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Posts Tagged ‘peak oil

Australia Pumping Empty

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Australia Pumping Empty
Fuel rationing may be just one of a series of shocks facing drivers and commuters in Queensland, Australia. Looming oil shortages will produce the biggest change in society since the industrial revolution, Sustainability Minister Andrew McNamara warned yesterday.

To underscore his concerns, Mr McNamara will appear in a documentary film premiering May 20th in which he says the days when Queenslanders could “travel on a whim” in oil-powered vehicles are numbered. The documentary, ‘Australia Pumping Empty‘, argues southeast Queensland is squandering billions on road, bridge and tunnel projects on which few will be able to afford to travel.

A report by Mr McNamara for the Queensland State Cabinet on the impact of the fuel crisis is expected to include recommendations on rationing, the future of public and private transport and sustainable population issues. It has been ordered on the premise that there is overwhelming evidence world oil production will peak in under a decade. It is expected to recommend risk mitigation measures such as cuts in fuel consumption and encouraging the development and use of alternative fuels, technologies and strategies. It will also outline demographic and regional changes as Queenslanders change travel, work and living habits.

“I think people are going to be in for a shock when they find it’s too expensive to drive their cars to work and then, when they get down to the station, they find the train is full and they can’t get on board,” Mr McNamara said. He will recommend the State Government focuses urgently on ways to cut private-car use. “I cannot overstate this – we need to adopt a wartime mentality. We’re going to face a level of urgency that will require dramatic change.” Private car use is expected to trend towards hybrid vehicles and then to electric. “But will we have enough electricity generating capacity when everyone comes home and plugs their cars in to recharge?”

Mr McNamara said no government would want to introduce fuel rationing but it could not be ruled out. It might become an option as fuel supplies run down and prices rise to avoid a situation where only the rich can afford private transport. “We face the need for a whole new economy, from the way we generate power, to how we deliver water, to how we live”.

It’s good to see that someone, somewhere, is taking all this seriously.

‘Queensland’s vulnerability to rising oil prices’ – taskforce report April 2007

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Written by Pete Smith

May 18, 2008 at 8:38 am

Goodbye To Cheap Air travel

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Popeye Express

Shares in British Airways rose sharply this morning after preliminary results for the 12 months to March revealed annual pre-tax profits up by 44.5% to £883 million. These excellent figures are bucking the trend in airlines around the world, and particularly in the US, where the airline sector as a whole posted an $11 billion loss in the first quarter of this year. BA warns that the next year will be “challenging”, in the light of continuing economic slowdown and oil prices showing no sign of a significant retreat below the $125 a barrel mark. The airline expects its fuel costs for the past year to have been more than £2 billion, around a quarter of its cost base, rising to £2.5 billion in the coming year.

In the last 90 days, jet fuel prices have jumped 38%. As oil has hit record high after record high, fuel costs have exceeded labour costs for many airlines, accounting for as much as 40% of operating expenses. Airlines can’t set their ticket prices high enough to keep their businesses in the air. According to Delta CEO Richard Anderson, ticket prices would have to rise 15-20% just to cover increased fuel costs. Of 769 million passengers on US flights last year, many are thought to be on non-essential trips which will be cut back as times get harder.

The budget carriers’ business models have always relied on the thinnest of margins, and fuel price rises have so far caused eight airlines to go under, with more tipped to follow. One of them, ATA Airlines, left US soldiers stranded in Iraq, unable to get home to Vermont as the company went bankrupt.

The larger carriers have responded to mounting fuel costs by eating into their cash reserves to keep prices artificially low. At its current spend of $3.3 million a day, American Airlines could have spent its $5 billion cash reserves, the largest in the industry, in four years. There’s only limited scope for cutting costs by tricks such as economising on maintenance, taking safety risks like flying with inadequate fuel reserves, and skimping on customer service. Carriers are hoping that mergers will ensure their survival, at least for a while. Northwest Airlines and Delta have a proposed merger under review, with United Airlines thought to be in talks with both Continental Airlines and US Airways.

Cheap air travel is almost certainly doomed. Depending on how you feel about flying, that may or may not be the downside. The upside is that rail travel is bound to gain market share in the years ahead. Rail is the cheapest and most fuel-efficient form of transport, using a third less fuel than air for personal travel, and as little as 3% of the energy for freight. Rail companies have recently been attracting substantial investments from some of the wealthiest US investors:

These are all freight companies, the North American passenger business having withered in the face of cheap, aggressively-marketed air travel, but there is good reason to expect that passenger services will follow growth in freight traffic. In their book ‘Transport Revolutions: Moving People & Freight Without Oil’, Richard Gilbert and Anthony Perl predict that in 2025, no more than 25 airports will be operating. Electric powered transportation and rail will be the standard transport options. In a post-peak oil world, rail is probably the longest safe bet one could possibly make.

Written by Pete Smith

May 16, 2008 at 12:31 pm

Peak Food

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'Peak Everything' Richard HeinbergRichard Heinberg is an American writer who is probably best known for his work on Peak Oil, the proposition that global oil production has reached, or is about to reach, a maximum from which the only way is down. The cocktail of declining output and rapidly growing demand has dire consequences for all aspects of our economies that rely on plentiful supplies of cheap energy. If you seriously think there’s any component of our way of life that’s immune to Peak Oil, you might consider a change of medication.

