[Ancien_Opus]

The first economic victim of peak oil seems to be subsidized pricing. Yemen, Iraq, Iran and Indonesia all seem to be moving away from fuel subsidies. A few countries must do without fuel such as Nigeria, Thailand and Zimbabwe. Even a few villages in Alaska had to shut
down their diesel generators this winter because of budget concerns.

The second economic victim of peak oil looks like fuel intensive business. If you can not raise prices then your business simply shuts down. This seems to be what is happening to fishing fleets in Indonesia, Thailand, Bangladesh and Vietnam.

The third economic effect seems to be this reckless dash to biofuels. Ethanol and biodiesel seem to be clear winners in a short sighted future. Especially if you even consider the rate of the declining grain stores. Food or fuel and who gets to decide? These biofuels may be sustainable, but only at much lower population density then currently occupies the globe.

A fourth economic effect that is apparent in our city and that is the rise of mass transit ridership. After years of declining riders our local mass transit has seen a sustained 15% increase in ridership in the last 12 months. The data corelates well with gasoline prices.

So some of the canaries have stopped singing in the mine.

[Waterthrush]

It is interesting to look at these long-running topics! I track my expenses very closely, so I am pretty sure of the effects of the 50% rise in gasoline prices on my spending.

1) I seem to have eliminated trips to the fancy car wash place. This is probably the most extravagant and unnecessary of my purchases. Guess I'll be doing it myself. Saves $80-$100/yr.

2) I am very conscientious about household energy use now. My electricity use has dropped virtually every month from previous years.

3) I have reduced clothing purchases. Some of my "incidentals," like drycleaning, that used to come out of my weekly "incidentals - i.e. food, gas and other - allowance, now comes out of the clothing budget.

4) I have not cut back on driving. A rearrangement of errands so they can be done on my way home was offset by a workplace move that had me driving slightly further each day (but still only 13 miles rt), by undertaking some volunteer activities that required additional driving, and by beginning to drive almost weekly to a local natural area that is not far - 6 miles - but adds up. I do now share longer drives on weekends to recreational areas with others.

I do have ideas for spending less in the next runup in prices too. I'm about to get a bicycle by the end of the month. But I'm doubtful about how useful it will be, as many local roads are too busy for safe riding.

I have closely questioned some other people about the effects of the higher prices on their budgets, but I find most people have zero idea of how they spend their money. I do know how my elderly parents are dealing with it - they have suffreed a bit of ill health in the past few months that has cut down on their driving generally, and that means they also eat out less.

The increase in gas prices must be coming from somewhere, once borrowing to deal with the problem stops - which I think has happend in the past couple of months. I will continue my inquiries!

[Doly]

$this->bbcode_second_pass_quote('Waterthrush', '
')I have closely questioned some other people about the effects of the higher prices on their budgets, but I find most people have zero idea of how they spend their money.

[Revi]

I heard two lobstermen complaining about the price of fuel. They were saying that they might have to get an outboard or row at these prices, so it's not just the fishing in Indonesia that's being affected.

[Ancien_Opus]

One a much smaller scale I abandoned my usual fishing vacation trek to Amisk Lake in Nothern Saskatchewan. Something that I dearly loved.

The Canadian dollar has risen rather dramatically against the US dollar now at 0.92CD/1USD. This is partially related to the fact that Canada has significant petroleum reserves and is the #1 US exporter. In the early 1990's the ratio was 0.61CD/1USD. So the actual cost of everything in Canada is a lot more expensive for US tourist.

The price of fuel at resorts is now $5.00/gallon USD and fuel at retail on the road is $3.75/gallon USD, coupled with $3.00/gallon fuel in the US.

Ten years ago this was a very economical vacation. Today it is very expensive. So on a personal level, yes I am feeling the effects.

[Revi]

I've just been hanging out at home and fishing some. No luck on the fishing, but it's helping out the finances laying low. Now it's time to fill the oil tank. Ouch!

[bshirt]

Wow!

There's some superb reading on this thread. Very enjoyable and well thought out posts everywhere.

A very sincere "thank you" to everybody.

