Energy/Credit/Currency Crisis Open Thread
Posted by Nate Hagens on October 6, 2008 - 8:50am
Topic: Miscellaneous
Tags: currency, demand, energy, euro [list all tags]
In what feels like the middle of a multi-round heavyweight bout, the world financial markets continue to be buffeted tonight, following the recent trend of lower equities, stronger dollar (vs Euro, SF and Sterling), sinking energy and commodities prices and considerably less confidence in the overall system than in weeks prior. Theoildrum.com has historically focused on the biophysical aspects of a world economy based on energy (and occasionally the human aspects that impact energy demand). Most research here attempts to predict what world oil and gas production might look like in a future where depletion inexorably overtakes technology, and the costs of procuring large amounts of quality fuels continue to increase. However, the spiralling of recent events make it likely that, at least for a time, be it a week - or several years - oil and gas depletion might be more than offset by the reduction in demand due to the manifold implications of the reduction in global financial leverage and resulting credit contractions and dislocations in the real economy. The linkages between finance and energy are becoming more direct, but I'm quite certain there are many under the surface we are yet unaware of.
Below are a few article links followed by some open ended questions. Please deposit data, charts and links of relevance.
From Nouriel Roubini's article in Forbes:
In a solvency and credit crisis that goes well beyond illiquidity, no one is lending to counter-parties as no one trusts any counter-party (even the safest ones), and everyone is hoarding the liquidity that is injected by central banks. And since this liquidity goes only to banks and major broker-dealers, the rest of the shadow banking system has no access to this liquidity as the credit transmission mechanisms are blocked.
From Bloomberg, on European Union Leaders Stop Short of Regional Plan on Bailouts:
Sarkozy said that ``all actors'' must be supervised, including rating firms and hedge funds. Executive-pay systems must also be reviewed, he said.
``We want a new world to come out of this,'' Sarkozy said. ``We want to set up the basis for a capitalism of entrepreneurs, not speculators.''
Anticipating increased spending, declining tax revenue, and government bank takeovers, they called for ``greater flexibility'' in the application of European Union competition and budget rules.
And in addition to an earlier announcement that Germany would guarantee all bank depositors (much like Ireland announced last week), HYPO did get a 50 billion Euro government led bailout. This on the heels of BNP Paribas buying out Fortis earlier today.
Tonight the Euro continues to weaken, and is now at levels not seen since late 2004. It is difficult to keep tabs on all that is happening, both globally, nationally, and locally. My personal view of our future continues to be a probabilistic distribution of many possible outcomes, the odds and timing of each, periodically adjusted based on the actions and feedbacks of important world actors. The 'public' is likely to become as important an actor as any.
The odds that peak oil is now behind us are now (in my opinion) nearly 100%. The odds of global economic expansion (and growth) now being over are also high (this has been oft-analyzed but here is a good overview of the reasoning). Whether we will have inflation or deflation of 'money' (as opposed to the four real capitals: natural, built, social and human), is still an open question and depends on what path world central banks choose. History suggest that the news has been so bad for so long that we are due some respite from concerted central bank intervention that props up confidence and the markets for a time. But history has been based on growing energy surplus, and ultimate confidence that one will get a return OF capital in addition to a return ON capital. Thus, the current financial/energy landscape may accelerate the popular modern timing of exchanging bank digits for real capital from the end of ones career, to somewhat earlier. Yes, this time it may be different.
Recent events are certainly stirring the pot of possibilities - here are a few questions for general discussion: (no right or wrong answers...;-)
- If/when the dollar rally ends will the oil sell-off end as well? Or do they have fundamentally different causes? (Here I would suggest that oil selloff is largely capital flow/hedge fund driven, and dollar rally has been largely flight to quality and repayment of debt denominated in dollars and leverage is mandatorily reduced.) (Note: Dollar rally vs Euro is 82% correlated with rise in 30 Yr Treasury prices
-What impact would a demise of the Euro have on the future for energy? (Note: tonights ECB call for 'greater flexibility' does not seem consistent with formal limits on borrowing and fiscal deficits by EU members under the Stabilization Pact)
-Will the fall out from the credit crisis cement peak 'energy'? (Presumably, we are headed for a depression and concomitant demand reduction - will the time gap brought about by credit crisis in creating/financing of new energy infrastructure now be overtaken by ongoing depletion in coal, nuclear, and oil industries?)
