Great summary on the gas situation

From a snarky penguin say hi to: Badtux


Here's a sampling of a comment from his blog:

Well, Yossi, those are not U.S. gallons, not Imperial gallons, so they're smaller than the gallons you may be familiar with. But anyhow, the deal is that while gasoline prices have been higher in some places for quite some time, that's because of road taxes. You may have been paying $5 a gallon in France ten years ago, but $4 of that was taxes to discourage people from driving. French farmers didn't pay that for fuel to operate their farm machinery. French railroads didn't pay that for fuel to operate their diesel locomotives. French shipping companies didn't pay that for fuel to operate their ships. French airlines didn't pay that for fuel to operate their aircraft.

But U.S. road taxes on fuel are minimal -- they haven't been raised in over a decade (thus why our roads are falling apart). So what you see is what *everybody* pays -- railroads, shippers, airline companies, everybody. The repercussions are going to reverberate through the economy. There are already truckers who are walking away from their trucks because Wal-mart won't pay them enough money to cover the fuel to haul their shit to Wal-mart so they can't pay the payment on their trucks and so they walk away and let it get repo'ed by the lenders because that's all they can do. The remains of the U.S. railroad network are already overtaxed as truck traffic shifts to rail (steel-on-steel has much less friction than rubber-on-concrete and diesel-electric power plants are extremely efficient). But our rail network was built when the U.S. had 1/3rd of the population that it has now. There is no way that it can carry everything needed to sustain technological civilization without significant infrastructure investments that are not being made.

The next problem, as was pointed out by distributorcap, is going to be *food*. The migrant workers who follow the harvests from north to south over the course of the year need some way to do that. Right now they own crappy old cars that also serve as their homes in far too many cases. But if they can't get gasoline for their cars, they can't get to where they need to be to do the harvesting. Then there's the farm equipment itself, which burns fuel. And the harvest gets carried to the processing plant via, for the most part, gasoline-powered trucks -- during citrus harvesting season locally, it's pretty interesting watching these stake-side trucks hauling down the road full of lemons or oranges or whatever to the nearest processing plant or distribution center. And there's fertilizer. Fertilizer is basically a way of turning oil into food. It's going to get significantly more expensive now. And people are going to start starving all around the world.

Then there's the impending national bankruptcy of the United States, part of which is related to these fuel prices, which will render the U.S. incapable of importing oil at all. When North Korea lost access to fertilizer and fuel for their farm machinery, their food production dropped by TWO THIRDS. If U.S. food production dropped by 2/3rds, there would be widespread starvation around the world and a whole lot of hunger within the United States itself. Ironically, the people most likely to be fed are those who are most spat upon today -- the manual laborers of America, whose ranks will swell as muscle power replaces oil. 

More later on the repercussions. Let's just say that the collapse of the American Empire will make the collapse of the Weimar Republic look like tapioca pudding insofar as its effect upon the world goes. Germany in 1933 did not have the ability to project forces worldwide in an attempt to seize at gunpoint resources needed to maintain its economy, and Germany in 1933 didn't have nuclear weapons. The U.S. in 2010 under President McCain will have both of those... meaning, if major U.S. cities don't end up glowing in the dark, I'm a penguin.

- Badtux the Pessimist Penguin

Couldn't have written a better summary myself - Demeur