Monday, May 16, 2011
A post hydrocarbon future?
Can the world handle the addition of an army of Far East consumers? Will their consumption patterns mirror that of the U.S.? What will this mean for the standard of living for the rest of the world? To be sure, U.S. politicians and talking heads will not worry about the aforementioned concerns. Instead, we will be bombarded by talk of "unsustainable debt" and the glory of the "free market".
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I was thinking about that this weekend while driving in a suburban area. The roads were a sea of V8 SUVs with one person, sometimes two people, in them. I starting thinking, what is in store for consumer patterns in vehicles? Real Estate (is suburban housing sustainable)? Etc.? What is the pricing when all the current patterns are uprooted? $5 $6 $7…$10 and unless a global recession, those prices are probably only a few years away.
Off the top of my head, I think telecommuting would be the simplest answer and could happen “over night” but how disruptive to real estate would that be? Would urban and suburban areas deflate fast, while rural areas would see up-swing in demand if people were freed from having to live near their work??
I have a friend who works for one the big banks as a project manager. Projects comprise people from many locations, so he realized it makes more sense to work at home and save the commute. He resisted for a time because he was so used to going to work, he didn't know whether he would be able to take the isolation. But he made the break, bought property in the country and built a house there. He is now very happy working online and only drives to the office (two and half hours) occasionally for faced to face meetings.
He also told me several years ago that top management gave up traveling and now meets through "telepresence" on life size screens. They may even be holographic by now.
BTW, Telluride, CO is built on this model and pioneered it.
An example of an innovation in personal lifestyles is telecommuting by professionals from Telluride, CO.
http://www.laits.utexas.edu/~norman/long/DII.html
I just got back from a little league game in West University in Houston Texas. The price per sf here might be the most expensive in Texas, but all the executives from the legal and oil firms here are oblivious to how things really operate at the macroeconomic level. Might as well count them as welfare recipients of massive tax breaks for big oil which runs off in advantage to the attorneys.
I had to square off a typical fat cat in front of several well to do know nothings, and they all thought that tax and spend meant that the government can only function with it's tax receipts and nothing more.
I begged to differ and had to counter with a $100 bet ( I happened to have a c-note in my back pocket ) so I raised it up and held it like a cheap furniture commercial, and challenged him ( as well as the others ) that Ronald Reagan ( somehow ... somehow their deficit terrorist hero ... ) outspent all previous administrations combined, and topped it off with that only Carter and Clinton in the past 50 years made a negative rate on the government spending scale.
This infuriated them all .. imagine these are the fatso's who control the energy firms and the contracts that govern their transactions ... being put on the spot by a relatively kids-glove to the area.
None of them took the bet, and I made my point as best I could.
Good job Goog!
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Kevin/Tom,
Here is an article about a 120,000 gal/day ethanol distillery in Iowa:
Link here.
US gasoline consumption is about 380M gallons/day. there are about 3100 counties in the US. So 380M/3100 = about 122,000 so on average each county uses 122,000 gal/day of gasoline.
If we put one of these $100M distilleries in every county as a coop, we could just about eliminate our petro based gasoline usage. All for just $310B which is less than TARP and probably less than what we are overpaying for just our imported oil in a year at these OPEC screw prices.
there are other alternatives to oil at these prices... Resp,
Googleheim,
Your story of West University made me want to post a tangent topic: mass transit. I also live in the Houston area. For about 15 years, I worked downtown and used the park-and-ride (I miss it now - it was a nice 20 minutes to read etc. for me.) Over the years, I saw the following situation happen maybe 50 times. At work, someone would ask me about the park and ride buses. I would tell the person that I enjoyed them; they provide a faster commute; I do not have to worry about parking downtown; I can read and/or rest while on the bus, etc. The person would seem interested (the person asked me in the first place) but would be hesitant, with all kinds of excuses. Sometimes, I would have this discussion several times with the same person asking me questions (you could tell the person really wanted to ride the buses but was scared for some reason), then the person would finally try it. Then after a few days of using the park and ride, that person would tell me how much better the commute was and how much that person enjoyed the park and ride bus and how that person wished he would have tried it sooner.
