IS SPAIN TO GAIN WATER FOLLOWING OIL PRICE HIKE?

Today the New York Times is reporting: Spain is having water shipped to parched city. Could a drop in vacation Spanish real estate vacation homes be seen as a positive outlook for Spain's water? http://news.nationalgeographic.com/news/2008/05/080519-church-photo.html If cheap airlines are "dying" or "dropping like flies" due to sharp oil price increases, this is likely to cut cheap flights from Europe and make this access route to Spain for most travelers a thing of the past. I am wondering how foreign property investors (many of whom are ordinary people from England - who bought second homes as investment properties) will keep up with their investments? If travel decreases, what kind of affect will this have on Spanish Real Estate? http://www.guardian.co.uk/business/2008/may/23/theairlineindustry.ryanair "The list of bankrupt airlines is growing by the week, but the biggest casualty of the oil squeeze in the airline industry could be the cheap fare and the holiday plans of a generation weaned on affordable air travel." Without cheap flights, second property investments can no longer be a revenue to investors (as second homes in Spain will have fewer tourist straveling to inhabit them). I imagine this will make many of these second homes (and hotels) become white elephants. From this report in the guardian.co.uk it sounds as though this scenario for the investors has already begun... Spanish property: the fiesta's over http://www.guardian.co.uk/money/2008/may/10/buyingpropertyabroad.property "Polaris World invites you to 'live the dream' at its gigantic golf resorts. But as the market sours, is it turning into a nightmare?" The upshot of all this is less tourists will consume less water. As a consequence, I am wondering if Spain will get some of their water back following a time when it was reported in peak boom 2006 how tourists in hundreds of hotels were consuming dwindling water supplies. Ecologists had estimated one golf course consumed the same amount of water each year as a small town of 5,000 people. So one crisis (expensive oil) may be easing another (a shortage of water). Tourists playing golf in Spain and taking water from 5,000 people may also become a thing of a past.... Drought threat to Spain as farmers and developers gulp down precious water http://www.independent.co.uk/news/europe/drought-threat-to-spain-as-farmers-and-developers-gulp-down-precious-water-414072.html "Spain's Environment Minister Cristina Narbona accused politicians in Alicante and Murcia of being more concerned with building thousands of villas, hotels and golf courses, than managing the water supply. Spain's booming agricultural sector, growing fruit and vegetables in plastic tunnels, is another huge drain on the water supply."

Oil prices up an average of 25% a year since 2004

Holy moley!

BEFORE

Bloomberg March 2004 http://www.bloomberg.com/apps/news?pid=10000006&sid=aRAWPN3xYKFk&refer=home

New York Crude Oil Rises Above $37 a Barrel on Venezuela Unrest
March 5 (Bloomberg) -- Crude oil futures in New York rose to more than $37 a barrel for the first time since the buildup to Iraq war on concern increasing unrest in Venezuela may limit shipments to the U.S. before the peak summer driving season.

+4.2 yrs

NOW

Bloomberg May 2008 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5eIZ7qh9xII

Oil Rises Above $135 After Unexpected Drop in U.S. Inventories
May 22 (Bloomberg) -- Crude oil rose to a record above $135 a barrel in New York on concern that supplies are inadequate after U.S. stockpiles unexpectedly dropped last week.

It is my opinion we are reaching a critical situation right now, because this time last year, oil was $66 dollars...

http://www.independent.co.uk/news/business/news/bad-news-for-motorists-as-oil-hits-new-high-832306.html
Oil was trading at around 66 US dollars a barrel a year ago - less than half today's level - but traders have been buying crude as a hedge against the faltering dollar.

Impact on air travel

American Airlines to charge for checked baggage:
Passengers will be charged $15 for their first piece of luggage.
The airline, blaming high fuel costs, also plans other fee hikes, domestic flight cutbacks and layoffs: http://www.latimes.com/news/printedition/front/la-fi-american22-2008may22,0,301394.story


United Airlines to start charging for second bag:
CHICAGO - United Airlines will start charging domestic passengers $25 to check in a second piece of luggage if they are not part of its most-frequent-flier programs, the airline said Monday: http://www.msnbc.msn.com/id/22992054/


Continental Airlines, others at Tallahassee airport limit number of checked bags:
$25 to check a second bag if you’re flying economy class within the U.S.
http://www.tallahassee.com/apps/pbcs.dll/article?AID=/20080519/BREAKINGNEWS/80519008


US Airways joins airlines charging for second bags:
US Airways Group (LCC) said Tuesday it will start charging fliers $25 to check a second bag, the company's latest effort to raise revenue and deal with rising costs.
http://www.usatoday.com/travel/flights/2008-02-26-us-airways-bag-fee_N.htm


Ryanair hikes bag and check-in charges:

Ryanair today raised the cost of putting bags in the hold and checking in at airports as the high cost of oil forced airlines to scrabble for extra revenues: http://www.guardian.co.uk/business/2008/apr/28/ryanair.theairlineindustry
Ryanair will soon make passengers pay £5 ($10) per piece of checked luggage, or £2.50 ($5) per bag if it has been registered in advance on the airline’s website - an initiative the budget airline claims will mean only 25 per cent of its passengers losing out financially:http://travel.timesonline.co.uk/tol/life_and_style/travel/news/article719678.ece

But here is the good news!

Ford Cuts Trucks
Abandoning its goal of a profit in 2008, Ford admits it can no longer rely on big pickups and SUVs: http://www.businessweek.com/bwdaily/dnflash/content/may2008/db20080522_219149.htm?chan=top+news_top+news+index_top+story

http://video.google.com/videoplay?docid=-1073425200911585815&q=richhard+heinberg&ei=-VYZSLPCFYWEqgPQutTiBg&hl=en

Quote of the 21st century

I just can't believe what I am reading these days, from the New York Times here is a quote of the 21st century: (Bush using alternative energy as a threat!)

“I said very plainly, I said, ‘You’ve got to be concerned about the effects of high oil prices on some of the biggest customers in the world,” Mr. Bush said. “And not only that, of course, high energy prices is going to cause countries like mine to accelerate our move toward alternative energy.”

I couldn't have made this stuff up in a fictional novel.

Here we now have Bush using alternative energy as a 'threat' towards the Saudis'.

From my last blog of April, where I said:

intuitiveblogger: "If we could hear Bush talk at least once about sustainability, this would be the first wave of a magic wand..."

Well I guess this last Bush quote is a magic wand although in this case it is looking more like a wand in the form of a double edged sward . Bush is now threatening to go alternative because the Saudis won't give more oil to bring down the prices. What next?

I think we have officially reached the age of peak oil.

Watch out for many changes over the next few months.....

intuitiveblogger