Oil hits $500/Barrel
Monday, March 31st, 2008At our house we (I) like to say, “why do today what you can do tomorrow”. No, not complacency but a practical sensibility toward hiding that list of to do’s for a rainier day. Essentially this is why we (Canadians) are simply putting off some dirty housekeeping (green and sustainable change) for a rainier day too.If you are looking for some solid logic for getting around to the job, read David Elfstrom’s article on preparing for the rainy day of $500/barrel for oil. David Elfstrom is an Engineer specializing in the field of Sustainability and among many other things, a volunteer (non-voting attendee) for the CaGBC LEED-H administrative committee. Canadian Green Building Council.
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How to prepare for oil reaching $500/barrel
It’s coming. Or rather, it’s not going to continue coming any more. I’m
referring to the declining availability of natural gas and oil while facing
increasing demand. Add the possibility of an international political event
and we’re primed for an energy price shock.
How well prepared you are for these events can make the difference between
financial success and failure in the next several years.
Resource production peak is a fact of geology and physics. If we just had
the slow decline in global resources to deal with, we could manage.
Unfortunately it’s never so simple. Taxes on nonrenewable carbon-based fuels
are also on the horizon, further adding to cost as the supply dips below
global demand. And political events in countries far away can have a
dramatic impact on everyone in the blink of an eye – maybe this week, this
year, next year. Like a rumbling volcano, we don’t know for certain when it
will blow, but it’s highly likely it will soon erupt. The risk is real and
quantifiable.
History repeats itself
In the early 1970’s U.S. domestic oil production peaked, and America’s
imports of oil started to rise. Soon after, political events occurred that
tightened international supply, causing an oil shock. The gasoline pumps
went dry and the price skyrocketed. The U.S. could not produce enough to
meet its own demand.
Once the 70’s oil shocks were over and energy prices dropped, it became
business as usual to create a North American infrastructure that ignores the
finite limits of fossil fuels and the vulnerability of our supply lines.
Today we are reaching global peak oil production and the threat of political
interruptions to the oil supply are at the highest since the 1970’s. North
America imports more oil from overseas than ever before.
Even in Canada, where there is a net surplus of oil nationally, many people
are surprised to learn that Ontario imports over half its oil from the world
market, and Quebec imports 90%. There is no pipeline from Alberta large
enough to supply the thirsty marketplace. Here in Ontario we are in a
vulnerable position relative to the Western provinces.
It’s not just about oil however. Domestic natural gas production is also
peaking. Because we can’t import any substantial amount of natural gas,
supply will decrease and price increase. Homeowners will be paying multiples
more for heating bills, and industry will compete with households over use
of the remaining supply. In 2007 the Canadian plastic industry began a
campaign promoting the economic benefits of using of natural gas to produce
plastics rather than burning gas for heat.
Individuals and businesses that are not prepared will be highly vulnerable
to the coming energy crisis. Here’s a sample of some possibilities to
protect yourself.
Buy a highly energy efficient home now
Don’t repeat the mistake of American auto manufacturers. Asian manufacturers
foresaw the market shift from gas guzzlers toward hybrid vehicles and highly
efficient cars. It takes a long time to turn a large business around, and
American automobile manufacturers are still ill prepared. It’s time to buy a
“hybrid home” now so that when the next energy shock occurs you won’t be
left holding the bag with an unsellable house.
A hybrid home, like a hybrid car, uses 50% or less energy than a home
built to the current building code. Hybrid homes also make use of simpler
solar thermal systems to provide free domestic hot water to the home, or at
the very least are “solar ready”, featuring a conduit running from the
basement to the roof to accommodate future solar thermal and solar electric
installations.
New homes built with an ENERGY STAR label should be your minimum choice.
A home with a LEED certification is better, and is just beginning to
come to Canada. A LEED Gold certified home is usually a hybrid home
with added environmental features such as healthy indoor air quality and
water conservation.
For buyers of existing homes, make sure you look for homes that have had
an ecoENERGY audit with an EnerGuide rating. An EnerGuide rating of 78
should be your minimum, or be prepared to spend money to increase it
through renovations. ENERGY STAR and R-2000 homes come in around 80,
and a hybrid home is typically an 84 on the EnerGuide scale. One or two
points on the EnerGuide scale can represent a big difference in the home’s
relative energy consumption.
Seek out townhomes, row homes, and triplexes in urban areas
Picture this: The price of oil triples again and gasoline reaches $5/L, with
spikes up to $7/L. Lineups at the pumps abound. This could happen within the
time span of several months. Overnight that subdivision with an hour or
longer commute into the city by highway becomes a liability as the cost of
commuting becomes very high, if there aren’t outright shortages of gasoline.
Many home buyers may not want to live in a green condo high-rise, but would still
consider affordable compact low-rise developments closer to the city. These
denser forms of housing cost less to heat, becoming more attractive to
purchasers in the face of doubling or tripling heating bills.
Anyone not already living in a green building will be left with an
unsellable home. The question now isn’t “can I afford to buy green?” it is
“can I afford not to?”
David Elfstrom is an engineer in Toronto, specializing in energy
efficient home design and HVAC system design with integrated solar technologies.
Email: david@elfstrom.com