The Ecologist - ARCHIVE
The Reality Principle: The consequences of oil shortages 

Date Published: 22/10/2001
Author: David Fleming

In the heat of the coming oil shock Green ideals will be forged into 
hard economic truths, as energy crisis devastates the global market.

It's a pity no one in authority listened. The case was made, not 
least in these pages, for reshaping the market economy intelligently, 
before the ecosystem took its brutal revenge. Arguments were made for 
the speedy development of renewable energy, organic agriculture, 
competent local economies, closed systems and effective means of 
restraining predatory multinational business. Solutions were invented 
and refined.

But the opportunity has now passed. The turning-point at which the 
initiative shifts from the market economy to the ecosystem will be 
the moment when the world experiences a peak, followed by a downturn, 
in the supply of oil.

This will occur when the five large OPEC producers in the Middle East 
- Iran, Iraq, Kuwait, Saudi Arabia and the UAE - are no longer able 
and willing to pump their oil fast enough to meet the growth in world 
demand. All the other oil suppliers throughout the world (including 
the UK's North Sea) are in decline, or too small for any remaining 
growth in their output to make a difference; global growth in oil 
supply now depends entirely on the 'Middle East Five', and when they 
can no longer meet demand, there will be an oil shock. The speed at 
which it arrives could be startling.

This will mark the beginning of the end of the oil-based market 
economy, and it is for this moment that we should by now have 
prepared an infrastructure of renewables, backed by conservation 
systems to reduce energy demand to less than one third of what we use 
at present. However, this infrastructure takes a minimum of 25 years 
to build, and since it has been barely started, the oil famine which 
can be expected to develop in the next ten years will be catastrophic.

The consequences in the short term cannot be predicted in detail 
because, when systems break down, they do so chaotically. But some 
leading symptoms can be foreseen. There will be incremental economic 
damage, affecting Third World countries first of all, before becoming 
more general. This is because the multinational institutions have 
taken pains to make 'developing' economies dependent on oil, and so 
when the price of oil rises beyond their means, their economies will 
start to disintegrate. Agriculture will be disabled by disruptions in 
the supply of oil for fertiliser, machinery, irrigation pumps and 
transport. Tourism will be paralysed by high fuel costs and by a 
collapse in consumers' income. Political unrest will develop as 
economic institutions and distribution systems for food and fuel show 
the strain and begin to break down.

It is now too late to prevent this from happening. Moreover, it is 
likely that governments, international organisations and 
transnational corporations will refuse to recognise that there is a 
problem until they are actually buried in it. Even then, they will 
insist that more oil exploration or more faith in free market forces 
will solve it. They will claim that a few wicked hooligans or 
'extremists' are stirring up public unrest. Then they will panic. But 
what about the critics who have been warning about this for so long? 
What should they do?

Endgames demand new tactics. During this period of transition, it 
will be necessary to shift the grounds of the ecology-argument 
decisively forward from ethics to practice. Let me explain. Ethical 
arguments are relevant in cases where a course of action is possible 
but undesirable and avoidable. It is possible to produce large 
quantities of cash crops by means of heavy applications of fertiliser 
and pesticide, by expropriating subsistence farmers and depleting the 
soil and drawing on irreplaceable reserves of groundwater - but, of 
course, there are environmental-humanitarian-ethical arguments 
against it. In the future, by contrast, such a policy will no longer 
be possible: there will not be the energy to produce the fertiliser, 
to drive the machines, the irrigation and the transport, nor the 
rich-country incomes to buy the product. There is no doubt that such 
industrial agriculture is bad, but we will be wasting our time 
pointing that out. If it is impossible, the ethical argument becomes 
scarcely relevant.

With oil famine, ethical options become the only way forward. 
Industrial agriculture? Fantasy. The only option for the future is 
low-energy organic cultivation, bringing redundant farmers and 
abandoned fields back into production. Globalisation? This is no more 
than a short-lived side effect of cheap oil. In the future, local 
development is the only practical solution. Nuclear energy? Moonshine.

To fill the energy gap left by oil and - shortly - by gas, would 
require some 12,000 nuclear powerstations worldwide which would mean 
two new nuclear power stations being opened every day indefinitely - 
well beyond the limits set by logistics, training, safety, 
waste-disposal and the availability of uranium. A gentle reduction in 
carbon emissions as a gesture towards slowing the advance of global 
warming? No chance. The forecasts for the use of oil and gas on which 
the Kyoto Protocol has been based are far in excess of the quantity 
that will actually be there to burn. A single currency and 
bureaucratic regulation by the European Union? Forget it. The euro 
will break up and the future evolution of currency, along with that 
of human society, political economy and culture as a whole, will - at 
last - be firmly located and adapted to specific places.

This does not mean that ethical judgement will become obsolete, but 
that ethics and practice will converge. The task of building an 
energy-efficient localised economy at least 25 years too late may 
well be futile - but there is one good outcome. This time, having 
explored all alternatives, human society will be forced to do the 
right thing.

David Fleming is an independent policy analyst. His book The Lean 
Economy will be published in 2002.

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