The Oil Drum: New York City

Helping New Yorkers understand, prepare and adapt to the implications of Peak Oil

Wednesday, August 31, 2005

Friends in the Sustainable Blogosphere

I'd like to point regular readers of this site to check out some great blogs that I have been following over the past few weeks and highlight some other people involved in building a more sustainable world.

Upstate in Syracuse, NY we have Baloghblog, who has been taking pictures of gas stations and has recently wrote an interesting post on taking a low energy vacation. He's also been keeping me up-to-date on gas prices with daily photos of gas signs in his area. We love the photos Baloghblog, but we hope you're in the passenger seat when you take them!

Cityhippy reminds me that all the little stuff we do matters and has collected more than 430 bookmarks on interesting sites dealing with sustainable living and regularly posts articles about people trying to live a more sustainable life. Recently CityHippy did an interview with the founder of GuideMeGreen - an inspiring guy.

Starts and Fits latest post is on the lunacy of GM's emphasis on heavy trucks to drive sales in the recent run-up in gas prices. Somebody over at the NYC Department of Fixing Stuff must read that page considering the recent quick turnaround on a request he posted.

Jeff over at Sustainablog has been a great source of information this Summer while he was vacation from school, although lately with school starting he seems content to use the Weekly World News as a key source on Peak Oil news. But then again, where else would I find out that "Gals Who Go Topless Live Longer"

Also, check out some of my links to the right and send me any of your favorite sites.

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Rally Today Against Mass Arrests of Cyclists

From Time's Up:

Wednesday, Aug. 31, 5:30 p.m.
Centre St. sidewalk east of City Hall (bet. Spruce and Beekman)

Last August marked the beginning of mass arrests during Critical Mass. In the past year, over 500 cyclists have been arrested for riding their bikes. Forty-nine cyclists were arrested just last Friday. Don't be silenced! Come out and protest all mass arrests and illegal detentions that took have taken place since the RNC, when hundreds were arrested, some while engaging in peaceful protest actions, others while simply passing by during the mass arrests. Let the Bloomberg Administration know you are outraged

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Tuesday, August 30, 2005

Finding Your Carpool

As I mentioned earlier, there will be higher gasoline prices while production, imports and refining capacity is cut in the wake of Katrina. I think the best way to reduce prices is to have as much voluntary reductions in gas consumption as possible over the next 2-3 months. Perhaps we can learn some ways of permanently reducing our demand for gas during this period of time to help learn how to adjust to a more sustainable way of life.

One easy way of reducing demand is to eliminate as much single occupancy vehicles as possible and start carpooling more. According the US Census report that I recently downloaded, only 1 in 7 NY State commuters carpool of those who use a car as their primary way to travel to work.

On the 10 o'clock news I saw them cover a service that helps connect people in need of a ride. It's called NuRide. Go check it out. Even if you don't own a car, you can participate. And you can earn points toward gift certificates from their sponsors. Help create a more sustainable way of life in your community.

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Heartbreaking News from New Orleans

So I'm sitting at home watching and reading about the unfolding disaster happening in New Orleans, Southern LA and Mississippi. I couldn't help but feel a deep sense of empathy for those caught in the storm's wake, particularly after reading about the death, destruction, looting and general chaos that reigns in the area. Then I read this:

With conditions in the hurricane-ravaged city of New Orleans rapidly
deteriorating, Gov. Kathleen Blanco said Tuesday that everyone still in the
city, now huddled in the Superdome and other rescue centers, needs to be

"The situation is untenable," Blanco said, pausing to choke back tears
at a news conference. "It's just heartbreaking."

The breach of two levees Tuesday meant the city was rapidly filling with water and the prospect of having power was a long time off, the governor said. She said the storm also severed a major water main, leaving the city without drinkable water.
"The goal is to bring enough supplies to sustain the people until we can establish a network to get them out," Blanco said.

It is heartbreaking. One of the oldest and most important US cities and trading ports has effectively been abandoned to the sea for an undefined period of time. Hundreds of thousands of people will be homeless for weeks to months.

Please dig deep into your compassion and donate whatever you can to the Red Cross Hurricane Fund.

Staten Islanders Call for Toll Fairness

I don't often align with the Staten Island Advance Editorials page, but they recently took the Democratic candidates running for mayor to task for all coming out against East River, while also calling for increases in the MTA bridge tolls. Here's the pertinent exerpt:

Talk about talking out of both sides of your mouth.

Then the candidates were asked about putting tolls on the East River bridges, which are currently free to cross by car, in order to ease traffic congestion in Manhattan.
Naturally, each candidate declared his or her staunch opposition to that idea.

Anthony Weiner, who has tried to position himself as the defender of the middle class, asked, "Why is it fair that every time there's a challenge in this city, people want to raise taxes on the middle class?"

We'd ask Mr. Weiner: Why is it fair that the residents of Brooklyn and Queens pay nothing to drive into and home from Manhattan over the East River, while residents of Staten Island have to pay a whopping toll to drive home from Brooklyn?

I'll add my own self centered perpective as a current resident of Manhattan: Why is it that Manhattan has to bear the traffic and congestion of free-riders from Brooklyn taking the low toll route out of Brooklyn and Queens, thus avoiding the $8 toll on the Verrazanno-Narrows Bridge going into Staten Island?

What we really need is congestion pricing, car-free parks, harrassment-free biking, more investment in mass transit alternatives, better mass transit quality, better freight rail links, and more hybird Taxis and alternative fuel cars.

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Composting for a greener New York

My building's tenant's association has decided to begin a newsletter. Recently, after a neighbor saw me taking a my bag of compost to the Union Square Greenmarket, she asked me to write an article about composting to explain it to other building residents. I thought the information might be informative for readers of PO-NYC too.

I was a regular at the Union Square Greenmarket for almost two years before I got curious about the stand at the southeastern end of the market. “Help create a sustainable NYC!” their sign says. I stopped to look, and discovered that the stand is run by the Lower East Side Ecology Center (7th St. between Aves. A and B), which is dedicated to recycling, composting, and environmental education. At the Greenmarket, the volunteers collect kitchen scraps that are used to make compost. Compost provides nutrients to soil and helps it retain moisture.

Composting is environmentally responsible and practical too, since it benefits city gardeners. The LES Ecology Center website notes that “The Department of Sanitation (DSNY) collects roughly 11,000 tons of ‘garbage’ every day, and according to DSNY’s waste compositions analysis, organic materials – anything from yard, wood to food waste – make up 26% of the waste stream.” By composting, New Yorkers could potentially save 2,860 tons of waste per day from entering the sanitation system.

Composting is simple. I have a small garbage can for composting under the sink, but if you have a balcony, you could put a covered trash can outside. I line the can with a plastic bag, and during the week, I make sure to separate the organic waste from the rest of the trash. Organic waste consists of all vegetables and fruits, bread and pasta, coffee and tea, among other items. Dairy, meat, and animal food are not composted. The volunteers at the Greenmarket give out a detailed list of compostable items to take home. The next step is to take the compost up to the LES Ecology Center stand at the Union Square Greenmarket. They’re there on Monday, Wednesday, Friday and Saturday from 8am-5pm. All you have to do is drop your bag in their bin.

