Carrboro Screening of "After the Peak"

Byoliveridley

I happened to watch an interesting short film called After the Peak about peak oil, the concept (not that revolutionary unless you ask Messrs  Exxon-Mobil, Shell and Dick Cheney!) that oil production will start declining after a certain peak production event. The docudrama made by local film maker James McQuaid was part of a public meeting on the local (Orange County, NC) responses to the coming energy crisis. Interesting conceptually, it was shown as a 30 minute local newscast, with the usual cast of characters, the too handsome eye candy anchor and his female sidekick, the young and breathless “street reporter”, the gray haired expert, and the uber-energetic sports guy! The newscast is set a year into the future when the price of gas is $10/gallon. The documentary of interviews with various community members about the effects of the price of gas on their business/life. In the 30 minutes, he touched upon food, school buses, sports, NASCAR, the poor, commutes, etc. It was an interesting effort, if a little over the top! The fake interviews with the racing track owner who’s closing his track down, the UNC athletic director who has to cancel all his long distance events, the manager of the local food store who threatens food scarcity.

But is $10 a gallon really a big deal?

gas-prices.png

This simple chart shows income adjusted dollar per gallon gas prices (gas prices from 2006, income from 2004, but it should not change too much.)

Let’s avoid the low income outliers and just compare the U.S and Germany. In April 2006, the U.S was paying $2.95 a gallon and Germany, $8.06 per gallon (ref). If you further adjust that with the per capita income of the two countries, $41,300 for the U.S versus $30,500 for Germany (ref), you will find that the price of gas in Germany is well above $10 a gallon already, they seem to be doing just fine! Maybe they just drive less. The US uses 381 million gallons of gas per day (that’s about 1.2 gallons per day per person). I agree that this comparison is a little flawed because the bulk of the German price is due to taxes, which go back to the government and are presumably used for various good deeds. Also, if the price of gas went up due to shortages, the price differential between Germany and the US would presumably stay constant (unless the Germans lowered taxes). My point is that many countries cope with high gas prices quite well, they just don’t make the same choices the Americans make, 1 acre lots, large SUVs, super long commutes, etc. There are a lot of efficiencies to be had here. The graph below shows the income adjusted gasoline price for a few countries (easy data was available!)

My take: we need to swiftly move away from gasoline by a) Disincentivizing the use of gasoline in transportation b) Incentivizing the use of electricity for transportation. Electricity can be produced more efficiently, and pollution at the source can be controlled more effectively. A combination of a drastic increase in solar and wind power, coupled with aggressive development in battery technology should more than solve our problem without much recourse to biofuels (that great boondongle).

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2 Comments

  1. Thanks for watching the film and commenting on it. I think the price differential between US and Germany is not relevant. The issue is what happens when the underlying commodity price doubles or triples, especially in a very short time? Erratic price changes are quite possible at the point where supply loses all “surplus capacity.” That dislocation may have sudden and disastrous results – the film depicts one such scenario. (Sorry about the stereotypical news team, but they were selected to look like every news team you’ve ever seen, more or less!)

  2. Jim:

    Great choice on the anchors and news team, it was very appropriate, and hilarious. I loved the interviews. I liked your documentary, but my blog post went from movie review to a data hunt on gasoline consumption, income and gas prices very quickly, almost like the review stopped in mid sentence! So I did not express it very clearly.

    My post was more aimed towards what the normative price of gas is in other countries, and how that affects behavior. Germans use approximately 4 times less gasoline per capita than the U.S. Of course, diesel use is more prevalent, so it’s probably not four times less fuel, but still, most of the world is used to at least $10/gallon level gas prices. I don’t even want to look at India, where gas prices make cars unaffordable to all but a few.

    Your point on the acute shortages is taken, but I don’t think it will have quite that extreme an effect. I understand that you needed to emphasize and magnify to make a fairly important point. But there’s plenty of excess money floating around in this very affluent country. As always, the poor will suffer greatly, the middle class will adapt, and the rich, well, nothing ever happens to them!

    America is built on cheap gasoline, and unsustainably so. These 60 mile commutes and utter disdain for public transport in all but the biggest cities is made possible only by cheap gas and highway subsidies. Take the cheap gas out of the equation, and life will change significantly. But most people will adapt and while there will be some dislocation, I don’t think the disastrous events that you predict will come to pass, but what do I know!

    Great stuff.

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