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WinnersBeyond Peak Scenario Contest |
Return to the Good Years
Or Life After Peak Oil
By John Kurt Bledsoe
In 1960, Walter Lord published the book, "The Good Years" about the period in US history from 1900 to 1914. The theme of the book was the wonderful optimism of Americans during this period, "when for a span of time that was never going to end Americans enjoyed the best of all possible worlds."
How was this possible I thought to myself, when we had no electric appliances and other household labor saving devices to speak of? We were totally dependent on public transportation for mobility, if we traveled at all. Entertainment was mostly live performances with movies and phonographs still in their infancy, radios and television still far off. There are many other aspects of our lives I may be overlooking which we all take for granted today. Hell, as Lord points out, we didn't even have a national income tax… well maybe he is on to something.
But I digress.
The theme of this article is that Americans of 100 years ago not only survived, but enjoyed life, by Jingo! And I think, with the passing of time and cheap oil, we can get back to that lifestyle. Just as with the world pool of oil running out, it will be a slow process, that will take several generations. Let me present my scenario.
Methodology
Peak oil is a far different issue than oil running out, and much more immediate. My review of all published material on the subject, and analysis of Hubbert's curve, is that 2013 will be the peak. Using historical production data, pegging 2013 as the peak, I drew a line that mirrored the curve up, as a curve down. Thus I ended up with a complete bell shaped production curve, with the area of interest being from now till 2105.
Demand has a different slope. I predict demand for oil, or suitable oil substitutes, will continue to grow. I make some assumptions, such as demand only grows linearly, since cost will constrain growth, but the Second and Third World's demand for a place in the sun will force growth. Demand growth annually I assumed would be between 1.4 and 2.0 mbd.
This will clearly leave a gap between the production of crude as we know it, and demand for oil or a suitable liquid oil substitute. This I called the shortage, and pegged the price of a shortage barrel at $1000.00 in 2005 dollars! My rationale is, while there are promising technologies, it will be extremely expensive to produce substitutes in the scale needed. I believe the cost in meeting the demand side, as crude supplies decline, has been greatly underestimated by almost everyone. But this meeting of demand must be done, if the more pessimistic scenarios out there are not to take place. $1000 a barrel is a round number, and works for my scenario.
The Next 100 Years! (Values given are for the end of the period.)
2005-09
Values: Crude production 86.8 mbd. Demand 90.4 mbd. Shortage 3.6 mbd. Average cost of liquid energy (ACLE) $80.15/barrel. Car fuel $2.74/gal.
Oil price won't fall but are generally accepted, life goes on since gas is readily available. Food prices jump, consumers cut back on specialty goods. Airfares finally shoot up, as some major carriers disappear. Smaller SUVs become popular, biggest ones pulled off market. All auto firms offer some form of hybrid. Amtrak shrinks. As rates rise, home sales stagnate, except in retirement areas. Baby boomers buy retirement homes, while still keeping primary residence. More big box discount stores open, like Sam's Club. There is serious overbuilding. Glut of office / light industrial parks, continue to concentrate around big cities like Dallas, Atlanta, etc.
2010-14
Values: Crude production 89.2 mbd. Demand 97.9 mbd. Shortage 8.7 mbd. ACLE $127.13/barrel. Car fuel $3.94.
Gas prices go up over $1.00 per gallon in just 5 years. Prices of everything doubles, or more, due to raw material costs. Inflation is not contained by monetary policy. Workers demand more pay, many get pink slips instead. Doubling of prices in just 10 years really hits consumers and producers hard. Several big food companies become insolvent, due to cost of production. Retailers demand more bulk items. Starbucks sales plummet.
SUV, truck sales drop off a cliff, as people come to realize tight oil supplies are here to stay. New vehicle sales, except for fuel efficient cars drops. GM, Ford pull their pensions. Air traffic shrinks as airlines finally forced to pass realistic costs on.