In many ways, New Yorkers are good environmental citizens without realizing it. By living in apartment buildings and taking public transportation, our lifestyle is pretty efficient. But there are other minimal changes that people can make in order to further reduce both energy consumption and waste. For example, consider buying compact fluorescent light bulbs, which only consume about 25 watts of energy, but give off the same amount of light as a 100W bulb and last 10 times as long. Another idea is to carry a small cloth bag for short trips to the grocery store. Cloth bags can be folded into a square just a couple of inches wide and easily stored in your purse or briefcase.

In the end, the small actions will help New York City become a greener place to live.

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Simmons on Brian Lehrer

Matthew Simmons, author of "Twilight in the Desert" an expose of the Saudi
oil industry which explains peak oil, will be on Brian Lehrer's show today
on NPR. You can catch the show on 820 AM or on their website.

Monday, August 29, 2005

Freakonomics Taken Down A Notch

As a quick follow-up to my exchange with Dr. Levitt over at Freakonomics, please see this insightful guest post over at Kunstler's site by Dmitry Podborits which pulls apart Dr. Levitt's post comparing media attention of Peak Oil to shark attacks. Well done Dmitry!

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Prayers for New Orleans

New Orleans sits 18 feet below sea level. Whatever water goes over the storm levies, will pool up in the city center and need to be pumped out.

The port of Southern Louisiana is the busiest US port, fifth largest port in the world, a remains the key entry point for a wide array of imports and exports up and down the Mississippi.

Again, aside from the weathermen blowing around on TV, stay tuned to on how this storm will affect the fragile oil/gas markets. While this storm is actually more about global warming / climate change more than it is about peak oil, it will expose just how dependent we all are cheap oil. Hopefully leaders around the country will realize that reducing short term and long term demand is the clearest way to reduce prices for all.

Most of all our thoughts and prayers should be with the people of New Orleans, Southern Louisiana, Mississippi and all the other people in the affected zone. Let us pray that the loss of life is minimal and few become homeless.

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Sunday, August 28, 2005

Coverage of August Critical Mass Ride

The city and NYPD by extension are basically at war with the people who participate in the monthly Critical Mass bike ride (last Friday of the every month at Union Square). I read on Bikeblog that last Friday they arrested something like 49 riders (NY Times count). The city really looks ridiculous in this whole debacle. For more coverage go take a look at some blog posts over at NYC Indymedia.

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Carpooling for Katrina?

I feel rather helpless watching Katrina bear down on Southern Louisiana, the great city of New Orleans and the entire state of Mississippi. This could be an enormous disaster that ripples well beyond the directly affected disaster zone. Indeed, the port of Southern Louisiana handles a significant percentage of US oil imports from abroad. There are also major offshore and onshore oil production and refining facilities that will at least be closed for at least a few precious days, instead of running at full capacity, necessary to maintain current supply levels. If they are severely damaged (it may take weeks or months to bring back online) the economic impacts will echo throughout the entire United States. Katrina could reduce the gas supply by 5-10%. The impact on prices could be significant.

For more detail on this unfolding crisis, please stay tuned for updates from The Oil Drum.

What can we New Yorkers do to help soften the economic blow? Reduce our gas consumption in any ways that make sense. In a word: Carpool!

In the weeks after 9/11, the city imposed a ban on single occupant passenger cars entering the city during the morning commute. I think this should temporarily be re-instituted as long as necessary to help the nation reduce its demand at a time when supply is short.

Please write to your councilperson, the Mayor and other elected officials to reduce demand locally through banning single occupant vehicles during the morning commute into Manhattan and reducing official vehicle use as much as possible. I would also love to see community leaders call for voluntary reductions in consumption that make sense.

Please write to your national level elected officials in the House and Senate that measures to reduce demand should be taken before opening the Strategic Petroleum Reserve (SPR).

Swift action to voluntarily reduce demand could stave off a crisis and help preserve our SPR for even worse disasters or national security crises (like Iran/OPEC cutting supplies).

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All U Can Eat - Get It While You Can

Every so often I hear a random song that completely captures a moment in time. I few months ago I wrote into The Oil Drum when I heard Billy Joel's "I've loved these days" from the album Turnstiles.

Yesterday I was listening to some Ben Folds and came across this gem, which seems to capture for me the American culture of overconsumption.

All U Can Eat

Son, look at all the people in this restaurant
What do you think they weigh?
And out the window to the parking lot
At their SUV’s taking all the space

They give no f*ck
They talk as loud as they want
They give no f*ck
Just as long as there’s enough for them

Gonna get on the microphone down at Wal-Mart
Talk about some shit that’s been on my mind
Talk of the state of this great nation of ours
People look to your left
Yeah, look to your right

They give no f*ck
They buy as much as they want
They give no f*ck
Just as long as there’s enough for them

Son, look at the people lining up for plastic
Wouldn’t you like to see them in the National Geographic?
Squatting bare assed in the dirt eating rice from a bowl
With a towel on their head, and maybe a bone in their nose

See that asshole with the peace sign on his license plate?
Giving me the finger and running me out of his lane

God made us number one because he loves us the best
Well he should go bless someone else for a while
Give us a rest (They give no)
Yeah, and everyone can see (They give no)
We’ve eaten all that we can eat

Submit your own songs that have some relevance to peak oil.

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Saturday, August 27, 2005

Economics, Freedom & Choices

I've been discussing the issue of how society could respond to peak oil if they became aware. Since I believe that the situation could worsen quickly in the next few years, particularly if the rise in energy costs has a domino effect on inflation, consumer purchasing power, unsustainable debt and a crash in the major asset categories (real estate, bonds, stocks), I would prefer a crash program by government to prepare the country for the coming storm. I could see the government tightening regulation on fuel efficiency standards and enforcing a 55 mph speed limit as a start, but I doubt that would go far enough.

So then I mentioned to my friends that I think the government should take a leading role in re-organizing society to become more fuel efficient and rally the country to conserve fuel similar to the campaigns during the world wars, where it became patriotic to conserve rather than waste. This is where they started to object, accusing me of imposing my own vision of social engineering on the general population and of favoring government propaganda.

Their take was that "economics" would sort out much of the adaptation without governmental interference and that curtailing "freedoms" to change behavior was a slippery slope leading to fascism/communism (take your pick of most feared extreme totalitarian regime).

Here is why I disagree with this assessment.

On economics: I would say that the massive investments our government currently invests in highway reconstruction alone have created a society that in many places is completely dependent on the automobile. Add in all the other indirect costs of maintaining this culture of automobiles (tax incentives, pollution, wars, etc) and you basically have a government that has been heavily subsidizing this societal model for decades.

And this model crowds out other viable lifestyles or societal models to the point where many communities have no transportation alternative. Witness all the suburban communities that have no sidewalks, no bike paths, where you have no choice but to get in your car to cross the road outside your front door. As gas prices rise they will find that they have no choice but to pay whatever price is posted at the pump. I think the government can provide more choices to these communities by making more investments in mass transit now.

