Wednesday, April 30, 2008

The End of Recreational Boating?

Here is a little item that was almost lost in a large, boring summary of oil industry news last week:

Oil to Hit $225 a Barrel?
If you think oil and gasoline prices are high now, they may seem cheap before long, according to CIBC World Markets Chief Economist Jeff Rubin. Rubin, who predicted three years ago that oil would reach $100 a barrel, thinks it will climb to $225 a barrel in four years. Gasoline could be around $10 a gallon by that time, he says.

It's that time of year again, and I'm making my long maritime commute from my winter digs in Myrtle Beach to Rhode Island. Here are my observations along the ICW about this season's boating activity so far.

If the boaters in North Carolina are any indication, then the small boaters will be out in force this summer. Lots of outboard boats, small I/Os and runabouts have practically slowed my progress on weekend days. The fuel prices haven't seem to affected that activity.

On the other hand, there is a startling lack of large powerboats passing me each day, which would be typical in past years, as big SeaRays, Hatterases and Vikings from FLA are delivered to New England so the owners can enjoy a few cocktails and sunsets out at Martha's Vineyard or Fire Island.

Yesterday, passing the FREE docks at Elizabeth City, NC, there was only one boat tied up. These docks are usually filled during the spring and fall cruising seasons. I had the Dismal Swamp Canal lock all to myself.

Back to the oil prediction; I read somewhere that in Europe, the boating industry saw a dramatic change when fuel prices hit the dollar equivalent of the $6/gal range.

At $10/gal, burning 15 gal/hr, a two hours spent water skiing with your kids will cost $300 just in fuel. A 30' Carver with twin gas inboards will burn about 25 gph, meaning a six hour round trip to Block Island will cost about $1500 in fuel. These activities will be competing with mortgage payments and rising cable TV bills.

If gas goes to $10/gal in four years, it will cost $220/hr just to run a twin screw towboat (like SafeSea has) in 2012. Suddenly, $250/hr for non-member towing is a money loosing formula.

All the more reason to start looking into branching out into other profitable tasks for your equipment, like derelict disposal contracts with local governments, and privatized security duties with DHS.

Here is my way off the wall prediction: in 10 years, there will be more money to be made with a small boat equipped with a FLIR camera than a towline and salvage pump.