Posted by steve on April 18, 2005
We devote this issue to the challenge of the end of cheap oil or “Peak Oil” as it is termed. We really wish our perception of the situation is wrong. But endless calculations, reading, research and meetings with experts all point us in one direction: THE PARTY IS OVER.
Get the biggest car you can. Fill it with fuel, and drive around – wherever you want to go. Enjoy it. Enjoy it thoroughly. Then get pen and paper and write about the experience. Put it in keeping for your great or great great grandchildren.
Because chances are they will be living in a world so vastly different from ours they will be enthralled to hear about what you could do in the petroleum age. Theirs will be the world of post-cheap oil. A world probably more like the 1800’s before petroleum products became widespread. More like the Amish people live today. That’s if all goes well in the power-down period we are about to enter.
What convinces us at AVBP that power-down is about to start are two simple observations. Of the 2000 billion barrels of oil presumed to be available to be pumped up, we have already used 1,000 billion. At present rate of consumption (80 million a day) we have another 30 years to go. But consumption is increasing with the expansion of the world economy, so 30 years is looking more like 15.
As consumption is increasing faster than extraction, we are looking to see the skyrocketing prices, well, any time soon. So 15 is looking more like 5 for major effects to manifest.
We know of no viable alternative energy source for powering transport and heavy equipment. And even if we did, another resource limitation, like water shortages would kick in.
We do not expect you to take our message onboard without checking.
- Look up the recent speech to Congress outlining the coming oil crisis.
- Read what Oil analyst Simmons is saying
- Read about Life after the oil crash http://www.lifeaftertheoilcrash.net/Index.html
- Check out the Association for Peak Oil Study
- Even insiders in the oil industry are tired of being misunderstood. Their attitude – let them freeze in the dark.
For the Swedes among our readers: Quote from Prime Minister Göran Persson: “- Vi har bara en sak att göra; bort med oljan, gör oss fria från detta elände.” Rougly translated ”The only thing to do is get away from oil and liberate ourselves from this oil misery.” Read more on http://tv4.se/visa/?ID=381503
So what is going to happen?
- We will see the end of continued economic expansion. Our way of life is dependant on expansion and oil. To take some basic examples, food depends on oil for growing, storing and transport. So food prices will rise.
- Plastics and chemicals use oil as feedstock. We will see a general rise in costs of goods.
- Transport is oil dependant, so transport costs will rise, raising the cost of doing business in most areas.
- As costs rise across the board say goodbye to expansion. Without expansion job losses will continue. As job losses continue more and more will be saying goodbye to their standard of living.
Already the last few weeks have been showing the signs of power down.
- Oil price hikes to $58 a barrel.
- Profitability of Airlines hit by rising fuel prices
- No increases in employment even in expanding economies
- Forecasts of slow or negative GDP expansion.
- Resource squabbles China – Japan over gas rights.
Let’s take a look on the good side:
+ Global warming will slow as fuel burning slows down
+ The toxic stress on your body (body burden) from living in a chemical– laden world will reduce as less and less chemicals are produced
+ The stress coming from the way we live will subside
+Living more naturally will come to all of us
If only we could achieve all that. On the negative side expect
- no decrease in unemployment
- resource wars as large nations get into ”last man standing” conflicts over oil.
- for the ”haves” to keep what they have so the ”have nots” get even less
- economic instability threatening the very fabric of society
Whatever organisation you are in, you need to get involved in framing a Power Down strategy. If you believe, by the way, it is not going to happen then you need to have a ”continued expansion” strategy. You will definitely be a winner if you bet on continued cheap energy boosted economic expansion and the cheap energy continues to flow.
Some approaches we have picked up along the way:
- Review the entire supply chain to find ways of reducing transport costs. Water transport is cheapest so it may be the last to go.
- Look for opportunities to use muscle and animal power.
- As power down comes it may be possible to earn money on the downturn, look for competitive advantages as power down plays out.
- Services and goods linked to the basics of life will always be needed. FOOD CLOTHING ACCOMMODATION HEALTH SECURITY AND SOCIAL COHESION.
- Consider finding other ways to finance the supply chain, using barter or points systems. Money will be getting tighter as it is inextricably linked to oil.
- Make allies in the industry you are in, so when the hard times hit you are able to support each other and still deliver standard of living supporting services to your customers.
- Prepare for your business activity to become far more local and regional as inhabitants turn to face the challenge of living within the constraints of whatever the local area provides, rather than enjoying the benefits of remote free trade.
- Handling the negative feelings. As tomorrow looks like it is not going to be like today the organization needs to deal with everyone’s negative feelings. And help people go through the different phases like disbelief, depression, panic and maybe call to action. Regardless of what you may believe at present, the coming debate about energy costs will be affecting many of your staff and customers, and you need to start to think about how you will communicate around the topic.
As we at AVBP have been working with addressing Peak Oil crash since February and the sustainability challenge for the last two years, we have gained insights and knowledge as well as put together a toolkit to meet the challenge. We are prepared to help organizations meet the challenge in various ways including:
- Providing factual information about the Peak oil phenomenon in the form of talks, summaries, reports etc.
- Providing guest speakers expert in this field.
- Helping with change management.
- Making our program management and problem-solving and innovation techniques available via our THINK TANK seminars.
- Sharing our across the board program methodology for sustainable regional development or even managing these programs.
You are welcome to contact us via our website. www.avbp.net