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Sunday, December 23, 2007

"Life after Peak Oil"

According to Gregory Clark, running out of fossil fuel may not reduce living standards by as much as you might think:

Life after peak oil, by Gregory Clark, Sacramento Bee: Oil prices have receded from their recent flirtation with $100 a barrel, but ... increased demand, high prices and the prospect of an eventual peak in oil production has caught Americans paralyzed between ... the fear that rampant consumption of oil and coal is irreversibly warming the Earth and the dread that without cheap oil our affluent lifestyles will evaporate. ...

Study of the long economic history of the world suggests two things, however. Cheap fossil fuels actually explain little of how we got rich since the Industrial Revolution. And after an initial period of painful adaptation, we can live happily, opulently and indeed more healthily, in a world of permanent $100-a-barrel oil or even $500-a-barrel oil. ...

Many people think mistakenly that modern prosperity was founded on this fossil energy revolution, and that when the oil and coal is gone, it is back to the Stone Age. If we had no fossil energy, then we would be forced to rely on an essentially unlimited amount of solar power, available at five times current energy costs. With energy five times as expensive ... we would take a substantial hit to incomes. Our living standard would decline by about 11 percent. But we would still be fantastically rich compared to the pre-industrial world. ... Our income would still be above the current living standards in Canada, Sweden or England. Oh, the suffering humanity! At current rates of economic growth we would gain back the income losses from having to convert to solar power in less than six years. ...

The ability to sustain such high energy prices at little economic cost depends on the assumption that we can cut back from using the equivalent of six gallons of gas per person per day to 1.5 gallons. Is that really possible? The answer is that we know already it is.

The economy would withstand enormous increases in energy costs with modest damage because energy is even now so extravagantly cheap that most of it is squandered in uses of little value. Recently, I drove my 13-year-old son 230 miles round-trip ... to play a 70-minute soccer game. Had every gallon of gas cost [considerably more], I am sure his team could have found opposition closer to home.

The median-sized U.S. home is now nearly 2,400 square feet, for an average family size of 2.6 people... Much of that heated, air-conditioned and lighted square footage rarely gets used. Cities ... that were developed in the world of cheap gas have sprawled across the landscape so that the only way to get to work or to shops is by car...

Some countries in Europe, such as Denmark, which have by public policy made energy much more expensive, already use only the equivalent of about three gallons of gas per person. I have been to Copenhagen, and believe me the Danes are not suffering a lot from those the daily three gallons of gas they gave up.

But can we get down to 1.5 gallons without huge pain? We can see even now communities where for reasons of land scarcity people have been forced to adopt a lifestyle that uses much less energy – places like Manhattan, London or Singapore. ... Housing space per person is much smaller, people walk or take public transit to work and to shop, and energy usage is correspondingly much lower, despite the inhabitants being very rich.

So the future after peak oil will involve living in such dense urban settings where destinations are walkable or bikeable, just as in pre-industrial cities (the city of London in 1801 had 100,000 inhabitants in one square mile). Homes will be much smaller... Nights will be darker. We will not have retail outlets lit up like the glare of the midday sun in Death Valley.

Such a lifestyle is not only possible it will be much healthier. We are not biologically adapted to the suburban lifestyle... – lots of cheap calories delivered right to your seat in the SUV that shuttles you from your sofa at home, to your chair at work, to the gym where you try and work on your weight problem. ...

So life after peak oil should hold no terror for us – unless, of course, you have invested in a lot of suburban real estate.

    Posted by on Sunday, December 23, 2007 at 02:16 AM in Economics, Oil | Permalink  TrackBack (1)  Comments (44)

          

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