Ecologic
Be prepared
by Dave Hansford
It makes sense to get ready for the next oil shock.
“The American way of life is not negotiable,” George W Bush once infamously boasted. But Nature won’t be asking Americans to put their toys down; she’s about to seize them by force. And New Zealand is likely to get hurt in the fray.
The legendary profligacy that Bush defended has helped drive American debt to jaw-dropping levels: total government borrowing spiralled from $US500 billion in 1970 to more than $US8 trillion in 2005. US companies are now exposed to some $US100 trillion of risky securities.
As at 2005, Americans owed around three times the US GDP. Add the looming sub-prime mortgage collapse and the American dollar is set for what the International Monetary Fund called “a sudden disorderly adjustment”.
The only thing staving off a foreign debt disaster is that oil is traded in US dollars – a hangover from a deal between Henry Kissinger and the Saudi royal family in the 1970s. But as the greenback slides and oil reserves shrink, central banks are unloading their US dollars and oil producers have started to look to other currencies.
The US economy is built on rampant energy consumption. It cannot survive the looming oil shock, and when it crashes, it may well take us down too.
At a household level, you can’t insulate yourself entirely, but there are some steps you can take now to help you ride the punch.
A no-brainer to start with: the less reliant you are on gas and oil, the better off you’ll be. That means getting rid of the second car and downsizing the first. Flick the jet ski while some people still think it’s an asset.
If you can use public transport, do so, even if it’s just a few days a week. It might not be as convenient or comfortable, but transport managers can justify investment in services if patronage is on the up.
If you must drive, get your car tuned, monitor your mileage every time you buy fuel and analyse every aspect of your driving behaviour and commuting patterns. Do you really need to crawl in rush-hour traffic? Negotiate flexitime with your boss, or telework until the jams have cleared. At least talk to your neighbours about car pooling or, better still, form a car club and share one among several households.
Don’t drive to the mall (megamarts will be in more trouble than you will be when transport costs hit the ceiling); walk or cycle, if you can, to local shops and buy smart – all that walking is wasted if you’re still going to buy South African wine. Besides, New Zealand businesses will need all your support. If you live in a distant suburb far from a transport hub, think hard about moving closer to town and distribution centres. If you live centrally, you can cycle or enjoy better public transport services; an electric car will make perfect sense.
Apart from cutting the umbilical cord to the fuel pump, insulate yourself financially. What’s the nature of your employer’s business. Is it vulnerable? Many economists are forecasting a series of economic shocks, followed by serious recession or even full-scale depression. Slash that household debt – your mortgage, your credit card balance. Look hard at your investments – do they rely on energy-intensive production? If so, invest in renewable energy technology instead, or pull them altogether and spend it achieving your own energy self-sufficiency.
As oil stocks dwindle and more land is given over to biofuel production, expect food prices to spike. Start a vege garden, keep chooks. If you know a farmer, think about trading your goods for meat. Buy a fishing rod – the fishing industry is the country’s most energy-intensive primary producer, and prices – even if the trawlers can keep working – will be astronomical.
It’ll be a bit like training for a marathon; start adopting a low-energy lifestyle now and the big crunch won’t be such a shock to the system. The next oil shock will soon sort the fittest from the fattest.
