 | The Top Energy Stories of 2006 (and Happy New Year!) from The Oil Drum | The Oil Drum | Gazprom, Russian plans and that niggling worry... |  |
Will the New Year bring Happiness and Prosperity?
Posted by Heading Out on January 1, 2007 - 12:57pm
Topic: Supply/Production
Tags: ethanol, mexico, predictions, saudi arabia [list all tags]
I would like to begin, despite the title, by wishing you each, individually, a Prosperous and a Happy New Year.
The past year has been an interesting one to watch, and comment on, and I would hope that this site will continue to be of interest to you as the topic evolves over the next year. And let me quietly suggest that the topic is likely to remain sufficiently evident that Halfin's suggestion of a change in emphasis is unlikely to come to pass.
The problem with making predictions, and I suppose also the fun, is that there are so many imponderables, such as the weather, that can make them into so much hot air or wasted electrons which, as we have discussed relative to predictions from folks such as CERA, can later make them embarrassing to have to recognize. And given that FTX has collected some of the more interesting ones already, maybe I should avoid that route.
So instead of making them as predictions, perhaps it would be better to frame the following as areas that will likely get more interest from the main stream media in the next year, and thus, in turn, get a greater share of public awareness.
Given that Russia and Belarus have now agreed to a price for gas the new year will not start with an immediate shortage in the West of Europe, but the increasing control that Gazprom is obtaining over the supply pipelines (in this agreement they gain 50% control of the Belarus pipelines) is likely to become increasingly worrying. In part this is because Gazprom will not allow competitors to use their pipes, and the greater growth in Russian production is likely to come, over the next year, from those independent companies, though they could, of course, end up being swallowed by Gazprom, as it continues to flex it’s muscles. The problems of supply within Russia may also rise again, if, as last year, there is a strong cold spell – since the country is increasingly relying on natural gas as a power source.
Over the course of the year it is likely that the succession will be stabilized in Turkmenistan, and it will become a little more evident if the country will continue to supply natural gas through Russia, or whether the Chinese can strengthen their position and gain a source of supply. Given that they are currently strengthening their position in Kazakhstan the growing impact of Chinese demand and their acquisition of the resources to fill it will limit the resources that can provide for the growing needs of other countries. This example has not been lost on the South Koreans, who are planning to buy more resources foe their own use.
Korea is pushing to produce 18 percent of the country's oil needs from Korean-owned oil fields by 2013, against 4 percent now.
Given that the decline in production from Cantarell is having an impact both on overall Mexican production , but also on exports – most of which go to the United States, we can expect this to start having a visible impact sometime this next year, bringing the Peak Oil debate back to the country’s attention. For while it may not be that hard to replace the odd 200,000 bd, when this starts to reach more than 500,000 bd it may become a little more difficult, depending on how tightly OPEC will maintain their production cuts.
And in that regard it will be interesting to see how production from the Kingdom of Saudi Arabia changes. They are projecting that there might be some from the Manifa field next year though the maximum production of 900,000 bd will not be reached until 2011. At that time two refineries in the KSA will also come onstream to process that particular crude. Needless to say the Chinese are also involved, since a third refinery is being built in Fujian that will take an additional 160,000 bd from KSA. However there should be new production coming along next year in the KSA.The current status of new production plans (as of December 6th) appears to be:
The Abu Hadriyah, Fadhili and Khursaniyah fields are being developed, with production of 500,000 bpd of Arabian Light crude oil, plus more than one billion standard cubic feet/day (scfd) of associated gas. This is forecast to come online in December next year.
Located deep in the Rub Al-Khali, or Empty Quarter, the Shaybah field has been delivering 500,000 bpd of Arab Extra Light crude oil since its start-up in 1998. Plans call for increasing production capacity to one million bpd, with the first increment of 250,000 bpd under implementation and slated to come onstream by the end of 2008.
Two other major field development projects on track to meet the maximum production capacity target are the Khurais and Nuayyim fields. The Khurais project, which will also include production from the Abu Jifan and Mazalij fields, is projected to produce 1.2 million bpd of Arab Light crude oil in 2009. The Nuayyim project, a central Arabian field, is slated to add 100,000 bpd of Arabian Super Light crude oil by 2008.
