81 comments on The Future of (Natural) Gas from the Western Canada Sedimentary Basin?
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If this is a typical natural gas scenario, it looks like I need to be able to heat my home with half the natural gas in 2020, right?
Hmmmm... let's see: 2020 is 13 years from now. That means I have to reduce consumption by 5.15% per year on average. Sounds like a mild PO scenario.
I guess I better get those windows fixed and better curtains on, some more insulation for the walls and maybe a solar heater or a heat pump... :-)
You have forgotten, to name two things, (1) the increase in population requiring heat, and (2) the increase in electricity production, presumably by natural gas generators. Then, we could begin talking about the ongoing demand destruction in industrial usage...Peak NG isn't going to be mild at all.
Actually, reducing ones NG consumption by 5% year over year is not that easy, but it is still better than having to reduce it by 7%. To me it looks like the NG generator scenario is basically a non-starter. Utilities which continue to lock themselves into that hell-hole probably belong there. I feel sorry for their customers, already. On the other hand, enormously rising electricity price for areas which are suffering from such mismanagement will fuel adoption of wind and solar energy which will become far more competitive just when NG prices will go through the roof, again.
yes, those clever suburbanites they have figured out how to insulate a home. but then they build a 4000 sf vinyl sided mcmansion(far from work so they can drive the suv's in a rat race up and down the freeway to nowhere - two income "family" i might add) but they have better schools and better parenting out there in the wasteland.
... and what happens when everyone in your street, town, city or country has the same idea?
Is there enough insulation material etc in existence?
And how about the skills to fit heat pumps etc?
And what about the poor or those in rented properties?
"Is there enough insulation material etc in existence?"
Mineral wool? Sure. It's made from silicates. Most of Earth's crust is made from silicates. How about EROEI?
"According to a 1996 report on the energy, environmental and economic benefits of fiber glass, rock wool and slag wool insulations, conducted jointly by the Alliance to Save Energy and Energy Conservation Management, insulation produced each year saves about 400 trillion Btu annually, or more than 12 times the energy used to manufacture insulation."
http://www.naima.org/pages/resources/faq/faq_mineral.html
"And how about the skills to fit heat pumps etc?"
That is easy: it's called "education"! Anyone can do it. It's just like going to school.
"And what about the poor or those in rented properties?"
We can force the property owners to take care of that. It's called "laws and regulations". Write to your representative.
Geez, IP, I don't know how you see to write with your head so firmly stuck up your ass. I doubt that you even own the condo your in much less a house much less an income property. But, I am a landlord. So consider your response:
Oh yea, you're going to "force"me to take action. Now I happen to have been cncerned about energy for probably longer than you've been alive so my rental is highly insluated with double pane windows. But it does have an obsolete propane furnace (I'm in the boondocks.) use because they heat using the wood heater.
But, let's suppose your "laws and regulations" require me to install the most efficient heat source available. Well, I can't install a ground source heat pump because the electrical system won't handle it so I guess I'm "forced" to put in a new propane furnace. And, let's assume the replacement is estimated to cost $10k. What's my reaction? Screw it. I'll pull out the furnace entirely and they can just heat with wood. But they have to have a funace. OK.
So, you are forcing me to spend $10K. Numerero uno, the rent goes up based upon the real rate of inflation to cover my capital costs. I'm losing $1k per year so to keep it simple, my minimum increase is $100 per month because that's what I'm losing on the $10k (Yea, it's rounded but landlords work that way.). BTW, the $1k is lost interest.
NOw I've got to pay for the furnace. Well, the IRS won't let me deduct the expense in a few years. No, they want me to deduct it over probably 15 years. I figure five years is reasonable so I tack on an additional $170 per month (remember, landlords round things off to the next highest number). So my lucky tenants are now paying $270 a month more. Can they afford it? I don't care. I'm perfetcly willing to close it up since I own it outright and my guess is someone will pay the higher rent...but they are unlikely to use the fancy furnace.
Am I going to take back these rent increases once I've recouped my money? Of course not. Now, other landlords might have other considerations so I can't speak for them. However, I'm willing to be t they aren't much different than I.
By the way, why don't you tell us all of your experience installing heat pumps.
Todd; a Realist
Todd certainly talks like a landlord. In my experience, landlords are parasites who find death adders in their pockets when they're asked to shell out for maintenance. If they even think something will happen to cut into the profits they make from owning somebody else's home, you get a long sob story about how it'll all come out of the tenants' pockets.
