Thursday, March 24, 2005

I see a Wal-Mart and I want it painted black.

An article in Rolling Stone titled "The Long Emergency" on peak oil by James Kunstler.

He's not one of the absolute worst case scenario folks, but he's pretty close. He maintains a blog with a R-rated name.

Though I agree with the concept of peak oil, I don't agree with a number of these ideas.

In particular, the worst case folks have a special warm spot in their hearts for the idea that peak oil means the end of Wal-Mart.

Somehow, I doubt it. I think Wal-Mart - aka the Cockroach of Retailers - is likely to outlive most of the rest of the retail landscape. Their ruthless, highly efficient distribution machine may use a lot of gas, but it's likely the last place people stop shopping because the cost equation, volume, and their general retail focus will work in their favor over that of other retailers with lesser volumes, higher costs and a narrower focus.

I think you can expect the landscape to be wiped clear of focused retailers (Circuit City, Office Depot, Winn Dixie, Toys R Us, various clothing retailers) well before Wal-Mart. And if Wal-Mart goes under, well, then the worst case guys will have been right.

Secondly, the suggestion that New England and the Upper Midwest will fair better than the Mountain States and Great Plains strikes me as fanciful. The costs of winter, in terms of items like heating, snow clearing, and road repair are enormous. The cost to maintain the infrastructure in colder climates is going to get very expensive; the further north you are, the worse it will be, and the states' tax burdens are going to get out of hand. And the Mountain States at least have some energy resources left.