On government "propaganda": I strongly believe that the government is basically willfully ignoring or actively covering up the peak oil issue. They have suppressed the Hirsch report and covered up the topics addressed in Cheney's Energy taskforce. Following 9/11/01, when the government could have rallied people to the cause of energy conservation and made energy independence a national cause they instead advocated getting back on airplanes, taking vacations and spending money to support the economy.

On freedoms: I basically agree that no one should ever be compelled to do something against their will, but rather appropriate incentives should be applied given the impact of that behavior on others. So for instance freight trucks have a much greater impact on roads than passenger cars and as such should pay a much higher proportion of the cost for road upkeep, whichever way that is collected. Accounting for this cost would potentially create the right incentives for switching a greater portion of freight transportation to rails.

However there are cases where freedoms come directly into conflict. For instance the constant flow of car and truck traffic in NYC inhibit my freedom to ride my bike (or scooter if I owned one) since to do so would risk major injury or death. These freedoms need to be balanced better.

Then there is the public health perspective. We live in an extremely interdependent society with or without cheap oil. Similar to a spreading epidemic, economic depressions have a way of hurting everyone in some way. No man is an island and no matter how much we individually prepare and insulate ourselves from the economic shocks that soaring energy prices will bring, we will all suffer as the economy slides. You may not own or rely on a car, but do you own a co-op? Well, even if your finances remain strong, your neighbors may not. If your neighbors lose their jobs or all their money in stock market crash, then you may end up with a financially bankrupt co-op. And none of us (even those who go down the subsistance agricultural route) will be immune from higher crime rates and other social ills stemming from a severe economic downturn. We are in this together and have no choice about it.

That is why I care about spreading awareness about peak oil and want to convince people to take this seriously. So that together we can take action to alter our lifestyle and create a new society less dependent on oil.

Thursday, August 25, 2005

Green Building Tour

This evening I took at tour of the "The Solaire" a 27 story, 293 unit building that was the first to be built under the Battery Park City Authority's groundbreaking Residential Environmental Guidelines. These “Green Guidelines” were developed in 1999 as a vision for the construction of environmentally responsible buildings in New York State. It was built in 2003 within a stone's throw from Ground Zero. The land itself was actually landfill from the excavation of the original WTC site.

Though the Green Guidelines required energy efficiency 30% greater than what was mandated by the NYS Energy Code, The Solaire uses 35% less energy than a similar building designed to NYS code requirements, and 65% less electricity during peak demand periods. In addition, the building's design incorporated 382 small solar panels, which generate no less than 5% of the building's base electrical load, but only in common areas, not the apartments themselves. I was less than impressed that the designers had simply done the minimum necessary to get the tax credit.

While the solar panels are highly decorative, I wasn't as impressed with them as I was with the water treatment system The Solaire contains an onsite wastewater treatment facility – the first in the nation to be built inside a multi-family residential building – as well as a stormwater reuse system. Together with other water conservation strategies, these features result in a building that consumes 33-50% less potable water than a traditional building of comparable size. But just don't ask what's in sludge pipe. :)

Rather than a real model for sustainable living, I see the building as a transitional test case for even more environmentally friendly building in the future, giving planners something real to base future assumptions off of and prove that certain ideas work practically & economically. I read one estimate saying that rents at the Solaire (which range from a $3000/mo studio to a $4500/mo 2 bedroom) were about 5-10% higher than a similar building proving that people were willing to pay extra for a green building.

Now I wonder if I can convince my landlord to reduce the lighting in the hallways which are bright 24/7?

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Lobby GE For Wind Powered Liberty

A few weeks ago I proposed an idea to give green power an image boost - making the Statue of Liberty's lights run on clean wind and solar power.

I think I have found the perfect partner for this endeavor, that is if they really want to make green power a reality. You may have heard of their ecomagination campaign. General Electric is trying to put an green shine on their corporate image emphasizing its newer cleaner technologies including more efficient machines and even windmills. GE was also involved in making security tighter at the Statue of Liberty, donating their bomb detecting equipment, so I figure they must already have some of the relationships in place.

Last night I sent a short letter to GE informing them of my proposal. I have not heard back yet, but I have seen some traffic to the website from some of their locations, so perhaps now is the point where a little extra push from the public would help nudge them in the right direction.

Send your note of support for this project at this site and link them back to the original post on the blog:

It's time to declare Lady Liberty Free of Fossil Fuels.

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Wednesday, August 24, 2005

State Per Capita Gas Consumption

While the entire country seems obsessed with gas prices, no seems to be really curtailing their consumption. Ianqui writes about this topic in some of her recent posts over at the Oil Drum, including one that has some bright spots. Everyday I read something different about how people are coping with the high gas prices - mostly cutting back on their expenses in other areas and using easy credit. The overall cost of gas to the nation or individual (and the overall economic impact) is a function price times consumption. Since we have no control over prices, let's take a look at the consumption side of the equation.

Unfortunately consumption data seems much harder to find than price data. Today I have done some digging on the state level gas consumption from a report that the California State government did this year. On a per capita basis NY State consumes the least amount of gas (297 gallons/capita) than any other state. Washington DC consumes even less (214 gallons/capita). NY consumes less than half of what Oklaholma and Wyoming consume per person. Still there is much work to be done. Many European countries have even lower consumption rates than NY.

What the chart really shows is just how dependent on fossil fuels suburban and rural parts of the country are compared to urban areas. This confirms my thinking that areas that are well served by mass transit and commuter rail links will probably fare much better as gas prices continue to climb. If anyone can send me something about the relationship between population density and gas consumption, I would appreciate it.

Finally, after about a month of running peakoilnyc, I will have some major changes coming to the site sometime next week which I am going to keep a surprise until everything is set-up off line. I believe that it is a natural evolution for this site and will further the cause of integrating the various local, national, international websites collaborating on how to best inform and prepare people everywhere for the implications of peak oil. Stay tuned.

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Tuesday, August 23, 2005

Betting on Peak Oil

If you start to define the characteristics of the American spirit, the profit motive would rank pretty high on that list. While I continue to discuss the peak oil issue with people on and off line, the one topic that everyone seems to be interested in is how to make money off of it (even if they reject the main ideas). In fact, by far the most hits that have ever come to this site was when I summarized some of my own financial moves in anticipation of peak oil. In fact, when I tell people that they should start putting some of their money into gold as a hedge against a stock market crash, people seem to be listening a lot closer and actually engage in follow-up questions like: How do you buy gold?

Betting was the topic of today's column by John Tierney, who placed a wager with Matt Simmons that oil would not hit $200/barrel by 2010. Of course Tierney takes the pure economics notion that technical progress and innovation will force prices down over time. Given that, I wondered why then he did not bet Matt Simmons that oil would go back to it's historic price in the $15-25 range. In fact, I wondered why they didn't just look at today's commodities market future price for December 2010 which sits at $60.56, $5 less than the current spot price. Tierney seems to be giving himself quite a margin of safety! From my perspective Simmons has already won the main point, which is that oil is definitely headed up in price.

