free html hit counter Peak Oil Debunked: 296. MORE DATA REFUTING RELOCALIZATION

Thursday, April 27, 2006


As we've discussed in two previous articles (55. WILL PEAK OIL MAKE LONG DISTANCE SHIPPING TOO EXPENSIVE TO CONTINUE? and 129. WHERE'S THE RELOCALIZATION?), Kunstler and other peak oil "experts" frequently claim that expensive oil will make long-distance transport too expensive to continue. This, in turn, will cause a process called "relocalization" where people will have to produce all their food and consumer products from their own local area. Because they buy into this argument, many peak oil chicken littles are running for the hills, and frenetically trying to get up to speed on Amish topics like how to sew, raise chickens, can vegetables, make their own shoes etc. etc.

Not that there's anything wrong with that. If you like the 1850 lifestyle, knock yourself out. But please don't deceive yourself that peak oil will force relocalization to occur. It won't.

Here's yet another data point to help you see the light:
"Containerisation is why a person in Northern Europe who wants to eat strawberries on Christmas day can find them in their supermarket," says John Fossey, a director at industry publication Containerisation International.

"It has been a key enabler of the rapid industrialisation and globalisation we are seeing in the world today."

Indeed, container shipping lines now run so efficiently that it doesn't really matter where you are sourcing products from.

If you look at the transport cost per individual item, it costs about $10 to send a tv set from China to the UK, or 10 cents to deliver a bottle of wine from Australia to America.

"It costs less to ship a container between China and Felixstowe than it does to then send it on the road to Scotland," says Philip Damas, research director at shipping consultancy Drewry.Source
Note that last sentence. If relocalization works the way peak oilers say it does, trade between the coast and interior of England is likely to come to a halt before trade between England and China.

A while back, a fellow named Vexed on brought up an educational example:

My father just bought a 100 lb weight set made in China for my step brother at Wal-Mart. It cost $29.95. What does it cost to ship 100 lbs from China to the US?
Let's follow through on this, and develop some cost estimates.

Working from stats I took from news articles (unfortunately no longer available), we find:

Price to move 2 million barrels of crude from Kuwait to Louisiana by Suez (approx. date Oct. 19, 2004): $6.95 million.

Doing the calculation, this turns out to be $.01/pound.

For container freight, North American, trans-Pacific service: average rate is US$1,547 per 20ft container.

Doing the calculations, and assuming a conservative rating of 17,500kg per container, I come up with $.04/pound.

So, the trans-Pacific shipment costs for Vexed's weight set should be in the neighborhood of $4, which is certainly doable.

But Vexed's example raises an important point. If peak oil is going to erode world trade, it will first begin to exert its effects on products which have a low price/weight ratio.

At $55, I calculate the p/w ratio for crude oil to be $0.18/pound.
Similarly, the p/w for the weight set is $0.30/pound.

The weight set is actually more cost effective to transport than crude oil. After all crude is really heavy, bulky, cheap stuff.

Here's a running table I've been keeping of p/w ratios:

p/w ratio for crude oil ($55/bbl crude): $0.18/lb.
p/w ratio for 100-pound weight set from China at Walmart: $0.30/lb.
p/w ratio for tomato: $1/lb.
p/w ratio for jeans: $25/lb.
p/w ratio for gold: $6500/lb.
p/w ratio for heroin: $250,000/lb.

If we assume that products with low p/w ratios will be relocalized first, we get the paradoxical result that crude oil (of all things) is the most likely product to be relocalized! Welcome to the wacky world of "relocalization".
-- by JD


At Thursday, April 27, 2006 at 7:15:00 AM PDT, Blogger John Markos O'Neill said...

I think we're headed towards some kind of relocalization but not because of peak oil. Rather, I think we'll relocalize manufacturing because it's annoying to carry our stuff around with us wherever we go.

We'll relocalize production of cheap things like clothes because it will be really nice to carry no luggage, then print out a set of clothes when we get to our destination. When we leave, we'll toss the clothes back into the "composter," where it's turned back into raw material.

