Monday, May 19, 2008

No Prob

A person named Jim Manzi over at NRO's The Corner is quite irritated by Peak Oil "hysteria," reminding us - rightly - that oil production's "peak" has been predicted at various times in the past, and yet didn't to come to pass in accordance with those flawed prognosticators. His advice - don't worry, be happy.

It amazes me that anyone could be so obtuse about the nature of the situation, once one has really given it any thought. Manzi, and others like him, doesn't deny that we are facing a future of energy constraints - he simply says we don't know when this will take place, so there's nothing we can nor should do about it. However, implicitly he and others like him recognizes that it WILL happen, so the "don't worry, drive happy" stance is tantamount to child neglect. It's saying, let the future worry about our irresponsibility. It's hard to think of a civilization that has been based on such an infantile premise.

A respondent (and reader of this humble "blawg"!) to Manzi's post at "The American Scene" really says it better - and certainly more succinctly - than I'm able:

"...It seems kind of beside the point whether Peak Oil is upon us now or twenty years in the future. There is a fundamental logic there that shouldn’t be shrugged off. It is simply a fact that we have designed huge chunks of our country around the premise that gasoline will be abundant and cheap. (I’m from Indiana, and let me tell you, if you don’t have a car in Indiana you ain’t going anywhere!) When that abundant and cheap era ends, we will have to find a new way of living our lives. I’m sorry, but twenty years does not sound like enough time to begin rearranging those places in our country that most need the rearranging. Especially when there is zero political will to do anything right now. I tend to share Deneen’s belief that we will have to get to Peak Oil, and beyond, before any meaningful changes are made precisely because we will be forced to. The problem is, those changes will have to be made during a different era, one of expensive and unreliable energy. Deneen’s basic premise seems pretty sound, that we are enjoying a relative life of ease while our children’s lives (or their children) are going to be infinitely more difficult."

This is the actual implication of today's column by Paul Krugman, who of late has really jumped on the peak oil bandwagon (and is one of the few places in the MSM where the issue even gets a mention). In a column entitled "Stranded in Suburbia," Krugman discusses some of the implications of peak oil and energy constraint, particularly the need to own smaller cars and drive less (he has yet to catch on to its implications on "globalization," its impact on the trucking industry, and its agricultural implications, etc. He seems oblivious to the implications of a no-growth economy for the financial markets. But you can only do so much in a short column, and he's coming along). He points to Europe as an example of a living arrangement that uses far less oil than the U.S., and nevertheless does well economically. He suggests that America will come - by necessity - to resemble the German model. This is something I suggested not too long ago, and for which I took some significant heat. Americans don't like being told that the Europeans are doing some things better - especially not "conservative" Americans.

Based on the lower patterns of energy consumption in Europe, Krugman opines "I have seen the future, and it works." But, Krugman should read the likes of Manzi: it is the mainstream view, and certainly that of the "economists," that nothing needs to be done until we receive the proper price signals. As Manzi's commentator points out, we will wait until energy is constrained to begin changing our behavior. However, if Europe is to be our future exemplary living arrangement (one that closely resembles the vision of "the urban transect" advanced by New Urbanists and some Catholic natural law thinkers such as Philip Bess), we should note 1. Europe has kept prices "artificially" high for years - since the gas shocks of the 1970s - through higher taxation, which it uses to fund an excellent public transportation system, among other things; and more importantly, 2., Europe never changed its basic living patterns as a result (along with smart zoning regulations that permit mixed use areas as well as limit building outside town and city limits).

Manzi suggests that we can wait until the last possible moment - when peak oil is upon us, which we will not know until we can compile several years of data about worldwide oil production - and then begin to make adjustments. However, if we KNOW it will be upon us at some point - and many reputable geologists believe it will be soon, soon, but regardless, it will come - then shouldn't we use whatever energy bounty we have now to prepare for that eventuality? We will need to begin a rather significant project of infill of existing living arrangements, particularly the suburbs, to achieve the necessary population density to justify public transportation. We will need to build high speed trains between the more far-flung cities of the U.S., in anticipation of the demise of the airline industry (if Manzi doesn't think they are done for, then he hasn't been reading the papers.) We will need to encourage more local forms of economic activity, particularly agriculture. Not only will it be more expensive to drive, but even maintaining our current huge investments in the automobile infrastructure will prove increasingly untenable. For instance, the cost of paving our millions of miles of petroleum-based asphalt roads will prove unaffordable.

