Peak Oil and Unpaid Mortgages Will Kill Suburbia
In a place like upstate New York, north of Albany, where April is more generally known as “mud season,” and the wait for “ice-out” on the big lakes takes forever, and on frigid nights the windigos steal through the tops of the tall pines — it would seem foolish to complain about perfectly beautiful weather.
We just had a week in the 70s, with more to come. The grass went from ochre to bright green in about thirty-six hours. The buds are popping like mad. This is usually what the first week of May is like around here, and that fact alone may explain New York state’s relentless population drain over the past forty years.
I was out on my bicycle, naturally, taking it all in — like, why sit inside and sulk because the weather is strange in a pleasant way? — and I ventured into the outlands east of town, where an impressive number of gigantic new houses had landed like alien mother-ships in the former cow pastures and wood lots. Of course, the aesthetics were an issue apart from the socio-economics of it, but nonetheless interesting.
Each new, gigantic house seemed the result of a losing struggle to reinvent basic design principles that did not require re-invention. I doubt the spirit of joyous “creativity” among the star-architects has seeped down to the level of the provincial house-builders, who, after all, are just assemblers of modular materials like dimensional lumber and eight-foot sheet-rock. It’s their inability to assemble these parts coherently that’s really striking, so what you get is an endless variety of mistakes along with a complete absence of anything done really well — which may be the essence of what the “diversity” craze has really meant to us, the ethos of current times.
The abiding quality of all these houses was grandiosity (by which I do not mean grand-ness). That, too, is a signature of these times in America — the nation too big to fail and tragically destined to do just that on account of its too big to fail-ness. And, of course, one could not fail to wonder, cruising by these hideously ponderous houses, whether as a matter of fact they were failing in terms of the owners’ ability to keep up with the payments, for instance. One after another, I pictured a husband and wife within sitting in the sunny breakfast room on Easter morning humped in tears as they sorted through stacks of bills and bank statements… and I imagined the yellow foreclosure tape a few weeks hence atop the weird split-block portico treatments and misbegotten arrays of concrete balusters, and the colossal Palladianesque windows with their pathetic snap-in muntins (and the fantastic solar heat-gain, not figured-in by the designer-builder, that would turn the lawyer-foyer into something like a crematorium by two p.m.)… and the pension fund in Wisconsin or Norway that was sitting on the booby-trapped CDO that contained this sketchy mortgage and thousands of others just like it… and, well, this choo-choo of thoughts led to envisioning the train-wreck of economies and nations that lies in wait just around the bend….
One also could not fail to reflect on the recklessness of a nation that placed untold million-dollar bets on the idea that it would be possible to travel anywhere in an automobile from houses like these a few scant years from now. This far along in the tribulations of our time, most Americans still have not heard of peak oil, and the few who have regard it as some figment that Ralph Nader or Al Gore conjured up on an acid trip in a sweat lodge. The more sophisticated among the mentally unwashed are certain that the earth has a creamy nougat center of low-sulfer light crude oil, or they heard that the Bakken formation in Dakota holds more oil than Saudi Arabia, or that the whole US car and truck fleet will be electrified in a year or two, or that we can drill-baby-drill our way to permanent oil abundance, or just that the American can-do spirit will come up with something to keep Happy Motoring alive because we’re the greatest! Such grandiosity!
Personally, I look at these houses scattered around what was only recently a dedicated farm landscape and I am quite sure that the denizens within will be marooned in their great rooms, and that very probably many of them will have no job to go to — in the conventional sense of what we think a job is, in some corporation or institution — and that in a surprisingly short span of years these buildings will be ruins or squats. I think these thoughts after struggling up a rather steep hill more than half-a-mile (and many others previously). A trip anywhere from here, to do anything, and the return trip, would occupy an entire day even for someone in decent physical condition. Somebody accustomed to rations of Cheez Doodles and Mountain Dew would be dead by then. There will be lots of dead.
On the macro level, the feeling spreads across the USA that our troubles are behind us. Employment is ticking up. The S & P index only goes up now. The banks have stabilized and those “toxic assets” (which I call “frauds” and “swindles”) have been disarmed and safely buried under Yucca Mountain. Housing starts may still be weak, but the “gaming” industry is making great strides in places like the old Puritan commonwealth of Massachusetts, so soon we’ll have a virtually automatic economy of leisure-and-entertainment paid for by creaming off a small percentage of the quarters pumped into video slot stations. No doubt the Chinese will be jealous and try to imitate us.
