Archive for the 'natural gas' Category

Break Up with Your Utility Companies - or Get Dumped!

Sharon May 7th, 2008

So I spent almost $2000 today - to fill up our oil tank.  We heat primarily with wood, but use oil as a back-up system to keep the pipes from freezing, and occasionally on days when we’re going to be out for an extended period.  Our hot water is also heated with oil.  For whatever reason, most oil heat in the US is in the Northeast, mostly in towns beyond gas lines like mine.  I suspect today’s purchase may well be the last tank of heating oil we ever buy.

Now at our comparatively low rate of use I can expect 400 gallons of oil (at $4.13 gallon) to last us at least three years.  Could we do without it entirely?  Absolutely - but it is a nice cushion - I’m fond of the occasional hot shower, and it means on occasional busy days when we’re out, we don’t have bank the stove for extended periods (and thus create more particulate emissions).  It acts as insurance so that the pipes don’t freeze when we’re away.  And it means my mother doesn’t have to dress up like the Michelin man to sleep in the back bedrooms the stove doesn’t reach when she’s visiting in the winter.  Although at these prices, Mom might have to suck it up, or we’ll move a futon in near the stove.

Since I don’t think oil prices are going down anytime soon, and various sources in the know including OPEC and Goldman-Sachs are predicting $200 barrel oil by the end of this year, this actually doesn’t look like a bad deal.  And as I said, there’s a good chance this is our last tank.

The combination of laying out such a huge sum and Gail the Actuary’s latest article on the frailties of the electric grid got me thinking more about an article I wrote a couple of years ago.  In “It isn’t Gridcrash that Makes the Lights Go Out.”  In it, I argued that most of us should prepare for life without electricity, not because of a fear of the loss of the grid  (although certainly that’s a possibility as Gail point out) but because of a real likelihood that we may not be able to afford the electric bill.  Unfortunately, I think this prediction is more true now than it was when I wrote the original essay.

Looking at my 2K oil bill, I can forsee what is going to happen to large numbers of my neighbors around their oil and gas bills.  It started this winter.  Around here, the minimum oil deliveries are 100-125 gallons - it isn’t worth their while to haul out the truck to give you 25 gallons.  But as 100 gallons starts to cost 300 or 350 dollars, it becomes less and less likely that low income families can come up with that amount, much less fill a large oil tank. 

And most of them don’t see a tank lasting 2 years - the average American household in my region (where our record low is -30) uses almost 600 gallons a year.  By fall, if oil prices continue to rise (and there’s no evidence whatsoever that demand will fall, and a good bit of evidence that producers can’t produce more), which seems extremely likely, heating oil is likely to rise to between $5 and $6 per gallon.  That would make even a bridge delivery of 100 gallons cost much of the monthly paycheck for a working class family.  Hell, it would pretty much all of our discretionary income.  And since most families use about $100 a month, that’s going to be a big deal.  Already, 16% of all Americans plan to use their tax rebates to pay utility bills.  Stephen B. reports over at ROE2 that 10% of all National Grid customers are presently more than 3 months behind on electric bills, and natural gas is in similar shape.

What that means is that the 8% of Americans who heat with oil are likely to be casting around for options to allow them to both eat and keep tolerably warm.  That probably means electric space heaters and wood heat.  But with wood up at $250 a cord or more in many areas, electric prices rising steadily as well, and capacity tight, tens of thousands of new high demand electric heaters are likely to present problems - both for the private users and for the electric infrastructure as a whole.   As Gail Tverberg’s article suggests, particularly in areas like the Northeast corridor where the grid is already vulnerable, the addition of these loads may represent a real threat to grid stability.  Any modernization or added capacity will likely bring prices higher.

The cost of natural gas has also risen over the last few years, with mild winters helping to keep this from entering a crisis situation.  But North American gas is already past its peak according to Julian Darley, author of _High Noon for Natural Gas_, and over the coming years, there are likely to be sharp price rises and competition with Canadians, who, not unreasonably, would like to use their gas for home heating too.   Trade requirements now have Canada selling most of its natural gas to the US - but one cold winter in which Canadian needs can’t be met is likely to lead to a change in that situation - and if Americans have to rely on their own natural gas, prices will be vastly higher and supply much lower.  It is also worth noting the vast rise in proposed new natural gas electric generating plants - we are building our electric capacity based on gas supplies that aren’t terribly secure.

