The Oil Drum

Margaret Wheatley relates how a colleague explained to her why it is lonely for the so-called pioneers, or fringe visionaries. It is always lonely for the person who arrives first in the future.

The ability to adapt depends on the rate of change.

At the risk of sounding trite we are already living the future. As many have pointed out we are probably into Kunstler’s long emergency. We are much caught up in the events and numbers involved in the crisis, and they are all so incremental, that we don’t see them as part of our future being transformed into our history. If the future is really history in reverse we go from asking “Where were you when ...?” to “Where will you be when ...?” We are looking for those monumental future events that will form history’s sign posts. These events will likely occur but will hopefully be separated by long stretches of boring detail. Many commentators on TOD make the mental leap to the transformed future but skip the transition phase, probably because this period is the hardest to define and perhaps because we all suspect it will be a terrible time. Jeffery Brown’s exhortation to ELP is probably the best approach to preparing for this transition phase. It leaves the definition of each term: economise; localize; produce, for each of us to define depending upon our specific circumstances. However ELP offers no guarantees but simply a way to do some practical useful preparation for generally unspecified events. Unfortunately we will also have to make another decision from time to time as our future unfolds. That decision will be to choose between Fight or Flight. Being a Canadian I am trying to implement ELP and to keep my stick on the ice.

The time has come to stock up on gold and lead.
Forget changing other peolpe`s minds because it`s too late.
Most of us are going to have to grow our own food, and that SUCKS.

There is some comfort in that the frog shall boil ever so slowly until it is cooked.

Except that this is a popular myth, the frog jumps out of the water as it heats, given the chance.

remember, you have a chance to adapt and do good in this world if you want to.

Or maybe you will suffer a massive stroke tonight and die in your sleep... It seems very naive to suggest that intention is sufficient. Circumstances beyond the individuals will I would imagine mostly determine "adaptation". It's also very difficult for many to see "the good" in the general, rather than personal sense, let alone have the discernment to be correct, and to go on to act, in my opinion.

I think there might be some disappointments and discontinuities in our future. Banal and gradual are very much to be hoped for.

Some of these articles are becoming positively dizzy with their own sense of perspicacity.

A few rays of light, some wealthy donors, and a small community in Africa gained the hope brought by a technology that supports some of life's basic needs:

http://www.voanews.com/english/2008-05-21-voa43.cfm

(Sorry, it's a bit long...but worth the read if I do say so myself...I do know it was very Therapeutic to write anyway. As I often have said, brevity is for bumper stickers.)

REMEMBERING THE FUTURE
In 1974, I was a freshman in high school. I had a one hour “study hall” that was more of a “time burning” hour than a study hour, taken simply because the school had no classes that a freshman could qualify to take at that time of day. At least that is how it started.
The classroom was normally used by a Sociology class, and the sociology instructor had chosen to use as his central reading assignment the newly printed to paperback book “The Third Wave” by Alvin Toffler. For those who may remember, the paperback edition was printed with covers in various pastel colors, almost an ode to the “psychedelic” sixties, very eye catching. The curiosity got to me, and I pulled a copy from the classroom bookshelf just to see what was going on. This was my introduction to “futurist” writing, and there began my lifelong fascination with the future, with sociology, with history, and with cultural anthropology, in other words, with why cultures exist at all and why they change in the ways they do.

1974 was a momentous year. The Western developed nations were in the depths of an energy crisis, a recession, and potentially on the eve of being drawn into war in the Persian Gulf. Israel was coming off a war in the region, and potentially facing more war. The U.S. relationship with Saudi Arabia was strained to the breaking point by the recent Saudi oil embargo, and Saudi Arabia was distrusted by many, viewed as no longer to be considered a reliable supplier of oil to the U.S. The U.S. was turning more to our Canadian and Mexican neighbors for oil.

Vast new oil producing areas were being discussed, but these areas were offshore. Many people including policy makers and even oil production specialists felt that these areas would never produce reliable and affordable supplies of oil. The potential fields were located in areas of some of the challenging weather, located where no real infrastructure existed. An oil industry would have to be built from scratch. If the North Atlantic did indeed have vast quantities of oil (which many doubted) it would take decades to build the industry to extract it.

