The Oil Drum

This is a guest post by Aaron Newton, who is working with coauthor Sharon Astyk on the forthcoming book, A Nation of Farmers. Aaron contributes at Groovy Green; he also blogs at Powering Down. Aaron is a land planner and garden farmer in suburban North Carolina, seeking ways to transform the current course of human land use development in an effort to prepare for the effects of global oil production peak and its outcome on automotive suburban America.

The notion of our standard work week here in America has remained largely the same since 1938. That was the year the Fair Labor Standards Act was passed, standardizing the eight hour work day and the 40 hour work week. Each Monday, Tuesday, Wednesday, Thursday and Friday workers all over the country wake up, get dressed, eat breakfast and go to work. But the notion that the majority of the workforce should keep these hours is based on nothing more than an idea put forth but the Federal government almost 70 years ago. To be sure it was an improvement in the lives of many Americans who were at the time forced to work 10+ hours a day, sometimes 6 days of the week. So a 40 hour work week was seen as an upgrade in the lives of many of U.S. citizens. 8 is a nice round number; one third of each 24 hour day. In theory it leaves 8 hours for sleep and 8 hours for other activities like eating, bathing, raising children and enjoying life. But the notion that we should work for 5 of these days in a row before taking 2 for ourselves is, as best I can tell, rather arbitrary.

The idea of a shorter work week is not a new one to anyone old enough to have lived through the energy shocks of the 1970's. It should be fairly obvious to anyone interested in conserving oil that reducing the number of daily commutes per week would reduce the overall demand for oil. There are about 133 million workers in America. Around 80% of them get to work by driving alone in a car. The average commute covers about 16 miles each way.

So let's stop and do some math...and I'll try to argue for 16 reasons why a four day work week is a good idea.

We all know the world is finite. The number of atoms is finite, and these atoms combine to form a finite number of molecules. The mix of molecules may change over time, but in total, the number of molecules is also finite.

We also know that growth is central to our way of life. Businesses are expected to grow. Every day new businesses are formed and new products are developed. The world population is also growing, so all this adds up to a huge utilization of resources.

At some point, growth in resource utilization must collide with the fact that the world is finite. We have grown up thinking that the world is so large that limits will never be an issue. But now, we are starting to bump up against limits.

What are earth's limits? Are we reaching them?

ED Note by PG: Note that this is an updated version of an article that was run about six months ago. With all of the new folks (Welcome!) around, it seemed like a good time for an article like this. We appreciate your sharing this and all the work here at The Oil Drum with the people you care about.

In Alberta, the debate of the the tar sands royalty review is heating up. Major companies are threatening to pull investments in the province, while other point out that a peaking world offers them few other options. The environmental effects of large-scale bitumen mining, which are not considered often enough, are discussed in detail in journalist Willam Marsden's new book.

On the other side of the country, LNG shipments seem set to ignite a political row over safety in narrow shipping lanes. Nuclear appears to be approaching a revival, although cost is an issue. The effects of climate change are making themselves felt across the globe, notably in the Australia and in the Arctic, where Inuit climate change campaigner Sheila Watt-Cloutier could be about to share the Nobel Peace Prize with Al Gore. (More under the fold!)

The notion of our standard work week here in America has remained largely the same since 1938. That was the year the Fair Labor Standards Act was passed, standardizing the eight hour work day and the 40 hour work week. Each Monday, Tuesday, Wednesday, Thursday and Friday workers all over the country wake up, get dressed, eat breakfast and go to work. But the notion that the majority of the workforce should keep these hours is based on nothing more than an idea put forth but the Federal government almost 70 years ago. To be sure it was an improvement in the lives of many Americans who were at the time forced to work 10+ hours a day, sometimes 6 days of the week. So a 40 hour work week was seen as an upgrade in the lives of many of U.S. citizens. 8 is a nice round number; one third of each 24 hour day. In theory it leaves 8 hours for sleep and 8 hours for other activities like eating, bathing, raising children and enjoying life. But the notion that we should work for 5 of these days in a row before taking 2 for ourselves is, as best I can tell, rather arbitrary.

The idea of a shorter work week is not a new one to anyone old enough to have lived through the energy shocks of the 1970's. It should be fairly obvious to anyone interested in conserving oil that reducing the number of daily commutes per week would reduce the overall demand for oil. There are about 133 million workers in America. Around 80% of them get to work by driving alone in a car. The average commute covers about 16 miles each way.

So let's stop and do some math...and I'll try to argue for 16 reasons why a four day work week is a good idea.

This is a guest Round-Up by ilargi.