In typical American style I feel like it should be pretty easy to make a killing if you can see an event happen long before it occurs. If you want to place your own wager, a good first step might be to go to where you can place small bets on the direction of the oil or gas market with small denominations of cash (minimum start-up cost is $100). I'm not sure how liquid that market is yet, so caveat emptor.

I've also been trying to figure out how to start buying oil futures and options. I'm a little scared since I think everything has to be purchased with either large amounts of cash or on margin (a big no-no for inexperienced investors). I saw an ad for a commodities broker on The Oil Drum (by no means do I believe they endorse them) that seemed to specialize in new commodities investors. Again keep your guard up and test the waters with small positions before expanding your exposure.

I feel like it is a win-win bet. If oil tanks, it probably means that we have learned how to re-engineer our society to use less oil and civilization is saved (that's spelled V-i-c-t-o-r-y!). If oil prices continue to rise then at least you have protected yourself and can use your new wealth to help rebuild our economy.

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Monday, August 22, 2005

From Peak Oilers to Citizens for Sustainable Living

"Yeah, the Mets just can't pull it together this year. Turning to another subject, I'd like you to completely forget everything you believe about free market economics, reject your whole way of life and share my dark vision of the world to come. Won't you join me?"

From the strange looks and reactions I get that seems to encapsulate the way I must come off to people I talk to about peak oil. It's a lot to take in, requires many leaps of logic and overcoming many layers of mass denial and ends with a doomsday scenario that makes the Great Depression sound like a relatively pleasant experience. It makes me depressed to think too much about it, but my convictions run too deep on this issue to ignore it and not want to inform others. I believe that overcoming the problems of peak oil is the greatest challenge that my generation (I'm 29) will face.

But this is a problem that "peak oilers" face in communicating this issue to the general public (and even the well educated elites) - no one likes a pessimist, even if they have much truth in what they advocate. What politician wants to stand on the stump and say "Follow me and your children will have a lower standard of living than you do"?

That is why I would like to start reframing the peak oil issue from one that focuses on the negative doom and gloom consequences of inaction into one that presents a positive vision of creating a sustainable society with healthier lifestyles for all citizens. However negative the consequences, we must focus on what we are for, not just what we are against.

So here's my short list of what should be included in the (peak) oil plank of the Citizens for Sustainable Living platform:

  1. Insist on complete transparancy of the world's oil reserves and production on a well by well basis.
  2. Make national energy independence a national economic and security goal
  3. Create an energy efficiency ethic in society that abhors wasteful behaviors
  4. Raise fuel economy standards for passenger cars and trucks - encourage adoption of hybrids, electric plug-ins and other more sustainable automobile designs
  5. Re-institute the 55 mph speed limit for maximum efficiency
  6. Decrease traffic through better design, congestion pricing, more telecommuting, staggered start hours, off-peak commuting incentives carpooling, etc.
  7. Invest in building and maintaining mass transit systems to connect as many communities as possible.
  8. Invest in the national passenger and freight rail infrastructure
  9. Revise building codes for maxiumum energy efficiency
  10. Encourage walking, biking, line skating and all forms of self propelled transportation through clearly marked lanes and public awareness campaigns.
  11. Encourage local food production, urban green gardens, farmer markets.
  12. Generate as much local power as possible from solar, wind, biomass, hydro/tidal and other sustainable forms of energy
I invite others to post their own ideas, elaborate on those listed above, debate which are the most important.

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Sunday, August 21, 2005

Peak Oil Going Mainstream

I have read through the whole Maass piece on peak oil in the Sunday Magazine section of the NY Times. I have many thoughts but I'm just going to rattle off a couple of key points and then post a copy my letter to Dr. Stephen Levitt, author of "Freakonomics", who wrote a dismissive review of the article on his blog.

First of all, hats off to Maass for scoring the interview with Sadad al-Husseini, the ex-Aramco executive. I think we might finally have our credible Saudi insider who is not beholden to the Saudi government or any other interest group that I can see. His comments seem to suggest that the Saudis have a limit to their production somewhere between 12 and 15 mbd. If true, this means they haven't peaked yet, but really don't have much excess supply capacity. It seems Matt Simmons is pretty close to the scary truth without the inside information and al-Husseini just gave us the wink and nod that he is close. I look forward to Maass' full book and hopefully more public statements from Sadad al-Husseini.

Second, the implications of this article for introducing the concept of peak oil to the public should not be underestimated. While the Times certainly has its critics, it is still highly respected as the paper of record. While this will not be an instant revelation that will cause a massive popular response, it does represent a critical step in bringing peak oil out of the relm of "wacko" conspiracy & doomsday theorists and into more respectable circles of political and economic debate. This is a tool that should be used to at least raise conciousness in the general community. I urge all of you to read the article and pass it on to your friends.

Ok, now onto Dr. Freakonomics....who I am very disappointed in. Here's a link to his knee-jerk economic analysis of peak oil. I was appalled, but not really surprised. Here is the gist of his counter-argument:

One might think that doomsday proponents would be chastened by the long history of people of their ilk being wrong: Nostradamus, Malthus, Paul Ehrlich, etc. Clearly they are not. What most of these doomsday scenarios have gotten wrong is the fundamental idea of economics: people respond to incentives. If the price of a good goes up, people demand less of it, the companies that make it figure out how to make more of it, and everyone tries to figure out how to produce substitutes for it. Add to that the march of technological innovation (like the green revolution, birth control, etc.). The end result: markets figure out how to deal with problems of supply and demand.

That might work if we were talking about a commodity or manufactured good that had easy substitutes and was not the main foundation of our modern society. Here is my reply:

Dr. Levitt

I urge you not to make hasty comments about this subject without deeper analysis. Oil is not just a commodity, it is THE commodity that makes everything in our modern world possible, in particular food production and most forms of transportation. Barring some major innovation, there is no technology or energy source that can replace oil and it's many uses. It's like water and air. 6 Billion people need oil. 100 million maybe...

If you read the Maass article closer you will find that really the oil market right now suffers from gross price distortion (probably way too low) because of a dearth of basic data on reserves and a well by well analysis of production rates. This is why people like Matt Simmons have been crying out for more data. Until we have more data I don't think anyone should be complacent about oil prices moving slowly in any direction.

The problem is that we have invested Trillions of Dollars into an economic structure predicated on consistently low oil prices. We have trusted politically motivated leaders and economic interests that oil is plentiful and can meet an ever rising level of demand. If we had better data then the market could have continuously bid up the price as it became increasingly apparent that oil supplies were becoming scarce.

Instead we are left with a situation in which all of this will become apparent when there are real shortages which will cause a huge spike in prices and the Saudis simply cannot increase production to alleviate the shortage. Then the market will react with brutal efficiency throwing the economy into an economic depression. Will oil restabilize at a lower price? Perhaps. It depends on whether you think inflation will be the main effect or an economic collapse causing rapid deflation of asset and massive unemployment. Remember that everything is relative. If there is rapid deflation and massive unemployment, then $10/barrel may be unaffordable. Please research this subject more closely and come back to us with a more thorough analysis of the subject. It's only the fate of our economy and civilization that hang in the balance.

