Good news: Wal-Marts of the world will soon go bankrupt.

[Deja Q]

According to this article, they have 1~6 years left.

http://www.gasandoil.com/goc/news/ntn42600.htm

Kunstler foresees "the demise of Wal-Mart style, big box, national chains." Companies whose profit margins depend on "merchandise made by factories 12,000 miles away" simply won't function in a world of $ 100-plus barrels of oil. "We're going to have to seriously reorganize our whole system of retail trade and economy."
Along with many scientists, Kunstler believes George Bush's "hydrogen economy" rhetoric is a "fantasy" and a stall tactic to avoid making immediate changes. "It's kind of a cruel hoax as far as the public is concerned because it raises expectations that we're going to be able to continue living this way, and we're not."

There's more, much more, it's a tremendously huge article.

And here's a blast from the past (1979):
http://www.library.arizona.edu/branches/spc/udall/congrept/96th/7907.html

[NMDemDist2]

1. one can only hope

wonder if Starbux will go the same route?

[name not needed]

7. I hope so

Dunkin Donuts coffee is cheaper AND it tastes better!

[umass1993]

34. No Dunkin donuts is NOT!

I pay $1.65 for a medium coffee, which is the same as a Starbucks tall(small) which costs $1.40

Dunkin Donuts is exploitation central. They price according to the local market.

At least Starbucks costs $1.40 everywhere, coast to coast, and they don't use styrofoam.. and they play good music. Give their music director credit. No doubt they have their dirt, but the dirt I see is less aggregious.

[Tandalayo_Scheisskopf]

2. Sorry, but I cannot...

Get too happy about this.

But fear not, help is on the way: I am involved in a project that uses a new and radically different hydroelectric technology. Very efficient. Bodes well for power generation and the creation of hydrogen from water.

Guess what? Investors like the idea as well, at least enough to listen.

[oneighty]

9. New?

Is there a Guard involved?

180

[Tandalayo_Scheisskopf]

11. Guard?

Eh? Explain.

[oneighty]

14. I will in a PM.

Okay?

180

[Deja Q]

18. I'm not happy either, the article nimbly talks of our potential extinction

Without petrochemical fertilizers, there wouldn't be enough food to feed everyone. (farmers selling off their land for high prices so 'developers' can build more pretty houses isn't helping either. Once the topsoil is bulldozed and destroyed, it's GONE.)

Alternative technologies exist. Pity Reagan killed off early funding in 1983, claiming they were "obsolete". Damn repuke scum. Trouble is, they're nowhere near sufficiently advanced. The help that's promised won't very helpful if our economic system collapses, which is likely. :-( (think about it. When it requires two barrels of oil-generated power to collect one barrel of oil... the ethanol chatter is also worthless as oil is used in ethanol production...)

If the peak comes before we're ready, under our current economic system, we are toast. And with the article stressing that everybody grossly overestimated the supply, I think there's big truth to the claim that the peak is too close for comfort.

May the investors pump trillions into alternative energy. But given the media, it's clear nobody is serious about the upcoming catastrophe. They all suffer from Reaganitis...

[Boomer]

32. Before we're ready?

If the peak comes before we're ready, under our current economic system, we are toast.

We will never be "ready" as long as this planet holds billions of people. Once we've run through easily-recovered oil reserves, there is no way to sustain the petroleum-based Green Revolution that allowed Earth's population to balloon out of sight. With luck some pockets of people will develop a substitute energy source and sustainable agricultural model, but they will also have to protect themselves against the millions of starving people who want what they have.

The gravy train is coasting to a stop, and most of the passengers are going to have to get off. The disembarkation is going to get very ugly indeed.

[slutticus]

36. Electrolysis? n/t

[Radical Activist]

3. So we need oil to maintain our entire economy and the

entire international corporate system. Now it makes sense. Almost all US corporations depend on their overseas factories. No wonder Wal-Mart execs give so much to Bush. They must love the idea of the US controlling the world's first and second largest oil reserves. That article truly makes the war in Iraq sound like a symptom of an out of control capitalist system.

