The End of Suburbia

I was hungry, so I did what most Americans do, I grabbed my car keys and drove over to the local Burger King. Within three minutes of ordering, I strode out with a burger with onion rings and BBQ sauce for $1.99 which I paid for with a credit card.

In this country, we take this extreme level of convenience for granted; this is our “normal”. Yet outside the USA, this level of self-indulgence is rare – hell, in most of the world, its unheard of.

Consider that the burger came from beef raised on a “factory” ranch. The cattle feed is mostly feed corn; a crop that requires a significant volume of fossil fuels to produce. The onion for the rings may have come from Mexico; transported (using fossil fuels) to its ultimate production. The energy to cook this meal (out West here) was produced by hydro-electric power. But in most areas of the country, electrical energy is generated using coal or natural gas.

The car which I so conveniently used to retrieve my burger was produced at a huge energy cost; again fossil fuels were consumed in massive quantities to turn iron ore into steel, plastic and other raw materials; then fabricating these materials into the final product, delivering it to a dealer… and ultimately (yes, fossil fuels) to turn the key and drive the quarter mile to the Burger King.

The United States of America represents a small fraction of the global population yet we account for over a quarter of the world’s energy resource consumption. Though few of us give a second thought to the huge energy cost of indulging what we here in America almost consider a right, they should. You see, the luxuries we take for granted is on a downward trajectory, it is coming to and end and it will be permanent.

I recommend everyone watch a little known documentary titled “The End of Suburbia”. The title is somewhat misleading, though the rise and fall of the suburbs is the central focus, the peak of our world oil production, in view of ever increasing demand, will become a global issue. The hard fact is that ALL economic growth is completely dependent on the availability of affordable energy - and the continued availability of that energy, in the opinion of MOST experts, has peaked.

By “peaking” I am referring to the top of a bell curve where all the easily accessible, and therefore low cost, petroleum and natural gas has passed. Domestic (within the US) energy production peaked in the 1970’s. The “fracking” issues recently in the news are the results of attempts to force the more difficultly obtainable petroleum to enable extraction. This bears repeating: Most experts believe that world production has already peaked; or will within the decade at best!

Though the focus on this startling documentary is on the eventual decline of our post WWII middle class way of life, this film produced in 2004 is almost prophetic in shining a glaring spotlight on the overall decline in living standard of the Western World and the United States in particular.

Most AMAZINGLY, many of the economic predictions described specifically in this film made in 2004 have already happened:

“Seven-trillion dollars lost out of the US Stock Market. Two-Million jobs lost in the United States. Federal budget surplus gone; state budget surplus' gone. The middle class disappearing.” This film accurately predicted the global recession we are currently experiencing as the cost of energy continues to rise as demand outstrips supply. New power generating facilities are not being built as investors know there are no additional sources of energy to fuel them. The situation is dire.

Alternative sources of energy are, and will be, insufficient to supplant the huge cheap, and formally abundant, fossil fuels. There is insufficient land mass on the planet to generate wind, solar, nuclear or bio-fuel source energy at the rate the world consumes fossil fuels. There is great concern that converting food production into fuel production will result in increased food costs, lingering recession and a lower standard of living, the likes of which Americans cannot even begin to imagine.

I have repeatedly expressed throughout this blog that I believe that our generation has lived in the best times man ever has, and ever will have, in the history of this planet.

Big Oil and Slick Politicians

American oil companies made no effort to hide the fact that they made over $123 Billion in net (1) profit this last year. What a surprise.

These obscenely high profits, though, pale in the light that congress has bestowed on these robber-barons close to $18 Billion in tax breaks. You see, as the oil companies will explain it, if they don’t have the tax “incentives” how can they afford to reinvest in developing more sources of energy, or alternative energies for that matter?

Uh... well how about using SOME of the Goddam $123 Billion profit!?! Hey, Mr. CEO, remember from your freshman year Business 101 class; “profit” is the money you made AFTER your expenses... you know, the cash you get to take home to your wife.

Oh wait… using “profit” to pay for your private helicopter, the vacation house in Bimini and the diamond broach for your mistress doesn’t leave you much discretionary income left over to, say, lower your prices a bit or reinvest in your company. For that, you need ME, and the rest of working-schmuck America, to chip in and help you out. You need ME to pay more taxes so YOU don't have to. Right!

To its credit, Congress hauled the oil executives in front of hearings to have them explain this orgy of profit obscenity. Or was this action perhaps more of a dog-and-pony show for public consumption than any truly substantive effort to curb yet another display of corporate excess at consumer expense.

These congressional hearings brought to mind a memory from my childhood. My father was a Public Utility Commission staffer for the State of California. One time he took me to work with him on a day when they were having a trial. In this case, the State was trying to get the Southern Pacific railroad to install safety gates at a dangerous railroad crossing. I watched as the attorneys for Southern Pacific grilled my dad on the witness stand. The attorneys were very aggressive, forcing my dad to defend his position and attacking every iota of his testimony. I worried, “These guys must really hate my dad!”

The judge interrupted the proceedings - the trial would continue after lunch break. As everyone packed their briefcases getting ready to head out, the same attorney who had been grilling my dad walked over, put his hand on my dad’s shoulder and amicably asked, “Well, Clyde, where do we want to go for lunch today?” I sat speechless as I watched my father and his adversaries laugh and talk like weekend buddies over lunch.

So I can picture, at the end of the congressional hearings about oil company profits, when the cameras ware switched off and the reporters leave, the oil company CEOs walking over to their supposed public inquisitors and asking, “Well, Senator, where would you like to go for lunch?”

So why are oil companies completely and totally unconcerned about disclosing their unrestrained bleeding of the American public? Because there is nothing anyone can, or will, do about it... and they know it!

(1) http://money.cnn.com/2008/04/01/news/companies/oil_hearing/index.htm?cnn=yes