If you want to share your thoughts with Dr. Levitt, his email is at this site.

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Break Point on Peak Oil

I just picked up the NY Times this morning which has a very long article in the magazine section that many people have suggested is the best Main Stream Media description of peak oil. I will post my review later tonight.

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Saturday, August 20, 2005

Book Review: Death of The Automobile

When we talk about oil, we are really talking about the highest quality, most easily produced and distributed fuel source for the internal combustion engine. And when we talk about the internal combustion engine, we are really talking about the automobile. That's what makes the work that is reported on at the Green Car Congress so important. Failing a total revolution in car design and a simultaneous revolution in an alternative fuel that can replace fossil fuels, society will face a major crisis in transportation.

On car ride up to camping in New Hampshire (yes, even peakguy gets into a car every so often!), I stopped by a small book cooperative along I-91 and my friend showed me a book he found in the maze of categories that related to my favorite topic. The book was titled: The Death of the Automobile and was written in 1972by John Jerome (1932-2002), a former ad guy for the car industry and editor of Car and Driver magazine.

It is a book that is well ahead of its time, fitting in closely with Ralph Nader's classic book "Unsafe at Any Speed" on safety, but also making many forward looking arguments about urban planning, suburban sprawl, environmental impact, fiscal impact of constantly paving and repaving roads. In particular, Jerome chastises the US automobile industry for squandering all the engineering advances of the time from 1955 and 1970 on simply building bigger, faster, less safe, less efficient automobiles that will eventually have such a massive impacts on society and the environment that they will ultimately become an unsustainable feature of modern life such that either society will have to make massive changes to regulate the impact of the automobile or the automobile will destroy modern society. He likens the automobile industry to the buffalo hunters of the 19th century - destroying an older, more sustainable lifestyle to force those people into a new dependent relationship leaving them few alternatives politically and economically except to pay tribute to the same people that destroyed their way of life.

One piece of consumer insight that he realizes long before the advent of SUVs is the American fascination with size and speed (preferably both together!). He describes the vicous cycle of making automobiles bigger and faster, making a bigger engine requires a bigger frame, a bigger and more powerful engine attached to a larger frame require heavier brakes and more complex steering assistance, etc, etc. I would add that bigger cars and the suburban lifestyle which requires little to no physical exertion, which creates bigger people. Bigger people are much less likely to want a small compact car and instead prefer the comfort of a large SUV. You can almost imagine the case of a family that fled the city in a Volkwagen bug in the late '60s or '70s, lived the suburban lifestyle for 30 years and find themselves with little choice but to fit their larger, older and less fit selves into a mini-van or SUV which they are completely dependent on for every aspect of their economic and social lives.

On the way back from the camping trip, feeling really energized from all the distance and weight we covered, we laughed when we saw a bumper sticker on the back of a mini-van that I guess described the owner's love hate relationship with her vehicle: Minivans Are Tangible Proof of Evil.

Much of what J. Jerome prophesized about not only has come true, but has mutated and metastesized into even larger less efficient automobiles, greater suburban sprawl and an unsustainable lifestyle that has no future. With peak oil on the near horizon, the death of the automobile is approaching faster than we are prepared to have mass scale alternatives in place.

I highly recommend reading more about how automobiles have changed our society. Specifically related to NYC, there is one historical figure that changed the face of our modern living environment to adapt to the automobile: Robert Moses. In the next few weeks one of my good friends will write a review of "Power Broker" a biography of Robert Moses written by Robert Caro.

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Friday, August 19, 2005

Making Peak Oil Understandable

I finally received my copy of "The End of Suburbia" from the Post-Carbon Institute and watched it earlier this week. I realize now why this is a good tool for educating the average person about peak oil. While the cheesy 1950's films on suburbia are perhaps not the best way to open the film, within about 20 minutes the film makes clear, concise and understandable the issue of how the current American suburban lifestyle is unsustainable because of the coming energy crunch. The revolving cast of Simmons, Campbell, Kunstler, Heinberg and company paint a rather compelling picture of how peak oil will affect the world, and indeed how it has already affected our foreign policy toward the Middle East. By the end of the 78 minutes, the film goes beyond simple reasoning and taps into a range of emotional doomsday scenarios - economic and monetary collapse, social order breaking down, war, population decline, etc.

While I have had some success in convincing some of my close friends about the serious nature of peak oil, I have met more denial than acceptance. One reason I think that people are hesitant to accept peak oil is because they simply have not heard experts like Matt Simmons speak on the issue because the Main Stream media has shunned him. I think this documentary can be used as good tool to raise awareness of peak oil with credible sources that are authoritative on the subject.

You can buy the movie from the Post-Carbon Institute. And it's available on Netflix! Rent it today and recommend it to your friends.

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Wednesday, August 17, 2005

New Yorkers feel the pain, too

Most of us don't drive much, but still, rising gas prices hurt city residents. The New York Sun reports on the effect the higher prices are having on cabbies and the city budget.

I wasn't planning on posting this article here, except that then they touched on my pet issue: Chuck Schumer and the Strategic Petroleum Reserve.
Still, New York's politicians are vowing to take action to lower gas prices.

At a press conference yesterday, Mayor Bloomberg said the Department of Consumer Affairs is inspecting gas stations to make sure that retailers aren't watering down their petroleum or manipulating their meters.

And in June, Senator Schumer introduced an amendment to an energy bill that would have opened the nation's Strategic Petroleum Reserve to domestic consumers. The amendment died after the Senate, in a vote of 57 to 39, voted to table it.
Ick. The last thing we need is for the press to spin this in a positive light.

Another worrisome bit:

Mr. Bombardiere, former owner of an Exxon station in downtown Brooklyn, said customers are increasingly using credit cards, rather than cash, to pay their escalating gas bills. And with credit-card companies taking a 3% fee on purchases made with plastic, the trend away from cash takes a heavy toll on stations' bottom lines.
I keep reading about how people are putting themselves further into debt because of high gas prices, and it bothers me. The credit card seems to be the classic (American) escapist response when people don't want to take responsibility for a financial crunch (to wit: thousands of college kids getting into debt to buy pizza and beer.) I wish I knew more about how personal debt affects the economy, but I know it's not good, and will be especially bad if our financial institutions collapse.

Still, I really do feel for the cabbies, and I wouldn't mind the city giving them a break somehow. But what a Catch-22. On one hand, I'd want to advocate for more subway riding and less taxi-taking, but on the other hand, it's these guys' livelihood. What's the solution to the problem?

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Tuesday, August 16, 2005

Reflections from the Wilderness

I had a great camping trip this past weekend. I still ache from carrying around 35 lbs of dead weight over 18 miles of rough terrain, but I really loved the experience.

