We are heading for economic disaster and the very steps we are taking to turn the economy around will result in an energy crisis. Which in turn will trigger another economic collapse. Is there any way off this treadmill?
I certainly don’t have the answer, however I think it is critical to recognize that energy issues are a leading cause of the current economic crisis. Unless we take this opportunity to make significant changes, further recessions will be inevitable and each will be larger than the one before. In fact, if we are going to move to alternative means for energy production then it is vital we start this process while we still have enough conventional energy to take on significant manufacturing and construction projects.
On the plus side, I am confident that real changes can be made that will reduce the negative impact of declining oil and gas reserves. In fact, we can look to the recent past for clues on how we might move forward. The industrialized world faced a significant energy crisis in the mid 1970s. America’s domestic oil reserves were declining and no longer able to keep pace with increasing demand. North America and Europe were becoming increasingly dependent on imported middle Eastern oil and in the midst of this transition, the political situation resulted in an Arab oil embargo. The USA and Western Europe were devastated. Line-ups at gas stations were common place. Layoffs were common-place in manufacturing industries. Inflation skyrocketed due to the effects of increased energy costs and currency devaluation (the West had recently abandoned the gold standard).
In response, US President Jimmy Carter pioneered sweeping changes in energy policy. His policies promoted extensive development of alternative energy systems (including synthetic oil production from coal, solar electricity production, wind power, etc) and energy conservation (including improved fuel efficiency standards and a nation-wide 55 MPH speed limit). However, when the political crisis resolved these “restrictive” energy policies were abandoned and America’s energy usage quickly returned to even higher levels than it was before the crisis.
This was not the case in Western Europe. North Sea oil production was spurred by higher energy prices and the Norwegian government implemented innovative regulatory policies to insure maximum production from their oil fields. Denmark made a serious commitment to energy self-sufficiency. Oil and gas was heavily taxed and the resulting revenue was invested in public transportation, wind energy development and innovative electricity generation. Energy conservation measures were heavily subsidized and promoted for public buildings and private households. Artificially higher energy prices, combined with the popular incentive programs resulted in a transformation of the Danish economy. Similar measures, to a somewhat lesser extent, were implemented by most of the countries in Western Europe.
One way to measure the effectiveness of these policies is to look at the Energy Intensity, or the Total Energy Consumption (in Tons of Oil equivalent) per unit of GDP, ranking of North American and European countries. Currently USA consumes 221.7 Tons of Oil equivalent to generate $1,000,000 of GDP. Canada is even worse at 293 TOe for $1 M GDP. In contrast, Switzerland, Denmark, France, Germany and England only require 122.3, 133.2, 170.5, 163.9 and 141.2 respectively. While it is easy to contend that higher energy consumption is necessary to have improved living standards, it is also difficult to deny that the average Swiss or Danish citizen enjoys a quality of life that is favorably comparable to the average Canadian or American. Some people argue that smaller countries have an advantage because of lower transportation requirements. This is difficult to justify when Australia comes in at 208, and nobody has a bigger country and spread out population than they do. Colder countries also have a disadvantage, but Norway manages to come in at 172 vs Canada’s 293. As another comparison, the largest energy consumption per $1 M GDP is Zambia at 730. In reality, they really don’t use much energy. They simply have a very poor GDP.
The countries of Western Europe don't really have any unfair advantages, they just use energy more efficiently. For example, the US vehicle fleet averages around 22 mpg. The German auto fleet is close to 44 mpg.
If the North American economy is going to fully recover without causing a worldwide energy crisis, there are going to have to be substantial improvements in the way we use energy in our daily lives.
PS: Just found this link http://finance.yahoo.com/tech-ticker/article/220827/Oil-Price-Spike-Coming!-Oil-Price-Spike-Coming!?tickers=OIH,XLE,XOM,CVX,BP
Sunday, March 29, 2009
Wednesday, March 25, 2009
Oil Prices : Part 10
If you think my last post is gloomy, you are certainly right. I’m not the first person to make these predictions though. Back in 2004, the US Department of Energy became very concerned about the possibility of peak oil. On one hand, economists where saying that the oil supply was virtually limitless. As long as prices increased, production would follow. On the other hand, geologists warned that known oil fields were declining and there were not many places left to look for additional reserves. The US government needed to know who was right - so they hired Dr. Robert L. Hirsch to find the answers.
You can read an excellent synopsis on of the report - which is titled “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management” on Wiki here:
http://en.wikipedia.org/wiki/Hirsch_report
Or you can find a link to the entire report at the end of the wiki article.
If you would like a very short summary -
From the introduction:
"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."
The report ends with these 10 conclusions:
* World oil peaking is going to happen, and will likely be abrupt.
* Oil peaking will adversely affect global economies, particularly those most dependent on oil.
* Oil peaking presents a unique challenge (“it will be abrupt and revolutionary”).
* The problem is liquid fuels (growth in demand mainly from transportation sector).
* Mitigation efforts will require substantial time.
o 20 years is required to transition without substantial impacts
o A 10 year rush transition with moderate impacts is possible with extraordinary efforts from governments, industry, and consumers
o Late initiation of mitigation may result in severe consequences.
* Both supply and demand will require attention.
* It is a matter of risk management (mitigating action must come before the peak).
* Government intervention will be required.
* Economic upheaval is not inevitable (“given enough lead-time, the problems are soluble with existing technologies.”)
* More information is needed to more precisely determine the peak timeframe.