Note that there is not much in this list until the end of next year, and then there is an increase in 2008, that will be supplemented with an increase in NGL by 310,000 bd, though again in 2008. Given that there are still those depletion numbers that must be dealt with, it will be another set of numbers to watch as the months roll by.
And speaking of numbers to watch the growing risks of American natural gas shortages by the end of the decade will likely become more evident. With the limited potential for alternatives, this will likely bring discussion on LNG terminals more into focus, though it is starting to be a little late to establish new supply trains from scratch to match the 10% of supply that was supposed to come from the Shtokman field but that is now scheduled for Western Europe .
The change in power in the Congress will bring more light on the situation as alternatives start to be discussed, and, in that regard, I suspect that some of the gilt may rub off the ethanol gingerbread. The price of corn has been steadily climbing and is now at $3.90 a bushel . Given that, just last July the Department of Argriculture was suggesting that the ethanol impact would only raise the price from $2.00 to $2.45, this additional cost may make the enterprise a bit less profitable and thus enticing. The calculation that shows a simplified version of the potential profit is given here . It suggests that there is no margin when the price of ethanol is $1.80/gal and corn costs $4.68/bu. This could lead to a fair amount of debate in those states that have mandated a certain percentage of ethanol be included in gasoline.
And, while I don’t foresee any major changes in direction for this site, I do expect that there will be an increasing focus on global warming with the change in Congress. Whether that will bring a greater degree of reality to the debate over energy supplies is, unfortunately, another matter.
Well, with a soft chuckle, my attempt to move higher up the TOD rankings for next year has now been made. (Sometime around the end of next year I will invite comments on this post that may move me (grin) above 16th in the ranking).
Until then, again, my very best wishes for the New Year to you all.
HO (Who is, alas, starting the New Year himself with a heavy cold, and hence posting instead of partying).
Happy New Year! HO--relax buddy--take care of your headcold.
Looking for the bright side of our global interconnectedness: if scapegoating has to be done [sigh] to achieve Detritus Powerdown, global warming being the focal point is better than all the myriad political groups choosing sides, then pointing fingers at each other. If we all see ourselves as part of the problem, and mutually work together towards solutions--this is far better than breaking up into countless warring factions jockeying for some perceived advantage. I hope we have the collective wisdom to choose this course. Maybe 2007 will be a lucky number!
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Well done HO. Happy New Year to you too!
Folks, also consider this a reminder to positively rate this articles (using the icons under the tags in the story title) at reddit, digg, and del.icio.us if you are so inclined.
This set of links especially would be a good thing for others to see, so they can sample The Oil Drum's content, so hit this hard, if you are so inclined!
Also, don't forget to submit them to your favorite link farms, such as metafilter, stumbleupon, slashdot, fark, boingboing, furl, or any of the others.
Cheers and Happy Holidays from The Oil Drum!
Re: 16th in the ranking
Uhmmm ... that's what you get for talking about specific oil & gas supply issues
You must know by now that all you need is a world Hubbert Linearization and the whole peak oil problem is solved. This must mean that I'm 17th right behind Freddy Hutter ... I thought, after my OPEC/Angola post, that I was 16th ... but you've jumped ahead of me. I'll have to work harder!
Happy New Year
-- Dave
I read this article pretty frightening.
http://www.timesonline.co.uk/article/0,,2089-2524271,00.html
And this about supply problems.
http://www.chinadaily.com.cn/english/doc/2005-01/28/content_413031.htm
The question is is peak coal possible. The reason I ask the question is coal extraction is limited technically by a number of factors similar in a sense to those facing the tar sands in Canada. We have not discussed the possibility of a peak in coal production in China but it looks to me that it might actually happen. The assumption is that at least one factor will limit the ability of china to produce and consume coal. Probably rail transport which seems to be a limiting factor in the US.
Thoughts ? Peak Coal can it happen ?
Here are the EIA projections.
http://www.eia.doe.gov/oiaf/ieo/coal.html
The most surprising item in the EIA paper is it seems the US is a net importer of coal ???
Quote
The Americas
The United States is projected to import 91 million tons of coal in 2030, 64 million tons more than in 2004. Although this is still a small share of overall U.S. consumption, at 5.0 percent, it represents a shift for the United States from being a net exporter to being a net importer
What ?