Meanwhile, as people turn to other utilities, replacing their oil bills with natural gas or electric bills, the number of people who are struggle to get by is set to rise for a whole host of reasons - higher food prices, rising unemployment, the stripping of benefits from jobs, rising medical costs for aging baby boomers - the whole shebang. And that means less ability to pay new bills.  And that means indebtedness to utility companies.  And that means shut offs.  This is likely to be especially acute in cold climate areas, but the American South uses more energy than the North does, and is generally poorer, so this is pretty much an equal opportunity problem, with different periods of seasonal crisis.

Getting shut off is easy.  Getting put back on is hard - there are hefty fees from your utility company.  Some places charge interest on overdue accounts.   There are a whole host of ways that once you are in the hole, it is very, very hard to climb out.  Many of us will get into the hole, and some will come out, while others will be stuck there.

 What we are seeing is the beginning of the end of many American’s relationship to public utilities.  As the costs of food and gasoline rise, and as benefits disappear and medical costs overwhelm many families, people are about to come hard against the costs of their fossil fueled lifestyle.  At first, this will be the poor, as is already happening - I’ve reported on the “Heat or Eat” crisis several times.  But it isn’t just heat - that’s just one canary in the coalmine.  The thing is, people struggling to get by tend to pay their bills in rotation, trying never to get far enough behind on any one bill to have a crisis.  But that kind of juggling is often disrupted - unforseen expenses always arise -  and often there’s a cascade effect, since all the bills are growingly large and somewhat overdue…  It doesn’t take much to lose heat and power and gas.

If you listen to the news reports, it sounds as though the economy is stabilizing, like we’re near the bottom.  Don’t worry, we’re told.  But it is worth noting that almost everything that we’re seeing now represents, at one level or another, the selling off of things that have in the past had value, often at very low prices.  Last year, I suggested that the new economy was going to based on bottom feeding - scavenging off the leavings of our prior wealth. I see nothing in the news reports that suggests I was wrong - both the highest levels of finance and the lowest are showing the same things - the repackaging of increasingly worthless assets for sale at pennies on the dollar.   There are already reports coming in of people stripping their attics of prized possessions and selling off anything they have, just to pay for basic bills.  Pawnshops are doing a booming business. It seems mostly as though the economy is staggering along, but whether you are repackaging worthless commercial assets, worthless luxury vehicles or worthless tvs, they all add up to…worthless in the most literal sense.  The days of keeping the bills paid this way are numbered.  The days of home equity loans are pretty much over, as almost half of recent homebuyers now have no or negative equity.  There’s simply nothing left - and when there’s nothing left and the money doesn’t meet the end of the month, off go the lights, and the heat, and the gas.

For now, it is mostly the working poor leading the way.  But it won’t stay that way. Most Americans live beyond their means - statistically, we spend about 5% more than we make.  Middle class Americans aren’t going to be able to eat the food bill, the heating bill, the electric bill, the mortage that isn’t worth much… something will have to give.  Fuel subsidy programs are already stretched - and a winter’s worth of fuel subsidies available to any household out here is good for about 3 weeks of heating at these prices.  Many of us are about to face the reality that we’re not that middle class.

What gives will be different for different people.  Some people will leave their homes, and some will consolidate, moving in with family.  Lots of people will skip meals - and their kids will go hungry to school.  And many will lose the utilities and attempt to compensate - they’ll spend more eating out, because there’s no gas to cook with on the stove, or eat only microwave meals, or things in bags and cold cans of food.  A few will get desperate enough to do things like bring in the charcoal grill and asphyxiate themselves.  The same goes for heat and light - people will cobble together bad solutions, and some people’s solutions will be bad enough that they do real harm - to themselves, of course, but it won’t be limited to themselves.  The fires in urban rentals won’t just destroy the homes of the cold and hungry, but their neighbors too.  And the costs of dealing with disaster after disaster will eat up city budgets - there’s no such thing as a crisis without unintended consequences.