All these lovely mild days, I was not unconscious of the eeriness of the weather and the possible insidious effects of it on the local ecosystem in everything from the added generations of deer ticks carrying Lyme disease and the death of the honeybees to the fate of this year’s apple crop. I confess: it made me very nervous. Something is happening… out there.
Regards,
James Howard Kunstler
Whiskey & Gunpowder
April 6, 2010
P.S.: Click here to listen to my new play Big Slide about life as the long emergency gains traction.






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Does this mean I should keep my horses? Because I am getting tired of paying the feed bill for them but it sounds like they may come in handy. But darn I need to drive to get the feed and the feed price is directly related to the price of fuel. Maybe I can eat them. Since the food prices are also directly related to price of fuel. I guess we had better get some more fuel. As far as the house, well I have a gas hog RV for backup. oops!
I have believed for years that things were mostly insane and doomed but so far they continue on same as it ever was. But your guess is as good as mine.
IMO Jimbo K your analysis is waaaaaaaay too kind. Those with “real” rural acreage and true “country” living, (not the faux kind found in suburbia gobbling up one-time prime farm ground) had better start working on a checklist of do-and-do-NOTs for when the Suburban Refugees find the Good Life Ain’t So Good After all and seek haven with their Hick Relatives who right now need to work on and POST a Laminated copy – and run off plenty of hand-outs–to inform those seeking a better shelter to heed and live by or else….vamoose…if they don’t like the rules and regs! When Peak Oil hits there are gonna be some mighty cranky and very ‘piqued’ people in unsustainable McMansions. Freezing in the winter months, broiling in the summer and nothin’ they can do about it. They’d better have good shoes (and buy up some ahead) for they’ll become acquainted with Shank’s Mare Transportation (an old-time term for WALKING.)
Horses, eh! The laws are changing. Many people want to rid themselves of “pleasure” equine creatures for the same reasons you mentioned when they figure out the true costs and hard work. It’s not as easy as it seems. Horse prices are probably at an all-time low as the upkeep is at an all-time high. In our parts, people with problem horses find the easiest way to get rid of a four-legged inconvenience is, like passing the Old Maid, make it someone else’s problem. Farmers used to go to weekly livestock auctions to buy and sell creatures, and years ago, no one locked the hauling trailers. Now everyone tends to lock up – or you might well leave the sale barn ready to go home and kick back for a bit before going to bed – and find out some toothless, spavined, swayback horse that was someone else’s problem just became YOURS when it was led into the livestock trailer and miraculously solved one person’s problem by creating one for someone else. when they clanged the door shut and slipped off into the darkness. Old movie, if I recollect correctly: THEY SHOOT HORSES , DON’T THEY? I dunno for sure, I’m thinking you can’t even shoot a hoss and dig a big grave or you’re illegal. As for glue factories? LOL. WHAT glue factories? Some are slipped across the border to Mexico were they eat ‘em. And it seems in Florida there are illegal slaughter plants processing horses, but hungry people do desperate things, as do people who have horses they can’t afford and never should’ve acquired. Even “aware” people don’t know the half of it that’s going on in Rural America.
One key to surviving the impending downturn is not simply preparedness. It is a willingness to do what will be necessary to fend off the unprepared no matter who they may be. My very “enlightened” progressive mother-in-law who does not believe any of the gloomy predictions tried to hedge her bets. She told my wife they knew where to go if things actually do go south as I predict. She simply told her they would show up at my door. They forgot about me, the very opinionated retired military guy. I told her bluntly, if you do not provide one year’s worth of food for ADVANCED storage they would be treated as any other interloper. Not kindly. At that point she told me she was just kidding. I told her I wasn’t. End of conversation. We have not talked much since, go figure.
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Philip that may be another win/win for prepping. Those kind of folks don’t mind others risking their lives as long as their own hands stay clean. They get to claim some kind of moral hi ground instead of a gutless renunciation of free will. But I’m a vet and my government thinks I’m dangerous.
I feel for you Philip I have em in my own family. What’s good for me is I have my Mom and she’s 100% percent behind me. Dad’s taking longer but I got him a .357 mag and he got his CCW along with my Mom.
