You are currently browsing the category archive for the ‘oil shock’ category.
A leading energy economist in the International Energy Agency reported today, in an interview with The Independent, that the world’s oil supply has been depleting almost twice as fast as their 2007 projection, and that an energy supply crisis is looming in the next five years that will choke off any economic recovery.
“We have to leave oil before oil leaves us,” said Dr. Fatih Birol of the IEA. “The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously,” he said.
It’s been over two years now since the World Without Oil game got people to collectively imagine our next oil crisis, and prepare for this day. For a video tour of your near future, try the official WWO videos by Kalwithoutoil. To see the full WWO archive, go here. Or for your own little refresher course in how to survive an oil crisis, review our WWO lesson plans? Photo by Napalm filled tires
“The calls for food assistance to our Catholic Worker House have tripled this past month, but last Saturday we had only 1/3 our usual number of volunteers show up to deliver the food… In the meantime, besides delivery, we have another problem, and that is food to give out to the poor. Our delivery this month from the Regional Food Bank was half its usual amount. Instead of about 14 tons of food, we received 7 at the Dorothy Day Center… The Printable Flyers are online. They are basic how-to instructions for coping with severely challenging circumstances. We’re handing out the full set, since we don’t know how far down this is going to go… We’re suggesting that people combine households, move in with each other, especially small households with only one or two people. The way things are going, keeping a household going with only one or two people isn’t going to work well. Inflation is running up prices, rents are going up, we’re headed for a big spike in foreclosures. I’ve been getting calls from people I know are middle class and even upper middle class about assistance in meeting mortgage payments. We’ve had to turn all of those down. I tell them to move in with their parents, but there is a lot of denial…. I worry all this will be too little, too late… I wish all this had held off for a couple more years, but oh well, at least we are where we are now and aren’t starting from square one.” Sound like a report on what’s happening today? It’s actually an example of “isthisnotagame”: it comes from an excellent report submitted back in July by jpeaceokc for the alternate reality game World Without Oil. Happy holidays, everyone. Photo by bella love via Flickr.
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.
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.
While the perps express shock at how much collateral damage their greed is doing (rather like termites in a collapsing house), let’s all take a calming minute to honor the heroes of this crisis – the people who did what they could to actively counter the devastation. Who are they, you might ask?
The people who ride bicycles. The people who take transit. The people who bought more fuel-efficient vehicles. The people who drive the speed limit or less. The hypermilers. The people who plant gardens. The people who localize their food and energy. The people who invest time in their communities. The people that took staycations. The people, in short, who did their own math, gauged the weather for themselves, and took positive action ahead of the crisis. The very things prescribed by the World Without Oil game (and taken to heart by many of our players).
How did they help? Quite simple. By reducing our demand for oil, these people have helped to drop the price of oil and thus ameliorate this year’s fuel price hike. The fuel price hike, of course, is part and parcel of the foreclosure crisis: it wasn’t just that people couldn’t afford their ballooning mortgages, it was the three-punch combo of mortgage + fuel prices + food prices that really knocked ’em down and out.
Plus of course, by adapting in a socially conscious way, these people have made their lives bailout-resistant. Individually, each contribution is small, but collectively they are quite significant. Large enough, anyway, to fill up our transit systems, calm our highways and empty our greenhouses.
The self-reliant individual used to be a proud model of American citizenship, good stewardship the epitome, and self-sufficient independence the backbone of the American character. When was it exactly that that model was replaced by the lowest-cost-at-any-price consumer, and the drill-anywhere bail-me-out spirit became our national standard? Photo by Pandiyan via Flickr.
I’m mulling this morning about the various natures of future knowledge, and how they influence human behavior. Hurricane Ike started this train of thought, which is not surprising, as forecasts and predictions and planning (and dread) are part and parcel of our experience with hurricanes.
After ravaging Haiti and Cuba, Hurricane Ike is plotted to come ashore again at Galveston, Texas, pushing a storm surge that threatens to overwhelm the sea wall there. So once again the little hairs stand up on the back of my neck: the World Without Oil alternate reality also had a hurricane (Felix) come ashore at Galveston, inundating parts of that city and also causing flooding in Houston.