As well off baby boomers retire, demand for self-contained, gated communities skyrockets, and not just in the sunbelt. Very large houses remain vacant for months on the resale market. Deferred maintenance starts to make lots of neighborhoods look seedy. Poorer people flood the largest cities, triggering a rental boom. Poorer baby boomers slowly realize they may have to work till they die, and finally cut back on expenses. Savings goes up, but the economy slips due to cutbacks in retail spending. The Dollar Tree becomes the $5 & $10 Store. Fast food places start closing earlier, due to lack of evening traffic.
2015-19
Values: Crude production 85.2 mbd. Demand 107.4 mbd. Shortage 22.2 mbd. ACLE $240.02/barrel. Car fuel $6.70/gal.
Farmers try to cut back on cultivation, pesticide and fertilizer use, and yields drop. Food prices skyrocket. More people start gardens.
Several states look at funding traditional passenger rail, as a grassroots demand swells. Freight railways prosper, even as economy shrinks. Fuel efficient cars suddenly become very fashionable. SUVs and trucks only bought by people needing them. SUVs in suburbs are replaced by stylish station wagons.
Many housing developers bankrupt as building costs skyrocket, demand for distant, large homes dries up. Urban home rehab becomes fashionable among younger professionals. Post WW2 tract housing, especially the smallest units becomes slums due to overcrowding by the marginally employed.
Walmart starts closing at 11 pm, opens at 7 am, in order to cut costs. Goods from China now almost as expensive as domestic goods, so Walmart brings back its "Made in the USA" campaign. They go as far as setting up manufacturing firms, till the Government takes anti-trust action. So long-term agreements, funding of firms becomes their approach. Lots of entrepreneurial spirit leads to small companies opening, to supply formerly imported items that have suddenly become prohibitively expensive.
2020-24
Values: Crude production 79.0 mbd. Demand 116.5 mbd. Shortage 37.5 mbd. ACLE $350.37/barrel. Car fuel $9.40/gal.
Even the most conservative thinkers realize peak oil has passed, even with ANWR on line. Coal gasification programs studied. First new nuclear power plant in US started. Congress enacts oil set asides for agriculture, defense.
Fuel costs accelerating. Car companies bring out high mileage models that sell well. Asian firms predominate. Trucks and SUV sales a faction of before. Worried drivers restrict their usage voluntarily, some car pooling starts, mass transit use jumps.
Some smart developers start buying up underutilized commercial land along the main streets in cities. Period of almost no new housing growth, many tract developments are only overgrown sites, void of any building. Highly energy efficient townhouses become popular, along with garden condos. Most developments gated. These now become more popular than McMansions. People start considering distance to work as a major consideration.
Walmart starts closing at 10 pm, opens at 9 am In order to cut costs. Selection and variety of goods drop dramatically as shipping and inventory cost escalate. Packaging costs cause producers to offer more canned and glass containers, less plastic. Bagging becomes paper again. Target-Lite stores become very popular due to sharp marketing of select limited items. Many other stores close. Many factories shuttered. Period of worldwide economic depression starts.
2025-29
Values: Crude production 70.5 mbd. Demand 125.6 mbd. Shortage 55.1 mbd. ACLE $461.92/barrel. Car fuel $12.12/gal.
Farmer's co-ops become closed to non farmers, to preserve supplies. Congress supports this by subsidizing energy costs for farmers. Wood farms established, as a boom in WB stoves with catalectic converters are being used for heating. Walmart opens their first Seed-and-Feed outlet. As the US makes the commitment to preserve the use of oil for agriculture and defense, the last SUV built is sold to Arnold Schwarzenegger.
Economic and liability protection incentives are given to the prosperous freight railroads, to again establish passenger service. With European technology, train travel again becomes an immediate hit. Based on what Americans see in Europe and Japan, express train service for distances less than a day's drive are demanded. GM and Ford production decline to depression levels. Driving down to 50 % of 2005 levels. Air traffic collapses.