I have seen this play out so many times, that I am sure it represents a reliable sample of all people, so one can conclude, if people just got out of their cars, they would likely find they enjoy mass transit and then there would be political force demanding it widespread.
Maybe gasoline prices will be a catalyst causing a tipping point on this issue. I remember in 2008 when gasoline hit $4 (people freak out on whole numbers in all markets), METRO’s park and ride system saw a ~ 20% increase in riders pretty much overnight.
Matt:
It would require four times the current US farmland growing corn to produce that 120,000 gallons per county per day. I do agree that our current transportation "system" is unsustainable. But I see no alternative to eventual price induced cutbacks before any major technological changes will occur. Regards, Jim
James,
I think most are looking at plant cellulose vice sugars.
wiki_link_http://en.wikipedia.org/wiki/Cellulosic_ethanol
"The raw material is plentiful. Cellulose is present in every plant, in the form of straw, grass, and wood.[40] It is estimated that 323 million tons of cellulose containing raw materials that could be used to create ethanol are thrown away each year in US alone. This includes 36.8 million dry tons of urban wood wastes, 90.5 million dry tons of primary mill residues, 45 million dry tons of forest residues, and 150.7 million dry tons of corn stover & wheat straw.[41] Transforming them into ethanol using efficient and cost effective hemi(cellulase) enzymes or other processes might provide as much as 30% of the current fuel consumption in the United States.[citation needed] Moreover, even land marginal for agriculture could be planted with cellulose-producing crops like switchgrass, resulting in enough production to substitute for all the current oil imports into the United States.[42]"
And that probably doesnt include grass clippings from maintained landscapes and collection of deciduous tree leaves in the fall... etc... Resp,
Iowa City, where I live, now composts its cellulose residue and sells compost at $10 a ton. That residue could be going to ethanol. The city picks it up now as it is. It's just a matter of redirecting it.
Matt, Tom: I am no expert in this field, but I calculate that the electricity yield from PVC panels is about 85 times the energy yield from corn ethanol ( per acre per year). Electricity can be used to generate hydrogen which could be a transportation fuel or could charge electrical storage devices or be fed into the grid. Stripping land of all its plant cover to burn in autos I would think would eventually deplete the land. The compost is currently used to replace lost nutrients, it is not wasted. I worked at a company 30 years ago with a cellulose enzyme project. The enzymes are the easy part, grinding and hydrating the insoluble cellulose so the enzymes have physical access is the hard and energy-intensive part; it is still not a viable technology.
I do agree that there are lots of possibilities and technology can always progress, but the overall yield of corn ethanol energy seems pretty low and the yield from other crops would be even lower ( as corn is intensively cultivated and bred for yield. I enjoy the discussion.
I greatly appreciate the new,improved mikenorman site and both of your economic contributions. I am a realative MMT newbie, 15 months and stunned by the revelations I have found in your and others' writings. Best regards, Jim
James,
OK I'm convinced. Now I'm off the ethanol kick and now on your PVC to hydrogen bandwagon ;)
Anything but these current arrangements with the OPEC people would be an improvement!
Resp,
James, I am not arguing for ethanol. I think there are much better ways of proceeding. For example, I prefer as much decentralization as possible.
I was listening to a VP of EXXON serveral years ago saying how EXXON is an energy company, not an oil company. They are ready to roll out hydrogen, but the cost of conversion is so enormous that either the price of oil would have to rise significantly, or else the government would have to mandate the shift. He said that any party that tried to mandate this would be so unpopular because of the price hike that they would not regain power for 50 years. But he emphasized that EXXON had no problem with doing it. The technology is there now.
And then you have Saudi's sitting there with 4M bl/day reserve production.
Why would you plow a lot more $ into developing more production when you know they are sitting there with all of that idle capacity? Why plow investment into alternatives when we are not even close to using what we already have in production for regular oil?
shows how corrupt/perverted the "free market" for oil is when you have all of that idle capacity and prices are hitting highs...
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