Image above shows those areas in the US taking the most strain. In SA we'll see a similar pattern. Faroff, smaller communities in rural areas will struggle. Upington, Kimberley, Beautfort West, Victoria West, De Aar and Middelburg. Too large areas will place heavy strain of local resources, especially water and topsoil.
The SARB raised interest rates an academic .5%. Many expected double that. The reason for this small even arbitrary change is that the governor knows full well that expenditure is due to be restrained anyway... Do you think the 50c increase we paid for this month reflects current oil prices. Not even close. It reflects oil prices somewhere around...er...$105, if that. So we have a long way to go before we're at an equilibrium level, and governments coffers are running low in the meantime. To get from $105 to $135 will take around 6 successive 50 cent increases, which means R13 per litre by Christmas. Probably by then the oil price will be $150. And in 2009 we will see $200.
In the same way that thousands of motorists rush on the eve of an oil price hike, entire governments and large corporates (like airlines) are buying huge oil future contracts in order to hedge against higher prices. That sort of behaviour leads to hoarding - at national level, and the result of this is demand spikes, which lead to shortages. We are very close to shortages now.
When shortages hit, markets will panic, buying as much as they can, exhausting their credit in order to keep their economies turning. Despite what the experts say, demand destruction won't happen for oil prices because we are both addicted and critically dependent on fuel. We can anticipate oil going over $200 to $300, probably even $900 eventually. The simply result is that these prices will break the world economy, and shatter the financial system.
And what flows out of this is this question: which is preferable, electricity or fuel?
The answer is probably electricity, as we need it to run critical systems like heating and refrigeration, along with municipal systems (sanitation works etc). And while the lights are on there is still some prospects for commerce. Probably, we will face fuel shortages first. Those living far from work will simply not be able to participate in the system. The most vulnerable are poor rural communities. Farming might save these, but it's unlikely as they will need good capital for the short term to operate machinery. Of course, future farming will not involve harvesters at all. It will be organic, and difficult, as we will no longer use fertilizers and pesticides as we do now. Crop failures in future will be an annual threat. Hunger is probably the greatest threat facing people today.
Moving on, for the short term, expect to see retractable steel spikes installed at petrol stations around the country. The trend has started for fuel theft, as people become more desperate to function. You'll see more vehicles stranded or abandoned at the side of the road. Advertisers will try to sell cars with 'free fuel' for the first 130 000km (like BMW), or companies like JOBing will provide free petrol. None of this addresses the problem - we need to be using less fuel. We need to be more efficient, but even more than that, we need to fundamentally change our living arrangements. Fundamentally change the architecture of how we live, move around, what work we do.
The world is about to become a much larger, and yes, scarier place, again. It's reverse globalisation. You didn't really think this extravagance could continue unabated, on and on for generation after generation? Globalisation had a season at best during human history,and that season is rapidly moving towards autumn. We've experienced unprecedented wealth at individual level for a long time. Not everyone benefited - in fact most didn't - but never before did human beings - ordinary people, enjoy such access to such wealth and prosperity as they do now. They will never again. Because there will never again be such a wealth of abundant energy to exploit, and it will never be cheap. Because it was cheap, we were able to live in an almost magical, mythical arrangement where each person lived on a caricature of country life - a plot of land, with a home and a garden, connected by vast roadways that converged on cities of gleaming buildings. Only with cheap abundant resources was this possible.
Now those resources are no longer abundant, or cheap, or easy to find, refine or extract. That might not be much of a conundrum except that before the advent of the oil era, we numbered 7 times less than we do now. It's not unreasonable to suggest that the new equilibrium level for Earth's human population needs to be pre-oil. That's about 1 billion people. We're at 7 now. And most economists and social experts will tell you, equilibrium for complex systems that overshoot isn't a civilised process. It's a brutal crash, an over-correction that is bruising, to say the least.
If you don't believe me, it's fine. But after the 6th consecutive petrol price hike (from now to December) you won't have to, because all of this will be well underway.
No comments:
Post a Comment