As more and more of us can’t afford our relationship with our utility companies, we’re going to break up like we’re on a bad date.  And since there’s no money in the budget for the mass reinsulation of 90 million homes, or the subsidizing of fuel and electricity on the scale that Americans use it, we have two choices.  We can break up with our utility companies only when we’re massively indebted and when we’ve already sacrificed dinner and home and other security to try and keep the lights on and the heat running, or we can do it wisely, and break up before the crisis gets acute.

That means adapting our homes to live without them.  It isn’t easy - but for the 2000 bucks I spent on oil, many people could get the basic framework of non-electric living in place.  And we could subsidize these things just as we subsidize solar or wind power - instead of giving people tax breaks for buying pv panels, we could give them tax breaks for buying things to enable them to live without them.  Because while PV is great, it is demonstrably far too expensive for anyone struggling to pay their utility bills - and a lot of people who aren’t. 

$2000 will get you a wood, corn or pellet stove, two solar powered battery chargers and batteries for flashlights and table lamps, and for your CD player or ipod.  It’ll get you cardboard and tinfoil enough to make a solar oven for warm weather, and  you can put stew on the back of the stove in winter.  Depending on the size of your house and your needs, you might have enough left over for long johns, or a couple of personal battery powered fans.  It isn’t ideal, but you’ll have light, heat and food.

Another $40 will get you a tiny washer that you can do easily by hand, but a bucket and plunger will do.  If you don’t have water, you’ll need money for a well pump, a cistern, lots of rain barrels or some other water solution - and this will probably cost more.  But maybe if money is tight you can work on making the water solution collective - most places around the world have central water, and everyone walks over, chats at the well, and carries their jugs back. 

Is $2000 out of the question?  Well, how about $300 in long johns, battery chargers, down comforters and a few small electric appliances - a tiny efficient space heater to take the edge off of the room you are in and a microwave to ensure copious hot tea?  You can live without heating or cooling - no one has to freeze or die of heat stroke.   The simple fact is that we’re not going to be able to afford even these preparations once we get further and further in debt to the purveyors of fossil fuels - the abrupt transfer to the low energy lifestyle, without any preparation, is what I’d like to see everyone avoid.

The grid may or may not be there.  There may or may not be imported heating oil, or Canadian natural gas coming through your pipes.  Your utilities company may or may not still be in business.  But what is almost certain is that the present trajectory means that more and more of us are going to have to reconsider our usage - and many of us aren’t going to be using any at all.   


We Regret to Inform You…

Sharon April 22nd, 2008

When climate change and peak oil thinkers run out of other things to worry about, there’s always the endless, inevitable debates about whether we are facing a “fast crash” or a “slow grind.”  And I admit, I’m worried about my fellow environmentalists - because I think they are about to lose their favorite distraction.  When no one was looking, we got an answer.  Fast crash wins.  And we’re in it now.

Wait a minute, you argue - that’s not right.  If we were in a fast crash we’d be well on our way to living in a Kunstler novel.  But we’ve still got cars, we’ve got food, things are slowing down, but at worst this looks like a slow grind - but the crazy lady at the blog is saying fast crash?!?!?

Before you argue with me (and you are both welcome and encouraged to), I’d like to post something a bit out of my usual style - it is simply a description of what has happened with food and energy in the last year - that’s all it is.  Then tell me what you think - because it wasn’t until I began to write this introduction to the present food situation that I suddenly was struck by the fact that even a fast crash doesn’t always look fast when you live it - new normals arise and it turns out we assimilate faster than we panic.

So here we are - the “We regret to inform you that what you have imagined to be “civilization” is now falling apart” post.  See if it strikes you the way it struck me. 

I would also note two things.  The first is that the general political consensus is that neither the food nor energy crisis will do anything but grow more acute anytime soon - we’re really in the early stages.  And that this only covers the first 4 months of 2008.


In early 2008, the world’s food and energy train came off the rails.  What was startling was that it didn’t happen either gradually or in a linear way - instead, things simply fell apart at an astounding rate, faster than anyone could have predicted without being accused of lunacy.

