Debt-laden states, Debt-laden people, and where to go from here . . .

Well, that was fast. California went into the toilet right on schedule, not passing the budget they needed. Now, banks are downgrading their bonds to 'BBB' status (Check out cnn.com/business for that story) and it turns out that a bunch of major banks, including Bank of America and Citi, are not going to accept their IOU's. Meanwhile, the economy has decided that it kinda liked being in the toilet right along with California, thank you very much, and has responded accordingly by shedding a ridiculous amount of jobs and 300 points off the stock market in two days. To make things even MORE interesting, oil is now a full $10 cheaper per barrel than it was a week ago. Also, it turns out that Americans are charging things left, right, and down the middle - only now, it's not cashmere sweaters from Nordstrom, steak dinners at Morton's, and down-payments on new SUV's. We are now using our charge cards (those of us still lucky to have them) to pay for stuff like gas, groceries, and our insurance bills.

THE CONSUMER FREAK-OUT INDEX

You've got to hand it to ABC News. Their R&D department are AWESOME at tracking just how crappy everyone's lives are across this great nation. Check out what I'm terming the 'Consumer Freak-Out Index' at http://abcnews.go.com/Business/page?id=7613976. This little ditty measures just how stressed out Americans are by county, using indicators like foreclosures, unemployment, etc. essentially, if you're over 18 on the index, your county is in full-blown freak out mode.

What does all this have to do with Peak Oil, you ask? EVERYTHING.

So American consumers from Seattle to San Diego and from Portland, Maine down to Key West are on edge. California, Arizona, New York, and Illinois, among other states, are edging closer to bankruptcy. The U.S. Dollar, ladies and gents, is the currency that sets oil. Our fiat-based monetary system is so stressed right now, that all it's going to take is one last straw in the right place at the right time and the kind of panic that is usually reserved for a Jerry Bruckheimer flick is going to set in. Imagine if all of the sudden, inflation starts to REALLY start to kick in. Demand for oil is going to be irrelevant. The price will rise; and of course, the companies will only be to happy to pass the costs on down to you.

A continuous conversation regarding the economy is going on right now at the highest levels of government. I continue to hope for President Obama and his government to succeed, especially with the addition of the new Junior Senator from Minnesota on board. The sad thing is, to paraphrase Bill Maher, I still have audacity. It's my hope that eroding. So many people I am friends with are already writing the Obama presidency's obituary, using the words of the old U.S.S.R., meet the new boss - same as the old boss. And to a certain extent, I think that they're right. You can't expect, even coming in with the poll numbers he had, to rock out that kind of agenda in the face of this economic doomsday.

The question now becomes, at what point does our government throw its collective hands up in the air and say, "We're broke! We can't do this crap anymore!!" The day is coming, and soon at that, when we're going to be forced to say that. When it does come to pass, think about our daily oil imports, paid for with loans. We have enough oil in the strategic reserve to keep us afloat for approximately 30 days, assuming stable demand. At the end of that 30 days, then the real fun begins.

I'm am beyond nervous about this current financial morass and what it means for our society. The aftershocks from last summer's oil quake are still reverberating today. I just wonder how long they continue before something REALLY big happens.

p.s. I'm attaching the slideshow that we presented here in Fort Lauderdale regarding out Post-Petroleum scenario. It's more rosy than I would have liked it to be, but we were told to be optimistic. Enjoy.

. . . whereupon Karl meditates on $73-a-barrel oil, $2.70 gas, and sustainable development.

Oil decided it wasn't happy crossing the $70-a-barrel mark and decided to keep on going up, briefly touching $73-a-barrel before retreating to the mid $72's. Gas, meanwhile, continues to rise about 5 cents per week and now sits around $2.70. More and more people are starting to take note of this and, I'm sorry to say, seem to be accepting the rising price of fuel in the summer as the 'new normal.' The questions started popping into my head as I saw these prices starting to climb. The magic number of $3.50 a gallon for gas may now not be the 'game changer' people like me hoped for. Of course, in the midst of this economic downturn, anything is possible. A statistic that came out this week from an oil analyst put things into perspective for us, however. For every 10 cents gas prices go up, American consumers spend $40 million less a day. This is especially problematic for us as we try to stay out of the economic ditch.

