Oil production could peak by 2010. What does that mean for your community? An article by Daniel Lerch, featured in the December 2008 issue of Planning magazine.
By Daniel Lerch
The year 2007 was a watershed for global warming awareness in the U.S., marked most notably by President Bush's first acknowledgment of the "serious challenges of global climate change" in his State of the Union address. After years of politically charged debate and halfhearted measures, a broad public consensus finally has emerged on the need to reduce carbon emissions, and significant initiatives are already under way at the local, state, and regional government levels.
This past year, in turn, has proved to be a watershed for awareness of our global energy plight. Oil soared to an all-time high of $147 in July, and major business publications like The Economist noted that limits to global oil production are not only real but are also much closer than expected. President Bush again weighed in, observing in January that the flow of global oil was not keeping up with increasing global demand — an unthinkable prospect in most economic circles until that point.
Many communities in the U.S. have launched climate change mitigation plans over the last decade, and interest in local energy planning has recently risen to levels not seen since the oil crises of the 1970s. Nevertheless, few jurisdictions have truly addressed the long-term ramifications of the 21st century's energy and climate challenges. Like households and businesses across the country, local governments still largely assume that markets and higher level agencies will eventually find ways to stabilize both energy prices and carbon emissions.
In fact, global climate change and global oil depletion together pose threats much greater than larger storm surges and higher fuel prices. They are enormous and complex system problems that ultimately threaten our modern global industrial economy. Planners and local leaders alone can't solve these system problems, but they can prepare their communities for the challenges to come.
The ramifications of global warming for planning practice have been widely discussed (see the August/September 2007 issue of Planning for a series of articles on the matter), but global oil depletion is much less well understood. Fortunately, some cities are already doing something about it.
A new energy era
A few years ago, the oil giant Chevron started an unusual ad campaign with messages like "The era of easy oil is over." Around the same time, BP rebranded itself with a modernized sunflower-like logo and the new tagline "Beyond Petroleum." These and other oil companies are responding to fundamental shifts in global oil supply and demand (not to mention shifts in public relations). The less-developed world — led by China and India — is quickly building an appetite for oil, pushing demand and competition to new heights. At the same time, the flow of oil to the global market has started to hit serious geological, economic, and political constraints, resulting in energy shortages in some parts of the world and higher prices just about everywhere.
The key factor driving these changes is "peak oil," the coming maximum point of global oil production. Peak oil is a problem because after global production reaches its maximum, the flow of oil to markets will go into permanent decline, forcing consumption down with it. While estimates of when that peak will occur have varied widely, last November the Wall Street Journal reported that a growing number of industry leaders see a production ceiling as early as 2012. Post Carbon Institute's analysis of projections made by current and former oil industry experts sees permanent decline possibly under way by 2010.
There are no good solutions to peak oil. We know that the easy "conventional oil" (such as we've been pumping out of Texas and Saudi Arabia for decades) is about to irrevocably decline because global discoveries peaked in the 1960s and, over the last 20 years, oil consumption has far outpaced its discovery. The global energy industry has invested heavily in the difficult "unconventional oil" (such as tar sands and deepwater oil) to help make up the difference. However, producing this oil is expensive and extremely complex, and there simply is not enough available to replace declining conventional oil supplies plus meet increasing global demand as quickly and as cheaply as we need it.
We can't just turn to wind, solar, biofuels, or nuclear, either. With oil accounting for over 95 percent of our energy use in both agriculture and transportation, there are no substitute resources ready to replace oil. Consider the problems for transportation alone:
- We can run cars on electricity, but we can't replace hundreds of millions of gasoline-powered cars with electric vehicles — nor retrofit our vast nationwide fueling and maintenance infrastructure — in 10 or even 20 years' time.
- We can run trucks on biofuel, but we can't produce nearly enough biodiesel, ethanol, and other fuels to move the nation's freight without sacrificing vast quantities of essential agricultural land.
- We can't, as yet, fly the jet engine airplanes essential to our globalized economy on anything except petroleum fuel, recent experiments with biofuels notwithstanding.
Leading up to and after the peak of global oil production, basic economics tells us that oil prices will generally rise and supplies and prices will become more volatile — which is exactly what we've been experiencing over the last few years. This volatility is in many ways a bigger problem than higher prices alone. If we merely faced steadily rising prices, we could make reasonable economic projections and adjust policy, budgets, and plans accordingly. Instead, energy price volatility means it's no longer possible to project with any certainty whether oil will be at $60, $125, or $200 next December, let alone in December 2019.
