. The same applies to fuel oil. The yields of refined products from a barrel of crude oil can not be varied much. Basically one would have to reduce the consumption of each type of refined product by the full percentage. The data needs to be grouped according to the type of finished product.
If the tendency would be to favor commercial and industrial uses which mostly consume diesel, then I would expect diesel to become unavailable for personal transport with a crude oil shortage of 30%. Even with long haul semi-trailer trucks slowing down and some freight switched to rail, I suspect there would be a shortage of diesel for everyone. The government would probably have to allow the price to rise, as opposed to rationing, to eliminate the less important uses of diesel.
As i under tand the Liquid Fuels Emergency Act, it only gives the miniter the power to direct which industries or areas of the ecomony have access to the fuel but does not give the government(AUST) the power to regulate the price.
BlueTwilight,
You have correctly picked what should be the topic of my next post - the supply-side perspectives of managing a shortage. I kept away from supply issues in this post because I wanted to focus it on potential demand reduction responses at the personal level.
Looking at supply-side responses will be more complex because each country has a very different upstream supply configuration. Australia's oil supply chain is really unusual because much of our domestic crude oil comes from the North West coast which is closer to Singapore than Sydney. So we do the sensible thing and send most of our Western Australian crude to Asia for refining. Then we import lots of refined products for direct delivery to the east coast where most of the people live. We have one refinery in the west and five refineries on the east coast.
Consequently Australia should be able to quickly shift its inbound profile to more-diesel/less-petrol without worrying a great deal about refinery mix. The trick will be to see if our petroleum buyers can swing deals to purchase more shipments of diesel during a global supply shortage. We can be optimistic but I don't think anyone can be sure of success with trading deals at such a time of stress.
I expect that other countries are more tightly locked in to refinery mix profiles so they would have to cut volumes of diesel, petrol, jet, heating oil and bitumens, etc in proportion. These differing considerations just emphasise the importance of looking carefully at each country's local situation and not assuming that reality for one nation is also reality for all others, on either the demand side or the supply side.
Cheers, Mark
I asked an expert this question:
http://www.theoildrum.com/node/5715/534419
He didn't seem to think it would be a problem.
Great work Mark. Can I borrow that Marrimeko for a public presentation? :)
I have had an idea rolling around in the back of my head that is a cross between a bus system and hitch-hiking to create what I call an ad-hoc car pool or ride share. The idea is that neighbourhoods ahve designated stops at which riders can stand indicating they wish to be picked up. The deal is that the routes are predefined and generally will only be the popular ones for that particular location. In my case this would be from the neighbourhood into the CBD with the drop off point predefined and maybe even officially marked with a signpost. A driver with spare seats who is going to the CBD stops and picks up passengers and deposits them at the stop in town. The driver has the option to drop them somewhere else by negotiation but the rider can only expect to be dropped at the stop. Coming home works in reverse. This is not a door to door service but designed to get you to within walking distance of your destiantion.
In our town, at least, we could operate a hub and spoke model so that you could travel pretty much to the main neighbourhoods using only spare capcity seating, that's going to those places anyway.
The biggest obstacle to this system working of course is that we don't like sharing the cosy private spaces we enjoy inside our cars as you identify. Getting people to overcome this is going to take some education but I think that it can become a way for people to get to actually meet their neighbours, perhaps for the first time in years, and people being people, will actually enjoy the experience and word will spread and the system can grow virally without the burden of central control.
I am a bit dubious about the high-tech solutions using mobile phones and twitter etc. These systems require a level of central control which I think human nature ultimately rejects. As a driver you may come to resent being bombarded with 25 requests everytime you turn on the key and twitter your availability. Central control works for taxis but that is a fundamentally different contract than a ride share. In NSW at least you cannot accept money for taking passengers or you are an illegal taxi.
My only nod to technology may be for riders to send an SMS of the rego number of the car they are getting into for security. It doesn't even matter who you send it to as the police can always get this info from the phone company. A driver might also insist that a rider do this as it identifies both parties if you either of you doesn't turn up for dinner. Perhaps the rider should text the driver so that both individuals are identified as well as the car. Some neighbourhoods/cities might also want to set up surveilance cameras watching the stops for extra security but this could be doen inexpensively using internet cameras.
My system relies on using in built social software of seeing someone in need and doing what you can to help out without having to sacrifice any of of your own time or money or have to go out of you way to pick someone up from their home. Your payoff might be meeting someone nice and having a pleasant conversation while you spend a few minutes in a car together. That's got to have some positive spinoffs.
Termoil,
No worries about using the mekko in other presentations. You can PrintScreen the mekko in the post or download mekko software and create your own. Just Google something like "Marimekko software tool" and you will get a number of download options including Excel add-ins. I use ThinkCell to create mekkos because we have a site licence for it at work.
If anyone wants to send me petroleum usage data for another country I am happy to turn it into a petroleum footprint mekko - email me at the following address: mranawhata at iinet dot net dot au.
Cheers, Mark
A sudden liquid fuel shortage won't bother my wife and I at all. We will just keep driving our electric car around and enjoy the quieter roads.