At Thursday, April 27, 2006 at 7:41:00 AM PDT, Blogger David Grenier said...

The weight set is actually less cost effective to transport than crude oil. After all crude is really heavy, bulky, cheap stuff.

Shouldn't it read: "The weight set is actually more cost effective to transport than crude oil. After all crude is really heavy, bulky, cheap stuff."

Otherwise, good post.

The thing is, you actually can still buy things like clothes and shoes made in the US that aren't more expensive than versions made in sweatshops. I buy jeans made by union workers in Chicago for the same price as a pair of Levis. Having everything made in China isn't what allows consumer culture to flourish - since prices are always set by the market anyway. Having everything in China simple means that the Capitalist gets a much larger percentage of the money you're forking over than she otherwise would, and the workers are getting far less.

At Thursday, April 27, 2006 at 9:06:00 AM PDT, Blogger EnergySpin said...

Interesting post but the numerical examples have to be qualified further. For example, it is wrong (as the peakoilers) to put all forms of transport under the same category.
Sea transportation has traditionally been cheaper than transportation by trucks or planes. Cheap oil was the prime reason they lost ground to them .. and were outprized from the market.

Struggling with the competition, the international shipping sector had to restructure and that meant higher automation for the ships as well as reliance on cheap crew labor from the East (Phillipines, thailand), the South Americas and Africa. As airlines are outprized from the international transport industry, shipping will become the dominant form of international transport again. Since many of the majors in the industry (i.e. Warzilla) are fuel efficiency freaks, the competitive advantage of "sea over air" will be even more evident.
In addition, research on fuel efficient military vessels is decades ahead than everything else and will likely spill over to the civilian sector in the form of fuel cells (at least 5-10% more efficient than the diesel engines) and nuclear propulsion. For quite different reasons, many Navies (e.g. US, UK, German) have actually produced working prototypes of surface and submerged vehicles that run on FFs and the civilian sector has not lagged behind. (The military research I am referring to, is NOT classified and one could google the web for actual projects that were successfully demonstrated more than 15 years ago! Submerged vehicle research is a rather interesting story ... but IIRC the Germans will be selling FF powered submarines well before the decade is over to Navies that have no need of nuclear powered subs with ICBMs).
Moving over to nuclear propulsion ... expect many more of that and efficiency gains are even more impressive provided of course we leverage on the Navy (and Russian Icebreaker experience) and do build them.

Even transport by air could be "saved" if the morons decided to switch over to WIG planes; they are twice as fuel efficient as the planes we currently have, and could sustain (somewhat) the JIT paradigm.

Moving over to land - based freight transport. IT is a pitty that we are not building TGVs like crazy ... for distances <1000km, these babies can deliver stuff in a much shorter time than transport by plane.

Where does this leave us with globalization/relocalization?
The majority of the stuff we need can be transported via alternate means in a much more cost competitive way and the only way we are not doing it is because the hidden subsidies to trucks and planes are hidding the true cost for us. IP stuff can be shipped via electrons (e.g. I have stopped buying prepackaged SW, I download the stuff from the vendor's website and pay by credit card)and the same can be done with other stuff. For example the internet may be used to deliver STL files for rapid prototypers. which are the natural extention of the JIT idea: why build it beforehand if the assembly line can be "reconfigured" in real time?
Foodstuff will have to be relocalized ... it makes no fucking sense to ship strawberries from Chille. We do have the technology i.e. greenhouses and the big agrobusiness will relocalize their production but remain international through GMOs and patents on gene sequences.
I will have to disappoint the doomers, but I think relocalization and the disolvement of big business will not happen. Certain practises will certainly relocalize (and they should), and they might actually become cheaper as the "fiat-money/debt-based" economies utilizer ex Hummer drivers as cheap labor for the American/European/Canadian/Japanese sweatshops of our future :) :) :)
And I am more than happy that the doomers are working hard for the economy of the future by invoking the Jevons paradox left and right.