Due to outrageous heating costs and high upkeep, many McMansions are dumped on the market and basically sold at a loss. Smaller sf homes are offered, but are not big sellers, due to cost, and many people upside down in present mortgages. It's a bleak time for the industry.
Retailers struggle to hang on. Those that have a strong e-commerce prosper, as most items that can be ordered on line, are. Industrial recycling services develop. Major initiatives underway to mass produce energy from woody waste, biomass. Salvage of metals from any source leads to scrap drives not seen since WWII.
2030-34
Values: Crude production 63.7 mbd. Demand 135.1 mbd. Shortage 71.4 mbd. ACLE $548.10/barrel. Car fuel $14.25/gal.
Food prices continue to escalate, driven by transportation costs. Families no longer able to fully make it in town, start renting marginal land, and intensively cultivating it organically. Hardwood tree plantations started on otherwise fallow land. Comprehensive grade segregated rail based high speed ground transportation passenger systems started in California, Texas, and Florida. Alternate local transportation demanded. The spread out nature of settlement makes for an extensive networks of buses. Motor fuel has gotten very dear, so long bus rides for commuting becomes the norm. Gas taxes are raised to pay for the service, compounding the pain. People seriously consider moving closer to work. McMansions and older, high utility homes are abandoned.
Skyrocketing gas prices make smaller, neighborhood locations of major stores popular again. Mega malls fight to have bus service hubbed on them. Yet miles of empty car lots, parking lots, shopping centers, offices predominate the landscape. Many become stripped of anything valuable.
Steel fabrication grows, mills reopened in old sites. Major productionization of making wood based "plastics" underway. Firms that can fabricate finished products from natural resources develop.
2035-39
Values: Crude production 59.7 mbd. Demand 144.6 mbd. Shortage 84.9 mbd. ACLE $604.30/barrel. Car fuel $15.66/gal.
Big Agriculture feels the pinch of high energy prices, and their inability to manage a more diverse crop system now being demanded by local retailers. Therefore many farms are divided into smaller holdings, sold off to a new generation of people willing to work the land. The government supports this by loans and insurance programs, thru the New Homestead Act.
Extensive electrification of freight railways started. Trucking firms do not move freight more than 100 miles. The rest is loaded onto trains. Especially popular with the truckers is the truck-stop on rails, where the drivers can eat and rest on-board, as their cargo moves with them. Yet they can move the freight on the short hauls on both ends, with no loss of control, or need for rail spurs.
Rebuilding of major arteries of cities into walking neighborhoods with townhouses, shops and access to public transit explodes, fueling an economic boom. Every decent size city starts building electric transit corridors in the suburbs along major streets. Small, highly energy efficient housing is built along cleared strips near the old main roads. Smaller, but more easily reached by foot or mass transit, retail shops spring up. Shoppers are tight with their purchasing, much more frugal than the baby boomers, now in their 80s, ever were. Due to most people eating at home, most chain restaurants (TGI Fridays, etc) close down.
Electricity relatively cheap due to new safe technology nuclear power. Plastics become almost prohibitively expensive, and use is limited to high value applications. As a consequence, trade with China shrinks, as demand for more natural, durable materials grows. The throw away society becomes one of reuse.
Steel exports are banned. All resources are directed into building a more compact infrastructure. Older plant sites in the cities are re-established, since workers can use public transit to get to work. Many sprawling plants in the countryside are abandoned, or finally torn down. Full scale production of oil replacements underway, creating a boom in agricultural machinery fabrication.
2040-44
Values: Crude production 57.4 mbd. Demand 153.9 mbd. Shortage 96.5 mbd. ACLE $642.79/barrel. Car fuel $16.65/gal.
More marginal land put back into production organically.
Most families now own only one small liquid fueled vehicle. First privately funded transit systems in decades starts in sunbelt retirement communities, geared to baby boomers too old to drive. Three new high speed grade separated transcontinental rail lines built across US, one from Seattle to New York, Oakland to Norfolk, and Long Beach to Jacksonville.
