C
Captain Compassion
Guest
After oil supplies dry up, what's Plan B?
Extreme scarcity could be disastrous for U.S. economy
Erica Etelson
Sunday, August 26, 2007
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/26/INF7RM3OC.DTL&type=printable
When Hurricane Katrina struck two years ago, Americans learned just
how ill-equipped the government is to respond effectively to natural
disasters. But if you think the government's response to Katrina was
inept, brace yourself for peak oil.
Global oil production will hit its peak in the next few years, at
which point oil prices will skyrocket and voracious consumers like the
United States, China and Europe will quickly drain every last barrel
they can afford to buy. Our per-capita oil consumption is double that
of most European nations and more than triple Mexico's, and shows no
sign of slowing. As supplies dwindle, an economic disaster on a par
with Katrina will start to unfold.
Global oil demand is at 84 million barrels a day and rising, and there
are at most a trillion barrels' worth still in the ground, most of
which is very difficult and expensive to recover. Do the math, and
you'll see that the end of oil is, at most, 30 years away.
But long before oil actually runs out, economists and energy analysts
warn that extreme scarcity will cause prices to soar so high that it
will no longer be feasible to use petroleum on a wide scale. It is the
imminence of this supply-demand shortfall that has people like
National Petroleum Council member Matthew Simmons and Reps. Roscoe
Bartlett, R-Md., and Tom Udall, D-N.M., worried - very worried - about
our economy's ability to withstand the end of oil.
Cheap and plentiful oil is the foundation of our economy. Everything
from food production and distribution to the manufacture of clothing,
footwear, medications and plastic goods relies heavily on petroleum.
You name it, and we need oil to produce it, ship it and, in many
cases, run it.
In February, the U.S. Government Accountability Office dropped a quiet
little bombshell: a report on peak oil concluding that there is an
urgent need for a swift, coordinated government strategy to assess and
develop alternative energy technologies to avert "severe economic
damage."
The agency concluded: "(T)he United States, as the largest consumer of
oil and one of the nations most heavily dependent on oil for
transportation, may be especially vulnerable among the industrialized
nations of the world." Stark though its conclusion is, the GAO may in
fact be understating the gravity of the situation.
The report followed on the heels of a 2005 peak oil risk management
report commissioned by the Department of Energy, which warned of the
"extremely damaging" and "chaotic" impacts that will ensue if
"intensive," "aggressive" and "expensive" mitigation measures are not
put in place at least 10 years ahead of time. Both reports landed with
a dull thud and have been dutifully ignored. In other words, there is
no Plan B.
Depending on whom you ask, the impacts of peak oil range from dire to
catastrophic: At best, get ready for a crippling recession and
widespread inflation. At worst, we face severe global food shortages
that threaten wide-scale starvation and an overall breakdown of social
and economic institutions. And if history is any guide, we can expect
a series of military invasions into every remaining oil hot spot in
the world - invasions that may, by the way, require even more fossil
fuels than we could possibly expropriate by force.
Because oil companies and OPEC nations are notorious for overstating
their reserves to manipulate the market, it is impossible to predict
when exactly the world will start feeling the crunch. As award-winning
New York Times reporter Peter Maas wrote in 2005, "Because we do not
know when a supply-demand shortfall might arrive, we do not know when
to begin preparing for it, so as to soften its impact; the economic
blow may come as a sledgehammer from the darkness."
But here's a little hint: Crude oil futures hit an all-time high of
$78.21 per barrel on July 31. Prices cannot go much higher without us
beginning to feel the foreshocks of a peak oil catastrophe. Oh, and by
the way, natural gas (which provides 42 percent of California's power)
is running out, too. One day, even coal will be gone. How much longer
are we going to wait before we figure out how to survive without
fossil fuels?
The United States has reacted to the threat of peak oil and gas with
all the alacrity of its response to climate change. It is ignoring the
looming crisis for as long as it can, just waiting for that
sledgehammer to land its first blow. Eventually, when a recession
hits, tax revenue will plummet, and the government will have nowhere
near the money it needs to build an alternative energy and
transportation infrastructure. Every year that goes by without an
intensive mobilization to build an oil-independent economy diminishes
our odds of surviving the end of oil.
States, too, seem to have their heads in the sand. California,
considered a leader in efforts to reduce carbon emissions, just cut
funding for mass transit by $1.3 billion for the fiscal year. Like
most states, it ignores the urgent need to build a transportation
network that does not rely on fossil fuels.