In the end, the Hirsch report gives 3 scenarios:
* Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
* Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.
The bad news is that when Dr. Hirsch reviewed data from the world’s top energy research institutes and collated the answers he found that all the experts agreed that world oil production would peak in the near future. Nine of the eleven predicted peak would occur between 2005 and 2010. The more optimistic estimates suggested peak would occur sometime around 2020.
If Peak oil is inevitable, and the industrialized economy is completely dependent on oil for energy, what will happen? Either changes will be made in the way energy is utilized or economic activity will decline at the rate of production. In a world that is based on annual increases in national GDP, what would be the result of a declining economy?
You can read an excellent synopsis on of the report - which is titled “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management” on Wiki here:
http://en.wikipedia.org/wiki/Hirsch_report
Or you can find a link to the entire report at the end of the wiki article.
If you would like a very short summary -
From the introduction:
"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."
The report ends with these 10 conclusions:
* World oil peaking is going to happen, and will likely be abrupt.
* Oil peaking will adversely affect global economies, particularly those most dependent on oil.
* Oil peaking presents a unique challenge (“it will be abrupt and revolutionary”).
* The problem is liquid fuels (growth in demand mainly from transportation sector).
* Mitigation efforts will require substantial time.
o 20 years is required to transition without substantial impacts
o A 10 year rush transition with moderate impacts is possible with extraordinary efforts from governments, industry, and consumers
o Late initiation of mitigation may result in severe consequences.
* Both supply and demand will require attention.
* It is a matter of risk management (mitigating action must come before the peak).
* Government intervention will be required.
* Economic upheaval is not inevitable (“given enough lead-time, the problems are soluble with existing technologies.”)
* More information is needed to more precisely determine the peak timeframe.
In the end, the Hirsch report gives 3 scenarios:
* Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
* Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.
The bad news is that when Dr. Hirsch reviewed data from the world’s top energy research institutes and collated the answers he found that all the experts agreed that world oil production would peak in the near future. Nine of the eleven predicted peak would occur between 2005 and 2010. The more optimistic estimates suggested peak would occur sometime around 2020.
If Peak oil is inevitable, and the industrialized economy is completely dependent on oil for energy, what will happen? Either changes will be made in the way energy is utilized or economic activity will decline at the rate of production. In a world that is based on annual increases in national GDP, what would be the result of a declining economy?
Monday, March 23, 2009
Oil Prices : Part 8 - here we go again.
As you can see on the graph, oil prices are climbing again. In the big picture a price of $50.00/ barrel doesn’t look bad, especially in comparison to the peak of $147.00/bbl that we saw last year. However when you look at the past month, where prices have steadily climbed from the mid-thirties to $50/bbl, or an increase of almost 40%, it looks like we are headed for trouble again.
In my opinion, this climb in prices is a signal that the stock market has hit bottom and the economy is beginning to recover. This is probably an effect of the major stimulus package that has been passed by the Obama administration. Increasing the money supply has been effective in slowing job losses and segments of the economy are beginning a slow and cautious recovery. In turn, this increase in the US economic activity is associated with an increase in oil consumption. Unfortunately, while the government can arbitrarily increase the money supply, it cannot increase the oil supply in the same way.
If we look at the past few months, the US GDP has fallen about 8%. Not coincidentally, US oil consumption has also fallen by the same amount - from nearly 21 million bbl/day to around 19 million bbl/day. This drop in demand is the result of lay-offs (fewer commuter trips and disposable income for shopping/travel), less transport runs (due to less purchases and retail orders), and reductions in manufacturing, air transportation and construction.
While we might welcome signs of economic recovery, in reality it could be the signal of much larger problems. While US oil consumption has dropped by almost 2 M. bbls/day, world-wide demand has only decreased by about 1 M/bbls. This is because China has been taking advantage of low oil prices and have actually increased their consumption by something close to 1 M bbl/day. This could signify the start of a significant shift in the power balance between the US and China. It also means that if the US economy recovered to it’s previous level, worldwide consumption would be considerably higher than mid-2008 levels.
There is a small surplus supply of oil that is sitting offshore while traders are waiting for prices to recover. This may delay an inevitable spike in oil prices for a few months. However, in the longer term, we are facing major problems. Oil companies have delayed development on a wide range of production projects in response to low price levels. This means that actual oil production in the coming 2 to 5 years will be significantly lower than earlier forecasts.
In light of this, I would like to make a few predictions:
1) Significant inflationary pressure caused by increased money supply and limited oil supply.
2) Oil prices will exceed $200 /bbl before the end of 2010.
3) This price spike will be followed by another economic crash.
I sincerely hope I am wrong - but if it happens - you read it here first.
In my opinion, this climb in prices is a signal that the stock market has hit bottom and the economy is beginning to recover. This is probably an effect of the major stimulus package that has been passed by the Obama administration. Increasing the money supply has been effective in slowing job losses and segments of the economy are beginning a slow and cautious recovery. In turn, this increase in the US economic activity is associated with an increase in oil consumption. Unfortunately, while the government can arbitrarily increase the money supply, it cannot increase the oil supply in the same way.
If we look at the past few months, the US GDP has fallen about 8%. Not coincidentally, US oil consumption has also fallen by the same amount - from nearly 21 million bbl/day to around 19 million bbl/day. This drop in demand is the result of lay-offs (fewer commuter trips and disposable income for shopping/travel), less transport runs (due to less purchases and retail orders), and reductions in manufacturing, air transportation and construction.
