Climbing Gas Prices, Slipping Dow: A Connection

This week the price of regular gasoline in my village at the top of Lake Michigan reached $2.60 a gallon, about 62 cents a gallon more than in January. Late last month, the Dow Jones experienced the steepest drop in years. Are the two connected? You bet.

You might also ask how these two trends are linked to the American Mode Shift, the transformation of metropolitan regions into cleaner, greener, more energy-efficient, more prosperous places? 

Here’s how. Oil is and will remain the economic lifeblood of the planet. There is nothing remotely on the horizon that can replace it, despite what the President of the United States and the governor of our fair state say about alternatives. A few nations in the Middle East, led we’re told by Saudi Arabia, have most of the oil. 

Well smart oil supply watchers, like the Oil Drum, have been reporting the strong likelihood that Saudi Arabia is flat out lying about how much oil it really has, and how much crude it is actually pumping. This sort of fact is important because the margins between oil supply, production, and demand are so tight that any chatter in the system produces wild price fluctuations that quickly become apparent at the pumps at Stapleton’s, the convenience store at the corner of US-31 and M-115, where I’ve purchased gas for over a decade now. Matthew R. Simmons, chairman of Simmons & Company International, a and a respected analyst, provided attendees at a London conference last month great background on the trends in production.   gas-prices1.jpg

Oil Drum reported that Saudi production fell 8 percent in 2006, a huge decrease for a nation that has boasted about its immense oil supply, and the technical ability to bring it to the surface. Though the news attracted no notice in America’s mainstream media, the money men and women on Wall Street, and the shrewd investors who move markets, pay attention to oil production because it is so important to stability. What explains Saudi Arabia’s sinking production in a year when oil markets were so strong and demand for petroleum was rising? The Saudis said they were trying to stabilize prices, but that would have meant increasing production to lower prices. Energy experts say they have a more likely explanation. Saudi Arabia has less recoverable oil than it claims.

As word of the production decline seeped out of the Middle East last month, stock prices plummeted in the Far East, then in Europe, and swept into U.S. markets. Stock analysts were invited onto NPR to issue calming rhetoric about a “market correction” and how investors shouldn’t panic. Maybe so, maybe not. But the underlying pressure in the economic system will continue to cause unexpected market eruptions for years, and they are likely to get worse. A couple of years ago the term “peak oil” crept into the American conversation to explain why gasoline prices had climbed to $3.20 a gallon after Hurricane Katrina, and why they’re likely to go higher this summer, and higher than that the next. Peak oil describes the economic knife edge where demand is outstripping production because there are just no more easily recoverable reserves left to produce. Exxon, for instance, is spending $20 billion to increase its production by 1 million barrels a day. In years past, that kind of investment would have yielded much higher returns.

And that leads me to the American Mode Shift. How do you protect yourself from the increasing entropy of a world that is running on increasingly scarce and expensive fuel? You live in a place that offers energy-efficient options in transportation, housing, accessibility, and development patterns. In other words, you try to reduce your vulnerabilities, and that means living where there are alternatives to the expensive, fuel-consuming, drive-through economy. 

Fortunately, there are many more of those places in the United States than there used to be 20 years ago. The momentous civic movement that is producing better places in the United States is occurring in response to the shifts in market signals, including the economic and environment cost of crude oil. A great train construction race has begun in the West. (See earlier posts to Mode Shift) In the East, regional rapid transit systems are under modernization or expansion in Washington, New York, Philadelphia, Boston, and Atlanta.

New York, Salt Lake City, Portland, Seattle, and other cities are requiring public buildings, and many private ones to be constructed with the highest design standards of energy efficiency and environmental sustainability. New zoning and master planning is taking place in Dallas and Austin and Albuquerque to draw homes, schools, businesses, retail, and recreation closer together, saving fuel, time, and money. Green spaces and green roofs are under construction in Chicago and New York to reduce heat island effects and save energy for air conditioning and heating. The idea of these ideas and many others — building biking and walking paths, constructing schools close to neighborhoods, providing venture capital to energy efficiency entrepreneurs — is to provide residents with a competitive edge and a better place to live. The American Mode Shift in our cities is specifically intended to provide residents oil-reducing options that keep the quality of life high while energy reserves run low.

George Lakoff and the Mode Shift

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A couple of months before it became clear in 2004 that John Kerry didn’t have a clue about how to frame his election bid — “Lt. Kerry reporting for duty,” is the memorably stupid way he started his nomination address — a University of California at Berkeley linguistics professor named George Lakoff (see pix) burst onto the national political scene to remind progressives that the message was everything in public policy and politics. His 2004 book, “Don’t Think of an Elephant!” was a tutorial in message development that was widely shared among very smart and committed liberals who couldn’t understand why a plain talking president who so transparently skirted the truth was going to win the election.

