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It’s probably unfair to finger Rocky Twyman as the architect of the global recession, for a variety of reasons. All Twyman did was lead a mass movement to pray for lower oil prices. But as Ian Ayres asks so succinctly, “Did God reduce prices on the demand side or the supply side?” Apparently Twyman and his followers didn’t specify, and God in his wisdom chose the demand side, in the form of a global recession.

It takes a village (in recession)

It takes a village (in recession)

Out of the many lessons to be learned here, let’s focus on this: Twyman’s blithe request illustrates the danger we’re in if we don’t look at the full relationship of oil prices, supply, demand, and the oil production pipeline. This was taught really well by players in the World Without Oil game: at game’s end, when the crisis was apparently “over” and gas prices had stabilized once again (at $5.50/gal US), many players were horrified to see their neighbors fall right back into their old fuel-dependent habits. Which is what I see now all around: people believing that after a period of “false high prices” driven by “speculation,” fuel prices are now declining to their “natural levels” where they will remain, apparently, until the Second Coming.

What has actually happened is that the credit crisis has removed uncertainty from the oil market. Earlier this year, the oil market didn’t know if the oil coming out of the ground would be able to satisfy demand, so prices for oil futures went up. Now, however, it’s clear to the market that a global recession is here, and since the recession will precipitate a sudden drop in demand, it’s also clear that for the short term oil suppliers have too much oil in the pipeline. Thus the tumble in prices.

What this does NOT mean is that we have a lot of oil, or that uncertainty is gone from our oil future. Uncertainty is an indelible part of oil – for one thing, the people who control certainty are the same people that profit from uncertainty. Add to that the tendency for oil to create and maintain non-democratic nations, and the growing strategic importance of energy, and you’ve got an enduring situation where the only certainty is uncertainty.

Plus… as I’ve noted before, success in energy independence means lower oil prices. The people who buy hybrids and use alternate transit drive down the demand for oil, which drives down its price for a while. But the only way to keep the price down long term is to actively pursue alternatives, and not to be seduced by a low price today. As we all know all too well by now, that can change, and astonishingly quickly. Photo by ursonate via Flickr.

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No Gas 4 U

No Gas 4 U: A World of hurt Without Oil

I learned a new WWO statistic, thanks to Krystyn: 3 mph.

That’s the speed that gasoline moves through a pipeline, apparently, and it’s one of the reasons that a full-on WWO experience has erupted for real in the Southeast. Have you heard about this? It’s been largely swallowed up, newswise, in the mortgage meltdown, the credit crisis, the bailout and other fiascoes.

Krystyn points me to this AP story about the gas shortage, which details how the disruption to the gasoline supply in the Southeast U.S. has led to gas lines, suspended business and school operations, price gouging, panic buying and hoarding, and so on. And even violence, as this Biz Week story relates how the area is abuzz with stories about “fistfights and fender benders among drivers jockeying for position before the gas runs out.”

The root cause is Hurricane Ike and its effect on the power grid. The hurricane disrupted refinery operations in Louisiana and Texas, but that was fairly brief. The power disruption lasted much longer, and without power, the oil companies were unable to move the gasoline through the pipelines and thus, a gas shortage on the other end that’s lasting much longer than experts realized it would.

I’m reminded of a discussion I had with an authority on the fuel system prior to launching the World Without Oil game. I asked him if the U.S. had any contingency plans in place to guard gas stations in the event of a crisis (as the UK does, for one), and he seemed to think I was crazy. “There won’t be any trouble at gas stations,” he said. “Why would there be?”

WWO players understood the street reality of the situation far better, and everything we’re seeing in the Southeast now was successfully foreseen by the collective imagination of WWO players back in May 2007. If this is what happens when a transitory shortage passes through a region, what will happen when a permanent national shortage comes to stay? And what can we do to prevent that from being a disaster? That’s what the World Without Oil project was all about, to “play it  – before we live it.”

Photo by B Rosen via Flickr. The Atlanta Gas Crisis photo pool is here.

It was the world's first serious alternate reality game, a cooperative pre-imagining of a global oil crisis. Over 1900 players collaborated in May 2007 to chronicle the oil crisis with their own personal blog posts, videos, images and voicemails. The game ended after simulating the first 32 weeks of the oil shock, but its effects continue, as game designers analyze its unique gameplay and we all watch the continuing drama with global oil prices and supply.