Sunday, November 19, 2006

Planning ahead for peak oil.

Entry for Monday, 29 August, 2005

I heard on NPR this morning that the price of oil is now at $70 a barrel. It's time for most of us to realize that yes, we can live with only one car. People did it for decades before affluence became an epidemic disease in America, and you can, too. We did it for about 9 years with a Mitsubishi Expo minivan. It sat on a car frame and got very good gas mileage - almost that of a sedan. The downside was that it needed its fourth transmission when we decided to get rid of it. And since we were down to five at that point, a regular four-door car seemed adequate when we had to replace it. So until this past spring, basically, we had only one car for almost a decade and it worked out perfectly well. It just takes a bit of intelligence and organization.

We now have had two cars for most of this year, and as soon as we sell the old house and pay off both cars, I intend to sell one of them. Or, possibly, if it can be done, we will trade both of them in for a hybrid. The waiting list for hybrids is a mile long, here. I am told it takes a couple of months or more to get one - and they are going for several thousand dollars more than list price. So I'm not sure if buying one right now is really a sound economic strategy. It might be better to wait until there are more in production and the price goes down a bit.

Meanwhile, though, the destruction of the US economy continues apace, and everyone should be thinking about how they are going to cope with the new realities. We all need to sit down with our budgets and ask ourselves, "How much can I realistically afford to pay for gasoline?" Probably, you are going to find that you're already paying more than you can afford, or will soon be. So the question then becomes two questions: (1) "How do I reduce the amount of gasoline we're using?" and/or, (2) "What else will have to fall by the wayside in order to pay for gasoline?"

For the first question, where you live will make a big difference in the options you have available. I f you unwisely chose a home that is far, far away from the necessities of life - well, you're basically screwed. Not only will the prices of all those necessities rise to reflect the increased costs of transportation, but you are too far away to walk or bike to the store. If you live near a bus route, light rail line, or subway - by all means buy a pass and don't be afraid to use it.

To which many of you will ask: How do I haul all those groceries home every week? Well, you're not going to like the answer to this one, but here it is. You aren't. You're going to have to learn to shop like people in the rest of the world - for a day or two at a time at most. You will have to get only what you can carry in a rolling grocery carrier with a small cooler or an insulated carrying case made specially for keeping items cool (like those they sell at Sam's club), and a backpack. If you have a bike with a large basket, that's great. People all over the world do this every day and you can do it, too. If you don't have these things then you need to find some. Driving halfway across town for a day of shopping, loading up the car to the gunwales, and then driving back is not going to be practical or affordable. Here are some examples of items you can find:

And if you don't have a formal budget, then you need to sit down and make one. That in itself is probably going to be a shocking experience. Collect all the bills and receipts that you have for the last month or two and tally everything by category. Then you will have to take a realistic look at your income and figure out what (1) has to be paid, such as rent, mortgage, car payments, utilities, medicine, etc., and (2) what should be paid, if possible, such as credit card bills and other debt, and (3) things you would like to have but do not need to survive. Many of you will find that you actually don't have any money for category (3). This means you have too much debt and credit cards, which you need to get rid of as fast as possible.

Cars are no doubt a major source of drain on your income. When you consider the payment, the gasoline, the insurance, and the maintenance - I think many of you will find that the money you save getting rid of all but one car will more than offset the adjustments you will make in your schedule to drop everyone off where they need to be using only one car, carpooling, or using mass transit. Working at home, of course, is another great option. If you have basically a desk job, then don't be afraid to explore with your emplorer the option of doing some or all of that work from a home office. It can save them and you valuable income that can then be allotted to other expenses.

But that isn't realistic for most of us. The truth is, the vast majority of people are simply going to have to live closer to where they work and can obtain groceries and other necessities of life. And to do this, a lot of us are going to have to give up the idea of big houses and big lawns. The ugly truth is that you do not need 5000 square feet of living space - or 4000, or even 3000. You don't need a yard at all. Unless you have 15 children, a townhouse is the most space that you need. Americans live in an unrealistic and unsustainable fairytale land that is unknown in most of the rest of the world - and it's going to have to stop. Either it will stop voluntarily, or reality will come crashing down and make it stop.

In the meantime, things are going to be changing rapidly in the economic landscape, and we need to be ready for anything. I have even heard it said that electricity could be rationed or rolling blackouts could be instituted to lessen the need for power generated by fossil fuels. You're going to have to learn to think outside the box - to be flexible and adaptable and to find creative solutions. If you can do this, you will be able to reduce your expenses and your debt. If you cannot do this - well, it wasn't a coincidence that the banks just pushed through a bill to make it more difficult to file bankruptcy. Think they won't order your house sold out from under you to pay your credit card bills, class? Oy vey! Think again.

Repeat after me, class: For-profit companies do not care about me. For-profit companies only care about making money off of me. Class dismissed.

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