The Fate of the Small Rural Town

Update: Today’s Drumbeat at The Oil Drum features two additional stories covering this issue:

Gas guzzlers and ‘ghostburbs’

SUV factories closing, bicycle sales and train use rocketing, commuter belts becoming “ghostburbs” as residents flock to the inner cities . . . welcome to 2008 America, where soaring oil and petrol prices have triggered a sudden revolution in travel behaviour and a seismic upheaval in the automobile industry.

High gas prices threaten to shut down rural towns

There are no utilities and no public transportation in this unincorporated town of a couple hundred people along a narrow road that winds through the mountains 314 miles north of Sacramento. Many people here buy gas for their vehicles and gas or diesel for generators that power their homes.

“I’m scared to death” of rising fuel prices, Hanley says. At the store, the hub for visiting whitewater rafters and residents of other isolated towns, gas cost $5.30 a gallon on a recent day when the national average was $4.07.

This community may be an extreme example of how rising gas prices are hitting rural Americans particularly hard, but people in small towns from Maine to Alaska are in a similar bind as those here.

Also a story on the situation I noted on my drive down to Texas with fewer RVs on the road:

For many, golden years mean less travel, more work

“We’re sitting with a calculator in one hand and a map in the other, trying to figure out how far we’re going to get when we get 7 miles a gallon,” says Lynda Perdew, 61.

Like the Perdews, many older Americans had long envisioned retirement as a period of adventure — a time to indulge in leisurely lifestyles, with frequent trips out of town to see relatives and explore places they’d never seen. That was then. Now, with food and health care costs surging and fuel prices soaring, many retirees have been forced to downsize their dreams of travel.

There were small, rural towns across America before the automobile and cheap oil came onto the scene. But some that even struggled to maintain their populations in an era of cheap energy may be destined to become ghost towns due to rising oil prices. I pondered this during my recent drive across arid areas of Montana, Wyoming, and Nebraska. Towns need food, water, and jobs – to name a few necessities – in order to survive. Water often comes to small rural towns in the West by drawing down fossil aquifers. Food comes via the same route, or is shipped in via ever more expensive long-haul trucking. Jobs are often many miles away, and the commute is becoming much more painful at today’s gas prices:

High Gas Prices Threaten to Drain Small Towns’ Populations

Don Campbell’s daily commute to Kansas City – about 100 miles each way – costs him roughly $866 a month at $3.90 per gallon. But he’s a union iron worker and says he can make the math work.

Most of his neighbors can’t. For them and thousands of other small-town residents across the country who drive long distances to jobs that pay little more than minimum wage, the high cost of gas is making that daily commute cost-prohibitive.

So much so that economists predict that over the next few years, the country could see a migration that would greatly reduce the population of Small Town America – resulting in a painful shift away from lifestyle, family roots, traditions and school ties.

The expected exodus from small towns, said Don Macke, a widely considered authority on rural economics and head of the Center for Rural Entrepreneurship in Lincoln, Neb., will be far more profound than the gradual erosion that has been going on since World War II. That decline was due to the country’s shift away from an agrarian economy and a choice for convenience: People wanted to be closer to jobs, shopping and entertainment.

The new flight, Macke thinks, will be more out of necessity.

As I recently reported, some are making ends meet by discovering the car pool. Others are trading their trucks and SUVs in for fuel efficient models. (You may have seen today that Ford’s sales are down sharply, as they can’t move their large models, and they can’t keep up with the demand for the small ones).

Most people, however, fall into this category:

Her father may leave Dixon and move closer to Freeburg, but Tracy Rector isn’t yet ready to commit to such a drastic move from her hometown.

“But I’m like most people – I don’t know what to do.”

That’s a big reason I started writing – to try to shed some light on the topic of energy so some people have a better idea of what to do. Most of my friends and family fall into that category: Gas prices are going up, and they don’t know what to do. As I always say to them, prepare for the future as if gas is going to be $10 a gallon.

Ultimately, the small, rural towns with good farmland and water resources should do OK in the post-cheap-oil era. But a lot of small towns that sprung up in the age of the automobile are likely to fade away as people move closer to jobs in the city. And if you live in one of those small towns, and you depend on cheap gas to get to a job far away, you better start thinking of a contingency plan because the days of cheap gas are over.