It started with biofuels and growing meat consumption rates.  They drove the price of staple grains up at astounding rates.  In 2007, overall inflation for food was at 18%, which created  a new class of hungry, but that was just the tip of the iceberg.  In 2008, the month to month inflation was higher than 2007’s annual inflation.  At that rate, the price of food overall was set to double every other year.  Rice, the staple of almost half the world’s population rose 147%, while wheat grew 25% in just one day.  Price rises were inequitable (as was everything else) so while rice prices rose 30% in rich world nations like the US, Haitian rice prices rose 300%.

Haiti was an early canary in the hunger coal mine.  Desperately poor, by early 2008, tens of thousands of impoverished Haitians were priced entirely out of the market for rice and other staples, and were reduced to eating “cookies” made of nutrient rich mud, vegetable shortening and salt to quiet their hunger pangs.  Women stood on the street, offering their children to any reasonably well fed passerby, saying “Please, pick, take one and feed them.”  Thousands of Haitians marched on Port Au Prince, yelling, “We’re hungry.”  And indeed, the Haitian government was complicit, allowing food relief to rot on the wharves. But Haiti was just the start. 

After riots over long bread lines threatened to destabilize Egypt, the Egyptian government set the army to baking bread for the hungry.  Forty nations either stopped exporting grains or raised tariffs to make costs prohibitive.  Food prices rose precipitiously as importing nations began to struggle to meet rising hunger.  The UN warned that 33 nations were in danger of destabilizing, and the list included major powers including Pakistan, Mexico, North Korea India, Egypt and South Africa.   Many of these hold nuclear weapons.

The crisis didn’t stop among the already-poor, however.  An article in The Economist reported that the crisis extended well into the middle class -  Joanna Sheeran, director of the World Food Project  explained, “For the middle classes,…it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.”  

Up to 100 million people who had managed to raise their incomes above $2 a day found themselves inexorably drawn back to the world poverty level, while millions of those who called themselves “middle class” began, slowly, to realize that they were no such thing.  Reports noted that many of the supposed middle class in rich world nations were actually the working poor who had overextended their credit to keep up appearances.  And the appearances - and credit access - were fraying

In 2007, a major American newspaper reported the growing problem of seasonal malnutrition affecting poor children in the Northern US - the rising price of heating oil meant that lower class families were struggling to put on the table.  Hungry, low weight children were unable to maintain their body temperature in chilly houses, and a vicious circle of illness, hunger and desperation ensued.  Malnutrition bellies began to be regularly seen by pediatricians treating the urban poor in cold climates.

Shortages were a chronic problem in the poor world, but by early spring of 2008, they began to arrive in the rich world - despite Japan’s deep pockets, a shortage of butter and wheat reminded the rich world of its dependence on food import.   Many of the supply problems were due to climate change and energy issues, as Australian dairy farmers struggled with high grain prices and the extended drought that destroyed their pastures. 

Following up on anecdotal reports of limits at bulk warehouse stores, in late April of 2008 rationing went official. Many Costco stores were limiting purchases of flour, rice, cooking oil and other staples to avoid shortages - and the stores tracked purchases electronically to prevent customers from visiting other Costco stores.  This was the first example of food rationing, but probably not the last - at least one financial analyst was predicting corn shortages in the fall of 2008.

The energy train and the food train were inextricably linked, and indeed directly (as the costs of diesel rose rapidly) and indirectly (rising energy costs created the biofuels boom) drove the food crisis.    They were linked in other, complex ways as well - the housing collapse that threatened to plunge Europe and the US into a  major depression was in part due to the high costs of commuting from suburban infrastructure.  Exurban housing collapsed hardest, while housing closer to cities remained desirable - for a while.

While the food crisis in the poor world made headlines, the energy crisis there went almost unnoticed.  <ore and more poorer nations simply could not afford to import oil and other fossil fuels, and began to slowly but steadily lose the benefits of fossil fuels.  Nations suffered shortages of gas, electricity and coal.  Tajikistan, experiencing a record cold winter found itself with inadequate supplies of heating oil and a humanitarian crisis.  South African coal supplies were so short that electricity generation dropped back to intermittency.