Economic indicators continue to point to brighter things ahead. The question, as I see it, is, brighter for who? House values are starting to stabilize. Detroit is seeing speculators and investors buying up their houses in hard-hit neighborhoods. The Dow Jones is back in the black for the first time this year. People, in other words, are getting hopeful about things getting 'back to normal.' The President and his pals are doing everything they can to foster this feeling, delusional as it may be. I understand why they're doing it. It's hard to change; and it's especially hard to change when you have no viable alternative to the energy sources that have powered our existence for the last 150 years or so.

The question we need to ask ourselves is, where does it end? How long will we continue to allow ourselves to dance on down this treacherous pathway? I'm headed to a seminar on Wednesday about transportation and climate change in South Florida put on by FDOT. Part of me feels this is akin to a chicken going to a survival training course put on by Col. Sanders. In this seminar, I fully expect to be told I need to be impressed by all of the magical, wonderful things people in FDOT and places around the country are doing to prepare to mitigate climate change by improving urban design, concentrating on infill, and building more transit/transit-oriented development. To be fair, in the papers they put out to show their thought processes, it looks like they're at least acknowledging the problem. Sooner or later, though, we need to stop talking and start acting. Meanwhile, we get to sit and listen to the fools in the Cato Institute and the Heritage Foundation tell us how awful it would be for us to put any money at all into transit and light rail. Ugh!

Sustainable development, as far as I'm concerned at this point in time, is a difficult line to walk. This is especially true considering the problems that are headed our way if we don't change our reckless pattern of consumption and wasting resources. There is a part of me that dreads the way that we operate in this country. As Schlesinger, our first Energy Secretary, pointed out so deftly, we Americans have two types of energy policy: Complacency and panic. The fact that we need panic in order to affect change speaks volumes about what it's going to take to get us moving in the right direction. Without some big panic-inducing event, Americans will not give up their SUV's, Trucks, and V-8 sedans, even if they now have to purchase them from foreign manufacturers. Living in South Florida, I can attest to the all too common sight of Mercedes-Benz S Class monsters, BMW 7 Series, Range Rovers, Bentley Coupes, Ferrari's, etc. All of them get horrid gas mileage; and I'm willing to bet that many of them are piloted by people who won't give them up until the last drop of gas is squeezed out of the last oil well.

As previously mentioned, without a sustained panic, we will not see any change. What's worse is that with every little uptick in the economy, it delays our realization and acceptance of the utter lack of sustainability of our current lifestyles. I am just as guilty of this as the next person, although I'm trying hard to correct this. But one person does not a revolution make. Even now, I have my doubts about the Obama Administration's reluctance to push harder for healthcare, energy, and transportation reform in the midst of the lobbyists. The question must be answered, At what point in time do you stop worrying about getting re-elected and start worrying about doing what's right? When that question is answered, for better or worse, we might start to see real change.

The Calm Before the Storm . . .

We've reached a point in the markets right now that I believe is the one of the final lulls in the action before we get hit for real.  President Obama, God bless him, is trying like hell to keep us afloat in the rising sea of problems he inherited.  Right now, gasoline has crept up nearly unnoticed to $2.50 a gallon.  That's up 30% in the month of May, according to a CNN report.  While this jump coincided with Memorial Day weekend (the unofficial start to the Summer 'Driving Season,')  and is not likely to repeat itself next month, the fact is that we will most likely see some kind of an increase in oil prices thanks to continued problems in the Middle East, the ridiculously poor performance of the American dollar and the coming Atlantic storm season.  

Economists are fretting over the stability of the micro-recovery they've witnessed in the markets over the past few weeks if Americans get hit with the whammy of high fuel prices again this summer.  They are specifically worried about gas as it edges closer to the magical number of $3.50 a gallon, the price at which market groups noticed that Americans finally took notice of the actual cost of driving places and started to change their driving behavior.  While part of me truly hopes for gas prices to continue to rise, the other part of me (the part that likes air conditioning, nice cars, food and drink from far off places, etc.) understands that one more summer like last summer and we may have a serious problem on our hands.  When people are spending their money on gas, they aren't spending it on other stuff.  And since we have an economy primarily based on the buying and selling of said 'other stuff,' people may start cutting back again, regardless of the pleas of Big Business and the government.  All the stimulus money in the world cannot make people spend their money on useless crap like iPhones and ShamWow's, especially when they're a hell of a lot more concerned about whether they'll have gas money to get to work or grocery money to eat.