At this point, you might be asking yourself: When oil becomes scarce,
how will I get food? That's a very good question. Here are a few more:
Will my garbage get picked up? How will my water district purify and
deliver water and treat sewage without petrochemicals? What if I need
an ambulance? What if my home is one of the 7.7 million that rely on
oil for heating? Which of my medications are made out of
petrochemicals? How will I get to work? Will I even have a job
anymore?
But don't just ask yourself. Ask your elected officials, your public
utility district and your grocer. Ask the U.S. Postal Service, Federal
Express and American Airlines. Ask GM. If you have one, ask your
financial adviser or stockbroker which companies will still be in
business after peak oil hits. Odds are, he or she will give you a
blank stare.
While the United States blindly carries on with business as usual,
countries such as Sweden, Iceland and Ireland are taking steps to
assess and mitigate peak oil impacts. Oil-rich Iran has begun
rationing and has already cut oil consumption by 25 percent. But here
at home, demand for oil is ever on the rise, and there is no talk of
conserving reserves for essential goods and services or to develop an
alternative energy infrastructure.
Instead, we are on course to squander every last drop on long solo
commutes, leisure travel, mountains of plastic junk and the senseless
transglobal shipment of unsustainably grown food.
That's where local government comes in. Small but growing numbers of
municipalities are initiating a process that federal and state leaders
should have begun 30 years ago, when domestic oil reserves peaked.
They are, in short, figuring out Plan B.
In May, Oakland appointed an Oil Independent Oakland by 2020 Task
Force. In June 2006, Portland, Ore., formed its own Peak Oil Task
Force, which got busy fast: By March of this year, it had released its
first major report, urging the city to "act big, act now," even
without further study or analysis. The report prompted the city to
pass a resolution to accelerate oil and gas conservation measures to
halve Portland's fossil fuel consumption.
Last year, San Francisco passed a resolution to assess the city's
vulnerability to oil depletion and to develop a transition plan. Other
cities, from Austin, Texas, to Bloomington, Ind., are confronting the
stark reality and trying their best to figure out how to soften the
blow.
Cities are looking at options such as local food cultivation, urban
redesign to minimize transportation needs, locally controlled
electricity, rainwater catchment systems (to ensure local access to
water for food cultivation), energy-efficient mass transit, and the
preparation of emergency plans for sudden and severe food, water and
energy shortages. They are embracing bio-regional sustainability - a
concept once dismissed as an ecotopian fantasy that is suddenly
starting to look like our last best hope.
But cities cannot solve the peak oil problem on their own. They don't
have the revenue needed to build light-rail networks and wind farms or
to store massive grain reserves. During a recession, they will be in
no position to guarantee income supports for millions of laid-off
workers. But the more they do now, while they still have a revenue
stream, the better off their residents will be.
If the peak oil doomsday scenarios are to be averted, it will require
coordinated action at every level of government, by every sector of
the economy and by every community and citizen in the nation. We are
heading into a political era in which the need to come together to
invent and support life-sustaining social and economic systems will
trump all else.
Some tout alternative energy technologies as the silver bullet that
will save us from a peak oil crisis. But there is a broad consensus
among energy analysts that it will be decades before such alternatives
are available for wide-scale implementation. Moreover, some of the
alternatives with the strongest political backing, including ethanol
and liquefied coal, may cause even more severe global warming than
petroleum has.
The United States needs to slam the brakes on fossil fuel consumption.
As if arresting climate change weren't enough of a reason for
immediate and strong conservation measures, the end of oil may just
force upon Americans a reality we have ignored for far too long: We
cannot go on like this, pedal to the metal, asleep at the wheel.
Erica Etelson is a Berkeley journalist, former environmental attorney
and oil independence activist. Contact her at
oilindependence@yahoo.com.
--
The object of life is not to be on the side of the majority but to
escape finding oneself in the ranks of the insane. -- Marcus Aurelius
Wherever I go it will be well with me, for it was well with me here, not
on account of the place, but of my judgments which I shall carry away
with me, for no one can deprive me of these; on the contrary, they alone
are my property, and cannot be taken away, and to possess them suffices
me wherever I am or whatever I do. -- EPICTETUS
Joseph R. Darancette
daranc@NOSPAMcharter.net
Extreme scarcity could be disastrous for U.S. economy
Erica Etelson
Sunday, August 26, 2007
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/26/INF7RM3OC.DTL&type=printable
When Hurricane Katrina struck two years ago, Americans learned just
how ill-equipped the government is to respond effectively to natural
disasters. But if you think the government's response to Katrina was
inept, brace yourself for peak oil.