Essie we had a term for the Shank’s Mare in the military LPC’s (Leather Personnel Carriers)
It is really tough to get family aboard. Lotta Denial. Sorta like Whistling by the Graveyard for many. They see signs of cracking at the edges, but they dont want to acknowledge it, so they quickly look away and believe that it’ll be, “There, there! All better – real, real soon.” Lynne you’re a treasure of information. LPC – I like that – in fact, I’m gonna “steal” that and use it as a civilian. It has a nice wakeup ‘ring’ to it – and will perhaps make people who live in flipflops consider how inferior they’d be for surviving, LOL. I love my gumboots, myself!
Dear Phillip: Hurrah for you and welcome to the crew! Sensible people aren’t joking when we say we are not going to be responsible for the grasshoppers during TEOTWAWKI, and we aren’t going to take in those who have scoffed, sneered, and made no effort to collect supplies or learn skills which will be necessary to the preservation of the group. We don’t need any abrasive consumers who want to argue or vote over every issue. I would adore having Lynne and Essie with me–oh, for even a retired vet who could double as a doctor–but the kind of “colonists” we all want are already well-advanced with their own preparations. I can imagine the look on your ma-in-law’s face if she saw MY list of rules, which includes that the minute the power goes off so does the air-conditioning! IF I think we can afford it, I may run AC in one of our spare motor homes, but I will probably stick to “One hour four times a day we have electricity because that is what it takes to keep the freezers safe. During that period you can wash, vacuum, run the dishwasher and recharge your batteries, but other than that, go sit in the woods with your feet in a pan of water. After your chores are done.” Those who can’t grasp what is possible tend not to understand the story of the Little Red Hen, either. I’m the one who bought the generator and fuel, and I am the one who says what we use it for. Anybody who wants what I have can barter for it or try to take it away from me. One or more may succeed. Until such time, there will be no room for moochers and malcontents. Anyone who isn’t worth what it “costs” to feed him/her can go elsewhere. Empty-handed. Oh, I am soooo mean.
Sigh. The SPAM filter ate my reply. Short version, hurrah for you Phillip, and welcome to the crew. Your ma-in-law sounds like an abrasive malcontent, and she should see MY list of rules, which includes “The moment the power goes down, the AC goes, too. The generator will be run one hour four times a day to keep food frozen. During those hours you may use any electrical device you please. Other than that, when you finish your chores go sit in the woods which are 15 degrees cooler and put your feet in a bucket of water.” When what we have is all we can count on having, somebody has to be in charge. No votes, no arguments, and no moochers. The Little Red Hen was right.
Linda All you need for redneck air conditioner is a breeze 2 burlap bags and 2 ,5 gallon buckets. Soak the burlap bags and hang up to catch the breeze, put the ends of the bag s in the buckets. TA DA, a swamp cooler. Burlap is also good for a camp refridgerator and keeping your stuff cool if you have a swift flowing creek around.
Three Words
Peak-oil paper tiger.
Plenty of energy.
Coal and gas.
Nukes and alternatives.
100 mpg cars.
Scientific innovation triumphs.
Doomsters eat sour-grapes.
Life goes on.
Mr. Simmons, the politicians apparently liked by Mr. Kunstler are working busily to obviate the use of coal or of petroleum products. And a 100 mpg car isn’t going to carry hay to the horses or keep the stores stocked.
Even if you don’t believe in Peak Oil, it’s fact that there is no more Cheap Oil or equivalent from other sources. Ten or twenty years hence, you can figure on only government people and the Important Rich will have access to unlimited transportation.
We’re in trouble, now, with the present population. How about the effects on demands from the growth in our numbers?
Dear desertrat:
I have posted responses to overpopulation alarmism in reply to previous essays by JHK and others. World population will peak in 40 years at levels not all that higher than current population. Despite end-of worlder’s dire predictions living standards continue to rise and food production keeps pace. Grain prices remain flat. Yes, oil is getting somewhat used up and harder to find, but improved exploration and production will result in continued supply what with heavy oils, deep drilling, etc., etc. Substitutes and energy-efficiency gains will keep the price of energy within affordability ranges. Heavier vehicles will of course get lower mpg’s than highly efficient hybrid electric or all electric passenger cars but will still carry freight more efficiently than presently. There are currently technologies being developed to extract energy from coal, oil, shale, tar sands, and municipal waste with zero CO2 or other emissions. Also, the future for improved nuclear technologies is bright. Kunstler’s world view is outdated. Don’t be suckered into fatalism.