While we might welcome signs of economic recovery, in reality it could be the signal of much larger problems. While US oil consumption has dropped by almost 2 M. bbls/day, world-wide demand has only decreased by about 1 M/bbls. This is because China has been taking advantage of low oil prices and have actually increased their consumption by something close to 1 M bbl/day. This could signify the start of a significant shift in the power balance between the US and China. It also means that if the US economy recovered to it’s previous level, worldwide consumption would be considerably higher than mid-2008 levels.
There is a small surplus supply of oil that is sitting offshore while traders are waiting for prices to recover. This may delay an inevitable spike in oil prices for a few months. However, in the longer term, we are facing major problems. Oil companies have delayed development on a wide range of production projects in response to low price levels. This means that actual oil production in the coming 2 to 5 years will be significantly lower than earlier forecasts.
In light of this, I would like to make a few predictions:
1) Significant inflationary pressure caused by increased money supply and limited oil supply.
2) Oil prices will exceed $200 /bbl before the end of 2010.
3) This price spike will be followed by another economic crash.
I sincerely hope I am wrong - but if it happens - you read it here first.
Sunday, March 15, 2009
On Peace and Shalom
The most common greeting in the Islamic world is “es salam alikum”. This is translated into English as “peace be upon you”. Traditionally, when a Muslim greets you with this phrase there is an implied understanding that they are willing to take responsibility for your well-being - to the best of their ability. I have personally experienced the power of this phrase while traveling in Jordan, Egypt and Israel. People who struggle to survive on a day-to-day basis have given me help and hospitality in ways that I could never repay. And when I tried to give them something in return, they refused. I was a guest in their country and they had taken me into their care. It was no longer between me and them - it was between them and God. “Es salam alikum” implies much more than the passive “may peace be upon you”.
The Hebrew word Shalom is the equivalent to the Arabic word Salam. Similar greetings are used, like Shalom aleikhem which is translated as “Peace be unto you”. In fact, John’s gospel records that the resurrected Christ used this expression to calm his frightened disciples as they cowered in a locked room. For an interesting contrast, the English translation of the gospel of Mark records Jesus saying “Peace be still” to calm the wind and waves. However, John used the Greek word “eirene” and Mark used “siopao” - this is like comparing to “Shalom” to “BE Quiet!”. The English word “Peace” can hardly do justice to this range of meaning.
Then what does Peace mean?
Most English speakers think of Peace as the absence of conflict. This is like saying that light is simply the absence of darkness. Yet we know that Light is the active principle and all life on earth is a response to the power that resides in sunlight.
In spite of this inconsistency, there is good reason to define “peace” in this way. The word first entered the English language around 1140 AD. The word was brought into the English language from Old French by the descendants of William the Conquerer. Originally the word was understood to mean “freedom from civil disorder”. In fact this word was originally derived from the Latin “pax”. Pax Romana referred to a type of political and social stability where everyone was free to pay taxes to Rome, follow Roman law, and do business as long as Roman interests where not threatened. This stability was maintained by threat of extreme violence.
Interestingly, the word “peace” replaced an old English word “frio” which meant something like “peace+happiness”.
The biggest problem is that the word “peace” is a passive principle. Shalom/Salam is an active one. Shalom comes from the verb Shalam (Arabic salam) which means to complete, fill-up, perfect, make whole or secure. It is related to the word “Shalah” which is connected to salvation. Shalom is a state of wholeness, well-being, safety - having reached a state of perfection.
While “frio” means “peace + happiness” Shalom means “peace+joy+hope+love” or something like that. By this logic, the Community of Christ vision statement would look something like:
"we proclaim Yeshua ha mashiach and promote communities of Shalom"
Perhaps this is why the Jewish faith does such a good job in understanding the role of humanity on the earth. God created heaven and earth. When everything was completed, God declared it very good. It was in a state of shalom. When Adam (heb. mankind) turned away from God, this opened a huge flaw in creation. Separation from God caused all creation to fall short of its ultimate potential. Our duty is to perform tikkun olam - and under God’s direction- help perfect or bring shalom to all of creation.
In line with this, my favorite Jewish prayer is:
Oseh shalom bimromav
Hu ya'aseh shalom aleinu
V'al kol Yisrael
V'imru, v'imru amen.
Ya'aseh shalom, ya'aseh shalom
Shalom aleinu v'al kol Yisrael
Ya'aseh shalom, ya'aseh shalom
Shalom aleinu v'al kol Yisrael
(May he who makes peace in high places,
make peace for us and for all Israel,
and let us say, amen.)
Most importantly, we must receive “shalom” for ourselves before we can bring it to others. Something worth remembering in these trying times.
The Hebrew word Shalom is the equivalent to the Arabic word Salam. Similar greetings are used, like Shalom aleikhem which is translated as “Peace be unto you”. In fact, John’s gospel records that the resurrected Christ used this expression to calm his frightened disciples as they cowered in a locked room. For an interesting contrast, the English translation of the gospel of Mark records Jesus saying “Peace be still” to calm the wind and waves. However, John used the Greek word “eirene” and Mark used “siopao” - this is like comparing to “Shalom” to “BE Quiet!”. The English word “Peace” can hardly do justice to this range of meaning.
Then what does Peace mean?
Most English speakers think of Peace as the absence of conflict. This is like saying that light is simply the absence of darkness. Yet we know that Light is the active principle and all life on earth is a response to the power that resides in sunlight.