Herein lies the essential problem for planners: Our decisions about planning and infrastructure can no longer honestly assume a steady supply of affordable fuel to power the vehicles that our local economies depend on. This highlights two key assumptions about oil found in just about every planning and policy decision we make: We assume that oil — and the energy and products that come from it — is going be both available and affordable tomorrow, and next year, and five and 10 years in the future.
Every building, neighborhood, and highway we have planned and built in the last 60 years has been based on these two assumptions. Indeed, without them it becomes nearly impossible to make any kind of meaningful plan or infrastructure investment. How might we plan a 10-year, multibillion dollar highway project if we have no basis for projecting increased vehicle miles traveled? For that matter, how might we plan a 10-year, multibillion dollar light-rail project if we can't project future ridership and induced economic activity?
And yet, we need to have some expectation of future energy costs in order to make defensible decisions. As I argue in my book, Post Carbon Cities: Planning for Energy and Climate Uncertainty, we are entering into an era of energy uncertainty where the old assumptions no longer fit and we can no longer rely on the usual experts to tell us what's going on. Instead, planners and officials need to make their own determinations about the future, starting with a realistic assessment of possible local economic and social trends in a world of scarcer energy.
Local responses to energy uncertainty
Today more than 20 communities in the U.S. and Canada have taken some kind of official action on global oil depletion — and many more are seeing action among grassroots groups — recognizing it as a legitimate and urgent economic problem that deserves serious attention. They're a diverse bunch, including communities large and small, urban and rural, conservative and liberal. Many have passed resolutions acknowledging the local challenges of peak oil, but the two most substantive types of action have been reports and task forces. Such in-depth inquiries have proven very useful for understanding the vulnerabilities, impacts, and solutions unique to each community.
Burnaby, British Columbia, a suburb of Vancouver, was one of the first local governments to consider the local effects of peak oil, having commissioned a staff report in 2005 on the general impacts facing the city. The report focused on the enormous challenges the city faces in making its automobile-centric economy work without cheap oil. The report has raised awareness about energy issues internally and has been used to provide background on certain city council decisions, such as the promotion of cycling infrastructure and opposition to freeway widening.
In 2005 another Canadian city, Hamilton, Ontario, began an inquiry into how future energy constraints might affect the city's long-term planning strategy, a key part of which was an "aerotropolis" airport-centric economic development concept. Transportation consultant and former Toronto city councilor Richard Gilbert was commissioned to prepare a report, which was presented in April 2006. The report found that peak oil in particular was an essential consideration for the city's long-term strategy. It also suggested that Hamilton could benefit from reinvesting in electrified transportation, returning to its early 20th century streetcar roots. (Gilbert has since authored, with Anthony Perl, the excellent book Transport Revolutions: Moving People and Freight Without Oil.)
Metro, the MPO of the Portland, Oregon, region, also received a report on peak oil in April 2006, which I prepared while a policy analyst there. This white paper identified future oil supply uncertainty as a serious risk management issue for Metro, particularly with regard to the agency's regional transportation and land-use planning responsibilities.
The report summarized the problem this way: "We increasingly face the potential for economic crisis brought about by uncertainty in our supply of oil, but we are unable to accurately predict in what way that supply may be threatened, and how severe that threat may be. Although the resilience of the world economic system in general — and the oil production system in particular — may sufficiently mitigate a crisis with ample time, these systems may not be able to respond in desirable ways to sudden and severe periods of instability."
Not all peak oil reports have been government initiatives. A citizen group in Willits, California (pop. 5,000), wrote one of the first community energy vulnerability assessments in January 2005, spurring their city council to establish an ad hoc energy committee to further consider municipal options for using alternative energy sources. The committee reviewed all municipal electricity expenses for a year, and developed suggestions for powering city facilities with solar power.
By late 2006, the city had used this information to acquire around $1 million in grants to install a solar energy system to power the water treatment plant and sell excess electricity back to the utility. This initiative alone will eliminate 30 percent of the city's electricity bill and will pay for itself in a matter of years.