At Thursday, April 27, 2006 at 11:05:00 AM PDT, Blogger Freak said...

"and they might actually become cheaper as the "fiat-money/debt-based" economies utilizer ex Hummer drivers as cheap labor for the American/European/Canadian/Japanese sweatshops of our future :) :) :)"

So, where does that leave people who are currently working at the bottom rung of the ladder in restaurants or grocery stores?

At Thursday, April 27, 2006 at 11:13:00 AM PDT, Blogger russ said...

Interesting. I think this says more about the future of China's interior and the future of coastal areas like Vietnam and Bangladesh.

At Thursday, April 27, 2006 at 11:14:00 AM PDT, Blogger Jim Robb said...

And what PeakOilers like myself worry about are the lowrungers who will come breaking into my urban home looking for all of the stuff I have been hoarding.

Really, what does happen to lowrungers? Will crime get worse?

At Thursday, April 27, 2006 at 11:50:00 AM PDT, Blogger Mel. said...

That's a tough question. The cure-all answer is that it's up to local bureaucracy and the government to enforce against major crime upswings in the case of economic implosion; however, given the fucking absurdity of Hurricane Katrina, it's obvious that said solution is a joke. Until the National Guard shows up, cities are going to burn, and it will be the "low-rung" contingency that backslides into desperation first.

Is it fair to blame them? Fuck no. It's not far to fall when you're living hand to mouth. The only real way to combat that sort of situation is to roll out work initiatives that would put infrastructure reconstruction jobs in the hands of the underclass (A page--notably antiquated--out of FDR's playbook), as well as aggressive moves to keep food moving into the ghettos. Riots happen, looting is an inevitability when social order breaks down, but the key between total anarchy and that kind of flare-up is the ability to keep people fed. Priorities change fast when you're starving to death.

This is one of the few areas where I share the doomer concern, but I do also believe--ironically--that "low-rung" communities will polarize more effectively in the case of PO crisis. Time after time, it's the poor communities that come together to revitalize areas that are social wastelands. When the cops refuse to patrol your block or do anything about the drug dealers trying to sell to your kids, the only way to create a show of force is to link up with your neighbors.

Chalk it up to stupid optimism, but it could fall either way.

At Thursday, April 27, 2006 at 2:26:00 PM PDT, Blogger bc said...

Funny, I was just about to post to the group about containers, there is a report on the BBC Thinking inside the box

It's a good example of how small technical innovations make a big difference - events and impacts which are quite impossible to predict.

The reason for long distance transport is not because it's a fun thing to waste oil on, but becuase it is economically efficient. Relocalisation appears to be totally brain damaged. Enforcing lower efficiency will damage our civilisation as surely as skyrocketing oil prices. Indeed, if fuel price is high, it is even more important to do things efficiently.

Relocalisation is a fancy way of saying "let's go back to the past". It won't work.

At Thursday, April 27, 2006 at 2:35:00 PM PDT, Blogger Petronomics said...

To get back to the topic of re-localisation, it might be useful to think about what kind of activities/industries are not "de-localised" today.
One such industry is cement production, where -although it seems to be changing too- most of the stuff is produced locally.
Apparently in good storage conditions cement weights 830 kg/m3 or 52 lbs/cu.ft.
A 20' container (1165 cu.ft or 33 m3) full of cement would imply 60,580 lbs or 27,390 kg. This is the cost of shipping 27.3 tons of cement is (using JD's benchmark)about US$56 per ton. Compare that with a price of $80/ton and you can see the shipping cost is relatively very high.
It is interesting though, that petrol / gasoline is product with a higher aggregated value than crude, so in this line of thought, should be delocalised. However as a capital-intensive activity the complex geopolitics of most oil-producing countries may offset the cheaper labour costs. Any more insights/data on this?

At Thursday, April 27, 2006 at 2:37:00 PM PDT, Blogger bc said...

