[Waterthrush]

I think Peak Oil - the period of maximum production - is here. So do many of you. I think it was Kenneth Deffeyes who said he had turned from a prophet into a historian.

So, what are your impressions so far?

Peak Oil doesn't seem sudden to most of us because we've been thinking about it. What about your peers? Does the increase in gasoline prices seem sudden to them? My impression is that the oil companies have actually been eating some of the refinery costs in order to keep gasoline below $3/gallon, but it has finally moved fairly decisively above that mark. World demand is not falling off, even though US demand is.

People are switching to use the more fuel-efficient car for the majority of trips. I actually think I'm seing fewer trucks and SUVs on the road than before. People are not yet cutting mileage, though.

An early victim has been American automobile manufacturers. They are not going to recover. Not one of them has a small fuel efficient hybrid car on the market yet. YET! They are dead companies walking.

This in turn is making Michigan, once a stronghold of the middle class, into an impoverished and depopulating ara. Other states - Indiana, Ohio, Pennsylvania - are following.

Several airlines have gone out of business. They are now nickel and diming their passengers to death. They have been caught shorting maintenance and are being penalized for that.

Inflation caused in part by crude oil costs has risen and is extremely noticeable in food costs.


**Put on your diarists' hats and tell historians of the future what you are noticing about this early stage of Peak Oil.**

[Novus]

It is not so much the cost of gasoline that worries me these days but the cost of everything else is rocketing. News items like the rice shortages in Asia that threaten hunger to billions and food banks closing their doors in major American cities because they run completely out of food is what shocks me. I am shocked by the complete failure of markets to adjust to a world in which energy growth is impossible. Capitalism seems to be in its death throws already with the nationalization of Norther rock in England and Fed bailout of BSC. For the Q1 of 2008 I did not envision these type of events so quickly after cresting the top of world peak oil production. As we are now learning quickly PO means so much more than expensive gasoline.

[sameu]

The Eurozone has record inflation. Lots of attention now goes to the diminishing 'purchase power'. Everything is getting more expensive and the politician, media, unions and general population treats it like something that suddenly fell out of the air. And of course no structural measures but trying to get by with quick fixes (like subsidising heating oil for the lower incomes with so called 'heating oil cheques').
Now you would think people would be more open to my peakoil arguments, because the foretold consequences are coming true, but they still think that it will just pass. Or maybe they're not thinking at all.

[cipi604]

I don't care about people anymore. They deserve what's comming.
I think the situation will be manageable 2 more years.

[sameu]

Yes well
But it stills remains tragic that e.g. my sister and her husband invest in a brand new bigger car (while their previous car was still very good) 'for the baby' instead of solar panels for instance; which I think would serve the baby more then a bigger car...
You couldn't be more not knowing anything while they have the *kuch* privilege of someone informing and warning them. That's just sad

edit: I agree with the two years, after that it will turn very ugly

[cipi604]

They believe that we are not only crazy, but unbelievable stupid, so why bother in the first place?

[sameu]

yeah I know
but still
family and stuff

[Tyler_JC]

I don't think anything that has happened over the past couple of years is out of the ordinary, civilization-threatening, etc. We didn't think the Good Times would last forever, did we? There's got to be a little rain with the sunshine.

Geopolitical tensions are no worse than they were a few years ago, during the late 1990s, the mid 1990s, the early 1990s, late 1980s, mid 1980s, early 1980s, late 1970s, 1960s...and so on.

The economic recession has started and it's effects are not outside of normal behavior. Some people are losing their jobs and houses. Asset prices are falling and corporate profits are falling. Democratic governments are throwing money at the voters in order to stimulate demand and secure votes. Again, Keynesian moves by elected officials aren't exceptional. Stagflation is here and it will stick around until declines in the dollar force interest rates higher. Where's Volcker when you need him?

Crime is somewhere higher than it was a few years ago but certainly no where near the horrible levels of the 1980s/early 1990s.

Food prices have moved up more rapidly than I could have ever predicted. But this is because of idiotic agriculture and energy policies. Higher oil prices pushed Congress to make the worst mistake in agricultural policy history (or at least one of the worst). Now we are burning food and money to make fuel. Grain-based ethanol projects (and other green fuels version 1.0 ideas) are an environmental disaster, an economic disaster, and are mostly responsible for the spike in food prices.

