March/April 2008

That’s a possibly apocryphal modern Arab proverb that encapsulates a much-debated but ominous concept--that of peaking global oil production. “Peak oil” is the moment when we humans can’t just increase the world’s oil production any time we want to—either because too much of it has been used up already, or because what’s left is too darn hard to extract. When will this day come? Some say it’s here now; others say we’ll hit the peak in the next dozen years. Still others say we may have decades to go, especially as new supplies are discovered, such as the 2006 discovery of a mammoth oil field under the Gulf of Mexico. Besides, there’s nothing like rising oil prices to encourage new technologies and make “depleted”oil fields profitable again with new recovery techniques. But most agree that it’s unavoidable at some point.

The whole messy business of declining oil production, including our response (or, so far, lack of it) has been dubbed the “Long Emergency” by James Howard Kunstler in his book by the same name (Grove Press, 2006). Kunstler wrote about oil prices going above $55 per barrel—laughable, now that the $100 mark has been broken. The theory is that at some price point, economies buckle and life as we know it changes forever. Says Kunstler, “We are in for a rough ride through uncharted territory.”

How we navigate that territory, he says, will define whether the next generation—never mind the seventh generation—lives well or suffers.

“Peak oil” is a catchy concept, but it may prove to be as irrelevant as the turning of the millennium. Whether we’ve passed some magic point of diminishing returns, we will continue to use oil—whether wisely or wastefully.

“It’s no exaggeration to state that reliable supplies of cheap oil and natural gas underlie everything we identify as the necessities of modern life,” says Kunstler, “not to mention all of its comforts and luxuries: central heating, air conditioning, cars, airplanes, electric lights, inexpensive clothing, recorded music, movies, hip-replacement surgery, national defense— you name it.”

While nuclear power or coal power could conceivably replace energy from oil and gas, each is so fraught with potential catastrophe--nuclear disaster, horrendous pollution, accelerated climate change--that neither offers long-term solutions. Between the energy crisis, climate change, global warming and political upheaval, we’re set up for an energy-based perfect storm.

The inconvenient truths.
No matter what your stance on the issue, a few facts help set the stage:

• The United States is highly dependent on oil, especially for transportation; some 70 percent of oil here goes to transportation, both personal and commercial. Oil is also used for manufacturing and in asphalt, but those are secondary uses compared to transportation.

• American production of oil peaked in 1970—nearly 40 years ago--and has been heading down ever since. And the day of “peak natural gas” is also already in the rearview mirror, despite lots of new exploration and drilling.

• The demand for oil in China has helped push prices skyward in the last few years. Meanwhile, the United States, with six percent of the world’s population, uses 25 percent of its oil.

• As demand for oil goes up, the impetus to extract oil from difficult and environmentally sensitive locations increases. In northwest Colorado, the battle has been joined over the Roan Plateau; despite repeated demands from locals and even parts of Colorado’s Congressional delegation, the BLM is likely to sign the first leases for oil and gas drilling in the summer of 2008.

• The area around Parachute, not far from Grand Junction, has huge beds of oil shale. New technologies could crush and heat the shale underground, thus releasing the oil. As the price of oil increases, this becomes an attractive option for eventual extraction—but at a
steep environmental price.

How will we respond to the coming “long emergency” if it indeed does come? Some say we won’t voluntarily change much—that we’ll do partial steps, and then wait for a crisis that requires us to change in a painful way. If so, some say the results could be horrific:

“If mainstream awareness of energy peak occurs during a crisis, we will find ourselves well along the amoral path of endless war for control of dwindling resources,” says the Post Carbon Institute, a California-based think tank. “During a period of draconian governance in the midst of a permanent energy crisis, all of the gains garnered by environmental and social justice groups in the past 50 years are subject to roll back at best. At worst, the recent history is full of examples of what happens when humans with powerful weapons get desperate— they reach for demagogues, Fascism and war.”

Well, that’s depressing. But it’s also only one vision for the future. In fact, Colorado has a crop of optimists who say we can choose our future. Between technological fixes, government policies, not-impossible lifestyle changes and the possibility that the day of “peak oil” is still decades away, we may well survive—and even prosper.

“Some of the more gloomy, pessimistic ‘peak oil’ views about the future of oil supplies that are current today result from an assumption of high decline rates,” says Peter M. Jackson, oil industry activity director of the Cambridge Energy Research Associates (CERA). CERA, a research and advisory firm serving energy companies, consumers, financial institutions, technology providers and governments, published in January an analysis that shows that the rate of declining production in the world’s oil fields is much less than was previously thought.“This new analysis provides the basis for more confidence about the future availability of oil,” says Jackson. Meaning, an oil crisis is further away than we previously thought.