[AngryAmish]

27. That was the PNAC's point

We support our wealth (including everyone owning a car, cheap stuff at Wal-Mart etc) by the flow of oil at market prices. Gulf War I happened because Saddam got Iraq and Kuwait (a large % of the crude - 15-20% I think) and was in a position to threaten Saudi Arabia. Saudi Arabia could not stop him. So we kicked him out of Kuwait. When he did not come to heel after, he had to be taken out. Thus Gulf War II. When everyone says it is not about the oil, it is about the oil. The US (and the rest of the developed world) will pay a higher price (OPEC is a cartel and keeps prices artificially high) in exchange for not having to seize and run those countries directly. It is cheaper to put up stooge governments in both blood and treasure.

[ayeshahaqqiqa]

4. Support your local businesses

This includes those who grow food locally. It will become more and more important as the world supply chains break down.

[union_maid]

6. If you can find them

There are feweer and fewer local businesses that provide goods that you actually need here in the 'burbs. They've been driven out. Some downtowns are doing well, but not on things that directly compete with the big discount stores for the most part.

[ayeshahaqqiqa]

8. Look to your rural areas

If you live in suburbs, you are closer to them than those in the heart of cities. Also consider planting gardens and drying/preserving your own food. I live in a rural area and can trade with my neighbors for eggs, milk, vegetables, and meat.

[SoCalDem]

16. Every town HAS them, it's just hard to find them sometimes

an example:

We have a Mom & Pop furniture store in our town.. We ALSO have big box stores.. I have bought all my furniture and appliances from the Mom & Pop.. Why??

I pay a teensy bit more, BUT they deliver FREE...SAME DAY.. their delivery people HELPED me unload my broken freezer and load my new one.. They hauled off the old one FREE..

If there is a certain item I want, they will ORDER it for me..with nothing down..

I wanted a couch, but it was more than I wanted to pay, He asked what my upper limit was, I told him, and he said "you got it"..

We always tell our friends to go there..and they have..

They may only have 3 or 4 models of freezer to choose from, but who needs 50 to choose from??

They are never crowded, and you never have to hunt down a salesperson.. and upstairs they have USED stuff.. (yes..they take trade-ins)..

[NC_Nurse]

5. I despise Wal-Mart!

I have a hard time believing they'll go down though. They'll find someone to exploit because it's their way of life.

[Moonbeam_Starlight]

15. Exactly how I feel

I despise them but I don't believe they are going anywhere. Unfortunately. They represent to me total corporate greed and selling cheap crap on the backs of sweatshop labor.

I won't and don't shop there. Ever.

[Tsiyu]

10. WE have no Walmart on our mountain

Yippeee. The good news is, all the mom and pop places will have a market, and a big pool of employees. We are working on getting local suppliers where i work. It does make a difference.

[catmandu57]

12. There is a super hyway running across the Pacific

Cargo ships by the thousands, 24 hours a day bringing goods from factories in Asia. Goods that were once made here, we bitch about the behemouth suvs on our hyways, and they are but a small part of the energy consumption picture.
Highly visible, but it's things like this people aren't thinking about that's going to do us in. All the energy being consumed by Asian economies, the increasing demand for limited lifeblood, it's a real problem and people are whistling past the graveyard.
The mal-warts and other big boxes will feel the bite first, but, unless we change our ways it's going to cheney us all.

[lapfog_1]

13. That conclusion isn't supported

Let's look at the other facts from the article...

First there is the statement that energy costs account for
about 8 percent of the cost of the good.

So, let's do the math... a $10 item at Walmart (made in China)
has about $.80 worth of energy in it (transport of raw goods,
manufacturer of components, shipping to assembly, assembly by cheap
labor, shipping of finished goods to store shelve). Energy is
about $40/barrel... now change energy to $100/barrel or 2.5 times
greater. So instead of $.80, we now have an energy cost of $2.00,
or an increase of $1.20. Walmart passes this cost increase along
to consumers so the "price" is now $11.20 instead of $10.

Does anyone believe that American factories and workers can now
make a living wage by diverting that $1.20 on every $10 worth
of goods into local factories? That we will now be competitive
with their cost of labor?

The second assumption is even MORE telling, and that assumption is
that the cost of transport of raw materials and finished products
is uniform over the 12,000 mile journey (to be fair, probably a
LOT more miles, as raw materials and components and so forth EACH
make their own journey). However, much of that journey is via
ocean shipping, which is much more efficient than the other component,
namely shipping via rail or highway. And those later two components
are STILL present in the cost of locally manufactured goods (anyone
who believes that we are going back to artisan based one at a time
manufacturing methods - i.e. cobblers and blacksmiths and wrights -
is simply smoking the funny weed). So even American produced goods
will have absorb much of the price increase of higher energy costs.
The only component eliminated of the entire cost of production is that
container ship... and that is likely nowhere near even 25 percent of
the total energy used.