House prices are returning to historical levels and some over leveraged investors/speculators are getting slapped by the invisible hand.

Oil production hasn't crashed and isn't about to start crashing. Higher prices have increased investment into the energy market and it has seen a major increase in attention over the past couple years.

[dohboi]

"Food prices have moved up more rapidly than I could have ever predicted. But this is because of idiotic agriculture and energy policies. Higher oil prices pushed Congress to make the worst mistake in agricultural policy history (or at least one of the worst). Now we are burning food and money to make fuel. Grain-based ethanol projects (and other green fuels version 1.0 ideas) are an environmental disaster, an economic disaster, and are mostly responsible for the spike in food prices. "

I agree, but note my emphasis on your "mostly." Most analysts I read (and farmers I hear from) include at least the increased prices of fertilizer and pesticides, both tied to fossil fuels, as important reasons for the huge increases in grain prices. And add the skyrocketing price of diesel for tractors and other farm equipment and for trucking the food to processing plants, warehouses, stores...

But the bio-fuel insanity is certainly a huge factor. It's funny, elsewhere I've been arguing with others (mostly folks who have been supporting bio-fuels) that ethanol has been a significant factor in rising grain prices around the world. Now here I'm trying to point out that it's surely not the sole cause. I would also add that the spread of western lifestyles--grain-fed meat, distilled liquors...--is a bit of a cause too.

The difference is that bio-fuels could vanish tomorrow if legislators wake up and stop supporting them. But PO is with us forever--it cannot be legislated away.

[PeakingAroundtheCorner]

$this->bbcode_second_pass_quote('Tyler_JC', 'I') don't think anything that has happened over the past couple of years is out of the ordinary, civilization-threatening, etc. We didn't think the Good Times would last forever, did we? There's got to be a little rain with the sunshine.

Geopolitical tensions are no worse than they were a few years ago, during the late 1990s, the mid 1990s, the early 1990s, late 1980s, mid 1980s, early 1980s, late 1970s, 1960s...and so on.

The economic recession has started and it's effects are not outside of normal behavior. Some people are losing their jobs and houses. Asset prices are falling and corporate profits are falling. Democratic governments are throwing money at the voters in order to stimulate demand and secure votes. Again, Keynesian moves by elected officials aren't exceptional. Stagflation is here and it will stick around until declines in the dollar force interest rates higher. Where's Volcker when you need him?

Crime is somewhere higher than it was a few years ago but certainly no where near the horrible levels of the 1980s/early 1990s.

Food prices have moved up more rapidly than I could have ever predicted. But this is because of idiotic agriculture and energy policies. Higher oil prices pushed Congress to make the worst mistake in agricultural policy history (or at least one of the worst). Now we are burning food and money to make fuel. Grain-based ethanol projects (and other green fuels version 1.0 ideas) are an environmental disaster, an economic disaster, and are mostly responsible for the spike in food prices.

House prices are returning to historical levels and some over leveraged investors/speculators are getting slapped by the invisible hand.

Oil production hasn't crashed and isn't about to start crashing. Higher prices have increased investment into the energy market and it has seen a major increase in attention over the past couple years.

[Tyler_JC]

Another annoying factor:

Lots of chemicals and fertilizers are being used to grow corn that we are later going to burn.

So not only is the ethanol boom raising corn prices, it's pushing up the prices of the things that we need to grow food.

And of course, oil prices push diesel prices push food prices.

The whole thing is a mess.

I am willing to concede that the current agriculture situation is new and is a serious problem that needs to be addressed with big changes.

But house price declines or small upticks in unemployment? Not unique.

[Revi]

Here in Maine I am noticing that the poor are having a really hard time making it. Life here never was a picnic, but now we are facing some really hard choices. A lot of people are moving out. I noticed that only about 2/3rds of the houses were occupied on the south side of Waterville. Then driving home we noticed that about a third of the driveways weren't plowed out in the country. Some of these people may be snowbirds, but a lot have just left.

Faced with the choice between toughing out a winter in an uninsulated house and heading south, a lot of people opted out of here. Especially this winter. We had 4 feet of snow on the ground. That's no exaggeration. I measured it. On the level, not plowed up. We still have two feet in the woods here in Central Maine.

People are still driving, but the number of silverados and ramchargers sitting in used car lots is staggering.

We are entering the period where people around here just can't make it any more.

Recession will make it worse.