Technology
Believers in technology see us getting more oil with better techniques; other believers in technology see it leading to a post-oil society. In fact, George Douglas, the mild-mannered spokesperson for the National Renewable Energy Laboratory (NREL) in Golden, says “The technology exists now to not use fossil fuels anymore, or at least to use them in a much smaller way.” NREL, which is funded by the federal government, analyzes many forms of alternative energy from a purely what-works point of view.

Douglas says these technologies may not be cost effective yet; others say that if the hidden costs of carbon emissions were factored in, economics would favor non-fossil fuels. And if we add on top of that the cost of national security based on getting our fuel from other nations, we are well past the competitive price point for non-fossil fuels.

Since transportation uses the lion’s share of available oil, much of the new technology reduces gas consumption in cars and trucks. (For technical reasons, replacing fossil fuels for sea and air transport will be more difficult. “For ships and airplanes, liquid fuels are still going to be king for a while, but these could come from renewable resources at some point” says Douglas, of NREL.)

Hybrid gas/electric vehicles are becoming more common by the day; they virtually double the distance a gallon of gas can power a car. Diesel engines are also available and fuel efficient; they fell out of favor in the United States because of emissions, but they can now run clean.

Another alternative--flex-fuel cars, already on the road--can run on gas or any mixture of gas and ethanol up to a mix of 85 percent ethanol with 15 percent gas, a mix dubbed E-85. E-85 is available at 50 fueling stations around the state, and more cars can use it than owners realize. (See the Department of Energy’s Alternative Fuels website www.eere.energy.gov/afdc/ for a map of stations that offer alternative fuels and a list of vehicle models that can use them.)

Meanwhile, new developments in all three categories—hybrids, diesels and flex-fuel vehicles—are close at hand. Plug-in versions of hybrids will be in showrooms within 18 months. These will allow owners to plug their cars into outlets at home, and will store enough energy in the car’s battery to power most daily commutes, with no liquid fuel burned. For longer trips, the gas engine kicks in, just as it does in today’s hybrids.

That electricity might come from coal-burning plants, Colorado’s largest source of electricity. It can also be generated from clean technologies such as concentrated solar power plants (Xcel has plans to build one near Alamosa), wind turbines, geothermal plants or
photovoltaics. SunEdison just opened one in 2007 along Highway 17 in the San Luis Valley; it uses three varieties of solar collectors, and will serve as a test site to see which works best--as well as providing enough electricity to power 2500 homes or more. From a thermodynamic point of view, energy is energy. We can, theoretically, replace oil with sunshine.

Ethanol poses a trickier problem. In the United States, this fuel alternative is made solely from corn. Some wonder whether we should use food to create fuel. But corn as a feedstock for ethanol is simply a bridge measure, says Megan Castle, spokesperson for the Governor’s Energy Office. All kinds of other organic materials can, with the right technology, be turned into ethanol, including manure, sawdust, construction waste and grass.

Broomfield is home to the first company to break ground on such a demonstration plant in the United States. Range Fuels, Inc. (rangefuels.com) is one of six companies across the country receiving funding from the Department of Energy to develop “cellulosic”
ethanol. Range Fuel will use a proprietary two-step process at its site near the paper plants of Georgia, where wood waste will be converted to cleanburning fuel. The company says other materials will be used at future sites.

Diesel holds similar promise as an alternative fuel. Car engines can be modified to use “biodiesel” that comes from many sources, including used cooking oil. Blue Sun Biodiesel (gobluesun.com), located in Westminster, turns rapeseed, canola, and other oilseed crops into diesel; by using this instead of petroleum-based diesel, emissions are reduced by 20 to 25 percent. It’s sold throughout Colorado and neighboring states.

Down the road, diesel created from a very different plant—algae--may hit the market. Boulder-based Solix Biofuels (solixbiofuels.com) is working with species of algae that are particularly good at converting sunshine to oil, which can then be processed into biodiesel. Algae are a better oil source than, for instance, soybeans; they require no soil, less water and much less space. In a happy turn of mutual beneficence, algae also use various greenhouse gases as nutrients, ostensibly helping to clean up waste from fossil-fuel power plants. Solix has a first generation plant in Fort Collins, and the algae are consuming excess carbon dioxide from the New Belgium brewing company; a second-generation plant is being built.

Put these advances together, and we can expect to see “plug-in flex-fuel hybrids” and “plug-in biodiesel hybrids.” These cars will run primarily on (hopefully clean) electricity, and yet will have the ability to go long distances using either some form of E-85 or biodiesel. Either way, gas for passenger cars can become insignificant. The question, some ask, is will it happen soon enough?

