By Jebediah Reed
Remember that time you went on a long drug binge and it turned into a crime spree and you totally messed up your life and hit rock bottom and had to go to jail for a while but in retrospect it was the best thing that ever happened to you because otherwise you wouldn’t have your great job now at Goldman Sachs (by the way, great quarter, eh?)? Well, you’re kind of like America, it turns out. At least according to Christopher Steiner, a staff writer at Forbes whose first book is about how high oil prices are coming and they’re going to cause an economic meltdown, but that’s a good news, because it’ll makes us stop being a nation of fat greedy dipshits.
The title of the book maps out the argument rather cleanly: $20 Per Gallon: How The Inevitable Rise in the Price of Oil Will change Our Lives For the Better. On the cover there’s a picture of a red five-gallon oil can with some cute little hippie flower logos on it.
By now, most of us know the basics of the argument here: Oil production will almost certainly be slowing in coming years because the “easy” oil is all gone and that means much higher prices; and because everything in our lives from hairbrushes to creamed corn is produced with oil, that means no more creamed corn for you, mister, unless you grow it yourself in the foyer of your McMansion, which by then you will have by necessity converted into an organic garden.
In looking toward the future Steiner uses the word “will” a great deal. He predicts big important trends: “High gas prices will clean up our skies and clear our vistas”; “$6 gas will spark an infrastructure revolution and the era of widespread tolling”; “Our cities will regroup, renew, grow denser.” But he also predicts weird small stuff: high school sports teams will travel less and more cops will do foot patrol beats.
The speculation can get a tad overheated at times. For instance, because gas for U-Hauls will be so expensive, when people decide to move from one city to another, they will be better off simply selling almost all their things and then restocking once they get to their new home. This will be a sad reality for some people who cling to the sentimentality of their stuff, but for other it will be liberating. Just cut your wires and go. Each new destination in life would carry with it a new tranche of furnishings and surroundings.”
Many predictions center around auto and air travel becoming vastly more expensive. The airline industry will shrink dramatically, cars will become too expensive for many Americans. This will spark a return to denser living in small towns and cities. The sprawly exurbs will not fare well, nobody should be surprised to hear.
If Steiner is correct, American cities will undergo a dramatic transformation in coming decades. In the chapter $12 (the first chapter is “$6,” the second is “$8,” and so on to “$20,” each tracing the effects of a rise to that price level), he writes: “As people leave the suburbs because they can’t afford 3,000 sq ft, four exterior walls, and two SUVs, our cities will swell with newcomers.” The density will make them better places. Rust belt cities will be particularly appealing to people seeking affordable lifestyles that don’t involve $3,000/month gas bills: “These are the cities with existing downtown infrastructure that’s terribly underused. Buildings of thirty or forty stories wait to be seized by someone with vision, someone with drive to make them great again.” And all those 12-lane highways will still be useful, but not for cars. Rather, they will “offer municipalities unmolested rights of way radiating out of central cities–easements that can used by governments to locate train lines.” Schemes like this will be possible because Americans will be driving less than half as many miles per year. And people will adjust: “Minivan lovers will learn to love the city. They will learn to love density. Places like Denver, Dallas and Atlanta will move from being mere regional hubs to world-class cities as people culture and commerce crowd in.” Hooray!
Well-built, old small towns on rail lines will thrive too. Their commercial life will cease being defined by that single Wal-Mart a mile or two outside town. Why? “Wal-Mart will die.” $14 gas will make its disposable crap-centric business model implode. All those boarded up Main Streets in Littlesville, USA, will be reclaimed and rehabbed so people can have compact walkable places to live and cluster their commercial needs.
None of these scenarios are new, but fortunately Steiner puts some numbers behind his case: At $14/gal, oil prices will functionally act as 25 percent tariff on everything we import from China. In a lot of cases that will mean that it’s more expensive to make it in China than it is to just make it here. Thus the withering of global supply lines. “Small towns across America will see their futures buoyed as manufacturing returns home.”
He thinks the country won’t get really serious about high speed rail investment until gas gets up around $18/gallon and the airline industry has essentially disappeared as an option for everyone but the richest. To do it right would probably cost into the trillions. There will be good and bad in high energy prices, says Steiner. “High-speed trains, however, will be unequivocally good and welcomed by all.”
The high-speed rail system will need electricity to run it though, and Steiner rightly suggests that nuclear energy should be at the center of our low-carbon national energy strategy, together with aggressively pursuing efficiencies, innovation, and renewables as niche contributors.
Of course, nobody knows what the future holds. Steiner does a solid job of laying out a positive scenario: relocalization, densification, renaissances in rail travel and nuclear power, and the decline of the culture of materialism. If it happens, awesome. But the bumps in the road will be wicked, of course, and while Steiner passingly acknowledges “difficulties,” he says almost nothing about them. Then again, people like Jim Kunstler have already done plenty of that from the “peak oil” perspective. It is a relief, in any case, that that phrase seems to be fading. Smart people everywhere are starting to recognize that oil will simply be getting expensive in the future and we don’t have to turn it into a polarizing debate. Steiner does well functioning in that vein. His book moves all this stuff closer to the center of the American discourse, and that’s a major accomplishment.