The most significant thing in Todd's post is the information that his rental property is in the boondocks. When Peak Oil starts biting, virtually the only people wanting to live there will be people with a job on site (like farmers). Instead, people will be willing to live in a shoebox if it means they can cut their travel costs down to manageable levels.
What does this mean for Todd's property? It means he'll lose his tenants as they either leave for a saner location or have their pick of properties after the rest of the population leaves. Prices will be so low that, if they stay, they may even buy a place and stop providing any landlord with their pocket money.
Todd will be lucky if he can get out without taking a huge loss. And I'll be saving my sympathy for:
(a) Outer suburban homeowners with mortgages far higher than their homes will be worth and petrol bills screaming for them to sell up and move; and
(b) Inner-city tenants who will be faced with the choice of staying put and paying triple the rent, or moving into a shoebox and paying 50% more.
I love sweeping generalizations from people who don't know what they are talking about. You're a case in point. First, if you knew anything about business, you'd know that no one, not even landlords can operate at a loss. If a law were passed that sitpulated that I had to spend $10k for a new furnace, I'm not going to just give the money away. And, it isn't that I abhor spending money. When I replaced the roof a couple of years ago, I added insulation to bring it up to R-30. It was an R-20. No rent change.
Second, take a huge loss? Naw. As I said I own it outright. Loss of income? I can survive quite well without it. In any case, there are few properties like this with power, phone, water and views to die for so re-renting it even at a higher monthly amount wouldn't be a hinderence. Why don't I ask more now you might ask? We have wondeful tenants and the current rent is about what they can afford. I'm not greedy. They been there seven years or so.
But, there's more to it than money or a place to live. As I've said many times, I'm a doomer and I want tenants that share this belief; who understand what may happen in the future. They know what action will be taken, and their part in it, to keep going if things get tough. This includes knowing that I won't throw them out if they can't pay the rent because of loss of income.
However, mandate that I spend money on a funace, then I have to raise the rent to recoupe my expenses.
One final thing. I was born at the end of the Depression so I had contact with all the family members invovled. My dad's father lost his business, his home, everything. He went from lower upper class to dead poor. My mom's parents took in relatives who couldn't afford any rent. They lived in the basement. My folks often had very little food. Unlike the Depression, people today have the option of making choices as to how they view the future. There will be winners and losser.
Todd; a Realist
On re-reading this later I see I forgot to mention the rental is on 17 acres. Yup, besides a lot of land, they get mountain, valley and views of the Pacific Ocean from a private road. Not that it makes a difference but it's worth noting I suppose.
Hello,
well, Mr. Infinite has some experience with how other places do things - like Germany. For example, you write 'my rental is highly insulated with double pane windows' which means you are just about par for the course for Germany, 1980 or so - you know, years after the first oil shock. Highly insulated in Germany these days are triple pane windows (vacuum or inert gas filled) - and yes, they do cost a bit of money. As does the solar water heater - but generally, the PV installation pays for itself in a few years, if you have the capital to install one.
You may want to read more about what is fairly common in Germany at http://clvweb.cord.edu/prweb/press/biohaus/journal_jan.asp - they are attempting to build something in the U.S. which is not considered all that extraordinary here in Germany.
I do think at times IP goes off the wall, but in part (though how large a part remains open) it is because he is trying to describe things which other people in other places consider absolutely normal, while being told this is not how people are. Or how it won't work, even though he knows it does in other places.
In a way, his reactions are a good indication of how the world often views today's America - with utter incomprehension.
And since most of the world isn't comprised of Americans, his points aren't actually all that irrelevant, even if in a purely American context, they seem strange.
If Americans keep insisting that they can't actually meet the challenges that other people consider utterly routine, the point will come (if it hasn't, actually), where America will sit isolated while the rest of the world goes along, dealing with life, ignoring the 2 year old's tantrum in the corner - except baby has the Bomb, which is a real cause for concern. But blowing things up is not actually all that useful - how is oil production in Iraq going these days, by the way?
