The Petro Razor imposes, the depo man disposes

Signal of the times: Malia Wollan of the AP posted a story this weekend about the growing epidemic of abandoned boats. More and more pleasure boat owners are no longer able to afford slip fees, and more and more commercial boaters are being driven out of business by the double whammy of fuel costs and a sinking economy. Just as I reported earlier about hot SUVs, the solution seems to be depo men - paying people that take your vehicle out and burn it or sink it for you.

Wollan quotes Buck Bennett, a natural resources manager in Georgia: “I’m not an economist, but when putting 500 gallons of fuel in a shrimp boat costs more than the boat is worth, that is a sad thing.” Bennett knows of over 150 scuttled boats on Georgia’s coast, and guesses that’s only a fraction of the actual count.

The credit crisis dominates the news today, but invisibly for most people. What we can see, however, is how the credit crisis is concatenating with others, especially the oil crisis of 2008, and self-exposed industries are going under. US auto industries insist on making big cars right up to the end, and now their bailout is (rightly) looking less and less likely; with hulks littering the waterways, the marine industry is effectively dead.

When hulks littered the streets in the World Without Oil game, after the Petro Razor made its cuts and people walked away from cars, boats and houses, it seemed unreal – such was our mindset in 2007. In 2008 it not only seems more real, it is really happening. Photo by sunface13 via Flickr.

As gas prices dip below $2 a gallon in parts of the U.S., the question arises: will Americans be fooled? Not if they actually pay attention to the forecasts: “Although prices may stay low for a time, ‘it is becoming increasingly apparent that the era of cheap oil is over,’” says the Financial Times about a report to be released this week by the International Energy Agency, according to this report from IEEE Spectrum. The IEA forecasts oil back to $100 a barrel and up as soon as the recession-caused glut passes.

Oil is fleeting, but wind is forever

Long-term, the IEA forecasts oil rising to $200 a barrel by 2030 – or it would forecast such a future, except that, in their words, “current global trends in energy supply and consumption are patently unsustainable.” As Bill Sweet of IEEE goes on to explain, “ultimately the IEA is saying that what it is predicting to happen will not actually happen because it cannot happen.” The IEA is acknowledging that you cannot just extend the graph out for another 20 years, that the reality the graph depicts derails the graph’s own underlying assumptions about prices, economic and population growth, and so on.

This is a remarkable statement, and worth repeating: the world’s energy “business as usual” will not survive for two more decades, and the energy infrastructure as we know it will be changed by the turmoil caused by market pressures on oil supply. This of course is not news to those familiar with the World Without Oil game. But it is news to see it openly said by as august an agency as the IEA. Lesson: it’s not a moment too soon for the U.S. to embark on radical reconsiderations of its energy future (pdf). Photo by maistora via Flickr.

It’s probably unfair to finger Rocky Twyman as the architect of the global recession, for a variety of reasons. All Twyman did was lead a mass movement to pray for lower oil prices. But as Ian Ayres asks so succinctly, “Did God reduce prices on the demand side or the supply side?” Apparently Twyman and his followers didn’t specify, and God in his wisdom chose the demand side, in the form of a global recession.

It takes a village (in recession)

Out of the many lessons to be learned here, let’s focus on this: Twyman’s blithe request illustrates the danger we’re in if we don’t look at the full relationship of oil prices, supply, demand, and the oil production pipeline. This was taught really well by players in the World Without Oil game: at game’s end, when the crisis was apparently “over” and gas prices had stabilized once again (at $5.50/gal US), many players were horrified to see their neighbors fall right back into their old fuel-dependent habits. Which is what I see now all around: people believing that after a period of “false high prices” driven by “speculation,” fuel prices are now declining to their “natural levels” where they will remain, apparently, until the Second Coming.