Portland, Oregon, was the first U.S. city to launch a task force to investigate the local ramifications of global oil decline. In May 2006, the citizen group Portland Peak Oil convinced the city council to establish a peak oil task force to:
- study "current and credible" information on oil and natural gas production, as well as possible economic and social consequences of decline;
- seek community input on impacts and possible solutions;
- recommend strategies the city can take to mitigate the impacts of declining energy supplies; and
- propose methods of educating the public in order to change behaviors and reduce fossil fuel dependence.
Twelve task force members were selected from the business, government, education, and nonprofit sectors (and notably including the former chief of staff to the mayor during the 1970s energy crisis). The task force split into four subgroups: land use and transportation, food and agriculture, public services, and economic change. These subgroups reviewed existing reports and data and interviewed more than 80 different stakeholders and issue experts. The task force's final report, released in March 2007, reviewed potential impacts and vulnerabilities in general, as well as for each of the four subgroup areas. It also made 11 specific recommendations to the city council focused on the twin goals of reducing Portland's exposure and strengthening community cohesion (see the sidebar, "The Future is Local").
The Portland Peak Oil Task Force has served as a model for other communities, although each effort has been organized and has functioned in ways unique to local economic, political, and cultural contexts. To date the following communities, listed in order of population, have initiated task forces or commissions: San Francisco; Austin, Texas; Oakland, California; Alachua County, Florida; Spokane, Washington; Bellingham City and Whatcom County, Washington; Berkeley, California; Bloomington, Indiana; Westerly, Rhode Island; Brattleboro, Vermont; Sebastopol, California; Town of Frankin, New York; and Haines Borough, Alaska.
Spokane, Washington, launched the nation's first joint peak oil and climate change task force earlier this year as part of a sustainability strategic planning effort. Also in Washington, the city of Bellingham and Whatcom County launched the first city-county joint peak oil task force this summer.
Responses to peak oil are not limited to North America, of course. Local governments in Australia and the U.K. have also initiated reports and task forces:
- The Environmental Protection Agency of the Australian state of Queensland is developing an Oil Vulnerability Mitigation Strategy and Action Plan. To date they have released "Towards Oil Resilience: Community Information Paper" and a supporting research paper, both in September 2008.
- Brisbane, Australia, convened what was likely the world's first joint peak oil-climate change task force in 2006. Its March 2007 report included 31 recommendations across eight strategy areas.
- The city of Bristol in the U.K. convened a peak oil task force in September 2008. Its final report is expected to review general impacts, discuss risks and opportunities, and make recommendations for action.
- Earlier this year, Somerset County (in which Bristol lies) passed a resolution committing to providing support and assistance to all towns in the county that wish to join the Transition Towns movement, a growing international network of citizens groups preparing their communities for peak oil and climate change.
The climate connection
Much as the broad system challenges spurred by peak oil can be understood as a problem of energy uncertainty, the economic, social, and ecological challenges driven by climate change can be understood as a system problem of "climate uncertainty."
The debate about the causes of global warming is over, and the scientists of the Intergovernmental Panel on Climate Change have developed multiple possible scenarios for the next century. However, there's significant uncertainty about the effectiveness of our possible responses to global warming, especially as regards industrial carbon sequestration and industrial biofuel cultivation. Even less is known about how changes in agricultural zones, regional water supplies, and weather patterns will impact national, regional, and local economies.
Local responses to peak oil should work in tandem with local responses to global warming. Both challenges have the same root cause — our unbridled consumption of fossil fuels — and can largely be addressed with similar strategies. A joint approach also reinforces the urgency to act quickly: At current rates of fossil fuel consumption, we will most likely pass peak oil by 2010, and according to NASA climate expert James Hansen, we seriously risk catastrophic climate change if we do not have carbon emissions well in decline by 2016.
In Post Carbon Cities: Planning for Energy and Climate Uncertainty, I reviewed the experiences of cities that, up to that point, had taken official action on peak oil, with a focus on Portland and its groundbreaking task force. Drawing from the work of these cities, there are five key principles that local governments should integrate into ongoing decision making and long-range planning for addressing both peak oil and global warming:
1. Deal with transportation and land use (or you may as well stop now). Fundamentally rethink your land-use and transportation planning practices, from building and zoning codes to long-range planning. Make infrastructure decisions with 100-year timeframes, and work regionally to address the land-use and transportation challenges of energy and climate uncertainty.
