Charles Maxwell, Hubbert's Peak, $15 gallon gas and our retirement.

[cashflo2u2]

A recent guest on CNBC (gag) who is supposedly a well respected analyst quoted Charlie Maxwell, a well known and respected oil guy, made this prediction about eventual $12-$15 gallon gasoline. What do retired farts living on essentially fixed income do? Move closer to the supermarket? What's the point- couldn't afford the food anyway.


'Squawk Box' Guest Warns of $12-15-a-Gallon Gas

The Gathering Storm | EnergyBulletin.net | Peak Oil News Clearinghouse

Hubbert peak theory - Wikipedia, the free encyclopedia

[ziggy29]

By that time there should be plenty of electrics and plug-in hybrids so you'll almost never need to burn gas if you're just running errands in town. So if oil prices are permanently elevated, manufacturers will make the investments needed to bring these to market.

[W2R]

I dunno about the rest of you, but I am setting up my ER so that I don't have to drive much at all. When I move to my ER home, I will be looking for a house within 1/2 mile of a grocery store and other businesses.

The objective is not gas savings, but driving less and walking more (to stay fit) as I get older. I also may get a bicycle. Who wants to spend their ER behind the wheel and/or fighting traffic? Not me. It may not be exactly glamorous, but I am thinking that I could transport my groceries and stuff in one of those wire carts that old ladies drag behind them.

Of course, this is not a solution for everyone. For example those ER's with school aged children may have to live further from civilization than I do, in order to be in a good school district.

[ziggy29]

Quote:

Originally Posted by Want2retire I dunno about the rest of you, but I am setting up my ER so that I don't have to drive much at all. When I move to my ER home, I will be looking for a house within 1/2 mile of a grocery store and other businesses. The objective is not gas savings, but driving less and walking more (to stay fit) as I get older. I also may get a bicycle. Who wants to spend their ER behind the wheel and/or fighting traffic? Not me. It may not be exactly glamorous, but I am thinking that I could transport my groceries and stuff in one of those wire carts that old ladies drag behind them.

In fact, this is why we moved where we did a couple years ago, with the intention of this being where we retire as well. I liked some of the larger ranch homes on a lot of land in the country a few miles out of town, but we had an overriding desire to be within walking and bicycling distance of most of the places where we need to run errands in town. Much of that mindset was fueled (no pun intended) by worst-case thoughts about energy prices and availability into the future.

In short, we didn't want to be hostage to gas prices in a location where we had to drive everywhere to do anything.

[maddythebeagle]

I suspect that high gas prices would simply result in adjustments in the economy....look what cheap fuel has enabled....people pushing out to the burbs with long commutes, stressed highway system, and bigger vehicles...so people will have to change...

[ziggy29]

Quote:

Originally Posted by maddythebeagle I suspect that high gas prices would simply result in adjustments in the economy....look what cheap fuel has enabled....people pushing out to the burbs with long commutes, stressed highway system, and bigger vehicles...so people will have to change...

Indeed. If you look at where the housing bubble has burst the hardest, you'll see a "who's who" of exurban cities just outside of high-priced metro areas.

When I lived in California, I saw a lot of co-workers buying homes in places like Stockton and Modesto and commuting into Silicon Valley. They could get a house for $120,000 there instead of $400,000 close in (this was years ago). Of course, they had to commute 70-80 miles each way, every day.

These outlying bedroom communities are among the hardest hit in the housing slump. They are hit with the trifecta: general housing slump, located in a very high-priced "bubbly" metro area, and require very long commutes to most of the jobs in the face of punitive gas prices.

With gas prices spiking, paying less for a home with a long commute is becoming more and more of a false economy, and people are trying to move closer in and sell their big SUVs. The problem is that they are trying to sell into markets that don't want either of these right now.

[REWahoo]

Quote:

Originally Posted by ziggy29 In short, we didn't want to be hostage to gas prices in a location where we had to drive everywhere to do anything.