In spite of this inconsistency, there is good reason to define “peace” in this way. The word first entered the English language around 1140 AD. The word was brought into the English language from Old French by the descendants of William the Conquerer. Originally the word was understood to mean “freedom from civil disorder”. In fact this word was originally derived from the Latin “pax”. Pax Romana referred to a type of political and social stability where everyone was free to pay taxes to Rome, follow Roman law, and do business as long as Roman interests where not threatened. This stability was maintained by threat of extreme violence.
Interestingly, the word “peace” replaced an old English word “frio” which meant something like “peace+happiness”.
The biggest problem is that the word “peace” is a passive principle. Shalom/Salam is an active one. Shalom comes from the verb Shalam (Arabic salam) which means to complete, fill-up, perfect, make whole or secure. It is related to the word “Shalah” which is connected to salvation. Shalom is a state of wholeness, well-being, safety - having reached a state of perfection.
While “frio” means “peace + happiness” Shalom means “peace+joy+hope+love” or something like that. By this logic, the Community of Christ vision statement would look something like:
"we proclaim Yeshua ha mashiach and promote communities of Shalom"
Perhaps this is why the Jewish faith does such a good job in understanding the role of humanity on the earth. God created heaven and earth. When everything was completed, God declared it very good. It was in a state of shalom. When Adam (heb. mankind) turned away from God, this opened a huge flaw in creation. Separation from God caused all creation to fall short of its ultimate potential. Our duty is to perform tikkun olam - and under God’s direction- help perfect or bring shalom to all of creation.
In line with this, my favorite Jewish prayer is:
Oseh shalom bimromav
Hu ya'aseh shalom aleinu
V'al kol Yisrael
V'imru, v'imru amen.
Ya'aseh shalom, ya'aseh shalom
Shalom aleinu v'al kol Yisrael
Ya'aseh shalom, ya'aseh shalom
Shalom aleinu v'al kol Yisrael
(May he who makes peace in high places,
make peace for us and for all Israel,
and let us say, amen.)
Most importantly, we must receive “shalom” for ourselves before we can bring it to others. Something worth remembering in these trying times.
Friday, March 13, 2009
Suburbia (1949 - 13 March 2009) End of the American Dream?
I was scanning the Yahoo! finance section today and happened on an article called “Suburbia R.I.P.” by Michael Cannel. Then a quick search on google for "abandoned suburbs" and "foreclosures" brought up a wide variety of similar stories. The photo shown here comes from : (http://www.theatlantic.com/doc/200803/subprime )
Or you might want to check out Cannel's story at:
www.finance.yahoo.com/family-home/article/106732/Suburbia-R-I-P
In the meantime, I would like to share some of the highlights here:
“The downturn has accomplished what a generation of designers and planners could not: it has turned back the tide of suburban sprawl. In the wake of the foreclosure crisis many new subdivisions are left half built and more established suburbs face abandonment.... Communities like Elk Grove, Calif., and Windy Ridge, N.C., are slowly turning into ghost towns with overgrown lawns, vacant strip malls and squatters camping in empty homes. In Cleveland alone, one of every 13 houses is now vacant, according to an article published Sunday in The New York Times magazine.
The demand for suburban homes may never recover, given the long-term prospects of energy costs for commuting and heating, and the prohibitive inefficiencies of low-density construction. The whole suburban idea was founded on disposable spending and the promise of cheap gas. Without them, it may wither. A study by the Metropolitan Institute at Virginia Tech predicts that by 2025 there will be as many as 22 million unwanted large-lot homes in suburban areas.”
“Already low or middle-income families priced out of cities and better neighborhoods are moving into McMansions divided for multi-family use. Alison Arieff, who blogs for The New York Times, visited one such tract mansion that was split into four units, or "quartets," each with its own entrance, which is not unlike what happened to many stately homes in the 1930s. The difference, of course, is that the 1930s homes held up because they were made with solid materials, and today's spec homes are all hollow doors, plastic columns and faux stone facades.
There is also speculation that subdivision homes could be dismantled and sold for scrap now that a mini-industry for repurposed lumber and other materials has evolved over the last few years. Around the periphery of these discussions is the specter of the suburb as a ghost town patrolled by squatters and looters, as if Mad Max had come to the cul-de-sac.”
Much of the same story is told by Neil Macdonald in his recent article called “the giant Ponzi scheme that is Florida” ( http://www.cbc.ca/world/story/2009/03/10/f-rfa-macdonald.html ). Some select quotes are shown below:
“Lehigh Acres, a sprawling bundle of communities without any kind of municipal government, is the worst. You enter it along Gunnery Road, running east of Fort Myers, and pretty soon the dilapidation flows everywhere.
Particularly striking is the newness of it all. Some of these homes — pastel orange, blue or green — have never been occupied, yet the windows are smashed, the appliances have been ripped out and the yards are a tangle of garbage-strewn brambles.”
“Cape Coral, more upscale than Lehigh Acres, lies on the other side of Fort Myers, surrounded by the clear water of the Gulf. It's the second biggest city in Florida by size, with more canals and water access than any city in America. A vast, rambling place with no core and ghost towns on its edges.”
“The family across the street abandoned their home a year ago. Just packed up and left. Connie (the neighbor) thought they were going on vacation. They even left their car, a late-model white Dodge Intrepid. A notice on the driver's window threatens it will be towed, at the owner's expense, if it isn't moved in three days. “The city put that notice on nine months ago," says Connie. "I wish they'd tow it. I hate looking at it. I hate it."
