Francis Koster: Finding Local Investments That Pay Off for You & Your Community

Great interview guest Chris! What a positive look into our future.

So nice to hear this as I just read Slow Money where only 1% of money spent in the community will bring wealth and security to the community.

I completely agree - Conservation is First and to reduce energy by 20% on old buildings  might be conservative. We've been able to decrease electrical needs by 45% by changing over the old computer monitor and tv to LCDs, tunrn down the refrig / freezer at night and insulation over windows.

I see more going on in the under currents of local commerce and more will happen over time as we decend from oil.

Post Carbon Inst. detailed how wood heat will increase 600% in coming years. This needs to be met with wood lot management, more efficient burn technology and better use of man hours to manage wood cutting.

I hope to see more small scale local fuel production in general being done locally as a means for communities to become less dependant on outside sources of energy to support law enforcement and emergency. And by all means, the local food sector will increase via seeds, plant and skills sales but also as food. I already see communities promoting edible gardens and no mowing lawns to prepare for our future.

Also, Post Carbon Inst. and Transitions Org details the increase in local transportation and bike/walking, home schooling and alternative health services as expending. Both organizations also indicate bio-tecture and recycling/re-purposing are going to be larger industries.

This all brings about a dilema (IMHO). All this is De-Centralizing (not de-stablizing) and not the old standard of people with money using their money to make more money. All the future "growth" decentralizese money, energy, food and helath in general and though sales and money exchanges will happen - the need for small producers does not mean they need investor money - it means they start small, manage money well and grow. 99% of these new endeavors are skill and labor intensive and those who do not want to do the actual physical work (again IMHO) will eventually run out of money to acquire the goods they need to live.

If all your basic life support systems run through many small local channels, you have reduced the need for large investors and increased resilience in the community.

You are 100% right - communities on small scale will be able to become resilient. The Donald Trumps, Buffets and other big money-monkey men will be obsolete.

I love http://theoptimisticfuturist.org/ !!

Sincerely, EndGamePlayer

I have to chime in here and say thanks for the interview and thanks also to endgame for the links - some very interesting and potentially useful ideas here. That "no mow grass" looks particularly intriguing. 

We have recently bought a 63 acre property with the intension of expanding our farming operation. We built a geothermally heated/cooled barn/residence on the property a couple of years ago and this year we plan on installing a solar pv system that with the help of 2 federal grants( cuts the cost nearly in half) will pay for itself in roughly 3 1/2 years. Soon all heating, cooling, refrigeration and irrigation etc will be solar powered. 

We have been trying to source B99 but up until recently we have not found a way of having it delivered. This past week, however, I found a local small time manufacturer of biodiesel from SVO from local restaurants that will deliver to us for the same or lower price of petro diesel.  

Also up this year will be  the construction of a commercial sized root cellar. 

As a result of this website we are significantly adjusting our farm plan to speed up implementation of projects that will help us be more resilient ( energy, production, marketing ) in the future. 

Typiclally we have more questions than answers on any given day so I'm interested in ideas that others might be interested in sharing on this "keeping it local" thread. 

All the best,

Jackson

Francis,

Here's their website: http://buckscountyfreedomfuel.auto.officelive.com

When we spoke this past week he said that he would have product in a month or so. It sounded as though during the winter they only have enough for their own heating needs. During the summer, I'm guessing, the restaurants are still looking for them to pick up their spent oil so they keep making biodiesel - which will be good for us since thats when we'll need it for our tractors. I actually found them on the links of a neighboring farm's website. Very small producer.

Probably of more interest to you and your readers is a company in Modena, PA called: Waste Oil Recyclers. They are a distance from us. Here is their website: http://wasteoilrecyclers.com/ These guys do much more volume than the Bucks County guys. I've walked through their place a while back and while they're not Exxon there were quite a few tanks in the room and each tank was holding thousands of gallons of oil. It sounded like Bucks County would be stretching to get me 200 gallons next month.  

By the way, as a result of your interview I spent a couple of hours leap frogging from one site to the next exploring some really interesting ideas. Everything from "no mow grass"- to electric tractors - to earthbag construction. The earthbag idea sounds promising for our root cellar. Re. the root cellar - here's another website that you might find interesting: http://wholefarmservices.com. I spoke with Chris from Whole Farm a few days ago. I think he will be of help to us as we plan on how to constuct this cellar. 

And I haven't even fully checked out you site yet! .. can't wait. I appreciate your whole approach. For us, the best idea is one that is simple but elegant ie it gets the job done efficiently and without a lot of cost or complexity. That is always what we are striving for. 

Thanks again for your work,

Jackson

Hi Jack,

Welcome to the forums.  The idea that oil has remained steady in terms of precious metals is an interesting idea.  If true, then it would call into question whether oil has experienced real supply pressure.  We can look at the following graphs:

Looking at this first graph, it does appear to show that the price of oil has remained constant in terms of gold, while increasing wildly in terms of the major currencies.  However, I propose that this is only an illusion, since gold is so expensive compared with the currency units on the graph, the huge numbers of US$ involved make it impossible to see the real fluctuations in terms of gold price.  So what happens, when we zoom in on gold?

This happens:

As you can see, "the gold cost of crude oil is at its third most extreme level in modern history.  At 11.5 ounces of gold for 100 barrels today, only September 1976’s 12.2 and November 2000’s 12.4 are greater." (source).  The price has since returned to the long-term average level around 7.  I would argue that this is only temporary, and we'll see another huge price spike as demand once again runs up against the limits of global supply.

What about silver?  It would appear that oil has been growing slowly more expensive in terms of silver as well (source):

  I don't know about gasoline, but according to the graph above, oil certainly isn't 50% less expensive.  Do you have a source that you can share?

The graph above only goes to 2005.  Since then, the price of oil has collapsed as the economy collapsed, and silver has had a big price run.  So, the price of oil in terms of silver has dropped down to somewhere around 2.85oz/bbl, which was about average before the bull market began.  We have to remember that silver has been in its own bull market, even in terms of gold.  Silver is an industrial metal which is irretrievably lost in many of its applications, and each year we use up more of it than we mine.  Mining is a highly energy-intensive process which is dependent upon the price of energy (oil), so as the price of oil goes up, the price of silver will tend to rise also.  Unlike gold, there is a relatively small above-ground inventory of silver at any given time, and so silver tends to behave more like other industrial metals (copper, zinc, iron, nickel) and commodities in general.  Also, extreme price volatility of oil can be consistant with tight supply.

But regardless of what the price ratio is of oil to dollars / yen / silver / gold / clamshells, the real issue remains: we are running out of oil supply.  Watch the free "Crash Course" chapters on the subject of peak oil, on this website. 

Since the price of everything depends heavily on the energy needed to produce it, it actually wouldn't be too surprizing if the price ratio of oil to many commodities remained somewhat constant, even as we ran out of oil. 

Why?  Because oil is energy.  It is the juice that powers the silver mines.  It powers everything.  As energy becomes more expensive, so will everything that energy allows us to produce.  Even if the price ratios remained constant, this doesn't solve the problem.  Our society will still be starved for energy.

Think of it this way: you're on an island, and there is a limited supply of both chocolate (silver) and matches (oil).  Both are in demand.  As the supplies are slowly used up, the relative cost ratio of both chocolate and matches might hold steady down to the last bar of chocolate and the last match.  I say it would be better to measure the value of commodities in terms of something that is not being used up, such as the value of a day's labor.  In terms of a day's labor, we can agree that the value of the U.S. dollar has gone down dramatically over the past 20 years.  But the cost of most commodities, including the master commodity--oil--has gone up.