[Tyler_JC]

I'm sorry to hear that your town is depopulating. It must be pretty demoralizing.

Is it falling below critical mass?

There's probably some danger threshold, after which the area becomes unlivable.

Have you ever thought about following them southward?

I have a couple friends from Maine, it seems like everyone is trying to get out of there.

The same thing is happening in much of rural America. People are clustering together in the most economically vibrant areas and allowing everywhere else to empty out.

The result is a very uneven country with a few Mega-regions controlling everything.

However, this isn't new and Peak Oil isn't the primary cause.

[retiredguy]

4 feet??? Pffft. We've had 100.7 inches so far. Beat the old record by over two feet.

Can't start the garden until the last of the ice melts.

Vacant houses around here, too. And unemployed people.

[Tyler_JC]

With current trends in migration, I wonder what this world is going to look like in 30 years.

I think we might be reaching the Megalopolis phase of human societal development.

The world will be split into massive, powerful MegaCities of tens of millions of people surrounded by rural areas that supply the MegaCity with resources.

High oil prices makes private transportation impractically expensive for the masses. Everyone moves into town in order to cut down on transportation expenses.

As the rural areas empty out, the process accelerates because living expenses become higher and higher in depopulating areas as the economics of scale start to unravel.

I dunno, it's going to be interesting. Peak oil is greasing the wheels of this transition and we can already see it happening.

That's where we stand as of Q1, 2008.

It's not the end of the world, just the end of the world as we knew it.

[mos6507]

$this->bbcode_second_pass_quote('Revi', '
')We are entering the period where people around here just can't make it any more.

[mos6507]

$this->bbcode_second_pass_quote('Tyler_JC', '
')High oil prices makes private transportation impractically expensive for the masses. Everyone moves into town in order to cut down on transportation expenses.

[Tanada]

I bought this house in 2004 after seeing for sale signs everywhere for over two years. I convinced myself that the bottom was here and that was the time to buy.

Now I have a house on a block where one house burned down and was converted into an empty lot while two others sit empty and another was converted into a rental unit. Two of the houses on my side of the alley are for sale and one across the alley as well. I am afraid to get my house appraised because I beleive the value has dropped since I bought it, which makes my 5% down mortgage a moot point, I would have to walk away from all the money invested in Principle and updates at this point in order to sell it.

The local economy is falling apart, the local manufacturing base shifted to 80% auto related over the last 30 years as the other bussinesses left town, and now the auto bussiness is crashing with one part supplier declaring Bankruptcy in February and reopening under protection and the big plant in town schedualed to close its doors by the end of the year.

Things are depressing around here, but what point in fleeing south where there are high summer cooling bills? I can stay warm at night in the winter with a low set electric blanket, if I am too hot in summer I can't sleep and can't function and there is no cheap alternative to keep cool.

[vision-master]

$this->bbcode_second_pass_quote('Revi', 'H')ere in Maine I am noticing that the poor are having a really hard time making it. Life here never was a picnic, but now we are facing some really hard choices. A lot of people are moving out. I noticed that only about 2/3rds of the houses were occupied on the south side of Waterville. Then driving home we noticed that about a third of the driveways weren't plowed out in the country. Some of these people may be snowbirds, but a lot have just left.

Faced with the choice between toughing out a winter in an uninsulated house and heading south, a lot of people opted out of here. Especially this winter. We had 4 feet of snow on the ground. That's no exaggeration. I measured it. On the level, not plowed up. We still have two feet in the woods here in Central Maine.

People are still driving, but the number of silverados and ramchargers sitting in used car lots is staggering.

We are entering the period where people around here just can't make it any more.

Recession will make it worse.

[Dan1195]

I think the best areas for now are S. New England and norteast metroplex, where I am, the Northwest (S.F. north,) and the plains if your not too far from a decent metropolitan area. Climates here are fairly moderate, are not heavily dependant on heavily vulnerable industries such as automotive and tourism, and one can keep driving to a minimum if in the right location.

Other locations are not that great:

Midwest - workforce heavily geared toward automotive and was already depressed from loss of manufacturing.

Southeast (esp. Florida) - High summer energy costs. Economy is more tourist based. Also high senior population that may not get replenished with less people saving.

Southwest - same as southeast, but worse off since environment cannot support that population without significant inputs (i.e. food, energy) that has to travel long distances.