What has actually happened is that the credit crisis has removed uncertainty from the oil market. Earlier this year, the oil market didn’t know if the oil coming out of the ground would be able to satisfy demand, so prices for oil futures went up. Now, however, it’s clear to the market that a global recession is here, and since the recession will precipitate a sudden drop in demand, it’s also clear that for the short term oil suppliers have too much oil in the pipeline. Thus the tumble in prices.

What this does NOT mean is that we have a lot of oil, or that uncertainty is gone from our oil future. Uncertainty is an indelible part of oil – for one thing, the people who control certainty are the same people that profit from uncertainty. Add to that the tendency for oil to create and maintain non-democratic nations, and the growing strategic importance of energy, and you’ve got an enduring situation where the only certainty is uncertainty.

Plus… as I’ve noted before, success in energy independence means lower oil prices. The people who buy hybrids and use alternate transit drive down the demand for oil, which drives down its price for a while. But the only way to keep the price down long term is to actively pursue alternatives, and not to be seduced by a low price today. As we all know all too well by now, that can change, and astonishingly quickly. Photo by ursonate via Flickr.

No Gas 4 U: A World of hurt Without Oil

I learned a new WWO statistic, thanks to Krystyn: 3 mph.

That’s the speed that gasoline moves through a pipeline, apparently, and it’s one of the reasons that a full-on WWO experience has erupted for real in the Southeast. Have you heard about this? It’s been largely swallowed up, newswise, in the mortgage meltdown, the credit crisis, the bailout and other fiascoes.

Krystyn points me to this AP story about the gas shortage, which details how the disruption to the gasoline supply in the Southeast U.S. has led to gas lines, suspended business and school operations, price gouging, panic buying and hoarding, and so on. And even violence, as this Biz Week story relates how the area is abuzz with stories about “fistfights and fender benders among drivers jockeying for position before the gas runs out.”

The root cause is Hurricane Ike and its effect on the power grid. The hurricane disrupted refinery operations in Louisiana and Texas, but that was fairly brief. The power disruption lasted much longer, and without power, the oil companies were unable to move the gasoline through the pipelines and thus, a gas shortage on the other end that’s lasting much longer than experts realized it would.

I’m reminded of a discussion I had with an authority on the fuel system prior to launching the World Without Oil game. I asked him if the U.S. had any contingency plans in place to guard gas stations in the event of a crisis (as the UK does, for one), and he seemed to think I was crazy. “There won’t be any trouble at gas stations,” he said. “Why would there be?”

WWO players understood the street reality of the situation far better, and everything we’re seeing in the Southeast now was successfully foreseen by the collective imagination of WWO players back in May 2007. If this is what happens when a transitory shortage passes through a region, what will happen when a permanent national shortage comes to stay? And what can we do to prevent that from being a disaster? That’s what the World Without Oil project was all about, to “play it  - before we live it.”

Photo by B Rosen via Flickr. The Atlanta Gas Crisis photo pool is here.

Krystyn Wells is now seeing the serious challenges and expectations from World Without Oil come to reality over the past couple of weeks. Serious game, indeed.

The Facebook tweet above by Krystyn (who was Pachinko_Chance in WWO) made me realize something new about the World Without Oil game: it was a kind of Rorschach Test about the health of the country. The game did a lot to lay open the extent to which oil and petroleum-fueled energy has oozed its way into the fabric of our lives, and I’ve written about that extensively in past blog posts, and about how this oozing has become painfully clear in the year since the game ended.

The sign of things to come

But as Krystyn indicates, maybe the game also laid open the extent to which trouble was brewing, not directly petroleum-related. Commentators on the game noted how it tapped into the subconscious or the mythological. When you read stories like this one, which is full of foreclosures and belt-tightening and slipping-down lives, it reads like today – and remember, mind you, it was written back in May 2007, when there was no credit crisis, no mortgage crisis, no foreclosures, just sunny skies and prosperity forever and people thought $3 a gallon was some sort of dark fantasy.

Maybe we need to have a crisis game like WWO every year – and build something that we can pick apart at the end, and trace its various narrative threads back to the real-life cracks in the infrastructure that inspired them. And then see what we can do to fix those cracks before they spread and threaten to bring everything crashing down. Photo by respres via Flickr.

