The world is going to get bigger

I don’t fly that much these days – maybe 10 flights a year. Yesterday I took one of my longer flights – from Minneapolis to San Francisco. On that flight I again thought about how the world is getting a bit bigger, and that it may get a lot bigger fairly soon.

That’s new. For most of my life the world got smaller. Air fare, especially as a percentage of average income, kept falling. Families spread out. My generation moved to take new jobs.

Air fares aren’t falling any more, and most people’s incomes aren’t rising much. When I consider increased costs of health insurance, my disposable income will be down this year – and I’ve been relatively fortunate.

On the other hand, air fare to Montreal (for example0 has more than doubled in the past nine months. The carriers reduced capacity, bought the competition, and now fly fewer but fuller planes at 2-3 times past fares.

Industry consolidation will continue to boost prices, but so will cap-and-trade carbon tax equivalents. There’s something much bigger coming though…

Energy security body calls for 'urgent' review of impact of oil shortages - Business – guardian

… Swedish academics unveiled their latest assessments of the numbers and came to even more gloomy assumptions. The study from Uppsala University entitled The Peak of the Oil Age estimated that by 2030 the world would be able to rely on only 75m barrels of oil a day, compared with the 105m forecast by the IEA.

Until relatively recently the agency was assuming the output figure would be as high as 120m and it still believes a peak of production could be reached in 2020, while Uppsala believes it might have already been reached…

I made my own “demand/supply peak light sweet” call in 2008 – in which I made wild ass claim that it would be apparent by 2015 that the demand/supply ratio for light sweet crude would cause prices to rise and crash and rise and crash their way to the $200/barrel mark (rise and crash because of secondary recessions, $200 because at that point serious conservation starts to align supply and demand).

Between some kind of carbon-tax-equivalent and “peak oil” of any form, air travel will at least double in cost over the next five years – even as profits continue to be squeezed.

That means a much bigger world to cross for the dispersed families of my generation. Maybe the next generation should stay closer to home base.

High speed rail, by the way, is looking pretty interesting.

Update 11/16/09: A follow-up article by The Guardian’s Monbiot: The one thing depleting faster than oil is the credibility of those measuring it - George Monbiot

Update 11/17/09: It occurs to me that a good measure of how real this stuff is would be to watch how very wealthy and smart people invest. I recall thatWarren Buffett recently bought some railways, and of course I'm not the only eccentric sort to make this connection ...