Good News
ODOT is giving deep thought to lining its highways with photovoltaics, a common sight in Germany. They reason that substantial parts of highway corridors are used for nothing else so why not? Planners are thinking of a slow start – not so many kilowatt hours to begin with. They need to gain the experience with them, and with the magnificent research and development that photovoltaic panels are experiencing now is the time to experiment and become ready for the advent of the splendid new opportunities as they appear. Those panels form a key part of the three tier, separate systems for freight and passengers, recommended by O-STAR.

Not Good News But Anticipated News
The International Energy Agency states the belief that peak oil will occur no later than 2012. That date is just five years from now On or before then is what they say.

An independent organization, and they are nothing if not independent, agrees. The organization is the Association for the Study of Peak Oil (ASPO). I don’t know the membership requirements but I shouldn’t think I’d qualify. Those guys are serious and know what they’re talking about. They’re oil men and I’m not. Their international chief is Colin Campbell, who retired as VP of BP, and his resume reads like Indiana Jones. The other publishing members are much like that. The American branch (Campbell is Irish) is active and outspoken and is the source of much of my information.

Last month in EB (Sept. 23rd) there were an article containing a series of historical graphs on petroleum production. I was so taken with those graphs I would have reproduced them here but for the fact that I know of no way to do that. Excited by what I read I downloaded from www.eia.doe.gov several thousand pieces of data and started to analyze them. I used the 1970s and surrounding years to do my own independent research, feeling that was a good way to verify my trust in ASPO-US. Okay, I did that, if to only a limited extent. I chose the target period because of the rather severe impact oil limitations had on this country at the time, and to calibrate my eye to the data that appears on a weekly basis on the www.eia site.

In the end I had a feeling of why bother? Those guys in ASPO know the business and why even try to compete. Besides, I did pretty good in mathematics in college but I simply couldn’t stand statistics, which is basically what we’re talking about.

Okay, it’s time to get ready for peak oil. The immediate impact will not be anything like the ‘70s I shouldn’t think. But we will have traded a buyer’s market for a seller’s market, which is what happens when demand is greater than supply. There is to be an international auction, wherein the nations most willing to put up the bucks get what they want (as in, can afford). The oil companies will be in a position to enjoy the fruits of monopoly – they got it, you want it with predictable results.

In a word, you certainly can have the gas, the question is how much are you willing to pay? Before you dismiss that as of little consequence, consider that the oil shortfall in the U.S. during the troubled ‘70s was around five percent, and that’s what the continuing decline in production capacity will mean each and every year thereafter, according to analysts. The only residual question. Are you sure of five percent or might it be four percent or six percent? All we know for sure is driver’s ain’t going to like it.

Wait a minute – production is flat right now and demand is increasing in the U.S. and especially in east Asia, but there are no shortages. What’s going on? The answer is that there certainly shortages but not in this country. An ever increasing number of countries find themselves unable to compete in the market place and are dropping out of the game (you’ve heard about Myanmar?). Some of what you are driving on now used to go to poorer countries. Tractors there don’t work anymore. Back to oxen.

There is a snippet of good news in all this. Someone mentioned that after the Soviets withdrew their support of the Castro regime, Cuban health improved. Seems like being priced out of the oil market will force our corpulent population to take a walk once in a while, much to their benefit.

Kerogen
A federal task force, comprising elements of several agencies – DOE, Interior etc., has concluded that kerogen sources will not answer. Kerogen, if you will recall, is what oil sands and oil shale yield (the stuff simply wasn’t buried deep enough to turn into petroleum) and will not supply our future needs. Something is going on. Federal agencies are admitting this? What’s going on? Where are the political commissars that have been planted in the agencies? It takes huge amounts of energy to convert those sources from kerogen to a petroleum substitute, energy that is presently provided by petroleum (much of it natural gas, but in petroleum geology that is simply a form of petroleum. Natural gas is formed when what otherwise would have been liquid is buried more than 15,000 feet below the surface.)

Ethanol
Given the heady level of government subsidies and requirements for mixing ethanol and gasoline – both federal and state – ethanol had become a cash cow for ethanol refiners and farmers in certain parts of the country. Result, as one might expect, is a glut of ethanol on the market and a collapse in ethanol prices. There’s much enthusiastic talk of a whole ‘nother bunch of refineries in eastern Oregon – they would ship the corn in from Iowa. Hunh? May we suggest that’s a bubble that’s gonna break?

Conclusions
Prices will rise. Prices of just about anything but suburban properties. Groceries – how much on the grocer’s shelves is locally reproduced? Those millions of trucks crowding the contemporary freeway are going to pay ever more seriously for fuel to stay on the highway. You will receive the bills when you buy something. Providing truckers don’t simply find another line of work and the trucks don’t get there at all. Remember – peak oil promises an oil shock of the 70s dimension each and every year forever and ever.

Airline ticket pricing will become unbearable (a very large part of the ticket is to pay the fuel and increasing fuel prices will be immediately felt at the ticket counter. Each and every year forever.) Forget fresh pineapple. I would look for a return to the sailing ship in the future. Shipping has always been price conscious. A hundred years ago sailing ships were remarkably efficient. They used small engines to hoist sails – and there was a certain amount of automation in arranging sails to take maximum advantage of the winds. Betcha they make it back, with solar panels, computers, electric motors, and very small crews. But your pineapple won’t be all that fresh when it gets here.

Seventy percent of Wal-Mart products come from China? They are distributed by truck. I won’t be buying stock in that firm. Wouldn’t call it a good bet.

The big question remains: How will you get to work if your boss can’t pay you enough to operate a car? How will you get your kid to the doctor or hospital when the need arises? How will you get to another city if a friend or relation needs you?

O-STAR says get out of the petroleum economy. More than quickly — ASAP! An alternative transportation system, three tier (local, intermediate and long range) , electrically operated by a solar powered technology rail system. steel wheels on steel rail, separate systems for passengers and freight can save the day. If peak oil actually does happen (it’s happening now to individual oil fields right and left), what else is going to save the day? Are you prepared for subsistence agriculture on what you can get out of a pig or two, a cow if you’re lucky, and a garden with a couple of fruit trees if your lot is big enough? Not exactly? Then, without liquid fuel, what are you going to do? The stores may well be empty and vacant – there’s no way to bring in stock. Railroads as presently constituted simply will not be able to handle what trucks now carry. You think ethanol will avoid that? Can I interest you in a very nice bridge over the East River?

News picked up from EB, date 10/1
* India’s fuel consumption grew 3.5 per cent in August and crude oil imports soared 9.7 per cent as refiners imported more crude to export processed products.
* US consumers are expected to pay record prices for heating oil, electricity and propane to warm their homes this winter, and low-income families will need government help to cover those bills, government energy officials said on Tuesday.
* Interior Department’s efforts to collect billions of dollars annually from oil and gas companies that drill on federal lands are troubled by mismanagement, ethical lapses and fears of retaliation against whistle-blowers, the department’s chief independent investigator has concluded.
* Soaring food prices, driven in part by demand for corn-based ethanol, have cut the amount of food aid the US buys to less than half the amount it did in 2000.
* The US economy faces a 40 to 45 per cent risk of recession induced by the housing market downturn, the chief executive of Freddie Mac warned, as data showed sales of new homes hit a seven-year low in August.

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