So, unless Americans are willing to work for $1.00 per hour or
less, or we go to completely automated manufacturing process with
NO labor component OR the Chinese become so fully employed that
they start demanding wage increases... things are not going to
change from the current trend.

Which is not to say that there isn't peak oil, or that the cost of
EVERYTHING we consume won't increase as a result, but the idea
that globalization will collapse as a result of higher energy costs
is nonsense (until it gets to be a whole lot more). So, there
isn't a silver lining to the whole $100/barrel thing... not that
destroying Walmart would be worth the cost of $100/barrel anyway
(when one looks at the other disruptions that would cause).

[Deja Q]

20. Ah, but you forgot:

PLASTIC. It's another staple of everything in our society (right down to MEDICAL CARE), and it is made from oil. The $10 product with its $0.80 in energy also has $x.yy amount in the form of plastic. As oil goes up, it's more than just the energy used to make the product that goes up. If oil is involved in an aspect, the aspect suddenly becomes that much higher.

True, not everything is made from oil. But where oil is a factor is where the price will increase.

Not to forget, our 'need' for oil continues to increase.

In some ways you might be right.

But people still won't pay $4.50 per gallon. (IF oil is $40/barrel right now and consumers pay ~$1.80/gal (and not happy about it), adajusting for a $100/barrel price ends up at $4.50/gal. Now you know this is a pile of cattle cack as other factors determine the price of gas, otherwise gas wouldn't have been $2.20 a couple months ago. That's why your calculations are too sanitary for my liking. Not to forget liveable wage and other factors such as company laying off well paid people who then have to (hopefully) get a job elsehere, most likely a retail job that pays 1.4th or 1/5th their previous wage... $4.50 per gallon of gas would add up quickly, even for local shipments of food and products. You forget, the American economy and infrastructure were never meant to survive depleting oil resources. When gas went up to $2.20/gal, food prices also went up (because of both transport and every other reason that involves oil - fertilizer, packaging, etc). Indeed, prices have since NOT gone back down despite gas having gone down to $1.80.)

In other words, the system is too complex for cozy maths. It's the same wooly thinking that allowed Reagan to nix alternative energy programs in the early 1980s, claiming the oil problem was over. :eyes:

[lapfog_1]

26. No, I didn't forget

the price of raw material is the same for things manufactured
in China and things manufactured here.

The premise was that the cost of shipping goods and raw material is
going to be so much higher (due to peak oil) that we won't do it.
And that's what I addressed in my posting.

If the price per barrel of oil goes to $100, then we will pay
higher prices at the pump. But your assumption that if the cost
of oil goes up by 2.5 times, the cost of gasoline goes up by
the same factor is not true. You have to understand the fraction
of the cost of gasoline that crude oil represents is what is
affected... but I suspect that the oil company monopolies will,
in fact, raise the price of a gallon to the numbers you suggest,
even if that rise is not justified... I think we have empirical
evidence of this. This could, finally, end suburban sprawl. But
the dream of the single family "homestead", complete with acreage,
may come to an end OR (in an alternate corporate universe) people
could move to internet based jobs and stay home (driving only
occasionally to market and school and other neighborhood trips).
Commuting could become a thing of the past.

I wasn't trying to present a complete economic model, but simple
math IS sufficient to refute the premise that higher energy
will lead to the demise of Walmart type stores and outsourcing
of manufacturing jobs to places where cheap labor is available.

What MAY end imports is the coming death of consumerism in America.
And that doesn't have much to do with energy costs. Most people
that work at Walmart still cannot afford to shop at Walmart...
and that's a huge problem if Walmart is driving the job growth.

[WVhill]

23. There are other factors to consider.

The independent operators in trucking get weeded out everytime diesel prices skyrocket. They don't get a fuel surchage in most cases like the companies. That means over time the ability to move freight on US roads gets concentrated in fewer companies. Eventually you'e looking at much larger freight charges because of the lack of competiton

The other factor is that a huge increase in oil pricing will put upward pressure on natural gas pricing and the cost of electricity. We've already lost energy intensive businesses that have moved overseas for cheaper energy. That will accelerate the process. I think much higher oil prices will end up increasing the deindustrialization of America. If you look at our export makeup we're looking inceasingly like a third world country.

