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Reducing Your Exposure to Oil Prices

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Tuesday, October 30, 2012, 11:23 AM
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Executive Summary

  • How to cut household exposure to oil prices
  • Spending is shifting from road to rail transport. You need to get out in front of this.
  • How to take advantage of the energy arbitrage that rail transport will offer in future years
  • Important case studies of what's to come
  • The big change ahead (and the argument for optimism)

If you have not yet read Part I: Getting On The Train, available free to all readers, please click here to read it first.

Portland, Oregon is a city well known internationally for its commitment to sustainability. Over the years, the downtown area has been wisely restored into a very pedestrian-friendly streetscape. And while Portland continues to have problems – mainly a weak economy that could benefit from greater diversification – the city continues to attract people from all over the world who are looking for a better place to ride out some of the problems now facing developed economies.

Over the past year, since moving to Portland myself, I've had a chance to do some accounting of how much I've reduced my own exposure to oil. Let me first say that getting oil out of the household budget was not my only reason for moving to Portland. However, as someone who started looking at these issues 10-15 years ago, the prospect of greatly reducing my oil consumption was a key factor in my decision to relocate.

Now, while it's true that reduced oil consumption is more common for everybody living here in Portland, the other important element (and this will seem obvious) is that living in other cities and regions typically means a greatly increased exposure to oil. So while the cost of food, medical care, and many goods is just as expensive here in Portland as elsewhere, it is now rather sobering to consider the burden of high oil prices in other regions from my new vantage point – especially given that oil has found a new equilibrium price around $100 a barrel.

By moving to Portland, we completely shifted the core of our energy consumption to natural gas and also electricity, which in the Pacific Northwest is largely sourced through hydropower. Electricity rates in the Pacific Northwest are either the lowest or among the lowest in the United States. Also, because of the rich offerings in public transportation choices, we were able to drop one of two cars. But there's more...

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