I learned a few good lessons along the way that might be of use to some of you who have an idea about heading for the hills when things start to get a little rough in civilization.

1. Water is Heavy! I guess this is a big duh for most of you, but a gallon of water weighs over 8 pounds. Luckily we were near many very clean springs and brooks that we either filtered or used iodine tablets on. If we had to carry all of our own water, we would have had another 20 lbs to carry around or we could have easily dehydrated after a few hours.

2. It's easy to overpack! I didn't use half the stuff that I brought with me. A couple of lightweight synthetic pieces of clothing are all you really need in terms of clothes. Layering is the way to stay warm. Cotton clothes are really not appropriate since they don't clean easily or dry off quickly (sweat, rain, mud, etc). Next time my pack should be about 1/2 the weight it was this time. Concentrate only on what is essential.

3. Good backpacks are worth every penny. I paid $230 for a good back pack at EMS and it really was worth it. Definitely get measured for one to make sure you get the right size and have them fit you into one. Backpacks that sit on your hips really take a load off of your shoulders and allow you to transport a greater weight more efficiently than any other method.

4. Bring extra shoes. My friend's boots completely fell apart and after we had hiked in 9 miles, this was a major disaster. Luckily we were able to apply a series of temporary fixes including ace bandage, tape, rope, a spare flip-flop, etc. Bring an extra pair of shoes as a back-up.

5. My body started to adapt to just being in constant motion, not really eating much, drinking lots of water and carrying lots of weight. It is important to pace yourself, but your body will start to adapt. After I got back, I felt that distance and weight were all fairly relative. Walking two miles to work did not seem like much compared to what I had just done. Then at work today, I climbed the stairs a few times between the 3rd and 9th Floors of my building. It didn't seem like that much effort comparatively.

Personally I don't plan on running for the hills, but I guess you should be prepare for any eventuality. If you do plan to run for the hills, definitely do a few practice runs. You will learn what works and what doesn't. Next up, NY Century Bike Tour on Sept. 11. I'm going to try to do the 35 mile ride. But first I need to undertake Operation Rescue Bike which entails a trip from Staten Island to the UES of Manhattan.

And speaking of biking, check out this story from The Villager about more details from the July Critical Mass ride. This administration and the police are really getting out of hand. Now they are arresting the press! I wonder what they would do to a blogger?

Peak Oil 101: Live Session Tomorrow

I went to the NYC peak oil awareness meeting last week and they have started to break out the various threads of interest into separate meetings. Tomorrow they are having a Peak Oil 101 session that will be facilitated by one of the veterans of the group who is steeped in all the relevant issues. If you are just wondering about peak oil, what it means or have critical question to ask, I highly recommend you attend this session.

Here are the details:

When: Wednesday, August 17, 2005 at 7:00 PM

Where: Wai Cafe 6th avenue between 16th and 17th New York, NY

1. Peak Oil 101: Where we are, where we’re going. This will be an introductory but wide ranging seminar exploring many possible future scenarios, considering not only fossil fuel supplies, but how energy issues could affect the economy, the real estate market, and jobs. Facilitator: Bill BurkeFirst meeting: Wed., August 17, 7 – 8 PM, Wai Café.

2. Personal Preparations for a Reduced Energy Future: A forum in which we can acknowledge and discuss feelings about the situation, and learn about practical actions to take. At first the focus will be on financial planning.Facilitator: Simon Whelan.First meeting: Wed., August 17, 8 – 9 PM, Wai Café. Directly following one hour of PO 101.

I will not be able to attend. If someone who attends would like to write a comment to me about their thoughts I would appreciate it.

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Green continuing ed at CUNY

Hi everyone! I decided to join PeakOilNYC, since I kept sending Peakguy ideas for posts. It didn't seem fair making him do my work for me, so here I am. You probably already know this, but I'm also a regular poster at The Oil Drum, so if you don't already read us over there, come on over!

Today I want to let you know about some interesting continuing education workshops at CUNY Graduate Center (5th Ave at 34th St.) that are open to the public. Though not free in most cases, they are usually only a session or two, are reasonably priced and might be a good way to learn more about sustainability, green design, and the organic food chain.

  • Sustainable Future. These classes include Ten Principles for Successful Development Around Transit, Introduction to Sustainability, and The Bioregional Approach to Sustainable Cities, among others.
  • Architecture, Design, and Planning. Learn about green building design, photovoltaics in buildings, and sustainable construction.
  • Food Matters. These courses focus on organic vs. local, and how food systems impact the urban environment.
I'm thinking about taking the series called Beyond Farmer's Markets: Putting Food Systems on the Urban Map, since I'm especially interested in how an environment like a city, which obviously doesn't have agricultural capacity, will fare in the future.

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Monday, August 15, 2005

Financial Preparations for Peak Oil

Events in the oil markets seem to be moving even faster than I had originally expected. While political leaders at all levels of government seem oblivious to the growing imbalance between supply of oil and the worldwide increase in demand, each of us at a personal level have the ability to cushion the financial impact to ourselves.

I am not a financial genius and do not have any credentials in the area of financial advice. That said, I have read much about the different ways that people are protecting their hard earned capital in advance of the coming oil crunch. As always, do your own due diligence and keep in mind what your investment time horizon is. Here are some general ideas to consider:

Precious Metals: The most conservative approach would be to simply buy some gold and silver. If the US dollar were to be undermined by high inflation, this seems to be a logical hedge to preserve your capital. Gold is normally positively correlated with oil prices and negatively correlated with the stock market. There are two schools of thought on gold - buy an ETF backed by gold like ticker symbol GLD or buy the actual physical product and store it somewhere safe. You choose which better fits your mindset (level of alarm) about peak oil.

Alternative Energy Stocks/Funds: As oil becomes more expensive, all alternative energy sources will become relatively more economically viable and government may start to provide more incentives than ever before to accelerate technological innovation and adoption. If you are not sure about individual companies, one way to invest is to buy one of the alternative energy funds that is out there, like Powershares Wilderhill Clean Energy Fund (Ticker: PBW). I would look at the composition of their portfolio for individual stocks, such as Evergreen Solar (ESLR), Ballard Power (BLDP), Plug Power (PLUG) and many others.

Rail Companies: As tractor trailer fuel costs rise, freight rail transport will become increasingly more cost efficient. Plus there are few players in the North American freight rail game, making competitive entries nearly impossible. The main players are Union Pacific (UNP), Canadian Pacific (CP), Burlington Northern (BNI), Genesee & Wyoming (GWR), Canadian National (CNI), CSX (CSX), Norfolk Southern (NSC). The current capacity expansion that is going on has helped boost shares of new IPO Freight Car America (RAIL), which produces rail cars that are lighter weight (aluminum instead of steel).

Oil and Gas: Many of us in the online community that have become aware of the peak oil issue early are probably more environmentally friendly than the general population, but we are still going to need new supplies of oil and gas to be developed to make it through the next few decades and hopefully have a softer landing and transition to whatever the next phase will be. I would steer clear of the big oil companies simply because they will be under the public spotlight and I can imagine Congress taking a share of their super-profits. I would look at smaller companies like Valero (VLO), Suncor Energy (SU) and some of the companies that Matt Simmons is involved with through his Investment Bank, like Superior Well (SWSI), Stolt Offshore (SOSA).