Industrial agriculture, described as “the process of turning oil into food” began to struggle to keep yields up to match growing demand.  Yield increases fell back steadily, with more and more investment of energy (and higher costs for poor farmers trying to keep yields up).  Yield increases, which had been at 6% annually from the 1960s through the 1990s fell to 1-2%, against rapidly rising demand.  Climate change threatened to further reduce yields in already stressed poor nations - Bangladesh struggled with repeated climate change linked flooding, the Sahelian African countries with growing drought, China with desertification. 

All future indications were that both food and energy supplies would fail to keep up with demand. Unchecked (the only kind we’ve got) climate change is expected to reduce rice yields by up to 30%, and food production in the already starving Sahel is expected to be reduced by half.  GMOs, touted as a solution, have yet to produce even slightly higher yields.  Arable land is disappearing under growth, while aquifers are heavily depleted - 30% of the world’s grain production comes from irrigated land that is expected to lose its water supply in the next decades.

Meanwhile the costs of fossil fueled agricultural skyrocketed, with Potash rising by 300% in less than a year.  What should have been a boom for farmers was actually the beginning of an increasingly precarious spiral of high prices, high indebtedness and market volatility.  Agricultural indebtedness rose dramatically.

Meanwhile, the ability of nations to transport food supplies began to be called into question.  Early trucker protests were intermittent and largely ineffective, but real predictions of diesel shortages and a shortage of refining capacity made it a real possibility that food might not reach store shelves. 

 And so how does the story end?  If you were reading this in a history book, what ending would you expect to see?  Because just because the crash doesn’t quite read like a post apocalyptic novel doesn’t mean that we aren’t the new Po-Apoc (like Po-Mo, only darker) generation.


Heat or Eat - An Expanding Crisis

Sharon February 12th, 2008

Well now, listen people let me tell you some news
I’ll sing a song called the crude oil blues
We’re low on heat .n all
We’re low on gas
And I’m so cold I’m about to freeze my A..self

We got the crude oil blues
Cause the winter time sure gets cold to the bottom of my shoes
Well my hands are shakin’ and my knees are weak
But it ain’t because of loveIt’s from lack of heat

I’m gonna tell you a story anout this drunk I know
He kept his basement full of homemade brew
But the winter got so bad it screwed up the boy’s thinkin
‘He got so cold he had to burn all his drinkin’

He’s got the crude oil blues
He said the wintertime can sure get cold to the bottom of your shoes
He said, burnin’ this booze just destroys my soul
But there’s one thing about it honey
When you’re cold, you’re cold - Jerry Reed “Crude Oil Blues”

If you’ve been following the situation in Tajikistan, you know that we’re seeing an acute variation on a crisis that is occurring in a number of cold places all over the world, including the US.

“The crisis has already gone far beyond power supplies, affecting every sphere of this impoverished and fragile society.

Humanitarian agencies say hundreds of thousands of people are suffering from severe food shortages.

“People are spending all they have on trying to keep warm, and they don’t have enough money to buy food,” says Zlatan Milisic, the country director for the UN’s World Food”

When it happens here in America (thankfully less often) we call it “Heat or Eat” and this fall the Boston Globe reported on rising cases of children suffering from malnutrition in winter because their parents cannot afford to feed them and keep them warm. Now this is nothing new, but the tripling of heating oil prices (the Northeast uses almost all the country’s heating oil) and rising natural gas prices have increased the severity of the problem:

“Federal research shows that while both rich and poor families increase their expenditures on home fuel during the winter, poor families offset this cost through decreasing food purchases, with an average 10 percent decrease in caloric intake. Parents know that children can freeze to death more quickly than they starve to death, and so most decrease food purchases first to pay for heat. Many inevitably sacrifice on both fronts, living with food scarcity while heating their homes with cooking stoves and space heaters, both of which dramatically increase the risk of fires, burns, and carbon monoxide poisoning.

These untenable choices wreak havoc on the health of children. Babies and toddlers lose body heat more rapidly than older children and adults because of their higher surface area-to-mass ratio. When babies’ bodies have to divert already-scarce calories to maintain body heat, cold and hunger intertwine to jeopardize their health and growth as well as their future ability to learn and relate to others.

The health effects of energy insecurity surface in emergency rooms at hospitals like Boston Medical Center during the cold of winter. Medical researchers found a 30 percent increase in the number of underweight infants and toddlers in the BMC emergency room in the three months after the coldest months compared with the rest of the year.”