I know how hard this idea of framing and values can be for advocates. Within my own organization, which is pretty good at framing and message, it’s still hard at times to make the case. Despite years of stressing the need to think carefully about words and values and framing, about message and messenger, there is a tendency among some of my colleagues to be concerned first about details other than the message, like organizing or holding a meeting or something. 

Lakoff’s message was direct. Campaigns are won and lost on message. Advocates who set the message agenda and are disciplined about sticking with it — Republicans were great at this until history exposed their hypocrisy — almost always win. If the message agenda is broken, campaigns generally lose. What happened to Kerry is that the Swift Boat Veterans For Truth made a direct hit on his message — a decorated war veteran running for president — and obliterated it. It took Kerry a month to formulate a response and by the time he did, the election was already decided.

Now Lakoff is out with a new book, “Thinking Points,” that replays many of the message tutorials but also ventures into a new domain: advocating for a four-point strategic policy program that would make America more just and prosperous, and progessives more revered.

Frankly, I’m less concerned about what the four strategic objectives will do for progressives, and by this Lakoff means the Democrats. An old friend once told me that we have two parties in America. The stupid party and the evil party. Take your pick. The Republicans could easily embrace Lakoff’s strategic recommendations because at the grass roots, conservatives are just as keen about these idea.

But as a marker of how much momentum smart growth and the American Mode Shift have gained in the popular imagination and public policy, “Thinking Points”  is a small revelation. Of the four strategic initiatives that Lakoff recommends, two are right out of the Mode Shift play book.

The first is establishing a new agricultural production system that provides Americans healthy food. At the Michigan Land Use Institute we call this Entrepreneurial Agriculture because reshaping the food production system to produce healthy fresh food means farmers are more profitable. Communities can conserve valuable ground that adds to rural character. Less energy and no toxic chemicals are needed. People are healthier, making them happier and simultaneously reducing health care costs. “In exchange for growing healthy food for our communities and protecting the sanctity of our earth and commons for future generations we will invest in sustainable farming,” writes Lakoff.

Lakoff’s second strategic objective is a national program to build public transit systems, what he calls “transit for all.”  The energy, cost, and accessibility improvements that transit provides, along with the economic development opportunities are well understood. Investing the $70 billion that it costs the United States to import oil each year in rapid transit design and construction would yield countless social and economic benefits. It is possible only if a coaliton of untraditional allies, among them environmentalists, labor, economists, energy, and national security interests cross ideological boundaries and work together. “The most effective long-term strategies start with the most commonplace activities: eating, traveling to work, and working in a business. Home is where we live. Start there.”  

Given Lakoff’s standing among Democrats, don’t be surprised to hear some of their presidential candidates talking about these ideas this year and next. By the way, they might also be interested in Lakoff’s other strategic objectives, which are related to the first two. They are clean elections and ethical business.

New Urbanism’s Mecca Is 25

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In 2002, when he was still the governor of Maryland, Parris Glendening invited a handful of Smart Growth leaders from around the country to join him for a three-day talk fest at Seaside, the famous Florida Gulf Coast resort community that served as the weirdly perfect set of the 1998 Jim Carrey film, The Truman Show. I attended the weekend, serving as the message and media guy for a gathering that also included Andres Duany, the architect and co-founder of the Congress for the New Urbanism, Bruce Katz of the Brookings Institution, Ron Sims, the executive of King County, Washington, Harriet Tregoning of the Maryland Planning Office, Don Chen of Smart Growth America, Angela Glover Blackwell of PolicyLink in Oakland, and Scott Bernstein, the founder and resident guru of the Center for Neighborhood Technology in Chicago.

The conversation generally focused on how to collaborate in order to build a more secure and visible national movement around the principles and values of Smart Growth. We spent the days in an airy, light-filled, cream pastel drawing room on the second floor of a stunning Seaside home. It was early winter, but every day the sun shined warm and welcoming through arched windows. I swam in a pool as Caribbean clear and refreshing as a beach in Aruba. We strolled narrow streets shaded by palms and one breathtaking house after another. 

The setting encouraged fulsome discussion that focused on design and policy. How could we help communities get more comfortable with that marriage? When you put that many energetic activists of national stature in one room, and get them to relax as Seaside did, the atmospheric molecules vibrate differently. I had the clear sense that regardless of what came out of the intimate conference (and nothing really did) the days spent in active dialogue reflected the quickening intellectual energy that Smart Growth was generating across the country. A mode shift was underway. Some of the people who’d helped to make it happen had a rare three days to share ideas. 

The beautiful place where the event occurred served its part by proving that a new community, well-designed and carefully constructed, adds its measure of value to the human experience. Had the weekend unfolded in a windowless room in an edge city Marriott, nothing like the rich experience we all enjoyed could have occurred.

