Peak oil means expensive food

In contrast with the former rosy outlook of politicians and economists, a recent survey of 21 predictions (from national governments, oil producers, energy analyst firms and retired oil geologists and oil engineers) shows global decline beginning anytime up to 2020. Of these 21 predictions, the mean statistical date is 2013, just three years from now.

Global production of cheap oil (the easy-to-get conventional oil) peaked in 2005 and has flatlined ever since. Irreversible decline is imminent.

There will still be oil, but it won’t be cheap as producers are increasingly resorting to expensive oil (the hard-to-get unconventional stuff).

Yes, there are alternative energies, but they and their prerequisite infrastructures won’t be ready in time for cheap oil’s decline, preparations needing to have been started 20 years ago.

First, it will be hugely expensive because we’ll have to use unconventional oil to create new energy and energy infrastructures. Secondly, as Canadian energy analyst Vaclav Smil writes, “because of the requisite technical and infrastructural imperatives and because of numerous (and often unforeseen) socio-economic adjustments, energy transitions in large economies on a global scale are inherently protracted affairs.”

As an example, commercial oil took decades after the 1860s to capture 25 per cent of the global energy market. Says Smil again: “Analogical spans for natural gas are almost identical: approximately 50 or 40 years.”

In the early 1980s, some advocates of alternative energy predicted the U.S. would draw 30 to 50 per cent of its energy from solar power, wind power and biofuels by the first decade of the 21st century. The reality, however, is 1.7 per cent.

What will be the impacts of oil’s decline? We’ve already felt the first impacts when oil prices spiked in the spring of 2008. The world sank into recession. (Most recessions in the past 60 years have been related to expensive energy.) Whichever comes next, another spike or a permanent, irreversible yearly decline in production, the result will be a deeper recession and finally a depression on a par with the Great Depression of 1929.

The impacts of even a small drop in production can be devastating. For instance, during the 1970s oil shocks, shortfalls in production as small as 5 per cent caused oil prices to nearly quadruple. The same thing happened in California a few years ago with natural gas. A production drop of less than 5 per cent caused prices to skyrocket by 400 per cent. What, then, can we expect when the annual decline rate, beginning soon, falls into the presently predicted range of 4 to 10 per cent?

Every sector of the economy will be affected, but the initial lack will be felt in terms of food. In this regard, Cuba’s experience has relevance for us.

When the Soviet Union disintegrated in 1989, oil subsidies to Cuba ceased, and Cubans entered a three-year “Special Period.” All of the nation’s cattle and even cats and dogs were killed for food. This happened because crops could no longer be transported from Cuba’s centralized growing areas to its many localities. Gradually, agriculture needed to be relocalized. Get to know a Cuban and see if the memory of those days doesn’t bring tears to his or her eyes.

The Cuban experience will become our own unless we learn from it and prepare.

Because most of our food comes to us from distant places by plane and truck, we are highly vulnerable. Grocery store shelves can empty in as few as two or three days without uninterrupted air and ground transport.

This is why I believe our mayor and council should be preserving each and every acre of Hamilton’s greenfields, even those currently dedicated to some other purpose, but as of yet undeveloped, for the growing of food crops during the inevitable years of energy decline.

Yes, that includes Aerotropolis. After all, that property has already been designated as prime agricultural land, not business and light industrial lands. If employment and economic growth matter, the employment grounds can be relocated to greenfields of a lesser designation and accomplish the same purpose.

If it’s the nearness of air transport that matters, there will probably be as many flights taking off from the lesser lands as the present airport.

Food matters first.

TheSpec