Today, we change our focus (just) a little. Recently, we’ve paid much attention to finance. Still, while many see a toss-up now for which might hit us first, energy or economy, the prize may well go to the third contender: the earth.

_{AFP - Jeff Haynes}

We were thinking about this, even before the Times Comprehensive Atlas of the World published an impromptu edition. Ice caps, lakes and shorelines simply change too fast, and maps become outdated: the world no longer looks the way it did only 4 years ago. The editor-in-chief: “We can literally see environmental disasters unfolding before our eyes.”

Still, we were already noticing articles on a wide range of climate issues, from just the past 4-5 days, and without even searching for them.

Global food prices set to rise by 50% in 5 years. Australian farmers pay 50 times more for irrigation water than in 2002. California cuts off water to farmers to save fish species, French wine growers harvest grapes 8 weeks earlier than in 1978. Russia considers a wheat export ban. Holland: bread prices to rise 20% next year. Milk named the new oil. UK: many crops just drowned. [insert deep breath] Eastern Europe, including Ukraine, had another crop-killing sweltering summer. Australia relives last year’s drought (and this time may not recover). The UN predicts a global food crisis. Topsoil vanishes at record pace. 2008 declared the Year of the Frog: up to half of amphibian species could be wiped out in coming years - the biggest mass extinction since dinosaurs disappeared. North American songbirds: going going gone, and we all know where our bees are by now. Not here.

_{Satellite images of the Aral Sea 1973-2004: the vast saltwater lake has retreated as a result of river damming and been turned green by pollution.}

None of the above mentions Africa and Asia, did you notice? Once we start there, we a/ run out of space, and b/ make people think climate change is not here and not now. It is. And it’s much worse than we, facilitated by IPCC reports and Al Gore love-ins, like to think. “Will sea levels rise by 59 cm or 25 meters?" says another headline for a James Hansen article. Well, why don’t we accept the middle ground? Better safe than sorry, right? Agreed, then, 12.795 m (42 ft) it is.

In Canada, we’re headed for 2 trade-offs: the world’s most polluted mammal, the beluga, makes way for the pine beetle, while the Prairies go from grass to shrubs.

_{Images showing how Lake Chad has shrunk: Left 1972, right 1987.}

We are being lured into complacency by 'scientific' predictions and political announcements for faraway abstract dates like 2050 or 2100. But if Hansen’s only half right, it’s time to seek 'true' higher ground. Today. No amount of oil, and no amount of money, will ever bring back a million extinct species, or put the ice back on Greenland or Kilimanjaro.

Ontario has nuclear ambitions, the first of which is being thwarted by a lack of transmission capacity. If the power can't be transmitted once the deadline arrives, Ontario will have to pay for it anyway under the terms of their agreement with Bruce Power. Meanwhile, Quebec has difficulties with transport infrastructure, Alberta is losing it's skilled workforce in the oilpatch to early retirement, and Danny Williams may (or may not) be talking to the oil companies in Newfoundland.

CIBC, pondering its exposure to the subprime mess south of the border, is concerned about the prospect of $100 oil, and that risk may be becoming a four-letter word. The M&A juggernaut may be coming to an end, as Canada worries about the knock-on effect of a US recession. The subprime nosedive gets dramatically worse, with some investors threatening to sue Bear Stearns over a total loss. Desperate optimism continues, despite the subprime problems being "safely contained to all 15 ABX indexes". Meanwhile the Mortgage Lender Implode-O-Meter reaches 100.

Water quantity is a problem for both California and London, England, whereas water quality is the issue in Alberta, Ottawa, China and the Gulf of Mexico. China in particular is paying the price for being "filthy rich".

Landowners worry about bulldozed rights

Hundreds of Ontario landowners have begun banding together in an effort to ensure their rights aren't bulldozed along with their homes and properties as part of a $635-million plan to get new nuclear and green power to the Toronto area....

....Under an agreement with Bruce Power, the province has contracted to buy 1,500 megawatts of electricity produced by the nuclear plant at the lake's edge near Kincardine, Ont., when two reactors come back on line in 2009 and the plant gets up to full strength by 2012....

....Provincial rate payers will be on the hook for up to $460 million a year for each "stranded" nuclear unit that cannot get power to the grid because of transmission issues, government documents show.

Also, the province has committed to at least 700 megawatts of wind power from the Bruce County area as part of its strategy to mothball its coal-fired power plants.

In March, the Ontario Power Authority, which administers power contracts in the province, urged Hydro One to get cracking on building a new 500-kilovolt transmission line to ensure the power can flow to energy-hungry southern Ontario.