This year Seaside marks its 25th anniversary, and the value of its homes and property are rising at a rate much faster than conventional Gulf Coast developments. It has grown more beautiful with age, and more durable. That is true in other New Urbanist communities, including The New Neighborhood in Empire, Michigan, near where I live. The New Neighborhood is an extension of Empire’s old neighborhoods, a short walk from the Lake Michigan shoreline. I learned this week that the New Neighborhood is selling more affordable lots and homes than any other development in Leelanau County. The New Neighborhood is one of a number of New Urbanist developments in this cold and snowy region of northern Michigan. The fact that they exist at all owes almost everything to Seaside’s successful design, construction, and marketing of a new idea in a warm, blue, and sunny place more than two decades and 1,000 miles away. 

  

Flip: Google and Congestion

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This fourth installment of Flip, which tracks keen new convergences between urban affairs and new media technology, was suggested by Joe Mielke, an IT professional and a colleague at the Michigan Land Use Institute. It’s Google’s recently introduced tool to track  urban congestion in real time, and available now in New York. Click the traffic link on the top right of the page.

The applications for this tool are immeasurable. If you’re swinging up the New Jersey Thruway from D.C. it’s possible now to call this tool up on your Blackberry. Lincoln Tunnel looks tight? Try the Holland or the GW Bridge. Better yet, you’re in Philadelphia and need to get to New York. Traffic is tough. Take Amtrak out of 30th Street Station. 

I’m looking longer term. The same technology that enables Google to measure traffic flow over such a large region could also be applied to new construction permits, and new homes and businesses actually built. The GIS information systems already provide the software capacity. Data is available in many jurisdictions on a weekly and monthly basis. Google could tie the systems and data together to give residents an accurate picture of development patterns over time. Each new building could be represented by a tiny blue dot that appears with every permit approval. Over time the various constellations of dots would indicate the speed, location, and density of new development, a more graphic and urgent picture in most cases than residents can obtain by just looking around.

Wonder why traffic is heavy and getting worse? It’s not just the number of vehicles. It’s where they come from. Google’s creativity and technical capacity could add a new narrative that prompts greater public insight into the where, how, and why of development trends and of traffic.

Green Cities

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 The American Prospect, one of the important forums of progressive thought, published a special section last month on “Emerald Cities.” 

“The environmental movement and the movement for a new urbanism come together in a quest for cities that are both affordable and sustainable,” write the editors. “With more sensible land use and transportation strategies, and better use of scarce subsidy dollars, America could provide more livable cities with lower energy costs, as well as cities that are not just for the urban gentry. The federal government is not leading in this area, but state and local government and private foundations and businesses are.”

The point that none of the pieces makes strong enough is that the cities achieving the American Mode Shift also are the most prosperous. That’s true here in Michigan, where Ann Arbor, Traverse City, and Grand Rapids are changing the rules of the development game and also are leaders in business development in a state anchored by the old tires and obsolete hierarchy of its auto industry. 

Ann Arbor established a green belt. Traverse City killed a needless beltway and bridge and replaced it with a $1.36 million regional land use and transportation project. Grand Rapids leveraged $2 billion in private and public funding to rebuild its downtown and use its water and sewer lines to lasso development at the edge.

It’s even more true in the metropolitan regions in other states that are pursuing new green strategies, and installing the civic equipment — trains, rapid buses, sidewalks, parks, safe neighborhoods, greenways, energy efficient buildings –that residents need to thrive and survive in this century.

Portland, Oregon halted a $1 billion freeway in the early 1990s and replaced it with two light rail lines and a downtown streetcar (see pix) that prompted $2 billion in housing and retail development. The city supports a multi-million dollar sustainable investment fund for green business start-ups and projects.

Seattle is weighing whether to tear down a shoreline freeway even as it prepares for new downtown businesses and 60,000 more jobs without expanding the number of parking spaces, which take up valuable room.

Denver is building a 172-mile regional rapid transit system financed in large part by the decision residents in seven counties made to increase their sales tax. When it’s finished it will be the largest rapid transit system in the West, and its transit stop and stations will serve as the new nodes of the metropolitan region’s business and housing development.

Salt Lake City reduced emissions of global warming gases by 36,000 tons annually, built a rapid transit that will grow substantially in the next decade, required public buildings and any publicly financed buildings to achieve the highest standards of energy efficiency and environmental design, and attracted thousands of new homes and residents. The city’s population has reached 182,000 and is closing in on the peak of 189,000 achieved in 1960. Salt Lake City and its suburbs, by the way, also registered an unemployment rate last month of less than 3 percent.   

Chicago’s green development strategy is based on improving parks, planting trees, conserving the Lake Michigan shoreline, and making public and private buildings more energy efficient. The city’s population is growing and thousands of new homes are under construction.  

You can read more on March 7 in a special Green Business section published by the New York Times and on the Michigan Land Use Institute’s Web site.