Are you serious decline??? Haven t you heard about Oil in ND USA.
Your way off. You cant get a hotel for 200 miles, rental property Nill, guys(riggers) are sleeping in their cars.
Its called Bakken Oil Deposit.
Good Grief man
The Bakken has lots of oil, true. Trouble is, the “Three Ps” of field production are very poor: Porosity, Permeability and Pressure. The output per well–and therefore the field–will be very low compared to the demand. There is a physical and financial limit to how many drilling rigs, pipe and pumps can be manufactured in any one year. Then factor in the cost and time for both source and distribution system for the electricity for the pumping.
Cheap oil’s gone. And the rate of decline in oilfield output exceeds the increases in the rate of production from new fields.
Addendum: Back around 35 years ago when oil was bumping up around $25 a barrel or so, an Exxon bigwig commented to me, “There’s all the oil you want…at a hundred bucks a barrel.”
Today’s oil is around $80/bbl and thereabouts. I figure the four-to-one ratio still holds: There”s all the oil you want…at three hundred 2010-sized bucks a barrel…
Glad to see you are not adverse to bicycling. In Asia, the scooter is well utilized and I have on one occasion witnessed a full family of five on a single one. I have taken to looking into motorized bicycles and am amazed at the degree of sophistication now incorporated into them. Once I modify the carburetor to run on alcohol and build my still, my mobility will be reaffirmed.
Dear desertrat:
World population will peak in 40 years at around 9 Bln. We are already close to 7 Bln. Despite end-of worlder’s dire predictions, living standards continue to rise and food production keeps pace. Grain prices remain flat. Yes, oil is getting somewhat used up and harder to find, but improved exploration and production will result in continued supply what with heavy oils, deep drilling, etc., etc. Substitutes and energy-efficiency gains will keep the price of energy within affordability ranges. Heavier vehicles will of course get lower mpg’s than highly efficient hybrid electric or all electric passenger cars but will still carry freight more efficiently than presently. There are currently technologies being developed to extract energy from coal, oil, shale, tar sands, and municipal waste with zero CO2 or other emissions. Also, the future for improved nuclear technologies is bright. Kunstler’s world view is outdated. Don’t be suckered into fatalism.
Bill, I’m fully aware of the various options available, but what I see as the larger problem is a quantity vs. time thing. Demands on existing systems are rising faster than supplies for those systems can provide, given the demands from emerging markets. New methodologies are not coming online in adequate fashion and in adequate numbers to meet demands/needs.
One issue about oil is that the cheap stuff is long gone, and the ongoing decrease in EROEI is driving the costs upwards. Not just for transportation fuels but for all the myriad products derived from the other half of that barrel of more-expensive crude.
And this increased quality of life of which you speak has occurred via debt, and the debtors are running out of money. Or, regard it as all this printing of paper money reduces its buying power and we have more of this ongoing decline in the buying power of the middle class. Wages haven’t kept up with the loss for some forty years, now, which is why there is so much debt. It’s an ever-declining spiral, from outside in…
I dunno. I watch all this stuff and the unending blank spots in folks’ thinking never fails to amaze me. For instance, anything ending in -lon is a Dupont original, such as orlon or nylon. Comes from petro-chemicals. Sweetie’s undies, a Sierra Clubber’s ripstop backpack or tent, or a parchute. Natural gas is the sole raw material for ethlene, from which come some 300 or more consumer products. Think plastics: Without them, no computers or cell phones or TVs. (Rats and mice think veggie-based plastics are yummy.)
So there’s more to oil and gas than transportation and keeping the house warm…
No, nobody’s 100% for predicting. But Kunstler has come closer to reality than many. But what do I know? I never heard of Hubbert’s Pimple until 1966, and didn’t really start paying attention until the Arab Oil Embargo of 1973…
The rise in living standards in the Eurozone and in North America have come about through creation of massive amounts of debt. Those good times seem to be in decline.
Per UN data, no, food production is not keeping up with demand.
