Radical Noesis - Thinking outside the box

One notable exception to the discussion of increasing demand for oil and control of it is this week's Falls Church News Press. Tom Whipple pens The Peak Oil Crisis: A Mid-Summer Review. He notes that peak oil seems to be "below the radar of even the most attentive newspaper readers" peak oil is happening. It is unfortunate that he blame news readers rather than news writers for the lack of "attentiveness," thereby missing an important opportunity to stimulate the press into better coverage. However, he focuses on the impact in poorer countries, which is something that is indeed going "under the radar." He notes the following events:

" • Last week the BBC reported that dozens were killed in fuel riots across Yemen when the government withdrew subsidies resulting in dramatic price increases.

• All across Indonesia people were lining up at gas stations in response to developing fuel shortages. In one city, half the public transport was inoperable due to a lack of fuel.

• In Zimbabwe , the government has moved to deregulate fuel procurement in the face of severe shortages: waits of hours for buses, gas lines that are blocks long, and a bread shortage. The black market price for gasoline is now ten times the official rate.

• Nearly all the poorer countries make their electricity using diesel generators. Nicaragua , one of the poorest countries in Central America , recently started blacking out the poorer districts between 7 and 10 p.m. , the hours of peak usage.

• Tanzania , with the highest gasoline taxes in East Africa and a chaotic oil marketing system, is seeing its plans for economic growth "suffocated" by high-priced oil. Tanzania also handles fuel for the landlocked states of Malawi , Rwanda , the Eastern Congo , Burundi and Uganda .

• And closer to home, Maxjet put off plans to offer cheap flights from Baltimore to London until spring when the company hopes fuel prices will be cheaper."

Somewhat amazingly, he calmly concludes that peak oil is likely to hit in 2005. Yoo hoo, that is this year. Hopefully, since Falls Church is a bedroom community for Washington, D.C., some of the nation's elected and unelected officials will read article ... and maybe ask a few questions. Of course, I don't believe that they don't know about peak oil - just few will address the issue. Maybe is the resident's of Falls Church show up on their doorsteps asking questions it would prompt a response.

Kudos to Whipple for highlighting the global effects on increasing oil prices. Unfortunately, he seems to imply that there is (and will be) little effect in the United States. That is likely to put his readers right back into the somnolent state, secure in the belief that "it can't happen here." In fact it is happening here.

Across the river in Washington D.C., American Woodmark Corp. of Winchester saw profits decline by 11%. A net loss in the midst of a new housing boom for a cabinet making company? Are they just poor business people? No, the cost of fuel is the culprit, and their story is the story of many businesses large and small.

"Few businesses in the Washington region depend on fuel as much as 25-year-old American Woodmark, which has 6,100 employees and 15 manufacturing facilities across the United States, each with specialized tasks and each requiring large trucks to haul away the cabinet components once they are made and assembled.

"Petrochemical costs account for a substantial portion of all of our costs," said Kent B. Guichard, the company's executive vice president. "A lot of what we do, after all, is move material. We are moving materials constantly between our plants and then ultimately to the consumer.""

American Woodmark is a primary cabinet supplier to Home Depot and Lowe's - where middle America and many small construction contractors purchase construction products. Now American Woodmark is going to have to pass their increased costs on to the consumer.

While buying new cabinets may be considered a discretionary purchase, buying things such a food is not. There is more oil in food than there is in cabinets, as from production to the plate all involves oil. If making and delivering cabinets takes a circuitous route to the consumer, it is nothing compared to food. Which brings us back to those "poorer" countries that Tom Whipple brings to our attention. Much of the food supply in the United States comes from outside the United States - a considerable amount from poorer countries. If they are struggling with the price of oil locally, wouldn't those impacts be felt across tens of thousands of miles of shipment to the U.S.? You bet they are, and they will.

So kind folks of Falls Church, please don't go back to sleep thinking that peak oil is a crisis "over there." It is here, and now, but like most major problems the effects are disconnected from the causes.