WWO predicted this hurricane, but like many predictions, this is not remarkable. Given how hurricanes operate in the geography of the Gulf, it’s a safe prediction to make (it’ll come true eventually). Right now, the forecast calls for Ike to hit Galveston, and this is also not remarkable. Forecasts are like a chain of well-educated predictions, and if any of these predictions goes awry, the forecast suffers.
Which brings us to foreknowledge – which I’ll define here as the ability to recognize what is actually going to occur. Foreknowledge depends on two things coming together: accurate perception of the world as it is and accurate understanding of the way the world works. Unlike an event chain, foreknowledge can bypass the tactical sequence in favor of the strategic outcome. At its highest levels, foreknowledge involves a “eureka moment” when the opaque transforms into the inevitable. And foreknowledge informs and motivates more strategic human behavior: a hurricane forecast leads to boarded-up windows and evacuations; foreknowledge about the effect of global warming on hurricanes and sea level, in contrast, leads people to rebuild or relocate.
The goal of World Without Oil was to create a platform for foreknowledge about oil dependency in its players and observers. It is generating two outcomes: (1) people able to perceive more accurately the world as it is and how it works in regards to oil, and (2) people having a foreknowledge “eureka moment” and changing their situation and behavior accordingly. Both these outcomes help to lessen the impact of the inevitable transition we face as oil becomes more difficult to find, extract, procure, and burn with a clear conscience.
In the World Without Oil game, we predicted that a sudden rise in oil prices would cause a bicycle shortage. But I don’t think we adequately envisioned the crisis in bicycle repair.
Behold a sign of the times: the times being 1973, that is. The photographer, ubrayj02, explains:
So add bicycle care and repair to gardening, cooking, hypermiling, community organizing, and the list of other skills that give a great return on investment in the world without cheap oil. Photo by ubrayj02 via Flickr.
Responding to the crisis of the World War I and II years, people planted Victory Gardens. By raising their own food, citizens cut the demand for outside food and saved the fuel that would otherwise be needed to bring food to them. More important, they increased the resilience of the economy (by decentralizing food production, by being able to make their own decisions about distribution, and so on). And most important of all, they thus became an active part of the war effort – “Food is Fighting!” as several government posters succinctly put it. One result: an extraordinarily unified country.
Now we fast-forward to 2008. Whether or not the government chooses to acknowledge it, there’s another crisis going on – or more precisely, a concatenating and synergistic series of crises with feet already in the door. And many people are responding appropriately: by planting the Victory Gardens of 2008, by riding bicycles and taking transit, by driving efficient cars and hybrids, by eating locally, by building green, by cutting waste, by building communities and debating solutions, and so on.
The differences between then and now are notable – and to my mind, ominous. Then, these citizen actions were actively encouraged by The Powers That Be, which tallied their contributions and recognized them as important. Then, the White House boasted its own Victory Garden. Today, however, these citizen actions are actively discouraged by the government in favor of Consumerism As Usual, and the contributions these citizens are making are not recognized or even tabulated. Instead, we hear the “drill!” mantra, even though the citizen conservation approach has the potential to produce (via saving) more than 10 times the energy that drilling would net, in a quarter of the time. And once again the potential to unify the country, not divide it further.
In the World Without Oil project, we simulated the first 32 weeks of an global oil shortage. In the simulation, the government did very little and it was up to the people to crowdsource their own solutions to the crisis. Unfortunately, as with many other revelations from World Without Oil, government inaction seems to be coming true. Will it be up to the people to crowdsource their way into a viable and better way of life? The good news is, we’ve already started.
In the wake of Russia’s Georgian victory, a lot of people have taken George W. Bush to task for his statement that he had “gotten a sense of [Vladimir Putin’s] soul” and found him “straightforward and trustworthy” upon their meeting in June 2001. But I for one am willing to take the President at his word. Perhaps the most noteworthy thing that we found out via the World Without Oil game is that oil changes people.
Here are some of the changes you can expect, according to the game:
- People will toss enviro regulations. Without even a second thought.
- People will try to dump their gas guzzlers (torching them for the insurance if necessary).
- People will start riding mass transit and bicycles in great numbers.
- People who are leveraged to the hilt will be devastated financially: repos, defaults, bankruptcies.
- People who control energy will assert their power to protect their control.
- People will turn to local sources, especially for food.
- People will start growing their own food.
- People will be angry – some, very angry – at being forced to change.
All of these changes are happening now, in the real world. Some of them are positive adaptive changes, but others are negative reactions to the prospect of change. What the WWO game enabled its players (and observers, even today) to do: try out those changes in advance. In the same way that a disaster drill allows people to think through the “alternate reality” of a hurricane, tornado, earthquake, or epidemic, World Without Oil prepares us to recognize a calamitous event in its beginning stages and to plan a wise response.
These real-world changes are happening because more and more people are sensing the basic market truth: The world wants more oil every day, but the world’s oil production fell below demand in 2005; in fact, the recent increases in production may not even bring us back up to 2005 production levels in 2008. People are sensing that the pipeline leading to their cars and homes is shaky and growing shakier, and many of them are preparing by adapting their lives now. Oil changes people, but for better or worse? That’s up to them. Photo by drp via Flickr.
The far-reaching World Without Oil dragnet pulled in a strange fish today: Igor Kenk, arrested for being the godfather of hot bikes.
An article in The Walrus by Holly Jean Buck lays out what went down: the improbably named crime kingpin is accused of stealing bicycles in Toronto and warehousing them for resale after the oil crash. With over 2800 bicycles on ice, Kenk would have been the pedal pusher extraordinaire in post-oil Toronto. The article cites WWO as one of its sources about the potential for a bicycle shortage in a $6-a-gallon world, and especially, Kal’s undercover video. Isthisnotagame?
As Holly Jean puts it, “there’s something there, something in his behaviour, that speaks to an essential human instinct: this pack-rat impulse, wired together with survival strategies, deep in our neural circuitry.” Part of that, of course, is a reaction to the creeping certainty that a survival strategy is going to be necessary. Photo by barely_legal via Flickr.
Thomas L. Friedman and I don’t always see eye to eye, but this recent editorial of his is right on:
When a person is addicted to crack cocaine, his problem is not that the price of crack is going up. His problem is what that crack addiction is doing to his whole body. The cure is not cheaper crack, which would only perpetuate the addiction and all the problems it is creating. The cure is to break the addiction.
He goes on to quote economist Paul Romer: “A crisis is a terrible thing to waste,” which pretty much sums up the reason we did a “historical pre-enactment” of the 2008 oil crisis in World Without Oil. Through the artifice of a game, we got to have the learning opportunity a crisis presents, without the crisis itself.
President Bush understands our oil addiction – he used the term himself, in a State of the Nation speech. As Friedman elucidates, what Bush doesn’t understand is how to cure addiction. After 9/11, he told the nation to go shopping while he worked up a pretense to invade a country with huge oil reserves. This is some kind of twisted War On Drugs approach to oil addiction: you occupy your dealer. The only thing is, the War On Drugs isn’t working either.
So now we have: This is your economy. This is your economy without cheap oil. Any questions? Artwork by ~~zorro~~ via Flickr.
Speaking of crises, I’m trying to clean up my desk. Here’s something easy to pitch out: a letter from Newt Gingrich. According to the envelope he needs my help to send a message to Congress:
Drill Here. Drill Now. Pay Less.
Strangely, he doesn’t mention that Drilling Here will net a nationally insignificant amount of oil, Drilling Now won’t yield that insignificant amount of oil for 8 or 10 years, and the Less we would be Paying would be about six cents per gallon. He also neglects to mention that we would be drilling in ecologically sensitive areas and all the profit from drilling would go to oil companies. Too bad this isn’t the World Without Oil game, where our hardheaded players put a natural check on unsupported, unsupportable emotional fantasizing.
And now I pick up a letter from the CEO of United Airlines, urging me as an airline customer to support efforts to curb oil speculators, whom the airline industries define as people who don’t actually use oil, i.e. people who are not them. I guess I can understand why the airlines would want to get the other bidders in the room out of the room, but would that really lower oil prices? Oil futures are different from other commodities futures: owners can’t sit on oil, to drive up its value; just because you pay more doesn’t mean it’s worth more; when the contracts come due, speculators need to sell their oil futures to someone who actually uses oil. If at that point the speculator paid too much for the oil, they take a loss. (We may see speculators taking such losses later this year, in fact, if oil prices don’t rise again.) Again, too bad this isn’t the World Without Oil game, which naturally invoked collective intelligence to examine claims such as the United Airlines letter for accuracy. But then again, maybe this letter actually supports the World Without Oil results; in the game, the airlines couldn’t adapt to the abrupt rise in oil prices, made bad decisions and went bankrupt.
At this point I am reminded of Jane McGonigal’s keynote at SXSW: Reality Is Broken: Games Can Fix It. In it, she listed four ways in which games do better than reality in generating happiness. I think that World Without Oil adds a fifth point to her roster: Games don’t reward people for sloppy play. Photo by Now and Here via Flickr.
Found this well-titled article in GQ about peak oil. For those unfamiliar with the term, it’s the (inevitable) moment when the supply of oil hits its peak and then starts to decline. Although it seems like it would be an easy moment to recognize, it’s not: Britain’s North Sea oilfields, some of the best managed in the world, hit their peak in 2000, and it took the oil field managers about a year to realize what had happened. The data are even more confusing when you’re talking about global oil production, and thus you have a debate raging right now as to whether we are approaching peak oil worldwide or whether we have in fact already passed it.
The peak oil bell curve is often taken for an ironclad rule, and in many ways it is, but it’s useful to remember that its curve essentially plots human behavior. Hubbert’s curve defines how humans extract oil in a relatively free market. Humans can modify the shape of the curve, and there’s some evidence that through advanced extraction techniques, we have been pulling oil forward and extending the top of the curve a bit. What IS ironclad about the bell curve, however, is the area underneath it: there is only so much oil. If you pull oil forward to ease today’s curve, it creates a sharper drop ahead.
The term peak oil is shorthand for the abrupt change caused by the shift from an upward slope, when the system encourages people to use more oil, to a downward slope, where the system takes oil away from people, when every day less and less oil is available. What worries people is that, psychologically, this is a potentially devastating transition for humans and societies to undertake with something as fundamentally useful as oil.
Easing this psychological transition was what the World Without Oil game was all about. A serious game is the perfect way to broach matters that we’d otherwise put out of our minds. It asked “what if?” and let people imagine what the first temblors of change would feel like. People played for the reasons that Sharon Astyk puts forth in her excellent blog, Casaubon’s Book, and emerged from the game better able to understand where we are, what has happened to Sleeping Beauty, and what we need to do now. Photo by Ben+Sam via Flickr.
“What began as a marketing tool has now become a lot more useful: playing with alternate realities can solve real problems.” The writer is Anne Wollenberg, her article’s in The Guardian, and she’s talking about the genre started by the World Without Oil game. Read the article; it’s really excellent and lays out pretty clearly the potential that these collaborative games have to save the world. (And let’s shout out to WWO player RockLobster, quoted in the article! Woo!)
As a result of our current concatenation of calamities, future thinking and what-if scenarios have suddenly become the thing to do. Witness a CNN Special titled “We Were Warned: Out of Gas,” sent my way by alert WWO fan Diane. The behind-the-scenes commentary, however, is more interesting and real to me than the Hollywood-style cinematic premise. The revolution will not be telescripted; it’s already begun. Video scene from Kalwithoutoil.
Recent comments by prominent figures (such as Phil Gramm) that the U.S. credit crisis, oil crisis, recession etc. are “psychological” have generated significant backlash (Gramm lost his job, for example). The World Without Oil game has a unique insight into this, actually.
It’s been well known that a sudden sharp increase in fuel prices would have a significant negative impact. Securing America’s Future Energy (SAFE) established this in a series of “wargame” simulations, as just one example. These top-down analyses generate outcomes such as “1 to 2 million unemployed people.” OK, fine. But do they actually produce anything of value for us, the common people? What if I don’t want to be included in that statistic? The top-down view has no wisdom for you beyond “suck it up.”
Whereas World Without Oil takes the bottom-up view, and is full of ways for a person to avoid becoming a statistic. It’s gathered hundreds of ideas expressed in over 1500 different ways, all focused on practical actions that people can take. I think any person that spends an hour or two exploring the WWO archive will come away better prepared for our oil-poor future. This is what WWO was all about – that by “playing it people wouldn’t have to live it.”
So, yeah, the problem is psychological. Policymakers who can only look from the top down are psychologically unable to see the value of a crowdsourced, collectively intelligent, bottom-up view such as WWO. They don’t truly understand the problem, and thus disconnect themselves from the solutions or any hope of meaningful individual action.
The credit crisis is grabbing the headlines in America, as Fannie and Freddie starve on the empty calories of their bad loans, IndyMac Bank goes into federal conservatorship, and so on. The latest Harper’s Index gives the underlying numbers:
Chance that a U.S. home is currently vacant: 1 in 35
Rank of this among the highest recorded vacancy rates in U.S. history: 1
An article in The Economist (July 12) backs up the numbers: 18,600,000 U.S. housing units stand empty. It goes on to say that “formerly vibrant neighborhoods have taken on the dilapidated air of ghost towns” and “municipal taxes go unpaid” and “boarded-up homes invite looting, drugs and other criminal activity” – all outcomes foreseen in the WWO game. What we didn’t foresee: that cities would respond by demolishing the homes. But that’s actually being contemplated, according to the article.
The media hasn’t yet connected the 2008 credit crisis to the 2008 oil crisis, but again WWO teaches us the connection is there. As explained in an earlier post, the Petro Razor is at work here. Communities with forced commutes are on the wrong side of the Razor are likely never to recover; I’ve already heard anecdotal evidence that this process is underway.
Meanwhile, in a short article on Page 10A, we learn that Russia has reduced oil flow to the Czech Republic without warning or explanation. The move comes three days after the CR inked an agreement enabling the U.S. to build a missile-tracking radar station on Czech soil, So now begins the petropower plays among nations, also foreseen in WWO? The event that set off the global oil crisis was this: oil suppliers “unilaterally renegotiated their contracts,” delivering less oil than promised, which is exactly what’s happening to the Czech Republic. So is this a one-off, or a canary going thud in the coal mine? Stay tuned. Photo by judepics via Flickr.
In the oil shortage chronicled by the players of World Without Oil, the resistance to telecommuting quickly went by the wayside, so to speak. Employers were eager to relieve their workers of the commute burden – infinitely preferable, in their eyes, to helping them with their fuel bills.
And now, here in the real world, an article in the New York Times relates how gas prices have driven students, so to speak, to taking classes online. The article reports online enrollment is up 50% to 100% in some schools, and “the greatest surges have been registered at two-year community colleges, where most students are commuters, many support families and few can absorb large new expenditures for fuel.”
Can employee telecommuting and virtual business travel be far behind? Thanks to loyal reader Laurel for the tip. Photo by wrumsby via Flickr.
This from CNN in May:
The International Energy Agency gave advance warning that its previous forecast for supply and demand remaining in pleasant equilibrium over the next two decades was flawed. Its new projections, due in November, will say supplies may fall 10 percent short of demand, according to a report in the Wall Street Journal.
“Stephen Leeb, an investment manager who has authored two books on oil scarcity, said Russia was already seeing a drop in production, and there’s little evidence Saudi Arabia could increase production even if it wanted to.
“If the two biggest oil producers in the world can no longer increase production, that’s a catastrophe, not a bubble,” he said.
Others say there’s no way $130 oil is justified.
“This thing has to turn around, it’s insanity,” said Peter Beutel, an oil analyst at the consultancy Cameron Hanover. “Ultimately we’ll see a huge collapse in prices.”
Beutel doesn’t know when that collapse would come, but he predicts it will be within weeks or months, not years.
But he doesn’t know just what might bring it about – perhaps the Federal Reserve increasing interest rates or a big drop in consumption as people worldwide can no longer afford to fuel their cars or heat their homes.
“If these prices stick, you may see whole neighborhoods where people abandon their homes,” he said predicting that in the Northeast U.S. it will cost $5000 to heat a home unless prices fall.
OK, so this is scary. To my ears, this amounts to an admission that what was foreseen in the WWO game is indeed on the way. One of the experts says oil supply has failed, and so there will be a “catastrophe” as people worldwide run short of oil. The other expert says, no, the “catastrophe” is the high prices, which will cause people worldwide to abandon their cars and their homes. Either way, catastrophe ahead? Photo by gruntzooki via Flickr.
The single most disturbing thing that arose in the World Without Oil game had to be the disintegration of law and order, especially in the suburbs. WWO players realized that if only 20% of the families in a neighborhood left (because it no longer made sense to commute, for example), it caused a chain reaction that led to increased crime – a situation compounded when communities were hard hit by budget shortfalls and a contracting economy, and thus shrinking and overstressed police forces and services. And the crime led to more people leaving the neighborhood, which led to more crime, and so on. And scenes like this, from player Warnwood.
Which is why it’s utterly disturbing to hear that our players predicted this correctly, and that the process has already begun – catalyzed of course by the subprime mortgage crisis. You can read all about it in this article in The Atlantic magazine.
In Europe, I am led to believe, the most desirable property is typically closest to the city center. Something to think about? I’m within walking distance of two downtowns, myself… Photo by robertpogorzelski via Flickr.
One of the key lessons of the World Without Oil game: oil is everywhere and in everything, and once you start interrupting its flow, weird things start to happen. They can be little things at first, but as seen from the boots on the ground, little unpleasant things add up quickly to koyanniqatsi, a life that must be lived differently. An example: gasoline theft. If it happens once, you grouse. If it happens four times, you stop buying gasoline. Another example: food prices. Milk goes up: you grouse. What do you do when the price of everything in every store is going up (but your income isn’t)? Well, some people are going to start stealing gasoline.
The mainstream media hasn’t really absorbed this yet. The stories I read talk about these incidents as though they are isolated. But they’re not: they’re all the click of one domino hitting two others. So without further ado here are 50 clicks for you, courtesy of the Wall Street Journal. (Thanks to WWO pal David Markham for the link; photo by timsamoff via Flickr.)
David Kirsch, an oil analyst at PFC Energy, said that if the most promising areas off Florida and California were opened for drilling, their peak production in a decade could be as little as 250,000 barrels a day — less than a quarter of what the gulf produces now. “It’s almost a desperate attempt to take advantage of the political climate brought on by high energy prices to steamroll through legislation that won’t fundamentally address those high energy prices,” Mr. Kirsch said. (As reported in the New York Times)
250,000 barrels a day – to put this number in perspective, it’s the amount that the Cantarell oilfield in Mexico declined in the last six months (and its decline will continue).
It’s the amount that North Sea oil fields declined in the last year (and their decline will continue). It’s the amount taken offline recently when rebels in speedboats attacked an oil rig off the coast of Nigeria. It’s a little over 1% of our current oil consumption and maybe a third of a percent of the world’s. It’s spit in the bucket.
Meanwhile, conservation methods offer us a way to reduce our dependence on oil by as much as one-third. That would be 28 times as great an effect. Twenty-eight times. We wouldn’t have to spend anything, or spoil anything, to do it. We could start right away, rather than waiting 10 years. And perhaps most tellingly, it would be a benefit that actually accrued to squeezed U.S. citizens, rather than a benefit that accrued to oil companies and whoever will bid the highest for the offshore oil.
It’s what the other developed nations of the world have done. Maybe we should take advantage of the research they’ve done in this area? Or must we live through the World Without Oil scenario first?
Another article in the paper that’s straight out of World Without Oil: “Between surging oil prices, food inflation and a credit crunch that’s depressed global growth, leaders from the Group of Eight face the gravest combination of economic woes in at least a decade when they meet next week. The outlook has darkened dramatically since last year’s summit in Germany, when leaders declared the global economy was in ‘good condition’ and oil cost $70 a barrel – which seemed high at the time… ‘Now you have a financial disorder where the epicenter is the U.S.,’ said Robert Hormats, vice chairman at Goldman Sachs in New York. And fuel and food inflation ‘are serious matters that affect large numbers of people.'”
“On oil, analysts are skeptical that the G-8 leaders – representing the United States, Japan, Britain, France, Germany, Russia, Italy and Canada – will come up with much beyond urging major petroleum producers to boost output” – um, does it strike anyone else as naive to ask sane businesspeople to work harder and invest more money so as to undercut their own price for a commodity they only have a finite supply of? The reaction to these pleas, BTW, has pretty much been what any pusher says to his john. Photo by rednuht via Flickr.
The mainstream media is catching up to World Without Oil’s vision for an oil-challenged future. Experts are “shuddering at the inflation-fueled chaos” and “foreseeing fundamental shifts in the way we work, where we live and how we spend our free time.” “You’d have massive changes going on throughout the economy,” said Robert Wescott, president of Keybridge Research. “Some activities are just plain going to be shut down.” Push prices up fast enough, said Michael Woo, a Los Angeles Planning Commissioner, and “it would be the urban-planning equivalent of an earthquake.” And S. David Freeman, president of the L.A. Board of Harbor Commissioners, said “The purchasing power of the American people would be kicked in the teeth so darned hard that they won’t have the ability to buy much of anything.” Do you remember the abandoned cars in WWO? Experts support this and offer a rough number: 10 million abandoned cars.
Read all about it in this LA Times article by Martin Zimmerman. Graphic from the article.
The Petro Razor: one of the useful precepts to come out of World Without Oil. In the game, once the global oil shock began, the Petro Razor went to work slicing away the things that depend on oil. And then the things that depended on the things that depend on oil. And then the things that depend on the things that depend on the things, etc. And it cuts away with an inexorable logic all its own. As Inky_Jewel put it: “The Petro Razor is trying to shave us clean. But nobody knows how to use it right, so it keeps cutting us instead.”
Here in the real world, the Petro Razor is also busy. I think a lot of its work has been masked by the subprime mortgage crisis, and certainly the two are working together to cruel effect. But hearing about the rise in abandoned pets and children’s activities being cut and people hiring hoods to torch their gas guzzlers and people setting fire to gas stations in protest and so on, sounds to me like the keen snick-snick-snick of the Petro Razor. Photo by I See Modern Britain via Flickr.
Alert reader Cathy sent me the link to this article by Damien Cave which begins: “Higher fuel prices are forcing cities across the country to cut public services, limit driving by employees and expand public transportation in what has become a sprawling movement to conserve energy.” The article goes on to cite that 90% of 132 cities surveyed are altering operations in response to higher fuel costs. This forced cutback in public services was a big item in the WWO game: almost every service a city offers consumes fuel, and cities draw up their budgets in advance, so sudden increases catch them flatfooted (as we’re seeing now).
But the article goes on to quote the mayors at the conference: “some of them also acknowledged that higher gasoline prices could eventually make their cities bigger, better and richer.” The mayors are reporting transit use is up, the movement to resettle pedestrian-friendly downtown is accelerating, and new interest in bike lanes.
In Newsweek, Robert J Samuelson acknowledges that the equivalent of Peak Oil is here – demand has outstripped supply – and quotes economist of CIBC World Markets as saying that this will help U.S. manufacturing: no longer can jobs go overseas with such impunity. Relocalization works for manufacturing as well as food. Indeed, I’ve already read of a case where IKEA moved a manufacturing plant to the U.S. for this reason – it was cheaper to build bookcases here than to ship them in from elsewhere.
Samuelson can’t see past the current infrastructure, unfortunately, but the Economist can. In their most recent issue, entitled “The Future of Energy,” the editors cite this “failure of imagination” as the key to our problem with energy. They put forward instead ideas for “a world where, at one level, things will have changed beyond recognition, but at another will have stayed comfortably the same, and may even have got better.”
What patently doesn’t work is to cling to a wasteful system that’s loaded with problems and is incontrovertibly beginning the decline of its useful life. To quote the out-of-game “addiction” teaser for World Without Oil: “You know that it’s bad for you. You’ll cut back someday.” More drilling and more wars are the addict’s groping for one more fix: they solve nothing and don’t change the fundamental forces at work.
As the effects of high fuel prices play out around the world, many people are commenting on the predictive power of the World Without Oil game – and it is remarkably eerie to see the events described by WWO players appear in real-life headlines and news stories.
But the real power of the game, I feel, goes beyond anticipating external events – i.e., telling the external truth of our relationship with oil. The real power is in activating internal truth: enabling people to see events and understand their connection to petroenergy. To pirate an old saying, telling external truths is giving people a fish, i.e. feeding them for a day; enabling internal truthtelling is teaching them how to fish, i.e., feeding them for life.
As an example, let’s look at a comment to the previous post by WWO player PeakProphet: he relates his experience trying to find a home for two abandoned puppies. This is not a story that on its face has anything to do with oil. But once he scratches the surface we see it has everything to do with oil: $4.50 gasoline has really impacted people in rural areas; many families are seriously stretched; pets are expendable. And PeakProphet knows from the WWO game that the oil crisis burden will not fall equally, that alas it will fall mostly on anyone less able to scramble out from under it: the poor, the sick, the stretched, and yes, the defenseless family pet. From two half-starved puppies we come to see an entire region overloaded with abandoned pets, and thus we begin to apprehend the ways in which our oil crisis has already kicked the legs out from under so much that we take for granted. “Tiny Little Kitten” by TrekkyAndy via Flickr.
“Americans are angry about the economy, I’ve come to believe, in a new and profound way…. our anguished cries may be fueled by our unwillingness to accept an unmistakable message the economy is now sending us: We must fundamentally change our behavior.” From a column by Chris O’Brien in Sunday’s San Jose Mercury News. He goes on to prescribe the ‘casserole economy’: “Simplify. Have more discipline. Begin to do the things you’ve known all along you should be doing, but haven’t either out of denial or inertia or because cheap gas allowed you to avoid them.” He quotes Kit Yarrow, economic psychologist at Golden Gate University: “Oddly enough, I think there is a huge silver lining. I think people will be less wasteful.” And Chris calls for government leaders to restore our tattered social safety nets and to galvanize the Victory Gardens of the 21st century.
In short, he sounds just like the voice of experience talking about the lessons of World Without Oil.
This is the point, folks, where the World Without Oil game wants to cease being prophetic. We were supposed to play it first, then live it differently. As the next stage of the crisis looms ahead, let’s focus hard now on that “differently” part.
I’m mulling this morning over the similarities between the subprime mortgage crisis and the high fuel price crisis. Both strike me as little garden paths that the unwary were led along, by people willing to make a buck over the inability of others to visualize the future.
In both cases, people were sold a dream of the unaffordable made affordable, and sold the products that go with it: big new homes in the suburbs and plush low-mpg vehicles to make their long commutes comfortable. Now however the payment rates are being radically readjusted and the balloon payments are coming due. The purveyors of this dream – the subprime lenders of U.S. energy policy, the oil and auto companies and others aided and abetted by a subprime administration – are escaping with their gains and leaving people made destitute by their deception.
What’s needed is action that materially reduces our dependence on oil forever – higher fuel efficiency, plug-in hybrids, alternative energy. Solutions such as drilling for more oil are merely a continuation of the cruel deception. For starters, it will take about 10 years for any new well to actually produce any oil – no help whatsoever to those being squeezed hard right now by high fuel prices. But the main point is: more oil, from any source, amounts to no more than taking out a second mortgage on a subprime energy policy, something that only puts the inevitable foreclosure off another year or two.
Clifford Krauss is living World Without Oil, but it’s no game. Clifford wrote an article that appeared yesterday in the New York Times. It’s about the effects of high gasoline prices on rural areas in the U.S., where people are reeling under the triple strike of low incomes, fuel-inefficient vehicles, and long commutes to work. Folks, you have to read this article: this is not fiction, this is really happening.
Cars abandoned at the side of roads. A man loses his truck because he couldn’t afford the payments and the fuel. People eating less meat, giving up video rentals to buy gas. People forced to choose between food and transportation. People praying to God for lower fuel prices. People unable to afford the transportation cost to get medicines. People defaulting on their electric and phone bills. People quitting jobs because working less is the economically rational choice: all the wages just go down the fuel spout.
And the ripple effects: stores and restaurants closing. Layoffs. Theft rising. Local governments abandoning services. A new calculus is at work to define the haves and have-nots: the Petro Razor. Fissures are appearing along the lines that WWO foresaw.