The production capability for the oil industry has two problems: Existing fields are declining at a faster rate than new fields are being brought on line. All that’s saving our billfolds at this time is the wide-scale recesion. The other is the cost of production, with EROEI worsening steadily.
Alternative fuels and power plants are not being brought on line in sufficent quantity or at a rate fast enough to meet changes in “the system” for either transportation or electric generation. Affordability is also a major problem.
No gazer into any crystal ball is 100% accurate, but Kunstler has done a better job than many…
Third try: Bill, the UN has been saying that the world is falling behind on food production.
Oilfield decline is faster than getting new discoveries into production. All that’s saving us is this worldwide recession, which is seemingly ending in some emerging economies. It’s fact that EROEI is in decline, so prices of oil and its numerous consumer products is increasing.
There is no sign that substitutes can come into use in sufficient quantity to offset declines. And, so far, all are pricey–and economies of scale have not occurred.
Nuke-tech is good, but the US is still doing a lot of foot-dragging. What’s done elsewhere doesn’t help here.
No seer is 100%, but Kunstler has done far better than most in an effort to look at the ramifications.
desertrat, I agree that we are in a difficult, protracted period of rising energy prices due to increased demand and vanishing “easy” oil. The oil price will probably stay in the $60-$120 range. However, the 1800′s saw Peak Sperm Oil with rising prices, then whadaya know, along comes kerosine. As scarce oil rises in price, GDP falls thereby lowering demand and price. This give and take of gradually rising oil prices will buy time for alternatives to become economically viable substitutes for light sweet crude. Deflationary pressures on oil prices will come from improved energy efficiency technologies such as lighter, stronger nanotech materials, biofuels, improved engine design, more electric vehicle transportation( charged by electricity from nuclear, coal, geothermal and nat gas power plants as well as by hydro, wind and solar generation).
Wild fisheries are dwindling, but aquaculture is booming, supplying 50% of all seafood consumption.
Where is the widespread famine? Agricultural production is sufficient. Per cent of income required for food purchases is not rising worldwide. Ag revolution continues to spread prosperity. Kunstler goes off the deep end. We will not feed billions of people with hand cultivation. There is way more than enough solar energy, arable land, minerals and fertilizers to grow more food than we need.
Sure, kerosene replaced sperm oil. Natural progression with the discovery of a better fuel. But what next? Insofar as transportation fuels, I know of no substitute for gas/diesel from crude oil which can be produced in the quantities needed to meet today’s demands.
Alcohol? A relatively low-demand country like Brazil is one thing; insufficent quantity for high-demand countries like the US or Europe.
Tar sands? Oil shale? Coal liquefaction? Not enough water for processing. Electric cars? Not enough lithium or nickel can be produced at rates or in quantities to suffice.
I dunno. I’ve messed around with EIA numbers for the various uses for transportation fuel. Cars, trucks, planes, trains, military. Made halfway reasonable assumptions about possible reductions in demand. Still, it’s close to impossible to get below a 20% reduction. That means roughly 16 million bbl/day, right at half of which is gas/diesel–at today’s demand level for today’s population. It’s a numbers game: The energy equivalent for alternative-source liquid fuels. I can’t make it work.
Try your luck; see how your calculations work out.
“GDP falls thereby lowering demand and price.”
It’s a numbers game, with present demand for crude and crude products at around 20 million bbl/day. That’s with a reduced demand from this recession, and at today’s population. The demographic boffins predict another 40 million added to our population over the next three or four decades. Even if folks cut back on consumeritis and Twinkies, that’s an increasing need for transportation–and higher demand.
Again: The rate of oilfield decline is greater than the rate of adding new production. In the meantime we are not physically able to bring alternative transportation vehicles or fuels to market in sufficient numbers to offset the declines or the effects thereof.
Production in thousands, demands in millions.
Alternative fuels? Sure, we’ll get some from oil shale and from tar sands as well as liquefiaction from coal. But all those are water-limited, and we already have problems with water supplies. IOW, doable but costly. Forget alcohol; as has been publicized, converting the entire US corn crop to alcohol would give us a month’s supply.
Electric cars or or dual-power? Okay, look at the quantity of nickel and lithium ore reserves, and figure the rate of mining and processing which can be bring them online in quantity and with immediacy.
