Oil Supply Uncertainty

The rising demand for and declining supply of oil will likely have tremendous impacts on land use and transportation planning efforts in the Portland region for decades to come.

This will be an issue of ongoing concern to Metro as we work with the public, businesses and other governments to shape regional transportation planning and growth management policies in the years ahead. Increasing volatility in oil prices could have serious effects on every industry, from health care to agriculture to high technology, and it may impact citizens¹ commuting options, home heating sources, and other uses of oil as well. How we as a region respond through our transportation and land use policies to the growing uncertainty in the supply and cost of oil will have a direct impact on our economy and quality of life for many years to come.

At my request, Metro policy associate Daniel Lerch developed a white paper outlining some of the policy challenges and opportunities the region faces if we wish to maintain our quality of life in the face of a more unstable and more expensive supply of oil. The white paper discusses how Metro may respond to future uncertainty in the supply and price of oil. It identifies oil supply uncertainty as a timely risk management issue and establishes a basis for the Metro Council to consider possible policy and program responses.

It is clear that we will need to be prepare for uncertainty in the supply of oil in our transportation and land use planning decisions.


13 responses to “Oil Supply Uncertainty”

  1. Rex,
    This is an example of why Metro has no money for planning UGB expanded areas and has to ceate a new fee to fund it.

    So many choices on how to spend money leave expansion as the stepchild task.

  2. The bigger issue, in my opinion, is how urban regions can convert to clean, emission and CO2 free technology. It is not just the consumption of fossil fuels in transportation. It is also the consumption of fossil fuels (mainly natural gas) that have become part of the trend toward service industries and professions–the “upward” in upward mobility, basic to the American dream.
    In the Silicon Valley or San Francisco there is relatively little energy used in office buildings. The natural climate is relatively moderate. But the exact opposite is true in Minneapolis, Chicago, New York, Detroit, etc. where winters are freezing cold and summers are sweaty. And it is true nearly anywhere in the Southern US, where natural gas generated elctricity is used for air conditioning. Large manufacturing facilities are also to blame for energy wastage (although heat may be derived from the processes themselves) but as more people work in offices, as opposed to outdoors, energy demand will go way up. Canada should consider itself forunate that it has large gas reserves (in Alberta) or they would be paying dearly for heat every winter.

    Energy prices tend to affect each other. Heating oil, distilled from crude, competes with natural gas for new installations, so when one goes up the other follows. But if crude itself goes up, heating oil also goes up, allowing also for a rise in natural gas prices. It’s called the energy complex.

    With even Pres. Bush calling for alternative fuels, I was disappointed that he said nothing about alternative energy for general purposes. The Great Lakes region has enormous potential for windpower and the volume of projects (in two countries) would sustain a specific DOE program to make that technology affordable. This could also support electric transporation. What has been holding these technologies back is, in part, the lack of volume demand. An initiative in a highly populated region would move these beyond the tipping point.

    As much as I hope that transit oriented development will continue–and become affordable–I don’t think Americans will abandon the personal automobile. We will find other ways to power them, such as Bush is attempting to do. So a realistic plan from METRO would continue to solve conventional traffic issues–stemming from personal auto use— but also look to cost-effective solutions for mass transit plus land use goals that will enable all income levels who desire to, to live in compact urban communities.

    By the way, Chris, China now has a working mag-lev train. Maybe you could post this for comments: http://www.msnbc.msn.com/id/12578447/

    I have been saying since I began posting here that technology would begin rapid advances. Therefore when we are projecting expensive systems don’t be so sure that they are going to remain state of the art for more than a decade, at best.

  3. Actually, some of the computer and software companies in Silicon Valley, Seattle, and Portland can house thousands and thousands of computers. Averaging between 100-1kw apiece, some of the larger companies (Microsoft, Google, Yahoo, server farms, etc) can use several Megawatts of electricity per office. Many have more than one office.

    They do, in fact, consumer a HUGE amount of electricity. Look at your own home: do you have a computer? Figure on a desktop using around 300-500 watts of electricity. Monitor? Another 500-600 watts. Flat screen? between 80-130 watts.

    Laptops are FAR more efficient when recharging & running off the plug.

    Now multiply this by every household out there… so much for energy savings from more efficient refigerators.

  4. Justin.

    I guess I should said “little energy used toward physical comfort at work.” (But then what about all the Californians’ hot tubs, 72″ Plasma TV’s, surround sound theatre systems, etc?) You are right to point out that high tech industries pose an energy consumption problem, too. There scarcely ever is a simple answer in any political/economic planning but rather a host of trade-offs that need to be examined. Unfortunately political activists, from both major parties, would like to convince us that somewhere, namely in their respective agenda, there is an easy answer. Oregonians’ independent political streak will mitigate some of these simplistic viewpoints.

    Peak Oil, if indeed it does happen, will hopefully spur us to new solutions. I hope that Oregon with its diverse energy sources can, once again, provide some leadership.

