Recreating Local Economies

With the growing expectation that abundant and inexpensive fossil fuels are quickly becoming a thing of the past, there is increasing talk about the need to recreate local economies. However, one of the largest challenges facing Americans, is that for almost anyone now alive, understanding exactly what that means is far from clear. We have grown up under the creation of global networks that bring us almost everything from baby bottles to toilet seats from across the globe. A growing circle of experts are sowing doubt about the feasibility of keeping 13,000 mile supply chains strong and financially competitive in the absence of inexpensive oil.

I do want to be clear that creating local economies which supply us with everything we need is both impossible and unnecessary. But shifting the current balance from 95% non-local to more like 75% local is worth the effort and would have a tremendous positive reduction on our usage of non-renewable liquid fuels like oil and natural gas.

The task of first re-imaging and then taking the necessary steps to implement a local economy, is both a necessary and imposing task. Because this is such an important topic these days, I feel a need to begin a series of posts which focus on how this kind of local economy would work and what would be the most critical elements to begin the process.

A concept of this magnitude needs a framework within which to help organize a coherent response. It feels obvious to me that I must lay out what elements are the most important and then drill down into each area over time. The areas I see as most critical include, food, energy, shelter, and clothing. By designing re-localized economies that can consistently provide us with these basics, I believe we can lay the foundation for resilient local economies.

Stay tuned...

Put GM to Good Use

Now that General Motors has successfully hidden under the protection of Chapter 11, closed thousands of its dealerships and laid off tens of thousands of it loyal employees, it is high time we make them accountable to their new owners - us! If the car companies have any future at all, it should be based on making products we urgently need - starting with public transit. Let the car era wind down gracefully. I project that the program to offer "cash for clunkers" will have a negligible effect on domestic car sales and even less impact on our national carbon emissions.

It is becoming ever clearer that the "Happy Motoring" era is over and we need to rapidly devote our remaining resources to re-localization, walkable communities, and public transit. It obviously requires a very drastic revision of our current collective self-image, of what we aspire to and who we are.

Instead of spending tens of billions of hard-to-justify dollars studying how to implement a high-speed railroad system, the most intelligent choice for us is to fix the existing passenger railroad lines and start cranking out ultra modern passenger cars that will be a joy to ride. We need to prioritize the highway maintenance agenda. Since we will not be able to afford to repave the whole existing system -- and let other nations meet our diminishing demand for cars in the USA.

Preparing for Coming Changes - LEARN

For those who understand where American's energy use is heading, here is a list five actions which will be necessary to help us prepare for the imminent decline of finite fossil fuels.

Source: www.solarcarandtractor.com
(L)OCALIZE agriculture, energy production, social services, essential manufacturing, etc. All will have to regress to a limited “twenty-mile radius” community. This will not be a choice. The inevitable curtailment of transportation fuel will reduce future travel. Intercity light rail will be impossible without energy. www.postcarbon.org.
(E)DUCATE yourself and others. We passed peak oil in late 2008. Natural gas, coal, and fissionable uranium are not far behind. Without ever-increasing energy, real growth, including a debt-based financial system based on future principal plus interest, cannot continue. Recognize the fallacies of bogus solutions like: “There’s plenty left”; “The scientists will save us”; “We can efficiency our way out of our dilemma (not if we don’t reduce consumption)”; “Biofuels, including waste, cellulosic ethanol, and grease will suffice” (at the expense of food). The honest facts must reach the public, the media, and decision-makers even in the midst of denial. Start with www.peakoil.net, www.theoildrum.com, www.321energy.com, etc.
(A)DAPT to a very limited solar-electric future as our only hope of perpetuating any semblance of the brief fossil-fuel age. This vision could be sustainable, clean, and far superior to our ancestor’s harsh existence. A solar-electric sequel could integrate with waning fossil fuels and all other energy sources such as limited hydro or geothermal into a modern electrically-based system and allow individuals to take control of their own production with PV. Also included are wind and concentrated solar.
(R)ATION all fossil fuels starting immediately with gasoline. This is the only way we can reduce consumption on a controlled basis without increasing price-competition and conflict over the remains. Rationing is probably our best chance to buy time for mitigation and give our kids a chance for the remnants of the party.
(N)EGATIVE population growth. This is the toughest and most critical issue. With peak oil we have passed peak growth. Our short cornucopia of excess resources (including fossil fuels and all natural resources) has ended. We have far too many people in the US and the world for a sustainable civilization. If we don’t get the correct facts out and convince people to begin negative population growth, mother nature will reduce population in her own cruel ways. See www.npg.org, www.optimumpopulation.org, www.worldpopulationbalance.org and others.
L.E.A.R.N. - We all need to understand and project this acronym.

Coming to a Yard Near You

The average plate of food travels over 1500 miles to get from the field to your plate. In the process it consumes copious amount of fossil fuels and ends up less than fresh the day it lands on your grocery store shelf.

What if there was a way to bring the growing of fresh fruits and vegetables closer to home? What if we were to take the dramatic step of moving the fields right into our own neighborhoods?

Consider Neighborhood Supported Agriculture.

By converting a small portion of the millions of acres of Kentucky Bluegrass that surround our homes with organic vegetable gardens and orchards we have the opportunity to greatly reduce our dependence on the fossil fuels required to plant, fertilize, harvest, process, pack and transport our food.