Many people have different opinions about the real estate market. I think there is a bubble in the suburban real estate market since they are based on cheap transportation costs, but I could see urban areas and areas near rail hubs become ever increasingly popular.

That's just my own suggestions. I am very open to suggestions if anyone has any others.

For full disclosure, I own GLD, PBW, RAIL, CSX and ESLR. I'm looking to buy into one of the rail companies and oil service companies once I sell more of my tech stocks.

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Friday, August 12, 2005

What's driving gas prices higher?

I'm about to take off for the weekend to go camping. A little homework for everyone this weekend: Ask your friends, co-workers and relatives "what is driving gas prices higher?" Humor them as they talk about Bush, the Chinese, the war, the oil companies, etc.

Then mention these 3 facts:

1. No good information on oil exists inside of OPEC. There is no independently verified estimates of OPEC production rates or reserves. If we had a firm accounting of how much oil is really left and what fields are in decline then the markets might stabilize around a price that makes economic sense. Maybe mention Matt Simmons' book.

2. Add that OPEC has publicly stated that they cannot produce any more oil than current production rates and that non- OPEC producers have had a decline in production despite the high prices that should encourage more production. If price instead of geology drives supply then why hasn't this mechanism worked yet.

3. Tell them that we only have ourselves to blame for not using technology The average vehicle fuel efficiency has actually decreased since the the late 1980s and many of the new hybrids are being built for enhanced performance instead of fuel efficiency.

I'm interested in how these conversations go. Please post the results of your conversations in the comment section.

Thursday, August 11, 2005

Going Camping

I'm going to be camping in New Hampshire this weekend with a friend who is far more experienced than I am. I feel very prepared - I bought a new ergonomic backpack, hiking boots, fishing pole and net, lots of other little useful gadgets. One item in particular that I thought was interesting from a peak oil perspective was the Coleman solar heated shower unit. It sells at Kmart for $12.

All you need to do is fill it with 5 gallons of water, leave it in the sun for 3 hours and presto, you have hot water for showering! I think every urban dweller should get one of these and consider trying it out. Then if your hot water goes out, you know what to do! I'm hoping to learn other little tricks that will help us urban folk survive some of the coming energy issues.

I'm hoping to convince a few people to write some guest posts on peak oil or related NYC issues while I am away. I may write something from the road, but I'm guessing my blackberry should be out of range.

We are on track to surpass 2,000 hits on the website since launch less than a month ago. Special thanks to,,,,, and many others for refering folks to this website.

Until then, stay cool and stay informed.

Wednesday, August 10, 2005

Car-Free Central Park?

Transportation Alternatives is sponsoring a petition to make Central Park Car-Free. As I witnessed at the NYC Parks Mayoral Forum, two candidates pledged that they would make Central Park Car-Free. Now it is time to have your voice heard on this issue.

If you agree with this Statement, please sign the petition:
Central Park, our nation's foremost urban park, was created as a refuge from the surrounding city. The presence of automobile traffic on Central Park's loop drive is undermining the park's status as a refuge and creating a grave safety hazard for recreational users. For these reasons, I support the elimination of all regular automotive traffic from the loop drive and the return of the drive to recreational use only.

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Is OPEC Irrelevant?

As the price of oil continues to surge up and up to over $64/barrel, I caught a whiff of Phase I of the Peak Oil future from the NY Times review of the oil market:

OPEC has increased its supplies to 30.4 million barrels a day, raising output by 300,000 barrels a day over the last two weeks, in a bid to cool prices, according to the organization's president, Sheik Ahmad Fahad al-Sabah. But analysts dismiss OPEC's power to influence markets. With little production left untapped outside of Saudi Arabia, there is nothing the cartel can do to rein in prices. "OPEC? They are irrelevant," said Lawrence J. Goldstein, the president of the PIRA Energy Group, an oil consultancy in New York. "It's only when you hold off supplies than you become influential." He added, "Today, all the events are leaning in the same direction: Up."

So they realize that everyone, including OPEC, is producing flat out and they don't think we have hit a peak? The next question is: what if OPEC decided to hold back production? Answer: Economic chaos.

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Tuesday, August 09, 2005

Interview With Matthew Simmons

I'm almost finished with Matthew Simmons' Twilight in the Desert. Then I see this interview with him by Jim Puplava on Financial Sense that basically provides a nice background to the issues he raises in the book.

Simmons makes some of the strongest statements about the timing of the coming crunch in supply:

In 1990 the United States was still producing 7.3 million bpd of crude oil, today it’s 5.1; the 7.3 was after a drop over the previous 5 years of 1.6 million bpd; our refineries only needed to run at 13 ½ million bpd; and we only needed to import 5.8 million bpd of crude oil imports to balance our system. Today we have to run our refineries at 100% or we have major product shocks; today, we have to import 10-11 million bpd, or we lose crude oil stocks; we have to basically create almost 3 million bpd of finished product imports; we have to run the system on a 24-7, all Summer long. And we still liquidate stocks.

So we have actually now created a pending domestic embargo, and we’re going to be lucky to get through the Summer without some periodic shortages. We probably will, but the odds are probably as high we will have some shortages, and then if we get through the Summer we have a fabulous respite from Labor Day to Thanksgiving, until we hunker to try to figure out how the world gets through the Winter of 2005 and 2006 because oil demand globally could easily go to 86-88 million bpd during the Winter, and that could easily exceed supply by 2-5 million bpd.

And this is just discussing the refinery issue, but still you can't just put crude oil into the gas tank, can you? My feeling is that this will mostly affect extremely isolated areas that are far from refineries. Maybe skip Hawaii in your winter vacation plans...and get some warm sweaters now while they're cheap.

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Voice Your Support for Green Buildings Bill

Please take a minute to help the NRDC (Natural Resource Defense Council) push for green buildings in NYC.

Here is the background they sent me:

Poor indoor air quality, inadequate ventilation and toxic chemicals from paint, carpet and other materials make too many buildings unhealthy places to live, work and go to school. In addition, commercial and residential buildings consume almost 70 percent of the electricity produced in the United States, making them responsible for huge amounts of air and water pollution.

The good news is that the New York City Council has introduced a "Green Buildings" bill that would require most new and substantially renovated city buildings (including $5 billion in new schools) to be built in the healthiest and most environmentally sound manner possible. Green buildings (which cost almost nothing more to construct than regular buildings) have better indoor air quality than regular buildings, and typically use carpets and paints that release fewer toxic gases. New Yorkers who would benefit from more green buildings include students, teachers and other city workers, along with members of building trades. The bill also would require many city building projects to use at least 20-25 percent less energy and 30 percent less water, not only saving millions of dollars a year in operating costs, but also reducing smog and other disease-causing air pollution produced by local power plants.

