Yes, Virginia. There Really is an Urban Density Imperative.

“The imperative of increasing population density in major urban centres is real – but it’s not what you think”      – Ed

I’ve written dozens of blog posts on the benefits of places, like Toronto, putting policies in place that allow for and even encourage increased population density within it’s borders.

There is no question that it allows for more efficient use of existing infrastructure (sewers, transit, energy grid, potable water, gas lines, etc) and that it allows for more tax dollars to be squeezed out of every square foot of habitable space.  It also generally makes for a more “walkable” neighbourhood, a safer street and a lively, engaging environment.  It means less dependence on cars.  It allows neighbours and strangers alike to co-exist and even thrive in the same place, for the safety of both, are dependent upon the presence of the other.     There’s another tale that is rarely told.

Rarely because it doesn’t really matter if you tell the first and sell it well.  It’s a story about scarcity.  It’s a story about denial, about change, about eschewing what we know and love.  But it’s mostly a story about going local and liking it.  It’s about oil.

Oh my God.  I actually felt your eyes roll!  From way over here, I felt it.  What does oil have to do with good neighbourhoods?.  One thing that we are protecting ourselves from, when we talk about increasing population density, the need for high buildings and more condos than we ever imagined, is oil shock.

Whether or not you’ve given it any thought, oil is front and centre in our need to downscale our lives, shrink our neighbourhoods, and start sharing more than our parents and grand parents ever did.

Think back a few years to when the price of gas was only .85¢ per liter.  That was only about 2007, prior to the sub-prime mortgage melt down in the US and the economic contagion that spread around the world, affecting some more than others.  Since then, gasoline prices have risen steadily and today are sitting at $1.23 per litre.  That’s, what, a 44% increase in price in only a few years.  What else have you been consuming that has increased 44% in the same time frame?  I can think of nothing that I consume more or less daily that has increased so, in price.

The City knows what’s happening.  Toronto is preparing for oil shock by getting us in the mood for increasing density by selling us the first story about quality of life issues, friendly neighbours, greater physical fitness, lively streets, etc.  Who wouldn’t like all those benefits?  But know that your world is getting smaller, largely because, in a decade or two, you won’t be able to afford to go driving/flying all over the place with the same whimsical folly that you do now.

Everything you do from eating to getting to work.  From vacations to reading a book and enjoying a coffee at Starbucks is going to get a lot more expensive.  Making your world smaller is the only way you’re going to continue to enjoy a rich, rewarding life, unless of course, you’re rich.

Even getting rich, is going to get tougher as we move into the future.  Sure, as always, there will be people getting rich one way or another, but almost anyone who has ever gotten rich has done so by burning fossil fuels.  Burning oil is how America got rich – and Canada.  It’s how Britain built an empire.  It’s how China and India are building wealth now.

When we decide this was normal?

The oil companies would like you believe that there is an inexhaustible supply of oil in the ground and that they’ll be here for us when we need it extracted.  Ok, lets play that game.  Hands up everyone who believes there is an infinite amount of oil in the ground …. A few I see.  Ok.  I see some people wavering.  Good.  Anyone else?  No.  Ok.  If you put your hand up YOUR WRONG! Absolutely, frightfully wrong.  Even if the entire planet was made of oil it’s still finite and, for all intents and purposes, non-renewable.  At some point we’d burn the entire planet and be out of oil.

Of course the entire planet is not made of oil, only a tiny percentage of the planet’s makeup contains any oil at all.  Oil is finite.  Oil is the ONLY fuel that we’ve managed to find that is actually usable in our transportation-rich world that’s economically feasible.  Everything runs on it; trains, planes, automobiles, ships, the air force, the navy.  The army marches on it.  Mining, farming, forestry, tourism and manufacturing are utterly dependent on it.  Take away oil and the world grinds to a murderous halt.

It won’t happen overnight, but it’s happening as we speak.  We are now past our peak oil production days.  That is to say, no matter how hard we look or how deep we drill, the oil we’re finding isn’t keeping up with demand.  Our reserves have been depleting since 2006.  The only remedy to depletion is new discoveries and these have not kept up with depletion.

Of course lots of oil is still getting produced from places like the Canadian Tar Sands, the Gulf of Mexico, Alaska, but even those relatively new sources are not keeping up with global demand.  Believe me, the oil companies are out scouring the planet for more oil and they are coming up wanting.

Depleted Azeri Oilfield

Even the “big finds” that have been discovered like the Tupi oil field off the coast of Brazil are only a pale imitation of the original “big finds” like the Ghawar oil field of Saudi Arabia (1948).  Tupi is buried under 2,000 feet of ocean, 10,000 feet of rock and 6,000 feet of salt.  Even after you get to it, the estimated reserve is only 8B barrels.  Compare that with the original reserves of Ghawar of some 80B barrels.

Let’s use our imagination and say that somehow, the oil companies find enough oil to supply the global demand.  What oil they find will become more and more expensive for it’s in places that are more and more difficult to get to or extract from.  Getting a barrel of oil out of Saudi Arabia is far less expensive than getting a barrel out of the Tar Sands, for example.

Even if we find enough oil to offset depleting supplies and keep up with global demand, the price can only rise, since the new finds are more expensive.

“Long range scanners indicate curious anomolies Captain.”

Given that the cost of oil is going to go up (sometimes down, but relentlessly up) everything that is dependent upon oil – which is almost everything – is going to get more expensive.  Non-seasonal foods from distant lands – dependent upon trucks – will cost you more.  Coffee beans – transported by boat – will be more expensive.  Books printed in China and shipped to Canada will be more expensive.  The logic is unassailable.

Demand for oil will relentlessly drive up the cost of almost everything – except your wages.  Stretching your wages will be helped when you don’t drive to work, but walk.  Occupying 400 square feet of condo will cost less than occupying 800 square feet of East York bungalow.  Eating locally produced broccoli (possibly from a community garden) will cost less than imported broccoli.  Living locally will become not just a good thing to do, but necessary.  Occasionally, you’ll still be able to take a vacation in Bermuda, but it’s going to cost you dear.  The 45 minute plane ride to Montreal from Toronto will be replaced with a 4 or 5 hour electrified train excursion.    “Distance learning” will become the norm and those who can work from home will enjoy an advantage of those who must travel to an office.

Lets talk about wages for a paragraph or two.  Today’s low cost producers,  India, China and Indonesia (even Mexico to some degree) will begin to lose their advantage as oil prices, hence transportation costs, begin to rise in the coming decades, which will begin to offset their advantage as low cost producers.  Making things locally again may become advantageous when transportation costs remove off-shore advantages.  Interesting thought eh?

In the meanwhile, enjoy the first story of neighbourliness, fitness, quality of life, vibrancy, energy and reduced costs of living, new pedestrianism and acting locally, for if the rarely told story of oil shock doesn’t bother you, living local is still good.

 – Article courtesy of Ed Horner


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