She hates the overgrown yards, too. They're a fire hazard and they attract snakes.Cape Coral can't afford to tow the car, though, or clear the brush from yards. The loss of taxes from foreclosed properties is strangling its municipal government. It's the same story all over the state.”
I certainly took the documentary “End of Suburbia” seriously back in 2004 - In my worst nightmares I never dreamed that it could all happen so fast!
Or you might want to check out Cannel's story at:
www.finance.yahoo.com/family-home/article/106732/Suburbia-R-I-P
In the meantime, I would like to share some of the highlights here:
“The downturn has accomplished what a generation of designers and planners could not: it has turned back the tide of suburban sprawl. In the wake of the foreclosure crisis many new subdivisions are left half built and more established suburbs face abandonment.... Communities like Elk Grove, Calif., and Windy Ridge, N.C., are slowly turning into ghost towns with overgrown lawns, vacant strip malls and squatters camping in empty homes. In Cleveland alone, one of every 13 houses is now vacant, according to an article published Sunday in The New York Times magazine.
The demand for suburban homes may never recover, given the long-term prospects of energy costs for commuting and heating, and the prohibitive inefficiencies of low-density construction. The whole suburban idea was founded on disposable spending and the promise of cheap gas. Without them, it may wither. A study by the Metropolitan Institute at Virginia Tech predicts that by 2025 there will be as many as 22 million unwanted large-lot homes in suburban areas.”
“Already low or middle-income families priced out of cities and better neighborhoods are moving into McMansions divided for multi-family use. Alison Arieff, who blogs for The New York Times, visited one such tract mansion that was split into four units, or "quartets," each with its own entrance, which is not unlike what happened to many stately homes in the 1930s. The difference, of course, is that the 1930s homes held up because they were made with solid materials, and today's spec homes are all hollow doors, plastic columns and faux stone facades.
There is also speculation that subdivision homes could be dismantled and sold for scrap now that a mini-industry for repurposed lumber and other materials has evolved over the last few years. Around the periphery of these discussions is the specter of the suburb as a ghost town patrolled by squatters and looters, as if Mad Max had come to the cul-de-sac.”
Much of the same story is told by Neil Macdonald in his recent article called “the giant Ponzi scheme that is Florida” ( http://www.cbc.ca/world/story/2009/03/10/f-rfa-macdonald.html ). Some select quotes are shown below:
“Lehigh Acres, a sprawling bundle of communities without any kind of municipal government, is the worst. You enter it along Gunnery Road, running east of Fort Myers, and pretty soon the dilapidation flows everywhere.
Particularly striking is the newness of it all. Some of these homes — pastel orange, blue or green — have never been occupied, yet the windows are smashed, the appliances have been ripped out and the yards are a tangle of garbage-strewn brambles.”
“Cape Coral, more upscale than Lehigh Acres, lies on the other side of Fort Myers, surrounded by the clear water of the Gulf. It's the second biggest city in Florida by size, with more canals and water access than any city in America. A vast, rambling place with no core and ghost towns on its edges.”
“The family across the street abandoned their home a year ago. Just packed up and left. Connie (the neighbor) thought they were going on vacation. They even left their car, a late-model white Dodge Intrepid. A notice on the driver's window threatens it will be towed, at the owner's expense, if it isn't moved in three days. “The city put that notice on nine months ago," says Connie. "I wish they'd tow it. I hate looking at it. I hate it."
She hates the overgrown yards, too. They're a fire hazard and they attract snakes.Cape Coral can't afford to tow the car, though, or clear the brush from yards. The loss of taxes from foreclosed properties is strangling its municipal government. It's the same story all over the state.”
I certainly took the documentary “End of Suburbia” seriously back in 2004 - In my worst nightmares I never dreamed that it could all happen so fast!
The End of Suburbia
Back in 2004, we had the opportunity to watch a documentary titled “The End of Suburbia”. ( http://www.endofsuburbia.com ). I must admit that it scared the heck out of us. Working in the oil and gas industry, I had already thought about the finite nature of oil and gas reserves. Amos Nur (Geophysics professor from Stanford) had even introduced me to the concept of Hubbert’s curve back in 1988. Nevertheless, I had not thought about the effects that oil shortages would have on North American lifestyles. This movie, more than any other single factor, started our shift away from our complacent lifestyle in Crossfield. And while I hate to admit it, the primary motivation was fear.
For the next couple of years we started gathering key components of farming equipment, working toward some level of self-sufficiency. Then we slowly realized that we were not in a very good area - or in a suitable house - for an energy-deprived future. We finally started to panic, thinking about the impact that major shortages could have on a significant city like Calgary.
In 2007, and in the midst of this increasingly depressing line of thought, we found that the documentary team had released a sequel called “Escape from Suburbia” ( http://escapefromsuburbia.com ). This movie followed a wide range of people who were taking a proactive approach to the - then far distant - potential fallout from peak oil. These people were filled with hope and they were not content to sit around while this unpleasant future unfolded. It was in this film that we first learned of O.U.R. ecovillage near Victoria BC. This was one of our primary reasons for moving to Vancouver Island.
Now, there is no way to prove that this current economic collapse was caused by peak oil. In fact, you may argue that the economy was supporting oil prices of over $100/barrel for several months and it was the unfolding of the sub-prime mortgage mess that caused this recession. Current oil prices of $40/barrel certainly don’t look like an oil shortage.