27 thoughts on “The Fate of the Small Rural Town”

  1. Fossil fuels are what killed rural towns. “40 acres and a mule” farmer density is 16 per square mile. A 6×6 mile township was up to 576 such families. Add support people in town and total population is a couple thousand adults and a similar numbers of kids. That’s enough for schools, shops, etc. But combines allow multi-thousand acre farms, so you’re down to just a handful of families per township.

    Some think peak oil means we all head back to the farm and repopulate rural America. That’s silly. We may have needed abundant petroleum to fuel the society which developed combines, but we don’t need much oil to keep them running.

    Getting back to gas prices, the disproportionate effect on rural America is why I’ve long argued gas taxes are a horrible way to attack our oil import problem. You need at least $10/gal to make much of a dent in ex/sub/urban consumption. But $10/gal destroys rural America which has no access to alternatives.

  2. ~ “There were small, rural towns across America before the automobile and cheap oil came onto the scene.”

    Most of those small towns sprung up in the age of the horse and railroads. That’s why there was usually a small town or village every 7-8 miles. That was about the range that someone could go in a day on a horse to go shopping, visit the local bank and lawyer, and get the essentials one needed to keep a farm or ranch running.

    It was only with the advent of ICE cars and trucks that the small in-between towns started dying. Areas of commerce evolved to be spaced at about the range one can travel to easily in a car or truck.

    My guess is that as cars become more and more expensive to drive, we will once more see the return of small business centers (towns) spaced at intervals that can service the needs of people on foot, bike, and perhaps even horse.

    In turn, those smaller but more frequent centers of commerce will be supplied by rail and truck where we can take advantage of the economies of scale of burning ever scarcer fossil fuels.

  3. about 100 miles each way – costs him roughly $866 a month at $3.90

    I feel bad for that guy – that’s a shocking amount per month. Doing the math, that works out to 222 gallons per month, which is about what I use in a year. Assuming he works 21 days per month, that’s 10.6 gallons per day for 200 miles of travel, or about 18.9 mpg, presumably on the highway. Not very good, frankly – he could easily cut that bill in half with a more efficient vehicle, and a savings of $433 month would help pay for it.

  4. what’s killing rural towns is fairly complex. I suggest googling “Buffalo Commons”. You’ll find a fairly good commentary on the depopulation process which is been going on for the past 80 years.

    I think what’s much more likely is that small rural towns along the rail lines will survive because they will become the centers of agriculture for urban wastelands. They will control the food supply for the vast majority of the population and because food generation is decentralized, the government will not be able to force farmers to produce food should the farmers decide to not plant.

    If you want to see a dent in suburban/rural suburban consumption, it will take significant financial incentives. you will need to demolish existing housing and rebuild a cluster housing complex complete with big-box store for fresh produce and other retail and professional outlets.

    In order to get people to move, you will need to pay off the mortgage and guarantee a new one for the cluster property.

    In the rebuild, one must be careful to control lighting and noise so that one isn’t moving from a nice residential property with lots of green space around you into an industrial park with big truck noise/traffic and high glare, overly bright lighting at night.

    without this intervention, urban spaces (especially those around subway stops) will skyrocket in price and the price differential between suburban housing and urban housing will effectively subsidize the cost of living in the suburbs just as it does today.

  5. ” You need at least $10/gal to make much of a dent in ex/sub/urban consumption. But $10/gal destroys rural America which has no access to alternatives.”

    Im not sure what drivers you are including in this. If you honestly think it will take $10 gas to affect consumption, you have no idea what you are talking about. $4 is enough to dramatically affect consumption. The only difference between $10 gas and $4 gas is how quickly people change. Most people are either snowed under with upside down car payments from the past few years of cheap ‘buy now for 0% financing’, or are waiting in the wings to buy a next gen super efficient vehicle (that are not out yet). 30 MPG is not sexy anymore. People want 40+. I dont care what the experts say on this. They are wrong. Its like listening to some idiot commentator/expert on CNBC about 6-8 months ago saying Americans would never give up their SUV. Well he was wrong.