As the 1970’s progressed, the situation was only to get worse. In the middle of the decade, the vehicle of the hip young had been the “custom van”. Decked out inside with everything from full bars to shag carpeting and water beds, some even had TV sets onboard. These were notorious fuel hogs, heavy with poor aerodynamics and requiring large engines to move with any level of acceptable performance. But the owners of these vehicles were certain that the worst of the energy crisis would soon be over, so they held on, at least for awhile.

In 1976, Jimmy Carter became President. He was being advised by the CIA that any potential finds of large new oil were behind us. With the Iranian revolution, the American purchase of Iranian oil ended, still true to this day. The Iraqi’s, encouraged by the West, invaded Iran, leading to a long and bloody war, and at times the stoppage of tanker traffic through the Persian Gulf. When the war finally ground to a stop, two major oil producing nations were war damaged and burdened with debt.

The worst was still in front of us. With the Iranian hostage crisis, oil prices went wild. The use of the words “super spike” became commonplace. Inflation, interest rates and unemployment were in the double digits, and news articles discussed the possibility of “hyper inflation” of the type seen in South America. The stock market indexes had been flat since the start of the decade, now flat for 8 years, while interest on CD’s and bonds was double digit. Many considered the stock markets a fool’s game. The age of “capital growth” was essentially over it was said, with one famous article proclaiming “The death of equities”.

The full effect of the combined emergencies hit in 1979. The full implication of real oil shortages became clearly visible to the public. The gas lines at the pump set off waves of panic buying, which only made matters worse. There were reports of shootings and assaults at gas stations, and house fires and fatalities caused by people trying to store gasoline in closets in homes, and even under beds in small apartments. Almost no one could see a way out. U.S. oil production had been declining since 1970 and was still falling. The U.S. relationship with Iran was on the edge of war, and Saudi Arabia was viewed as hostile to American interests. U.S. allies in Europe and Japan were suffering even worse than the U.S. with rationing of heating and in some countries in Europe, even electric power was available for only part of the day.

The press was full of alternatives. National Geographic had numerous articles on solar energy and wind power, with magnificent artist impressions of giant concentrating mirror systems, and towers of multiple windmills taller than the World Trade Center. General Motors was showing it’s “Electri-Vette”, a fully electric Chevette with a claimed range of over 100 miles. GM was assuring the customer it would be for sale no later than the mid 1980’s. Briggs & Stratton Corp. in conjunction with the Canadian electric delivery truck maker Marathon constructed the first “hybrid” automobile. It had six wheels (two in front and four in rear to carry the weight of the heavy lead acid batteries) and a small Briggs & Stratton gasoline engine. It was a “serial hybrid”, using the electric motor for propulsion and the gasoline engine only to recharge the batteries, and was by design a “plug hybrid” although no one thought to call it that. Gasoline mileage was claimed to be 85 miles per gallon or more, but there were doubts about the ability of the batteries to take the constant charge and discharge cycles without failing.

Airlines were being merged, and many were facing bankruptcy. In the early 1980’s, Richard and Burt Rutan displayed the “Starship”, an executive class airplane with pusher propellers, streamlined design, and advanced composite construction. It was claimed to be 30% more fuel efficient than conventional aircraft and was seen as the future of the industry. Beech actually manufactured a small series of the aircraft, but the cost of production was prohibitive unless oil prices stayed very high.

People had now suffered through a decade long recession by the time Ronald Reagan was elected President of the United States. Oil prices were by far higher than they had ever been. The once hip “custom vans” were in junkyards or up on concrete blocks behind the house or garage. Japanese cars such as Honda, Toyota and Datsun, once rare, were now selling in record numbers, while American firms such as Cadillac, Ford, Chrysler and Lincoln were suffering terrible losses, some with unsold vehicles that were already two years old. People were paying astronomical prices for woodstoves to combat the high cost of heating oil.

The price of commodities of all types were higher than they had ever been. Metals, farm commodities, and food prices were higher than they had ever been and inflation was still raging. The Chairman of the Federal Reserve Paul Volcker began a policy to break the back of inflation once and for all. With interest rates already high, he raised them. Again and again, Volcker raised interest rates. Pain in the economy increased, unemployment increased, and the stock market slid downward even further. Many in Congress were calling for Volcker to be removed, impeached if need be, or laws changed to permit his removal. By 1982, the economic pain had become almost unbearable. The length and depth of the recession had broken many firms, some of them with long histories as pillars of American industrial might, such as Allis Chalmers Corp. and International Harvester. American Motors, the smallest of the U.S. automakers disappeared.

