The Livable Blog

The image above shows a short summary of the state of world shipping, in crisis and declining. And now as Charlie Smith discusses below, oil prices are again soaring "oil prices have only surpassed this level on an inflation-adjusted basis three times before: 1980, 1981, and 2008."

What a great time to blow billions on freeways while cutting things like chronic pain clinics, school music programs, and public transit!

But others are noticing that the the age of cheap oil is over. I have pasted a Guardian article about the US military's take on the near term prospects for oil supply and prices below as well.

Forget rear view mirrors, if Campbell does not have his head completely up his rear orifice the South Fraser Freeway will be delayed and then canceled.

Trade drives provincial policies, but is Gordon Campbell looking in rear-view mirror?
By Charlie Smith

[snip]

The B.C. Liberal government has tried to position our province to be the beneficiary of growing transoceanic trade.

Part of this strategy is the Gateway Program, which is an unprecedented, multibillion-dollar road-building exercise that includes a new Port Mann Bridge, a widening of Highway 1, and a South Fraser Perimeter Road.

Agricultural land is being sacrificed for pavement and to create space for containers coming from China.

Metro Vancouver has previously reported the Ministry of Transportation and Infrastructure secured approximately 110 hectares of agricultural land for the South Fraser Perimeter Road and the Golden Ears Bridge projects.

According to the theory of comparative advantage, we can rely on people in other parts of the world to grow our food because they're better at this than we are. We'll just trade for more of it as we need it.

[snip]

But all might not be as well as it seems, particularly if oil prices continue rising. The current price of US $85 per barrel is relatively high on an inflation-adjusted basis.

As this chart indicates, oil prices have only surpassed this level on an inflation-adjusted basis three times before: 1980, 1981, and 2008.

The inflationary period in the early 1980s triggered the worst economic slowdown since the Second World War.

Everyone knows what happened to the world economy in 2008. International trade plummeted as a result.

It could happen again.

I'm beginning to wonder if the B.C. Liberal government and its cheerleaders in the media are looking in the rear-view mirror--and not to the future--when they promote policies like the HST that blindly assume that more international trade is inevitable.

Follow Charlie Smith on Twitter at twitter.com/csmithstraight.

Full text at
http://www.straight.com/article-302419/vancouver/trade-drives-provincial-policies-gordon-campbell-looking-rearview-mirror

But don't worry, others are paid very well to worry for you:

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says
• Cost of crude oil is predicted to top $100 a barrel

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

It adds: "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply

So who thinks that blowing billions to expand container shipping capacity is a wise investment today?