-Given what is happening, would a 'fast-crash' scenario be, in many respects, preferred to a long drawn out slow crash? (In the sense that a fast crash leaves more quality resources in the ground, and creates enough pain and recognition that our current 'ends' are not the best way to spend our remaining fossil energy surplus?)
-If Peak Oil means the end of growth (I think this likely but not certain), what do people do with IRA's/401ks that aren't due to be redeemed for 10-30 years?
-Would a concerted 100 basis point global ease this week do anything?
-What other Black Swans could make this situation better, or worse?
It seems (at least one) genie is out of the bottle. The time to ask comfortable questions and get comfortable answers may be passed. But uncomfortable answers probably still have a window.
I imagine there will be some growth in some companies for a while as supply chains shorten and patterns of consumption change. More of this will be zero sum than we are used to (More business at the expense of of others rather than as a result of overall growth). I think the realization of Peak oil and resource limits will come when the financial issues subside and the recovery runs into a wall.
Perhaps we see world wide competition for growth at what will prove a zenith - and we witness an interim phase before decline?
Investment, such as it has been in the energy industries, has neither called forth significant energy growth, except perhaps coal, nor a uniform economic (industrial) growth world-wide. China and Russia and India have 'grown' but alongside some very dodgy (consequent?) financial arithmetic in N America and Europe.
My guess is that on a world plateau we are seeing competition for growth,with winners and losers - beginning to approach zero sum. This 'competition for growth' phase anticipates any overall decline, and will see fewer countries achieving growth, before the next phase of overall decline?
We ain't seen anything yet.
I think there is a lot of room for growth, at least world-wide. We can all be more like Japan, and Japan isn't optimal by any means.
The problem I have with stats like these is that $/kWh, or kWh/$ have not to my mind been shown to be constant across different sectors of the economy. They probably vary a lot for different activities. And dollars probably embody more than energy, although energy is probably a significant component.
To a large extent then, what we see on graphs like this will depend on what mix of economic activities are conducted domestically in each country, and what is imported. Japan, for instance, does not do a lot of primary energy extraction domestically.
Well, in the US, transportation is 28% of energy consumption, and in Japan it is only 23%, even though Japan make do with half the energy consumption per capita. There are similar figures for residential use, where 68% of US consumption is devoted to lightning or area heating/cooling, and where ditto for commercial is 48%. These consumption patterns and differences are inherently domestic - it is not stuff you import or export where lots of energy has been sunk.
If anything, I think Japan's industry is quite heavy. Ship-building, automobiles, steel... Sure, they do not do a lot of energy extraction domestically, but such extraction's energy consumption hardly seems to show up in a total energy breakdown of US consumption either. (The main item may be oil refining at 16% of industry's 33% of total.) For Canada, though, I think you have a point, as they have unconventional oil and uranium ore and actually export a lot.
Thanks for your response. It's good to know that the effect is minor - I had wondered about the extent to which economies apparently becoming more energy efficient was due to "off-shoring" the more energy intensive parts of the economic chain.
Bingo!
China oil usage is up but how much of that is just transfer from economies like the US?
I cannot agree more.
I'll stay out of the discussion started by mistermarko regarding the importation of raw materials and export of finished products. But regarding Japan's lower energy use for transportation and heating/cooling, we must bear in mind the differences between Japan, which is a bit smaller than California and the US regarding size (and therefore travel distance) and climate. Using Kansas City and Tokyo as representative of the national average, Japan has a seasonal temp range of 50F (85-35) whereas the US has a range of 75F (90-15) Much more cooling and especially heating is required in the US continental climate vs. Japan's maritime climate.
We cannot all be more like Japan. Japan functions by importing commodities and exporting finished products. In a global economic downturn demand for such produce (which does not include food or energy) decreases, so one countries export gain is necessarily another's export loss. Japan will be keen to hold on to their share. Any other countries trying to emulate them will face a battle (so to speak).
Mistermarko,
Japan imports a lot of commodities from Australia, but that hasn't pushed down out GDP/kW. This graph shows that its possible to have a high GDP/capita without being an energy glutton. Europe and Japan have high energy prices and high efficiency standards. Australia, Canada and US have a lot of room for further improvement.
Then again we could try to become more like KSA, Russia, S Africa, by keeping energy prices low and "waste baby waste". Who are those poor sods below S Africa? ( Iraq?).
Mistermarko, the downturn is temporary, whatever you may believe. Think like this instead: When it is too expensive to buy extreme gas guzzlers, what do you do? Well, you probably pimp your small car more instead!