Let's imagine world oil supply suddenly drops by 10, 20 or 30 percent
This is an interesting thought exercise, with lots of great information and ideas on rapid conservation.
But I question the assumption that such a drop will or must happen. Oil has been produced from 150 years, and no drop even remotely close to that magnitude has ever occurred. Which suggests that such a drop, while not impossible, is something which does not occur easily.
The most efficient response to huge drops of this nature is surely to focus on preventing in them in first place (or cleaning them up if they do).
I don't believe any civilian glitch could cause such a huge drop. Maybe a whopper accident in the Straits of Malacca? But even then, wouldn't the best response be to just clean-up the mess, or route around it?
Even a military event is going to be hard-pressed to cause a drop of the magnitude assumed here. And there too, I think the approach is the same: provide security in depth at any large potential breakdown point like Ras Tanura or Ras al-Juaymah.
When the Soviet Union collapsed, Cuba's crude oil imports shrank from 13 million tons in 1989 to 6 million tons in 1992, a 54% reduction in 3 years.
A war between Israel and Iran combined with several category 5 hurricanes in the Gulf of Mexico and the southern U.S. might do it.
The Cuban event occurred in a single country, not the world (as assumed in this scenario). View any of the standard charts for historical world oil production (i.e., Colin Campbell's charts from the ASPO newsletter), and you'll see there really are no severe dips in oil supply, except the 1979-83 period which was caused by lack of demand. Even World War II didn't put a dent in world oil supply.
Yes, individual countries can and do get cut off from time to time (Germany and Japan in WWII also come to mind). And of course it's a great idea to think about conservation with thought experiments like this one. But taking out 10-30% of world oil production overnight is something very difficult to achieve.
Iran closing the Strait of Hormuz, or an OPEC oil embargo, would do it. Basically, it would be a political emergency. It would also be solvable politically (though often with difficulty & delay, & sometimes not completely). The measures taken to cope with the drop in supply would be emergency ones & very different from the measures needed to cope with Peak Oil.
Peak Oil, at least for the first 5 or 10 years after peak, will be dealt with through prices. Because of the inelasticity of demand (i.e. oil consumption is strongly embedded into the structure of society), price rises will be very large. Here in Australia, we got to around $1.50/litre for petrol before the crude price collapsed last year. When the price hits $2/litre, people will be screaming blue murder and governments will promise action. At $2.50, the governments might actually start doing something.
The other difference, of course, is that if people see that the change is going to be long-term & maybe permanent, they'll change what they do. This means smaller cars. It means driving less. It means living closer to where you need to be. It won't change overnight, but if people know the problem isn't going away, they'll start looking for ways to adapt.
I was going to raise this objection as well. 10% overnight would be tantamount to KSA going offline - and presumably staying there. GOM interruptions are generally mopped up after a couple months, although some production can stay offline for years (Thunder Horse).
The impact of revolution or war is overstated, too, at least to judge from the few historical examples. The more that producing nations are dependent on crude exports for revenue, the more incentive they have to maintain that revenue. An example is Iran, who, after going offline briefly during the 1979 revolution, produced 1.683 mb/d average in 1980. Also, even the impact of an ongoing war didn't prove deleterious to operations in the Middle East: Strauss Center :: Tanker War
Qualitative differences between then and now would be the size and added potential of Middle East Nations' current arsenals, and the tightness of supply in the world, as opposed to the vast spare capacity that existed in the past.
Welcome to Rationland.
Its part of the general class of resource inequality effects in response to constricted supply. Exportland is another. They layer on top of each other to result in some serious effects as the level of you and me. If you look around here there is a graph somewhere I did a few years back to explain the 'lands concept.
Some comments.
1) In a resource constriction, emergency based or not, access to supplies is NOT on a proportional basis. If someone closes the Straits of Homuz then the countries of the middle east still get their full allocation, the US gets most of its usage - in fact its the large oil importers in SE asia that get hit most. Even if its a gradual post peak decline, those with contracts and power do best, those on the spot market worst.
2) For an emergency effect, the strategic reserves come into effect. That provides a buffer of time to implement longer lasting changes (if the change is permanent).
3) There are fractions effects (Fracland) that change your scenarios substantially. You can't run a tractor on JetA1, and you can't necessarily veer and haul between distillation fractions as far as you might like.
4) There are major system effects that you need to consider. For instance, petrol for the car of the power station worker is key, otherwise nobody moves as everything electrical grinds to a halt. Light & Heavy commercial includes food vehicles that have to get through or people riot. Cooking without oil becomes required as all cooking oils end up re-purposed to driving.
5) Biggest commuters, living the largest distances away from work, with the thirstiest cars, are often the bosses and managers. For a short while not having those always looking over the shoulder of those who can easily commute would be an advantage. However in the end the need to have them on the spot to sort out the problems created by the energy shortage means that some systems would 'break'. Sentiment would shift, investment decisions would change, bosses would look to 'lifeboat' - the knock on effects throughout the economy would be larger than the original shock.
