Jeff Rubin: Peak Oil Will Make Our World A Whole Lot Smaller
Why? Peak Oil. Jeff Rubin is a regular supplier of great quotes to TreeHugger (like his description of the tar sands: "You know you are at the bottom of the ninth when you are schlepping a tonne of sand to get a barrel of oil" )
For almost twenty years he was chief economist for CIBC World Markets, but has left that comfortable world to spread a not so comfortable message: Our lives are about to change, as the title says: Why Your World Is About To Get A Whole Lot Smaller. It is much the same message as delivered by James Howard Kunstler in The Long Emergency, but with more math and better credentials.
Rubin goes through the supply issues, of how we are running out of affordable oil, but also the demand side. It isn't just transport; much of the middle east generates its electricity from oil, and now is producing much of its water. Ski Dubai alone burns the energy equivalent of 3,500 barrels of oil a day, enough to drive a car around the equator with quite a few barrels to spare.
Between the reduction in supply and the increase in demand, we are going to get squeezed as we come out of this recession and gas prices rise again. Rubin summarizes his thesis in the National Post:
Life as we've known it is up for grabs in a world of expensive fossil fuels. Expensive oil means a severe curb on the free-spending lifestyle that cheap energy has afforded us for some time now. It means you can say a long and wistful goodbye to the inexpensive products manufactured on the other side of the world. You may not love them, but they have been stretching our dollars for a while now and holding down inflation at the same time. You'll miss them when it starts to become clear that your paycheque just doesn't go as far as it used to.
But he sees some good news in this.
We will be living in denser communities, driving smaller cars, living more frugally and locally. When we travel, we may soon be boarding an electric-powered train rather than an oil-powered airplane.
But living in a clean, efficient, densely populated city is not exactly the end of the world. Where would you rather spend your vacation: Paris or Houston?
He is not too happy about where infrastructure and stimulus money is going, namely GM and highway construction.
Here's the question: Will we decide to reinvest in a global economy and an infrastructure that keeps us bound to oil consumption for every dollar or pound or yen of wealth we produce? If so, we are committing ourselves to a damaging cycle of recessions and recoveries that keeps repeating itself as the economy keeps banging its head on oil prices. If we go this route, peak oil will soon lead to peak GDP.
Or we can change. Not only must we decouple our economy from oil but we must re-engineer our lives to adapt to a world of growing energy scarcity. And that means learning to live using less energy. While much could go terribly wrong in this transition, don't be surprised if we find more than a few silver linings in the process, like a solution to carbon emissions, for example. And don't be surprised if the new smaller world that emerges isn't a lot more livable and enjoyable than the one we are about to leave behind.
Either way, your world is about to get a lot smaller.
There are many that think peak oil is Malthusian tripe, that good old ingenuity and a the right price will bring back the rigs. They are often the same people who think climate change is a hoax. They won't like this book; it makes too much sense, written by someone who understands the issues and conveys them dispassionately.
More at Why Your World Is About To Get A Whole Lot Smaller
More on Jeff Rubin:
Jeff Rubin Predicts "Mass Exodus" From Cars in US
Gas $7 Per Gallon in Four Years
The World Is No Longer Flat
The End of Aviation: What Will Happen When We Can't Afford To Fly?
High Oil Prices Help Revive US Steel Industry, Create American Jobs