My bad, I see you are already writing about the article I mentioned - must remember to read first then comment!

At Thursday, April 27, 2006 at 11:13:00 PM PDT, Blogger EnergySpin said...

The lowrunger question can only be answered satisfactorily if we answer another question first:
Is society just a group of people looking after their personal material interest, or is society something more than that?

At Thursday, April 27, 2006 at 11:54:00 PM PDT, Blogger Stephen Gloor said...

JD - ""Containerisation is why a person in Northern Europe who wants to eat strawberries on Christmas day can find them in their supermarket," says John Fossey, a director at industry publication Containerisation International."

There are some serious problems with you article. Containerisation is only a packaging device. How good would a container be without a truck to deliver it to the wharf, a crane to load it onto the ship, a crane to unload it and a truck to deliver it to the destination. A container is only part of the story. Without cheap oil the container is just so much dead steel.

Secondly the issue is not about transporting oil but transport that cheap oil allows. Pre fosil fuels there were two types of transport human/animal powered and non human/animal powered transport. Human/animal powered transport like horse dreys and camel trains were slow and expensive and limited to low volume/weight, high value items like silk and spices. Non human transport, wind powered ships, was relatively cheap however was not reliable. Certain low value high volume/weight goods could be transported by ship however it suffered from being restricted to the sea and navigable rivers hence the enormous strategic implications of coastal cities on river mouths in antiquity. This made it uneconomic to send large quantities of low value, high volume/weight goods like staple foodstuffs long distances so food production was mostly a local affair as was heavy bulky farm tools etc.

The rise of fossil fuels changed this. ALL tranport became non human/animal and it became cheap to transport low value goods enoormous distances so this is what happened. If it was cheaper to transport wheat thousands of kilometers than grow it locally then this made sense as the transport cost shrank to near zero.

The problem is that communites have became dependant on this low cost transport and rather than growing food or making goods locally they transport them from large distances which is fine while tranport is cheap. The rub comes when the source of cheap tranport, fossil fuels, either become more expensive or in the extreme case non-existant. Then the communities based on long distance transport of basic goods might have a problem.

Hence the move to localisation. Without cheap transport then this makes sense. I do not know how bad the transport situation will get however I am applying the principle "prepare for the worst - hope for the best" This is what the people that you dismiss as "many peak oil chicken littles" are doing. remmpowered local communities up till now ravaged by fossil fuel globalisation may be the way forward. This is particularly relevant considering moves to alternative transport based on a distributed smart grid.

At Friday, April 28, 2006 at 1:33:00 AM PDT, Blogger Freak said...

some american cities have laws prohibiting gardens. such madness should not be allowed even if we had 1000 more years of oil.

At Friday, April 28, 2006 at 1:49:00 AM PDT, Blogger DC said...

however I am applying the principle "prepare for the worst - hope for the best"

Which is terrible advice. Do you drive a car or take a shower in the morning or use an ATM? Do you prepare for the "worst" in those instances? In other words, do you drive a tank, take baths and wear an armored vest to the bank? No, because if you started applying this rationale to the myriad details and activities in your life, even the most mundane things would quickly require a herculean effort to accomplish. Chances are you prepare for your estimate of the likely, which differs from my estimate of the likely based on our relative aversion to risk and perceptions of utility.

The same principle applies to localization in the context of peak oil: you mitigate the risk only so much as you can't afford to ignore it any longer. For example, why snap your fingers and halt the complex, global supply chain tomorrow as a precaution? Sure, you've presumably eliminated the risk that it becomes dangerously obsolete. On the other hand, at what cost? By localizing you have lost out on the economic benefits of the previous system for each instant that the worst case scenario fails to transpire. Benefits that might acrue to some degree and which you could leverage if and when you need to initiate change later on.

There is a trade-off. This is not a subtle point, yet it is lost in many peak oil discussions despite the many invocations to Hirsch's characterization of peak oil as the mother of all risk mitigation problems.