  5. The issue is that energy will cost a lot more and since our current lifestyles are so energy intensive, they will change. The market will be the major means of change but act much too slowly in affecting urban form. Houses, shopping malls, roads are 50 year investments; they can’t move with the winds of fashion. That’s why governments must take this trend into account and plan for communities that use less energy by design.

    Even if some new wonder fuel is developed, less energy use has the benefits of reducing greenhouse gases and requires compact, mixed use, walkable design to lower energy use.

    For example, New Yorkers use half as much energy per capita as us here in the Northwest, mainly because of high transit use and compact development in NY city.

    As for how this will be used in the New Look and the RTP update, we have convened a cross discipline work group in the planning department at Metro to recommend how to account for this in our modeling for both land use and transportation. We are also taking the report to MTAC, MPAC, TPAC, JPACT for discussion and comment. I see it as a major input to both efforts but don’t know what form this input will eventually take. it will depend on what sort of traction it gets.

    BTW, on June 2, Illahee is hosting an all day symposium on Oil, Water and Oregon at the Oregon Convention Center. Panels will discuss responses in the area of transportation, agriculture, economy, energy and community. http://www.illahee.org/symposium

  6. That’s why governments must take this trend into account and plan for communities that use less energy by design.

    I’m sorry, but you aren’t that smart. You can’t accurately project 50 years out what the demands for housing, transportation, jobs or energy will be in Portland Oregon. Or determine what choices now would result in lower energy consumption then.

    New Yorkers use half as much energy per capita as us here in the Northwest, .

    That does not appear to be true – at least if one looks at New York compared to Oregon in 2004. Here is a link: CFED Per Capita Energy comparison for 2004

    mainly because of high transit use and compact development in NY city

    And that explanation appears to be purely speculative. It certainly is unlikely to explain why Oregon uses more energy per capita than Arizona or California or Florida. Or Vermont and New Hampshire. I don’t know how big a part urban design plays in energy consumption, but I would be it is not close to determinative.

    I support ways to look for reduction in reliance on the automobile. But I don’t think you can start trying to fine tune the RTP around 50 year trends. You need to look at the immediate – 5 to 10 year – impacts. By the time you get 20 years out you are operating more on your assumptions/biases/hopes rather than any hard data or real understanding of the impacts of decisions. The promise of investment today to prevent congestion tommorrow is almost entirely a false promise.

    You ought to plan for the city you want now, what makes sense to reduce energy consumption now and let future elected officials worry about reducing future energy consumption as those decisions are presented. The plans to expand the freeway system at the urban edge (I5, Sunrise, Sunset, 217, I5 south, I205) may well model to reduce congestion and therefore energy consumption in 50 years. And, like most of the traffic modeling of the last 50 years, it will be way off the mark when people don’t act the way the engineers predicted they would. The transit models for 20 years from now probably aren’t much better.

  7. How governments reduce energy demand is very complex. It is best when a short “payback time” is ascertained for any given improvement. Things like expensive MAX trains never are paid back, except in arguable community benefits, since they are forever subsidized. Government pushed energy codes in buildings do have a payback time; e.g. insulation requirements add cost but do save energy over the course of decades, but some people might rather have the money upfront and not be forced to make that investment (plus many, many others). Some government projects are total war on human society.

    If it were true that New Yorkers use half the energy that Portlanders do you would not see a spectacular spike in natural gas prices when the cold wave hits them. But I think it is true that they do less driving: I understand that a higher percentage of BigApple.com residents don’t own cars. ( Now if those redneck, rural Oregonians, Montanans, Idahoans… aw heck! everyone to the East of the Cascades, South of Eugene and North of Nanaimo and east of Pittsburgh, PA would just get a life! Trade in yer Dodge Ram for 2GB RAM, already!)

    My point is I just don’t know how far we can go with the “creative class” ideal and the concomitant smart growth plans. Not everyone makes their living at a desk and we ought to pare those “jobs” down whenever possible! We already have a bloated service sector, way out of proportion to the overall value being created. That is why any American labor that is replaceable is being replaced. Those businesses which sell high priced services have to rely on customers coming along who have lots of discretionary cash! And where did they get it? 1. Buying import products 2. Hiring illegal labor 3. The foolish generosity of Alan Greenspan and his cash machine 4. Selling out to foreign investors. Yup, there are lots of ways to create “wealth” in this country, for some–few of them true.

    So who knows what Americans will have to do to sustain their lifestyle in the future–especially those in the outlying areas. We who live in seaports can have relative security as long as there is a brisk export-import trade that must come through our burg. None of that is witten in stone. What if the rest of the country decides for protectionism? Think Amreicans will always supply the brainpower for the rest of the world? Think we can compete aagainst, well educated-but hungrier-Indians and Chinese? I doubt it. Underlying any direction a society takes will always be individual decisions for economic survival.

  8. Look at your own home: do you have a computer? Figure on a desktop using around 300-500 watts of electricity. Monitor? Another 500-600 watts.


