New World

What is likely to happen as the oil runs out?

Steeply rising oil prices will cause unprecedented impact on the global economy. Modern agriculture, transport, and mining are greatly dependent on cheap oil. They are also some of the major greenhouse gas producers; so one of the early effects of declining oil will be at least a temporary decline in the amount of greenhouse gasses going into the atmosphere.

Liquid and gaseous fuels can be made from coal, shale oil and tar sands (see the box on the right). All these fuels produce even more greenhouse CO2 per unit of energy obtained than does conventional petroleum. Liquid fuels cannot be made from coal, oil shale, or tar sands if climate change is to be limited; it's as simple as that. Greed and short-term profits are stronger movers of industry and government than long-term sustainability and our environment, but there is another factor involved, Energy Return On Investment (EROI) (see the box on the right); the ratio for free-flowing petroleum has been around 30:1, that for tar sands is much closer to 2:1. It may well be that the extraction of liquid fuel from tar sands will be found to be uneconomical.

So, what will happen as oil prices rise and airlines have to increase their ticket prices, long distant trucking becomes uneconomical, and international shipping costs go through the roof? In the early stages we will probably see:

• A steep decline in the use of the private car and increased walking, cycling and use of bus, train and tram transport;
• A steep decline in air travel;
• A steep decline in international tourism;
• A move from road to rail transport for freight (rail is much more energy efficient);
• A move toward sail-powered shipping;
• A decline in mining with consequent rises in metal prices;
• A steep decline in the long-distance movement of materials and a consequent great increase in reliance on local foods, manufacture, and supply;
• A trend away from highly mechanised farming toward more labour-intensive farming;
• A forced increase in recycling and reuse;
• An increase in renewable power, such as wind and solar;
• An increase in ethanol (and methanol) production;
• Increased use of wood as a heating fuel;
• A move toward obtaining liquid fuel from wood.

The present globalised food production and distribution will collapse as the oil runs out, we will develop more self-sustainable communities.

1. Mining costs rise because mining uses large amounts of petroleum. This will lead to –
2. Higher prices of metals, which will lead to –
3. Higher prices of machinery (manufacturer's costs will also increase due to the petroleum that they use);
4. Producing fertilizer requires large (fossil fuel) energy inputs, so the cost of fertilizer will rise;
5. The combination of higher machinery, fertilizer and fuel prices will greatly increase farmers' costs so farm produce prices will have to rise proportionately;
6. The cost of delivering that produce to markets will rise because of higher fuel prices.

It seems to me likely that these accumulating effects will cause major upsets to the global economy, with probably deep economic depression.

In time people will look to unconventional petroleum sources as a source of energy. Many of these are more greenhouse polluting than petroleum; so the loss of petroleum will not necessarily result in less greenhouse carbon dioxide being produced in the long term.

Compounding of effects such as this will happen in some places and will be much worse for the inhabitants of those places than one effect alone.

This is all going to change. As energy-efficient public transport replaces private cars (usually transporting only one person at a time) the need for multi-lane roads will greatly diminish; the need for paths suitable for cycling and walking will increase. As private cars become too expensive to fuel there will be an increased demand for old-style corner delis and local supermarkets within walking or cycling distance rather than huge shopping centres within driving distance.

As the cost of transport increases I suspect that smaller regional cities will become more viable than larger cities. Electric rail will become very important as a way of moving goods into cities.

As the price of food rises there will be a trend back toward the vegetable garden in the back yard. How will this effect those houses that have been built on such small blocks that they have no significant back yards? I suspect that, again, larger cities will go into decline and smaller cities where land is more affordable will prosper. What will happen to the large areas of deserted housing that may develop in big cities?

On the other hand, with the use of machinery being minimised everywhere (and on farms and market gardens in particular) because of the costs of running it, there will be a greatly increased demand for labour, especially outside of the cities.

For example, at present wheat is carted long distances to large flour mills, from there the flour goes to large centralised bakeries, the bread is carted to large shopping centres, and finally people drive their cars to buy their bread. There is much more use of transport involved in this system than there needs to be. Smaller flour mills could be placed closer to where the wheat is grown, smaller bakeries could be spread around, and smaller shops closer to where people are living.

Index

On this page...
Cities
Employment
End of petroleum meets greenhouse
Energy return on investment
Environment meets economics
Industry
Introduction
Tar sands
Temptation of war
What is likely to happen as the oil runs out?