Today's headlines lead with coverage of the on-going crisis in the debt markets, and an explanation of the financial engineering underlying much of the global liquidity bubble. Debt ratings have not been adjusted to reflect current market conditions, meaning that 'asset' valuations are over-stated. No institution wants to force asset sales for fear of revealing just how much real valuations differ from nominal ones, but eventually such a sale will occur - with the potential to cause an abrupt repricing of a wide range of 'assets' (many of which will actualy be revealed to be essentially worthless). Leverage will magnify the losses, leading to a very serious financial crisis. One estimate (below) puts the potential losses, once assets are eventually marked to market, at 20 times the sum involved in the LTCM crisis in 1998 - so far, and getting worse by the day.

The Round-Up is also convering the Canadian energy scene, as well as environmental and international news, in that order. Oil companies leaving Venezuela and aiming for the oil sands are finding that all is not clear sailing, while China is entering the oil sands for the first time. Nunavut seeks control over future oil and gas revenues, Newfoundland and Labrador wants to bypass Quebec in selling electricity to the US, and the slow down in natural gas drilling is hurting frontier communities in Alberta and BC.

Credit crunch will 'shred investment portfolios to ribbons'

The near collapse of two Bear Stearns hedge funds has lifted the rock on our 21st century mutant capitalism, exposing the bugs beneath to a rare shock of naked light.

When creditors led by Merrill Lynch forced a fire-sale of assets, they inadvertently revealed that up to $2 trillion of debt linked to the crumbling US sub-prime and "Alt A" property market was falsely priced on books.

Even A-rated securities fetched just 85pc of face value. B-grades fell off a cliff. The banks halted the sale before "price discovery" set off a wider chain-reaction.

"It was a cover-up," says Charles Dumas, global strategist at Lombard Street Research. He believes the banks alone have $750bn in exposure. They may have to call in loans....

....Wobbles are turning to fear. Just $3bn of the $20bn junk bonds planned for issue last week were actually sold. Lenders are refusing "covenant-lite" deals for leveraged buy-outs, especially those with "toggles" that allow debtors to pay bills with fresh bonds. Carlyle, Arcelor, MISC, and US Food Services are all shelving plans to raise money. This is how a credit crunch starts.

"This is the big one: all investment portfolios will be shredded to ribbons," said Albert Edwards, from Dresdner Kleinwort.

I must begin by stating that I really don’t think I am that old! Why, you might ask, do I need to say that? Well, I have just finished reading “Coal – a Human History”, which, as I mentioned at the time, was recommended by Tim Appenzeller during his talk on coal, at the Emerging Technologies Summit in Santa Barbara last month. The presentations for which have now been posted, and the DVD’s will follow soon. Since I have also just finished Big Coal by Jeff Goodell, and Time had an article on Chinese coal it seemed a good time to revisit the subject. Particularly since there were a couple of papers at the Summit that spoke to one of Jeff Goodell’s issues.

So why do I need to start by commenting on my age? Well it is because I can remember the smogs of England before the Clean Air Act came in, I can light not only a coal fire (piece of cake) but also a coke fire (you try!), I have lain on my back to hand-load coal in a seam that was, at the time, some 20 inches high, I have “black-leaded” a stove, and holystoned a curb after shoveling coal into the “coal hole”. Which made reading the book, by Barbara Freese, to some degree a voyage down Memories Lane. And, I must admit, that, not having learned my lesson, this will be, not only a book review, but also a comment on where I think folks are making a bit of a mistake in remaining complacent about the future of the world energy supply, particularly as it relates to the old King of the fuel business.

[Editor's note: In a complete reversal, Bloomberg and Pataki announce plans for an intermodal transit hub at the New Yankee Stadium. Cynical folks are already emailing me saying that this is a last minute snowjob before the city council vote tomorrow. Seems like a delay is in order to consider this new information.]

The proposed plan for the new Yankee Stadium is going from bad to worse. First there was the news story last week that the Empire State Development Corporation is helping to subsidize extra parking garages to the tune of $70m. Then we hear that a long anticipated additional Metronorth stop for the Hudson River Line is "not in the cards". One would hope that this monumental opportunity to build a great transit hub connecting the 4,5,D subway lines and Metronorth in the South Bronx is not lost. Moreover, they are moving the existing parkland into the semi-industrial area nearby and some of it is going to rest on the top of the parking garages.

The lack of metronorth access combined with the increase in parking spaces would create a traffic and pollution nightmare for an area trying to finally get back on it's feet ever since Robert Moses destroyed this area in the name of more highways and the resulting social instability. All so the Yankee players and their suburban fans can fit their SUVs and HUMMERs into a parking space.

The South Bronx needs less cars, not more. It needs to become more sustainable.