Another provision in the bill would encourage green buildings to use sustainable wood certified by the Forest Stewardship Council. One hundred percent of New York's state-owned forests are certified by the council, so the requirement would help protect the state's jobs as well as its forests. But the timber industry opposes the proposed certification system, and is trying to either kill the bill or to replace the wood certification standard with its own weaker system.

The city council is expected to vote on the Green Buildings bill on Wednesday, August 17th.


I urge you to sign their letter to Mayor Bloomberg and Speaker Miller!

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Reminder: NYC Meet-Up Tomorrow

NYC Peak Oil Meetup Group has an event tomorrow!

Here are the details:

What: NYC Peak Oil August Meetup
When: Wednesday, August 10 at 7:00PM
Where: Wai Cafe
6th avenue between 16th and 17th
New York NY 10001

See who's coming or make an RSVP, click here.

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Monday, August 08, 2005

"What is Peak Oil?" (Part 2)

Last week, I wrote a short post as a primer for people new to the concept of Peak Oil. I really encourage anyone new to the subject to read some of the links at the bottom of that post because they are quite compelling reads. As my second post on this series I want to focus a little more on timing since most people understand that oil is non-renewable and that "one day" we will "run out". Peak Oil is more of a series of events that in hindsight will represent the period of time when the world's increasing demand for oil cannot be met by increasing supply as it has been for the last 150 years of industrial development. Saudi Arabia has managed the oil markets as the swing supplier ever since the US hit its own peak production in 1970.

Back in the Spring as oil prices were in the $50 range, Bush met with Prince Abdullah (now King Abdullah) and basically got a firm "No" that they couldn't increase production to cool off prices. As Matthew Simmons has clearly laid out in his book Twilight in the Desert, Saudi Arabia has probably been operating at full capacity for the last few years and has no additional capacity to expand production. Without a swing producer and no production slack within OPEC or outside of OPEC, supply is now limited by geology, not economics or politics. That ends the first half of the oil age. What follows is my hypothesis of how the post-peak may play out:

Phase I: Oil Prices Increase to Curb Demand Growth
The recent increases in the price of oil from $20 to $60 in 6 years may be the first phase of this process where supply cannot increase as fast as demand at a particular price. Thus the market price for oil is limiting demand growth rate so that it better matches supply. In a simple way, oil is now being bid up by many people who would like to have it, but some who can afford it and others who will not be able to afford it at a given price. Witness the impact of $60+ oil on the developing world (in particular Southeast Asia) versus the Developed World and you can see who is winning this bidding war and who is limiting their demand growth. But this phase just slows the growth in the increase of oil consumption, so economic growth simply slows down as inflation starts to creep up, producing economic instability in many parts of the world. Prices may have to reach over $100/barrel to actually decrease demand. At this point, unless whole societies are transformed to rely on much less oil, prices will continue to increase steadily.

Phase II: Supply Shrinks and Oil Markets Close
Eventually supply will reach a point where the decline rates in the large super-giants that have been overworked, will not be made up for by the ability to increase production in newer fields. If this happens quickly (say a 5-10% yearly decline in supply), this will have a severe worldwide economic impact causing such rampant inflation in the cost of basic goods that many standards of living worldwide will fall dramatically. Some currencies will become so devalued that they may not be able to be exchanged for goods on the international market. As a result, the oil trade may collapse completely on the basis of money for oil. In its place would be a sort of barter system of food or other commodities or manufactured goods for oil. Order may breakdown in some developing countries as economies collapse due to lack of fuel.

By then it will be apparrent to all that oil is a very precious strategic commodity that needs to be secured by military means. China may embark on military operations in Central Asia to get "their share of the pie". Other countries may follow suit and many petty resource wars may occur at a regional level in Africa and Latin America. If there is a major conventional war between the major military powers (US, China, Russia) and some of the oil exporting countries (Iran, Iraq, Saudi Arabia, Venezuela, Nigeria) then even more energy will be wasted securing the remaining oil resources. Even without major wars, I believe the world will revert to a neo-mercantile system of economic/military blocs, which has been the norm of human history except for the post WWII era fueled by cheap oil.

Phase III: From Global to Local
The end of the global oil market will be the end of global trade. Each economic/military bloc will have to become economically self-sufficient. Transportation of people and goods within these blocs will be expensive as oil and other quality fuels will be extremely scarce. Each local area will need to meet its own needs for survival of its citizens. Food production (dependent on petroleum based fertilizers) and logistics may not be able to meet the demands of the 6 billion people that had previously supported by the enormously cheap energy over the last 150 years. Famine and disease may create a Malthusian solution to population overshoot. We will have to live within the means that we can self-produce in a sustainable manner.

This is the nightmare scenario and I haven't even discussed the interaction of climate change and soil erosion. It may happen in the next 5 years, it may not happen for 10-20 years. It can be avoided or greatly mitigated if urgent action is taken at all levels of society. All the warning signs are going off right now.

Ultimately I do believe that local areas will have to become more self sufficient as we transition from an easily extracted energy source like oil to whatever combination of alternatives that will be of much lower quality and not as easily extracted or produced. That is why I have focused the attention of this blog to preparing NYC for peak oil.

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Sunday, August 07, 2005

Estimating NYC's Gas Bill

(Map - Population Density)

I found some interesting car statistics on the NY DMV website on the number of registered passenger vehicles by county. Here's what we have for NYC in 2003:

Total Cars By Borough
Queens 639,849
Brooklyn 362,289
Staten Island 236,989

Manhattan 215,521
Bronx 215,300
NYC Total 1,669,948

I was surprised that Queens had so many more cars than Brooklyn, but I wasn't surprised to see my home borough of Staten Island above Manhattan and the Bronx despite having less than 1/3 their population.. Looking at this on a per capita basis, you can see which boroughs are more dense urban areas with very good mass transit access, versus less dense (in some parts suburban) areas with less mass transit access:

Per Capita Cars By Borough
Staten Island 0.512
Queens 0.286
Bronx 0.158
Brooklyn 0.146
Manhattan 0.138
NYC Average 0.206

This shows that Staten Island and Queens, the least densely populated areas of the city are the most reliant on cars for transportation in the city. I'll look for the numbers later, but I'm guessing that Long Island, Westchester, Connecticut and Northern NJ have even higher rates of cars per capita than Staten Island.

I couldn't find any numbers on how many miles the average NYC car drives in a given year, but let us assume that each of these cars travels 5,000 miles (conservative) and gets 15 mpg (also conservative considering city driving!). That's 333.33 gallons of gas a year for each of the city's 1.67 million cars, or 556.6 million gallons of gas collectively. At $1.50/gallon gas prices, the city's collective gas bill is $835m. Assuming that most of the demand is inelastic due to lack of transportation alternatives, at $2.50 the gas bill goes to $1.4 Billion, at $4/gallon the bill would be $2.23 Billion.

Each incremental dollar that is spent on gas comes at the expense of money that could be spent in the local economy. The city's transportation goal should be to reduce the overall dependence on the car for everyday transportation and reduce our dependence on oil products to fuel those cars.

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