The Oil Drum | Shhh is for oil shale

57 comments on Shhh is for oil shale

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memmel on June 27, 2006 - 6:37pm

Actually I'm not sure it matters. I think cheap oil is more important then peak oil. I mean once oil is 200 dollars a barrel electric based transport makes tons of sense. Cheap Oil offers the convenience of personal or directed transport expensive oil makes it not worth the price.

Think of it like air conditioning we love it but we can live without it. The moment oil becomes expensive then it does not matter anymore we will switch to electric transport.
I think the speed of the switch will surprise many. My bet is on electric trolleys.

Also considering the enormous cost of our interstate system the moment its not usable by the majority is the moment we let it fall apart. People are not going to pay taxes so the rich can drive cars. Local roads are next unless reasonable personal electric transport is available.

I really think in Europe for example the only reason they still have things like the autobahn is because people still believe they might buy a car the moment this dream is gone is the moment the autobahn becomes a memory.

If you think about it Automobiles really took off in about 20 years 1945-1965. I see just as fast a fall.

Now the big loss for america is not oil based transportation we can actually switch fairly rapidly but the fact we built our cities around cheap oil thats the real pain.

Middle America is going to lose a enourmous amount in property values as cities renew there inner cores and contract around electric train routes. This implosion and redistribution of real estate wealth is one of the real problems.

The next is the loss of the American Dream for the majority of Americans as transportation costs and devaluation of there homes basically bankrupts them.

Finally god knows what going to happen to the poor as middle class America streams back into the cities pushing the poor out into slums far from the city center and fast transport.

Its the social consequences of the loss of cheap oil never mind peak oil that are staggering for America.

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foolontheswill on June 27, 2006 - 6:47pm

"The moment oil becomes expensive then it does not matter anymore we will switch to electric transport. I think the speed of the switch will surprise many."

I'll be surprised, given that better than 2/3 of our current production relies on fossil fuels (coal/gas/oil in that order of percent contribution). Remember, you don't get coal without petroleum machines to dig it out.

And you don't get nuclear plants without oil for the mining of uranium, production of cement and steel, etc, etc....

So where is all this electricity to replace oil going to come from?

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memmel on June 27, 2006 - 7:42pm

Unfortunately I believe it will be coal and lots of it.
Cement Steel etc are still primarily coal based industries.
The steel of course can come from recycling so its not a matter of smelting the raw ore.

Also there is still plenty of oil for operation of value add machinery i.e where it used to do useful work say put in a trolley line. I suspect what will happen is oil or in this case diesel will be rationed and subsidized by the government for these types of uses. There will still be a lot of oil around and its simple to reallocate it to concentrate on supporting redevelopment. It just won't be cheap.

This does mean the US government will probably take over a lot of the remaining oil supply for military and emergency industrial use further impacting the oil available for the poor SUV owner. Remember we are still a large oil producer and I'm sure at this point the average tax payer would not have a problem with the US nationalizing its remaining oil production.

In the end we have no choice. If we got off our butts today and started putting electric trolleys and rail back into our cities and subsidize inner city development and taxed the hell out of gasoline for private usage it will make life much easier in the long run. I acutally suspect this will happen once Bush and co leave. But it may be to late.
It seems to me that every year we don't act the pain increases ten fold.

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got2surf on June 28, 2006 - 2:20pm

Coal will be king!

I just read an article in my dentist's office (sorry - no link) which stated:

New coal plants coming on line in the coming 24 years, will, in their 60 year lifetime, release more CO2 than ALL coal burned in the last 250 years...

Unfortunately, I continue to believe as strongly as ever, that faced with change (to our non-negotiable way-of-life) vs. 'discretely' ramping up coal usage, coal will be king...

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eric blair on June 28, 2006 - 11:42am

Remember, you don't get coal without petroleum machines to dig it out.

Errr, there are plenty of electric mining tools.

http://www.phmining.com/equipment/shovels.html

You are right - where will the power come from

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AlanfromBigEasy on June 27, 2006 - 7:01pm

Middle America is going to lose a enourmous amount in property values as cities renew there inner cores and contract around electric train routes. This implosion and redistribution of real estate wealth is one of the real problems.
The next is the loss of the American Dream for the majority of Americans as transportation costs and devaluation of there homes basically bankrupts them.

The US wrote off much (most ?) of their existing housing stock after WW II. Our economy survived this writeoff (despite many individual losses).

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memmel on June 27, 2006 - 7:52pm

Can you expand on this I'm aware of the boom from new housing being built but was not aware that the older homes were written off so I'm not clear on what your referring to.

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AlanfromBigEasy on June 27, 2006 - 8:09pm

A series of deliberate policies to encourage economic activity with new conctruction at the expense of establsihed housing.

