The vulnerabilities of the global village and its economy have been laid bare by the assault of the coronavirus (Sars-CoV-2), which has led to a pandemic of the infectious disease, COVID-19. The mobility chains that enable the flow of civilization are now substantially truncated, with collapsing demand for transportation fuels – and crude oil, from which they are refined – leading Russia, Saudi and other OPEC countries to agree on combined production cuts of 10 million barrels a day, even though demand might have fallen by 30 million barrels a day. It remains an open question how soon, or if at all, everything will get back to normal, when arguably, it is “normal” that has brought this current situation upon us, as yet another element of a changing climate. The broad reach of the expanding global mechanism both invades previously uncharted terrains and ecosystems, and provides vectors for the transmission of contagion. Thus, the relentless rise of a resource-intensive civilization and its highly mobile population carries many potential dangers.
The need for re-localisation, in the anticipation of Peak Oil, leading to waning supplies of cheap transportation fuel, was a founding tenet of the Transition Towns (TT) movement. However, this motivation appeared to lose some of its urgency, once a flood of oil entered the market, largely as exhumed from shale by the procedure of hydraulic fracturing (“fracking”). Indeed, a few years ago, TT-HQ asked itself the question, “Does so much cheap oil mean peak oil as an argument is now over?” In fact, the production of conventional crude oil has remained on a plateau since 2005, while 71% of subsequent growth in the production of “oil” has been provided by shale hydrocarbons; hence, we may anticipate that any stalling of the fracking industry will begin to restrict the overall global oil supply.
Although uncertainties surround the immediate picture, oil price recovery can be expected due to a combination of rebounding economic activity, once “lock-downs” are lifted, and supply adjustments from selective production shut-ins by high-cost producers, lower investments in US shale and potential voluntary production cuts by OPEC. The IEA also anticipates that demand may recover in the second half of 2020, and through 2021, with a dwindling in the surplus. In the longer term, further rising oil prices might be expected on a simple “supply and demand” basis, but the cost of producing unconventional oil is, in any case, high, and the selling price must ultimately reflect this.
While the market is currently awash with cheap oil, this is likely to peter out, and supply challenges appear, probably within the present decade, due to sustained contraction of the fracking industry, and the fact that 81% of the world’s oil fields are already in decline. On this basis, new production greater than the equivalent of 4 Saudi Arabia’s would be required by 2040, only to maintain current output, and more than this, to meet any demand growth. Should the shale industry derail completely, the oversupply correction would be even more rapid.
In the absence of cheap, plentiful liquid fuels, it will prove extremely challenging to maintain the mobility required for globilisation, whereupon re-localisation begins to emerge as a concerted approach toward reducing demand for fuel/oil, and coping with some of the enormous changes we are likely to experience, even at the deepest human level. In the present time, although mobility on all scales has been crushed, temporarily, in an effort to slow the spread of the coronavirus, this situation does not offer us an exact foretaste of how life might be in a future marked by oil-deficiency (other than the unaccustomed silence from immobile cars and planes). There, people will be able to get together physically, as they must, to perform essential tasks, whereas presently, a “social distance” of 2 meters must be maintained, other than between immediate family, and any others dwelling in the same household.
While, during the past decade, the broader issue of addressing climate change has largely taken over the mantle from the more specific topic of peak oil, an expected reining in of the global oil supply may have the more immediate impact, by triggering a crash of the global financial system. Once again, we are reminded that neither the peaking of particular resources, mainly as a consequence of depletion, nor the warming Earth, are “the problem”, but are among the many signals of a broader systemic failure that we experience viscerally, rather than as physically detached observers. Thus, they can be interpreted as cracks in a wall, but indicators that the wall is highly stressed and likely to crumble: COVID-19 may be another such sign. In so many manifestations, all of we humans are both participants and subjects of an experiment of exquisite complexity, being carried out in real time. Hence, none of us will be impervious to whatever outcomes it may unfold.
