The near future

Jeff Rubin talks about the production of oil, changing demand, the resulting price, carbon, and the economic implications for many industries including autos. It’s about 30 minutes of presentation plus a Q&A.

It is very interesting how the price of oil and carbon both push towards more local production (de-globalization). The effect of higher oil prices pushing more buying power to oil states is worrisome, especially to anyone whose business model depends on personal trucks; doing anything to pump up the flow of money to the oil exporters is tantamount to economic suicide.

What can we do? It’s obvious that just attempting to “stimulate” the economy will go nowhere, because if the stimulus is effective it will be drained out of the economy again by increasing demand for oil and thus the price. Any plan that will work over time has to be based on reducing demand for oil. This means a REAL clunker-removal plan (maybe Priuses for F150’s, certainly not trading from Durangoes to Chargers), building the rolling stock and new sidings and switchyards to get freight off the Interstates and onto rails, and plenty more.

It’s equally obvious that the “shovel-ready” project plans to widen roads for more fuel-consuming traffic should be shovelled into the nearest pothole.

If Detroit is going to live again, it’s going to have to live as a domestic industry using domestic energy. Oil doesn’t qualify, and it’s rapidly becoming unaffordable. The future was almost with us in 2000, with the Ford Precept† and Chrysler ESX-3; the GM EV-1 would have been a runaway success if peak had come a little sooner, or the program had started a little later. Now we have to retrace our steps and re-learn what we had once been ready to do quite well. It’s sad to see how our mis-steps have cost us so much and led us so far astray.

† Disclaimer: I worked on a Ford project to develop a light-truck CVT. I had no part of the Precept effort.

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