And a further link on the environmental impact
http://www.american.edu/TED/chincoal.htm
http://news.bbc.co.uk/2/hi/programmes/newsnight/4330469.stm
Oil comes into play in CTL schemes and hybrids powered by coal generated electricity.
Finally I found a intresting article the original pdf seems to be missing
http://72.14.253.104/search?q=cache:zoDa-TsnihwJ:www.lanl.gov/orgs/d/d4/...
But it does hint that indeed china is having problems in its coal production and the limiting factor is not surprisingly railroads.
memmel, It is interesting you should link the story below:
http://www.timesonline.co.uk/article/0,,2089-2524271,00.html
On the prior string, I did a prediction set of my own...
http://www.theoildrum.com/node/2130#comment-143607
Take notice of point 5:
5. China slowdown: Surprising many, China will slowdown, and perhaps to such an extent that it creates an investor crisis. China has overgrown it's resource base, it's labor base, and it's customer base. It has become a speculative bubble, competing in some very low margin industries, and there has been a great deal of "paper inflation" there, in real estate and over capacity of production facilities, but many of those of inferior quality. Do NOT think that China is immune to the type of "Asian flu" that has in recent years swept through several Pacific rim countries. India and other Asian economies are providing stiff competition to the Chinese. They will have to learn to get lean, something they have not been to this point. The energy waste in China has historically been horrendous. This must change.
The Times article you quote is very indicative of what I was talking about....
On the subject of "peak coal" you ask is it possible? Of course, any mineral that is finite not only can peak, but in fact MUST peak, that is the philosophical, almost theological in some ways, underpinning of "peak oil", isn't it? Several long standing coal producing nations have already peaked in fact.
The question is, just as with oil, is it a geological peak, or a logistical peak? They are two completely different things! Coal is more subject to logistical peak, due to the labor and machinery required to extract it, and as you point out, the rail system required to move it. This requires huge amounts of steel, fabrication, etc., just to provide the digging equiment, engines to drive them, locomotives, engines to drive them, rail lines and yards, handling facilities to load and unload the coal...etc. In fact, this is the issue with American coal, in that due to environmental issues and low return on investment, most folks have not been eager to invest in coal handling infrastructure, and for example we have trouble exporting coal because the shore facilities would rather handle something this is easier to move and pays better. Coal requires very large and heavy scale investment in handling facilities to export, and also large barges that are not useful for much else, and that are wore to pieces relatively quickly. For MANY decades, there will be more coal than people who want to deal with it in the U.S.
China faces the same issue we did after WWII. Do you stay with coal, which requires heavy industrial development, lots of steel, and a large workforce which can go on strike, or do you go to something lighter, easier to handle, and with a far lower number of laborers to have to deal with, such as Diesel fuel or natural gas. For America, the choice was easy.....the coal miners struck just as oil and gas went into a prolonged price decline that lasted until the U.S. peak in 1971.
The Chinese are unfortunate in that easy and cheap oil and nat gas may not be so readily available. Coal, the heavy dirty slow way, may be the only choice they have. This will surely limit their ability to grow.
This makes for an interesting structural situation doesn't it? Renewables such as wind, solar and methane recapture may work better in China than in the U.S. simply because we already have a large coal/gas/oil infrastructure, comparative to the size of our economy. China's while large, is not nearly as large or able to grow as fast as the economy they intend to build. In other words, our renewable industry is competing against a massively entrenched and already discounted fossil handling industry, already expensed, while China will have to bear the massive capital expense either way they go.
Back to my prediction: China will slow down considerably, the question is, will it be a soft or a hard landing? Many Americans will get caught in the downdraft. Recently, one General Electric executive said he expected 60% of GE's growth in revenue to come from Chinese sales (!!) Millions of jobs worldwide rely on Chinese growth which is simply runaway and cannot be realistically sustained.
Roger Conner known to you as ThatsItImout
Thank you !
Great response save me a lot of time trying to muddle tpo the same conclusion.
I did not think about strikes at all but your right thats China's great weakness esp with their communistic propaganda which would turn people away from the government if they crack down on workers.
I also find it interesting that China holds 1 trillion dollars in USD but claims to be a poor country and can't afford pollution controls.
