What Does the End of Cheap Oil Mean to our Urban Future?

Commentary, Environment, Owen McShane

One of the most common topics on blog sites and newsgroups here in New Zealand and around the world is “What does the end of cheap oil mean to the future of our cities?”

As usual, those who combine a yearning for catastrophe with a hatred of both the automobile and the suburban lifestyle as detailed by urban pundit and author James Kunstler have leapt to their own self-evident conclusion. The Kunstler Katastrophists are convinced the suburbs are no longer viable and will be abandoned and left to decay into extensive ghost towns, home only to vermin and weeds.

The millions of people who inhabit the metropolitan areas of Los Angeles, Houston, Toronto and even Auckland and Christchurch will pull up stakes and surge into downtown neighbourhoods where they will take up residence in high-rise slabs from which they will be able to walk and cycle to work – or, of course, catch a bus or train.

These Kunstler Katastrophists presume that in a few years we can completely rebuild our cities as replicas of the 19th century cities people like Dickens wrote about with such great affection. Here is Kunstler in full “optimistic” flight on his blog:

The US economy is crumbling because the way we conduct the activities of daily life is insane relative to our circumstances. We’ve spent sixty years ramping up a suburban living arrangement that has suddenly entered a state of failure, and all its accessories and furnishings are failing in concert. The far-flung McHouse tracts are becoming both useless and worthless in the face of gasoline prices that will never be cheap again. The strip malls and office “parks” are following the residential real estate off a cliff. The retail tenants of all those places are hemorrhaging customers who have maxed out every last credit card. The lack of business is now leading to substantial layoffs. The airline industry is dying and will probably cease to exist in its familiar form in 24 months. The trucking industry is dying, threatening the entire just-in-time distribution system of things that even people with little money to spend still need, like food. (http://jameshowardkunstler.typepad.com/)

All this because U.S. gas prices may soon reach $5/gallon. Mr. Kunstler does not seem to realize that we New Zealanders, like many other people round the world, have been living with $5/gallon gas for years and have even survived $10/gallon gas for close on two years. Yet, Kunstler and many like-minded catastrophists state with total confidence that once gas hits $10/gallon, all Americans will simply stop driving – and start rebuilding their cities.

Fortunately, the simple sums suggest otherwise. Look up the population of your nearest city. Look up the housing replacement rate and figure out how long it will take to transform present-day Seattle or Auckland into a remake of 19th century London. Then think about the cost of all the new buildings and infrastructure and the lost asset value of all those abandoned suburbs.

Many of us believe that long before anyone has to consider such a drastic reshaping of our built environment, new technologies and some minor behavioural shifts will make such disruption unnecessary.

The alarmists respond that we do not have the time.

However, we can develop new technologies and produce new products at high speed if we have to. Consider the rapid development of technology during WWII – jet engines, radar, V2s, computing and much more. By the end of WWII, it took only five days to build a Liberty Ship in the U.S. dockyards. When I first went on the Internet in 1994, there were only 70,000 of us in the club. Now there are over 1.6 billion.

Of course, we have the time. After decades of paying about $5/gallon for our gas, the New Zealand urban landscape looks much like America’s, although the average vehicle size may be somewhat smaller.

Now that we are paying $10/gallon for gas, sales of small, more efficient cars are booming and a few more people are cycling to work, carpooling or taking public transport. Nevertheless, hardly anyone except our local Katastrophists is talking about giving up cars altogether or proposing that we rebuild our cities within the constraints of extremist smart growth policy which prohibits urban development outside “urban growth boundaries,” while aggressively increasing neighbourhood population densities and mass transit.

The most obvious change in behaviour is a boom in drive-away theft from gas stations. Barrier arms or similar hardware will soon put a stop to this.

Our Densities are Higher and Our Uses are more Mixed than in the United States

Since the 1970s, New Zealand has had “enabling” urban planning rules that have allowed mixes of high-, medium- and low-density housing and mixed uses of retail, etc. Lots have ranged in size, but there would hardly be any suburbs built exclusively for single-family homes on one-acre lots. Consequently, Auckland’s density per square mile is about double that of most U.S. cities of similar age and size. However, we are already “densified” and further density increases are strongly resisted, because curbside parking is already in short supply and inner-city districts are noticing the increased congestion, noise and loss of amenity.

One effect of $10/gallon gas is that public transport prices are also rising steeply, and councils are raising taxes to keep up with the necessary subsidies. Some people seem to think that public transportation runs on fairy dust.

Our car ownership is about the same as in the United States; we drive somewhat shorter distances on average but generally spend more time driving up and down hills.

Of course, we are now complaining about the price of gasoline. But, the United States need hardly fear any massive revolution while their gas remains at only half the price of ours.

U.S. consumers are reacting to a dramatic change in price. However, many cyclists are still prepared to pay more for their litre of bottled water than they are prepared to pay for a litre of gas.