The expert monopoly

As the bailout crisis talks continue, and the common people wait to find out what particular flavor of long hard road awaits them, one might wonder if there’s any way that we the people could have foreseen this coming. The answer is yes, and the key incident to remember is: Nicholas Leeson and Barings Bank.

You may remember Mr. Leeson: he was the young trader who undertook risky deals that went bad and the resulting losses destroyed Barings, an investment bank that was over two centuries old. The incident shook the markets, but the focus at the time quickly shifted to controlling individual traders, away from the obvious lesson about the shaky fundamentals of investment banking itself, and the incident seems to have been forgotten entirely when Republicans Phil Gramm and James Leach championed the Gramm-Leach-Bliley Act, which undid the Glass-Steagall Act’s protections that had been in place since the Depression.

Thinking about Leeson reminds me in turn of Frank Corder, the man who stole a light plane on September 11, 1994, and crashed it into the White House. It does not take an expert to extrapolate from this event the events on the same day seven years later. But as we all now know any such lesson was not learned - not by U.S. security experts, anyway.

Once you begin to see the kind of myopia that afflicts experts, you can start to see it in all sorts of places. And it validates two idea behind the World Without Oil game: one, that a common citizen can see some approaching futures more plainly than experts can; and two, that a sufficiently large group of everyday citizens can outperform experts in certain challenges, especially those of imagination. The key is creating a seriously playful motivation to bring the citizens together, and a seriously playful space where they can collaborate. Should some tiny fraction of the money looming to be spent on the credit crisis go toward crowdsourcing views about what the next crisis will be? I think we should get that game started right away. Image by Mike Licht, Notionscapital.com via Flickr.

Oil drilling: the risk is socialized

“Privatize the profit, but socialize the risk” is the meme of the moment: it’s what happens when you let a company take home the benefit from operations but bail it out with public money when times turn bad, and as we all know it leads to heedless corporate behavior and eventually, to tears. You would think that now of all times our government would reject deals of this sort. But the House quietly passed yet another “privatize the profit, socialize the risk” scheme yesterday: it opened up both coasts to oil drilling.

This, despite Exxon’s successful legal action culminating earlier this year to reduce its payments on the Exxon Valdez disaster from its original $5 billion. (If you don’t remember the Exxon Valdez oil spill, you can be forgiven; it might have happened before you were born; the ship went aground back in 1989.) So, despite the most open-and-shut culpability imaginable, Exxon successfully managed to socialize the risks of oil production in Alaska, using their privatized profit to fund a 19-year delay and, eventually, bailout. We all ended up paying for the Exxon Valdez; can we really expect anything better when oil rigs start appearing off our beaches and in our fisheries? The risks are great, which is why the coasts were put off limits in the first place, and now they are yours and mine. Photo by ingridtaylar via Flickr.

While the perps express shock at how much collateral damage their greed is doing (rather like termites in a collapsing house), let’s all take a calming minute to honor the heroes of this crisis - the people who did what they could to actively counter the devastation. Who are they, you might ask?

Bailout-resistant

The people who ride bicycles. The people who take transit. The people who bought more fuel-efficient vehicles. The people who drive the speed limit or less. The hypermilers. The people who plant gardens. The people who localize their food and energy. The people who invest time in their communities. The people that took staycations. The people, in short, who did their own math, gauged the weather for themselves, and took positive action ahead of the crisis. The very things prescribed by the World Without Oil game (and taken to heart by many of our players).

How did they help? Quite simple. By reducing our demand for oil, these people have helped to drop the price of oil and thus ameliorate this year’s fuel price hike. The fuel price hike, of course, is part and parcel of the foreclosure crisis: it wasn’t just that people couldn’t afford their ballooning mortgages, it was the three-punch combo of mortgage + fuel prices + food prices that really knocked ‘em down and out.