One example is VA loans (most of the market in early post-war years). Zero problem getting a loan for a new home (0 down from memory). but no financing for existing homes with any defects at all. And delays for multiple inspections before closing on an older home. (I heard electricity wiring and plumbing had to be up to current code). Result, few owner occupied buyers of "old" homes; land lords bought them for rental instead. First step to slums & boarded up houses.

I saw a mid-1950s promo film for post-WW II sprawl Metairie on PBS. One claim was that you could easily get a VA loan for a "new problem free home" in Metairie but not for an older home in New Orleans. Probably the de facto truth.

Many other policies to devalue the existing urban hosuing stock (new highways deface & divide established neighborhoods in order to speed new suburbanites to work). Don't you want to live next to an interstate in what was a nice urban park ?

"Urban Renewal" hurt more than it helped.

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phineas gage on June 27, 2006 - 8:24pm

Alan, given the nature of your posts, I'm sure you've read Kenneth Jackson's Crabgrass Frontier. For those that haven't, he outlines the bias against the city and in favor of suburbanization with the federal loan program. The central thesis of the book is that the nature of development is dependent on the predominant mode of transportation. For example, the streetcar era gave us one type of neighborhood, and the automobile gave us a different (and inferior one) It's an excellent book for anyone intersted in peak oil, the disaster of suburbia, city planning and the history of transportation.

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AlanfromBigEasy on June 27, 2006 - 10:04pm

Actually I have not read it. I was just aware of some of the specifics and these were part of a larger politically driven enonomic drive to build sunurbia and "abandon" older cities.

Urban parks were once special targets of highway planners (FREE Land !) with untold damage to surrounding neighborhoods when a nice park is replaced by a freeway :-((

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phineas gage on June 27, 2006 - 11:07pm

Alan, although it would be a little bit of a "preaching to the choir" situation for you, I think you'd reall enjoy it. The author loves train/ streetcar oriented transit and the development patterns engendered by them. The book is nearly 20 years old now, so it is a little dated, but I'm sure you could get it cheaply over the internet or order it through your library.

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AlanfromBigEasy on June 27, 2006 - 11:15pm

Library ?

Most were destroyed. Collections flooded or roof damage let rain water in.

Order ?

First class mail only. Delivery 2 or 3 times/week.

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phineas gage on June 28, 2006 - 6:58am

Ouch. If I owned a copy, I'd gladly give it away and mail it to you.

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oaksmoke on June 27, 2006 - 7:21pm

I agree. There are many ways to produce oil, but none of them will be affordable at the volumes we currently burn. Our first response will be to downsize our vehicles. We will we surprised to find the smaller vehicles will cost the same as our current large ones. Riding the declining resource curve is not an economic joyride. Eventually only millionaires will be driving around in cars running on shale oil. Joe Sixpack will be riding his electric bicycle to work on the vegetable farm.

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mh497 on June 27, 2006 - 11:41pm

"We will be surprised to find the smaller vehicles will cost the same as our current large ones."

Have you priced a Honda Fit?

They're about half the price of your average SUV, and get nearly three times the mileage.

I do however agree, the 'new' oils are not cheap and don't have great scale, so oil prices will go up over time, and it seems likely we will have to live with less.

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LJR on June 28, 2006 - 7:28pm

A friend and I recently priced a Honda Fit in San Francisco. The dealership was asking the $15,000 base price plus a $4000 "dealer's charge" for a white, stick-shift Fit with zero options. Came to $19,000 before tags, tax and license. Add another $2000 for those. A Fit in a designer color with automatic and options easily pencilled out at $23,000 before tags, tax and license. Not exactly the $17,000 Dan Neil was quoting in his LA Times review for the fully decked out unit he was driving.

You may argue that the base price is what counts but I'd counter by saying that when fuel efficient vehicles become de rigeur the premium over base is liable to stay rather high. Then too, it's the full price that gets paid.

Furthermore, the cost of raw materials will probably rise as well so the base manufacturing cost will increase.

Electric cars must use quite a bit more copper than a conventional car and the red metal has already doubled in a short time.

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Whitehall on June 29, 2006 - 2:14pm

Actually, we're being told that copper prices are up 400% over the last 24 months. I assume that's more than 4 times prices 2 years ago.

Steel and iron are up 40%.

Fabricated metals are up 50%.

Air Freight up 8%.

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davebygolly on June 28, 2006 - 1:44am

"People are not going to pay taxes so the rich can drive cars." People already pay a lot taxes for the benefit of the rich, the military being the primary example, but there are many others, corporate subsidies, etc. Now there are roads that will be allowed to deteriorate and ones that won't. The highway system is important to the miitary, and the parts that are of convenience to the rich will be maintained, at least some.

There is absolutely no tendency toward sharing hardships any more than there is to sharing bonanzas.

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