    I am sick and tired of hearing these predictions get more and more dire every month. You are going to see demand drop accelerate with time , and its not going to take $10 a gallon gas.

    its almost like some of you are jumping over one another to continue to speculate a higher price of gas that will immediately affect demand. Did you honestly think you’d see some immediate huge response from $4 gas, and not seeing a 25% reduction continues to push up the price at which you expect to see an immediate reduction? NOTHING this big happens overnight.

  6. Right. It is urban areas that subsidized rural development, and for decades. Still, many zip codes are depopulating. $5 gasoline will result in even more depopulation, although rural Senators and Reps are the most diligent welfare queens known to history.
    Actually, densification of cities, and rural depopulation is probably a good thing. We will use much less energy, and our urban cores can become cosmopolitan crucibles of culture.
    I get a kick out of these guys who think they are rugged individualists, driving on state roads subsidized by urbanites, in trucks built in huge factories, and powered by gasoline brought to them by a socialized military service and multinational corporations. Most likely consuming power off a grid, again cross-subsidized by urbanites.
    It can be a great lifestyle, just remember who pays for it. By the way, it looks like April U.S. oil consumption was down 800,000 bpd y-o-y. And that was BEFORE the more recent price spikes. EIA data.
    It is obvious now we are seeing Peak Demand in the U.S. My guess is we will drift down to 15 mbd in the next five to 10 years, depending on gasoline prices.
    Yes, people won’t be able to drive 100 miles to work anymore.
    It is time we invested in our cities and made them great places to live also.
    Large parts of the Midwest could become a buffalo range.

  7. ~ “urban spaces (especially those around subway stops) will skyrocket in price”

    Correct. Lived in Frankfurt, GE a few years ago. When people went apartment hunting there, the first place they looked was somewhere within walking distance of an S-Bahn or U-Bahn station.

  8. Hawkshaw-
    Maybe. The Volt could save our suburbs. Probably not rural areas, as the 40 miles per charge is not quite enough.
    By the way, does anybody know if Volt-type cars can be juiced by 220, or even 220 three-phase? Hell, for that matter, 440?
    If so, we might see more-rapid charging.

  9. The simplest solution for rural & ex-urban commuters is car-pooling. Put 6 people in one of those SUVs that Good Liberals love to hate and we get over 70 miles per person-gallon — way better than the fearful Good Liberal driving alone in his hybrid shoe box.

    In parts of the former Soviet Union, spontaneous car-pooling (with money changing hands) is so common that people call it “taking a taxi”. Of course, in the West, we have politicians, bureaucrats, insurance companies, and ambulance-chasing lawyers getting in the way.

    Fortunately, a poorer society will not be able to pay much longer for the inflated overhead of the Government-Lawyer Complex. Smile everyone — brighter days ahead! High gasoline costs are the death knell to big intrusive government.

  10. Those small towns will be producing America’s oil soon. Modified yeast can turn any plant,or plant waste,into any kind of fuel we need. We’re still a couple years from commercial production,but it’s an industry that will ramp up quickly. In 10 years,the U.S. will be an oil exporter. As modified yeast farms ramp up,so will the use of PHEV’s. A double whammy for fossil fuels. Of course,we still need to get through the next two years. After that,forward looking markets will do their thing,and oil prices will hit the skids. Oil producers will have to sell their oil at a discount to the cost of synthetic production,since synthetic fuels will be of superior quality. Sky high oil prices are the best thing that could’ve happened to the U.S.. It got us off our asses and kicked that famous yankee ingenuity into high gear.

  11. I already car pool. I started last month. Has worked out great. And I make enough money that oil could double and I would still be fine. It simply makes the point that more and more people are going to choose ways to be efficient, and it simply takes a little time.

  12. Maury – I sure hope you’re right. Though 10mbpd is a lot to produce from farms.
    I started taking the bus to offset my modest 15mi commute. Saving about a hundred dollars a month and 200$ per year in insurance. And having an extra couple hours a day to read! Though it is an extra hour per day in transit.
    It’s true, if you can pack 6 people into an SUV that’s great, it’s better then throwing it away, but 4 people in a Prius is still at least 3 times better. And probably just as comfortable.
    But I do agree, expensive gas is a god sent. Wish they would add a little bit more in taxes to help maintain the roads and public transit though. Doubt it will happen though.