The idea that factories are going to spring up due to high energy prices is ludicous. It will increase the advantage of cheap foreign labor.

[goclark]

17. Are they closing Gas stations in your neigborhood?

We had 4 gas stations for years near our house. I was shocked today to see that two of those station,one a Shell, are gone. Wire fence is up and pumps are just holes covered over with dirt. I drove about 6 blocks and another gas station was gone too.

These were all popular stations.

Is this a trend?

[oscar111]

19. Solar replaces oil, Walmart buys GatesMSC, Waltons rule UN, King Walton

Gee, folks ,think outside the box!

Oil gets costly, cities just shift to solar boilers on towers and wind and coal and yechhhh nuclear.

trucks recharge batteries for all electric trucks, ultimately from solar boiler towers. Cheap transport endures. Ships ditto.

Exxon buys solar companies, and limps on.

Iraq starves, Saudi starves, Islam shrinks except for places like Indonesia. terrorism shrinks fifty percent. Israel continues with massive as usual usa aid... its opponets weaken from no oil , but they have nukes.. mideast has nuke war... end of israel, end of Egypt, Lebanon, syria... history limps on , bandaged all over as usual. Global warming shrinks Islam more... less terrorism... warming ends Mexico, sends milions into usa, war erupts to stop the flow, usa weakens, northern nations dominate the world. Orbital sunshade finally .. 2015..built by Japan, a million miles sunward at the L1 point.. google "orbital sunshade". CBS story on it.

[Deja Q]

22. Too simplistic.

Last I read, solar power optimally works when there's fully daylight. Doesn't work well when it's cloudy. Doesn't work at all during the night. Also needs oil to make the solar panels; they're not made out of tree bark.

Ditto for batteries.

We might miraculously manage to maintain our present nightmarish use, but we'd be prolonging the worst for a short period of time and fighting a losing battle.

We need a paradigm shift along with preparing for it and we need to do it 20 years ago. We really should have done this 20 years ago, around the same time Reagan nixed the alternative energy programs Carter had created! (who's the worse president now, it's not Carter...)

[lapfog_1]

30. Electric storage is not a problem

Once you've generated electricity, there are two obvious and fairly
inexpensive methods to store it (and non polluting as well), first
is turn it into hydrogen gas and store that, use the hydrogen gas
and a fuel cell to turn it back to electricity on demand. Second
is flywheel storage system... but this system has drawbacks, not
the least of which is the containment structure that has to be
built around them (lots of kinetic energy stored and released
by, say, a mechanical failure, will still act like a large explosion).

I'm not a fan a nuclear, but I'm willing to listen...

We needed to start on the materials science to make low cost and
nonpolluting photovoltaics, and a decentralized grid, plus electric
automobiles.

[Blue Wally]

39. Coal

It is dirty, but it works. We have a thousand years or so of coal in the ground here in the US. Coal can substitute for oil in many of its applications and coal gassification opens new horizons. John Kerry should listen to Sen Byrd.

[Boomer]

41. You can't eat solar power

Petroleum-based fertilizer is used to force higher than "normal" crop yields from farmlands. This artificially inflated agriculture sustains billions of people. As the price of oil goes up, the price of food skyrockets and millions of people starve. When the oil runs out, the farm industry collapses back to pre-Green yields and we'll suffer a truly major "correction" to our population numbers.

[Deja Q]

21. I've seen a few buyouts and closures...

Amoco is now BP. (heck, there are two BP gas stations 1 mile apart! :eyes: ) And a couple years ago, Amoco bought Oasis...

Cenex is now Marathon, I noticed.

I've seen a few closures too...

Consolidation and closure and putting ads on the TV how these gas companies are a "true American company" and so on... (Marathon most notably...) :eyes:

[Jane Austin]

33. Ours all closed in the energy crunch in the 70's.

n/t

[Dogmudgeon]

24. This is NOT good news

By the time the economy is in bad enough shape to bring Wal-Mart down, half the people in this country alone will be out of work and facing immanent eviction from their apartments, or reposession of their houses.

We don't often think about what a real energy crisis will be like. It won't be a matter of being cold and having no lights at night -- domestic energy is only about 10% of our energy budget. No, a real energy crisis will result in huge sections of the economy shutting down, like a heart that has been deprived of oxygen for ten minutes.