Many economists felt that Volcker and Reagan were pursuing a policy that was totally ineffective. After all, Volcker’s approach was monetary. The problem was seen by many as structural. Energy supplies were not going to grow to any great degree, they argued, and American industry could not compete with the lower cost producers of Japan and Korea. Many experts and most projections were calling for gasoline in the $4 to $5 dollar range by the mid to late 1980’s, and only higher by end of the century. The belief was that oil would be for all purposes unaffordable by 2000. Many cities were planning or building light rail systems and blocking off whole sections of downtown areas as “pedestrian malls”. Architects such as Michael and Judy Corbett were designing and building “sustainable” neighborhoods with narrow streets, pedestrian walks and bikeways and plenty of room for gardens to grow food locally in the neighborhood. Young high school graduates were marrying and building their first home, and many of these in poorer areas of the country were “basement homes”, because they could be heated with a wood stove and because they could be built cheaply and without borrowing. Borrowing at double digit interest rates was almost impossible for the young.

In the summer of 1982, with doom projected for the future of the United States, with no advance warning, the price of gasoline at the pump began to drop. Almost no one had noticed that crude oil prices were already beginning to decline. There was no internet in those days to count daily price and monthly barrels of oil production, although Bill Gates, Michael Dell and Steve Jobs were already at work on the future. Most people believed that the price drop was temporary, and the trend to massively more expensive oil would continue. But the price continued to drop, and the price drop began to accelerate. The stock market, which was at a bottom that was lower than it had been 11 years earlier, began to rise, and the rise began to accelerate. Many potential investors who had grown up in the decade long recession dismissed the option of investing in the stock markets. They had seen mirages before, better to stay with CD’s or bonds, at least you got some money back. But the market continued to rise, the oil price continued to fall, and even in the face of falling prices, oil production began to recover from what had been a 5 year valley, although they would not recover to the old high production levels of the 1970’s until the early 1990’s!

Was it a mirage, or could it be that the recovery was at hand? Could there really be the possibility that oil and gasoline prices would drop? The old rule had been “the oil companies raise prices, and once they see we will pay them, they will never reduce them.” Could oil prices actually go down?

When looking for the future, sometimes it is the small cultural items that signal a paradigm shift, a turn of epic proportions. For me, it was two items in the media that harkened the end of the catastrophic 1970's:

The first was a syndicated article in the “lifestyle” section of a newspaper. The article asked what type of automotive vehicle the “ultra rich” preferred? You would think it would be Rolls Royce or Mercedes luxury cars, the article said, or perhaps limousines with chauffer. If you believe that you would be wrong, said the article. The vehicles preferred by the ultra rich are trucks, or what are called SUV’s. These are exempt from the CAFÉ laws mandating fuel economy, and they are great for going to the country with children, grandchildren, dogs and luxury gear. They are great for hunting trips, and ski vacations. The chic’ vehicle among the ultra rich, not the pretenders but the REAL wealthy class are GM Suburbans, and fully outfitted Jeep Grand Cherokees. It was not long after such articles were published that the sale of SUV’s began to increase. Ford began planning a vehicle for the customer who wanted to ape the super wealthy. The highways began to fill with upmarket trucks for the “pseudo wealthy” class. As stock markets and investment returns improved, the class of pseudo wealthy began to grow very fast.

The second item was a feature on “60 Minutes” the CBS newsmagazine TV program. The feature had a “60 Minutes” journalist going to Italy to drive a Lamborghini Countach:
http://www.focusmag.gr/id/files/54996/lamborghini%20countach2.jpg

This car was designed in 1971, just before the energy crisis and long recession hit the Western world. For over a decade, this most radical design had existed in relative obscurity, known only to exotic car enthusiasts and built by an obscure Italian supercar maker in very small numbers, sometimes only a few dozen a year. The car has a 12 cylinder engine of fantastic horsepower (in most tunings over 500) and the car is capable of almost insane performance, with top speeds claimed over 200 miles per hour.

In the 1970’s the n