Plus of course, by adapting in a socially conscious way, these people have made their lives bailout-resistant. Individually, each contribution is small, but collectively they are quite significant. Large enough, anyway, to fill up our transit systems, calm our highways and empty our greenhouses.

The self-reliant individual used to be a proud model of American citizenship, good stewardship the epitome, and self-sufficient independence the backbone of the American character. When was it exactly that that model was replaced by the lowest-cost-at-any-price consumer, and the drill-anywhere bail-me-out spirit became our national standard?  Photo by Pandiyan via Flickr.

I’m mulling this morning about the various natures of future knowledge, and how they influence human behavior. Hurricane Ike started this train of thought, which is not surprising, as forecasts and predictions and planning (and dread) are part and parcel of our experience with hurricanes.

Hurricane Ike, Friday Sept. 12, 10 am PDT: some things are foreseeable

After ravaging Haiti and Cuba, Hurricane Ike is plotted to come ashore again at Galveston, Texas, pushing a storm surge that threatens to overwhelm the sea wall there. So once again the little hairs stand up on the back of my neck: the World Without Oil alternate reality also had a hurricane (Felix)  come ashore at Galveston, inundating parts of that city and also causing flooding in Houston.

WWO predicted this hurricane, but like many predictions, this is not remarkable. Given how hurricanes operate in the geography of the Gulf, it’s a safe prediction to make (it’ll come true eventually). Right now, the forecast calls for Ike to hit Galveston, and this is also not remarkable. Forecasts are like a chain of well-educated predictions, and if any of these predictions goes awry, the forecast suffers.

Which brings us to foreknowledge - which I’ll define here as the ability to recognize what is actually going to occur. Foreknowledge depends on two things coming together: accurate perception of the world as it is and accurate understanding of the way the world works. Unlike an event chain, foreknowledge can bypass the tactical sequence in favor of the strategic outcome. At its highest levels, foreknowledge involves a “eureka moment” when the opaque transforms into the inevitable. And foreknowledge informs and motivates more strategic human behavior: a hurricane forecast leads to boarded-up windows and evacuations; foreknowledge about the effect of global warming on hurricanes and sea level, in contrast, leads people to rebuild or relocate.

The goal of World Without Oil was to create a platform for foreknowledge about oil dependency in its players and observers. It is generating two outcomes: (1) people able to perceive more accurately the world as it is and how it works in regards to oil, and (2) people having a foreknowledge “eureka moment” and changing their situation and behavior accordingly. Both these outcomes help to lessen the impact of the inevitable transition we face as oil becomes more difficult to find, extract, procure, and burn with a clear conscience.

An unanticipated bottleneck

In the World Without Oil game, we predicted that a sudden rise in oil prices would cause a bicycle shortage. But I don’t think we adequately envisioned the crisis in bicycle repair.

Behold a sign of the times: the times being 1973, that is. The photographer, ubrayj02, explains:

So add bicycle care and repair to gardening, cooking, hypermiling, community organizing, and the list of other skills that give a great return on investment in the world without cheap oil. Photo by ubrayj02 via Flickr.

Citizen contributions, now more than ever

Responding to the crisis of the World War I and II years, people planted Victory Gardens. By raising their own food, citizens cut the demand for outside food and saved the fuel that would otherwise be needed to bring food to them. More important, they increased the resilience of the economy (by decentralizing food production, by being able to make their own decisions about distribution, and so on). And most important of all, they thus became an active part of the war effort - “Food is Fighting!” as several government posters succinctly put it. One result: an extraordinarily unified country.

Now we fast-forward to 2008. Whether or not the government chooses to acknowledge it, there’s another crisis going on – or more precisely, a concatenating and synergistic series of crises with feet already in the door. And many people are responding appropriately: by planting the Victory Gardens of 2008, by riding bicycles and taking transit, by driving efficient cars and hybrids, by eating locally, by building green, by cutting waste, by building communities and debating solutions, and so on.

