Oil, Wal-Mart, environment

Two bits:

Regarding the "end of cheap oil": A global production line and global market means a dispersed economy; and so requires a dense web of transportation connections to sustain that dispersion. Since most transportation technology uses oil in one form or another for power, the degree to which oil prices can affect such an economy is dramatic. Whether the current high price of oil is historic (in the sense of being part of a long-term crisis, where increasing demand, shrinking reserves and slowing discovery is a long-term trend, and likely to just get worse) or merely episodic (hurricanes and/or political storms are causing temporary disruptions in supply and, with speculators, causing bursts in price, technology is allowing previously hard-to-get oil to be cheaply retrieved affecting the total reserves available, more efficient technology will hold down increasing demand) -- in either case expensive oil has the potential of a serious re-alignment of the connections in a global economy.

From a recent discussion (aired 10/18) on Christopher Lydon's Open Source radio program, called "The End of the Oil Age", I take it this disruption is discussed in James Howard Kunstler's book The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century. In the show, Kunstler is definitely in the camp that the high price of oil is a historic event, with terrible consequences for the current economic structure. Here's a link to a condensed version of the book which appeared in Rolling Stone Magazine. For example:

The way that commerce is currently organized in America will not survive far into the Long Emergency. Wal-Mart's "warehouse on wheels" won't be such a bargain in a non-cheap-oil economy. The national chain stores' 12,000-mile manufacturing supply lines could easily be interrupted by military contests over oil and by internal conflict in the nations that have been supplying us with ultra-cheap manufactured goods, because they, too, will be struggling with similar issues of energy famine and all the disorders that go with it.

Wal-Mart also figured in a Living on Earth radio program, "Wal-Mart to Reduce Its Environmental Footprint" (aired week of 10/28/05). The story raises in general (albeit implicitly) the contradiction between capitalism and the environment. Capitalism tends to see the environment as an economic externality; the cost of trashing the environment is paid for not by the polluter, but by you and me and everybody else -- via ruined health, taxpayer-paid cleanup, and the loss of unspoiled nature. However, there are ways that going green cuts internal costs; with the environmental benefits being a useful by-product and good for public relations.

E.g., in the radio program, Andy Ruben, the VP of Corporate Strategy and Sustainability at Wal-Mart says that by reducing the package size of just one toy brand that Wal-Mart carries will save it $2.4 million in transportation costs (presumably more will fit in each cargo container coming from China, and on each warehouse on wheels), meaning 3,800 trees that will not be harvested, and 1,000 barrels of oil that won't be burned.

jd