[Revi]

Some people are still in debt for last year's oil around here. They are having a very hard time keeping up with this latest cold snap.

The near term economic effects of peak oil are becoming apparent around here. We'll all be feeling them soon. The next few years are going to be interesting.

We notice it in the things we used to do and aren't doing anymore, like travelling. The budget won't allow it.

[cube]

Sometimes "cost" can NOT be calculated using "economic" means.

Lets take an example that at first may seem very far off...but stick with me and you'll see my point.

Imagine a general fighting a war. He has an army of tanks and a supply of fuel trucks. We know for sure that a tank is many times more expensive then a truck and furthermore 1 fuel truck could probably supply several tanks. The cost of fuel trucks may account for less then 10% of the overall budget.

Does that mean if the enemy destroyed all the fuel trucks then the general only incurred a loss of 10%.....of course not! Without fuel, a tank is a sitting duck.

Getting back to oil, trying to calculate the "cost" of PO by assigning a price to each barrel of oil and subtracting is folly. The economic "cost" of PO is not equal to $60/barrel X production loss....no more so is the "cost" of losing a fuel truck in the middle of a war == to the cost of the truck.

Within an interconnected system, the lost of 1 component == the lost of everything that is attached to it. How much is "attached" to 1 barrel of oil?
How many:
1) bushels of corn does that equal?
2) commute trips between work and home?
3) high value consumer products from pantyhose to pentium chips?

The cost is probably hundreds...maybe several $1,000 per barrel of oil. This is the cost of PO.

[MrBill]

The 10% of the economy that allows the remaining 90% to function normally.

[Revi]

I often think that the price of gasoline could be $10 a gallon and it would still be a bargain. We just don't have a clue how much it's worth. Everything is dependent on cheap and stable prices for this most precious of commodities. The rest of the economy spins on it. It really is the oil that keeps the machine running.

[perpetrator_unknown]

The price of oil/gas is irrelevant... throughout time human labor has been the measure of wealth... regardless of machines, engines and inventions even
in todays industrialized world it's always cheaper to get someone from the third world to make, dig manufcature for you over a machine

You could have a million mining machines and trillions of barrels of oil but with nobody to operate and service the parts they're useless.

I think we who live in the first world forget about the billions of slave workers behind the scences who make everything we use for less than a few cents a day, Indonesians who stitch our Nike runners together, Indians to scrap off our cargo vessels, Mexicans who pick our fruit etc

Don't be delluded to think that oil has done anything unique or special, we're pretty much still in the 1800's as with wood and coal or even before... there's a slave army driving this all and offsetting us paying the true cost of what we consume... like the colonial British marvelling at the power of steam and their inventions, Americans worshipping the Liquid Black god will
see them fall, it's the people they're trampling over that will bring about their fall not the lack of fuel.

The USA and it's overinflated energy footprint has missed the boat, even if they switched all their industrial might to play catch up in alternate sources, they couldn't manufacture enough wind turbines, PV panels etc to match their 'unique' needs hence the black wave ride out.

[Jack]

Thread returned to Depletion Economics. Jack.

[pukeko]

Most of the diccussion I have seen is on how an oil shortage will impact on our personal lifes - mainly tavel, cars and home energy consumption. What happens when the shortfall in oil impacts on the transport industry? How will we move those goods moved by the trucking industry both short and long haul? At the moment there is no viable alternative to diesel fuel. The same applies to the shipping industry. Large modern cities will collapse when there is no transport system.

[topcat]

Near-term, I see rationing, either by price at the pump or worse yet by the gubermint.

The follow-on effect will be substantial cost increases in just about everything. And when transportation, manufacturing, and all other inputs go up so do prices, which will again increase the cost of inputs, which will raise prices, and you have a self-feeding spiral.

And just about everything costs more until something gives. Most probably riots in the unemployment and soup lines.

[Sheb]

What would I cut back to compensate for higher energy prices? Well, considering that this will eventually effect most aspects of our daily lives, I would cut back on everything. In fact, consider Maslow's hierarchy of human needs. (Water, food, shelter...). These needs, as we try to fill them, will have to start being proportionally cut from the top down. At the highest, most expendable end of the hierarchy, Self-realization will go right out the window for on the order of 99.9% of the worlds population. On the other hand, water itself, the elixer of life, will be cut for many folks as well.