In short, we will need to invest huge sums to prepare for a way of life that will be significantly different than the way we live now. And people like Manzi are saying, "we don't know WHEN it will happen, so don't sweat it." What we will find is that once we begin to sweat, we won't have the means - the energy and the attendant funds - to change very much. In the meantime, we WILL use the existing surplus and still cheap energy to continue the great American wasteland - the build-out to nowhere, an economy premised upon an infinite future of cheap transportation, an agricultural system based on energy inputs that far exceed calorie outputs, and the destruction of arable farmland for endless tracts of McMansion temples to the modern ego. The petroleum reservoirs of the earth were not formed for any one of us, not even those with the most money. However, we act as if it is ours alone to use and exploit without thought or reflection on the implications for future generations. The future will suffer as a result of our profligacy and unwillingness to act responsibly.

I'll say it again - it amazes me that we have come to a pass in this nation's history when someone like Manzi would be called a "conservative." To be oblivious of the implications of our current actions in the name of an ever better future is the hallmark of progressive liberalism.

20 comments:

MH said...

Or, by repeatedly trying to frighten people into change before the need is actually present, you might just be crying wolf so often that by the time you are right, nobody is listening.

Also, some problems are cheaper to fix the closer you are to them. For example, I live in a neighborhood that was originally populated because of street car lines that have long since been torn out. They have tried to replace a portion of those lines with light rail, but that is vastly more expensive than a street car and even the most deluded bureaucrat's daydream doesn't image running the line to my neighborhood (only six miles from downtown).

Of course, rebuilding the street car would be much cheaper, but you can't do that now because the streets are too crowded with cars (and probably because of concerns about over-head wires, difficulty of access for those with physical disabilities, etc.) Those are the kinds of objections that are convincing when gas was $4/gallon, but that probably won't hold much water if gas prices double again.

In the meantime, I have the bus. I can ride for free because of an employer subsidy (my employer is worried about parking, not peak oil). I can catch the bus about 2 blocks from my house and get-off about two blocks from my office with no transfer and a bus comes by every about 15 minutes for any hour at which I would want to travel.

I'm starting to ride the bus more, but even with all of the above and $4 gas, the bus still doesn't save me any money unless I value my time at less than $20/hour. I'm just doing environmental penance/reading cheap novels.

Anonymous said...

Several of your suggestions for US transportation and energy policy ignore fundamental economic reality.

You mention high speed rail. In places like Europe or Japan, it makes economic sense because the distances are much smaller than in the US. But the economics of air travel become far more favourable when the travel distances rise above a couple hundred miles. So while high speed rail might make economic sense in the Boston-Washington corridor, or *perhaps* San Diego-San Francisco, it is doesnt make economic sense for the nation as a whole. Certainly not when you consider that the air transport infrastructure is already in place (and paid for), versus a brand new high speed rail system.

Regarding 'peak oil', this misses the fundamental fact that the amount of recoverable reserves is related to the price of oil. As oil prices rise, oil that was not economically recoverable at $30/barrel becomes economic at $60 or $100/barrel. Unfortunately there are long leadtimes with these new oil supplies, but if prices remain high over the medium and longer-term, you will see large amounts of alternative oil sources come onto the market. The oil companies remember the large investments in alternative energy sources that became uneconomic overnight in the mid 1980s when oil prices collapsed to below $10/barrel. But if/as oil prices remain high, such investments can and will occur.

Coupled with the demand reductions that will occur as consumers reduce gas consumption and buy more energy-efficent vehicles, the combined effect will be to greatly alleviate the current supply-demand imbalance. Have some faith in free markets. They will work, if we let them. It will take some time, but then again, it took decades to develop the energy infrastructure we have, so it will take for the market to make adjustments, particularly capital-intensive investments. But it can (and will) happen; indeed, it already is happening.

EM

Anonymous said...

As you say, anyone with half a brain who has really looked at the situation, knows - KNOWS - that Peak Oil is nothing but hysteria. The fact of the matter is that the world is absolutely awash in crude oil. There are only two kinds of Peaks to worry about - political peaking (purposely understating the amount of reserves) and Peak Cheap Oil. But, go look at the real numbers. Hell, once we run completely out of cheap, easy to get crude, we'll still have at least a century's worth of shale oil and other non-traditional crudes to burn through.

Petroleum will be king for all of our lives. It is the cheapest (even if the price doubles from its current record high levels), most versatile, easily transportable, and incredibly abundant fuel out there.

Really, truly, genuinely dig into the facts, and leave your biases and preferences behind, and you will see how silly the Peak Oil nonsense is.

Anonymous said...

Manzi's point is that predicting peak oil has been futile so far. Given technological improvements in oil location and extraction, it promises to be equally difficult. If alternative fuel sources are developed in a timely fashion, the oil market should change in any case.

