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Smc Newsletter February 07






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    Smc Newsletter February 07 Smc Newsletter February 07 Document Transcript

    • Volume 2, Number 2, – February 2007 People you should con- The Economy Will Bring Peak Oil To You tact about peak oil: It won’t just be through high gaso- line prices, either. Not only is just •Senator Barbara Boxer http://boxer.senate.gov/con- about everything we buy dependent tact/email/policy.cfm on oil and gas, but economic growth •Senator Dianne Feinstein seems very dependent on oil staying http://www.senate.gov/~fein- cheap. As I will show later in this is- stein/email.html sue, economic growth tends to slow •Congressman Sam Farr or reverse whenever the price of oil 1221 Longworth House Of- rises rapidly, and commodities de- fice Building clining in availability tend to exhibit Washington, DC 20515 wild price swings—both up, and (202) 225-2861 down. So destructive spikes and de- FAX (202) 225-6791 http://www.farr.house.gov/ ceptive collapses should character- •Governor Arnold Schw… ize oil price movements over the http://www.govmail.ca.gov next few years. •President George Bush It is unlikely, sadly, that the cause http://www.whitehouse.gov/ of these swings will be readily appar- ent for many years. There will be Now you can contribute a unrest in Nigeria, hurricanes in the cent to SMC every time you Gulf of Mexico, drill rig shortages do a web search—just go to here and short-sighted national oil www.goodsearch.com, enter companies there—to provide reas- “Sustainable Monterey Coun- suring temporary explanations for ty” in answer to the “Who do developing downturns, shortages you GoodSearch for” ques- and price spikes. Someone, usually tion, and search . in the pay of the oil companies, will always be there to let us know that Thanks to all those who have contributed help and funds to things will be straightened out next SMC month, next quarter or next year, and we won’t have to worry about supplies in the future. And, whenev- er prices drop for a while, as they have in the recent past, many com- UPCOMING EVENTS February 1, Thursday: SMC Discussion April 5, Thursday: SMC Discussion Group: Group: Economy, 6:45-9pm, Mty Youth Transportation, 6:45-9pm, Mty Youth Center, 777 Pearl St. Center, 777 Pearl St. February 17: SPG “Spring Cleaning, Keep it Clean” event, Saturday, 10 am – 4 pm, PG Natural History Museum March 1, Thursday: SMC Discussion Group: Food Security, 6:45-9pm, Mty Youth Center, 777 Pearl St. Mission: To ensure an orderly transition through the fossil fuel decline by co- operatively developing a sustainable economy for Monterey County.
    • SUSTAINABLE MONTEREY COUNTY Peak-oil’s effect on growth? THE PEAK AND DECLINE OF OIL PRODUCTION WILL CAUSE A SERIES OF RECESSIONS When delays are unavoidable in re- sponses to commodity gluts and shortages, the responses over- shoot and prices swing wildly. And wildly swinging oil prices have repeatedly caused recessions (periods of negative economic growth). Note in the top figure how each big rise in the price of oil is followed by a period of lessened or Oil prices & resulting US GDP growth since 1970 negative economic growth. These are always accompanied by job losses and often by stock market declines. The bottom figure shows what happened as overexploitation caused the whale population to crash—making whale bone virtually unavailable. Before peak, price fluctuations could elicit responses in supply. After peak, a steady de- cline in supply resulted in wild price fluctuations superimposed on a ris- ing trend. It appears that oil is near its peak and the price swings have begun. Whale bone production and price history Why should the price of oil behave so badly, rather than smoothly reflect increasing scarcity? Because people and businesses need to continue functioning, and adaptations take time to imple- ment. Plus, we’re always ignorant of the actual state of affairs. If gas goes to $10.00 per gallon, everyone will try to keep driving to work—especially if convinced that the price spike is temporary. But the price will rise until enough buyers are forced to cut back, so that the amount purchased is no greater than the amount available (demand destruction). Only after prolonged pain can enough drivers ditch Hummers for Priuses, and enough suppliers implement extreme measures to ramp up supply, to blunt a price spike. However, a recession may result in the meantime, and the declining demand curve can shoot right past the (rising?) supply curve—so the price crashes—to wait for the next recovery…