    I wholeheartedly agree with you that computers are a huge waste of energy, but I think your numbers are a bit distored–especially for monitors. My old Samsung 900NF (a 19″ 60lb relic from 2003) draws a whole 110 watts. And while some gaming PCs are capable of using 300-500 watts, in reality most use between 100 and 200 during normal use.

    Here’s a link with a few power numbers for various desktops.

    As for me, I’ll stick with my Mac Mini (25-40 watts).

  9. here is the link on NY vs Pacific NW energy use:


    Sightline is NW Environment Watch’s new name. The conclusion about energy use and urban form is theirs. Sorry for not including the link.

    Cities have been planned for millenium, some well, some poorly. While we can’t predict the future, human beings haven’t changed all that much in 10,000 years. They still need to eat, have two feet to walk, a mouth to talk to people they meet, a need to socialize, a desire to live in security, to raise their families where it is safe and clean… No crystal ball is needed to figure out how to meet these needs, nor how to create lower energy use communities. For example, we exchanged houses with a Dutch family. Their home was made of concrete, tile roof, steel framed windows, and part of an infill project where they all rode bikes to work and school. They could afford the house built so solidly because the government discounts mortgages on 100 year cycles and mandates fireproof, energy efficient buildings in exchange. They could walk and bike because government planned their city to favor walking and biking.

    the NW Power Planning Council developed whole new ways of looking at electrical energy when the WPPS fiasco went down that relied on least cost energy production and created huge supplies through conservation. A similar approach could work in transportation.

    To insist that we be philosopher-prophets to talk about building human scale communities is nihilist thinking and not very useful. Why not join the apopcalyptical fanatics that eschew planning and conservation because the world will end soon. It’s foretold!

  10. I would like to echo the link between urbanization and energy consumption. The Sightline (Northwest Environment Watch) graph referenced by Rex shows highway fuel consumption and non-industrial electric consumption. Another way to understand this link is through residential (as opposed to industrial/commercial) energy consumption.

    I recently looked at some data gathered by the DOE’s Energy Information Administration on per capita residential energy consumption (i.e. factoring out industrial/commercial uses). A relationship seems to exist between urbanization and energy consumption. The states with higher residential energy consumption per capita were more rural (including North Dakota, Nebraska, Tennessee, West Virginia, Indiana and Alabama) and the states with lower residential energy consumption per capita were more urban (including California, New York, Arizona, and New Jersey). Oregon was just about average.

    Of course, other variables might also explain the consumption differential including average house size, family size, income levels, etc. Climate, however, seems a remarkably independent variable.

  11. highway fuel consumption and non-industrial electric consumption.

    Apparently not counting the primary heating fuels in the Northeast which are natural gas and fuel oil while including residential electricity which is often used to heat homes in the Northwest. I am sure there is an explanation for those choices. But I am not sure how you conclude the difference is related to compact development and use of transit.

    To insist that we be philosopher-prophets to talk about building human scale communities is nihilist thinking and not very useful. Why not join the apopcalyptical fanatics that eschew planning and conservation because the world will end soon. It’s foretold!

    Or not. In any case the problem is that the philospher-poets who think they can fine tune their vision for Portland 50 years from now. We can see the results of those past attempts in the stubs off the Marquam and Fremont Bridges for the projected freeways we were going to need.

    The new future vision is a new bridge accross the Columbia to handle all the traffic from Vancouver – with light rail to make it politically acceptable. A wider I5 south so that people can commute to Salem from Portland and vice versa. A wider I205 to handle the overflow from the new I5. The list goes on of “energy saving” visions for Portland in 50 years.

    All in the name of reducing congestion and saving energy in the distant future. At the same time immediate needs to fix the Sellwood Bridge without and “energy savings” four lanes, make the Morrison Bridge something other than a freeway entrance, provide more south/north connectors in Washington County and provide a Greenway for Damascus will all be put on hold.

    There are plenty of good reasons right now to build compact, livable communities. There are plenty of reasons for creating a flexible transportation system with multiple options. But projecting theoretical energy prices 50 years from now as a major planning factor is foolish and likely to distort the choices we make in ways that serve no purpose. They will be like those bridge stubs – memorials to arrogance.

  12. Just read in the paper today how a small yoga studio in the Pearl has roughly a $700 a month heating bill. For a 2600 sq foot space. If you want to talk about energy costs, this is a great example of inefficiency that will likely put a lot of businesses out cold.

    Which is a really good reason why the state gives out tax breaks to encourage people and businesses to invest in more efficient buildings – so they don’t need to use as many resources to heat/cool/light a space. This will pay off in the future when the investments have been made, and the prices skyrocket.

    Interesting point about the indoor shopping malls – they are a fool’s paradise. So much energy wasted in the ‘public areas’ – that serve no function. If you look at the main street shopping areas & downtown in the metro area, their equivalent are open, public streets. That require 0 heating or cooling energy. Guess which model will last?

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