To be honest I never quite understood what china was up too. I used to live in Shanghai and traveled through the country quite a bit. The problems were obvious. I'm flabbergasted by the western preoccupation with Chinese growth.
If you spend any time their its obvious that its a train wreck waiting to happen. I did not consider how crippling strikes would be to certain parts of their economy.
Thanks for your thoughts.
Powder River Basin coal is cheap to mine, but expensive to transport since it is so far from the markets on the East Coast. It only became economical (and broke the coal unions) when the government set the sulfur emission regulations just high enough to make Powder River coal burnable without sulfur remediation, and just low enough to make East Coast and Great Lakes states (union) coal require remediation.
That's why the fuss over expanding output from East Coast coal plants without remediating sulfur. The original regulations would require remdiation if expansion occured, but the remediation isn't taking place because then the coal burning power plants would burn East Coast and Great Lakes coal instead of Wyoming Powder River Basin coal.
Of course, when we lost those two railroads in the Basin in 2005, we damn near started burning East Coast coal because the Basin couldn't supply enough, but then we squeaked through and we are now building a new railroad into the Basin.
The coal that the U.S. imports is almost entirely metallurgical grade. It is used in direct heating/chemical reactions in production of higrade alloy steel. This replaces the Pennsylvania antracite that has been depleted, at least the easily mined material.
China is a bomb IMO. (Not the only bomb though.) The leaders are riding a horse they can't get off. Any slackening in the growth rate produces massive unemployment and upheaval. Yet the growth is totally unsustainable every which way. Unlike here, there are elderly Chinese (not even that elderly) who remember what it was like under Mao -- meager, simple, austere, but iron rice bowls, rudimentary universal health care, guaranteed minimal survival. Gone. Once the compensations of growth disappear, watch out.
These vulnerabilities are the reason the Chinese leaders put up with as much bullying from the US as they do, and continue holding a huge pile of rapidly depreciating dollars. Deadly embrace I call it.
Where else to go but coal after oil and gas become scarce? In more pessimistic moments (which stretch out into minutes, days, weeks sometimes) I think there's no hope that we'll avert worst-case scenarios of global warming and environmental devastation. Peak coal would be a blessing if it would but come on time. But it won't -- there's TOO MUCH of it. It seems that little stands in the way of our wrecking the planet.
Your comment about China not being able to back off its growth trajectory is particularly apropos. The Chinese leadership has convinced hundreds of millions of people (perhaps as many as half a billion people) to leave the farm for a life in the city working at salaried jobs. The arguments used involved freedom, personal development, and a change from calculating wealth in calories eaten per day.
It is highly likely that if the growth stops in China, then unemployment will increase. I doubt that the Chinese leadership will be able to convince people to go quietly back to the farm and count wealth by calories eaten.
It might well be worth the leaderships' life and China's existence as a single country to try.
I wonder... did anybody have to convince you to live in a city, drive a car, use an A/C etc.? Why didn't you instead become a farmer who works heavy almost all manual labour 24/7, just to feed his family? Tough choice I imagine. It surely has taken a lot of propaganda and communist brainwashing to do it.
Old saying (unknown source)
"Man will disappear with a wimper not a bang."
The US is not currently a net importer.
As noted elsewhere, the coal currently imported is relatively small, and fills a particular niche. The imports are also related to particular transportation costs: it can be cheaper to import australian coal by boat at a particular port than to move it from Wyoming or West Virginia.
Well, that's a reminder to be sceptical of "facts". I've read elsewhere that we've become net importers of coal. I checked EIA for YTD data:
Imports: 27.3 million short tons
Exports: 36.8 million short tons.
I was skeptical also hence the question marks.
I was actually surprised to see any imports.
There was an ad on Australian TV where a shopper wants a plastic bag and the sales assistant asks 'how do you expect the environment to deal with that bag?'. Seems with coal the message is more like 'enjoy'.
I recall in my Navy days seeing coal being loaded on a ship in Norfolk harbor. A local told me it was going to England. Quite literally a coals to Newcastle situation. This coal had certain properties that the British steelmakers wanted. Could it be that the coal being imported into the US has certain properties a specific customer wants?
Correct also its cheaper to ship via the ocean in some cases than rail.