(Despite appearances to the contrary, no, it isn't 'Disagree with Ziggy Day' )

We did chose one of "...the larger ranch homes on a lot of land in the country a few miles out of town" as our retirement location. We are 5 miles from the nearest convenience store and 12 miles from the nearest supermarket and shopping center. I figure if gas gets to $10 a gallon, we can still make three shopping runs a week for less than $25 (our car averages 30 mpg).

Not something I'd particularly enjoy, but not exactly hostage territory either. And not nearly draconian enough to make me want to give up life out here in chigger acres the tranquil countryside.

[walkinwood]

The "experts" always extrapolate today's trends to headline capturing heights. There's enough literature available to show that their forecasts fare no better than a toss of a coin. IIRC, the book Black Swans has a long chapter on economic predictions.

They never seem to take behavioral change and enterpreneurial innovation into account or it may just be that these things are too complex to predict.

[tomintucson]

As I mentioned in another post , the economist Robert Schiller recently put forth an interesting perspective on the investment implications of rising oil prices during his appearance on the excellent Consuelo Mack's WealthTrack. He said that if you consume energy (and who doesn't), then you are in effect short the price of oil. The obvious trade which he therefore recommended is to be long oil in your investment portfolio. Brilliant logic, I think. So many of these money guys are way smarter than myself.

Tom

[rmark]

Some essays and charts on predictions/expectations form a variety of sources

Peak Oil Depletion - Charts for Prediction & Projection of Peak Date, Rate & Decline

[rs0460a]

Quote:

Originally Posted by Want2retire I dunno about the rest of you, but I am setting up my ER so that I don't have to drive much at all.

That's exactly what happened to me. I have 2 cars (that's another story). I filled the tank on my "summer car" mid-April. The last time I filled it was back in December of '07 .

The other one (SUV) which gets poor mileage, but I use it for meals-on-wheels food delivery (volunteer 1-2x week) gets filled once a month (on average).

My DW (who still enjoys going to w*rk every day ) spends much more on her "transportation".

It also helps that I really enjoy being in my "castle" with the "guys" (my two shelties). Some folks must be always on the go. I did that when I worked (for the last 46 years). Now my fun is "frisbee time" on the "back forty" ...

- Ron

[haha]

Quote:

Originally Posted by walkinwood The "experts" always extrapolate today's trends to headline capturing heights. There's enough literature available to show that their forecasts fare no better than a toss of a coin. IIRC, the book Black Swans has a long chapter on economic predictions.

Maybe true of "the experts", but definitely has not been true of Charlie Maxwell.

Incidentally, I have gone a good piece toward earning back what I lost in my recent divorce with energy related speculations.

Ha

[Danny]

I can always walk or ride my bike if it gets bad enough...I'll just put the golf clubs on my back...a guy showed up at the range yesterday on his bike!

[Dawg52]

Quote:

Originally Posted by Want2retire I dunno about the rest of you, but I am setting up my ER so that I don't have to drive much at all. When I move to my ER home, I will be looking for a house within 1/2 mile of a grocery store and other businesses.

I'll be doing a similar thing in the future. I live just around the corner from my mom and aunt so can't do anything right now. But I live across town from(yep, u guessed it) the country club. When the time presents itself, I plan to buy a small house(townhouse maybe) close to the club. I can then drive my electric cart to the course. That will eliminate much of my car trips. Just use the car for once a week shopping.

Hopefully it will not get that bad but if we do get a full time diet of $12/gal, I'll probably cut my car trips as stated above.

[barbarus]

It is easy to just say "move close to your j*b", but that ignores the fact that people will have to live the lives of Gypsies since they will have to travel to new j*bs every few years as the old ones vanish.

The brahmins who inhabit this blog don't seem to get how severely the "Walmart people" are being importuned by the current economy. They may be crude, unlettered, unwashed and uncouth(as is myself), but they represent a powerful political force. The scalawags who hold public office will be falling all over themselves trying to curry favor amounst the rabble to no good effect for you patricians (or anyone else).

There won't be any place to hide out.
Do you think the businesses that cater to the lower 80% are going to sit still for lowered profits.

Uh uh.