However, there may be a fundamental connection in this entire crisis and it could go something like this;
Oil prices were undergoing a steady and significant rise from 2001 onwards. Normally increases in oil prices would result in increases in the cost of everything from agriculture and manufacturing to transportation and home heating. In turn, these cost increases should spur demand for higher wages resulting in an inflationary cycle. Amazingly, wages in North America - and official inflation statistics - stayed relatively flat during this period.
Closer examination of the figures show that the inflation index excluded “volatile” items like food and energy. These prices certainly increased faster than the background inflation rate and everyone had to buy these things on a static salary. Where did the money come from?
The answer seems to be that the government policy of lowering interest rates stimulated steady increases in housing prices. For example, if a family could afford a $100,000 mortgage at an interest rate of 10%, then they could just as easily afford a $200,000 mortgage at 5%. The process extended to families who owned their home. In their case, they could refinance their home at a lower interest rate, keeping payments the same and freeing up equity as cash to meet their expenses. Each increase in house prices provided more equity (on paper) and another easy way to free up extra income.
The easy access to mortgage funds at low interest rates kept the housing sector booming, in spite of the looming crisis with oil prices. Unfortunately, when prices spiked to more than 100 dollars a barrel, entire sectors of the economy began to fail. The first being the North American auto sector - which was building SUVs that no one could afford to drive. Then came the release of information stating that banks were over-extended on poorly secured mortgages. Housing prices fell as people were laid-off and could no longer afford to pay their mortgages. Soon houses were worth less than the mortgage owing on them.
Finally the whole house of cards came tumbling down.
For the next couple of years we started gathering key components of farming equipment, working toward some level of self-sufficiency. Then we slowly realized that we were not in a very good area - or in a suitable house - for an energy-deprived future. We finally started to panic, thinking about the impact that major shortages could have on a significant city like Calgary.
In 2007, and in the midst of this increasingly depressing line of thought, we found that the documentary team had released a sequel called “Escape from Suburbia” ( http://escapefromsuburbia.com ). This movie followed a wide range of people who were taking a proactive approach to the - then far distant - potential fallout from peak oil. These people were filled with hope and they were not content to sit around while this unpleasant future unfolded. It was in this film that we first learned of O.U.R. ecovillage near Victoria BC. This was one of our primary reasons for moving to Vancouver Island.
Now, there is no way to prove that this current economic collapse was caused by peak oil. In fact, you may argue that the economy was supporting oil prices of over $100/barrel for several months and it was the unfolding of the sub-prime mortgage mess that caused this recession. Current oil prices of $40/barrel certainly don’t look like an oil shortage.
However, there may be a fundamental connection in this entire crisis and it could go something like this;
Oil prices were undergoing a steady and significant rise from 2001 onwards. Normally increases in oil prices would result in increases in the cost of everything from agriculture and manufacturing to transportation and home heating. In turn, these cost increases should spur demand for higher wages resulting in an inflationary cycle. Amazingly, wages in North America - and official inflation statistics - stayed relatively flat during this period.
Closer examination of the figures show that the inflation index excluded “volatile” items like food and energy. These prices certainly increased faster than the background inflation rate and everyone had to buy these things on a static salary. Where did the money come from?
The answer seems to be that the government policy of lowering interest rates stimulated steady increases in housing prices. For example, if a family could afford a $100,000 mortgage at an interest rate of 10%, then they could just as easily afford a $200,000 mortgage at 5%. The process extended to families who owned their home. In their case, they could refinance their home at a lower interest rate, keeping payments the same and freeing up equity as cash to meet their expenses. Each increase in house prices provided more equity (on paper) and another easy way to free up extra income.
The easy access to mortgage funds at low interest rates kept the housing sector booming, in spite of the looming crisis with oil prices. Unfortunately, when prices spiked to more than 100 dollars a barrel, entire sectors of the economy began to fail. The first being the North American auto sector - which was building SUVs that no one could afford to drive. Then came the release of information stating that banks were over-extended on poorly secured mortgages. Housing prices fell as people were laid-off and could no longer afford to pay their mortgages. Soon houses were worth less than the mortgage owing on them.
Finally the whole house of cards came tumbling down.
Tuesday, March 10, 2009
Solitary Confinement
The last few months have been full of intense experiences and it takes time to process everything. It is also clear that while Jan, KJ, Krista and I have all been at the same physical locations, we have not experienced the same things or understood them in the same way. Perhaps this is one of the biggest problems facing the human family. I know that it certainly affects our own. Perhaps I might use some experiences from our time at Koinonia Farms as an example.
Virtually everyone who came to support Koinonia embraced a common set of values and ideals. These shared beliefs are expressed in Koinonia’s mission statement : “We are Christians called to live together in intentional community sharing a life of prayer, work, study, service and fellowship. We seek to embody peacemaking, sustainability, and radical sharing. While honoring people of all backgrounds and faiths, we strive to demonstrate the way of Jesus as an alternative to materialism, militarism and racism.”
You might think that a mutual and sincere commitment to this clear statement of belief would allow people to work together in a constructive way - and for the most part, you would be right. Unfortunately, there were also some big exceptions. Long-time community members were alienated by the rest of the group and big differences of opinion would flare up over the meaning of sustainable agriculture or fair labour practices. Even the trip to Missouri to receive the Peace Prize led to conflict among community members.