Overall, its a big area that I've been trying to get my head around for a while now. Rough guess is that the decline effect for the 'common man' is at least 4x the basic headline figure. If it's sustained then we quickly get past the ability of people to change fast enough and the system goes into 'break' rather than 'bend' mode - flipping to new states that aren't incredibly well thought out. Run that backward and the 100% to 0% fuel transition requires only a 25% change in global supply numbers, less for many which then get amplified by system effects. Call it 10-15% decline sustained for the shift to start. Temporary effects can weather larger headline numbers.
I really ought to capture all this in an article sometime.
Oh, BTW, checkout the UK strategic plan for this type of thing - it takes rationing seriously and has a finely graded list of who gets fuel. It's decidedly not 'cost based' and is designed to be implemented in days - one advantage of fuel protests.
There are diesels designed for aircraft which run on Jet-A, so I'm not sure that problem is as big as you think it is. At least some portion of the stream now designated "jet fuel" has a reasonable amount of lubricity etc. and can be blended into diesel. The cetane rating may suffer, and the sulfur content may be out of spec, but if the only consideration is to keep the system running all of that can be thrown out the window: trucks will run on it, and that's all that will matter.
Greasel will become very popular, among those people with connections to get it.
I can't see an oil shortage of that magnitude happening suddenly at once, although it could ratchet downward to that level over a period of several years. But even a smaller rapid decline could do the trick.
"if we're lucky we will find that our public servants have already done it for us, and heaven knows they've had enough warnings since 1973."
You're kidding, right? In Canada, the government agencies make FEMA look like the epitome of efficiency; witness the 1998 ice storm that crippled southern Ontario and Quebec.
In a sudden oil shortage, Alberta would be the place to be. The shortage implies high prices, which would be a boon to our economy. The American environmentalists who want to block tarsands oil as "dirty oil" would quickly be shoved to one side as the masses decide they'd rather have their car than fuss about carbon dioxide emissions.
Natural gas would be interesting to watch. If the glut still exists, there would be a rush to it, although many people would discover the infrastructure to support it for mass transportation couldn't be built overnight.
I don't think there would be anarchy as many survivalists believe (and hope). We would be forced to go back to living the way we did in our grandparents' time. A garden in the back yard, a heavy diet of potatoes and other root crops in winter, no more exotic tropical fruits in supermarkets, locally produced food in stores, and more walking and bus riding.
This is darkly amusing ; I talked with a "Green" (political party) local councillor recently who explained to me that he favoured more apartment-dwelling (..high-density residential development..) as it's "more sustainable".
BTW extremely good overview of "the great hunger" here (ireland's experience of "heavy diet of potatoes")
Dublin Apartments (south-facing; no balcony) :
Unfortunately, some of the premises of this article illustrate all to clearly the assumptions which many at TOD have, and which are not only unworkable but also unlikely to even be tried.
OK, let's say that world oil production declined "suddenly" by 20%.
"Suddenly" is not defined, but let's say it is within the space of two weeks -- not over a year.
First, this is emphatically NOT a decline that is due to "peak oil" reasons, but rather would come about most likely due to some sort of war, or civil war. While this is entirely possible, this was also possible at all times anyway. You could have had a war in 1965 which could have led to some "sudden" collapse. So, the connection with "peak oil" issues is tenuous. A "peak oil" decline is more likely to be a steady 10% per annum (and that is rather accelerated).
The second assumption is that the reaction to this is a statist one -- in which a central government starts handing out directives. Well, if you haven't noticed, the big centrally-planned economies and statist governments kinda disappeared around 1990 or so. Almost all petroleum-related issues today are handled by "the market."
So, what happens in "the market" if the supply drops 20% "suddenly"? Presumably the price goes up. This leads to the marginal consumer of petroleum dropping out of the market.
There is always the assumption that a 20% drop in availability hits the MOST IMPORTANT 20% of uses. Actually, a 20% drop in production first hits the LEAST IMPORTANT uses. So, people stop flying on the plane for their vacation, or driving around their RVs, or heating their pools. I think you could get rid of the most wasteful 20% of consumption with hardly any ill effects.
Right about here, people will argue that the poor person who is having their heating shut off is not the "least important" use. By "least important," I mean that people are least willing (able) to pay. It is unfortunate that many people don't have heat in winter. However, this was true when world oil production was 10mmb/d, and it was true when production was 80mmb/d. It was true when oil was $100 and when it was $15. This is not a problem that has anything to do with the production or price of oil.
Another assumption in the "suddenly" scenario is that people don't have any time to prepare for or adjust to the new supply situation. For example, if you own a big SUV and you have to commute 40 miles to work, then you have to keep driving the SUV no matter what the gas price is, so you can get to work.
However, with a relatively short period of adjustment, a person can change their situation radically. They can move 10 miles from work and ride a scooter instead of an SUV. Or, they can get a new job. People move all the time (the average American moves every 7 years anyway), and they are buying new vehicles and getting new jobs all the time anyway. So, this is nothing new for anyone. Within 12 months, people who have the most marginal (wasteful) lifestyles can adjust to the new situation.