Global oil production will hit its peak in the next few years, at
which point oil prices will skyrocket and voracious consumers like the
United States, China and Europe will quickly drain every last barrel
they can afford to buy. Our per-capita oil consumption is double that
of most European nations and more than triple Mexico's, and shows no
sign of slowing. As supplies dwindle, an economic disaster on a par
with Katrina will start to unfold.
Global oil demand is at 84 million barrels a day and rising, and there
are at most a trillion barrels' worth still in the ground, most of
which is very difficult and expensive to recover. Do the math, and
you'll see that the end of oil is, at most, 30 years away.
But long before oil actually runs out, economists and energy analysts
warn that extreme scarcity will cause prices to soar so high that it
will no longer be feasible to use petroleum on a wide scale. It is the
imminence of this supply-demand shortfall that has people like
National Petroleum Council member Matthew Simmons and Reps. Roscoe
Bartlett, R-Md., and Tom Udall, D-N.M., worried - very worried - about
our economy's ability to withstand the end of oil.
Cheap and plentiful oil is the foundation of our economy. Everything
from food production and distribution to the manufacture of clothing,
footwear, medications and plastic goods relies heavily on petroleum.
You name it, and we need oil to produce it, ship it and, in many
cases, run it.
In February, the U.S. Government Accountability Office dropped a quiet
little bombshell: a report on peak oil concluding that there is an
urgent need for a swift, coordinated government strategy to assess and
develop alternative energy technologies to avert "severe economic
damage."
The agency concluded: "(T)he United States, as the largest consumer of
oil and one of the nations most heavily dependent on oil for
transportation, may be especially vulnerable among the industrialized
nations of the world." Stark though its conclusion is, the GAO may in
fact be understating the gravity of the situation.
The report followed on the heels of a 2005 peak oil risk management
report commissioned by the Department of Energy, which warned of the
"extremely damaging" and "chaotic" impacts that will ensue if
"intensive," "aggressive" and "expensive" mitigation measures are not
put in place at least 10 years ahead of time. Both reports landed with
a dull thud and have been dutifully ignored. In other words, there is
no Plan B.
Depending on whom you ask, the impacts of peak oil range from dire to
catastrophic: At best, get ready for a crippling recession and
widespread inflation. At worst, we face severe global food shortages
that threaten wide-scale starvation and an overall breakdown of social
and economic institutions. And if history is any guide, we can expect
a series of military invasions into every remaining oil hot spot in
the world - invasions that may, by the way, require even more fossil
fuels than we could possibly expropriate by force.
Because oil companies and OPEC nations are notorious for overstating
their reserves to manipulate the market, it is impossible to predict
when exactly the world will start feeling the crunch. As award-winning
New York Times reporter Peter Maas wrote in 2005, "Because we do not
know when a supply-demand shortfall might arrive, we do not know when
to begin preparing for it, so as to soften its impact; the economic
blow may come as a sledgehammer from the darkness."
But here's a little hint: Crude oil futures hit an all-time high of
$78.21 per barrel on July 31. Prices cannot go much higher without us
beginning to feel the foreshocks of a peak oil catastrophe. Oh, and by
the way, natural gas (which provides 42 percent of California's power)
is running out, too. One day, even coal will be gone. How much longer
are we going to wait before we figure out how to survive without
fossil fuels?
The United States has reacted to the threat of peak oil and gas with
all the alacrity of its response to climate change. It is ignoring the
looming crisis for as long as it can, just waiting for that
sledgehammer to land its first blow. Eventually, when a recession
hits, tax revenue will plummet, and the government will have nowhere
near the money it needs to build an alternative energy and
transportation infrastructure. Every year that goes by without an
intensive mobilization to build an oil-independent economy diminishes
our odds of surviving the end of oil.
States, too, seem to have their heads in the sand. California,
considered a leader in efforts to reduce carbon emissions, just cut
funding for mass transit by $1.3 billion for the fiscal year. Like
most states, it ignores the urgent need to build a transportation
network that does not rely on fossil fuels.