At Friday, April 28, 2006 at 1:53:00 AM PDT, Blogger bc said...

Even in Roman times it was far cheaper to transport goods by sea than by road. This had a significant effect on their empire.

People keep saying cheap oil makes long distance transport cheap. Actually it makes LOCAL and OVERLAND transport cheap. The idea that things can be made locally is ludicrous. I guess you all have metal ores in you back yard and will be able smelt them and turn them into useful products - NOT.

Specialisation of production and transport is what characterises modern civilisation. Without mass production, there is no modern civilisation.

Localisation = going back to the Bronze Age.

At Friday, April 28, 2006 at 2:08:00 AM PDT, Blogger DC said...

As an aeronautics guy, I think a distinction has to be made between the commercial and cargo airline industries. The profitability characteristics are different for each one. Furthermore, there is always a lag in the make-up of the cargo fleet given that the stock usually comes from used commercial aircraft. Right now FedEx uses modified DC-10s and MD11s. Soon they will all be replaced with more efficient A300s for a nominal cost. Any way you slice it, the cargo airline industry is much more robust than the commercial airline industry. Things REALLY have to get bad before the JIT shipments of roses from Europe and Caterpillar replaement equipment from the US halt.

Finally, my hunch is that the time for ground effect aircraft is near! :-) Boeing is looking at such a concept with the Pelican. I did a rough analysis back in 2003 (note: I don't work for Boeing) that showed a nice little niche for these behemoths (between the transit time benefits of air cargo and the price benefits of seas shipping). Automation and satellite tracking/navigation were the big barriers to any such concept (i.e. to avoid big waves and ships)...but they no longer apply.

At Friday, April 28, 2006 at 2:18:00 AM PDT, Blogger DC said...

Ack...only after opening my trap do I see that Energyspin already mentioned WIG aircraft...

At Friday, April 28, 2006 at 2:23:00 AM PDT, Blogger Roland said...

Those ground effect aircraft look damn cool. Almost harking back to the old flying boats, except they don't really fly.

At Friday, April 28, 2006 at 8:35:00 AM PDT, Blogger Mel. said...

The lowrunger question can only be answered satisfactorily if we answer another question first:
Is society just a group of people looking after their personal material interest, or is society something more than that?

Very well put, Spin. The further complication is that said question will recieve a hundred different answers from a hundred different people. While I might consider my low-rent, bike-powered, one-tank-of-gas-a-month lifestyle to be the apex of democratic society, there's at least a few thousand people who would sooner burn down their neighborhood and nuke Iran than give up an ounce of their so-called constitutional "freedoms" allowed them by our social order.

It's bullshit, but also fertilizer from which urban atrophy and doomer-style chaos can possibly bloom.

At Friday, April 28, 2006 at 9:34:00 AM PDT, Blogger FeelingWierd said...

I don't consider myself a doomer, but compared to you guys I guess I am. I think you are missing the bigger point here. As energy gets more expensive and then less available(do you guys accept that premise or not??), then more and more people will wake up. And that is the real fear of most Peaker's. Sooooo many people have been lied to for so long, that their hummer driving, wasteful lives were real!! And when that 3 generations of programming is suddenly faced with what the future really holds. You will see a mass and relatively quick re-alignment of everything. People dumping their 3400sqft McMansions, and 10 mpg Hummers will become a daily problem. But it's so much more than that. People will be trying to downsize at every level dependent on where you start. It's easy for a Hummer Drive McMansion owner to down size, because he has so much to work with. But what about all the normal hard working stiffs out there, living nearly pay check to paycheck. What happens when they get spooked and head for the exits??

If this happened over time, that would be one thing. But this is the MOTHER of all clustered errors. So many people made the same mistake, and unfourtunatly they are all going to see the folly of this mistake at relatively the same time. And like a spooked herd of antelope or cattle, they are all going to bolt for the doors...