In a more gradual scenario, the 10%-per-year scenario, you would have several years to adjust your lifestyle to a radically lower level of energy use. This can take a much different form than one might expect. It doesn't mean you have to build windmills. I have long thought that Americans can reduce their energy use by 50% without much real hardship, or even change in their lifestyles. (The next 50% is a little trickier, and would probably motivate some wholly new systems such as a proper rail system.)
I don't think people at TOD appreciate how much human behavior an change WHEN PEOPLE ARE MOTIVATED BY PRICE. All of a sudden, hundreds of billions of dollars are directed at the problem (mostly private, not government money), and enormous amounts of manpower. Look at how much effort went into windmills once oil went over $100/barrel.
Ability to pay is far more important a factor in allocating a resource than utility or need.
The upper middle class could accommodate a doubling or trebling in the price of oil without any major changes. Their plane tickets to the tropics might cost $1,500 instead of $1,000, but it still represents under a week's salary for one earning $100k/year (after-tax income). Just business as usual.
On the other hand, poor people suffer far more from an increase in oil prices, even though their energy usage is far more oriented on necessities. Housing, food, and transportation are all energy-intensive products and services, and each represent a large fraction of a poor person's income. Furthermore, the poor typically inhabit older buildings and use older vehicles, which use more energy but are overall far more cost-effective. The net effect is that any increase in the price of oil will hit hard. Since poor people rarely have savings, something will have to be cut back on (perhaps give up the car, perhaps go homeless, but something will give).
It's quite likely that starvation and deprivation of the lower classes will account for the largest percentage reductions in energy usage in a price-rationed scenario.
I agree with the premise that the poor will be the first to give up something, but this is hardly new. Inequality is a commonality of life, and economic inequality of capitalist life.
I don't, however, think that it follows that starvation and deprivation need follow, unless you consider the car a natural right all men are entitled to (I don't).
Something has to give. And I think you've hit on it: the car. Faced with higher fuel prices, what are you going to do? 1) not eat (don't think so) 2) go homeless or 3) give up car, even if it requires you to ride the bus, bike, walk through rain and sleet and snow, or even move to a perhaps shittier place.
No matter the circumstances,I would go with three.
Actually, people often give up their homes (or, more accurately, get evicted for non-payment of rent) before they give up their car. A car will provide both shelter (albeit poor shelter) and mobility, while a house provides only shelter. Somewhere on the order of half of the US homeless population owns a car.
That mobility is necessary in an era when the duration of you average minimum wage job is on the order of months.
Their plane tickets to the tropics might cost $1,500 instead of $1,000, but it still represents under a week's salary for one earning $100k/year (after-tax income). Just business as usual.
It's probably more complicated than that. Most of those folks are mortgaged to the hilt, and many are commuting long distances, so only a small - perhaps even negative - fraction of their income is truly discretionary. So the effect of an oil price spike tends to be amplified. That might be why the airlines took a fairly substantial hit when oil spiked to $147 last year, despite the equivalent shortage being only a few percent at most, far short of 20 or 30 percent - and even though the increase in ticket cost, as you point out, was modest compared to the relevant gross incomes.
...need...
You do have part of a point, and yet it's amazing how many "needs" a person can have fulfilled, and still be deemed poor enough to deserve buckets of sympathy and perhaps a one-way pipeline out of someone else's wallet. Cable TV, enough food to become obese to the point of being incapable of walking properly, a clunker working well enough that there's no need to get on yer bike, lottery tickets, beer and other alcoholic beverages, etc., etc. The category "poor" seems to have become so open-ended as to have lost a great deal of meaning.
...starvation...
That's a bit of a reach, except when it happens anyway even when oil is abundant and fairly cheap, e.g. under unutterably bad governments that destroy anything that dares to move. Sure, there is always an abundance of histrionic moaning and groaning - possibly deemed helpful in raising charitable funds, calling for tax increases, or mewling for handouts - and significant genuine misery. And there are always the intractable individual hard cases. But even at the worst times these last few decades, it's been damned difficult to find much of anybody starving, even when you're having to step over them in order to enter a Washington DC, New York City, Chicago, or London train station. Quite the opposite; the males are often sufficiently well-fed and well-muscled that if they're not in a stupor that prevents them from standing up, they're quite able to be intimidating. (Yes, yes, it's overwhelmingly unlikely they're eating orthorexic-yuppie morsels from whole-paycheck food stores, although shelters do occasionally receive some very odd donations. Nonetheless, that's not quite the same as starving.)
What I read from garyp seems to me the closest to reality what happens during an oil shock. Things are not so easy as most people think. There will be panic and chaos. Less oil and high oilprices means economic contraction and this will be much worse than in 2008-2009. The globalisation will go down rapidly with severe consequences for the production and transportation of goods, not in the last place because demand of goods will diminish. This results in bankruptcy of a lot of industries.
Of course 10-20% less oil in a short timeframe happens only in an emergency situation. More likely is a decline in production of a few % year on year which will result in bigger oil-export drops though.
Few % a year?
Like North Sea? Or Canterell?
We'll be lucky to have few percent a year yoy declines.
I think 8% is much more likely.
Could be much higher if above-ground problems exacerbate the situation, which is very likely.