It has been some 15 years since the Transition Towns concept was inaugurated, over which time the manifestations of a “changing climate” have become more intensely palpable, in terms of: economic instability, relentless CO2 emissions, global warming, degradation of the soil-water-air nexus, and resource depletion, including that of global oil reserves, if definitions of “oil” are examined in depth. While some transition towns have recast their banner, e.g. as a “Greener Henley”, in order to emphasise an aim towards ameliorating climate change, the importance of establishing small, resilient communities remains, be they Transition Towns, Eco-villages, or any other denomination that holds, at its core, a belief in re-localisation as a pathway toward sustainability, which, in the longer run, must become regeneration. [It is, therefore, reasonable to assume de-globalisation as a necessary and default counterweight to this process].
Probably the aspect that is most specific to the TT model is that it intended largely to begin within existing infrastructure, e.g. the energy descent action plan, and so the notion of “urban permaculture” matches perfectly with this, i.e. that we can’t simply knock everything down and start again from scratch. Thus, an adaptation of the space and structures we already have in place is a critical factor, so to produce more of our food and energy at the local level. The use of land, and even roof-space (that had previously either served other proposes or none in particular), along with insulating and draught-proofing buildings, are all key elements. This is not to rule out “new build” entirely, but this should meet highly efficient energy criteria, e.g. “Tony’s House” in Reading, a town which, although not yet with “city” status, remains the largest in the United Kingdom.
Clearly, such a dramatic transformation (either by design or default) is likely to bear profound economic ramifications. The present ultra-low oil price is a passing shadow of combined low demand, during the global coronavirus lock-down, and oversupply, principally from an industry of sufficient fragility that a US government bailout may be requested, to prop it up. As noted in the recent Finnish government report, “The era of cheap and abundant energy is long gone… Money supply and debt have grown faster than the real economy. Debt saturation and paralysis is now a very real risk, requiring a global scale reset. Money supply and debt have grown faster than the real economy.”
Thus, once the full force of the coronavirus storm has passed us, and the oversupply of oil begun to ebb, a necessary phasing out of petroleum products that are too expensive to buy will necessitate the reengineering of the entire global industrial system. Peak oil can be considered as a narrowing window between the price that producers need to stay in business, and one sufficiently low that customers can afford to buy products and services based on oil. Thus, the present economic system sets an upper limit of about $100 a barrel, but at lower than $45, producers need to borrow more money to keep going. Hence, “peak oil” may equate to “peak credit”.
The Finnish report notes that as oil markets become unreliable, the world needs to develop “an entirely new energy system based around an entirely different paradigm.” This is no “return to the Stone Age”, but a requirement “to create a high technology society” that does not depend on relentless consumption of natural resources, now in excess of 100 billion tonnes annually.The report further offers the sombre prognostication that “If this is not achieved, the alternative is the degradation (and fragmentation) of the current industrial ecosystem.” Thus, while a rapid shift from oil and the other fossil fuels toward renewable energy is necessary, a curbing in our use of energy, overall, is mandatory.
This will involve a profound reorganisation of all societies around the globe, otherwise conflict can be expected. The present BAU model, however, accelerates all forces in the direction of achieving ever larger systems, and to consume inexorably more energy and other resources. Professor Nate Hagens, a former Vice President at investment firms Salomon Brothers and Lehman Brothers, who now teaches ecological economics at the University of Minnesota, is quoted as saying:
“Not only are we speeding, but we are wearing energy blind-folds at the same time. But the momentum of our current system forces us to have conversations about a bigger system not a smaller one—so the correct and valid plans and blueprints are not discussed… It is a perfect storm—and when the waters recede we are going to have smaller, simpler and more local, regional economies.”
It might appear sage, therefore, to prepare the ground in advance of any collapse; to divert our resources and planning away from the proverbial global village, and toward a globe of villages. The currently enforced “working from home” may become part of the new normal. Thus, although Transition Towns thinking came about primarily through considerations about peak oil, all essential efforts toward re-localisation and community resilience may provide the strongest available single buffer against the many storms that are likely to prevail upon us.
Teaser photo credit: Urban Permaculture Facebook page
