The Downside of Ecomomic Growth

With all the talk these days around increasing the flow of money, what would happen if our banks really did start lending in a big way next week?

The stalled economic engine of our country would begin rolling again, we would see a surge in loans to the construction industry, increases in production and (hopefully) sales of autos, large and small manufacturing, people would be called back to work and everything would be great again.

Well... there is one not-so-small problem with that scenario.

For those who have been following the roller coaster ride in the energy industry, you already know how close our current supply and demand is. Since the global economy started to significantly slow last fall, we have reduced our global consumption of oil by over 3 million barrels per day (bpd), to about 83 million bpd. This is about 2.4 million bpd less than in 2008 and the lowest level since 2004. A real reduction, but nothing like the collapse in demand we have been hearing about. On top of that the work to secure both additional sources of oil and investment in alternatives has almost come to a standstill. Billions of dollars of new projects have been delayed or cancelled completely and the oil services industry, those companies actually doing the exploration and drilling, has cut back almost 50% since last year. According to the Rig Count industry website who follows the changing number of active oil and natural gas rigs:

The year-over-year oil exploration in the US is down 42.3 percent. Gas exploration is down 48.0 percent.

So if our economy begins to ramp up again it will not take long for our demand to outpace our supply. When that happens prices go up. Oil has already risen from a low of $35 per barrel to the low $50's while demand has been low. This cycle of economic activity causing higher energy prices is a relationship we have not seen in the past.

We simply do not have the option to just re-start our economy in the same fashion we have been doing for the past 100 years. We are being forced to re-structure our economy to be more resilient to these supply constraints while increasing our local self-sufficiency. This will result in reducing our dependence on massive amounts of energy from faraway countries in order to bring us our food, to heat our homes, and to manufacture the items we truly need for a high standard of living.

Eight Steps to a Bountiful Vegetable Garden

You’ve decided that you want a vegetable garden to lower your grocery bills. But, where do you start? There are eight essential steps to successful vegetable gardening.

Step 1. Pick an appropriate area for your garden. When you choose your site, consider these important factors:

- Sunlight. Most vegetables grow best in full sunlight. Choose an area that gets at least six hours of sunlight a day.

- Soil. The best soil for growing vegetables is a dark soil, rich in nutrients, that has good drainage but will still hold sufficient moisture for the plants. Don’t plant your garden too close to trees and shrubs whose roots will steal nutrients and water from the vegetables.

- Water. Place your garden near your water supply — faucets that can be reached by no more than two hose lengths.

Step 2. Create your site plan. Make a plan before you purchase your seeds or plants. It will help you decide how many you need to buy to best fit the available space. Base your plan on the vegetables that your family likes, how much work you want to do on the garden and how much room there is in the garden. Create a quick sketch to follow while you are planting.

Step 3. Buy your plants and/or seeds. Be sure that the plants you get will grow well in the area where you live. Buy young, healthy plants that are not limp or straggly or that have been over-crowded in pots. On seeds, look at the date stamp on the package to make sure they are not too old.

Step 4. Prepare your soil for planting. This is one of the most important things to do for a successful garden. To prepare the soil, add a layer of compost or fertilizer over the top of the soil. Then till (or spade) this layer into the existing soil. Rake the soil into rows or mounds, depending on the type of vegetables you’ll be planting.

Step 5. Sow your seeds. If some of your vegetables will be planted from seeds, plant them first. Sometimes seeds are started indoors or in a greenouse to give them a good start. When seedlings appear, thin them to the distances recommended on the seed packets.

Step 6. Plant your plants. Plant young plants following the directions given by the plant nursery where you purchased them. Planting times can be tricky. You want to plant early, but not so early as to stunt their growth in cooler weather. Some plants will require netting or wire forms for best results.

Step 7. Care for your growing plants. Once your vegetables are all planted, you need to care for them by watering, weeding, pruning, and protecting them from insects.

Step 8. Harvest your garden. Different vegetables are harvested at different times. Vegetables should be carefully watched and picked at their peak. You may eat them immediately after harvesting or you can freeze or can them for later use.

The Future of the Auto Industry

As the administration looks for ways to help out the failing auto industry, I agree with Mr. Wipple quoted below, that this is the time to take an "out-of-the-box" look at the situation to see what makes the most sense as we move forward.