So why promote making massive changes to the economy and American social life, some of which will be unsustainable in the immediate future (try pricing out light rail and other public transportation for cities in flyover country where commuting is seriously long - not to mention the time expenditures mh wisely factors in) for a problem that no one has been able to get their brains around, whether they have half a brain or full one, functional, or no?

Promoting massive social and economic change on the basis of possibilities is a progressive stance, not a conservative one. A political scientist should know that better than most.

Patrick J said...

Mr. Deneen, I'm having trouble telling whether you and Paul Krugman are deliberately being disingenuous or are entirely missing the point that what works for individual parts of the world won't work for all of it. It isn't that the European / urban population and travel model that you in DC and Krugman in NYC are familiar with is better than the longer distances that suburbanites and farmers have to deal with, or worse. It's just different. Take the "future" European model that Krugman visionizes (actually it's just the old pre-modern model). What's the logical conclusion to his unfinished thought: that our energy problem would be solved if all of American flyover country had the population density of Rotterdam, Washington DC, or New York City? Obviously not.

The whole point of Europe is that it, like the urban centers of the USA, specializes in the service and tech fields, not in producing food or anything else tangible. But it doesn't follow that the world as a whole can be composed entirely of urban areas, anymore than a person can be composed entirely of lungs or kidneys, no matter how admirably those organs might perform their jobs.

As for your commenter's observation which you seem very taken by, I'll only point out that it has always been true (that oil was not an infinite resource). In mathematics, an observation which is not inaccurate yet is unhelpful is referred to as trivially true. There is a lot of trivial truth in all commodity bottleneck doomsaying.

• Britain had a finite amount of coal, so prior generations were going down a blind alley in ever using coal as an energy source.
• One day oil production will peak and then decline and we won't be able to rely on it for energy, so we should stop relying on it now.
• My baby will eventually grow into an old woman and finally die, so I'd might as well stop feeding her now.

All the premises are true, and all the conclusions are false in the same silly fashion.

Jim Manzi is right that when oil truly does become scarce that the growing problem will begin to provide its own solution, in forcing innovation. What you and your commenter seem worried about is a hard, abrupt landing ("Manzi suggests that we can wait until the last possible moment - when peak oil is upon us...") But that's not the last possible moment, by any means. Oil won't run out all at once everywhere. And the good news is that there's plenty of fat in the world's oil consumption patterns to allow for a soft landing. A lot of what oil is currently used for (e.g., generating heat by simply burning it, and oil-fired power plants) can be replaced by nuclear and coal energy, allowing a higher percentage of the eventually dwindling supply of petroleum to be used for what it's best suited, portable energy storage.

Manzi is right. The market will work. It may already be at work. The NRC has recently approved two new nuclear reactors in Florida, the first two of what will be many new reactors that will come online in the next 10-25 years, after a quarter century of stagnation in new nuclear power production during an era of cheap oil.

papabear said...

Manzi has responded.

What does he mean by "economic growth"? Is it just a numbers game for him, a question of $$$?

BT said...

More totalitarian bilge.

Big government "solutions" like you propose have proved time and again to be a joke. Ethanol anyone? Your government elites can't possibly control or plan markets as complex as transportion and energy.

When the market faces obstacles, it moves to take care of them. Its absurd to think that as petroleum gradually runs out that inventors and investors won't be stepping in to make money with new energy technologies.

Patrick Deneen said...

A few things:

1. If people are going to rudely comment, it would at least be worth to read a few more postings, just to see if your impressions are true. But, I suppose that's too much to ask. The idea that I am a totalitarian or a hippie suggests drive by clicks.

2. I regret the "half a brain" comment and have excised it. I apologize for rudeness.

3. To repeat for the 3,488 time, "peak oil" does not mean we are running out; it means we have burned through the cheap stuff, the easily gotten first half. On the other side of the oil mountain there is inexorable decline of production leading to year after year decreases. The "replacements" that have been mentioned here all use much more energy to produce than has been historically the case with oil. Anyone who has read previous postings knows my thoughts on ethanol, not to mention the tar sands, etc. After we factor in the amount of energy we use to produce these substances, it's not likely we are going to replace what we will be using year upon year. That's not to mention the environmental devastation that ensues. That's another problem we'll just leave to the youngsters.

3. The biggest problem with our paradigm is the idea that either the Market or the Government will do something. This is a profoundly problematic dichotomy. What if we decided to do something ourselves - such as change our behavior? Yes, it might eventually be formulated as legislation, but authors as ancient as Aristotle have acknowledged that the best laws are those we impose upon ourselves. Ultimately what I am talking about here is a change in culture - one that is not drastic or catastrophic as some here seem to think would be the case - not specific policy prescriptions. When one calls for such a thing, an anathema rains down from both libertarian Right and progressive Left. It leads me to believe that I must be onto something.

bjanaszek said...