Happiness in Suburbia?
Over the holidays, a good buddy of mine needed a house watcher. He and his family were going south for the holiday, and his wife could not abide the thought that her miniature Beagle would be alone with no one to play with...and my buddy could not abide the pooch bouncing around the cab of his pickup all the way down there....so, I got to live for several days in suburbia (I normally live in Rural (with a big R, you notice) Kentucky, way out in the sticks. So the cursed Suburbs were of interest to me, and I watched, looked and listened, to the way folks lived there and the way they COULD live there, in the event of a downturn in fossil fuel supply, and or a major upturn in fossil fuel prices. Here is what I observed:
1. Currently, suburban fuel waste is ASTOUNDING. You can stand in the yard of a suburban home, and watch 3 or 4 cars or trucks leave the driveway within a 30 minute span....and then see all of them returning in hours, within 10 or 20 minutes of each other, and then some fraction of them leave again....this goes on all day. It is hard to believe that all the repeated coming and going is needed. My friend took a total of 3 vehicles out of state to carry 5 people, due to the fact that several in the party did not get along well enough to ride together....this consisting of a total of two pickup trucks and one SUV! For a 230 mile trip, mind you...!! The issue of fuel seems to be, even at current prices, a non issue.
2. Everyone uses natural gas or propane, BUT, and this is big, has a stash of firewood and a woodstove, which they are currently holding in reserve. Fuel at this time is cheap enough that the inconvienence of replacing and handling firewood is not worth the effort. The reserves of firewood can be astounding, with many having enough laid up to last an easy 3 or more winters. The "convenience" premium for fossil fuel to heat with is purely that, a "convenience" premium, and not a "survival" issue. If nat gas and or propane were to rise greatly in price, the amount of fuel switching possible in many suburban neighborhoods could be astounding, and very fast. Electricity is generated in our area by coal, and everyone also has electric blankets and space heaters, which are used in "moderate" tempeture season, to cut the nat gas or propane cost. This is instant fuel switching to coal. Most of the houses are fairly well insulated and do not cost a great deal in heating.
3. Recreational vehicles of all types are in every garage: Motorcycles, Jet Ski's, Bass boats, even childrens go carts, drag race or road race cars, the variety is astounding. It is fascinating to think that many say it would be impossible for people to afford an electric or hybrid vehicle, due to cost, complexity, or "EROEI" issues. It begs the question (and I am going to stay on this point in other posts) as to how they can afford third, fourth, fifth and sixth vehicles, very complex ones with high horsepower, purely as amusements. What is the EROEI of a Bass boat? A Jet Ski?
3. Speaking of electric cars, when one watches these people operate, it becomes obvious how they afford the daily running about. I looked at a map of the suburbs around the town I was in in question: A person was within 6 to 12 miles of groceries, doctors, schools, workplaces, etc., and within 15 to 25 of a hospital, a community college etc., anywhere in the city. A small plug hybrid or full electric car could have easily made any of the trips taken on a daily basis, as they were short trips (no more that 40 or 50 mile range both way, and in most cases, not over 30) and for the most part under 35 to 40 mile per hour speeds. The potential for change is HUGE.
4. Most suburban households have excess land around them, for possible gardening, permaculture, fruit trees, greenhouses (by the way, many of them have two or three extra buildings, such as storage sheds, workshops, extra garages, etc). On many of them, the falling tree limbs and cut grass could be harvested for some type of biomass. They are not space limited in anyway.
5. Solar exposed roof area, again, is in no way limited. If one counts the roof of the outbuildings, it is huge, often totaling more by two or three times than the floor space of the house itself.
So on future prosperity, the suburbs don't have it so bad: With cost effective solar (both thermal and PV) and electric and plug electric vehicles, the total fossil fuel consumption could drop by very great magnitude without giving up much of what is considered "a suburban lifestyle". The electric infrastructure and vehicles would consume no more material, engineering, and energy than what is currently used to build the vast variety of high tech "toys" for recreational use only.