Growth is a function of technical progress and sound economic policies. Energy plays a role, of course, but there is a lot of room to rearrange current energy consumption to allow for added growth. We need not even force it - markets will take care of this by themselves. (Of course, it would help if the US slowly introduced European gas taxes, but I realize this won't happen.)
Jeppen, the first Great Depression was temporary - it ended with the Japanese invasion of China in 1937 and the German invasion of Poland in 1939. You say 'there is a lot of room to rearrange current energy consumption to allow for added growth.' This does not contradict my point, the economic problem is not rearranging current energy consumption, it is coping with falling energy consumption. And energy consumption is falling because energy has become too expensive. Economic growth could only take place in this situation if society and industry became more energy efficient and at the moment this is not happening enough. However, I agree with you that growth is (sometimes) a function of technical progress; but nothing short of molecular engineering will get us out of this predicament. On that note: www.myidea.net/ideas/node/326
Mistermarko, oil use per capita has actually fallen 10% since 1980, so we are already coping with falling energy consumption in some sense. During this time, average world GDP per capita has risen around 50% in constant prices.
Granted, the fossil oil per capita will decline faster after peak oil, but as I have argued in other comments, I believe we will cope quite well.
(Sorry, but I don't understand the relevance of your reference to molecular engineering.)
The Global Footprint Network gives the 2003 global biocapacity per capita at 1.8 hectares, the global footprint per capita at 2.2 hectares (the deficit representing resource depletion) ... Japan's 2003 footprint at 4.4 hectares, and biocapacity at 0.7.
By contrast the US 2003 footprint is estimated at 9.6 hectares, and biocapacity at 4.7 hectares.
So while Japan can't live on the current footprint of Japan's economy without importing most of its commodity or embedded resources per capita, on the GFN estimates (and the caution is needed that footprint estimates are intrinsically rough estimates), the US could do, and have resource to export, unfinished or embedded, on top.
I think very few folks will want to be like Japan once oil scarcity becomes an issue. Unless Japan finds a real way to transport goods by sail that economy is in a horrible position.
Coal did the job for some time, I believe.
Room for growth?
Well, maybe.
The slices might still depend on the size of the cake.
Japan hit some kind of 'growth' ceiling for over a decade (also involved dodgy financial arithmetic) but has nudged up somewhat recently. Is Japan's ability to engage with recent China something to do with this recent bit of growth? China is now Japan's biggest trading partner, overtaking USA. Also Japan's relationship with China seems to have turned on a sixpence (dime) this year - agreement on exploration and development of previously disputed gas offshore.
http://www.iht.com/articles/2008/06/18/asia/gas.php
Global competition and the ability (the race) to command resources?
(We used to talk about limiting factors analysis in process control but it gets difficult on the global scene, what with changing balances between manufacturing and services within GDP - also, how much competitive 'advantage' [sic] does USA get from its presumably larger allocation of GDP to non-discretionary petroleum transport kWh?)
The "growth ceiling" was mostly a drought in domestic investment in productive capacity, as Japanese industry shifted from roughly 90% domestic content of production to roughly 60%.
However that shift was largely outsourcing production stages that could be handled well in a labor intensive way in South East Asia and China ... the "outsourcing of material and energy" was the foundation of Japanese heavy industry for its initial post-WWII growth industries of steel and ship building, continuing into the second stage with motor vehicles.
So we understand that various factors due to deregulation and corruption within the financial industry likely lead to the crisis that the USA is facing. But then you have to ask: Is that enough for Europe to dive head first into the same predicament? Germany and England appear to be tumbling at the monent.
1. Does Europe show the same trend to deregulation that the USA has?
2. Does Europe have too much invested in the USA?
3. Are these just all multi-national firms and the problem is not radiating from the USA but is global?
4. Is it all based on the latest oil shock?
High oil prices are uncomfortable, but IMO had little to do with our economic crisis. The crisis was entirely on account of trillions of debt collapsing; debt = money, collapsing money supply = deflation. What happened in dotcom was also involved collapsing debt, but a relatively minor amount as vaporware companies went bust... very few employees lost jobs. The numbers are so large this time that, as we can see, major banks worldwide are collapsing. Eurozone countries now guaranteeing bank deposits will find themselves bk, not least Iceland where bank debt = 7x gdp.
