03 October 2006

Life In An Expensive Oil World

I'm not going to predict when petroleum prices go up. I will predict how we will react as it does so, in fits and starts, over time.

Less Thirsty Surface Transport

Hybrids will get cheaper, with mass production. As they go mainstream, they will reduce fuel demand per vehicle by about one-third. Eventually, there will be plug in hybrids that get some energy directly from an electrical grid.

Cars will get smaller and run with less horsepower. Many two or three car families will buy a two seater, fuel efficient, inexpensive small commuter car or two (50 mpg plus) to compliment their big hybrid car (40 mpg plus) or SUV (30 mpg plus) for large family outings and soccer team transfers.

Families that can't afford commuter cars will buy Vespas and motorcycles and mopeds.

People will use city buses and light rail more and car pool.

People will use more diesel, more biodiesel, and more ethanol, and even natural gas too, for a while, as transporation fuels. Almost all non-premium lubricating oils will be biosource.

More intercity freight will go by rail or barge instead of truck. Intermodal transportation (i.e. ship to rail to truck in shipping containers) will become much more common. Eventually, dual fuel locomotives that run on overhead powerlines in urban areas and their own power in rural areas will be developed.

High density areas (like the Pacific Coast and Northeast) will revive intercity, high speed passenger rail. Low density areas will revive intercity bus service.

Reduced road traffic will drive up gas taxes.

Electric Vehicles

Electric vehicles will come eventually. When they catch on, they will go as fast as conventional vehicles, perhaps 85 mph, and handle much like a hybrid, but with less range.

Fleet vehicles will probably come first, like urban postal delivery vehicles with a known need less than the range of the vehicle. Then, SMART cars will be replaced by electric SMART cars for commuters who know their commute is less than the vehicle range.

Eventually, almost all intracity traffic will be electric, about a decade or two after gas is at a stable price north of $8-10 a gallon. ($4-$6 a gallon in Europe and Japan hasn't had that effect.)

Intercity traffic will eventually be mostly by biofueled rail, bus and car.

Cement roads will grow more common vis asphalt roads.


Airlines will set aside a larger share of their planes for business travelers, as the hoi polloi in coach decide that ticket prices driven by fuel costs are getting to high to go see grandma and grandpa for Thanksgiving and Christmas and Easter and summer vacation. Commercial planes will get smaller. Reduced demand will cause consolidation in the industry.

An airship market will emerge which will allow more rural areas to go roadless. At first, it will be used mostly for freight delivery and ecotourism in roadless areas and places with islands (like Hawaii and Alaska). Eventually, it may edge out trucks in rural areas, far from interstate highways and railheads, with increasingly marginal quality road systems. The airships will have partially electric motors with the capacity to get a solar powered boost from the top of the airship to their battery/generator/fuel cell power supplies.


Freight ships will start using more wind assistance with sails or kites. Some freight ships will go nuclear.

Highly automated fish farms will replace much of the commercial fishing fleet.

Recreational sailing will grow relative to recreational motor boating. The sailboats will still have electric motors, but much smaller ones intended for backup power during calm winds rather than waterskiing.

Demand Reduction

Many business trips and family visits will be replaced by conference calls and videoconference calls. Courts will hold more minor hearings via videoconference or conference calls with the offices of the lawyers involved, sometimes with clients available via telecommunications as well rather than at lawyer's offices. E-filing will become more universal in legal practice.

More retail stores will become showrooms only. In those with heavier inventory, like furniture and appliances and new vehicles, inventory will not shipped until an order is confirmed. In those that sell media, like movies, music and books, content will be downloaded and again, retail stores will be mere showrooms.

School districts will reduce transportation needs by creating neighborhood K-8 schools.

Daily newspaper and most periodical delivery will end, first in rural areas, then in suburbs, and then in cities. Online news sources will mostly replace them. News stands will remain in urban areas, and Sunday delivery will probably last a little longer.

Publishers will stop printing non-library copies of case reporters and academic journals of all kinds.

FedEx and the Postal Service will deliver less and less stuff as e-mail surpasses mail, package delivery and faxes. Junk mail will get more expensive and hence, less popular. Rural areas will lose door to door service, in favor of apartment style multi-home postal boxes and mailbox dropoffs. Eventually, physical letters and packages will be rare enough that home delivery and pickup of mail will seem as quaint as milk delivery, ice delivery and coal delivery. You will receive e-mails when less-urgent packages arrive and go to a post office in your area to pick them up.

Employers will increasingly insist on direct deposit for paychecks. Major consumer creditors like credit card companies and utility companies, will increasingly be paid electronically.

Large area wireless networks (like open opening soon in Western suburban Denver) will provide television, radio, internet access, telephone service, and utility meter reading, especially in suburban or lower density areas (where communications traffic is less dense), reducing the need for line maintenance to electrical lines.

Bedroom community suburbs will grow less popular. Infill will surge.

Many office parks will empty in favor of suburban office centers where smaller groups of local employees interface through telecommunications with other office workers. This may actually involve more decentralized franchise like bureaucracies, with small headquarters companies supervising lots of independent contractor local companies, in much the way that car dealers are not currently owned by the companies that make the cars. The biggest office parks, meanwhile, will develop local housing, in part out of old office units.

Medium rise tall buildings in central cities may make economic sense again.

Heating oil use will decline in favor of natural gas (or perhaps LPG), electric heat, improved insulation, and sometimes, even coal. Similar trends will develop in industrial uses. Consumers will also increase insulation efforts to reduce natural gas demand.

Agricultural and Rural Life

Local greenhouses will start to look better than shipping produce from half the world away.

Organic farming is going to become much more economical than "conventional farming" as petroleum based fertilizer prices soar.

Fuel crop farming will replace food farming, especially in areas where traditional crops like tobacco or cotton, are squeezed.

Rural communities will have less farmers as jobs like operating a tractor are automated. Those displaced will move to cities. Rural per capita incomes will rise, but not rural population densities.

Rural areas may actually deconsolidate school districts and form local K-12 schools to reduce student transportation needs. Deconsolidated districts will rotate teachers in specialized areas, rather than moving students and shift to favor school sports with small teams like basketball and volleyball and track and swimming, as opposed to big ones, like football and baseball.

High school level boarding schools may make a comeback as rural residents running automated consolidated farms grow more affluent but the areas are more sparsely populated.

County roads in rural areas not supported by gas taxes will be allowed to fall into disrepair as rural populations fall, with off road vehicles becoming the norm in rural areas, and roads reduced to periodic removals of major obstructions and ruts.