2 years into an 8% decline, the Empire decides to take some oil by force somewhere - all hell breaks loose. Production plummets in several key countries that have major internal problems - 12% a year decline.
Not by any stretch an unlikely scenario.
Let's see. 12% a year means halving of production in 6 years.
That oughta cause a few revolutions.
Mexico looks to become a net oil importer very soon.
Without the oil export revenue, Mexico has nothing to subsidize domestic motor fuel prices. With gasoline either at world prices or unavailable, will there be another Mexican revolution.... especially given that whoever came out on top couldn't do squat about it either?
Andrew,
North Sea and Cantarell are both off shore which normally has much higher decline rates.
Cantarell is in exceptionally rapid decline.
I agree that it could be 8%, but 5% yoy for 5-10 years is also possible. That would be very bad also, especially for the percentage of export decline.
Halving production in 6 years is something like worst case scenario, indeed only possible with severe above-ground problems
World production contractions have never exceeded 5% in one year:
These were in the wake of '73 and '79 - above ground factors par ultimate. In a BAU decline (oxymoron?) one would suppose production would decline in an orderly fashion, along the mean of what it has advanced; after all, no one's going to create some super virus that only kills petroleum industry employees.
By the same token, something I've wondered for a long time is what will happen if we hit a tipping point in investment where renewables are making great strides, and investors just say to hell with all these filthy hydrocarbons. That could have a severe impact on the FF industry in a very short time; it's also akin to what Kurt Cobb had in mind with his essay about what would happen if the cornucopians turn out to be half correct, and we just drag things out for decades, with an ultimately worse result.
That's spooky how the linear regression in my graph intersects the X axis at 2005 - the Year of Ken Deffeyes. Hadn't noticed that before...
Hello The Dude,
Thxs for your work, but I don't think it is absolutely necessary to consider how much world production contracted in order for it to set off local, undesired events.
For example, how much did local fuel supplies immediately contract in Argentina [1%, or even smaller %?], and did that correlate with the commuters decision to burn their trains? Probably very little. I think it was more frustration at their govt not looking out for their best interests by bringing about well-planned-in-advance,long term energy and resource solutions, plus communicating effectively to the citizens early and often.
The govt/corporations could have easily had plenty of trains and extra infrastructure in reserve, ready to spool up long before the long-simmering frustration erupted in a destructive crisis. Anyone can look at a growing population chart, then make simple extrapolations from that. They just choose not to do this analysis, IMO, they would rather reap BAU-profit.
Same with the US: with on-going BAU, what chance do we have to install the Precautionary Principle, then buildout Alan Drake's RR & TOD, Kunstlerization & Permaculture, plus have strategic reserves of bicycles & wheelbarrows? IMO, full-on Peak Outreach is our best chance to help bring about non-BAU options for Optimal Overshoot Decline.
Saying "I told you so" won't make anyone feel better WTSHTF when Total Global Production DOES DROP 10%, 20%, 30%, or more. The old ounce of prevention is better than a pound of cure...the amazing thing is that Malthus explained this so long, long ago, but very few want to take his advice.
"How does having more people make any problem you care to think of become easier to solve?" -- Bartlett and/or Hardin
Dude -- investors have already said to hell with FF. Just last week I attended a drilling prospect expo in Houston. There were over 300 companies trying to sell their prospects (many of the best I've seen in over 30 years of reviewing deals). I only saw 2 other buyers looking at the deals besides myself. There were probably a few more around I didn't see. I saw hundreds of millions of $'s invested in 3d seismic and mineral leases sitting idle as the prospect generators only had each other to talk to. You can only imagine the reaction I got after explaining how I going to spend around $300 million over the next several years buying drilling deals. It was very exciting and depressing in the same heart beat. Good for us to be buying world class prospects at bargin basement prices and sad to see guys I've known for over 30 years slowly bleeding to death.
I suggest you buy oil deals while you can. Sam's best case is that the top five net oil exporters shipped one percent of their post-2005 cumulative net oil exports every two months in the 2006-2008 time frame, on their way to hitting the 50% depleted mark by the end of 2014. I suspect that 2010 average annual oil prices will exceed average annual 2009 oil prices, as we see a renewed bidding war for declining net oil exports, and as we transition from voluntary + involuntary net export reductions this year to mostly involuntary net export declines next year and in following years.
Natural gas deals may be a different story. I suspect that the 2010-2011 winter will tell the tale regarding natural gas.
Yes indeed WT. I've spotted 65 different prospects that fit our criteria. I've got another geologist and geophysicist joining in a week. The owner just pushed another $50 million at us to commit in the next 6 months. Very nice problem to have. At the same time I need to form a JV with a couple of prospect generating houses and financially support their efforts so we have wells to drill another couple of years out. No one worries about the well being of the oil patch since we are the enemy. But I see a large segment of the prospect generators fading away into the sunset and perhaps never returnng. Out side the oil patch I doubt few folks out there realize that there is little to no capital coming into to the industry to support future efforts. No support...no future uptick in drilling when prices kick back in. But you can surely bet there will be an outcry that the oil industry is holding back on drilling even after prices jump just so they can keep prices up.
