Friday, September 5, 2008

Uncle Sam's Vital Signs

The questions surrounding Peak Oil and the other resource peaks the world is now facing tend to fall into three general categories:
  1. When will we start running significantly short of Resource X (oil, clean water, NPK fertilizer, etc)?

  2. What role does Resource X play in maintaining the present lifestyle of advanced industrial civilization?

  3. What will happen to society as available supplies of Resource X start to shrink?

Among those who have studied these questions and written about them for a long time, there are many who are saying that the world is experiencing significant resource peaks now, that the resources which are now beginning to decline play a key role in maintaining modern advanced civilization, and that catastrophic changes will result as available supplies of these resources start to shrink. Several of these writers (known as “fast-crash” theorists) point to the American financial troubles and the run-up in oil prices, both of which began in the last half of 2007 and which continue to the present, as proof that big changes are imminent, and that societal collapse is just around the corner. Others say that while there will be big changes, and that they may happen suddenly, society as a whole will experience a more gradual decline that lasts for decades at the very least.

I think something big (or several “somethings big”) is about to happen. Our way of life is unsustainable, and our political and financial systems are built on an unjust and unhealthy foundation. All around there are signs that our present system is beginning to break. But I am reminded of Jackie Gleason, an American entertainer whose lifestyle was an almost exact opposite of what most doctors recommend, yet who didn't die until he was 71 years old. How fast will things unravel? If you're asking me, I will be the first to admit that I don't know. But this last Labor Day weekend, I was obliged to travel to visit relatives in Southern California, and since I chose to drive there and back, it seemed to be a good opportunity to see firsthand the effects of some of the trends I have been following.

I got on the road rather late – around 1 PM on Friday, to be exact. That wasn't a smart move, since it made for a long night of driving. I kept myself focused by listening to the radio, but in listening I noticed just how dumb radio and mass media have become. As they have increasingly become mere tools of a corporatocracy, mere vehicles for presenting ads to hook consumers, radio and TV and other media organs have ceased to say anything really meaningful. Even when the night grew late and I was fumbling for classic rock stations to keep me focused, it occurred to me that the selection of “classic rock” songs that actually get airplay nowadays has become quite narrow. That list generally does not include any of the politically dangerous songs from the 1960's and 1970's; instead, it's mere head-smashing noise designed to appeal to teeny-boppers – things like “School's Out Forever” by Alice Cooper or songs by Van Halen and Bachman Turner Overdrive, along with rock songs of more recent vintage like “Hit Me With Your Best Shot”.

I stopped at the gas station shown below once I crossed into California. I have written before that I believe the oil markets are being gamed by several powerful interests in order to hide possibly faltering world oil production, but someone must have forgotten to invite the owners of this station to play the game. The sign speaks for itself.

I rolled into Buena Park around 5 AM on Saturday (Ouch!), and tried to check into my hotel. But because my bank card was from a small Oregon bank, the hotel computer would not accept it. I spent a couple of frantic hours searching for an ATM from which I could withdraw enough money to pay the room reservation, then spent another hour or so trying to convince the hotel staff that yes, I could be trusted to occupy a room in their hotel without smoking in the room or smashing things, oh, and by the way, would you please take my cash since my card doesn't seem to work? I finally got to sleep around 9:30 AM.

I slept for only a few hours, since I was supposed to meet my mother later and we were to visit my sister, then go out to dinner. In the time before our meeting I wanted to see a bit of my old stomping grounds, just to see what changes, if any, had taken place since I moved away. I drove through a bit of Anaheim and Fullerton among other places. In the picture below is a local example of the fallout from the present mortgage and financial crisis. The yellow sign in front says "Bank Owned."

It is by no means an isolated example. If you go to and look up single family homes for less than $200,000 in north Orange County, the majority of properties listed are in foreclosure. I think this is typical of many working-class neighborhoods in Southern California.

Moving on to upscale “custom homes” (or McMansions), I'll tell you the story of a plot of ground near the intersection of Lincoln Avenue and Holder Street in Buena Park. In 2006, when I began bicycle commuting from my home to an engineering office in Cypress, this plot had been a strawberry field with a fruit stand. But I guess adverse agricultural economic conditions combined with the lure of cashing in on the real estate boom caused the owner to sell to a developer of “custom homes” who tried growing houses on that plot, starting in 2007. It was a bad time for such a move. Though I failed to snap a picture of that plot, I can tell you that this past weekend I saw a number of unfinished houses there – evidence perhaps of hard times for the builder.

Dinner with my mom provided an opportunity for a stimulating conversation which began when she asked if I would ever move back to Southern California. My answer, “Never!”, led into a discussion of Peak Oil and the general unsustainability of Southern California. We talked about mass transit, since my mom regularly rides the bus. I had noticed that the OCTA has been buying new double-decker natural-gas powered buses. My mom informed me that while the buses were quite nice, it was still hard to get anywhere in Orange County by bus, that the buses did not run frequently enough to be convenient, that the drivers were frequently rude, and that while the OCTA had long ago promised to install security cameras on their buses, no cameras had actually been installed.