Seven fattish years followed by seven lean ones... if we're lucky, peak oil to be in full bloom as we try to get out. GD had cheap oil and a relatively young work force, we won't.
Ah, so you say, eh? Hmmm...
http://switchboard.nrdc.org/blogs/dgoldstein/oil_prices.html
The mortgage credit crisis is not only due to subprime lending: even the giant government-sponsored enterprises Fannie Mae and Freddy Mac are seeing their portfolio values decimated by defaults. But these defaults are not random: they have a very clear pattern that has mysteriously been overlooked by the financial services sector. Mortgage defaults occur in places where the need to drive is very high — strolling suburbs with little or no transit service. Urban areas with compact, walkable neighborhoods and good transit services have been largely immune from the credit crisis. What date we have suggests that the lower the auto transportation cost associated with living in a certain neighborhood, the lower the probability of default.
And from 2005 - prescient:
http://www.nbnnews.com/NBN/issues/2006-08-21/Coast+to+Coast/index.htmlCo... Rising Gas Prices Kill the Suburbs?
Once Americans start to realize that high-cost gas is here to stay, more home owners, including young families, will want to live in central cities and there will be a push for more public transportation, predicts Stuart Gabriel, director of the Lusk Center, a real estate think tank at the University of Southern California. In the Los Angeles area, Gabriel says that KB is leading the way to a new type of neighborhood that will give the city European-type higher density.
Etc.:
http://www.iht.com/articles/2008/06/24/business/exurbs.php
Cheers
That first link gives a notion of proof to something that I've been thinking about for a while.
While it's tough to directly link oil prices to the credit/mortgage crisis, it makes sense that it would be a catalyst.
It'd be nice to see the source and evidence that Goldstein has, but he basically confirmed my theory. That when you take at-risk mortgage borrowers who are already teetering on the edge of being able to pay for necessities and their credit card and mortgage payment at the same time, and raise the most vital necessity of them all in order to make that money (gas), those at-risk borrowers find themself over the cliff and in the deep end.
Multiply that by the number of sub-prime at-risk mortgages, and package them together and sell them off to investment banks whose mystery borrowers default, and down the hill it goes...
I suppose this may be obvious to some people. But it is not obvious to those outside of the loop.
The problem I see with the growing demand for public transport is that most transit planners and engineers are far too excited about building their pet projects than trying to squeeze the most out of scarce public funding. I predict that some cities will spend the next decade building expensive rail lines while they disintegrate because they have no money for schools, bus service, medical care, etc. We simply can't afford urban mega-projects since public entities will be strapped for financing AND the benefits will be isolated to very few of urban dwellers. The best hope we have is instituting means to better exploit the carrying capacity of cars (we have a huge fleet and the urban environment accommodates them now without any retrofitting), get people on bicycles and their feet, and build electric-based transit modes that don't require new rights of way. ROW acquisition is very expensive and the streets will be less and less busy with cars as we move on into the long-term effects of peak oil. Of course, every city is in a different position and has different assets. Here in Seattle, a fleet of 159 electric trolley buses serves over 75,000 riders a day. It could be expanded at $4-5 million a mile and given greater priority over other traffic. However, our region is more interested in building light rail (tunnels, elevated portions, etc) at $300 million a mile and leaving the buses stuck in traffic. By the time that light rail project is done (15 years; 2023) millions may have already fled to the rural areas in order to survive.
WHT, here's my 2 cents worth. Finance is truly global, it is far easier to move a few electrons than physically ship any piece of goods. From my PC with a few clicks I can transfer money around the globe in a search for the best returns or higher security. IMHO banks have embraced globalism for more than most other businesses and will have offices in all major banking centres, London and New York being the major dealing centres. We have thus seen banks being failed-out in both the US and Europe.
This weekend the previous weekend's fail-out of Fortis bank itself failed following continued withdrawal of funds, with the Dutch government nationalising part and the remainder being taken over by BNP (French bank). On Sunday Germany's Merkel guaranteed all German savings, a day after she rebuked Ireland for doing much the same thing, previously she vetoed French efforts to launch a pan-EU rescue package! A week is a long time in finance.
Leverage by European banks is in many cases even higher than that of US banks, in some cases the amount of "assets" (loans, CDs, crap...) being several times the GDP of the home country. Some European countries also have housing bubbles. What has caused all this?