A Force for Decentralization

Americans are responding to this change in price by reducing their mileage. (Americans drove 11-billion fewer miles in March 2008 than in March 2007.) Significantly, the most dramatic reductions are taking place in the rural areas. My own experience suggests this is because the reductions are much easier to achieve in rural life. We tend to co-operate when it comes to long trips, we can more freely plan our times of day and we spend no time at traffic lights, in gridlock or looking for parking spaces. When gas prices are high, such waste is infuriating.

Hence, while none of us can be sure about future human behaviour, my research and my experience suggest that high gas prices are a force for decentralization. Kunstler is sure we shall all rush to the city centre. Some people will, of course, but they will be watching many households moving in the opposite direction.

Freeman Dyson’s book The Sun, the Genome and the Internet identifies many present and future forces for decentralization. My current position is that high gas prices are more likely to decentralize more people than to centralize them. However, no human behaviour is uniform. Some people will go downtown and some – probably more – will go to rural centres. Many will go to more remote locations for “the sea change, the tree change and the ski change.”

Some people are convinced that this out-migration will be strongly resisted by the existing folk and even more so by people like me who will want to protect our piece of paradise. Not so – provided the planners do not force us all to crowd into high-density settlements with no room to swing a cat or grow our vegetables. And they will probably try.

When we moved to New Zealand’s Northland area 11 years ago, there were few people in the area and services were basic. Now we have a French restaurant, an Italian bread shop, a bundle of local newspapers, excellent butchers and delicatessens, the school rolls are growing and the medical services are better and nearer and so on.

Most New Zealanders of my generation grew up in the country, and we are returning to our roots. The media like to make much of a few hopeless cases who want the cows surgically silenced from mooing and so on, but I have never had any problems of that kind. Frankly, we are the ones who are driving many of the new rural crops such as olives, wine and truffles as well as the new tourism establishments and the like.

The Iron Horse will Prevail

For most of human history, people have had access to private point-to-point transportation using horses, camels, mules, asses, llamas or whatever. Christ rode into Jerusalem on the equivalent of a Volkswagen. In the 19th century, trains and trams allowed the development of far-flung cities from which large numbers of people could get into the central city for work. (The Manhattan model). The problem was that the horses that dominated short urban trips caused dreadful air, water and soil pollution, not to mention the stench at a gridlocked New York intersection in mid-summer.

The car was a miracle. It eliminated the pollution and released huge amounts of food for human consumption. In 1910, 40 per cent of the grain grown in the United States went to feed horses. This “extra” grain fed the population explosion that followed.

Therefore, the car was the real Iron Horse – not the train.

Modern trains are at a higher level of technology than were 19th century trains, but their new technologies only increase their speed and reduce their pollution. They do not overcome the fact that trains cannot provide the flexibility of rubber-on-road transport of buses, cars and taxis – or indeed, of the family horse.

Anyway, the rubber-on-road system is about to go through a development phase that will leave the train in (on) its tracks or stuck at the station.

The Next Generation of Cars will be a Computer with Four Wheels

Many people in many research centres are working on new technologies that will mean you will be able to drive your car to the highway where it will link to a position over an underground cable that will guide the car. You will be able to take your hands off the wheel, read and even use your cell phone. The same cable may use an induction system to supply power to your electric drive system. (You will, of course, charge your electric car in your garage overnight.)

Then, when you get near your destination, you will put your hands back on the wheel, leave the highway, go back on the street and complete the trip. If there is no parking, you will get out of the car and tell it to go park itself and it will. When you leave work, you will phone your car to tell it to pick you up and it will.

This is what we mean when we say the train is 19th century technology – it is stuck and cannot make the leap into the 21st century.

No one can be sure this total package will prevail, but there are so many options being developed that cars will certainly leap to new levels of efficiency and effectiveness over the next few years. If this seems like science fiction, imagine convincing your great-grandparents of the reality of modern desktop computers and the power of the Internet.

Behavioural Change

There will be some behavioural changes at the margins. People who are tired of congestion may make their move to the regional centres earlier than they might have otherwise, while their children might move to a downtown apartment.

The technology will change much more rapidly than urban form and land use can change. If need be, we shall electrify the private vehicle fleet and the car will be cheaper than ever to run.

There will be more telecommuting.

There will be more high-tech carpooling using GPS, iPhones and the Internet.

A few more people will cycle or ride trains and buses, but the changes in travel mode will not be dramatic.

The worst thing that can happen is that the cities will move from being Opportunity Cities to Panic Cities that insist on controlling where and how their people should live based on knee-jerk reactions to change and a total lack of confidence in people’s ability to innovate and adapt.

That is what we are all so good at – provided no “wise elite” decides to make our decisions for us.

Owen McShane is on the Research Advisory Board at the Frontier Centre for Public Policy, www.fcpp.org