I am, sadly, very pessimistic on the front of energy and America's future.  This nation continues to listen to the wrong voices, closing its collective eyes and hoping against hope that we will find some kind of energy miracle that will continue to allow us to live 'The Good Life' of fancy electronics, 5000 square foot houses, big SUV's, and unprecedented mobility.  Closer to the truth of the matter, I firmly believe, is that at some point in the next 30 years, we will see life as we know it fall to pieces.  We are nowhere near ready for any kind of oil shortage like the ones we had in the mid-1970's and early 1980's.  A prolonged energy crisis in this country, especially in our present weakened state would lead to a serious depression that may last a decade in the best case scenario.  Worst case for this situation is something many people would be afraid to consider.  The question remains how to prepare for it.

Rather than going out and spending the money on public transportation, the highway lobbyists convinced the government to spend money on roads.  Even with the amount of money the Obama Administration committed to light rail and high-speed rail, it is microscopic compared to the amount spend on highway and road repair and construction.  Something must be done to reign in our culture's love affair with the automobile and allow a return to mass transit.  Hopefully, the credit crunch and increasing fuel prices will cause us to recognize that this problem is not going away.  The time for action is now; because every day that we spend not acting is one more day of preparation lost forever.

Post-Petroleum Aviation: Can Airlines Survive Oil's Decline?

Something our research is looking at right now:  The teetering airline industry.  Looking around on the internet, few industries (save agriculture) are in a worse position right now to deal with a decline in oil production than aviation.  Jet-A1 kerosene (totally petroleum-based) makes up most of their fuel production.  Just to begin stepping away from this is a task that would make sweeping the Aegean Stables look like cleaning up a bit of spilled milk.  

According to aviation watchdog groups like the UK's Aviation Environment Group, biofuels are what airlines have tapped to produce the lion's share of future fuel, with a 30% share expected by 2030.  While this goal is admirable in its intention, AEG and other watchdog groups say that this is nothing more than a misguided attempt by the industry to maintain themselves in the increasing pressure of a Green Economy.  

Estimates put forth by AEG in "Bio-Fueled or Bio-Fooled" (Google it; it's worth a read) indicate that to replace all of the fuel used in the aviation industry today - and please keep in mind, that's assuming NO change in demand, for better or worse - it would take 1.4 billion hectares of land.  To put in in slightly plainer language, that is more than 5.4 million square miles; that is more than half the size of the entire land mass of the continent of North America.  The land that we are talking about would, of course, take the place of farm land, thus driving up food costs considerably; therefore, in the view of many practitioners and planners like myself and my colleagues, bio-fuels truly are simply a band-aid fix.

Also mentioned prominently is the Gas-to-Liquid method that coal and natural gas companies are pushing, in the hopes that they can stop their slide into irrelevance.  They point out that the Fischer-Tropsch method harnessed by Hitler's war machine in Nazi Germany is a proven product that could replace a large percentage of oil as a liquid fuel.  What they don't mention is the inconvenient little fact that switching over to a GTL fuel majority share would lead to an approximately 80% increase in greenhouse gas emissions, as noted by a study at Princeton University in 2006.  I don't think that I need to point out that an 80% increase in greenhouse gas emissions is not a good thing, even if it does let us take that nonstop flight from Miami to London.

The question, of course, is what direction does the airline industry take to alleviate its fuel concerns?  Well, the answer is that, short of minimizing service and flying smaller, more fuel efficient aircraft, there is no answer.  In the future, our scenario construction sees the entire process of air travel dwindling down to a minimal level.  Ships once ruled the oceans; and we see them doing so again.  Examples of solar sails (www.solarsailor.com) and even regular old cloth sail ships returning are starting to show up.  Other alternatives, especially in regional travel, are the upcoming high-speed rail lines and corridors linking important areas around the country.