This is a shame which is not limited solely to mass transit in Southern California. If global oil supplies have peaked as stated in last year's German Energy Watch Group report, then mass transit systems will become a vital resource in urban areas. It is therefore critical to make mass transit safe, comfortable and pleasant to use, in order to wean people away from the breaking system of automotive transport. But Orange County has a right-wing Republican heritage and consequently tends to despise government-supported social welfare systems like mass transit. One thing my mom mentioned is that the buses are now packed with people – not just kids and immigrant workers, but professionals fleeing high gas prices.

I got over eight hours of sleep on Saturday night (which felt very good) and prepared to roll out on Sunday. I drove to the house of a neighbor I had known for a long time, and got caught up on neighborhood news, then headed away – down the incredibly wide streets, utterly devoted to cars and inhospitable to any other form of transport, including bicycles – and hit the 5 Freeway northbound a little after 10:30 AM.

The drive north was a repeat of Friday's drive, complete with listening to classic rock (punctuated by a few minor league baseball broadcasts) until I got to the city of Elk Grove. Elk Grove intrigued me because the city had been the subject of an article in the British newspaper The Guardian, titled, “There Goes The Neighborhood: Mortgage Crisis Sees Suburbs Slump” ( Indeed, the Guardian had published a series of articles about the possible looming decline of American power and prestige in the face of declining energy supplies and an unraveling economy. Because Elk Grove had managed to make the headlines, I decided to stop and have a look myself.

Pulling off the 5 Freeway, I rolled up to a gas station/mini mart and went inside. “Excuse me,” I said to the woman behind the counter, “I have a question. I am the author of a blog which deals with energy and financial issues, and I heard something about how the present financial crisis has hit Elk Grove. Can you direct me to some housing developments or shopping centers whose builders have stopped building because of the present financial situation?”

The woman looked at me as if I had just come from Mars, giggled, and said something about “I don't know anything about all that.” But another customer overheard my question and directed me to a few places where I might find what I was interested in seeing. So off I went down Elk Grove Boulevard. Along the way, I saw a trail of these signs:

Following the signs led me to this house:

Inside the house I met Joey Satariano, a RE/MAX realtor who was very happy to have his picture taken. He acknowledged that business had dropped off in recent months, yet he remained enthusiastic about future prospects. He was offering a “Tier 1 list” and a “Tier 2 list” of repossessed homes to interested buyers. He also told me where I could find some unfinished housing developments.

Moving on from there, I drove a bit further down Elk Grove Boulevard. But long before I came to the places described by Joey, I spotted a cluster of homes with tar paper and stacked shingles on unfinished roofs, so I turned aside to have a look. I found a very large development consisting of a decorative wall surrounding a number of undeveloped lots. If you look in the pictures, you will see that some lots have nothing more than conduit and cable sticking up in the air for utility connection to future houses.

There was a model home office close by, so I went inside and talked to one of the sales agents. She was a pleasant, attractive lady, but she seemed to be a bit stressed by my questions. I found out that her company, Reynen Bardis, had been forced to halt building more homes due to lack of funds, and was simply trying to sell off its model home stock. Their brochure listed homes ranging from 1936 square feet to 2951 square feet, at prices ranging from $370,900 to $449,990. But I noticed that someone had written in (perhaps) desperate handwriting, “MAKE AN OFFER!” at the top of the price list.

Adjacent to this development was a development owned by Taylor Morrison Builders. It too had unfinished houses on partially finished streets. I talked with a couple who had recently bought a finished home on a street with both finished and unfinished houses. The husband, a large, burly letter carrier, seemed genuinely surprised that the city of Elk Grove should have attracted international attention due to the mortgage crisis. “If you want to see the foreclosure capital of California, you should go to Stockton!” he kept saying, with great enthusiasm.

He and his wife informed me that Taylor Morrison seems actually to be doing rather well. Part of this may be due to the fact that they are a multinational corporation and can spread losses around so that they don't hurt so much. They are also cutting back on building in Elk Grove, but they are building “on demand” – that is, they sell houses to prospective buyers (based on architectural renderings, perhaps), then they build the houses they have sold.

Both the letter carrier and his wife have jobs that are two freeway hours away from Elk Grove, yet they value living where they do because of the school system and the neighborhood. I asked them where they thought gas prices were going, and whether there was any sort of mass transit system to service their neighborhood. They both acknowledged that gas prices in the long term were likely to rise, and that while there were plans to expand rail service to Elk Grove, it might take a while.

Soon it was time for me to go. I had spent over an hour in Elk Grove, and it was now around 6:30 PM. I still had nine hours of driving ahead of me.

So there you have it – my extremely cursory attempt to take Uncle Sam's vital signs, to see how fast our various diseases are progressing, to discern whether they are as immediately life-threatening as some say. It seems obvious that we are in trouble generally, though some places feel the trouble less than others. When I think of Southern California, it seems to me to be a ruined place, ruined by the land use, development and economic policies of an elite whose sole aim was to make a lot of money without regard to the effects of the means used to make that money. And now this elite is trying to make money from the rest of the country by making the rest of the country like Southern California. Will things hold together long enough for them to succeed? Time will tell.

Meanwhile, although Hurricane Gustav did not do very much damage to oil refining and extraction infrastructure in the Gulf of Mexico, it did do extensive damage to the electrical grid in the Gulf states. This will have the effect of removing over a million barrels per day of petroleum products from American markets for a few weeks. Things could get interesting.

No comments: