I can’t say precisely when, so by “soon” I mean within two years at most. My reasoning is below; I’d be curious to hear feedback.

Given that the:

1. Price of oil spiked to $147 per barrel in 2008
2. Current oil price is $80, even though we’re in the worst recession since the Great Depression

I reason that:

1. The price of oil remains ~$80 per barrel because demand is keeping it there.
2. The U.S. is in recession with oil at that price, no recovery is coming. We are in a permanent recession.
3. With oil at those prices during a recession – four times that of just a few years ago – indicates we have hit the limits of supply at this price. That is, oil producers cannot pump more to get the price down, even if they wanted to (which most don’t).

However, demand in China continues to grow, and we continue to burn far more oil than we’re finding, so this means another oil price spike is almost certain within two years. The U.S. economy may find a way to recover somewhat, too; perhaps another bubble can be found. And the Americans are starting to drive more, again. That will push demand up.

Demand is going to push on supply, and price is going to go up fast, followed by a crash to a lower level than we are now. We have to reach a level of recession where we are consuming considerably less oil, or are considerably less dependent upon oil.

As we’re not doing anything serious about consuming or being less dependent upon oil, there will be another spike and crash.

Don’t wait for your federal government or even state/provincial government to provide leadership. They will at best respond too late, once we’re mid-crisis or beyond. Make your town a transition town.

Climate change is not a clear and present danger. It is clear to scientists, to those who take the trouble to understand the science, and to those who trust the former or the latter. It is not at all clear to anyone else, and of course the truth and danger are deliberately obscured by paid deniers.

Climate change is also not a present danger, meaning it is not an immediate threat. The longer we put off confronting climate change, the more damage it will do, but the nature of the threat is creeping and exponential. Some changes are occurring right now and many may realise that climate change is a contributory factor, but the danger is distant and remote. Later, as we go up the exponential damage curve, climate change becomes a clear and present danger but it will be too late to stop the worst.

Humanity does face a clear and present danger, however, and combating this crisis will go a long way toward fighting climate change. Environmentalists must not waste this crisis. Despite forty years of environmental activism and some major battles won, the war is all but lost.

If you want to win, it is time to change strategy. The crisis is peak oil, and is dead simple:

1. There is only so much oil;
2. At some point, the peak, we will have used half of all the oil;
3. After that point, there will only be less oil; and
4. Our entire civilisation, especially transportation and food, is dependent upon oil.
5. No substitutes are anywhere near available.

It doesn’t take a genius to realise that unless our need for oil remains less than the supply of oil, the price of oil is going to go up. Way up, given how dependent we are upon it.

From The Oil Drum

After the price of oil spikes, there will be a recession, and the price may come back down. That has been the pattern in recent recessions caused by oil price increases. This time, however, we have passed peak oil and that means the supply is less than it way – which means the price is not going to go down as much as it used to.

We are in a permanent recession as a result of the fact that oil prices are roughly four times what they were a few years ago. Because virtually 100% of our transportation – trucks, trains, planes, ships, and of course cars – runs on oil or its derivatives, the price of transportation has increased. The same effect exists with food, where pesticides are petroleum based, and of course tractors run on diesel. Inflation lately has been driven by these increases in transportation and food costs, and as people have to spend more on necessities like food and transportation, they will have less to spend on other things. This means less consumer demand and therefore a recession.

This recession is permanent and will probably deepen. Just prior to the recession, the price of oil spiked to $147 per barrel, and it is now approximately $80 per barrel. This is four times the price of only a few years ago, when the economy was booming. We are now in the worst recession since the Great Depression. The price of oil is not going down.

How does this recession fit into environmentalism? It is a crisis that will continue until we greatly reduce our demand for oil. Which, coincidentally and interestingly, is also a big part of the cure for climate change.

Climate change warriors need to get behind a plan to get off oil. The peak oil crisis is now, and people will respond. Whether they respond by invading another oil-bearing country, by dissolving into poverty and despair, or by conserving and moving to renewable energy is currently an open question.

Environmentalists, climate warriors, peak oilers, nationalists, and democratic reformers need to pile onto peak oil. The longer we delay, the more damage we suffer from recession, from peak oil, and from climate change. Replacing oil with conservation and renewables makes the nation energy-independent, creates a secure food supply, eliminates oil-induced inflation and recessions, and slashes greenhouse gas emissions.

Peak oil is a clear and present danger to the nation, to our prosperity, and to civilisation, and the protective steps for peak oil will greatly help with climate change. All of us need to join together to combat it.

Peak oil means that we have used half of all the available oil on the planet. From that point forward, oil will become scarcer, harder to extract – and more expensive.

Peak oil wise men say to expect oil price volatility with an overall upward trend. Consider these signs:

• The spike to $147 per barrel in October 2008, just before the banksters crashed the economy
• The price of oil is ~$80 per barrel in the middle of the worst recession since the Great Depression, or 400% more than it was just a few years ago.

Note that there were recessions after the oil price spikes in 1973 and 1979.

The suburban foreclosure rate is higher than the urban rate, attributed to transportation costs which are 17% of the average American’s income, undoubtedly higher for many suburbanites commuting from work to Wal-Mart to McMansion in an SUV. The suburban foreclosure rate is a probable consequence of peak oil.

There will be other consequences, too. If the wise peak oil folks are again correct, we can expect:

• Modern agri-business dependence on oil means food prices will increase
• The increasing cost of transportation will cause everything, and especially imports, to rise in price

I have predicted that the outcome of these two is that our current recession is permanent. With food, transportation, and other costs permanently higher, there will be a reduction in overall employment because more of the family budget will go to these necessities.

Offsetting this drop in employment to an unknown amount will be new farm jobs (at very low pay) and likely a throttling of immigration.

Learning more about peak oil

The following sites are excellent on the subject of peak oil:

• The Oil Drum: Discussions about energy and our future
• Future Scenarios: Mapping the cultural implications of peak oil and climate change
• The Archdruid Report: Druid perspectives on nature, culture, and the future of industrial society

There are also some great books that explain peak oil and its consequences clearly:
James Howard Kunstler’s The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century pretty much sums it up.

Kunstler has also written a novel, World Made by Hand, in an attempt to convey what it would be like for those living in a post-peak oil world.

John Michael Greer’s The Long Descent: A User’s Guide to the End of the Industrial Age also does a great job explaining peak oil and why we don’t see it: we have all bought into the myth of unending progress, rather than accepting that much of our progress has come by burning oil.

The Oil Drum is one of the best resources on the web for keeping up-to-speed on peak oil’s progress and ramifications. The site also lists several “Peak Oil Primers,” and amusingly ranks them on a DEFCON scale. The DEFCON scale was designed to indicate the activation level of the U.S. military, with DEFCON 5 being “normal peacetime military readiness” all the way up to DEFCON 1, which signals an “imminent or ongoing attack.”

Having spent some time on each of those sites, I can say that they all predict very bad outcomes as peak oil progresses. TOD’s DEFCON rating appears to come from the optimism a site has about avoiding the worst of these outcomes, and how far along we are. I think it is fair to say that Kunstler and Savinar think sliding down the razor’s edge is unavoidable.

Where would you rate yourself? Do you think we still have time to develop alternatives, that peak oil has not yet arrived, that its impact will be slow and we can adapt? Put yourself at DEFCON 5, the lowest rating. Think like Kunstler and Savinar, that there are going to be significant casualties and a big chunk of civilisation will be lost? You’re at DEFCON 1. Or perhaps you’re somewhere in-between.

Personally, I stand at Defcon Zen. What is will be, and we do what we can. Continue reading →