2. Tackle private energy consumption. Use existing tools to encourage serious energy conservation and efficiency in the private sector. Engage the business community aggressively, challenging local leaders to reinvent the economy for the post carbon world.
3. Attack the problems piece by piece and from many angles. Use proven solutions, pursuing many different kinds of solutions at different scales. Enlist the entire community, setting clear community goals and spurring action from all sides to meet them.
4. Plan for fundamental changes — and make them happen. Educate local elected officials, staff, and community stakeholders about the challenges of energy and climate uncertainty and engage them in the discussion. Challenge them to find serious solutions and integrate peak oil and climate change considerations into decisions.
5. Build a sense of community. Get people talking with each other, forming relationships, and investing themselves in the larger community. The social resilience that comes from a strong sense of community and mutual investment is essential for meeting the complex and unknown local challenges of peak oil and global warming.
Joint energy and climate strategies would do well to focus on two main goals: reducing overall consumption and meeting basic needs more locally. In this way communities can reduce their reliance on transoceanic supply lines, reduce their vulnerability to rising and volatile energy prices, and reduce their contributions to global warming.
Meeting these goals and preparing for the challenges of peak oil and global warming will not be easy. But it is planners — as the professionals responsible for steering long-range land-use patterns, transportation investments, and economic development — who have the tools and skills to build communities that will thrive in the new era of energy and climate uncertainty.
The Future Is Local
"Relocalization" is a strategy for fostering more resilient communities and local economies by finding ways to meet basic needs — energy, food, basic manufactured goods — as close to home as possible. While that shift may seem like a radical proposal in a thoroughly globalized world, relocalization is based on the common sense of earlier generations. It's a practical adaptation to address climate change and peak oil that builds local economic security, healthy communities, and the ability of local governments to respond proactively in the face of uncertainty.
"[Relocalization] gives a sound direction and action-orientated answer to the question, ‘What can I do?' says Sonya Wallace, cofounder and coordinator of the Sunshine Coast Energy Action Centre in Queensland, Australia. "I've found people in my local community embrace the idea and feel a commitment to it locally, while they also appreciate its global connections."
The Relocalization Network, a program of the Post Carbon Institute that can be found at www.relocalize.net, is an international online network that supports individuals and citizen groups as they build resilience to peak oil and global warming locally. It allows the exchange of ideas, information, and best practices and provides technical, informational, and community organizing resources. "Like all community groups and nonprofits, we recognize the very real danger of reinventing the wheel and thereby wasting our own and our supporters' time and energy," says Allyse Heartwell with Bay Localize in the San Francisco area.
Citizen groups and affiliate organizations all over the world have joined Relocalize.net. Members work within their communities and in cooperation with local governments, businesses, media, and community-based organizations to put the concept of relocalization into practice. Many groups host workshops, conferences, film screenings, and neighborhood exchanges. Members also collaborate on local projects, including cooperative transportation networks, business directories, community-supported agriculture programs, and community vulnerability assessments. Some have been instrumental in passing new legislation promoting relocalization goals. By working locally on small-scale projects, Relocalize.net groups create opportunities for citizens to reconnect with or rebuild local support systems and prepare their communities for the challenges of peak oil and global warming.
Portland Peak Oil Task Force — Next Steps
A varied group of stakeholders was asked to review the potential local impacts of peak oil. Here is a summary of their risk-reduction recommendations, released in March 2007.
1. Reduce total oil and natural gas consumption by 50 percent over the next 25 years.
2. Inform citizens about peak oil and foster community and community-based solutions.
3. Engage business, government, and community leaders to initiate planning and policy changes.
4. Support land-use patterns that reduce transportation needs, promote walkability, and provide easy access to services and transportation options.
5. Design infrastructure to promote transportation alternatives and facilitate efficient movement of freight, and prevent infrstructure investments that would not be prudent given potential fuel shortages and higher prices.
6. Encourage energy-efficient and renewable transportation choices.
7. Expand energy-efficiency programs and incentives for all new and existing structures.
8. Preserve farmland and expand local food production and processing.
9. Identify and promote sustainable business opportunities.
10. Redesign the social safety net and protect vulnerable and marginalized populations.
11. Prepare emergency plans for sudden and severe fuel shortages.