Many years of low interest rates has driven people to look for higher returns using ever more complex methods and greater leverage. I have even read Japanese housewives have borrowed money to gamble in the Yen carry trade! Higher returns only really come at the expense of higher risks but this seems to have been overlooked until recently (cheap money forcing out prudence??). IMHO this process of slicing and dicing, passing the buck, writing insurance that would not be called has been done all round the world wherever gambling is allowed. So "does Europe have too much invested in the USA?" not really because the problem is not isolated to the US, it's only a problem if or when it goes wrong:-) It's similar to writing insurance policies at too low a rate, i.e. works fine when there are few claims but goes horribly wrong when there are many claims. The US being a huge economy impacts on the global economy and it seems perhaps more excesses were made, e.g. NINJA loans.
"Are these just all multi-national firms and the problem is not radiating from the USA but is global?" Many multi-national firms are being affected but also any entity that needs to be able to borrow money, e.g. to smooth out income vs expenses, the state of California, retailers often pay rents quarterly... Hundreds of billions have been taken out of the capital markets and this is having a big impact. Of course there are some multi-national firms that are cash rich and rarely need to borrow. They are ideally placed to capitalise. Warren Buffett says “In my adult lifetime, I don’t think I’ve ever seen people as fearful”.
What's going to happen next? I would expect the central banks to try lower interest rates. Will it work? no because it doesn't address the root cause and the base rates are no reflection of what people are having to pay.
"Is it all based on the latest oil shock?" No, it would have happened anyway just like previous "panics". Of course the speeding bullet of infinite growth is going to run into the wall of declining EROEI and cause more problems.
Kind of a perfect storm
For quite a while, at least 10 years, I've been convinced that an economic collapse would precede the worst of an energy crisis. Colin Campbell has talked about this off and on for some years now. It shouldn't surprise anyone, although the particular way the economic scene plays out is impossible to anticipate, beyond causing mayhem and impoverishing possibly billions of people.
I took some time last night to watch End Of Suburbia" again. From 2003. Kunstler, Ruppert, Bakhtiari, Deffeyes were all right on target. There's a little snippet with Deffeyes describing the economic ramifications in words that perfectly fit today's scene. Deffeyes argues that the economic meltdown is the energy meltdown. Thermodynamics. I do agree as well that we are at the point where predictions beyond mayhem can no longer be made.
cfm in Gray, ME
Four years ago I started showing End of Suburbia around town, which led to the formation of a local NGO here that I am still active in. I have many copies of this film and was thinking about handing them out and reshowing it since people tend to give credence to those who are able to predict the future!
With a few small modifications, I think you've outlined things nicely.
This one, however, is the wrong question since we aren't likely able to steer things one way or the other, at least not intentionally. Also modified:
Cheers
The idea behind the 700 billion bail out is that the government takes over bad assets. Then the economy grows, the assets regain their value and the government sells them. Without energy the only thing that will grow will be the money supply creating another inflationary bubble that will also crash. Here are some wild possibilities that could divert energy from the world economic system back into America:
An Alan Drake rail system could divert wealth from OPEC/energy exporters and keep it America, and grow the economy.
A collapse in the dollar relative Chinese Yuan that could spur the growth of American manufacturing.
The mass manufacture of a cheap electric car --but this could be a techno dream.
The only questions are is America in too much debt for any of the above to happen, and will we go through a inflationary depression first? I wonder if it is possible that civilization will not collapse because of this: Instead of requiring energy based growth from fossil fuels we can somehow mutter along by not transferring wealth away-- by building a train system for example.
Personally, in my mind's eye I cannot see a clear vision of how far things will fall. There are so many variables. The biggest variable isn't even economic, it's the climate. A sudden flip in the climate in either direction and all bets are off. Is that going to happen or not? That's the $64,000 dollar question. The only way around this is to assume climate's rate of change will be no more drastic than it has been in, say, the last decade. But that appears to be an obviously false assumption given indicator after indicator is being realized decades, even a full century, faster than ever anticipated. But let's take our assumption and go with it.
We must anticipate major dislocations with the rate of change we have seen so far. More droughts, more heat waves, more freak storms, more flooding, more lost coastline, more Katrinas and Galvestons. Given we have not been able to restore any of the places facing major disruptions this far despite - until recently - a supposedly strong economy, we must anticipate further destruction will be met with even less renewal afterward. This equates to massive population disruptions when considering a century time scale.
