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Peak Oil and Forestry

Started by Tarm, May 27, 2004, 02:07:07 PM

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Tarm

With the rising gas prices I've been thinking more about Peak Oil.  For arguments sake let's say the Peak Oil guys are right and worldwide oil production will peak in 2008 and then decline by about 2% a year. (www.peakoil.net) In the past reduced oil supplies have resulted in much higher fuel prices. My question to those on this list is "If fuel cost were four times higher than now, how do you think it would effect forestry and the lumber industry."
A surging fuelwood market?
Stagflation and the collapse of the housing market?
Skyrocketing logging and trucking cost?
A runup in land and timber values as people buy hard assets?
No one can predict the future but is fun to try.


Rocky_J

I do not think the impact will be as extreme as some might believe. Yeah, prices will rise. So our fuel costs might even begin to approach half of what most other people in the world pay for gas. The major American oil companies are among the biggest and most powerful in the world, and they will not allow fuel costs to rise so much as to make alternative fuels attractive to the masses. Nobody will benefit if the whole system collapses, so those with influence will not allow it to happen. We will have some whiners complaining that gas is too expensive, but for the most part life will go on as usual.

Ron Wenrich

It probably wouldn't take a 4 times the price scenario to change things.  Just a doubling that is maintained.  People will not change their ways unless it looks like the change is permanent, just like back in the '70s.

Firewood would be a hot commodity, but so would pellets.  That would divert some of the wood waste like sawdust, chips, and even other biomass into that type of fuel.  

Cogeneration would also be on the front burner again.  More use for wood waste, ag waste and municipal waste.  

The housing bubble would surely burst.  Its doing that right now due to higher interest rates.  New housing would be closer to metropolitan areas and would really limit urban sprawl.  That would be good for forestry.  

Housing size would be smaller, meaning less lumber used for the conventional house.  However, vinyl siding would be too expensive,  which may mean more wood used in siding.  Smaller houses use less hardwood for flooring and less furniture.  A bigger impact on the hardwood industry.

The resulting inflation would crush personal savings.  New cars would be out of the reach of many people.  Alternative methods to move people would include mass transit.  Think RR ties.  Good for low grade markets.  Pallet consumption would be down due to fewer cars being sold, and smaller car sizes.  Also, the infation would limit sales of big ticket items.

Logging costs would rise, due to fuel expense in trucking and harvesting.  But, with more of a limited demand, prices to the landowner would fall, making timberland a compartively poor investment.  

Imported wood would be more expensive.  Canadian timber would still be used, but wood coming in over the ocean would probably decline.  That increases some of our wood markets,. but shuts our export veneer out of other markets.  Good for softwoods, bad for hardwoods.

The forests may get a rest.  With more of a low grade market and an decrease in the grade market, some of the junk would be able to be cleaned out of the woods profitably, and the good stuff left to grow.  We would actually be able to practice forestry and get rid of some of this highgrading.
Never under estimate the power of stupid people in large groups.

SwampDonkey

Skyrocketing Fuel Costs   :-/

There will be more mill closures for sure as fuel prices skyrocket, but new mills will be super huge with less employees. Same with pulpmills, we've already seen alot of them being upgraded with less employees over the last 10 years. Companies have pretty much eliminated the small contractor from the woods now and adopted a completely mechanized operation on Industrial freehold land and crown. They had several meetings with government and industry over the last 4 years, but industry always wins. Forest companies have already stated that they are not opening new positions, just maintaining or reducing what they have (N.B. APEC report). There are still quite a number of private woodlot contractors, they will be done, as private woodlot owners aren't going to give wood away. The cost of wood and fuel and trucking will be prohibitive to operate. And now a-days revenue from private woodlots is only supplemental to most owners. The number of private land contractors has been declining every year for the last 30 years.  
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

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