Driving down to 33% of 2005 levels. Big abandoned retail sites are stripped of all material for recycling, and new multifamily developments spring up.
Sears reintroduces the "Comprehensive Department Store" in an old downtown location. It becomes an immediate hit. Walkup cafes become popular. Natural materials industries are revived. Many quarry sites abandoned in the past, reopened, due to now being economical.
2045-49
Values: Crude production 54.3 mbd. Demand 163.3 mbd. Shortage 109.0 mbd. ACLE $681.64/barrel. Car fuel $17.64/gal.
Intensive management of national forests started, as Government realizes the vast potential as a resource.
Due to demand, local public transportation nets expand to cover almost all suburban neighborhoods. Almost all freight now moved any distance at all is by rail. Electric trolley buses make a comeback. Decay of infrastructure, especially bridges and overpasses makes driving any distance at all a chore. While surface streets hold up ok, long-term preventative maintenance is not done.
Older single family homes on big lots find fewer buyers. Yards are let go, due to high costs of chemicals, equipment.
Last Walmart big box store closes. More traditional department stores open. Many include lunch counters. Pay parking becomes the norm. Massive wage concessions made by labor, in order to get people back to work.
2050-54
Values: Crude production 46.6 mbd. Demand 172.6 mbd. Shortage 126.0 mbd. ACLE $741.47/barrel. Car fuel $19.14/gal.
Back to the land movement takes place. Many abandoned McMansions stripped for materials. Lots plowed for agricultural use.
First freeway in S. California converted into a transit park corridor, with a high speed long distance electric train core, feeder light rail, bike path, walking path and two-lane parkway for private cars. California leads the nation in high speed passenger trains, with the new LA to SF line, running at 150 mph average, covering the 388 miles in 2 hours 35 min.
Retail node centers open at points convenient to public transit. Very limited parking available in most cases. More items designed and fabricated to last a lifetime. Craftsmanship valued again.
2055-59
Values: Crude production 35.7 mbd. Demand 181.8 mbd. Shortage 146.2 mbd. ACLE $812.09/barrel. Car fuel $20.89/gal.
Some conversion of exurbs into truck-farms done, to serve nearby cities.
More cities adopt the electric transit corridor concept. Suburban slum removal begins in earnest. Light rail systems built on right of ways of former multilane streets, fed by short haul buses.
Driving down to 20% of what it was in 2005. Much rural freeway mileage abandoned. The stretches left are passable, but only at risk to your suspension. Mostly now used by locals. Older suburbs abandoned, as gated townhomes become the rage. Last drive thru restaurant, a McDonalds in Illinois closes. Apprentice programs developed to foster passing on skills to future generations. Factories that remain downsize, but turn out fewer, highly sought products. Made in America becomes the world standard again.
2060-64
Values: Crude production 24.0 mbd. Demand 191.0 mbd. Shortage 167.0 mbd. ACLE $879.62/barrel. Car fuel $22.57/gal.
Prohibitive costs pull much irrigated land out of production. Laws passed to convert formerly productive farmland, in the better growing areas of the US, back from residential to agricultural.
Despite massive subsidies, airline travel is costly, and only used by businesses that need the time savings. Older cars become a status symbol. Most are garaged, and
only taken out on Sunday's to polish and show off in the driveway.
E-commerce passes bricks and mortar for the first time. Clean coal technology allows larger factories to develop, since economies of scale come into play.2065-69
Values: Crude production 17.8 mbd. Demand 200.6 mbd. Shortage 182.8 mbd. ACLE $915.22/barrel. Car fuel $23.49/gal.
Large scale conversion of whole suburban tracts, mainly in the Midwest back into farmland. Main crops are woody plants for fuel production.
Smaller, more livable cities redevelop along rail lines. Medium size cities attract businesses as alternatives to high price / high rise growth in large cities. High speed interurban trains make commuting practical to these urban centers from small towns.