In his 2007 book ‘Peak Everything: Waking Up To The Century Of Decline In Earth’s Resources‘, Heinberg widens his scope to embrace not just energy, but other crucial areas such as agriculture, water, population and climate stability. In a chapter entitled ’50 Million Farmers’, he postulates that the era of abundant, cheap food is ending, and discusses four key factors that will reacquaint the well-fed West with the old spectre of famine. Although written from an American perspective, this analysis is relevant to all developed economies.

Looming fuel shortages

Agriculture accounts for about 17% of the US annual energy budget; it is the single largest consumer of petroleum products as compared to other industries.
“About 1500 litres of oil equivalents are required to feed each American each year.
“Every calorie of food produced requires, on average, ten calories of fossil fuel inputs.”

A shortage of farmers

“The average age of American farmers is over 55 and approaching 60.
“The proportion of principal farm operators younger than 35 has dropped from 15.9% in 1982 to 5.8% in 2002.”

An increasing scarcity of fresh water

“Over 80% of water consumed [in the US] goes toward agriculture.”

Global Climate Change

” ‘Global warming’ …. implies only that the world’s average temperature will be increasing by a couple of degrees or more over the next few decades. The much greater problem for farmers is destabilization of weather patterns. We face not just a warmer climate, but climate chaos: droughts, floods, and stronger storms … unpredictable weather of all kinds. Farmers depend on relatively consistent seasonal patterns of rain and sun, cold and heat; a clmate shift can spell the end of farmers’ ability to grow a crop in a given region, and even a single freak storm can destroy an entire year’s production.”

Heinberg rejects 21st Century techno-fixes such as GM crops, on the grounds that they are still heavily dependent on a fuel-fed industrial system. He believes that we must de-industrialise agriculture, reducing fossil fuel inputs, increasing labour inputs and reducing transport, with the emphasis on production for local consumption. Citing examples such as Cuba’s ‘Special Period’, WW2 Victory Gardens (the equivalent of British allotments) and the Permaculture movement, he argues it is possible in principle for industrial economies to move to smaller-scale food production systems that don’t depend on fossil fuel inputs.

But we need more farmers. This implies people who aren’t afraid of hard physical work and who don’t mind getting their hands dirty. I just wonder if, collectively, we’re up to the task.

Written by Pete Smith

April 29, 2008 at 10:06 am

We Regret To Inform You…

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This post contains in its entirety an article by Sharon Astyk at The Silver Bear Cafe. I don’t usually do this, but I can’t improve on the original, and just posting a link wouldn’t do it justice either.

We Regret to Inform You…
Sharon Astyk

When climate change and peak oil thinkers run out of other things to worry about, there’s always the endless, inevitable debates about whether we are facing a “fast crash” or a “slow grind.” And I admit, I’m worried about my fellow environmentalists – because I think they are about to lose their favorite distraction. When no one was looking, we got an answer. Fast crash wins. And we’re in it now.

Wait a minute, you argue – that’s not right. If we were in a fast crash we’d be well on our way to living in a Kunstler novel. But we’ve still got cars, we’ve got food, things are slowing down, but at worst this looks like a slow grind – but the crazy lady at the blog is saying fast crash?!?!?

Before you argue with me (and you are both welcome and encouraged to), I’d like to post something a bit out of my usual style – it is simply a description of what has happened with food and energy in the last year – that’s all it is. Then tell me what you think – because it wasn’t until I began to write this introduction to the present food situation that I suddenly was struck by the fact that even a fast crash doesn’t always look fast when you live it – new normals arise and it turns out we assimilate faster than we panic.

So here we are – the “We regret to inform you that what you have imagined to be “civilization” is now falling apart” post. See if it strikes you the way it struck me.

I would also note two things. The first is that the general political consensus is that neither the food nor energy crisis will do anything but grow more acute anytime soon – we’re really in the early stages. And that this only covers the first 4 months of 2008.

In early 2008, the world’s food and energy train came off the rails. What was startling was that it didn’t happen either gradually or in a linear way – instead, things simply fell apart at an astounding rate, faster than anyone could have predicted without being accused of lunacy.

It started with biofuels and growing meat consumption rates. They drove the price of staple grains up at astounding rates. In 2007, overall inflation for food was at 18%, which created a new class of hungry, but that was just the tip of the iceberg. In 2008, the month to month inflation was higher than 2007’s annual inflation. At that rate, the price of food overall was set to double every other year. Rice, the staple of almost half the world’s population rose 147%, while wheat grew 25% in just one day. Price rises were inequitable (as was everything else) so while rice prices rose 30% in rich world nations like the US, Haitian rice prices rose 300%.

