Peak Oil: High Tide for an Oil Addicted World/Mitigation and Transition
What are our options for dealing with peak oil?
Once we accept that oil production cannot continue to grow, we are faced with the choice of how to proceed. The easiest option is to do nothing, carry on as we are and hope that a new technology will provide a solution or that the problem will not be a big as predicted. If we are to act there are a number of options open to us but we must decide whose interests we are acting in.
Firstly, we could just act in our own selfish interests and then we can ask do we move to a farm in the countryside, stock up on provisions and the weapons to protect them and so attempt to save ourselves and our family? This is our first option and can be summarised as “The bunker mentality”.
Alternatively we can think of the nation as a whole and about trying to preserve what we have. Then we can ask do we act as a nation, using our present wealth to secure the resources we will need it the future? Or do we choose the most difficult path, and attempt to scale-down our resource use responsibly, and thereby benefit the entire planet? That gives us our second option of heading towards a more sustainable society.
We could even take the interests of the plant a bit further and ask do we choose to change our social and economic structure so that we have a system that is in balance with nature. Perhaps this option is the most radical but could be argued to be the one that will enable us to have a good standard of living in a post peak world.
Why is it important to act now? If we act now, we may damage the economy.
Of course any action we take now will affect the economy, likely for the worse. But this affect must be weighed against the economic effects of the peak itself.
Whichever actions we choose to take, we must act soon. Even the big petroleum companies are predicting a global peak in oil production by 2020, while most independent geologist place it much sooner. We have no why of knowing when the wider effects of the peak will become evident in society, but once they become prominent, we will have missed our chance to prevent them.
Can we afford to be wrong about peak oil?
Any adequate preparation for peak oil will be difficult. On a national level, it will require strict regulatory measures to gradually lower our dependence on oil and gas, reducing our economy and rendering us less competitive globally. Personal sacrifices would also be necessary as car and plane travel was restricted and electricity use cutback. If the predictions are wrong and peak oil does not occur, these sacrifices will have been unnecessary.
But the consequences of wrongly assuming peak oil is "no big deal" are just as costly: once we've passed the peak, it is those countries which prepared beforehand which will be the best-off economically. If are economy is still reliant on today's levels of oil and gas consumption when global production begins to decline, we'll be forced to either pay exorbitant prices for whatever oil is available or face the economic blow of losing the oil and gas we depend on almost overnight.
Either way, we cannot afford to be wrong about peak oil.
What is the government doing about this?
Far too little. While Sweden is planning to have a 'oil-free' society by 2020, the UK finds it hard enough to begin to put plans into place to mitigate climate change. It may simply be a case of the government's faith in the markets to sort it out, through demand destruction - i.e. job loss, decreasing power usage. Some say that the government is dealing with peak oil through climate change. However, the government won't even really recognise the problem so officially it is not doing anything about it. There is a small but growing number of MPs concerned about it though.
What can businesses do about this?
Businesses provide products and services to consumers with a view to usually making a profit. Whatever business you look at it takes a resource from one source or another and adds value to it some way before moving it on to customers who are the prepared to pay for it.
There will be winners and losers in business. Many businesses will go to the wall not realising that the rules have changed permanently. Others will survive, and others will positively thrive. There will be new businesses that our generation had not previously dreamed of and old established businesses and industries which currently appear to be exceedingly strong will disappear completely. Broadly those that produce or sell necessities for their local communities will thrive and prosper. Businesses that produce or sell luxury items will suffer and probably go out of business altogether.
The general economic trends that we are likely to be looking at are high interest rates, periods of high inflation and periods of low inflation. It is also likely that some things will become un-saleable at any price, so provoking deflation in some areas whilst other items are going up in value. Different parts of the economy will be affected differently. Wages will probably not rise as quickly as the cost of living, and this will lead to unrest in the workforce and a growing number of strikes.
Rising energy costs are currently very much on businesses minds already. Businesses are going to have to accept that higher prices are here to stay and the costs will get even higher. Businesses will have to look at every way possible to reduce their energy costs. The methods for doing this will be via conservation of energy. Hedging against rising energy costs would be beneficial and this could involve signing long term contracts with suppliers or buying energy futures (this will probably be beyond most businesses).
Investing in & controlling renewable sources of energy is another option as if you can generate enough power for your business, you are fixing the price for the long term. The problem with most forms of renewables available to businesses will be their intermittency and businesses need a reliable supply. There is of course some doubt as to whether the grid will be able to provide reliability in the future and this should be factored into business plans.
Some businesses will be tempted to ask the question “can I handle the rising costs of energy in my business?” And answer yes, but without taking into account what is going to happen to their suppliers and their customers and how it will affect their behaviour, the answers given will not necessarily be the right ones.
Customers are going to be spending an increasing proportion of their income on necessities such as fuel and food; this will change what they are able to buy. Customers that are reliant on their cars to get to a business will change where they buy things. They will do other things for entertainment; they may have less time to be entertained.
Businesses may have to find alternative routes to market as their existing distribution systems become to expensive.
Suppliers are businesses in their own right. Suppliers are critical to any business, whether it be raw materials or energy suppliers or computers. If suppliers cannot keep pace with change they may not be around to supply what businesses need for their processes. Security of supply could become a major business issue.
Businesses will need to look at what is happening to their competitors. It is possible that some will be in a better position to cope with the changes than others.
A key question that business should be asking is “can my business survive the coming changes”?
Many businesses will be able to, providing they are in the right business to start with and can manage themselves according to the new rules. They may have to change what they sell, how it is made, where it is made and many other things. It will be essential to plan the business with peak oil in mind.
If businesses can meet this challenge it will be easier for everyone. If businesses fail in a big way it will spell disaster for society as a whole as businesses are currently part of the fundamental fabric of society, and have been since long before the industrial revolution.
Survival will need to be the primary aim for businesses in the future.
What are Tradable Energy Quotas?
It modern society, how much energy an individual or business has access to is limited only by how much they can afford. The most fundamental difference as we pass the peak is that there will be a definite limit on the total amount of energy available—and more importantly there won't be enough for people to use as much as they might be able to purchase. With our present system, this would lead to such a huge increase in energy price that most people would no longer be able to afford any electricity or petrol at all.
One scheme for how we might prevent this involves what are called Tradable Energy Quotas (or TEQs). The key idea is that every individual and business would be awarded a certain energy "quota" once a month. The quota isn't the energy itself—it must still be purchased normally—but merely an allowance to consume that energy. So each time you fill-up at the pump or pay an electric bill, you'd spend some cash and use up some of your quota.
These energy quotas are called "tradable" because they'd be exactly that. If you didn't require all of your energy quota, you would be able to sell as much as you like to anyone else. Business which require a large amount of energy would need to purchase the addition consumption quotas from people or other businesses which use less.
The advantage of TEQ is that the price of petrol and electricy can be control, as the total amount of quotas awardment would be set to match the amount of energy available. And even if the price of the traded quotas were to escalate due to limited energy supply, this would only affect people and business who consume so much energy that their monthly allotment is insufficient; the majority of people would be able to live without purchasing any extra.
What is the Rimini Protocol?
Similar to the Kyoto Protocol for carbon emissions, the Rimini Protocol lays out a system whereby nations can mutually agree to reduce their oil and gas consumption. It was proposed by Dr. Colin Campbell and the Association for the Study of peak oil & Gas, and signatories must agree to restrict their imports and consumption of oil. Unlike the Kyoto Protocol, the Rimini Protocol is in the very initial stages of refinement and has yet to get widespread attention of governments or the media.
What is the Simultaneous Policy?
The Simulataneous Policy is a way of getting governments around the world to implement hard choices all at the same time. Many governments won't implement a policy because it will harm them if they do it unilaterally but it everyone agreed to do it at the same time, then they would be okay. It is a way for governments to cooperate in solving global problems.
What should government be doing about this?
There are many different things that the Government could do to ease the transition to a post-peak world. To begin with, it needs to recognise the scale of the problem. At present, the Government denies that peak oil is imminent, because it relies on information provided by the flawed studies conducted by the International Energy Agency (IEA).