rental properties are subject to supply and demand like most everything else and there are good renters out there (although relatively rare). and even when there was a glut of rentals on the market, good renters were out there, but to attract good renters your property has to be competetive with the market (and that would include the cost of heating the shack). another big factor is whether the landlord owns the property outright (and not just working to make money for the mortgage holder). if the landlord has to keep the place rented to make the payments, they may be more inclined to accept less than desirable renters. now, if you own the property, having it sit unrented for awhile will hurt, maybe hurt a lot, but it wont mean that you loose the property. * (from slumlordin' 101 by elwoodelmore)
Expat,
I really love your posts but regarding energy efficiency what were you doing 25+ years ago? Were you as concerned then as you are now? You talk about what the Germans are doing today. Ok. Do they all use air-to-air heat exchangers? Do they all use heat exchangers on their sinks/tubs to reclaim the hot water? The list of things that can be done is endless. And, it's not just what they are doing today. Is everything being retorfitted with the most up to date stuff regardless of its age (For all I know it might be.). Is Germany mandating SIP consrtuction? Are they mandating PV/wind systems for individual homes (My PV system is 3.6kW. What's the size of your system?)? What about active solar heating/cooling systems? They're certainly proven. How about Trombe' walls?
As a landlord, you denigrated the double pane windows I installed. Yet, I did this over 25 years ago when no one cared about energy efficiency. Hell, when I designed my house about the same time with insulation that grossly exceed the standards at that time (and currently) and used solar insolation for 30% of the heat, the county building department thought it was funny - they actually asked why I was doing this.
But in the case of my rental, I offered to install friction-fit, removable interior storm windows to make them triple glazed like I installed on my own house. My tenants declined. They certainly aren't fancy but they work for me.
I and my tenants are essentially carbon neutral for heating since we heat with wood. Mine comes from my property and theirs could too but they have physical limitations so they buy it. As an old fart, I can't cut enough for both of us. How many Germans are carbon neutral when it comes to heating (and in my case, cooling)? My guess is zip.
My point to all of this is that there are many paths to energy efficiency and one can't generalize. The US is clearly an energy hog. As I said above, some will win and some will lose.
Todd; a Realist
Actually from memory 25 years ago (or 30) people were much more concerned about energy efficiency than now.
The price of oil and electricity, relative to incomes, was much higher then than now.
However building technology has improved a lot since then. And some jurisdictions (California, notably) require much higher standards of insulation etc.
I agree with you that as a landlord, you are only going to install new technology as and when you have to, and that will be reflected in higher rents. And so it goes for a propane boiler.
My own take is that we can incentivise people to install heat pumps (and we should) but we shouldn't be in a position of mandating that sort of technology. Insulation is a low cost/high return proposition, heat pumps are a high cost/high return proposition.
It may also be reflected in lower costs for the tenant.
"I doubt that you even own the condo your in much less a house much less an income property."
It's OK... we own four properties on three continents. The largest property happens to be my own. I know what the heating bill looks like because I am paying it. :-)
"Oh yea, you're going to "force" me to take action."
I am not. The lawmakers are. They are doing that already. For one thing, there are safety regulations. You can't have people live in an unsafe house. If you do, you are breaking the law. Are you breaking the law, Todd?
Since you are already regulated, what are you getting upset about? You will be regulated some more. Big deal. Actually, you might just be penalized by energy prices to the point where you won't find people to rent your place. If you don't like the business, sell your income property and invest your money otherwise.
As for the rest of your argument: yes, rents will go up. The poor are screwed. They poor are always screwed. It does not take PO to screw them. How do I know? My parents were poor when I was a kid. Man, were we screwed, and gas was cheaper than water is today!
I did not need PO to be screwed as a poor kid, Todd. I really didn't. And that is just the short version: how screwed the poor are is mostly a function of politics. Therefor the poor in the US are double screwed. The poor in Europe, on the other hand, are only half screwed.
"By the way, why don't you tell us all of your experience installing heat pumps."
I don't have any, yet. I keep asking my parents, if they want one, but they rather pay the heating bill as it is, right now. I could push them harder to do it, but why bother? A year or two down the road they will reconsider, anyway. My Mom is good with numbers. She will figure out how much money she can save once the NG in their neighborhood gets really pricy.
IP,
You know, I've allowed myself to be sucked into thread hijacking and I should have never responded to your initial post. I'm a Mod on another forum and I should have known better.
If you want to continue along this line, repost it on DrunBeat.
Todd
the poor in the rented properties will just have to get a no money down e/z pay loan (garanteed by the govt.) to buy and fix up a hovel of their own. then they can become wizzards of the financial world (use the hovel as an atm)