Monday, December 21, 2009

$20 per Gallon: How the Inevitable Rise in the Price of Gasloline will Change Our Lives for the Better / Christopher Steiner - NY: Grand Central, 2009

Many oil industry analysts have concluded the world has reached its maximum annual production of conventional oil. Henceforth, our energy requirements will need to be increasingly fulfilled by other energy sources: coal, nuclear, renewables, poorer quality oil, tar sands, etc. All of these are inferior sources of energy and are much more expensive to produce. Consequently, the world will see a steady increase in the price of energy which will change our society and our way of life. Christopher Steiner's $20 Per Gallon is an attempt to understand what these chnges will be. Surprisingly, Steiner believes that on balance we will be better off by losing our addiction to cheap oil.

Steiner is a journalist and an undergraduate engineering major. He is not an economist, and this shows in his work. Nonetheless, $20 Per Gallon is a welcome attempt to begin thinking seriously about the consequences of rising oil prices. The work proceeds through ten chapters, titled with a rising price of a gallon of gas (Chapter $4, Chapter $6, Chapter $8, etc.). In these chapters Stiener describes how the incremental increas in gas will wean Americans from SUVs, drastically downsize the airline industry, stimulate the production of electric cars, rebuild our cities and destroy suburbia, restore the character of small towns, rebuild U.S. manufacturing, "deconstruct" our global food system, and stimulate the construction of high speed trains all across America.

While the broad outlines of Steiner's vision of the future are probably correct, he fails to provide the details necessary for a clear picture of the future. The optimistic tone of the work often relies on technological solutions to the problems raised by expensive energy. Hydrocarbon fertilizers will be replaced with electrolosis created amonia, the burden that electric cars will place on our electric grid will be solved by smart grid technologies, and petro-plastics will be replaced by bio-plastics. Between the lack of detailed economic analyses and the faith in technological solutions, the hopeful picture of the futre seems more hopeful than justified.

Perhaps the strongest chapters in the book outline the development of urban neighborhoods, public transportation, and high speed interstate rail lines. These developments rely mainly on proven technologies and a will to implemented cost effective plans. It is very easy to see how the rise in energy prices will stimulate retrofitting our housing and building stock to avoid heating and cooling waste and how our transportation needs will require the development of cost effective ways of moving our workforce to and from their houses and workplaces.

It is less clear that we will be able to feed our huge population without the cheap energy that made such a population possible. Steiner would have done better to investigate the carrying capacity of land in and around our major cities to see just what land and water resources would be needed to feed them and how much it would cost to bring enough food to the market. If our current conurbations are not viable, our future will be different in ways that Steiner does not explore.

Nonetheless, one is left with less anxiety about the future having read $20 Per Gallon. For anyone contemplating the most dire scenarios spun out by "peak oil" theorists, that may be a good thing. One should not underestimate the resourcefulness of people and our ability to create meaningful and enjoyable lives without the goods and services of our hydrocarbon economy. Still, Steiner's vision is certainly too rosy. He consistently glosses over the real sacrifices that people will need to make with the loss of cheap energy or during the transition to a new energy economy.

Many of these sacrifices are likely unanticipate today, but it precisely because they are unanticipated that Steiner's book is so valuable. It is the first attempt I have seen to seriously imagine the consequences of rising energy prices. If only a good economist would bring her or his attention to the issue as Steiner has.

No comments:

Post a Comment