I’m not against any of these efforts. I’m just saying that folks are dreaming when they think in shorter terms than ten to fiteen years before there’s enough volume to make a difference. In the meantime, folks gotta get to work, earn money and pay bills.
So I’ll go along with Matt Simmons’ view about future oil supplies, and what amount I happen to understand–or think I understand–about what can be done in this wonderful world of alternatives. I dunno. I’ve been in the engineering bidness since over fifty years ago; I don’t think I’m covered all over with stoopid and iggerant.
Apologies for repetitiveness and disjointedness. Sometimes this forum comes up and I don’t see previous posts I’ve made.
Regrets…
Petrobank in situ process for oil sands needs much less water. Global Resource Corp. microwave technology may be useful for in place conversion of shale to usable oil, Schlumberger thinks it may be. Thermoenergy is developing a zero emmission carbon capture boiler technology that looks promising. Those are just a few examples.
You make a convincing argument that the problems are real. Yes, I believe our standard of living will suffer temporarily, but I just think creative and thinking scientists and engineers like you will team up with determined business types like me to figure out the ways to develop solutions that will trump the fossil fuel age. After all, fossil fuels were created here by nature and time, handily providing the twentieth century’s free lunch. Some version of bio molecular manufacturing going well beyond early ethanol attempts at biofuels but more along the lines of Solazyme might be the solution to the liquid fuel scarcity. We may be able to mimic and speed up nature. Turning the more solid hydrocarbons into cleaner liquids for transportation will be done at some price. Using the abundant coal, with carbon capture, for electricity should provide energy for plug in hybrid or all electric cars. Ten or fifteen years will produce many exciting surprises and many disappointments. We are going through a huge shift in economic power. If America does not use every resource at its disposal, we will be left as a second rate nation.
” If America does not use every resource at its disposal, we will be left as a second rate nation.”
And here we’re back to the politics: Our government is working diligently to restrict our access to resources of almost all types. Stipulate that we’re in a transition period from the old way to newer ways. We’re inhibiting our access to physical materials of the present and to the funds for future capital investment.
I am not aware of evidence pointing to an organized conspiracy trying to prevent markets from adopting saner energy solutions. Except perhaps the organized green conspiracy to block nuclear and coastal oil production. Rather, there does seem to be plenty of evidence to indicate several difficult problems of presently inadequate technology in the areas of nuclear, photovoltaics, biofuels, batteries, geothermal, coal, shale, tarsands, heavy oils, and other alternative sources of energy. As technology continues to improve capital will continue to flow to the more workable solutions. Government subsidies often back the wrong racehorse. There are many promising energy developments appearing on the horizon: nuclear “batteries”, nanotech thin-film photovoltaics, genetically engineered organisms for biofuel production, improved nuclear reactors, and more.
“inadequate technology”? Sorta reminds me of the joking question, “If it takes one woman nine months to have a baby, why can’t nine women have a baby in one month?” No matter how brilliant some idea might be, it has to be scalable and cost-effective. There are all manner of wondrous new ideas which have reached the working-model phase–but they don’t do well in large scale, or are way expensive.
For instance: Folks talk about retrofit of solar panel systems for homes. Okay, first the capital investment. Then the maintenance cost and the labor. Fine: Can retirees on fixed incomes afford that? Or the folks on welfare? Can litle old ladies change out the batteries, or afford to pay somebody to do it? That’s damned sure more than, “Oh, that’s just a minor detail.”
I don’t see any conspiracy against what I referred to as interim maintenance of our present system. I mostly see just stoopid on the part of TPTB. Just one example: The best fishing in the Gulf of Mexico is in the areas around the offshore rigs. Why? Simple: The support legs of a rig provide one acre of habitat per hundred feet of water, and they initiate complete new food chains. Been out there dozens and dozens of times. I like ling, king and mahi-mahi. Blacktip shark is good, also. But all manners of hell are yowled against drilling offshore of the ocean coasts or the Florida Gulf coast…Squeaky wheels get the most grease, so Congress dutifully does stoopid.
Relax! Our wonderful POTUS has demanded alternatives so there will be alternatives and he can be celebrated!
People will adjust and improvise. Sadly Simmons is probably closer to accurate. Sometimes being right has nothing to do with actual outcomes. A spectrum of outcomes will likely be true.