    • SUSTAINABLE MONTEREY COUNTY YOU CAN DEFEND YOURSELF AGAINST PEAK OIL • Personal debt can make you vulnerable to economic downturns—get rid of it. • Shorten or eliminate a long driving commute to stay afloat during price spikes or rationing. • Get a very efficient car, if you must drive. • Ride a bicycle wherever you can. • Diversify investments, if you have some, especially against currency and sector risks. • Insulate your living space. • Make your lighting and heating as efficient as possible. • Take political action to mitigate energy depletion, consistent with minimizing climate change. • Buy from local farmers and manufacturers. • Get to know your neighbors. • Reduce your material consumption in general. It seems that Americansoften blame poverty on individuals, rather than on the policy failures that lead to widespread poverty. We continue to witness a colossal energy policy failure—guess what comes next. Further Reading The Oil Drum http://www.theoildrum.com/ Association for the Study of Peak Oil--USA http://www.aspo-usa.com/ Energy Bulletin http://www.energybulletin.net Oil Addiction: The World in Peril, Pierre Chomat Beyond Oil, Kenneth Deffeyes The Long Emergency, James Howard Kunstler The Oil Depletion Protocol, Richard Heinberg
    • Director’s Note CONTACT Happiest of February’s to you! This month brings our new “Cre- INFORMATION ating Sustainable Communities” Lecture Series to the Monterey Youth Center. It offers a more concise format for local solutions to MARK FOLSOM: the global problems that face us today. Once completed this lecture Phone: 831 648 1543 series will be available to all our communities, so we can increase the livability of our region while reducing fossil fuel use and lower- E-Mail: folsomman@red- shift.net ing our CO2 emissions. Our topic this month, Local Economies for Strengthening Com- munity, takes a look at the history of currency, our national debt, Steering Committee Members peak oil and the economy and how cities around the world are Deborah Lindsay, Director deb@sus- adapting to lower energy inputs and declining economic growth. tainablemontereycounty.org What are some of the solutions? Start reducing your personal debt, practicing voluntary simplicity, trading skills with your neighbors, Ruth Smith, 831-620-1303 participating in local credit cooperatives, and producing goods clos- Committee Chair and Budget Chair er to the point of consumption to reduce long (and fossil fuel/CO2 Virginia Chomat, Secretary and Co-treasurer intensive) supply chains. Pierre Chomat, Consider the Genuine Progress Indicator (GPI) as a concept in Resident Expert green economics as a replacement for gross domestic product Mark Folsom, (GDP) as a gauge of economic growth. GPI measures nature's abil- Newsletter Editor, ity to provide services and generate water, air, soil and food. GPI folsomman@redshift.net also reflects sustainability: whether a country's economic activity George Wilson, over a year has left the country with a better future with the possibil- 831-372-0659 Committee Evaluation Coordinator ity of repeating at least the same level of economic activity in the Denyse Frischmuth, long run. 831-643-0707 How’s the GPI in your house? In your neighborhood? In the Volunteer Coordinator and Urban Envi- County? ronmental Accords Coordinator Everyday, in everyway, find even the smallest opportunities to Robert Frischmuth, boost local economic security and protect the environment. But to Co-Treasurer put this all in the simplest of terms, do as one of my bumper stick- Program Heads: Annette Chaplin, ers suggests, “Consume Less, Share More”…thinking like this goes 831-372-8725 along way in creating sustainable communities. Sustainable Pacific Grove Cheers! Deborah Lindsay Linda Parker, phone # 831-656-0664 surite@sbcglobal.net Big Sur Powerdown Oil and Investment For the last thirty years, the price of oil has been the single most important de- terminant of the economy and the stock market. Sharp rises in oil prices have been deadly for the economy and the stock market, while steady or declining Newsletter Design by prices, or even prices that increase only gradually, have led to good times. For Adrienne Allen investors, it’s what we dub your “desert island, one phone call” indicator. If you aa_nixon@comcast.net can know only one thing about the world, make it the direction of oil prices over the preceding year, and you’ll do better in the stock market than almost anyone We’re on the Web! else following any other indicator, from interest rates to corporate profits. This See us at: has been true for the last three decades, and it will remain true throughout the http://www.postcarbon.org/ early part of this century—until we kick our oil habit and develop and switch to groups/monterey viable energy alternatives. --Stephen and Donna Leeb, The Oil Factor, 2004