Recycling Today’s June Conferences: Twilight Time

The creation of new capitalist economies and the power of demographics are combining to place the United States in the “twilight” of its global economic dominance, according to economist and futurist Don Reynolds of 21^st Century Forecasting, South Orange, N.J.

For the second consecutive year, Reynolds addressed attendees of Recycling Today’s June Recycling Conferences at a joint keynote session open to participants in the Paper, Plastics and Electronics Recycling Conferences, held in Chicago in late June.

As recyclers well know, the economic growth rate of several other nations continues to surpass economic growth in the United States and Western Europe, Reynolds remarked.

He pointed out that just 15 years ago, the world’s largest economies were in the United States, Japan, Germany, the United Kingdom and France—traditional members of the G7 (Group of Seven) club.

Today, China and Brazil have muscled their way into the top five, while Russia and India are also striving to reach one of the top spots. He described the income growth in these nations as “geometric” as opposed to linear.

Latin America represents “a great growth area” said Reynolds, who pointed out that the region has switched from a ratio of 25 dictatorships and 4 democracies to one with 25 democracies and just 4 dictatorships.

As well as this region is performing now, it could further benefit from offshore oil deposits off the coast of Brazil, Reynolds stated.

Oil prices currently are tied into China’s activity more than anything else, said Reynolds, a long-time Texan who watches the industry closely. “Peak capacity is what we’re experiencing, not peak supply,” he stated, referring to both production and refining capacity.

Prices may be artificially high by about 10 percent because of commodity fund investing, said Reynolds, pointing out that some $200 billion is invested in commodity indexes today versus only $2 billion just four years ago.

But prices are likely to remain high, he cautioned, because even as production and refining capacity is able to ramp up, “China’s demand will soak up what little capacity is left [to be grown].”

Reynolds predicted that the world has “entered a prolonged era of high energy prices,” predicting a floor price of $90 to $120 per barrel for oil with plenty of spikes and volatility.

The futurist dismissed corn-based ethanol as a viable solution, and cited it as a legitimate cause of global food shortages and hunger in other parts of the world.

“The real breakthroughs long-term might [involve] hydrogen,” Reynolds stated. He also pointed to bacteria-driven algae as a technology to watch. He added that he is not convinced that cellulosic ethanol can replace gasoline to a great extent, though the prospects appear better than those for corn-based ethanol.

The new technologies are needed not just to supplant oil, said Reynolds, but also to combat global warming. Reynolds foresees as much as a 6 degree average annual temperature increase occurring. “When I tell you I believe in global warming, that means something,” said the self-described Texas oil patch conservative Republican.

Some bright spots for Americans in attendance, according to Reynolds, are that the U.S. and U.S.-based companies are still number one in the world in research and development and that “the U.S. is still a place people want to move to,” Reynolds remarked.

Recycling Today’s 2008 June Conferences were held at the Hyatt Regency O’Hare June 22-24. Next year’s conferences will be June 7-9 in Atlanta.