The energy crunch looms closer, even the oil barons are noticing

The question is worldwide, but it's also intimately local: how close are we to the big crimp in all our driving and flying and inefficient, electronic gizmo-infested houses?

How close to having to pay sharply more for everything, including food? How close to having to traumatically change the wastrel ways and infrastructures (notably urban sprawl) we've built up over the past 50 years of cheap oil? When are we going to get serious about preparing for the inevitable?

The question is raised by the upset in Libya, which provides two per cent of the world's oil. How can two per cent drive oil prices up so sharply? Yes there's speculation, hoarding and panic, but oil supply is that tight. It's coming anyway, and these hiccups are just reminders.

It's true, predictions of depleted oil go back to the original OPEC oil crisis of 1973 when prices spiked and recession followed. It's happened several times since, including three years ago when it was a factor in triggering the recession.

Things always seem to go back to "normal," but now there's more. The International Energy Agency last fall declared that "peak oil" -- a phrase it had shunned before -- is actually past. It happened in 2006. Their calculations indicate that's the point at which the world's conventional reserves started drawing down faster than new discoveries could keep up. (Egypt's reserves peaked in 1996.

Meanwhile its population tripled since 1960, increasingly supported by imported food -- which it can no longer afford. And boom! -- is that a message for the rest of us?)

Thanks to our failure to conserve, the worldwide shortfall will be covered from now on with the stuff that's mostly problematic, dirty, expensive, or all three -- tar sands, Venezuelan heavy crude, coal-to-oil derivatives and biofuels -- until they, too, start buckling. Natural gas will also play its part.

Meanwhile, if you've ever wondered what the big oil companies say privately, Foreign Policy magazine, privy to the inside stuff, had a recent article entitled "The coming misery that Big Oil discusses behind closed doors." They all say the same. Shell was most specific, foreseeing a decade of mayhem starting within four years. On the big scale, Japan, Norway, Denmark, and some big corporations like Wal-Mart have changed their ways, Shell says, but in most countries, notably Canada and the U.S., there's hardly anything that registers.

And that's not all. The connection is tight between oil and food. Higher prices for both underlie the mayhem in the Middle East. We have warmed the Earth and unleashed the deluge by burning off the world's fossil fuels, which is diminishing our food-producing capacity with floods and droughts. And in one of its classic bonehead moves, the Bush/Cheney government tried to get "off oil" by subsidizing corn-based ethanol. Now 40 per cent of U.S. corn goes to ethanol, driving prices of corn even higher -- and that of the meats and many other foods it commodifies. Getting "off ethanol" is now another problem.

So what's the message? In energy terms, it's not so much that we have to get off our butts and develop the alternatives at hand -- although that, too. First, it's that we have to shift gears in our heads and realize that we're going to have to use less, and use whatever we have more efficiently. When the really high prices hit, it will be like its own carbon tax, and probably then we'll get the message, although with much gnashing of teeth and accusations that the politicians have let us down. By then, it will be late. We've already wasted the 38 years since we got the first message in the OPEC crisis.

The gear-shifting also has to take place regarding economics. The future will be harder and leaner. In terms of tax dollars, outlays on facilities that will depend on traveling and discretionary spending to make them go should be combed over hard. Stadiums, for example. Or the controversial Halifax convention centre. At root, that's my problem with it -- it seems to me yesterday's economics, not tomorrow's.

On the other hand, certain forms of local activity may increase -- local tourism, for example, if people fly less and spend more at home. Or agriculture. There was a story in the last Sunday Herald about an outfit looking for farmland in the Annapolis Valley and Western Nova Scotia.

I'm not sure what kind of clients these are -- big corporations have been buying increasingly valuable farmland across the globe. But it does make the point about shifting economic values, and adds to the argument of those fighting to save farmland in Kings -- it may soon have much greater value for farming. And, of course, once we are forced to conserve and use energy alternatives, anything connected to that will thrive.

At any rate, the challenge of societal and economic change -- as opposed to mindless technological change driven by cheap energy -- is coming down with greater and greater speed and ferocity.

Ralph Surette is a veteran freelance journalist living in Yarmouth County in Nova Scotia. This article was originally published in The Chronicle Herald.

 

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