  13. wako,they’re saying it would take a 200 sq. mile facility to produce all of America’s needs with modified yeast. Of course,that’s not going to happen. Instead,we’ll see mom and pop operations all over the country. The yeast can be modified to ferment any kind of plant. Timber country would use wood chips. Corn farmers would use the stalks. The day will come when homeowners can buy buckets of modified yeast off the shelf at Walmart and make gas from grass clippings. People in the industry are very excited about near term prospects. They’re talking multi-billion dollar enterprises within a few short years. I’m going to buy shares in LS9 as soon as it IPO’s.

  14. If you honestly think it will take $10 gas to affect consumption, you have no idea what you are talking about.

    Ryan, I said it takes $10/gal to make “much of a dent”. Bad wording on my part. I’m talking about 60%-ish reduction in oil consumption, enough to eliminate US oil imports. $4/gal gets you a few percent reduction, not elimination of imports.

    At $7-8/gal Europe uses half as much oil per capita as the US. But $7-8 would have less effect here because our population density is much lower. And to eliminate oil imports our consumption has to drop BELOW Euro levels. That’s why I say it would take $10/gal.

  15. April U.S. oil consumption was down 800,000 bpd y-o-y.

    Yes, and it was down roughly this much Jan-Mar as well. The monthly numbers continue to show larger declines than the weeklies. Doug says monthlies are more accurate. 800k bpd is about 4%. A sustained 4% annual drop, along with drops in other OECD countries, is enough to offset BRIC/OPEC growth and cause global consumption to stop rising or possibly even fall a little.

    It’s interesting that gasoline is only down about 1% and diesel about 2%. The big drops are in other stuff like LPG.

  16. Maury, LS9’s technology sounds really great. I was really amazed by it. The only confound I noticed was the magnitude:

    The closest that LS9 has come to mass production is a 1,000-litre fermenting machine, which looks like a large stainless-steel jar, next to a wardrobe-sized computer connected by a tangle of cables and tubes. It has not yet been plugged in. The machine produces the equivalent of one barrel a week and takes up 40 sq ft of floor space.
    From an article in the timesonline

    So 1000l container with 40sqft foot print and one barrel a week. Pretty awesome, but needs some improvement to become economical for an individual.
    But I’m like you, I’d love to get in on LS9 too.
    Here’s hoping for a solution.

  17. The Volt could save our suburbs.

    Maybe. But given the accelerating rate at which GM is circling the drain, I wouldn’t bet on it.

    What I would bet on (and why I agree with your larger point, even though I don’t think it’ll be the Volt that gets us there) is the Aptera, or VW’s recently-resuscitated 100km/liter car, or some other modern iteration of the post-WWII “bubble cars”.

    $10/gallon will matter a whole lot less when we can move 2 people in climate-controlled comfort at 150+ mpg. No moonshot leaps in battery or any other technology are required – just mass and Cd reductions, and for the safety Nazis to stay the heck out of the way.

  18. It’s new technology wako. A laptop does more today than a room sized computer did in the 70’s. The important thing is,they can modify yeast to eat anything,and make any kind of fossil fuel. And the cost of designing the yeast continues to drop. They’re already talking about a variety that can eat CO2 and produce oil or gas out of thin air. That would be freaking awesome.

  19. Hey, a 4 percent drop in one year in oil consumption is not amazing, but it will be if sustained for several years…and I suspect it will be sustained, if oil stays at this price level….
    I am seeing more and more scooters on the road in Los Angeles…a guy riding a scooter is probably cutting consumption by 80 percent….
    mass transit ridership up…
    It is sad about GM, but maybe they can hang on…too long they let managerial hubris rule…
    simple observation: GM execs eat in special private dining rooms, while Silicon Valley top guns share the same cafeteria…

  20. I agree Maury, and I actually wonder why they didn’t start with a photosynthetic organism first. Probably evidence that I know so little about genetic engineering. But regardless, I hope that it can be made to work efficiently enough and that we can scale things up quickly enough to avoid too much of the hurt.
    And it certainly sounds promising. Next step will be to make other organisms that convert CO2 to methane.

  21. a couple points on subsidies. The whole issue of subsidies is heavily confused because of the methods of accounting for subsidies. Gasoline tax is used to fund roadways… mostly. It’s also used to fund public transit… kind of. It’s also used to fund… I think you get my drift.