Small in-town cars predominate. Underpowered pickups still sold to farmers. Ped-venience store chains spring up, allowing almost everyone to have a shop within 15 min. walk. Heavy manufacturing now done almost exclusively in the US, to support the new infrastructure building.
2070-74
Values: Crude production 11.5 mbd. Demand 210.2 mbd. Shortage 198.7 mbd. ACLE $947.58/barrel. Car fuel $24.34/gal.
Due to food prices, mainly bulk starches grown for food. Meats come mainly from rangeland not suitable for other uses. Significant hunger in US. Kids wonder why Grandma n' Pa were so fat in the old pictures.
The last Interstate Highway (PA Turnpike) converted to a transit park corridor. Trucks now only used for local deliveries from rail depot to businesses.
Most vacant land near a downtown is actively renewed as mixed use, walkable developments. Poorer folks being forced to the edges of town.
Noticeable stabilization of energy prices has more people spending, fueling the retail economy. Labor intensive production becomes more commonplace, since energy is so expensive.
2075-79
Values: Crude production 8.3 mbd. Demand 219.9 mbd. Shortage 211.6 mbd. ACLE $964.05/barrel. Car fuel $24.80/gal.
Where there is naturally fertile soil in parts of the country, requiring less chemical cultivation, along with population declines, wholesale conversion of decrepit housing tracts to agriculture use takes place. Old asphalt parking lots become high production gardens, when it is realized that by punching holes in the usually thin asphalt, it acts much like black plastic mulch.
Driving down to 10% of what it was in 2005. Massive effort to rationalize the rail network takes place. All long distance, high speed, and lines thru densely populated areas are grade segregated. Numerous projects are undertaken to straighten, thus shorten routes. Chicago to New York now done in under six hours by train, with beautiful viaducts thru the Appalachians to boot.
Migrations take place to areas that do not require as much year round energy use. Small, extremely energy efficient homes become the norm. Individual vacant lots in towns are now being filled in. This urban fill raises the value of all town properties, at the expense of tracts further out.
Last retail plastic goods are sold. Shopping done with reusable woven bags. Packaging almost all paper.
Unions become more like guilds, where a firm is guaranteed a skilled labor force, in exchange for lifetime employment.
2080-84
Values: Crude production 7.0 mbd. Demand 229.6 mbd. Shortage 222.6 mbd. ACLE $970.79/barrel. Car fuel $25.03/gal.
Everyone now had a garden, canning very important for families. Every inch of land that can support a plant is planted.
Electric cars that are recharged in the grid are used for local trips, but almost any family that can afford one, still has a liquid fueled vehicle, but usually many years old. Replacement part costs are very high. National speed limit dropped to 45 mph. Mostly a moot point since the roads are so bad, being too expensive to repair.
Most shops are not air conditioned. The summers become holidays with limited hours per week. Migration north due to global warming, cooling costs lead to a drop in sun belt population. Much of the sunbelt looks like the third world, but a bit more prosperous.
By now, the US is an electrically driven economy, based on wind, nuclear power and coal, while oil is almost strictly conserved as a strategic resource. Everything is recycled, with a reward cost attached to reusable containers. Scrap drives clean out the last rural junkyards, freeing more land for productive use.
2085-89
Values: Crude production 5.8 mbd. Demand 239.4 mbd. Shortage 233.6 mbd. ACLE $976.99/barrel. Car fuel $25.25/gal.
Last oil based agricultural chemical sold. Organic pest control and soil renewal techniques are mandated.
Computer controlled sailing ships developed to move goods internationally at reasonable prices. International trade rebounds. Some minivan type cars, optimistically called touring cars, are still made for family use. Other bigger types have long disappeared. Otherwise, people drive Personal Coupes (PCs), small 2 seat autos.
Urban fill well underway. Patterns of settlement slowly evolving with people moving closer to work or to transportation lines. A premium is had for housing close to a downtown.