As for me, here is what I am cutting back on my own to make these reverse-growing pains less difficult:


Travel: I don't do it except when the Navy sends me somewhere. A tank of gas lasts me a month. My long-time girlfriend is understanding and fine with it, as she is a new surgical RN at UVA's hospital and really does not have the time to travel. When we do travel, it's by train.

Eating out/Entertainment: My entertainment needs are nil. However, we go out to see a movie once every other week or so. Eating out consists of gelato or a drink before the movie. Frankly, she has indicated that she could give that up if she were *permitted* to raise sheep and spin yarn, knit, etc. Knitting is her ideal entertainment.

Groceries: Trying to move up the value chain as far as food prep goes. I eat alot of pasta and burritos. two months ago, it was mostly canned beans. Now it is dry beans in bulk quantity. As for my greens, I know what to look for in the woods next to my house (wild lettuce, lambs quarters, mint, pokeweed--be careful with that one!). Still alot to learn though. First thing when I move, I will start gardening, any way I can.

Purchases of capital goods: the last item's I have bought include:
- Emergency Generator (yamaha EF1000i)
- Xantrex Marine Inverter/Charger
- Swiss military surplus 20-L fuel tanks.
- Bulk solar cells @ $1 to $2 per watt. I'll integrate these into panels myself. Oh...and small utility trailer to get us out to Albuquerque. No TV, no stereo system. I use a computer all the time, and my main machine is a factory refurbished Dell for $450. Once I move, I'll buy and rebuild an old Onan or Yanmar (or if I'm lucky, Lehman) diesel genset and convert it for biodiesel.

Tech Toys: Cell phones, cable TV, etc. I do have a Palm Treo. It is my phone, notepad, digicam, and all else. I get alot of mileage out of it, but know that it's comm-functions will vanish should TSHTF.

Investments: I buy things I will *Need*. Food, fuel, land, guns&ammo, land, etc. And paying off all debt.

Recreation: I walk in the woods for veggies, and I make stuff, in an engineering sort of way. Most recent hobby is learning to thermite and make iron from aluminum and rusty steel cans found in the environment. 20th C. trash--Possibly the biggest environmental resource for the 21st & 22nd centuries.

Just ramping up on these things will take me 2-3 years. I hope we have that long before the "horizon starts receding"!

[pukeko]

When fuel shortages really hit home governments will step in and limit fuel supplies to the agriculture and transport industries. Better sell your SUV now because when this happens it will be worthless.

[Homesteader]

My wife and I moved from Maine to NC almost two years ago. Last winter we kept the furnace off and heated with wood. The previous winters heating cost was about $650, which was only $100 less than the winter before that in Maine! This past winters cash outlay was $250 for an inexpensive wood stove and some pipe and maybe $20 in gas and bar oil. Already had the chainsaw.

This past winter was much colder than the winter before but the house never got below 55 degrees. We figured it was better to get the kids used to living a different lifestyle now so it wasn't a big shock later. We garden, have sheep, goats, milk cow, chickens, rabbits, pigs. No television, no video games, no x-box. The kids play basketball, football, read all the time, build forts in the woods. Most of our clothes come from Goodwill. All our light bulbs are energy efficient. Will build a root cellar and outdoor wood-fired oven this summer.

One issue is the houses in NC aren't designed and insulated like a house in northern New England. Heating and cooling costs would be much less if they were. My neighbor across the street has an earth-sheltered home and doesnt even have central heat/air. A small wood stove and a circulating fan takes care of heating and cooling.

[Revi]

We're still in Maine and spent about $650 to heat the house last winter as well. We burn a cord or so of wood, and keep it cool at night, and when we're not there. It's a hard go here in Maine. I know people who use much more wood and much more oil. I don't think that this is a very easy place to be post-peak. We don't really have anywhere else to go anyway, so this will be where we make our stand.

[vision-master]

I'm spending more time on the bicycle. The money saved by not burning any petro, I can buy myself a nice lunch & coffee ($6) during the ride.