I think high oil helps Chicago region... (Phoenix, Atlanta: tax, live)

[chet everett]

Well, not every person, surely.
Energy traders are going to be smiling. BP has a fairly large presence, and will likely grow in influence. ADM is making piles of cash off EtOH.

The resiliency of Chicago's desirable residential areas and those reachable via commuter train have already been tested and this may test them MORE or perhaps saner heads will prevail in the coming weeks/months and oil will drift back to a less pumped up hysteria.

If I was in Houston or Calgary I would be happy happy happy.

LA is as doomed as doomed can be, ditto for Vegas & Atlanta. Doesn't help a Charlotte or Fayettville.

The fork was already in pretty much the entire Michigan/Ohio region, so today's bad news is just another crepe on the casket.

Chicago ought to be pretty good.

BTW I think that "Peak Oil" is bs and even CO2 limits are a cucko idea to give the Congress more control of tax policy than they deserve, but give the crazy spike in oil prices with ZERO change in supply or demand there are some hectic trading days ahead and I fully expect that many Chicago traders will make out the bandits they often appear to be...

[ndfmnlf]

Not just Chicago, but rural Illinois is benefitting from high oil prices. The reason is corn-based ethanol. The price of farmland is soaring. I own some land in western Illinois and people are constantly asking me if I want to sell my property. Ethanol plants are being constructed all over the state. Farmers are flush with cash. Corn is gold.

[SocialDem]

Originally Posted by chet everett

BTW I think that "Peak Oil" is bs and even CO2 limits are a cucko idea to give the Congress more control of tax policy than they deserve, but give the crazy spike in oil prices with ZERO change in supply or demand there are some hectic trading days ahead and I fully expect that many Chicago traders will make out the bandits they often appear to be...

You believe peak oil is bs on what basis? Have you extensively studied the energy markets? Do you know a great deal about the science, mathematics and logic behind peak oil? From a purely logical standpoint, peak oil is inevitable at some point. Given that there is a limited amount of oil in the ground, production must necessarily peak at some point in time, the question isn't 'if' but 'when.' You may be surprised to know that even the oil companies, and I mean essentially all of them, acknowledge that peak oil will be a reality in the coming decades. Virtually every major international organization, research group and, yes, corporation tied to the energy markets acknowledges the inevitablity of peak oil. It's one of the primary reasons the major oil companies are investing billions into alternative energy. Hell, many countries have already seen their production peak, a fact that is easily shown by simply glancing at readily available country-level production statistics.

Where the experts disagree is on when, rather than if, peak oil will hit. That being said, even the most conservative estimates (including estimates put out by many oil companies) say peak oil will come in 40 years and certainly no more than 50 years. More liberal estimates say peak oil will hit in as little as 3 to 5 years. The consensus, however, places peak oil between 15 and 25 years away.

But the real problem now is, contrary to your own assertion, soaring demand which is outpacing rises in production. You have to recognize that the petroleum market is fully globalized. Demand in the US, and in much of the developed world, is relatively stable (though it, too, is rising slowly). However, demand in the developing world (where the vast majority of the world's population lives) is skyrocketing; India and China are adding millions upon millions of cars to the roads each year. Many other countries are doing the same. Add to this the massive increases in global trade, requires substantial increases in oil use for global transportation networks, and it becomes clear that demand is rising at an increasingly massive and rapid pace and will continue to do so for the forseeable future. Thus, rising gasoline prices are inevitable and will continue indefinitely. Sure, they'll fluctuate (as all commodity prices do) but the general trend will be upwards.

So, how does this effect Illinois? In some ways it'll be good; the density of the urban population in Chicagoland will help to minimize the full impact of the rising price while downstate Illinois will benefit from increased revenue from ethanol in the short term. However, I personally doubt ethanol will remain all that viable for long. There are a lot of questions regarding it's actual benefits, given the amount of energy necessary to produce it and it's inefficiency relative to other sources of biofuel (sugarcane, for example). Currently, Congress's subsidies for ethanol production and tariffs on foreign biofuels make Illinois corn a lucrative investment. However, it is unlikely that these subsidies and tariffs will last more than a decade given recent trends in world trade. When that happens it is likely that the ethanol market will collapse, hurting much of Illinois. However, recent problems in world food supply could more and make up for the loss of ethanol...

[oakparkdude]

Chicago is one of the few metro areas with a very viable central business district (with room to grow) and established transit links in all directions as far as 50 miles from the city. We're already seeing the trend of suburban offices relocating to the Loop. Assuming high fuel costs continue, we'll probably see an acceleration of that trend.

The one disadvantage of Chicago is a sclerotic and Balkanized governing class which seems give little or no thought to mass transit. While places like Houston and Phoenix invest billions in new transit, we're complacently letting our infrastructure fall apart.

[Steve-o]

Originally Posted by sukwoo

While places like Houston and Phoenix invest billions in new transit, we're complacently letting our infrastructure fall apart.

Its too little, too late for those cities, IMO.