The whole point of Europe is that it, like the urban centers of the USA, specializes in the service and tech fields, not in producing food or anything else tangible. But it doesn't follow that the world as a whole can be composed entirely of urban areas, anymore than a person can be composed entirely of lungs or kidneys, no matter how admirably those organs might perform their jobs.

I'm not sure anyone is advocating this. The point is that plenty of people live a great distance from where they are employed. Every day I hear people complain about the price of gas and the length of their commute. But no one would ever consider re-locating to the city (Pittsburgh) because, you know, you might get murdered.

I should add that if your employer is located outside of an urban area, and you can live nearby, that's great. Even better if you can take a bus/ride a bike/share a ride to it. It's not simply about living in an urban center, it's about tightening the space around your home.

Patrick Deneen said...

Oh, and:

4. When we start pricing the cost of things like rail, etc., let's not forget the cost of maintaining an interstate highway system. We assume that alternatives would be expensive without factoring in the current costs, as well as the "externalized" costs of a host of other things that oil now permits us - e.g., industrial agricultural with its topsoil erosion, etc.

5. Perhaps "conservatism" is a broken and pointless term, and there is a need for fundamental re-definition. However, I maintain that it has something to do with conservation - conservation of nature and human culture. To urge prudence and caution in the name of conserving our contemporary anti-culture is to defend a culture that does not conserve. I recognize the paradox, and of course am not urging revolutionary action, but a first step would be to see how problematic this argument is. From there, small steps leading to a different trajectory might be possible. Likely? No. But, worth at least making the argument.

MH said...

bjanaszek,

I agree broadly with your point, but not your specific example. I actually live in Pittsburgh proper. It is true that you are very, very unlikely to get murdered. However, you will get taxed much more heavily than you are in the suburbs (an extra 3% income tax is nothing to sneeze at, especially since it applies at all income levels). Plus, at least from my point of view, you have to figure on private schools for the kids.

Despite (or because of) high taxes, the city is a billion in debt, plus has an underfunded pension that actually places the city hundreds of millions more in debt. And the population base to pay for this consists of you, me, and thousands of retirees and public sector workers who can outvote anyone who actually has to pay the taxes our elected officials impose.

Which I guess bring up a broader point. If you want greater density, you have to figure some way to run cities that give people what they want at a reasonable cost.

Anonymous said...

"... What if we decided to do something ourselves - such as change our behavior? ..."


Again, who says we *aren't* doing something?

An example: Try trading in a large SUV to buy a smaller, fuel efficient SUV. Good luck. Prices for large used SUV's have fallen so fast that the Blue Book prices havent kept up, and can be a couple thousand dollars high. Dealer lots are full of large SUVs that few people want to buy, while the smaller SUVs fly off the lot so fast that sometimes it can be hard to find a particular model to test drive!

The bottom line is that people *are* 'doing something'; many of them are trading in their gas guzzlers, and changing their driving behaviors. They are doing that because of the free market, and market-based pricing that allows consumers to make the best decisions for themselves. They dont need the government to tell them, or new laws to force them.

Adjustments may take time, but they *will* happen, if we let the market work. Europe and Japan use energy more efficiently, but of course energy prices are far higher there thanks to high energy taxes, and consumers have had far more economic incentive to conserve. We will see similar changes in consumer behavior in the US if prices remain high. When you factor in the many billions of dollars that European and Japanese consumers had taken away via taxes over the last two decades, I am not so that our current so situation is as bad, or their situation as good, as some would suggest.

Joseph said...

Doesn't local agriculture mean more farms and fewer people in residential areas? Won't the resulting lower population densities produce more sprawl?

Anonymous said...

4. You're stealing a base when you talk about the price of light rail in comparision to maintaining highways. Driving is not going to go away anytime soon and those roads (just like the vast European highway systems) will need to be maintain. Light rail and other expansions of alternate transportation will be on top of maintaining the highway system. The only thing you can possibly hope for is reduced wear and tear on the system, but some parts face erosion based wear as well (bridges for example) and as we've learned since the Minnesota tragedy, we are well behind in dealing with those needs.

The better choice is to get the market to develop new sources of fuel that are sustainable and practical (i.e. not ethanol). Get hydrogen fuel cells to work or find better hybrid/electrics and the dependence on oil will drop without having to fundamentally alter the driving culture.