I'm with you...I'm not optimistic about NG for at least 2 years. But we'll be drilling for some monster NG reserves that will be there 3 and 4 years down the road. With drilling falling off a cliff NG prices are bound to spike up eventually even with a slow economy come back IMO.
facinating minithread discussion--thxs WT & Rockman!
It's times like this that I miss OilManBob and his perspective. RIP.
This is such doomer bait but few seem to have taken the hook. Come on, the gist of the article is that if a 30% drop in liquid fuels were to happen tomorrow it could be handled with a little car pooling and a few less Sunday drives, where is the immanent collapse of society?
The Oil Drum | Why We Drive
It's such a pleasant dream I just want to bask in its glory...
Phil Hart -
Aha, now I know why the toy gas station pictured in Mark Reynold's article has such a long waiting line!
The first two cars (the orange and green ones) appear to be 1968 -1970 American Motors AMXs, a somewhat unsuccessful attempt on the part of American Motors at a two-seater sports/performance car. If you got your AMX with the optional 390 cubic-inch engine, you'd probably be lucky to get 13 -14 miles per gallon. (That is, only if you drove 'nice', but what's the point of having a car like that if you have to drive it nice?)
So as you can see, the shortage at your toy gas station is the wee drivers' own fault. They wouldn't have this problem if they were driving Toyota Prius's or one of the smaller Fiats.
I suppose I have much less faith in humans than most of you.
It's ridiculous to think that nations will "share" the oil wealth.
Is that why the U.S. is in Iraq? To ensure that the oil is properly shared?
When PO becomes pressing and the world economies are all in the dumpster, everybody gets in line behind the U.S.. It's as simple as that.
Graphs about each country's current usage are not helpful.
You want to know who gets the oil - post of graph of the size of each country's military - that will correlate much more strongly than "need" or "want" or "current usage."
Human atrocity on the downslope of the oil depletion curve is going to make the brutal human interactions of the 19th and 20th centuries look like a garden party.
I hope you`re wrong. Recently I`ve wondered if maybe the governments and military wouldn`t practice conservation of resources, like people in general are doing more and more.
It`s a truism to cite military power as the final card to be played in the who-gets-the-oil game. Of course it isn`t impossible, I agree.
But once the military uses up its fuel reserves, its metals, its resources, then it will be increasingly difficult to get ahold of more of these things. So governments might institute rationing etc. if there were shortages, letting the poorest least powerful people on the margins of the society be the ones who bear the most pain, while (of course!!) powerful leaders, police, the rich, will get the oil.
I mean that the elites in all the biggest cities all over the world have more in common with each other than they do with the poorer, less educated people out in the boondocks.
The governments are just made up of people and these people won`t have much allegiance to their country, perhaps, they will care about their own families. They will therefore use the military to protect themselves, not their country.
Noone has mentioned westexas Export Land Model
ELM with a real 20 to 30% reduction in production would be worse than most scenerios discussed so far.
OTOH the article probably means only a decrease in net exports.
You missed Gail's article on net oil exports:
http://www.theoildrum.com/node/5666
The graph there shows:
(1) a large group of exporters already peaked in the end 1990s and the declining trend thereafter is irreversible
(2) Russia and Saudi Arabia lifted the total up to a 2005 peak
(3) We had a stay of execution due to a smaller number of countries with low domestic consumption increasing their production, plus an uptick in Saudi Arabia in the boom year 2008
(4) That hitherto growing group is now stalling and net oil exports will go down on the given slope of the rest, around 1 mb/d each year, if trends continue.
I proposed the ELM to help me understand, and then explain, Net Export Math. Three key observations: (1) The Net Export decline rate tends to exceed the production decline rate; (2) The Net Export decline rate tends to accelerate with time and (3) Net Export declines are font-end loaded, with the bulk of post-peak Net Oil Exports being shipped early in the decline phase.