Frozen foods gone. Chilled items, including beer have become very expensive compared to 2005. Coolers only used for limited dairy, and that is rationed for the kids sake.
Manufacturing corridors from the 19th century are mostly reborn, as their low energy requirements are realized.
2090-94
Values: Crude production 4.5 mbd. Demand 249.1 mbd. Shortage 244.6 mbd. ACLE $982.69/barrel. Car fuel $25.46/gal.
Last Mideast oil wells are capped. US interest in region drops to nothing.
Organic methods and a balance between use and renewal lead to peak possible agricultural output.
Cars are now predominantly 2 person coupes used to get to the rail station. Mostly electric. Speeds are limited to 30 MPH everywhere.
Urban fill achieved. Flight north continues to cooler, older cities, like upstate New York, Wisconsin, etc.
New marketing techniques allow for minimum movement of goods while maximizing customer convenience.
Deer, elk, moose, etc. are all now managed as a source of raw materials. Leather replaces plastics almost completely in appropriate applications.
2095-99
Values: Crude production 3.4 mbd. Demand 259.0 mbd. Shortage 255.6 mbd. ACLE $987.42/barrel. Car fuel $25.64/gal.
Small farms boom due to intensive methods, local demand.
Last mass produced gasoline car built. Stylish electric runabouts are in use. Traffic lights are a thing of the past. Pavement is usually only two lane, with stop or yields signs controlling flow.
Exurbs gone. Suburbs beyond public transit gone, except for small farms, or slums.
More retail consolidation in locations with good transportation links for both suppliers and customers.
Much small scale production. Heavy industry located need sources of energy, raw materials. Labor relatively cheap.
2100-05
The "Good Years" are reached. Values: Crude production 2.2 mbd. Demand 271.0 mbd. Shortage 268.8 mbd. ACLE $992.22/barrel. Car fuel $25.85/gal.
Agriculture: More intensive land use including formerly marginal acreage. Production much closer to markets, utilizing non-oil fuels for machinery, almost completely organic soil renewal. Many home owner gardens, canning and lardering. Most food sold in bulk, without fancy processing, packaging. Many canned goods that can be stored at room temp. used.
Transportation: Long distances by high speed rail lines. Medium distances have lots of interurban electric railways, fed by metros, trams and trolleys depending on population density. Cars still around, short drive electric, and underpowered liquid fueled. Due to costs, families that keep cars severely limit trips. Overseas, most movement by ocean liners, freight by sail. Air travel limited to small lightweight extremely expensive airplanes.
Housing: Apartments in the cities, along rail lines. Smaller cities, suburban areas have many duplexes, single family homes, all on small lots, within walking distance of public transportation. Well off people live in single homes within gated communities that provide all external maintenance. Natural landscaping is the norm. Many well off enclaves served by their own rail stop. Working poor live the furthest out, sometimes more than one family/generation per unit. Poorest people live in shacks on the outskirts of town, in abandoned industrial, commercial, former highway areas. Cities have a lot of rooms to rent, giving extra income for home owners with space, and lodging for those otherwise homeless.
Retail: Concentrated at transportation hubs, once called downtowns. Department stores rule, since everything available in one place. People will not go all over town to pick up one item here and there. Ped-venience stores are really corporate owned mom and pop type corner groceries, with a country store feel. Gone are the fatty, sugary, over packaged over processed, snacks. Also there are farmer's markets. The last two types of retailers are in the residential areas. Most malls and strip shopping centers long gone, unless at a transport hub.
Industry: Production rationalized with consolidation where it makes economic sense; steel, transportation equipment, machine fabrication, consumer durables, textiles, etc. Local and regional firms flourish. Much more use of pottery, glass, metals, wood, cotton, other recyclable / renewable materials. Plastics are only for high priced items without a reasonable substitute. Leather is widely used. Coal, wind and nuclear powers everything that can be hooked to the grid.
