Cheap Oil and the American Century

At the dawn of the 21st century, America stands astride the world like a great colossus. Our armies have troops in almost every country, our economy is 25% of the world's economy, and our language is the language of business and internationalism. It seems to be the American century.

This century will see the end of cheap oil, and of oil altogether as an energy commodity. That's right, by 2030 even the optimistic USGS admits that world oil supplies will have peaked and will be on their way down. World experts predict the oil peak will happen in the next couple years. It may have already happened. After the peak, even if world demand for oil stays steady over time (and it is rising), prices will only go up. Eventually, they will hit $100 a barrel. Estimating from today's pump prices, I guess that translates to at least $3.80 a gallon for gas.

But that's not all. By 2100, petroleum oil will be rare and prohibitedly expensive. Oil wells will still exist and coal oil and oil shale will probably help the supply, but demand will be sky-high. Once it hits a certain price, oil will no longer be used for transportation by the public. It will only be used for the production of chemicals and for powering military equipment.

What will $3.80 a gallon for gas do to the American economy? Will it end our economic and military dominance of the world?

It is obvious that expensive gas will hurt the American economy. It will cause a recession, possibly a massive, long-term one. However, if we as a nation are farsighted enough to invest today in the development of alternative sources of energy, we can ease the transition. We need to invest now, and invest heavily, because 10 years from now may be too late. Despite talk of hydrogen and electric cars, they are not currently in production and will require time to develop, produce, sell, and provide infrastructure for. Time measured in decades.

And what of alternatively powered ships? Planes? Eighteen wheelers and transport trucks? Tractors and skidders? Bulldozers? Chainsaws? Snowplows? Motorcycles? These are the engines of global commerce, and they will sputter without cheap gas. No alternative-fuel designs have been developed for them as of yet. More decades that we can't afford to wait.

And how will we produce plastics? Fertilizers? Pesticides? Asphault? This will not be an easy switch. Modern economies are addicted to oil. We are dependent on cheap energy and cheap products from oil.

If we are not farsighted and wait to develop alternative energies, then we may see a worldwide depression as the cost of transporting and producing goods zooms into the stratosphere, disrupting international and long-distance trade. This depression is likely to last until semi-cheap alternatives have been developed and disseminated to the world. How long this could last is unknown...perhaps 10 years, 30 years. No fuel we can develop in the near future will be as be cheap as oil, but it will have to do.

I expect that expensive gas will thoroughly disrupt financial markets, cause global political instability, and lead to disruptions in shipping and commerce. In such a world, it is entirely possible that America's global economic and military dominance will end. If our current refusal to develop alternative energy and conserve energy continues, America will be at a severe disadvantage in the energy-poor world of the future.

Our fortunes are yoked to the falling star of oil. When you are flying, there always is a good time to deploy your parachute. Ours has come.

The Texas Hill Country and the Rise of the Houses

Crystal-clear creeks, caves, and big, flat-topped hills sweeping blue to the horizon. Steep canyons and cliffs where deep caves and unexpected springs hide. Dry savannas of bunchgrass, live oak, and juniper on the hill tops, tall forests of oak and ash on the cliffs. Water runs under the limestone earth like hidden veins, diving and surfacing in valley streams bordered by gigantic baldcypresses and sycamores. This is a land of beauty, of hidden treasures, of old German towns and big ranches, of rare birds and plants and salamanders and insects. It is the last land of the East, and the first of the West. This is the Hill Country, up on the Edwards Plateau in the heart of Texas.

I grew up in the hilly eastern Hill Country, where the rivers get big and dig deep furrows into the land. The Colorado wore its way 2500 feet down where Lake Travis stands now, and cliffs a 1000 feet high still overlook the lake. My grand-uncle once hunted the valley of the Colorado, and I can only imagine how majestic the land must have been then, before the lake. Sadly, I know my nieces will wonder the same thing, for a very different reason: sprawl.

For 16 years, my family followed suburban development outward from Austin. We lived in old suburbs, in new suburbs, in failed suburbs, and in suburbs that were originally retirement homes for old people. I went to elementary and middle school from small neighborhoods surrounded by a sea of ranches; our daily bus trips to school would take us an hour into the country. Cows grazed next my high-school football stadium, and rich suburban families mixed with country folk in my school. I grew up thinking this was normal, and stable. I expected the country I loved to stay open and beautiful forever.

In my mid-teens, more and more ranches were being converted to housing developments. Austin was becoming a popular place to live, and the rich wanted to live in the hills to the west of the city, not the flats to the east. So the developers built, and built, and built. In a dry land prone to flash floods, receiving less than 32 inches a year of precipitation, they built palatial cliff-top houses with wide avenues and acres of short, green grass.

I am in my late twenties now. Austin is the least dense city in the nation, ringed by suburban sprawl to all sides. There were 300,000 people in Austin when I was 12, there are a million people here in 2004, and a million more people are expected by 2014. The eastern Hill Country is starting to look like southern California, and open land and water are starting to be rare commodities.

So why am I telling you all of this? My land is deathly ill, pocked with development, strip-mined for cement, but it survives for now. Farsighted conservationists established parks to preserve endangered species, and establish more still today. They have kept my land from completely dying. They have kept my hope alive.

Looking forward, one could say that things will only get worse for the eastern Hill Country, that my land is gone forever and may never come back. Sprawl, no matter how ugly or ill-planned or ill-suited to the landscape, seems to be the American way these days. But I just can’t believe that there is no hope.

There are a few reasons I have some hope for the future of the Hill Country, but I want to write about my favorite today: oil. This may seem a strange reason, but I will explain.

The price of oil is going up as demand rises and supply begins to plateau before inevitably falling. There is only so much oil in the world, after all. Alternative technologies to replace oil-driven cars are not being developed fast enough to forestall an era of extremely high gas prices and few good transport options. I don’t know how long this era will last—judging from the experiences of the 70s, at least a decade or two. And it is entirely possible that the price of transportation will never, ever again be as low as it is today.

Expensive transportation is the death of the middle-class suburb. Cities and towns will become denser as people move in to be nearer their jobs, telecommuting will become commonplace, and many suburbs will coalesce around service centers to become distinct towns. Only the rich will be able to keep commuting. Many suburbs will empty, and the face of the eastern Hill Country will change again.

Some see the future as a scary place, empty of many of the great natural treasures of our time and full of uncertainty. I see the future as a place of regret, but I also see it as a place of change for the better. A few good things will remain to us, and we will have the chance to fix our greatest mistakes. The future may indeed be a sadder place, but it is the only place where hope lives.