At this point, you might be asking yourself: When oil becomes scarce,
how will I get food? That's a very good question. Here are a few more:
Will my garbage get picked up? How will my water district purify and
deliver water and treat sewage without petrochemicals? What if I need
an ambulance? What if my home is one of the 7.7 million that rely on
oil for heating? Which of my medications are made out of
petrochemicals? How will I get to work? Will I even have a job
anymore?
But don't just ask yourself. Ask your elected officials, your public
utility district and your grocer. Ask the U.S. Postal Service, Federal
Express and American Airlines. Ask GM. If you have one, ask your
financial adviser or stockbroker which companies will still be in
business after peak oil hits. Odds are, he or she will give you a
blank stare.
While the United States blindly carries on with business as usual,
countries such as Sweden, Iceland and Ireland are taking steps to
assess and mitigate peak oil impacts. Oil-rich Iran has begun
rationing and has already cut oil consumption by 25 percent. But here
at home, demand for oil is ever on the rise, and there is no talk of
conserving reserves for essential goods and services or to develop an
alternative energy infrastructure.
Instead, we are on course to squander every last drop on long solo
commutes, leisure travel, mountains of plastic junk and the senseless
transglobal shipment of unsustainably grown food.
That's where local government comes in. Small but growing numbers of
municipalities are initiating a process that federal and state leaders
should have begun 30 years ago, when domestic oil reserves peaked.
They are, in short, figuring out Plan B.
In May, Oakland appointed an Oil Independent Oakland by 2020 Task
Force. In June 2006, Portland, Ore., formed its own Peak Oil Task
Force, which got busy fast: By March of this year, it had released its
first major report, urging the city to "act big, act now," even
without further study or analysis. The report prompted the city to
pass a resolution to accelerate oil and gas conservation measures to
halve Portland's fossil fuel consumption.
Last year, San Francisco passed a resolution to assess the city's
vulnerability to oil depletion and to develop a transition plan. Other
cities, from Austin, Texas, to Bloomington, Ind., are confronting the
stark reality and trying their best to figure out how to soften the
blow.
Cities are looking at options such as local food cultivation, urban
redesign to minimize transportation needs, locally controlled
electricity, rainwater catchment systems (to ensure local access to
water for food cultivation), energy-efficient mass transit, and the
preparation of emergency plans for sudden and severe food, water and
energy shortages. They are embracing bio-regional sustainability - a
concept once dismissed as an ecotopian fantasy that is suddenly
starting to look like our last best hope.
But cities cannot solve the peak oil problem on their own. They don't
have the revenue needed to build light-rail networks and wind farms or
to store massive grain reserves. During a recession, they will be in
no position to guarantee income supports for millions of laid-off
workers. But the more they do now, while they still have a revenue
stream, the better off their residents will be.
If the peak oil doomsday scenarios are to be averted, it will require
coordinated action at every level of government, by every sector of
the economy and by every community and citizen in the nation. We are
heading into a political era in which the need to come together to
invent and support life-sustaining social and economic systems will
trump all else.
Some tout alternative energy technologies as the silver bullet that
will save us from a peak oil crisis. But there is a broad consensus
among energy analysts that it will be decades before such alternatives
are available for wide-scale implementation. Moreover, some of the
alternatives with the strongest political backing, including ethanol
and liquefied coal, may cause even more severe global warming than
petroleum has.
The United States needs to slam the brakes on fossil fuel consumption.
As if arresting climate change weren't enough of a reason for
immediate and strong conservation measures, the end of oil may just
force upon Americans a reality we have ignored for far too long: We
cannot go on like this, pedal to the metal, asleep at the wheel.
Erica Etelson is a Berkeley journalist, former environmental attorney
and oil independence activist. Contact her at
oilindependence@yahoo.com.
--
The object of life is not to be on the side of the majority but to
escape finding oneself in the ranks of the insane. -- Marcus Aurelius
Wherever I go it will be well with me, for it was well with me here, not
on account of the place, but of my judgments which I shall carry away
with me, for no one can deprive me of these; on the contrary, they alone
are my property, and cannot be taken away, and to possess them suffices
me wherever I am or whatever I do. -- EPICTETUS
Joseph R. Darancette
daranc@NOSPAMcharter.net