Ultimately, a scaled-down version of the airline system currently in place will most likely come to pass.  Because of their large, powerful lobby and the fact that the world has yet to begin the slowdown process that we hope will ultimately save us, airlines will continue to be a factor in transportation.  It bears reminding, however, that this industry is one major fuel crisis away from complete disaster.

Our Petro-Lifestyles & Our Healthcare System: More Similar than you'd think!

Today in Washington, D.C., President Obama and members of his cabinet are getting together with people on both sides of the current healthcare system.  As was pointed out by Rick Klein in his column today on ABCNews.com (Link below), parties on both sides recognize that the situation we're in right now (i.e. costs spiraling out of control, corporate lobbies running the show, etc)  and feel something needs to be done.  The trouble, of course, is trying to come to a consensus on what, exactly, should be done.  

Does all of this sound familiar?  If you have paid any attention at all to the back and forth among policy makers and advocacy groups in the argument over energy, it should sound very familiar.  Right now, even oil companies (though at their own snail-like pace) are admitting that new sources of energy need to be examined, even if they are still in the business of reassuring us that America can keep on using oil for 150 years without running out.  People recognize that the United States uses petroleum at a rate that is absolutely unsustainable, given the current global conditions.  The problem remains how to deal with the use, what alternatives are viable and practical, and how best to get this country (with its notoriously short attention span and reluctance to change) headed in the right direction.

In our current healthcare system, if you don't have insurance, you're either out of luck or you're paying through the nose to get the care you need.  In our current petroleum system, if you don't have enough money, you can't buy a hybrid or solar panels for your home.  Moreover, a certain element of society thinks that this is not a problem and would really like to see things continue in this vain.  They see healthcare and our petro-lifestyle as market driven.  As much as they say that they empathize with those who suffer (whether it be in the hospital or when they open up their energy bill), they continue to repeat the Reaganomics mantra of trickle-down, tax cuts, the market will solve everything, etc.

The time has come, however, as with the healthcare summit, to start to focus forward, erasing the mistakes and failed policies of the last 8 years.  President Obama sees the need to bring these parties to the table with healthcare because the industry, as loathsome as it is sometimes, still holds  a very tight grip on the way things get done in Washington.  The oil companies (or as some of them are now calling themselves, the 'Energy' companies) on the other hand, have been weakened by the combination of last summer's oil spike, the ridiculously massive profits they reaped during that time, and the ad campaigns they are running that all but the most gullible American sees as a ploy to not let the Big Bad Government eat them up.  

The opportunity to hold an energy summit, like this healthcare summit, is here, now.  We must act quickly and decisively if we are to act on the initiative of the First 100 days of the new administration.  As the old blacksmith's saying goes, "Strike while the iron is hot."  Doing so will set the energy policy that we need to begin our long, hard journey away from fossil fuels; and the sooner we get started, the better.

The NEW and IMPROVED Blue Dog Rising is here!

Ladies and Gentlemen, thank you for your patience with Blue Dog Rising.  I've decided to change direction and turn this blog into the voice for Post-Petroleum life on this planet; and you're all invited to join in.

So the questions begin . . .

What will Post-Petroleum America and the world look like?  Will it be the apocalyptic world of Mad Max and The Postman?  Or will it be the optimistic views of friends of mine where all of our problems are solved and we live happily ever after?  What will we use for fuel without oil?  Where will be live?  How will we cope with these problems?  

We will be discussing these questions and more on this page for the foreseeable future.  Any comments, concerns, questions, quips, etc (to paraphrase one of my favorite professors) are welcome and encouraged.  I will be posting links to interesting articles and suggesting books and authors for my audience (and here's to hoping that there is an audience for this) to check out.

So to begin with, here are a few books you should look at, if you haven't already.  Each of these addresses, in some facet, the growing problem of Peak Oil and how it can and will change the way we live our lives:

The Post-Petroleum Survival Guide and Cookbook:  Recipes for Changing Times by Albert Bates

The Party's Over:  Oil, War, and the Fate of Industrial Societies  by Richard Heinberg

Twilight in the Desert:  The Coming Saudi Oil Shock and the World Economy  by Matthew Simmons

Stay tuned to this blog for future posts including news items and writings of our Post-Petroleum Planning group!