The Republicrats and Democrins will stampede like drought-crazed stock at the first whiff of water. President Clinton and her VP McCain will let lose a torrent of Bill-of-Rights squashin' legislation that'll make your head spin! Both aisles of both bodies of Congress will erupt in an orgy of desperate intrusive pathetic legislation to pacify the masses.

Where will you hide from this manure tsunami?

[W2R]

Quote:

Originally Posted by barbarus It is easy to just say "move close to your j*b", but that ignores the fact that people will have to live the lives of Gypsies since they will have to travel to new j*bs every few years as the old ones vanish. The brahmins who inhabit this blog don't seem to get how severely the "Walmart people" are being importuned by the current economy. They may be crude, unlettered, unwashed and uncouth(as is myself), but they represent a powerful political force. The scalawags who hold public office will be falling all over themselves trying to curry favor amounst the rabble to no good effect for you patricians (or anyone else). There won't be any place to hide out. Do you think the businesses that cater to the lower 80% are going to sit still for lowered profits. Uh uh. The Republicrats and Democrins will stampede like drought-crazed stock at the first whiff of water. President Clinton and her VP McCain will let lose a torrent of Bill-of-Rights squashin' legislation that'll make your head spin! Both aisles of both bodies of Congress will erupt in an orgy of desperate intrusive pathetic legislation to pacify the masses. Where will you hide from this manure tsunami?

Are we reading the same thread? Whew... I re-read it twice, but I don't see who inspired all that. Hope it wasn't me!

[HFWR]

Quote:

Originally Posted by barbarus It is easy to just say "move close to your j*b", but that ignores the fact that people will have to live the lives of Gypsies since they will have to travel to new j*bs every few years as the old ones vanish. The brahmins who inhabit this blog don't seem to get how severely the "Walmart people" are being importuned by the current economy. They may be crude, unlettered, unwashed and uncouth(as is myself), but they represent a powerful political force. The scalawags who hold public office will be falling all over themselves trying to curry favor amounst the rabble to no good effect for you patricians (or anyone else). There won't be any place to hide out. Do you think the businesses that cater to the lower 80% are going to sit still for lowered profits. Uh uh. The Republicrats and Democrins will stampede like drought-crazed stock at the first whiff of water. President Clinton and her VP McCain will let lose a torrent of Bill-of-Rights squashin' legislation that'll make your head spin! Both aisles of both bodies of Congress will erupt in an orgy of desperate intrusive pathetic legislation to pacify the masses. Where will you hide from this manure tsunami?

"You use your tongue pertier than a Kansas City whore."

Blazing Saddles

[ladelfina]

barbarus.. I get what you are saying here:

Quote:

The brahmins who inhabit this blog don't seem to get how severely the "Walmart people" are being importuned by the current economy.

I have no idea, though, what any politician is actually going to be able to do about it.

What I do see is that people here have addressed $12 gas in terms of their personal mobility and community transportation and planning. That's just the tip of the iceberg. Look around you, and try to identify any object or service in your life that is not petroleum/fossil-fuel-dependent. There are few. In my cluttered office with tons of stuff I can't find a single item, except a clamshell and a piece of driftwood.

[MGYog]

Quote:

Originally Posted by ladelfina In my cluttered office with tons of stuff I can't find a single item, except a clamshell and a piece of driftwood.

Florida, here I come ( looking for a place close to groceries, ability to walk to amenities, no need for gas heat, and bikeable or walkable decent health care).

[Walt34]

Quote:

Originally Posted by Want2retire When I move to my ER home, I will be looking for a house within 1/2 mile of a grocery store and other businesses.

We did exactly that (grocery, general shopping, hospital, etc. are all within 10-15 minutes) but at the time it was solely to get away from heavy traffic. A bicycle for groceries is out of the question because on the roads around here a bicyclist has a 20-minute life expectancy. There are no bike paths and lots of sharp turns and hills.

But I can see fuzzy images of a small motorcycle or scooter and a tiny car in our future. Wouldn't be the end of the world, we've done it before. DW's first car was a Chevette.