If I had to point to any one thing that was most educational, it is the last point made: The amount of energy that is consumed to build and power the vehicles we don't ever talk about much: The motorcycles, boats, jet ski's, recreational cars, street rods, race cars, scooters, go karts, on and on and on....a whole second automotive industry could be built out of the materials and fabricating facilities used just for America's "toys". I didn't even mention the vast hoards of high powered, high tech yard care tractors, small farm tractors for "tinkering" around on the property, Troy built type gardening tractors and tillers, etc. Oh, did I mention the RV's for the road trips, complete second but mobile homes that come with almost any well off suburban household? It is astounding.
Every time I look around me, I realize more and more that so called "mitigation" of possible peak oil is in no way a technical problem, or an "EROEI" problem, or a "unaffordability" problem, but is almost purely a factor of will.
The American middle class gets mad if you tell them this, but it is true, and someone must tell them now and then...."you take it so for granted don't you?' "Do you have any freakin' idea how good, how damm good, you have it?"
RC known to you as ThatsItImout
Here in Europe we have a good lifestyle, so I've always wondered why the US has a roughly 2 x higher per capita energy usage.
Your description of US suburbia now explains it all!
The middle classes in the US seem to have a LOT of scope for conservation without affecting their standard of living significantly.
A comparison of the USA to Europe would be a good TOD topic. There are many differences, the suburb structure is one. Two others that are important are (1) the relative distances between major cities, and (2) the relative extremes of the North American climate compared to Europe. You are warmer in winter and cooler in summer, and that affects demand considerably.
There is an extremely detailed analysis of this question that appeared in Science magazine as an article, at a rough estimate 25 years ago. As I recall, the major issues were distance travelled for shipments of all sorts and weather, exactly as you said. For example, in large parts of the country, if you want a six-pack of beer you must drive thirty miles. If I leave here (Massachusetts) and drive at top legal speed to the west coast at a reasonable number of hours a day, I will be most of a week en route. Also, the western part of that route is decidedly not flat.
When I lived in southern Michigan, I recall a year in which temperature and humidity were both in the 90s for 6-8 weeks. This was unusual, and inconvenient, but not viewed as lifethreatening in the town where I lived. Within a year or two of that, we had temperatures of zero to -20 (I dressed carefully to walk to work) for some weeks, not to mention two days with minus forty temperatures and high winds.
Perhaps someone can find the article and summarize it.
The scary thing is that absolute wealth (waste?) is not what will determine how the power down goes. The only thing that matters is expectations. People here in the US are so accustomed to this profligate waste of energy that no matter how well they could live without it there is a high probability of resentment when their choices become limited.
rc, ty for your post from the wasteland. i have been wondering about that planet since about '85. and on the subject of toys. i notice a proliferation of the inflatables (an obsession with blow-up dolls ?) the nyt stated that the electic costs can run as high as $1000 (seems overstated). but anyhow do we need 10 kw christmas light displays ? another energy wasting toy i see advertised is the remote car starter. what a waste. i'm sure there are many more
It is ironic that the very waste that is hastening the arrival of PO will probably make it easier to deal with when PO arrives.
It is easier to give up luxuries than necessities.
A lot our our economy is based on luxuries.
So contraction will have a lot of effects its not simple.
Basically your talking major depression.
Unfortunately the very wide income distribution may mean that some people will have to give up necessities well before others consider giving up their luxuries...
I've always thought the big problem with peak oil would be economic more than technical. Sure, there are a lot of toys we could cut back on. But those toys are someone's job.
I'm reminded of a friend of mine. He's a rabid rightwinger; his dream is to meet Newt Gingrich one day. He's wealthy, but notoriously tight. When we go out, we can't go anywhere but the local diner, where you get a huge amount of food for $7. Otherwise, he'll gripe for days. His wife never gets flowers, candy, jewelry, or any other gifts. No kids, no pets - they're too expensive. No cable, though he does have a 20-year-old black and white TV to watch the news on.
He thinks What's Wrong With America is too much wasteful spending. By the government and by individuals. He's always complaining about people who waste their money on Nintendos, McMansions, iPods, eating out, DVDs, new cars, etc.
I can see his point, but if everyone did what he wants - only buy necessities - the economy would crash. Heck, he'd probably lose his job, since he's a surveyor. I keep telling him, rather than griping, he should be grateful for the "waste" - it's made him a rich man.
Leanan wrote:
"Those toys are someone's job." Right. and so is being a guard in a Gulag, or a U-Boat commander or a--- (you fill in awful things we pay people to do which shouldn't be done at all).