When these problems occurred, I pondered why people couldn’t understand the source of the problems and come to a reasonable compromise. Eventually it became clear to me that we are all living in our own reality. We are trapped in our own life experiences and prisoners of our own perceptions. Sometimes it seems like we are in solitary confinement and we ache to share our reality with someone else. Words are the only tools we have to break down the walls of our individual realities and find common ground with another human being. Unfortunately, Words are only symbols and their very meaning is shaped by our own individual experience.
How do you explain a sunset to a blind man? What does “Love” mean to an abused child? What is “Justice” to a someone who can’t find a job because of the color of their skin?
I pondered these questions in my final lunch-time devotion at Koinonia. I had been studying Hebrew and noticed some fascinating things. First I need to explain that the Hebrew language doesn’t generally use the verb “to be”. For example, when we say “a tree is big” a Hebrew speaker simply says “tree big” or “the tree is big” is translated as “the tree the big”. However, God’s name, rendered I AM THAT I AM in English translations, comes from a Hebrew verb HYH - which means “to Be”. First person of the verb is EHYH - I AM - or perhaps something like “I AM Eternally Becoming” or “I AM Ultimate Existence”. Third person of the verb is YHYH or YHVH (Jehovah) or “HE IS”.
Most of us are familiar with Descartes’ famous words “Cogito ergo sum” - “I think therefore I am”. Unfortunately, this thinking is the product of an existence that is severely limited in both time and space. We can’t even focus our attention on more than one thing at a time. Perhaps this is more like “i think therefore i exist”. Compared to God, we exist in a very narrow place.
In an earlier entry, I wrote about the name of Jesus - Hebrew YESHUA - and how that name can be interpreted as He-Saves. I further detailed how the word “Saves” comes from another Hebrew words meaning to “deliver from a narrow place to a wide open place of safety”. From this I inferred that Jesus takes us from our narrow individual reality, which is bounded by birth and death / place and perspective, and leads us to the wider Reality. Recently, while attending synagogue, I learned that the Hebrew word for Egypt “Mitzreem” also carries the connotation of being “The narrow place”. This further connects us to the idea that God told Moses to lead us from slavery (to our limited perceptions) in the “narrow place” of individual existence to a life of responsibility in the promised land of unlimited existence. All of this is interesting to someone like me - who has a fascination with obscure details. Does it have any practical value in the “real” or “day to day” world?
The Torah relates the story of the Tower of Babel. It starts with the words “At one time, all the people of the world spoke the same language and used the same words.” According to Jewish midrash, Nimrod used this amazing language to unite the people and use their efforts to build a tower that promised to make them independent of God. The biblical narrative continues that God observed “The people are united, and they all speak the same language. After this, nothing they set out to do will be impossible for them.” So God confused the languages. People could no longer understand each other, construction efforts ended, and the people scattered.
Personally, I believe this story is meant to be interpreted in a mythical sense. Certainly I see that communication failures threaten one human endeavor after another. It was true at Koinonia and it even happens in our small family.
Given these incredible obstacles, how can it be possible to bring the human family together before we devastate the world through environmental destruction, resource depletion, over-consumption and armed conflict?
And the photo - It's the moon setting over Koinonia at the same time the sun was rising.
Virtually everyone who came to support Koinonia embraced a common set of values and ideals. These shared beliefs are expressed in Koinonia’s mission statement : “We are Christians called to live together in intentional community sharing a life of prayer, work, study, service and fellowship. We seek to embody peacemaking, sustainability, and radical sharing. While honoring people of all backgrounds and faiths, we strive to demonstrate the way of Jesus as an alternative to materialism, militarism and racism.”
You might think that a mutual and sincere commitment to this clear statement of belief would allow people to work together in a constructive way - and for the most part, you would be right. Unfortunately, there were also some big exceptions. Long-time community members were alienated by the rest of the group and big differences of opinion would flare up over the meaning of sustainable agriculture or fair labour practices. Even the trip to Missouri to receive the Peace Prize led to conflict among community members.
When these problems occurred, I pondered why people couldn’t understand the source of the problems and come to a reasonable compromise. Eventually it became clear to me that we are all living in our own reality. We are trapped in our own life experiences and prisoners of our own perceptions. Sometimes it seems like we are in solitary confinement and we ache to share our reality with someone else. Words are the only tools we have to break down the walls of our individual realities and find common ground with another human being. Unfortunately, Words are only symbols and their very meaning is shaped by our own individual experience.
How do you explain a sunset to a blind man? What does “Love” mean to an abused child? What is “Justice” to a someone who can’t find a job because of the color of their skin?
I pondered these questions in my final lunch-time devotion at Koinonia. I had been studying Hebrew and noticed some fascinating things. First I need to explain that the Hebrew language doesn’t generally use the verb “to be”. For example, when we say “a tree is big” a Hebrew speaker simply says “tree big” or “the tree is big” is translated as “the tree the big”. However, God’s name, rendered I AM THAT I AM in English translations, comes from a Hebrew verb HYH - which means “to Be”. First person of the verb is EHYH - I AM - or perhaps something like “I AM Eternally Becoming” or “I AM Ultimate Existence”. Third person of the verb is YHYH or YHVH (Jehovah) or “HE IS”.
Most of us are familiar with Descartes’ famous words “Cogito ergo sum” - “I think therefore I am”. Unfortunately, this thinking is the product of an existence that is severely limited in both time and space. We can’t even focus our attention on more than one thing at a time. Perhaps this is more like “i think therefore i exist”. Compared to God, we exist in a very narrow place.
