Category: peak oil

$90 oil

I think everybody has heard that oil pushed through $90 a barrel on trading today. Let’s see what everybody has to say:

I’m sure that’s enough bad news for now, so I’ll conclude with this reminder that it’s spring in the antipodal regions of planet earth. Australia had it’s annual Bike to Work Day earlier this week, with many happy bike commuters enjoying the bicycle ride to work as thousands dusted off their bikes for the event. Treadly also posts a few entries on Bike To Work Day Down Under.

Now’s a good time to mention my buddy Jim in Fort Collins, Colorado. Jim is Oil Free and Happy and sells cute t-shirts and patches from his website for you to wear. I have one of his “Powered By Sweat” shirts. Oil Free and Happy — give him a visit and buy a patch or shirt from Jim. (I don’t make a dime from referring you to him.)

Photo: “NYC Bicycle Commuter 79th St @ 5th AVe” by Bicycles Only.

$3.49 per gallon

That’s the price I saw this morning for regular unleaded at the Shell gas station on Alma Street in Palo Alto, CA. Granted, that’s always the most expensive station in town, but it’s still a dramatic jump from the $3.20 or so they had last week. Near my home, the nearest gas stations were at $3.19/gallon last night.

Although the current U.S. administration is still in denial and refuses to do anything useful about it, the world is in fact running out of cheap oil. Investors have even woken up to this fact.

Locally, I see more bike commuters than ever although the weather has chilled, the days are shorter, and the California rainy season has started. Many are people I’ve never seen before on shiny new bikes, and the ones I talk with tell me they’ve only recently started bike commuting. They started because of high gas prices, but they continue because they discover they actually enjoy riding in to work.

Increased bicycle use for transportation is great to see, but high gas prices are still a concern for me. Higher gas prices mean I pay more for everything. Economic growth comes from growth in energy use. I’m not too hopeful that we’ll effectively transfer our energy use from transportation to other, more constructive purposes. Our transition to a low energy economy will be very painful for everybody. We’re already seeing pain in Africa and some Pacific Rim countries, where gasoline that once was used to run irrigation pumps, farm tractors, fishing boats and village generators is now shipped to the United States because we’re able to pay the higher price for the fuel. Even North Dakota’s wheat harvest was threatened because of diesel shortages there.

Many of my anti-car friends rejoice at the prospect of high gasoline prices, but I see pain in all of our futures. I know the readers of Cyclelicious are doing your parts to forestall and maybe even ease that pain. You’re doing the right thing by riding your bikes and encouraging others by your example.

Gasoline makes you fat

Santa Cruz Highway 1

Here’s an interesting study [PDF] from Washington University in St. Louis in which economist Charles Courtemanche demonstrates a causal relationship between the price of gasoline and obesity rates in the United States. According to this study, an additional $1 in real gasoline prices would reduce obesity in the U.S. by 15% after Â…five years, and that 13% of the rise in obesity between 1979 and 2004 can be attributed to falling real gas prices during this period. Courtemanche provides evidence that increased gas prices will result in more exercise for Americans as well as fewer restaurant visits. He writes:

If the price of gas rises, the cost of driving also rises, which may affect body weight in two ways. First, people may substitute from driving to walking, bicycling, or taking public transportation. Walking and bicycling are forms of exercise, which increase calories expended. If a person uses public transportation, such as subways, buses, trolleys, or rail services, the need to move to and from the public transit stops is likely to result in additional walking, again increasing calories expended. Second, since the opportunity cost of eating out at restaurants rises when the price of gas increases, people may substitute from eating out to preparing their own meals at home, which tend to be healthier. Income effects may also lead people to eat out less in an effort to save money to pay for the increased cost of gas.

Courtemanche notes that the reduced obesity rates can save 16,000 lives and $17 billion per year in health costs, partially offsetting the pain of paying higher gas prices.

Props to Tim Grahl for this news.

Other news:

Tax credit for exurban car commuters

Hey America, did you know that we’re at near record low gasoline inventory levels in the United States? What do you do when you’re running short of a declining resource? Do you carefully husband the resource so it will last as long as possible? “No!” proclaims Congresscritter Zack Space of Ohio. “Let’s pass money around so we can use it up even faster!”

I announced my plan to introduce the Rural Commuters Tax Relief Act of 2007. This legislation could not be simpler: If your household makes less than the national median income, you drive more than 30 miles to work and you work at least four days per week, then you receive a $100 tax credit for each month that the average price of gas is more than $3 per gallon.

The U.S. household median income in 2006 was $48,200. If you’re married filing jointly with two children, you can easily find enough deduction to bring your federal tax burden to less than $3000. With this tax credit you can chop your tax bill nearly in half!

It’s nice that Mr. Space is pulling for the little guy, but I and others have been warning for years that the affordable house out in the exurban prairie won’t be so affordable once oil prices start the inevitable climb right about now.

Read Zack Space’s opinion piece here. You have to wonder what they thought on Easter Island when the last tree was chopped down.

Signs of the times

BP has announced its departure from the retail gas business in North Dakota, Texas, Louisiana and Wyoming. North Dakota has experienced fuel shortages all year.

BP says it is abandoning those markets because it cannot meet its goal of supply reliability. In the United States, BP brands include am/pm markets, Amoco, and ARCO.

BP station operators in the U.S. southeast are also reporting that they’ve been told to find new suppliers.

Fuel shortages that are already endemic across large swathes of Africa and parts of Asia are beginning to hit more remote areas of the United States, where mass transit and even bicycling is not a realistic transportation option.

Folks, this is our breadbasket. If our farmers and ranchers can’t buy the fuel to manage our food supply, we’re in for some tough times ahead.