    At the same time, we use the general tax fund to subsidize public transportation and roadways. I have always advocated that every transit system should fund itself. If you want roadways, funding must come from the gasoline tax or road use tolls (which is actually better). If you want public transit, all funding comes from gate receipts. If you want bicycle pathways, pay a bicycle roadway tax. All this cross subsidy stuff has to stop because it distorts how people value some good or service.

    When it comes to urban spaces subsidizing rural I was talking about the price differential on real estate subsidizing where you live. For example, if it cost me $400,000 for 800 ft.² in the city and $200,000 for 2000 ft.² in suburbia, that means I have $200,000 (effectively) to pay for my transportation costs. If I can pay off my mortgage faster, that’s more money in my pocket for transportation. I don’t know about you but I can pay off $200,000 faster than $400,000 because I can control how much I spend on transportation.

    as for power subsidies, well, I don’t see any power generation plants (wind, nuclear, natural gas) sitting in Boston proper. All the power plants are located… guess where… suburbia. [world-domination So I guess if we really wanted to take political action and have suburbia control the power plants, I guess cities would be under our control and dance to our tune]

    Someone said:It is time we invested in our cities and made them great places to live also.

    Cities have nothing of value. They cost more, you get poor quality food, it’s unsafe to exercise in public space, you live in cramped quarters with way too many people around you. Why the hell would anybody even want to go near a city. I think of them as a landscape with herpes.

    The things friends have told me they value about cities (shopping, restaurants, museums, live music) hold no charms. I have enough stuff. I cook better than most restaurants and I take great joy in cooking for my friends. Museums are nice once or twice a year at most for myself. They are however useful if I’m going on a date and want to get laid. And last, live music never fails to disappoint. Give me a good quality MP3 any day.

    the only significant advantage a city has over suburbia is that you have more targets of opportunity if you want sex.

    On the business side, you have nothing but disadvantages. Higher cost of power higher cost of real estate higher cost of employees. The only advantage I can think of is that your CEO can usually find another CEO close by so they can go play golf together.

    The only way I could make a city livable is remove all the buildings, all the roads and replant the landscape with trees and grass and food plants.

  22. I work for a major overnight delivery company. My route is a remote area. I drive between 300-400 miles per day. I spend aleast 80 dollars a day and as much as 100 dollars to fill my van. I wonder if there will be point when the saids it’s not worth it. Or the prices are so expensive that only the rich afford the srevice.

  23. Certainly a lot depends on the town. Some towns, and probably most suburbs, are the product of cheap oil, and face hard times if not total ruin.

    My chosen location — a village in a rather remote location in the Japanese mountains — has a long history. Ironically, it was cheap oil that almost killed this place. Before the advent of the private automobile, this village flourished economically. People had enough money to build their own hydroelectric station on the river.

    So the more expensive fossil fuels get, the brighter this village’s future looks. In fact, already some people who left after graduating from high school have come back.

  24. Government regulations and litigation are killing the small town at a much faster rate than fuel prices. Always look to the lawyers to understand where things are going wrong.

    Small towns cannot provide the high technology medical services modern people expect. Chronically ill persons and the elderly will find it more difficult to live in isolated villages and townships.

  25. ~ “Small towns cannot provide the high technology medical services modern people expect. Chronically ill persons and the elderly will find it more difficult to live in isolated villages and townships.”


    There are numerous places in the world where elderly people live long healthy lives without the benefit of high-tech medical services.

    Living in a rural environment with the support of family and friends is more healthy than living in a crowded, polluted urban environment — even if there is no high-tech medical equipment available.

    The high-tech medical equipment often available in an urban environment doesn’t necessarily mean a higher quality of life.

  26. If people really are mass migrating back to big cities, then the world is in for great doom and even more economic pain. America’s great power has been the distributed world brought on by transportation. The entire nation was changed into factories and farmland by the steam train.

    I guess socialist politicians will like this outlook better though. As people migrate to cities, they tend to lose their morals in the great mishmash of cultures which occurs. This in turn causes social problems. This in turns means everyone starts looking to politicians for solutions.

    We have to achieve cheap fuel, or we can all look forward to a French socialist lifestyle in the future. I know some here will like that. But I can tell you, I would not.

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