5. If you're going to fundamentally redefine the term "conservatism" you might point that out first before bashing Manzi over the head with the idea that his perspective is profoundly unconservative. It would make for greater clarity, at least.

Patrick Deneen said...

Anon -
4. Because we want it doesn't mean it will happen; and, yes, given that the cost of maintaining roads is bound to go up (particularly given how much of asphalt is petroleum), then all the more reason to be considering improving our train network while we can afford to do so. All you anti-Guvment people out there are surely aware that we are massively subsidizing automobile driving. Why aren't you howling about that and demanding Mr. Market to step in? Maybe we should let the private sector take over road building. Ayn Rand thought we should.

5. See Point #1. I spend a lot of time here attempting to redefine what's meant by conservatism. It wasn't a drive by "bashing."

There seems to be some sense among drive-by readers that I'm making this stuff up. I'm not. Smarter and richer people than me are thinking ahead - for instance, Richard Rainwater. I'm just an errand boy, sent by petroleum geologists, to collect a bill.... Anyway, don't worry: nothing is going to change. Until it has to.

papabear said...

Doesn't local agriculture mean more farms and fewer people in residential areas? Won't the resulting lower population densities produce more sprawl?

More rural "sprawl" is a different thing than suburban sprawl. If you are talking about land-use patterns from the past, that is.

Manzi is echoing Hirsch's warning that we should not implement peak oil mitigation strategies too early, lest it affect the economy. I'll have to reread Hirsch's arguments, but Manzi strikes me as being a "fiscal conservative" or a cheerleader for the current political economy more than anything else.

I do not believe the GDP is an accurate indicator of anything with respect to the economy, and traditional conservatives are right to point out the problems and unsustainability of such an economy--over-reliance on petroleum is just one problem among many. But some can only see numbers and government statistics, while missing the big picture.

Anonymous said...

I find it disheartening that Mr. Manzi still fails to show any concern about our level of wastefulness regarding our use of oil. It’s simply fact that oil is finite. It is simply logic that dictates that future acquisition of oil will be more expensive and burdensome. It follows from these facts that our lives and the lives of our children will be more difficult in the future. I find it depressing that he sees no utility in trying to address these facts in a farsighted way, rather than in a reactive way. I don’t understand why it should be so damaging to begin some very simple steps to help us with this transition. More trains, better zoning, and more localism. I agree with Dr. Deneen (err, sorry Mr. Manzi, Mr. Deneen) that this should be a subject championed by conservatives, not fought tooth and nail.

Again, there are parts of this country that are simply not functional in there current incarnation if oil becomes more expensive or unavailable. I don’t know Mr. Manzi’s view on Iraq, but how can some conservatives see nothing wrong with investing billions (maybe trillions) on the infrastructure in that distant part of the world, while whole parts of our own country are being set up for calamity?

He asserts that it would cripple our economy to levy huge taxes in order to pay for a different infrastructure, but that seems like a wild assumption. After all, we still manage to pay for malign government influences like ethanol (see the farm bill). Maybe we can use that money rather than levying huge new taxes. Maybe we can stop this madness in Iraq and use that (seemingly limitless) pot of money. I mean, our current situation was influenced, in part, by government incentives, why is it somehow beyond the pail to suggest different incentives?

Also, thanks Patrick for using my comment in your blog post, it is very flattering.

-Derek Sutton

bjanaszek said...

Anon--

My standard Pittsburgh tax argument is, yeah, I pay 3%, but my property taxes are pretty light compared to the suburbs. I call it a wash, and maybe only because we're homeschooling our kids. I do agree, though--the city government is a mess, but I'm a life-long 'burger, so I'm trying to stick it out.

I'd argue the biggest mistake the city made in recent history is to provide tax breaks to attract businesses in the late 80s and 90s--certainly these companies have helped the area, but when their employees live in the suburbs, the city just loses all around.

MH said...

Jim Manzi has the cover story in this weeks National Review. I haven't read it yet (I always read the serious part last), but it is an argument against genetic determinism.

MH said...

bjanaszek,

Pittsburgh property taxes are about the same (in terms of millage rates) as Mt. Lebo or Aspinwall. You can save money by living in a cheaper house regardless of whether you are in the city or not (just watch out because some of the suburbs -- I'm look at you Wilkinsburg -- have much higher rates).

I don't know that everything about what happened to in Pittsburgh before I got here in 2003, but I tend to think Pittsburgh's main mistake was not cutting the city work-force until well after the tax base was destroyed and not reforming the pension plan until it was basically hopeless. If I weren't paying so much in taxes, I wouldn't complain so much about the crappy city services.