- Zev

The Peak Oil Crisis: Seize the Moment

by Tom Whipple

Earlier this week the Obama administration, now the effective owner of the U.S. automobile industry, put Detroit on notice that it has 30-60 days to come up with a believable plan to "restructure" itself or it goes into bankruptcy. This action makes it a good time to step back and ponder just where America's industrial base is going. With $2 gasoline and some incentives, recession-wracked American consumers seem willing and able to absorb another 8 or 9 million new gasoline and diesel powered cars and trucks this year --- but does this make any sense? The "restructuring" plan seems to be one of trimming overhead, shutting some factories, abrogating labor agreements, and stiffing shareholders, bondholders and debtors to the point where the manufacturers might be able to limp along with a minimal infusion of taxpayer dollars. This plan might be fine except for one glaring fallacy. In the next few years, oil prices are going up so high that ownership and use of the automobiles and trucks in their present form will be a totally uneconomic proposition. How many of the current flavor of cars and trucks is Detroit going to sell with gasoline at $10 a gallon or higher? full story

One Million Gardens

Given that the first days of Spring have officially arrived, I wanted to let you know about a an exciting national campaign to help stimulate the national move towards growing more of our food closer to home. As the economic challenges continue to grow, more and more Americans are considering getting involved in local food production. A spokesperson from the National Gardening Association recently mention that they expect Americans to plant up to 7,000,000 new food gardens this year.

As a way to help to accelerate this trend, just last month, the "One Million Gardens" campaign was launched.

The campaign's simple goal is:

To identify, encourage, and document the creation of at least 1,000,000 food gardens throughout the U.S. in 2009.

It is a 21st Century version of the Victory Garden campaign the Federal Government encouraged during World War 2 when over 20,000,000 gardens were planted as part of the War effort and associated rationing.

Please take a look at the site, add your garden to the list, and let others know about this campaign. It is also our hope that we can show the Obama administration the growing numbers of people involved in this work and help shift national policies to help encourage the production of more food closer to home.

Let's Get Growing!!!!!

While We Were Sleeping

As the current economic realities continue to unfold, it is critically important that Americans understand that what we are experiencing is a global interrelated challenge.

Over the past year or so, while America slept, China went on a shopping spree. According to the March 17th issue of the Washington Post,

Even as global financial flows have slowed sharply overall, China has dramatically stepped up its outbound investment. In 2008, its overseas mergers and acquisitions were worth $52.1 billion -- a record, according to the research firm Dealogic. In January and February of this year, Chinese companies invested $16.3 billion abroad, meaning that if the pace holds, the total for 2009 could be nearly double last year's.

On Feb. 12, China's state-owned metals giant Chinalco signed a $19.5 billion deal with Australia's Rio Tinto that will eventually double its stake in the world's second-largest mining company.

China is now actively in the process of insuring their future by buying up mineral and oils rights all across the planet. They are moving down the path of material abundance which we have been modeling for the past 30 years; and very little we say or do is going to change this anytime soon. The challenge for us is that with 1.3 billion people in China if they want to play the consumption game, that will put unimaginable stress on our ability to do the same.

Americans will be faced with the necessity of a different sort of future when it comes to energy. As these massive Asian countries lock up resources for their future, we will be forced to either fight them... which is not very realistic, or seriously begin to re-organize our energy demands so we are not as effected by these huge global shifts in control of resources.

If we can be successful in building the systems to provide for our needs much closer to home, we can help assure a less stressful transition from an oil dependent society to one with built-in resilience from the coming environmental and financial shocks.

For cities and states who enact legislation to encourage these changes, they will find themselves in a far better position than those who doggedly hold to the fading dream of ever growing economies full of more and more stuff.

Huge Tracks of Land

It was not until 2010 that the world really began to aggressively deal with its energy issues.

As it began to truly sink in that we were approaching an end to the "Age of Fossil Fuels" and moving into the beginning of the "Age of Renewables," individuals, groups, businesses and eventually governments, significantly ramped up their renewable energy planning.

Gazing over the acres and acres of shiny solar panels in the valley below, it was easy to see why it made sense to capture the energy that shines down upon this land. It was an added benefit that the landowners made the construction conditional on their ability to interplant shade-loving coffee between the long lines of sleek panels. Not a bad place for a renewable energy power plant.

It is just too bad we did not start all this a few years sooner...

Shining Examples of Sustainable Development

Americans are searching for a clear picture of what the future will look like given the tremendous force that is about to be exerted by the Obama Stimulus Package. This spending is not only a stimulus package but an effort to change economic and industrial direction for our nation from one that we know is depleting to one that we hope is sustainable. Like when a rock hits a wall it changes direction, so our economy has "hit the wall" and is certainly changing direction.

So what could this new model look like? How can we use less energy and still live a more fulfilling life? That is the question many Americans are asking and when a writer, Neshama Abraham wrote a little piece exploring this and looking at Oshara Village in Santa Fe New Mexico as a model, the internet picked up on it and made it the top pick for the Google search "Obama Future Today"

Oshara Village has super energy efficiency and mixed-use design that will provide homes, jobs and schools in walking distance. The Plaza and the first 40 homes are complete and a new line of Gold Certified, more cost efficient homes have emerged as a result of this economic change in direction. The first 20 families, the Oshara Pioneers are quickly becoming a community and more are moving in every month. Google "Obama Future Today" and see what the future might look like.