While thankfully America’s poor are not in the situation of the Takjiki people, it is also true that both parties are early victims of a dilemma that is likely to hit more and more of us, in both rich and poor nations - the conflict between meeting energy needs and food needs.

Thus far, biofuels have rightly drawn most of the attention in explorations of the link between energy and hunger, but they aren’t the only such link. And heating energy is likely to be a particularly acute such interface, as both natural gas and oil supplies destabilize and rise in price.

Richard Heinberg’s recent essay on the coming crisis over natural gas supplies that the US and Canada face suggests that a crisis point in heating energy could come upon us fairly quickly. The vast majority of Americans heat with natural gas, and a disruption in the Canadian supply is likely to send prices skyrocketing, and potentially, show up as actual shortages in some regions, although whether of the US or Canada is not clear:

“From a Canadian perspective there are some problems with the arrangement, though. First is the fact that Canada’s production of natural gas and conventional oil is declining. Second is that Canada uses lots of oil and gas domestically: 70 percent of Canadians heat their homes with gas, and Canadians drive cars more and further than just about anyone else. The problem is likely to come first with natural gas; as production declines, there will come a point when there isn’t enough to fill domestic needs and continue to export (roughly 60 percent of Canada’s gas now goes to the US).

That point is not decades in the future, it is fairly imminent.”

A recent article observed that because of global warming issues, more and more new electrical plants are turning to natural gas. Given that the North American (and many regions of the world) gas situation is quite acute, such a rush to natural gas is likely only to raise prices and push heating energy costs even higher, and possibly impact availability.

It is hard not to come to the conclusion, then that we in Northern regions face a heating crisis, and probably within a few years. And since we live in a society that practices cost rationing even for the most basic needs, that means that poor people in cold places will be increasingly priced out of heating energy. Or they will be priced out of food, as they futily stop eating in order to try and keep warm.

Meanwhile, natural gas based fertilizer prices will continue to rise along with the commodity, as more and more competition for gas ensues, further boosting the price of food, and making the heat or eat problem even more acute.

And what choices do we have as an alternative? Wood heating could be a decent option in many places, although not in urban centers where particulate emissions costs would be greater than the benefits. There is just barely enough wood in the US to warm the northern houses without losing forests, if carefully and sustainably managed, we all get used to colder temperatures and if we insulate as best we can, but we’d find ourselves with virtually no wood for building or paper making or any other use. Anything other than absolutely perfect management would result in deforestation - and something less than perfect management is far more likely than the alternative. Rising wood prices could give us the absolute incentive to deforest the landscape of the US, vastly increasing the consequences of climate change, topsoil loss, desertification and turning our country into the blasted landscape of post-apocalyptic novels.

We could grow more corn, this time to be burned in corn stoves, further accellerating global warming with artificial nitrogen and further putting pressure on food prices, pushing more of the world’s population into hunger.

Electrification of heating is probably a necessity, particular in population centers, but right now, as we transfer more electric load to heating, that means more coal or nuclear plants, since no renewable build out can meet that need - we risk warming the planet more seriously in order to keep ourselves warm.

Or we can accept the current model, pricing people out and letting them starve and freeze - or see mass migration to already water stressed and overpopulated but warmer areas. The truth is that our energy problems *ARE* our food problems - the longer we view the two as distinct, the worse our problems will be. They cannot be seperated from one another.

We need some better choices than this - and the first step in such better choices would be taking up seriously the larger questions of where our heating fuel is going to come from. From there, we need to ask how our resources are best spent - and one of the ways in which they would be best spent would be in a massive reinsulation of American homes to require minimal heating fuel. If we’re going to build anything out, it should be this - or rather, we should build them in - new levels of insulation and warmth. This will be as necessary in the South as it is in the North, as rising heat waves and failing electrical supplies raise heat deaths.

The Community Solution is working on this At this point, the plan is simply too expensive to be applied in many houses without massive national subsidies that are at this point unlikely to be forthcoming. So the other thing we need is a plan for ordinary, poor people to keep warm (or cool), without destroying the planet and without starving to death.