The differences between then and now are notable – and to my mind, ominous. Then, these citizen actions were actively encouraged by The Powers That Be, which tallied their contributions and recognized them as important. Then, the White House boasted its own Victory Garden. Today, however, these citizen actions are actively discouraged by the government in favor of Consumerism As Usual, and the contributions these citizens are making are not recognized or even tabulated.  Instead, we hear the “drill!” mantra, even though the citizen conservation approach has the potential to produce (via saving) more than 10 times the energy that drilling would net, in a quarter of the time. And once again the potential to unify the country, not divide it further.

Support the military, now more than ever

In the World Without Oil project, we simulated the first 32 weeks of an global oil shortage. In the simulation, the government did very little and it was up to the people to crowdsource their own solutions to the crisis. Unfortunately, as with many other revelations from World Without Oil, government inaction seems to be coming true. Will it be up to the people to crowdsource their way into a viable and better way of life? The good news is, we’ve already started.

Losing muscle: saving fuel by cutting education

It’s my last day of vacation here in Arlington, Vermont, where gasoline is $3.79 a gallon or so (it’s still over $4 back in Cali) and the winters are long and warmed with fuel oil. Our hosts had friends over last night, and I asked a man named Hamilton what the winter would be like. “Cold” was his laconic answer.

At current prices, winter can cost residents here $6000 or more in fuel oil. Hamilton went on to relate that a fuel-oil supplier he knew was already carrying about $750,000 in debt from last year, when suppliers faced customers unable to pay who are facing freezing temperatures. Who will step in this year, I wonder. And the next, and the next.

Meanwhile, an article in the New York Times describes how schools across the nation are dealing with the triple whammy of skyrocketing fuel costs and more foreclosures and the recession: cutting bus service; cutting hours (and in some cases, days); restricting travel; generally saving money any way they can. “The big national picture is that food and fuel costs are going up and school revenues are not,” said Anne L. Bryant, executive director of the National School Boards Association, according to the article.

As the school year begins, teachers will be playing oil mini-crises with their students in their classrooms, using the World Without Oil lesson plans. Students not of driving age may have difficulty relating to gas prices, but underheated houses and four-day school weeks will connect them more directly, alas.

In the World Without Oil game, the players imagined what would need to be done if petroleum suddenly became more expensive or otherwise hard to get. In the game, the players wrestled with cutbacks of essential services. What does it say that schools across the country are going to four-day weeks? The oil crisis of 2008 continues. Photo by bitzcelt via Flickr.

Oil is changing transit ridership

In the wake of Russia’s Georgian victory, a lot of people have taken George W. Bush to task for his statement that he had “gotten a sense of [Vladimir Putin's] soul” and found him “straightforward and trustworthy” upon their meeting in June 2001. But I for one am willing to take the President at his word. Perhaps the most noteworthy thing that we found out via the World Without Oil game is that oil changes people.

Here are some of the changes you can expect, according to the game:

• People will toss enviro regulations. Without even a second thought.
• People will try to dump their gas guzzlers (torching them for the insurance if necessary).
• People will start riding mass transit and bicycles in great numbers.
• People who are leveraged to the hilt will be devastated financially: repos, defaults, bankruptcies.
• People who control energy will assert their power to protect their control.
• People will turn to local sources, especially for food.
• People will start growing their own food.
• People will be angry - some, very angry - at being forced to change.

All of these changes are happening now, in the real world. Some of them are positive adaptive changes, but others are negative reactions to the prospect of change. What the WWO game enabled its players (and observers, even today) to do: try out those changes in advance. In the same way that a disaster drill allows people to think through the “alternate reality” of a hurricane, tornado, earthquake, or epidemic, World Without Oil prepares us to recognize a calamitous event in its beginning stages and to plan a wise response.

These real-world changes are happening because more and more people are sensing the basic market truth: The world wants more oil every day, but the world’s oil production fell below demand in 2005; in fact, the recent increases in production may not even bring us back up to 2005 production levels in 2008. People are sensing that the pipeline leading to their cars and homes is shaky and growing shakier, and many of them are preparing by adapting their lives now. Oil changes people, but for better or worse? That’s up to them. Photo by drp via Flickr.

The stability of oil supply takes another hit

The all-out war in Georgia finally moved from page 14A to the front page in my local paper today: about time. But the story leaves out entirely one of the most important elements of the conflict: the oil factor. The Baku-Tbilisi-Ceyhan Pipeline runs from Azerbaijan to Turkey through Georgia and, with a one-million-barrels-per day capacity, is a key provider of energy for the EU and the United States. In fact, along with the sister Baku-Supsa Pipeline, it’s the sole supply link for oil resources in this area that wasn’t controlled by Russia or Iran.

Bonus points for you if you recognize the destruction of this pipeline as the world-shattering MacGuffin in the James Bond movie The World Is Not Enough.

News reports in the U.S. seem to downplay the oil angle, probably in hopes of maintaining the recent slide in oil prices. But the threat is very real - not just that hostilities will damage the B-T-C pipeline (which is already shut down for the moment due to PKK insurgency last week in Turkey), but that Russia will seize control of the pipeline and use it as a tool to control prices and exert power over the West. Indeed, that may be a prime reason for the Russian attack on Georgia. As noted in earlier posts, in the World Without Oil game, players predicted aggressive moves such as this by the new petropowers to consolidate their energy control…. As with Iraq, if oil is not the #1 reason given for invasion, it will be a faithful and constant #2. Photo by YourLocalDave via Flickr.

Getting past the Overwhelm Factor

We got a friendly email from Kathryn Blume, who’s touring with The Boycott, her update of Lysistrata for the twenty-first century. In the one-woman play, the First Lady of the United States launches a nationwide sex strike to combat global warming.

Blume: “If you let yourself stop to think about it, climate change is an incredibly scary thing. But most people don’t let themselves think about it. The Overwhelm Factor is just too much. So having someone who can stand up in public and admit their fear, but then also tell a really funny story about the whole situation can be an incredibly cathartic experience, and inspire people to start taking action.”

The World Without Oil game had a similar premise for its approach to oil dependence – we also used “what if?” game play to get around the Overwhelm Factor – but frankly we could have used some more of Kathryn’s humorous approach. Maybe Oliver Twist could be updated for the post-oil era? “Please, sir, can I have some more?”

Bikeless in Toronto

The far-reaching World Without Oil dragnet pulled in a strange fish today: Igor Kenk, arrested for being the godfather of hot bikes.

An article in The Walrus by Holly Jean Buck lays out what went down: the improbably named crime kingpin is accused of stealing bicycles in Toronto and warehousing them for resale after the oil crash.  With over 2800 bicycles on ice, Kenk would have been the pedal pusher extraordinaire in post-oil Toronto. The article cites WWO as one of its sources about the potential for a bicycle shortage in a $6-a-gallon world, and especially, Kal’s undercover video. Isthisnotagame?

As Holly Jean puts it, “there’s something there, something in his behaviour, that speaks to an essential human instinct: this pack-rat impulse, wired together with survival strategies, deep in our neural circuitry.” Part of that, of course, is a reaction to the creeping certainty that a survival strategy is going to be necessary. Photo by barely_legal via Flickr.

Speaking of crises, I’m trying to clean up my desk. Here’s something easy to pitch out: a letter from Newt Gingrich. According to the envelope he needs my help to send a message to Congress:

Drill Here. Drill Now. Pay Less.

Strangely, he doesn’t mention that Drilling Here will net a nationally insignificant amount of oil, Drilling Now won’t yield that insignificant amount of oil for 8 or 10 years, and the Less we would be Paying would be about six cents per gallon. He also neglects to mention that we would be drilling in ecologically sensitive areas and all the profit from drilling would go to oil companies. Too bad this isn’t the World Without Oil game, where our hardheaded players put a natural check on unsupported, unsupportable emotional fantasizing.

Rewarding good players

And now I pick up a letter from the CEO of United Airlines, urging me as an airline customer to support efforts to curb oil speculators, whom the airline industries define as people who don’t actually use oil, i.e. people who are not them. I guess I can understand why the airlines would want to get the other bidders in the room out of the room, but would that really lower oil prices? Oil futures are different from other commodities futures: owners can’t sit on oil, to drive up its value; just because you pay more doesn’t mean it’s worth more; when the contracts come due, speculators need to sell their oil futures to someone who actually uses oil. If at that point the speculator paid too much for the oil, they take a loss. (We may see speculators taking such losses later this year, in fact, if oil prices don’t rise again.) Again, too bad this isn’t the World Without Oil game, which naturally invoked collective intelligence to examine claims such as the United Airlines letter for accuracy. But then again, maybe this letter actually supports the World Without Oil results; in the game, the airlines couldn’t adapt to the abrupt rise in oil prices, made bad decisions and went bankrupt.

At this point I am reminded of Jane McGonigal’s keynote at SXSW: Reality Is Broken: Games Can Fix It. In it, she listed four ways in which games do better than reality in generating happiness. I think that World Without Oil adds a fifth point to her roster: Games don’t reward people for sloppy play. Photo by Now and Here via Flickr.

Peak Oil, Peak Everything

Found this well-titled article in GQ about peak oil. For those unfamiliar with the term, it’s the (inevitable) moment when the supply of oil hits its peak and then starts to decline. Although it seems like it would be an easy moment to recognize, it’s not: Britain’s North Sea oilfields, some of the best managed in the world, hit their peak in 2000, and it took the oil field managers about a year to realize what had happened. The data are even more confusing when you’re talking about global oil production, and thus you have a debate raging right now as to whether we are approaching peak oil worldwide or whether we have in fact already passed it.

The peak oil bell curve is often taken for an ironclad rule, and in many ways it is, but it’s useful to remember that its curve essentially plots human behavior. Hubbert’s curve defines how humans extract oil in a relatively free market. Humans can modify the shape of the curve, and there’s some evidence that through advanced extraction techniques, we have been pulling oil forward and extending the top of the curve a bit. What IS ironclad about the bell curve, however, is the area underneath it: there is only so much oil. If you pull oil forward to ease today’s curve, it creates a sharper drop ahead.

The term peak oil is shorthand for the abrupt change caused by the shift from an upward slope, when the system encourages people to use more oil, to a downward slope, where the system takes oil away from people, when every day less and less oil is available. What worries people is that, psychologically, this is a potentially devastating transition for humans and societies to undertake with something as fundamentally useful as oil.

Easing this psychological transition was what the World Without Oil game was all about. A serious game is the perfect way to broach matters that we’d otherwise put out of our minds. It asked “what if?” and let people imagine what the first temblors of change would feel like. People played for the reasons that Sharon Astyk puts forth in her excellent blog, Casaubon’s Book, and emerged from the game better able to understand where we are, what has happened to Sleeping Beauty, and what we need to do now.  Photo by Ben+Sam via Flickr.

Chavez in Russia: all smiles

Another WWO pre-ja vu moment this week, reading this article by Megan Stack of the LA Times about Hugo Chavez’ visit to Russia, and what can only be described as the petro-drunk antics that he and Vladimir Putin indulged in. The two oil-rich nations signed energy security agreements, oil business deals, and arms deals, and expressed a common interest in establishing the ruble as a major reserve currency, replacing the dollar. The two spoke of Fidel Castro and waved off a report that Russia would begin to use Cuba as a base for nuclear-capable bombers.

These real-world actions mirror what players of the World Without Oil game foresaw as happening: the rise of a new world petro-order. And just to slam the point home, read this article by Norma Love about New Hampshire’s abrupt u-turn regarding Venezuelan oil. The upshot: for a number of years Chavez has offered free oil to keep America’s poor warm in the winter; New Hampshire has refused it on principle, led by Republican Senator John Sununu; except this year, not so much. “Live Free or Die,” except when it’s oil.