Haiti was an early canary in the hunger coal mine. Desperately poor, by early 2008, tens of thousands of impoverished Haitians were priced entirely out of the market for rice and other staples, and were reduced to eating “cookies” made of nutrient rich mud, vegetable shortening and salt to quiet their hunger pangs. Women stood on the street, offering their children to any reasonably well fed passerby, saying “Please, pick, take one and feed them.” Thousands of Haitians marched on Port Au Prince, yelling, “We’re hungry.” And indeed, the Haitian government was complicit, allowing food relief to rot on the wharves. But Haiti was just the start.

After riots over long bread lines threatened to destabilize Egypt, the Egyptian government set the army to baking bread for the hungry. Forty nations either stopped exporting grains or raised tariffs to make costs prohibitive. Food prices rose precipitiously as importing nations began to struggle to meet rising hunger. The UN warned that 33 nations were in danger of destabilizing, and the list included major powers including Pakistan, Mexico, North Korea India, Egypt and South Africa. Many of these hold nuclear weapons.

The crisis didn’t stop among the already-poor, however. An article in The Economist reported that the crisis extended well into the middle class – Joanna Sheeran, director of the World Food Project explained, “For the middle classes,…it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.”

Up to 100 million people who had managed to raise their incomes above $2 a day found themselves inexorably drawn back to the world poverty level, while millions of those who called themselves “middle class” began, slowly, to realize that they were no such thing. Reports noted that many of the supposed middle class in rich world nations were actually the working poor who had overextended their credit to keep up appearances. And the appearances – and credit access – were fraying

In 2007, a major American newspaper reported the growing problem of seasonal malnutrition affecting poor children in the Northern US – the rising price of heating oil meant that lower class families were struggling to put on the table. Hungry, low weight children were unable to maintain their body temperature in chilly houses, and a vicious circle of illness, hunger and desperation ensued. Malnutrition bellies began to be regularly seen by pediatricians treating the urban poor in cold climates.

Shortages were a chronic problem in the poor world, but by early spring of 2008, they began to arrive in the rich world – despite Japan’s deep pockets, a shortage of butter and wheat reminded the rich world of its dependence on food import. Many of the supply problems were due to climate change and energy issues, as Australian dairy farmers struggled with high grain prices and the extended drought that destroyed their pastures.

Following up on anecdotal reports of limits at bulk warehouse stores, in late April of 2008 rationing went official. Many Costco stores were limiting purchases of flour, rice, cooking oil and other staples to avoid shortages – and the stores tracked purchases electronically to prevent customers from visiting other Costco stores. This was the first example of food rationing, but probably not the last – at least one financial analyst was predicting corn shortages in the fall of 2008.

The energy train and the food train were inextricably linked, and indeed directly (as the costs of diesel rose rapidly) and indirectly (rising energy costs created the biofuels boom) drove the food crisis. They were linked in other, complex ways as well – the housing collapse that threatened to plunge Europe and the US into a major depression was in part due to the high costs of commuting from suburban infrastructure. Exurban housing collapsed hardest, while housing closer to cities remained desirable – for a while.

While the food crisis in the poor world made headlines, the energy crisis there went almost unnoticed. More and more poorer nations simply could not afford to import oil and other fossil fuels, and began slowly but steadily to lose the benefits of fossil fuels. Nations suffered shortages of gas, electricity and coal. Tajikistan, experiencing a record cold winter found itself with inadequate supplies of heating oil and a humanitarian crisis. South African coal supplies were so short that electricity generation dropped back to intermittency.

Industrial agriculture, described as “the process of turning oil into food” began to struggle to keep yields up to match growing demand. Yield increases fell back steadily, with more and more investment of energy (and higher costs for poor farmers trying to keep yields up). Yield increases, which had been at 6% annually from the 1960s through the 1990s fell to 1-2%, against rapidly rising demand. Climate change threatened to further reduce yields in already stressed poor nations – Bangladesh struggled with repeated climate change linked flooding, the Sahelian African countries with growing drought, China with desertification.

All future indications were that both food and energy supplies would fail to keep up with demand. Unchecked (the only kind we’ve got) climate change is expected to reduce rice yields by up to 30%, and food production in the already starving Sahel is expected to be reduced by half. GMOs, touted as a solution, have yet to produce even slightly higher yields. Arable land is disappearing under growth, while aquifers are heavily depleted – 30% of the world’s grain production comes from irrigated land that is expected to lose its water supply in the next decades.

Meanwhile the costs of fossil fueled agriculture skyrocketed, with potash rising by 300% in less than a year. What should have been a boom for farmers was actually the beginning of an increasingly precarious spiral of high prices, high indebtedness and market volatility. Agricultural indebtedness rose dramatically.

Meanwhile, the ability of nations to transport food supplies began to be called into question. Early trucker protests were intermittent and largely ineffective, but real predictions of diesel shortages and a shortage of refining capacity made it a real possibility that food might not reach store shelves.

And so how does the story end? If you were reading this in a history book, what ending would you expect to see? Because just because the crash doesn’t quite read like a post apocalyptic novel doesn’t mean that we aren’t the new Po-Apoc (like Po-Mo, only darker) generation.

Sharon

www.sharonastyk.com

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I wish I’d written this.

Written by Pete Smith

April 28, 2008 at 9:34 am