24 December 2007

Life after peak oil -- better for everyone!

Following an initial period of painful adaptation, we can live happily and healthily in a world with high energy costs
By Gregory Clark - Special To The Bee
Published 12:00 am PST Sunday, December 23, 2007

Oil prices have receded from their recent flirtation with $100 a barrel, but demand soars from China and India, rapidly industrializing countries with a massive energy thirst. The combination of increased demand, high prices and the prospect of an eventual peak in oil production, has caught Americans paralyzed between twin terrors: the fear that rampant consumption of oil and coal is irreversibly warming the Earth and the dread that without cheap oil our affluent lifestyles will evaporate.

Can't live with oil, can't live without it.

Study of the long economic history of the world suggests two things, however. Cheap fossil fuels actually explain little of how we got rich since the Industrial Revolution. And after an initial period of painful adaptation, we can live happily, opulently and indeed more healthily, in a world of permanent $100-a-barrel oil or even $500-a-barrel oil.

The first lesson of history is that cheap energy explains only a modest portion of our current wealth. We are now, as a result of the Industrial Revolution, 12 times richer than the average person in the pre-industrial world. Modern economic growth has been accompanied by huge declines in energy costs from exploiting coal and oil. A worker today can buy a gallon of gas with his wages from 20 minutes of work. Before the Industrial Revolution to buy the energy in a gallon of gas the English worker of the 1760s needed to work four hours.

As energy prices declined consumption rose. Currently in the United States we consume the equivalent in energy of six gallons of gas per person per day. In England in 1770 energy consumption (mainly coal) was equivalent to only 0.5 gallons of gas per day.

Many people think mistakenly that modern prosperity was founded on this fossil energy revolution, and that when the oil and coal is gone, it is back to the Stone Age. If we had no fossil energy, then we would be forced to rely on an essentially unlimited amount of solar power, available at five times current energy costs. With energy five times as expensive as at present we would take a substantial hit to incomes. Our living standard would decline by about 11 percent. But we would still be fantastically rich compared to the pre-industrial world.

That may seem like a lot of economic hurt, but put it in context. Our income would still be above the current living standards in Canada, Sweden or England. Oh, the suffering humanity! At current rates of economic growth we would gain back the income losses from having to convert to solar power in less than six years. And then onward on our march to ever greater prosperity.

The ability to sustain such high energy prices at little economic cost depends on the assumption that we can cut back from using the equivalent of six gallons of gas per person per day to 1.5 gallons. Is that really possible? The answer is that we know already it is.

The economy would withstand enormous increases in energy costs with modest damage because energy is even now so extravagantly cheap that most of it is squandered in uses of little value. Recently, I drove my 13-year-old son 230 miles round-trip from Davis to Chico, to play a 70-minute soccer game. Had every gallon of gas cost four hours of my wage, I am sure his team could have found opposition closer to home.

The median-sized U.S. home is now nearly 2,400 square feet, for an average family size of 2.6 people, almost 1,000 square feet per person. Much of that heated, air-conditioned and lighted square footage rarely gets used. Cities in the Central Valley, such as Elk Grove, that were developed in the world of cheap gas have sprawled across the landscape so that the only way to get to work or to shops is by car. Ninety-four percent of the inhabitants of Elk Grove drive to work. Sidewalks have disappeared in some locations.

Some countries in Europe, such as Denmark, which have by public policy made energy much more expensive, already use only the equivalent of about three gallons of gas per person. I have been to Copenhagen, and believe me the Danes are not suffering a lot from those the daily three gallons of gas they gave up.

But can we get down to 1.5 gallons without huge pain? We can see even now communities where for reasons of land scarcity people have been forced to adopt a lifestyle that uses much less energy – places like Manhattan, London or Singapore. Manhattan, for example, has 67,000 people per square mile. Kensington and Chelsea in London have 37,000 people per square mile. Housing space per person is much smaller, people walk or take public transit to work and to shop, and energy usage is correspondingly much lower, despite the inhabitants being very rich.

So the future after peak oil will involve living in such dense urban settings where destinations are walkable or bikeable, just as in pre-industrial cities (the city of London in 1801 had 100,000 inhabitants in one square mile). Homes will be much smaller, but instead of caverns of off-white sheet rock, we will spend our money in making much more attractive interiors. Nights will be darker. We will not have retail outlets lit up like the glare of the midday sun in Death Valley.

Such a lifestyle is not only possible it will be much healthier. We are not biologically adapted to the suburban lifestyle of Central California – lots of cheap calories delivered right to your seat in the SUV that shuttles you from your sofa at home, to your chair at work, to the gym where you try and work on your weight problem. It will also make aging more graceful. We now live as much in fear of losing our gas-fueled mobility as we age as we are of the Grim Reaper himself.

So life after peak oil should hold no terror for us – unless, of course, you have invested in a lot of suburban real estate.

No comments: