We are likely at or near peak oil. The effects will be devastating, including a permanent recession/depression and a major scaling back of civilisation-as-we-know-it. The current recession may well be as much due to high oil prices – now ~$80 per barrel, or quadruple the price of just a few years ago – as to the banksters.
Note: This article is aimed at people with some awareness of peak oil. (It has been increasingly in the news lately.) For a frightening and well-sourced look at expected outcomes, check out Life After the Oil Crash. If you don’t want to ‘believe’ that site, there are plenty more where that came from; I’ve sourced a few reputable sites at the end of this post along with some good peak oil books.
The key points are these:
- Our economy requires continuous growth. Our economy runs on oil. Oil substitutes are nowhere near being ready in sufficient quantity to take over, if that is even possible. Therefore, a reduction in oil supply/increase in prices means an economic contraction.
- Because oil is used for virtually every single thing in our society, from factory-farmed food, to our entire transportation system, to even building alternative energy systems, price increases will ripple through the economy and bankrupt countless people and companies.
What I want to talk about here is the expected response of various governments, especially mine (Canada) and the U.S. Given a serious depression brought on by spiking oil prices and a shortage of supply, what will governments do?
Ignore the problem
Up till now, they have largely ignored the problem, but reality is about to rear its ugly head and become quite unignorable. Still, so-called ‘conservative’ governments have a solid track record of ignoring the suffering of millions of their own people, and there’s no reason to believe that they will not try to do so again. The Great Depression was a perfect example, in which right-wing governments in Canada and the United States believed that ‘the market’ would correct itself given time.
When that didn’t happen, those governments were replaced with more activist leaders, but by then millions were utterly destitute. And now, unfortunately, all the major parties in Canada (Conservatives and Liberals) and the U.S. (Republicans and Democrats) are essentially ‘conservative,’ which in practice means in service to the wealthy.
Token gestures
This is really a variation on ignoring the problem, in which a leader pretends to take something seriously but does not actually take realistic steps to address it. Token measures may be taken, often announced with great fanfare, but the problem continues to worsen because nothing is really being done about it.
In fact, the token measures usually make the problem worse, because the powers-that-be squander money and other resources that could have been used to combat the problem. Case-in-point is the recent Canadian ‘economic stimulus,’ in which the Conservative (in name only) government handed out billions for paving driveways and adding decks to houses. A sensible response would have been to insist that all stimulus money be used for conservation, say insulating one’s house, or for alternative energy generation. This would have had the effect of saving people money and energy and slowing climate change and reducing the impact of peak oil. However, that contradicted ‘conservative’ ideology so could not be done, and as a result Canada now has billions of dollars less and continues to increase energy usage.
Baby steps
The masses are getting, restless, so Something must be done. Token gestures are no longer adequate; too many people are losing houses, going hungry, turning to crime, and otherwise making the government look bad. If Something is not done, the current government may actually be replaced.
The Obama administration’s recent announcement of a few billion for nuclear power is a baby step. It will help a tiny bit – or it may hurt. Either way, a few nuclear plants will not get the U.S. ‘off oil’ any time soon.
Alternate endings
After all avenues of non-action have been exhausted and there is real threat of political change, even insurrection, somebody may get serious about addressing the root cause of the problem – or they may claim to do so in order to seize power.
In the United States during the Great Depression, Franklin Roosevelt became President and his government took serious steps to end the Depression and to make sure it couldn’t happen again. In the first case, for example, FDR put people to work through civic improvement programs, and in the second the Glass-Steagal act was passed to keep the banksters in check. (Its repeal is a big part of the reason the current crop of banksters again crashed the economy.)
On the other side of the ocean, a madman used the German depression to seize power.
There is another possible ending for us. It could be that no realistic actions are taken and no megalomaniacs attain power, but things just fall apart; the centre cannot hold. Let’s go through each of these scenarios.
The Madman
Nobody wants to take this possibility seriously; I suppose we like to think we’ve ‘evolved’ past this stage of allowing such evil. Realistically, it has happened within the lifetimes of people alive today and the conditions are ripening for it to happen again, especially in the United States.
There are a very large number of seriously unhinged people in the United States, and some of them have achieved quite high levels of power. That Sarah Palin would seriously be considered as a vice-presidential – and now even a presidential – candidate is truly frightening. That tens of millions of Americans think she’s just the ticket is insane. That Rush Limbaugh has 25 million ‘ditto-heads’ speaks to the debasement of the American people.
The U.S. has only two parties, and one has allowed the other to wage a ‘culture war’ for the purpose of dividing the nation and making it easier (for them) to conquer. They are abetted by a sniveling, corporate media that has fought in court for the right to not tell the truth when reporting news. The other party (the Democratic Party, in case you were wondering) is little better, and Obama is, in practice, little different from his predecessor. Many people elected Obama thinking him to be another FDR, not Bush-lite.
All of this sets up the conditions for a strong leader to sweep into power and take control – all that is needed is a crisis. A peak oil-induced depression will be a very serious crisis indeed.
The centre cannot hold
It is quite possible that our political parties are so corrupt that they will dither and hand-wave and make token gestures until the country simply falls apart. If federal governments remain ineffectual and lose sufficient credibility, and if people are suffering greatly, then the federal government may become obsolete.
This could happen in various ways. Regional leaders may arise who provide an answer – perhaps not one that works, but that appears to work long enough. These leaders may push for secession of their region.
Or, things could just disintegrate into something like James Howard Kunstler’s World Made by Hand
Given that rising oil prices have a strongly localising effect, this ending is quite possible. As oil prices rise, for example, so do transportation costs. That favours local manufacturing, local farming, and individual conservation over giant, remote generating plants. As communities come to rely on their own resources more-and-more, and as the higher levels of government continue to extract taxes that provide less-and-less value to people, there will be a strong pull away from federalism. Nobody likes taxation without representation….
Half-assed action
Both of these outcomes are non-solutions to our current predicament, which is that the price of oil is going to keep going up while the supply diminishes, progressively rolling back technology and civilisation. The final possibility is that a strong leader who ‘gets it’ somehow attains power and takes some action, but not likely enough to get us to a sustainable way of living. Keep in mind that this person could be a Hitler or an FDR.
Let’s think this through from the point-of-view of this strong leader (could be national or regional).
- He (for convenience I’m using the masculine) recognizes that the oil supply is dwindling and there is nothing he can do to prevent that.
- Insufficient action has been taken to prevent many of the worst effects, and so there will have to be a significant change in living standards; in particular, there are many things the government will no longer have the money to do.
- The market did not and will not solve the problem.
- Localisation will be driven by increasing costs of transportation, and this is a threat to national/regional unity.
What to do?
Realistically, the only choice is to redirect remaining energy supplies to building a sustainable society. This sounds simple and even appealing, but in reality it means a huge change in how we live and will be strenuously resisted by everyone from CEOs to commuters. As a result, any leader will almost certainly take a ‘half-assed’ approach to get us through the worst of the crisis, thus permitting a partial recovery and setting us up for the next crash.
For example, fuel economy standards will be raised, school buses may be pressed into service as commuter buses, growth of suburbs may be curtailed, building codes will be revised, and quite possibly a large-scale build-out of alternative energy will begin, with wind and nuclear in the lead.
Conservation will be strongly encouraged, and governments may no longer be able to give plum deals to heavy industrial consumers, for example the aluminium industry. Recycling could take off. Sports teams and rock stars will no longer be able to jet around the country in order to make millions. Local agriculture will revive somewhat. There will be a lot of people who have to find new ways to get by as cubicle jobs evaporate.
All of this may get us to a point where we can plug along for awhile at $100 per barrel oil, or $200, or wherever it settles briefly. John Michael Greer suggests this first crisis period will last 10-25 years, and this seems reasonable. However, the continuous growth economy will still be in place, the supply of oil will continue to diminish, and competition for the remaining oil will increase, so at some point there will be another collision between the two and another step down.
The only way to prevent this is to move to a sustainable way of living. The means exist to do this, but, as mentioned already, there will be very strong resistance, so most likely we will not go all the way there. Unfortunately, the longer we wait, the less resources (primarily oil and gas) we will have to fuel the transition, and the closer will be other, very serious problems like climate change. If you’ve been following the latter at all, you know that the cost of mitigating climate change now is vastly less than the cost of attempting to adapt to it later – and we’ll have less resources to to do.
I’ll detail the steps we really need to take in the next article.
Suggested books and sites if you want to learn more
There are several excellent websites that discuss peak oil.
- The Oil Drum: Discussions about energy and our future
- Energy Bulletin: Peak oil primer
- ASPO (Association for the Study of Peak Oil and Gas): Understanding peak oil
The books below discuss in much more detail some of the ideas mentioned in this post.
The first book (from left-to-right) inspired the movie Collapse, currently in the theatres. The book pulls no punches about what we can expect in a post-peak oil world.
James Howard Kunstler’s The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century
The third book is Kunstler’s World Made by Hand, which essentially describes the outcome of “The centre cannot hold” scenario. The U.S. reverts to a very local ‘economy’; life is shorter and more brutish.
The next final book describes the outcome of an experiment that took off and became wildy popular: The 100-mile diet. The authors attempted to live only on foods grown within 100 miles of their home. They were motivated by concerns about climate change, but in reality peak oil is going to strike first and make the 100-mile diet a necessity rather than an option. (I discussed some serious concerns about this even being possible today in Why Most Food Could Never Be “Local” – What this means in a peak oil world to your food choices, to the 100-mile diet, and to vegetarians.)
1 comment so far ↓
It seems like local political arrangements, especially in the US, tend toward inequalities in power in the absence of any checks or balances from above. The outcome could be not Hitler but thousands of bosses and caudillos.
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