Re: High fuel, I love it.

Posted by Jerry/MT on March 08, 2007 at 19:13:23 from (206.183.116.129):

In Reply to: High fuel, I love it. posted by IaGary on March 08, 2007 at 12:48:07:

Opinions are like belly buttons - everybody's got one!
Here's mine. All this economic globalization that we have experienced in the last several years has been made possible by CHEAP ENERGY PRICES.

When I was kid in Indiana, you hardly ever saw a piece of lettuce after September because it was produced way over in Florida or California, which to my way of thinking at that time may as well have been the moon. No steel workers wife could afford to pay what it would have cost to get a head of lettuce from Florida or California. Then along came the interstate highway system and with that, along with CHEAP FUEL, you coud get lettuce from the Imperial Valley year around at a reasonable price. But you couldn't get annual crops like apples in say July because they would have to be shipped from the Southern Hemisphere and that was too expensive and took too long. Disposable incomes rises and along comes high speed container ships that run on CHEAP FUEL( it takes a lot of energy to move those behemoths through the water at 35 knots!) and big cargo aircraft that run on CHEAP FUEL and now you can get apples in July from Chile for a reasonable price. Not only that, you can get apples from China to compete with American apples because of CHEAP FUEL (and cheap Chinese labor and no regulations).

I worked in the airplane industry for 34+ years. When I started in 1965, not everybody could afford to fly and so the relative number of avaiable seat miles flown yearly was small. But disposable income rose and airplane fuel efficiency rose and the cost per seat mile went down and traffic increased. Then the airlines were deregulated and airplane efficiency improved some more, and competition forced lower prices to where peole get on airplanes like thay used to ride the city bus. And by the way, CHEAP FUEL helped make that possible,too.

What do you think will happen when FUEL AIN'T CHEAP? Well, I think airplanes, which need an energy dense fuel will continue to use Jet A and the price of fuel will be reflected in the ticket price just like it is today. No more $39 one way fares, maybe $390 one way fares. Your fares will be based on the distance you fly so you fly further you pay more.
Chinese apples will cost $1.00/pound more than domestically produced apples because of shipping costs. Same with summer apples from Chile. Maybe the cost will get so high that the demand for summer aples will drop and it'll be like the old days, when you eat the last stored apple, there ain't no more til the next domestic apple harvest.
Imperial Valley lettuce will probably be reasonable because lettuce will be hauled on trains where ton mile costs are cheaper than trucks.
My point is that high energy costs will force more local production because the labor advantage in foreign countries won't be big enough to offset the transportation costs, (driven by high energy prices) to the big markets which are located right in the good ol' USA. Oh we may have to give up having two cars and a pickup, ATV's, RV's, trips to Timbuktu, etc, because we gotta' eat. Maybe we'll bring manufacturing back to this country to produce products for our domestic market because it costs too much to ship stuff from the Far East or where ever.

Just my opinion.

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