In an earlier entry, I wrote about the name of Jesus - Hebrew YESHUA - and how that name can be interpreted as He-Saves. I further detailed how the word “Saves” comes from another Hebrew words meaning to “deliver from a narrow place to a wide open place of safety”. From this I inferred that Jesus takes us from our narrow individual reality, which is bounded by birth and death / place and perspective, and leads us to the wider Reality. Recently, while attending synagogue, I learned that the Hebrew word for Egypt “Mitzreem” also carries the connotation of being “The narrow place”. This further connects us to the idea that God told Moses to lead us from slavery (to our limited perceptions) in the “narrow place” of individual existence to a life of responsibility in the promised land of unlimited existence. All of this is interesting to someone like me - who has a fascination with obscure details. Does it have any practical value in the “real” or “day to day” world?
The Torah relates the story of the Tower of Babel. It starts with the words “At one time, all the people of the world spoke the same language and used the same words.” According to Jewish midrash, Nimrod used this amazing language to unite the people and use their efforts to build a tower that promised to make them independent of God. The biblical narrative continues that God observed “The people are united, and they all speak the same language. After this, nothing they set out to do will be impossible for them.” So God confused the languages. People could no longer understand each other, construction efforts ended, and the people scattered.
Personally, I believe this story is meant to be interpreted in a mythical sense. Certainly I see that communication failures threaten one human endeavor after another. It was true at Koinonia and it even happens in our small family.
Given these incredible obstacles, how can it be possible to bring the human family together before we devastate the world through environmental destruction, resource depletion, over-consumption and armed conflict?
And the photo - It's the moon setting over Koinonia at the same time the sun was rising.
God created Heaven and Earth - Hell is up to us.
I love reading Torah (the first 5 books of the Bible) in the original language. Hebrew is incredibly concise. From the beginning of creation to the end of the first day requires about 80 english words. Hebrew does it in 50. The Hebrew language has an ambiguous quality. The same word or phrase can have a wide range of meaning depending on how it is read. Heaven (Sham’yim) has an obvious connection to Water (m’yim) and Sea (yim). Water is simply From-Sea. The Hebrew expression Ha-Eretz can be the entire planet earth, any dry land, or even the land of Israel. Ruach can be Spirit, wind or breath and yom is a period of time - anything from a day to a geologic epoch. In Hebrew, the entire creation process from a formless, empty void to a revolving planet with continents and oceans is done in a series of 3 divisions (B-D-L) - between light and darkness, earth and sky, land and sea. According to the Torah, the entire creation process ended on the seventh or Sabbath day. Sabbath (SBT) having a direct connection to seven (SB’H) and to “rest-from-work” (SBT). In Hebrew, the number seven also signifies completion, wholeness or fullness.
Last December I was asked to teach an introductory Bible course at the Koinonia home school. This gave me a much-needed excuse to refresh my Hebrew language skills, which I had learned more than 20 years earlier, and devote some time to the Torah. I read the first chapter of Genesis (B’RoSHeeT) in preparation for the first class and I was struck by verse 31.
It goes something like this; “And God saw Everything that was made - IT was Very Good”.
The next day, Bud and I were unloading pecans from a wagon into the sizing shack. It was cold, noisy and cramped. There were almost as many sticks as nuts which made the work slow and tedious. It was a terrible waste of time.
I thought, “You couldn’t pay me enough to do this job”.
At that very moment, I realized that I was blissfully happy!
We had witnessed a beautiful sunrise. The air was fresh. The sky was blue and clear. Birds were chirping in the trees. I was working with Bud. He is a wonderful man and a good friend.
I couldn’t think of anywhere I would rather be.
What happened?
Then it hit me. God created Heaven and Earth. As for Hell, we create our own.
The other day, we were driving down the highway to Mill Bay and our youngest daughter spoke up from the back seat. “At least there was one good thing about Georgia. I’m no longer afraid of death because I’ve already been through Hell.”
It certainly didn’t matter what the rest of us thought - and I guess that’s the point.
PS: That's sunrise over the Koinonia chapel.
Last December I was asked to teach an introductory Bible course at the Koinonia home school. This gave me a much-needed excuse to refresh my Hebrew language skills, which I had learned more than 20 years earlier, and devote some time to the Torah. I read the first chapter of Genesis (B’RoSHeeT) in preparation for the first class and I was struck by verse 31.
It goes something like this; “And God saw Everything that was made - IT was Very Good”.
The next day, Bud and I were unloading pecans from a wagon into the sizing shack. It was cold, noisy and cramped. There were almost as many sticks as nuts which made the work slow and tedious. It was a terrible waste of time.
I thought, “You couldn’t pay me enough to do this job”.
At that very moment, I realized that I was blissfully happy!
We had witnessed a beautiful sunrise. The air was fresh. The sky was blue and clear. Birds were chirping in the trees. I was working with Bud. He is a wonderful man and a good friend.
I couldn’t think of anywhere I would rather be.
What happened?
Then it hit me. God created Heaven and Earth. As for Hell, we create our own.
The other day, we were driving down the highway to Mill Bay and our youngest daughter spoke up from the back seat. “At least there was one good thing about Georgia. I’m no longer afraid of death because I’ve already been through Hell.”
It certainly didn’t matter what the rest of us thought - and I guess that’s the point.
PS: That's sunrise over the Koinonia chapel.
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