At Friday, April 28, 2006 at 10:25:00 AM PDT, Blogger HedgeFund said...

A few comments.

(1) We are all better off with cheaper energy than expensive energy; lower income people suffer more proportionally from increases in costs like energy. No moral statement -- it's just the way life is. Consuming energy is not a God given *right*, nor is cheap gasoline for the American driver, nor is air conditioning. Higher energy prices mean more people will do what I've been doing this month: sealing up the air ducts, redoing the weather stripping on the doors, fixing up the attic insulation, etc.

(2) Who will buy all these McMansions & Hummers if there is a mass sell-off? Expensive energy will require the secondary market price for these inefficient items to be quite low. Thus, those who engaged in this *excessive* behavior will be punished accordingly. What goes around does tend to come around. (Hence, a motivation for living according to the Golden Rule.)

(3) An increase in energy prices will cause a shift in the cost-benefit trade-offs of where items are produced & how they are shipped. It's no big deal, just a drag/tax on the global economy. We'll adjust.

(4) An increase in gas of $1/gallon will run the average American some $500-$750 per vehicle per year. By comparison, the new XBox 360 runs $400, the games ($50-60), extra controllers ($30-$40) each. etc. I am not worried about the living standards of *working stiffs* here in America. So they can't buy a new XBox 360 or a PS3 this year -- big deal. They may even need to wait another year before they get their new 60-inch flat-screen TV. Gasp!

(5) A bigger immediate concern to the US & world economies than PO is the continued leveraging of the American consumer (I view PO stuff as long-term in naure). At current consumption levels, the aggregate American consumer does not have enough income to make P&I payments on his/her debts. Fully 60% of the P&I payments are made with new borrowings. The aggregate American consumer has been using their home as a giant ATM machine and using these funds to buy more *stuff*. Maybe, just maybe, the spike in energy prices will bring some rationality back to the spending addicted American consumer before the consequences of spending more than one earns becomes unbearable? On second thought, I doubt it -- it's just not the 21st century version of the American Dream. I mean, don't house prices just go up every year??

At Friday, April 28, 2006 at 11:25:00 AM PDT, Blogger Mel. said...

Admittedly, I'm not getting what this "bolting" phenomenon is that you're referring to.

Bolting where? Antelope are clearly fleeing the jaws of predators or migrating based on environmental opportunity; the middle class, as you noted here, has nowhere to bolt TO. An excessive rise in gas prices isn't going to cause a fire sale effect on consumer idiots rushing to buy devalued Humvees and starter mansions; a few might, but an assertion like that doesn't make sense otherwise. You don't blindly up-buy in the midst of a potential recession.

And frankly, those of us living check to check also gain no advantage indulging some blase' fight-or-flight response. We're already well-versed in the art of cutting corners, space heaters, mass transit to save gas. Barring total economic clusterfuck, this mentality is going to facilitate a much easier acceptance of PO reality.

I get your point, but am having a hard time grasping where it's stemming from. Aside from general concern about suburbia imploding as the impractical fucking carriage of overconsumption that it is.


At Friday, April 28, 2006 at 11:49:00 AM PDT, Blogger Mel. said...

(2) Who will buy all these McMansions & Hummers if there is a mass sell-off? Expensive energy will require the secondary market price for these inefficient items to be quite low. Thus, those who engaged in this *excessive* behavior will be punished accordingly. What goes around does tend to come around. (Hence, a motivation for living according to the Golden Rule.)

Whoops, I didn't even note this. Couldn't have summed it up better myself.

At Friday, April 28, 2006 at 4:57:00 PM PDT, Blogger DC said...

Even if people get upside-down on their mortgages, is there any reason to believe that people will try unloading houses en masse? Houses are "stickier" investments in that most people stick with their homes once they've committed to the purchase.

At Friday, April 28, 2006 at 9:44:00 PM PDT, Blogger Omnitir said...

Feelingwierd said:
As energy gets more expensive and then less available(do you guys accept that premise or not??)

