<This Week in Petroleum 7-18-07The Oil DrumAn Extension of the World Import/Export Land Model>
<DrumBeat: July 20, 2007DrumBeatDrumBeat: July 22, 2007>

187 comments on DrumBeat: July 21, 2007

Comments can no longer be added to this story.

BrianT on July 21, 2007 - 11:28am Permalink | Subthread | Parent | Comments top

Expat: You make very good points. I live in midtown Toronto and own a car.One could certainly drive less than 6000 miles a year-unless you are leaving the city it would be difficult to drive more than this number of miles (if you live downtown). The main point I was trying to make is that an extremely dramatic decline in US oil consumption in no way makes economic decline a necessity.

0
Comments can no longer be added to this story.
Cherenkov on July 21, 2007 - 2:48pm Permalink | Subthread | Parent | Comments top

BrianT,

You seem to believe that all the commuters out there will simply quit coming to work. There is not enough mass transit to make up for the loss of the automobile in the US.

But, more importantly, you seem to forget how large a part the automobile itself plays in the economic engine. The US was built around the auto. Think of all the businesses that directly and indirectly depend upon the auto. Of course there are the assembly plants. (Thirty years ago, that would have included steel plants and die plants and so on, but there is little left of the old industrial US). There are the mechanics. The gasoline stations. The manufacturer of gasoline pumps. Tire manufacturers. Road builders. Road maintainers. The people who build the machines that build and maintain the roads. There are the insurance companies. The auto glass people. The fluids people. There are drive-ins and after-market geegaws. And each one of those worker's salaries are spent within the community and circulated several times over.

This is a hugely integrated, complex system that needs each one of its parts to function properly. Now, that is not to say that once the shakeout begins it won't eventually settle. But to what?

I dare say it won't be based upon lots of people driving a few thousand miles each year. My guess is the automobile will become an item of extreme luxury. So, in the not so distant future, when you are walking in the cold to buy a loaf of bread from a local baker, that sleek black car that eases by will inspire typical American feelings of envy. It will not be Joe Blow, average American worker at the wheel, unless he is the chauffeur.

0
Comments can no longer be added to this story.
ScottM on July 21, 2007 - 5:22pm Permalink | Subthread | Parent | Comments top

Brian T:
To add to Cherenkov points, you live in Ontario and the auto industry here became the largest auto manufacturing jurisdiction in North America a few years ago. Its decline will affect Toronto probably more than many American cities. Also high oil prices are helping push the Canadian dollar higher. This hurts the auto industry and all the rest of the manufacturing industry in Ontario. Without manufacturing we in Ontario will probably become a have not province. I am invovled in a plant that supplies the auto industry and with my work I deal with outside contractors and suppliers. The economic spinoffs from these facilities will be hard to replace.

0
Comments can no longer be added to this story.
BrianT on July 21, 2007 - 7:44pm Permalink | Subthread | Parent | Comments top

Guys: The loss of auto manufacturing has nothing at all to do with peak oil. Oil could be $5 a barrel and eventually a lot of these jobs are going. Chrysler just partnered up with Chery in China. There is talk of India putting out a $4000 car soon. You can't blame every single problem in the world or your life on peak oil.

0
Comments can no longer be added to this story.
neutrino23 on July 23, 2007 - 12:20am Permalink | Subthread | Parent | Comments top

You make a good point. Certainly there are people that commute a fixed distance to work each day. There are also a large number of people that drive indeterminate distances each day. Think of service people traveling around a territory of multiple states repairing fairly expensive equipment. Think of salespeople visiting customers in multiple states. Certainly some of that can be done by phone and computer. However, face to face contact is most effective. The company that takes away the company car and tries to substitute video chats will lose market share to the companies that keep sending sales guys to each customer. The change will happen eventually, but it won't happen quickly.

0
Comments can no longer be added to this story.
wizofaus on July 21, 2007 - 9:05pm Permalink | Subthread | Parent | Comments top

I'm not sure many people would say it was a necessity - with prudent government policies, and a massive change of attitude change among consumers and corporations, any modern, sophisticated economy should in principle be able to survive rapidly decline oil supplies. But those policies and attitude changes needed to happen yesterday, if significant decline rates are to start in the next 10 years. Not only didn't they happen, but there's no indication that they're likely to any time soon. The only thing I can see staving of significant economic decline is for oil production to be boosted sufficiently to hold off the peak for another 10 years: not impossible, but it's hard to see where all that oil would come from. Oh, and genuine planning for that peak would have to start within the next or so year.

0
Comments can no longer be added to this story.