And we've gotten to the economic and political meltdown yet. How do we deal with the economic meltdown? I think you have to ask first, how deep will it be? At minimum, we are seeing a massive realignment in the financial industry. Personally, I'd liquidate it completely. It has no role to play in a sustainable economy. The wealth they have is paper, not real. It's only important as long as debt exists. Easy: eliminate debt. Forgive it all. But liquidate the financial industry down to zero. The only remaining banks must be that: A place to save, nothing more. But I'm drifting.
Housing prices have at minimum two more years of free fall. Banks are failing and will continue to. Well, not failing, but being gobbled up. With nothing to buy with, service industries are going to disappear/consolidate. That's 70% of the economy. How much of it is useful? That's how much might remain when all is said and done. I've no way to guess what that percentage might be. (It might be something for Gail to look into and post on.) Regardless of what that number is, does anyone see the manufacturing base rebuilding at anywhere near the rate the service industry contracts? No. That's a lot of people with no work at a time when the only tool our government has to deal with it is more debt, more dollars printed to provide food, make-work and shelter for many millions of families.
When we start to talk about spending programs to put people back to work, what do we build? Where? Do we spend any money on the Hurricane Coast knowing we can't rebuild what is already there? Do we spend money all along the southern tier knowing there's not the water to support it given the droughts expected there, and those already existing? Etc. Before we start building intercity rail we should have a national dialogue of just what the nation's going to look like in 50 years. Even with that effort we would likely end up building a lot of rail to nowhere. Without it, we almost certainly will.
As I said, when I put all the puzzle pieces out on the table I have a hard time seeing what the picture is/will be long term. I had told my wife this time period would be crucial, and it has been. The next step is the next 30 days and the election. Yes, I know in many ways the election will be immaterial, but in others it may be significant. Actually, the House and Senate elections will tell us more than the Presidential will. If we see some Velvet Revolutions occur, i.e. some incumbents tossed and out-of-nowhere populist candidates voted in, then there may be hope this slide into chaos can be constructively managed by the people becoming mobilized, activist and reasserting our authority.
Cheers
In Ruminations from the Garden I suggested that our reaction to Peak Oil would probably hasten rather than put off the event. Peak Oil by my definition is about production, not how much oil remains in the ground.
Consider what effect the outbreak of a major war (and the ones we now fight are not major wars) might have on those transporting fuel across oceans and moreso, through critical choke points.
Someone on Kunstler's website suggested that 700 billion would have been enough to revamp the entire US rail system, providing electric powered transit by train to every city of 50,000 or above.
Instead we gave it to the people that authored the condition we now are in.
I don't know if the figures are right, but it is obvious that rather than make changes we should be making we've decided to fight over dwindling resources.
The tragedy is that we need to use the oil we have left to build alternative infrastructure (while we still can). Today we have backhoes, bull dozers and semi-trucks to move materials. Imagine what it will be like to make those changes absent fuel to run those machines.
Also, with an economy based on perpetual growth, we must at least consider that it was a plateau of oil and other energy supplies that caused the economic turmoil, rather than the other way around.
That's about $7,700 per household. I posited quite a while back you could get every household in the US well on the way to energy self-sufficiency with that much money.
Consider:
A home brew windmill can be made for $1,000 or less.
A home brew set of solar panels can be built for the same.
A home/apartment could be well on the way to being, or be completely, super-insulated.
A "winter" apartment could certainly be set up for a lot less than $7,700.
Etc.
Cheers
How would that help out the liquid fuel crisis? Unless you are the in Northeast the money people would save on electricity and natural gas could possibly be spent on transportation fuel making the oil situation worse. Jevon's paradox. Oh well, at least no one would freeze to death while they are starving to death because diesel shortages hold up food deliveries to the markets.
Luckily for me, I didn't say it would. What it would do, however, is what you state: give a layer of security to households and make them slightly less dependent on what TPTB do.
That said, it would help with the liquid fuel crisis by freeing up significant energy for such things as electrified rail, hybrids and electric cars/vehicles. That, in turn would free up more fuel for long-haul, heating, etc.
There are a number of short-range electric vehicles being built, as has been discussed here many times before. What's wrong with a nation of golf carts?
Cheers
I think golf carts are probably more stupid than bikes, but still a million times better than cars. So why not give $7000 to people for golf carts then, instead of giving it to people for home brewed windmills so they end up buying golf carts?
It was a tongue-in-cheek comment. But I also said for people to use for the solution that works for them. If a golf cart/electric vehicle does more for them, and the climate, then why not?
Cheers