Four former Net Oil Exporters--China; the UK; Indonesia & Egypt--illustrate all four of these characteristics (note that China had increasing production):
Four Former Net Oil Exporters
Production & Net Export Increases/Declines Per Year, Over the Referenced Time Frame, Are Respectively Shown (EIA, Total Liquids)
China (1985-1992)
+1.8%/year (Prod.) & -16.9%/year (Net Oil Exports)
Indonesia (1996-2003)
-3.9%/year & -28.9%/year
UK (1999-2005)
-7.8%/year & -55.7%/year
Egypt (1999-2006)
-3.8%/year & -37.1%/year
And here are the initial (first year of the decline) and final (last year before net oil importer status) year over year Net Oil Export Decline rates for the four former Net Oil Exporters (showing an accelerating Net Export Decline rate):
China
-5.5%/year (Initial, 1986) & -57.3%/year (Final, 1991)
Indonesia
-16.0%/year (1997) & -69.3%/year (2002)
UK
-38%/year (2000) & -237%/year (2004)
Egypt
-8.6%/year (2000) & -100%/year (2005)
And finally here are the numbers for 17 Net Oil Exporters showing production declines:
17 Net Oil Exporters Showing Production Declines
Production & Net Export Declines Per Year, Over the Referenced Time Frame, Are Respectively Shown (EIA, Total Liquids)
Saudi Arabia (2005-2008)
-1.0%/year (Prod.) & -2.7%/year (Net Oil Exports)
Russia (2007-2008)
-0.9%year & -2.4%/year
Norway (2001-2008)
-4.7%/year & -5.1%/year
Iran (2005-2008)
-0.5%/year & -3.4%/year
Nigeria (2005-2008)
-6.4%/year & -6.9%/year
Venezuela (1997-2008)
-2.6%/year & -4.5%/year
Mexico (2004-2008)
-4.7%/year & -13.5%/year
Colombia (1999-2008)
-3.6%/year & -8.3%/year
Oman (2000-2008)
-3.1%/year & -4.4%/year
Malaysia (2004-2008)
-4.2%/year & -16.8%/year
Syria (1996-2008)
-2.4%/year & -5.5%/year
Vietnam (2004-2008)
-3.5%/year & -46.0%/year
Denmark (2004-2008)
-7.6%/year & -16.4%/year
Yemen (2001-2008)
-5.4%/year & -11.5%/year
Ecuador (2005-2008)
-1.7%/year & -4.4%/year
Gabon (1997-2008)
-3.7%/year & -3.8%/year
Equatorial Guinea (2005-2008)
-1.45%/year & -1.46%/year
We can go back and run different assumptions for "Export Land," i.e., lower & higher rates of consumption at final peak, lower and higher rates of production decline and lower or higher rates of change in consumption (or no change), but the bottom line is that it appears to me that once production starts declining in an oil exporting country, if that country does not cut their consumption at the same rate that their production declines (or at a rate greater than the production decline rate), then their Net Export decline rate will exceed their production decline rate. In fact, that is what the 21 case histories show--over a 23 year time frame from 1985 to 2008. The only countries that came very close to almost exactly matching their production decline rate were Gabon and Equatorial Guinea, which have very low levels of consumption.
Since I can't find any examples of exporting countries cutting their consumption enough to keep their net export decline rate below their production decline rate, I fully expect virtually all net oil exporters to show the same net export decline pattern as the ELM and as the four former net oil exporter case histories.
Sam's middle case is that the (2005) top five net oil exporters will be (net) exporting about 12 mbpd in 2015; his best case is about 18 mbpd in 2015, versus a 2005 rate of about 24 mbpd. The 2006-2008 numbers fell between his middle and high cases. If the "Most likely" case is between the middle and high cases, the expectation would be for about 15 mbpd in net oil exports in 2015, down about 38% from the 2005 rate (from Saudi Arabia, Russia, Norway, Iran and the UAE).
That's how an oil crisis looks like (Sunday driving ban on German autobahn during the 1st oil crisis in 1973)
The cruelty of averages explained:
www.n24.de/media/_fotos/bildergalerien/2008_4/chronikderrezessionen/oelk...
IEA's 2005 classic: Saving oil in a hurry
http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=1474
IEA 2005: extract from Exec Summary; covers a number of bases as they say.
I think there is considerably more fuel savings available in the commercial sector than people think. This is because in our current model people believe that the minimisation of financing cost (inventory) is more important than the minimisation of the delivery cost. I managed to achieve a reduction of 15-20% in the delivery cost through switching this logic around, and with very little change in what customers experienced.
I used to work in the waste management industry in the commercial sector. Unlike the domestic sector, our customers were free to choose which providers they used, so typically there were 3-4 suppliers operating in each area. Customers also had very different demands based on the volume of waste produced. The two main variables were the number of bins on site (customers typically wanted as few as possible to minimise the space they took up) and the number of visits per week, typically 2 visits per week.
Most route optimisation looks at how to route the deliveries on a particular day. This is now very sophisticated and works well. The problem is that it makes the hidden assumption that the visits requested for a particular day must happen on that day.
In the waste industry, if a customer has a twice a week service, they typically wants a Monday and Thursday collection (or a Tuesday and Friday) collection. If a customer has a three times a week service they typically want a Monday, Wednesday and Friday service. If you have these two customers next door you end up with a FOUR times a week service, Monday, Wednesday, Thursday and Friday.
I developed a process, and some software to help, that looked at optimising the day of the week, not the deliveries on the day. Over about 2 years I was able to take 120 trucks off the road. Each truck uses 500l of diesel per week, so I estimate I am up to 3.1 million litres of fuel saved per annum!
There were a number of constraints, so the process is a bit more difficult than it sounds. Each depot had between 6 and 10 trucks. Each truck made approx. 600 visits in a week, so you could be trying to optimise 6,000 visits for one depot. You also needed to get the load balanced, so that the driver did not do 20 hours on the Monday and 2 on the Tuesday, you had to fit within the 48 hour working week, you had to make allowances for the weight on the truck so that it was not overloaded, and you had to make sure that the truck could get to a disposal site enough times during the day to be able to empty the waste it had collected.
The steps in the process were as follows:
1. Visualise all the customers that you service in the depot, and analyse the structure of the current service provision.