And after you count all that trash in those suburb garages, go to any big box store and walk down any isle, and check off the stuff that, like the jet ski and the exercise machine, we could be happy without. My favorite bad example is the little fuzzy battery-powered squirrel from China that my granddaughter is gonna play with for a few minutes, break, and ask me to fix- or just chuck into the garbage.
Just think of it for a moment- what could we do with all that misdirected human effort and capital? We could do everything we talk about here and more, and everybody giving up a useless job and doing one of the important and world-improving ones would be much much happier, and I for one and you, probably, would be happier paying for their doing an electric car or a windmill storage system than we are paying the same amount to the same person for crap.
I just had a new year's party with friends. We all are retired academics with pretty good incomes. They had all that stuff mentioned, and we had none of it. We all agreed that I and my wife were "lucky to be so well off and happy" relative to the others. Well, maybe because we did not even think of buying any of that stuff that the other folks had stored in every corner of their houses? And because we had a big good garden and a well-insulated house, and lots of trees- and a whole lot of land that was bought with the money that didn't buy that junk, those kerosene jags to Indonesia, and , and , and--.
What we need here is a sales job- sell 'em the goods instead of the bads. No lack of good jobs here. But it had better be quick.
I'm not saying suburbia should be preserved. Indeed, I'm in the camp that thinks it cannot be preserved.
But how to get there from here...aye, there's the rub.
Also, I think the suburb described is a rather wealthy one. It is not typical.
Your comment states the whole conundrum.
"Those toys are someone's job." Right. and so is being a guard in a Gulag, or a U-Boat commander or a--- (you fill in awful things we pay people to do which shouldn't be done at all).
People would rather be Gulag warden or U-Boat commander than UNEMPLOYED, they don't set up their own job and even hardly choose it.
Someone else does, WHO and WHY?
My favorite bad example is the little fuzzy battery-powered squirrel from China that my granddaughter is gonna play with for a few minutes, break, and ask me to fix- or just chuck into the garbage.
Yeah, but WHY did you (or someone in the family) buy it?
Because it's fun and a minor expense as a single unit even if it is tremendously expensive for the utter crap it is.
Do you think this will go away or that "crappy products" should be banned (good luck with this...).
Just think of it for a moment- what could we do with all that misdirected human effort and capital? We could do everything we talk about here and more,
WHICH of the "everything possible" will be worked on, who will decide about what to work on, how will the cost effectiveness of those jobs be assessed?
Do you think NASA is cost effective even for the wondrous things they do?
Despite producing CRAP the free market economy "works" because the constraints on costs and sellability are really tight and hard pressing.
It is very unfortunate that the overall outcome is disastrous but to fix this requires equally hard constraints, some form of dictatorship.
Too bad dictatorships are driven by power and control, the USSR/Russia was and is pretty good at producing weapons.
What could enforce "enlightened production" and/or "enlightened consumption"?
Some enlightened socialism?
Tough luck if we can judge from previous experiences.
And anyway it take time to build social habits...
Funky formatting.
That is not really how economics works, though. We don't have a king who can order the plants to retool and make it so.
And it's not just the car parts plants that will be affected. It will be everything. Waiters, college professors, highway engineers, airline pilots, hotel managers, salesmen, veterinarians, etc. Are they all going to become organic farmers or nuclear engineers?
I predict that there will be mass unemployment in the U.S. within the next fifteen years. Further, I predict that there will be a number of federal government programs to combat this mass unemployment; probably these will have little effect.
One of the things we should be thinking about now is how exactly to transfer income to twenty to forty million unemployed Americans. We're not going to leave them to freeze and starve in the gutters, but surely we need better mechanisms for redistribution of income than we now have.
Personally I'm a fan of Milton Friedman's idea of a negative income tax; politically that one might fly, and because we already have an Internal Revenue Service we would not need some brand new beaurocracy to administer it.
"I predict that there will be mass unemployment in the U.S. within the next fifteen years."
Because of oil shortages?
Don, previously you said that you wrote an economics textbook. That would require a serious economics background - could you tell us what book it was?
Could you outline the path you expect to take us from here to the U.S. of 15 years from now?