Public Policy
Faced with the likely prospect of an imminent fuel shortage, federal and local governments could institute rationing, or begin taxing carbon emissions as a way to curb our oil-thirsty ways, or fund the development of alternative fuels at the same level that it funded the
Interstate highway system in the 1950s. For now, it’s using voluntary incentives— and the bully pulpit.

For several years, the federal government and the state of Colorado have offered tax incentives and tax credits to people who opt to buy hybrid cars, or put photovoltaic systems on their houses, or take other energy-conserving measures. These incentives will continue. And the 2007 energy legislation has set new fuel efficiency standards for cars at an average per fleet of 35 mpg by 2020 (critics say the standards don’t go far enough). The law also includes incentives to companies who are designing waste-to-ethanol demonstration plants, such as Range Fuels.

In Colorado, Governor Bill Ritter is making plans for what he’s calling a “new energy economy,” essentially a way to turn the coming crisis into a business opportunity for Colorado. One part of the initiative: the creation of the Governor’s Biofuels Coalition that supports both biodiesel and ethanol fuels. Besides encouraging innovation, the state is also leading by example: it is rapidly improving the efficiency of its fleets and switching to biofuels whenever possible.

Will this be enough? Says Castle, “we are being upbeat and positive. There are so many technologies that are going to have a large impact. And Colorado, with all its resources, is a leader in the field.”

Elise Jones, the executive director of the Colorado Environmental Coalition, isn’t as sanguine. She suggests that in addition to all those fuel-replacement strategies, the state also needs to help reduce the base need for transportation by “working on our land use patterns.” The CEC’s agenda for the 2008 legislative season includes making explicit the connection between sprawl, transportation and the environment. She says “Peak oil aside, we should be living close to where we work.”

Indeed, we can reduce unnecessary driving by choosing to live in a walkable community, perhaps a “new urbanist” or co-housing arrangement, where basic services—and the bulk of our social lives—are within a very short walk. A study of a New Mexico co-housing site indicates that well over half of a normal family’s driving could be avoided by choosing to live in a walkable community, telecommute, and access local shopping, school and social amenities (see osharavillage.com for the Oshara Village Co-Housing Transportation Study).

Relocalization
Which is one point the “relocalization” movement makes (along with supporting telecommuting, biking, mass transit and other less oil-consumptive options). While this movement applauds clean energy technologies and all manner of conservation efforts, its supporters say we may find ourselves stranded in more profound ways.

They could take Wendell Berry as their laureate (he wrote the following in an essay entitled “In Distrust of Movements,” first published in summer, 1999, in Orion Magazine):“Though people have not progressed beyond the need to eat food and drink water and wear clothes and live in houses, most people have progressed beyond the domestic arts — the husbandry and wifery of the world — by which those needful things are produced and conserved. In fact, the comparative few who still practice that necessary husbandry and wifery often are inclined to apologize for doing so, having been carefully taught in our education system that those arts are degrading and unworthy of people’s talents. Educated minds, in the modern era, are unlikely to know anything about food and drink, clothing and shelter. In merely taking these things for granted, the modern educated mind reveals itself also to be as superstitious a mind as ever has existed in the world. What could be more superstitious than the idea that money brings forth food?”

Michael Brownlee--who uses the title “catalyst” to describe his role in Boulder County Going Local, sums up the relocalization theme by saying “We have lost our ability to provide our most essential needs such as food and energy locally. That’s made us vulnerable to global economic shocks. (Boulder County Going Local is a for-profit offspring of the non-profit Boulder Valley Relocalization. It promotes community self-sufficiency; food, energy and social connections are at the top of their priority list.)

Our best defense against that vulnerability is to learn how to live and thrive with local resources, starting with food but including energy and everything else. That means eat-local campaigns are more than just romantic efforts to keep a quaint tradition—small scale farming—alive. They may be vital to ensure that we’ve got the basics and aren’t incapacitated by the vicissitudes of national or international conflicts.

Relocalization proponents also work with cities and counties to create policies to encourage all kinds of alternative energies. One happy side-benefit: solar, wind and other technologies are controllable at the local level and do not make good targets for mass disruption. And these changes have the happy side benefit of reducing greenhouse gas emissions from homes as well as cars.

Humans adjusted amazingly fast to the wonders of oil; it was first extracted from the ground only 150 years ago. Brownlee believes we can—and must— adapt to the coming circumstances. He even sees an upside: “When people begin buying food from local growers, and when they begin building their lives around their local economy, then life becomes much richer and much more satisfying than the frenetic life we’ve grown accustomed to.” The new economy, he says, will be “more socially connected, more sustainable, and more equitable.” So maybe we’re not looking at hardship; maybe we’re looking at an improved quality of life, post-oil. Either way, in the final analysis, the best approach may be to hope for the best, and prepare for the worst.