2. Divide the area covered by the depot into areas that would be covered by a single truck (it improves driver knowledge of the area which makes it easier for them to do the optimisation of the visits in a particular day, and it also makes them more responsible for the level of customer service)
3. Work out how to minimise the number of days that you visit each area, e.g. move the day of service, reduce the frequency by increasing the number of bins, sub-contract the service, lose the customer
4. Check that the new routes can be done within the constraints (software helps, but it is best done with one of the experienced drivers)
5. Consult where necessary with customers (where it was just a change in days customers were simply told what was happening)
6. Implement
Above all, it required local knowledge. The number of variables was simply too great to put into a computer (particularly difficult to collect accurately and at low cost).
Steps 2 and 3 were the ones the depot managers needed the most help with, and step 5 was critical to a successful implementation.
When I left the company and tried to set up on my own, senior management at companies I talked to refused to accept that local knowledge was required, and thought that somehow I was cheating by not getting the computer to do all the work. This to me highlighted how obsessed some senior people are with efficiency, and illustrated just how little they understood the Complex Adaptive Systems benefits of local management properly empowered and supported to use their knowledge to serve the customers properly.
My conclusion (bit of a leap from waste to the whole logistics sector) is that cheap fuel has funded Just In Time inventory management. As fuel becomes more expensive, enlightened managers will realise that there is a significant energy and operating cost to JIT, and will start to partner with customers to get at the day of visit optimisation benefits.
Jeremy
Congratulations, Jeremy, on this amazing accomplishment. I hope other companies can likewise benefit from your insight and experience.
I wish our municipal waste and recycling trucks were more fuel efficient. Every Friday, I watch them lurch forward, advance a dozen or so metres, brake, idle as the driver gets out to do his thing, and repeat this process all through the neighbourhood. Electric assist and regenerative braking would presumably cut fuel consumption and vehicle emissions considerably, and lower maintenance costs as well.
Cheers,
Paul
In the year 2000 there were fuel shortages in the UK when there were blockades of the oil refineries protesting fuel tax rises. The blockades had widespread public support, and the government caved in and suspended tax rises for several years.
For a couple of weeks supplies of fuel dwindled and became increasingly rare. People voluntarily cut back driving considerably, and drove far more slowly and economically. I didn't see one incident of agressive driving for the entire period. I don't know if any study was made on the fuel saving the modified driving style acheived, but I think it would have been significant.
It is ironic that the one thing that brought out rational driving behaviour in the mass public, was a campaign to reintroduce the unlimited cheap fuel that we could once all afford.
I don't think american examples of oil embargo era are appropriate. The oil supply dropped just 5%, prices shoot to 400%. This discussion is about oil supply dropping to 10% to 30%, lets say 20%. At that much reduction in supply the fabric of modern societies begin to unfold. I know very well that an electricity shut down (called load shedding here) for anything like 24 hours take people to their last drop of patience and trust in govt and anything like 36 hours results in massive, often violent protests and attacks on govt buildings and whatever come in sight. As soon as news of diesel not available at petrol pumps break out, the transporters who bring food from outside city first increase prices many hundreds of percents then after they receive attacks from mobs they stop delivering at all. You have to literally live on whatever you were able to stock in food items in your house in your limited salary and then on whatever your neighbours, relatives and friends can deliver to you. People have to think that the 20% supply reduction would not be surpassed to all users evenly, never in a human society. Some uses such as military, water supply, severage pushes, police movements, ambulances, hospitals are too essential to cut off. Also the political leaders would not have any share in reductions. Somethings like taxis, street lights, shops etc would face 100% shut down, some like home electricity and gas would face may be 40% shut down, some like food and essentials' suppliers to cities would face like 10% reduction (still enough to boost prices of food many times). If this continue for something like 2 weeks or 1 month govt may have to go and some other political party would come in power. If this continue for 2 months or 3 months then the entire system of govt may have to go and there could be a martial law with strict rationing of almost everything. If this continue for something like a year, the govt would be there no more, people would be on their own, fighting in groups to get their hands on resources to save their lives. These groups can be as large as an entire province or quarter of a province, sea ports denying delivery of imported fertilizers and pesticides to farming province who deny any food supply until the fertilizers and pesticides are supplied to them. Things may get more complicated with whatever kind of govt exist in sub-divisions of country itself losing its power and trust of people resulting in more sub-divisions. On the global scale, usa would certainly invade saudi arabia either directly or through its illegal child israel, iran as a mean to destroy western economies fire a few hundred missiles on saudi arabian oil wells and oil refineries that appear to reside near iranian border, china may finally invade canada at the same time usa march its forces there resulting in a huge war in americas, russia may be very very rich all of a sudden etc.
Thxs for this posting, WFP! It mirrors a lot of my same thoughts.
If the price mechanism is used to ration supply then those countries that have done the least so far in this direction are likeley to be disproportianatly effected.
Countries in Europe at least have the option to reduce taxation -prices will still go up up -maybe 50%- whereas in the US they could easily double or triple to be at the same level.
I'm thinking that driving is going to be quite pleasurable in a small fuel-efficient hybrid while those big thirsty SUVs just sit on the driveway...
Nick.