In Boulder, Colorado an innovative Neighborhood Supported Agriculture model is bringing local food production and distribution into urban settings. A 3 ½ year old urban farming project called Community Roots Farm was created by farmer Kipp Nash, who has successfully converted 13 front and back yards, and church lawns into vegetable gardens for neighbors and CSA shareholders, with surplus for the local Farmer’s Market and food for families in need - while creating increased community connections among neighbors at the same time.

This model which is being studied in order to help replicate it across the nation is at the forefront of the urban agriculture or locavore movement.

As the economic contraction continues and the cost of oil begin to go up again, the ability to eat locally produced organic food may become one of the most important aspects of sustainability.

The Downside of Ecomomic Growth

With all the talk these days around increasing the flow of money, what would happen if our banks really did start lending in a big way next week?

The stalled economic engine of our country would begin rolling again, we would see a surge in loans to the construction industry, increases in production and (hopefully) sales of autos, large and small manufacturing, people would be called back to work and everything would be great again.

Well... there is one not-so-small problem with that scenario.

For those who have been following the roller coaster ride in the energy industry, you already know how close our current supply and demand is. Since the global economy started to significantly slow last fall, we have reduced our global consumption of oil by over 3 million barrels per day (bpd), to about 83 million bpd. This is about 2.4 million bpd less than in 2008 and the lowest level since 2004. A real reduction, but nothing like the collapse in demand we have been hearing about. On top of that the work to secure both additional sources of oil and investment in alternatives has almost come to a standstill. Billions of dollars of new projects have been delayed or cancelled completely and the oil services industry, those companies actually doing the exploration and drilling, has cut back almost 50% since last year. According to the Rig Count industry website who follows the changing number of active oil and natural gas rigs:

The year-over-year oil exploration in the US is down 42.3 percent. Gas exploration is down 48.0 percent.

So if our economy begins to ramp up again it will not take long for our demand to outpace our supply. When that happens prices go up. Oil has already risen from a low of $35 per barrel to the low $50's while demand has been low. This cycle of economic activity causing higher energy prices is a relationship we have not seen in the past.

We simply do not have the option to just re-start our economy in the same fashion we have been doing for the past 100 years. We are being forced to re-structure our economy to be more resilient to these supply constraints while increasing our local self-sufficiency. This will result in reducing our dependence on massive amounts of energy from faraway countries in order to bring us our food, to heat our homes, and to manufacture the items we truly need for a high standard of living.

The Future of the Auto Industry

As the administration looks for ways to help out the failing auto industry, I agree with Mr. Wipple quoted below, that this is the time to take an "out-of-the-box" look at the situation to see what makes the most sense as we move forward.

- Zev

The Peak Oil Crisis: Seize the Moment

by Tom Whipple

Earlier this week the Obama administration, now the effective owner of the U.S. automobile industry, put Detroit on notice that it has 30-60 days to come up with a believable plan to "restructure" itself or it goes into bankruptcy. This action makes it a good time to step back and ponder just where America's industrial base is going. With $2 gasoline and some incentives, recession-wracked American consumers seem willing and able to absorb another 8 or 9 million new gasoline and diesel powered cars and trucks this year --- but does this make any sense? The "restructuring" plan seems to be one of trimming overhead, shutting some factories, abrogating labor agreements, and stiffing shareholders, bondholders and debtors to the point where the manufacturers might be able to limp along with a minimal infusion of taxpayer dollars. This plan might be fine except for one glaring fallacy. In the next few years, oil prices are going up so high that ownership and use of the automobiles and trucks in their present form will be a totally uneconomic proposition. How many of the current flavor of cars and trucks is Detroit going to sell with gasoline at $10 a gallon or higher? full story

While We Were Sleeping

As the current economic realities continue to unfold, it is critically important that Americans understand that what we are experiencing is a global interrelated challenge.

Over the past year or so, while America slept, China went on a shopping spree. According to the March 17th issue of the Washington Post,

Even as global financial flows have slowed sharply overall, China has dramatically stepped up its outbound investment. In 2008, its overseas mergers and acquisitions were worth $52.1 billion -- a record, according to the research firm Dealogic. In January and February of this year, Chinese companies invested $16.3 billion abroad, meaning that if the pace holds, the total for 2009 could be nearly double last year's.

On Feb. 12, China's state-owned metals giant Chinalco signed a $19.5 billion deal with Australia's Rio Tinto that will eventually double its stake in the world's second-largest mining company.

China is now actively in the process of insuring their future by buying up mineral and oils rights all across the planet. They are moving down the path of material abundance which we have been modeling for the past 30 years; and very little we say or do is going to change this anytime soon. The challenge for us is that with 1.3 billion people in China if they want to play the consumption game, that will put unimaginable stress on our ability to do the same.

Americans will be faced with the necessity of a different sort of future when it comes to energy. As these massive Asian countries lock up resources for their future, we will be forced to either fight them... which is not very realistic, or seriously begin to re-organize our energy demands so we are not as effected by these huge global shifts in control of resources.

If we can be successful in building the systems to provide for our needs much closer to home, we can help assure a less stressful transition from an oil dependent society to one with built-in resilience from the coming environmental and financial shocks.

For cities and states who enact legislation to encourage these changes, they will find themselves in a far better position than those who doggedly hold to the fading dream of ever growing economies full of more and more stuff.