Manufacturing plastic is likely to be cost-effective long after the price of oil is too high to burn as fuel economically ... but where will the energy come from to run the factories?

Since America still gets 30-40% of its energy from hydro, nuclear, coal, and other sources, we "have enough" -- but not enough to support a pseudo-capitalistic economy that requires a 2.5-3% growth rate just to break even.

For Europe, the crash will be harder and faster; but they are less spooked when the word "socialism" is uttered. On the othe hand, for China, the threat of losing the ability to make their own leap into the industrial age will send the elites there into overdrive. I strongly suspect China will start building up its military quite soon, if it's not happening already.

The rest of the world will be told, in not so polite terms, to go Cheney themselves.

The silver lining isn't that we'll be rid of Wal-Mart and Starbucks; it will be that while we are living in relocation camps and in emergency housing, we'll be watching the communal TVs tuned to the horrible sights of massive famine, widespread warfare, and the possible death of 4 billion people in less than a decade's time.

--bkl

[Massacure]

37. How is Europes crash faster and harder???

They use much more nuclear energy, much more fuel efficient cars, much more mass transit. Plus as you said they won't get freaked out if they socialize the energy market.

I don't mean to argue with you, but I just don't see how they can possibly fall harder than the U.S.

[Dogmudgeon]

38. My take on Europe

I think the crash will hit harder and faster -- but I should have added the proviso that they will also be able to reorganize faster, for the reasons you spoke of.

I believe that Europe's crash will be faster because they are not as "leveraged" as the USA. For instance, OPEC uses the American Dollar as their working currency, so most of the OPEC members will do what they can to prevent a breakdown in America before they take care of Europe. This is true in many other industries as well as oil -- electronics, for example. In a crisis, we can manipulate financial securities that Europe just doesn't have.

Of course, if OPEC dumps the Dollar for the Euro, which has been talked about, we're in deep doo-doo.

America also has a much larger amount of sheltered, isolated economy than Europe has, and can sustain isolationism much better. That, too, will provide a certain cushion in the absence of cheap energy. We may be fearful of socialism, but we will be able to rely on local industries and businesses faster than they will in Europe.

It's fair to say that each place has its strengths and weaknesses. Europe is more likely to have less money, but America is more likely to see a large part of its population go into shock, especially since little or no help will be forthcoming -- it wouldn't be good for the Free Enterprise System, y'know. So Europe will hit bottom fast and bounce back, while America will have a slower, more painful, retrogression.

It may take Europe a few years to reorganize in the face of a collapse, but America will be doomed to become a neo-feudalistic country unless major political changes happen. Most Americans would sacrifice their babies to Satan before they would embrace Socialism ... as of now, anyway.

Well, I'm not a very good prophet anyway -- if you have better thought-out ideas than me, I'd certainly be glad to hear them. The only "last word" I care to have in the face of the impending breakdown of the modern world is to say that I lived the last years of my life without too much misery. Since I'm 46 now, and most men in my family live into their mid-80s, I assume I'll be around in 2045 -- and we should be well into the Gaunt New World by that time.

--bkl

[levdog]

25. the dumbest thing i've read today

if global business chains will go bankrupt because of rising transportation costs, what chance does small business have ?...

is this a consolation piece of 'well, gas prices are high, but at least it's hurting big business too...'

i don't get it

[bpilgrim]

31. PEAK OIL will certainly have very dramatic consequences on the economy

and hey certainly makes a good point about shipping cost having a bug impact.

nothing dumb about that fact, imho.

welcome to du :toast;

peace

[rfkrocks]

28. Great Post!-in gop land we don't believe in science

oil will go on forever and don't need to plan for shortages -the capacity to reason out problems to ensure one's survival is generally looked upon as a positive matter unless you are George Shrub and right wing nutjobs-and then facts are too damn confusing

[umass1993]

35. pessimist

Or you are labeled a pessimist and shrugged off.

[mhr]

42. Republicans Are Pessimists - Progressives Are Pragmatists

Republicans like to bury their heads in the sand.

Progressives identify and deal with a problem squarely.

[bpilgrim]

29. wow - excellent article and a WINNING strat for kerry

thanks for posting :toast:

peace

[mhr]

40. Short, Sweet, Article On Peak Oil Here

www.dallasforkerry.com/mediascope/brainzone/