Once the Government acknowledges the problem, it should begin a process of educating the public as quickly as possible. This would include information about the possible ramifications for the UK and for the rest of the world, and the steps we need to take as a society to minimise the pain. The public must become much more aware of the energy they use, and how they can reduce their overall consumption.
Beyond this, the Government could produce a roadmap explaining how they intend to manage the energy descent, and a set of policy measures for implementing it. These might include:
- Introducing a fixed carbon allowance for each adult, which can be traded between individuals.
- Beginning the process of decentralising power generation, e.g. by funding local grids and micro-generation.
- Legislating very high energy efficiency requirements for new housing, consumer goods, electric lighting.
- Establishing local food production centres, and discourage shipments of food across the country and imports from abroad.
- Declaring a date by which most of the UK's energy will be independent of fossil fuels.
Do we have to change our expectations?
Yes. Things can't continue as they are and we need to have a bit rethink about what we want from the world.
What is the optimum population levels for UK and the World?
That depends on what we want to do as a society. If we try and maintain our current way of doing things then it can be argued that we have already exceeded our optimal population level and we could be heading for a population crash this century. If we were to head towards a more sustainable society, one that is in balance with nature but still a technological society we could still maintain our current levels of population and even have a higher level of population. The Club of Rome, for example, has a world-wide sustainable population level of 8 thousand million people in one of their scenarios.
Although it may be difficult to say what the optimal populatio0n level it would seam wise that we should be heading for a stable population level and zero population growth now. That way we have the possibility of avoiding the worst of any possible population crash or even avoiding it all together.
Can we change the economic system?
Yes we can. Not only can we but it can be argued that we must or a change will be forced upon us by nature. There are plans for other types of economic systems that have been around for many decades or more. There is, for example, well know systems such as socialism and communism. However, those system have had mixed success. The communist system in the former Soviet Union collapsed and even in communist China elements of a free market has been introduced suggesting that the centralised-planed economy does not work. However, it can be argued that the socialism practised in Sweden in the 1970s and 1980s is an example of a socialist system that did work. However, such systems also suffer form having a sigma attached to them in the West.
There are also other plans for money-less system. These systems such as energy credits of the Technocracy movement in the US and Europe or the cosmic accounting system proposed by Buckminster Fuller use energy as a regulator of the production system (like for example, the money-less society of “Star Trek”). The problem with these systems is they have not been fully evaluated in experimentation or simulation and need more research before we can be sure they can work.
A lot of this sounds like things the green movement has been saying.
And others as well. You may well find similarities between the Greens and other organisations who take a more “reality based” view of things. You could say that the greens work from the environment and its physicals limits and then sees how people can bets fit into that. Other parties and organisation are more money centric and the “value of money” is subjective, therefore, it could be argued that such policies, ideologies or plans are based on subjective judgements rather than physical reality.
Nature does not care what race, region or ideology you may have. Nature has her own rules, you either play by her rules or you take what comes!
Can’t we survive without oil?
We have managed to survive with out before and in all likelihood we will managed to survive with out oil in the future. That is we as in the human race, now if “we” was to mean this civilisation then it will probably not survive, certainly not in its current form without oil. However, this society is not the only way we can have a high standard of living not is it the only way we can maintain a technological society. Surviving is one option but we can actually go beyond just surviving and work towards something worth while.
Do we need to change the definition of success?
Yes. If we continue with success being defined by increasing economic wealth, then with this clearly not being possible, will only lead to greater unhappiness. It may be that we want to start thinking about social success - i.e. Gross National Happiness rather than Gross Domestic Product.
Do we need to have an end-game plan?
No, there is nothing that says we must have a plan at all. It could be argued that there was no plan for forming this current civilisation in the first place. It could be argued that this civilisation was formed because of individuals and groups following rules (such as law of the state) and interacting with one another rather than following any sort of plan. However, where would we be if we had followed a plan? What could we achieve if we had worked towards a goal? Perhaps we would not be in this situation of facing the possibility of lives ruined and populations crashing? Perhaps if we worked towards a goal and had a plan maybe we could actually build a better society post peak than we built pre-peak?
- Limits to Growth : the 30-year update by Onella Meadows, Jorgen Randers, Dennis Meadows. Earthscan. 2005. ISBN 1-84407-144-8.