Peak oil is not peak energy. There *are* actually other forms of energy then oil (and of course other types of oil then conventional light sweet crude). That all forms of energy will become more expensive and less available with oil production peaking is not a guaranteed outcome. I consider this premise to be most unlikely.

At Friday, April 28, 2006 at 9:48:00 PM PDT, Blogger Mel. said...

I think simple market logic supports your assertions, om. If there's a demand for it, then supply will take advantage of that.

Expensive oil will begat a corporate push for popular alternatives. If you can't sell gas-guzzling shitboat cars, then you will jump on the hybrid bandwagon, or you'll go out of business.

The POD blueprint seems to perpetually underestimate the greedy survival instincts of big business.

At Saturday, April 29, 2006 at 12:32:00 AM PDT, Blogger Oil CEO said...

Great Post, JD.

I'll be thinking aboout this one. It certainly brings up several topics that need to be examined and debated. Your insistence at scrutinizing the numbers is much needed and appreciated.

At Saturday, April 29, 2006 at 1:58:00 PM PDT, Blogger Dom said...

I know I'm WAY at the bottom of the comments and if anyone is still around to read what I have to say:

"Even in Roman times it was far cheaper to transport goods by sea than by road."
There really are a few people who understand!

Shipping is called that because ships and harbors were always (after developing the technologies) the cheapest. Beginning about 1750 the British began transforming their tiny island nation by BUILDING CANALS, so that the whole island was close to water. This was, btw, the actual beginning of the Industrial Revolution. The South Sea bubble (shipping HALF way around the world!!!!) had burst a generation before that BTW.

The Railroad(!) made overland shipping just as cheap while being a bit faster. The mule named Sal (on the Erie Canal) gave way to the coal mule, which eradicated (!!!) all famines in The West (save the Irish one) because every corner of the world could now be "shipped to" and was no longer completely dependent on the local harvest that year.

'Relocalisation is a fancy way of saying "let's go back to the past". It won't work.'
The real concern is having to give up the semi-truck, not the goods coming from Taiwan to Los Angeles.

We will go back to the past by re-inventing the freight train. The distant shopping malls WILL shut down. Production may not re-localize too much. SHOPPING PATTERNS will.

JD, you missed seeing the real problem. Containers on the high seas have nothing to do wiht localization, at least not for middle America. The US (and USSR and China) are mostly in-land countries. As oposed to Japan and Europe, for instance. Nebraska will have a hard time of it.

Or do you see something that I missed?

At Saturday, April 29, 2006 at 3:20:00 PM PDT, Blogger Roland said...

Or do you see something that I missed?


At Wednesday, May 3, 2006 at 2:32:00 PM PDT, Blogger mattbg said...

If shipment between the coast and interior comes to an end before shipment between two ocean-separated countries, doesn't that automatically imply an end to trade between two ocean-separated countries, since the products won't be able to be affordably shipped from the coast to their interior destinations?

Everyone could move to the coast, or...? Or, localization could be used to reduce or eliminate the expensive interior trips.

At Wednesday, May 3, 2006 at 9:41:00 PM PDT, Blogger Matthew Whiting said...

It's not likely HedgeFund will read this, but I applaud his evaluation of the leveraged American consumer. If PO gets us to conserve and invest in improvements that lessen energy expenses that gets us Americans thinking more about saving and about the future.

At Monday, June 5, 2006 at 3:45:00 PM PDT, Blogger LoneSnark said...

"Everyone could move to the coast, or...? Or, localization could be used to reduce or eliminate the expensive interior trips."
Not at all. You are again forgetting trains. While rail consumes much more energy per ton-mile than a ship it is still rediculously energy efficient. So, what will happen is everyone will move to the coast or the nearest rail hub.

If a peal-oil disaster does occur it is my suggestion that you invest in railroad and ship construction. America does not have sufficient rail capacity, nor sufficient mileage, and anyone that can provide these will be greately rewarded.


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