Made poignant by the fact that Gracesmom, probably WWO’s most beloved character, was a young single mom living hand-to-mouth in New Hampshire.

The turn of events points up something else that WWO got right: the government’s paralysis, and especially the Administration’s. Looking at the dive in oil prices the day after Al Gore issued his energy challenge only serves to highlight how unable the Administration is to generate any vision of a way forward. Thanks, Laurel, for the lead!

You're in the story

“What began as a marketing tool has now become a lot more useful: playing with alternate realities can solve real problems.” The writer is Anne Wollenberg, her article’s in The Guardian, and she’s talking about the genre started by the World Without Oil game. Read the article; it’s really excellent and lays out pretty clearly the potential that these collaborative games have to save the world. (And let’s shout out to WWO player RockLobster, quoted in the article! Woo!)

As a result of our current concatenation of calamities, future thinking and what-if scenarios have suddenly become the thing to do. Witness a CNN Special titled “We Were Warned: Out of Gas,” sent my way by alert WWO fan Diane. The behind-the-scenes commentary, however, is more interesting and real to me than the Hollywood-style cinematic premise. The revolution will not be telescripted; it’s already begun. Video scene from Kalwithoutoil.

It's all in your mind

Recent comments by prominent figures (such as Phil Gramm) that the U.S. credit crisis, oil crisis, recession etc. are “psychological” have generated significant backlash (Gramm lost his job, for example). The World Without Oil game has a unique insight into this, actually.

It’s been well known that a sudden sharp increase in fuel prices would have a significant negative impact. Securing America’s Future Energy (SAFE) established this in a series of “wargame” simulations, as just one example. These top-down analyses generate outcomes such as “1 to 2 million unemployed people.” OK, fine. But do they actually produce anything of value for us, the common people? What if I don’t want to be included in that statistic? The top-down view has no wisdom for you beyond “suck it up.”

Whereas World Without Oil takes the bottom-up view, and is full of ways for a person to avoid becoming a statistic. It’s gathered hundreds of ideas expressed in over 1500 different ways, all focused on practical actions that people can take. I think any person that spends an hour or two exploring the WWO archive will come away better prepared for our oil-poor future. This is what WWO was all about – that by “playing it people wouldn’t have to live it.”

So, yeah, the problem is psychological. Policymakers who can only look from the top down are psychologically unable to see the value of a crowdsourced, collectively intelligent, bottom-up view such as WWO. They don’t truly understand the problem, and thus disconnect themselves from the solutions or any hope of meaningful individual action.

“When exactly was it that the U.S. became a can’t-do society? It wasn’t at the very beginning when 13 ragamuffin colonies went to war against the world’s mightiest empire. It wasn’t during World War II when Japan and Nazi Germany had to be fought simultaneously. It wasn’t in the postwar period that gave us the Marshall Plan and a robust G.I. Bill and the interstate highway system and the space program and the civil rights movement and the women’s movement and the greatest society the world had ever known.

“When was it? Now we can’t even lift New Orleans off its knees.”

When indeed? From an Op-Ed piece by Bob Herbert, sent my way by WWO friend Cathy. Herbert is referring to Al Gore’s challenge for the U.S. to get 100% of our electricity from clean sources in ten years – or put another way, to begin to catch up to the sort of energy independence that Brazil enjoys right now and Sweden will have in a few years.

Can-do power

Herbert is anticipating howls of protest about the “cost” of Gore’s plan – and sure enough, everyone with a stake in the present energy system is screaming “impossible.” But Cathy also alerted me to this: Texas Approves a $4.93 Billion Wind-Power Project (Midwest wind power is a key element in Gore’s plan).

As Cathy notes, “I favor decentralized power (or shall I call it democratic power , like roof mounted solar and wind - so there isn’t a need for the transmission line - but at least it is wind.” True that - as talked about at length in World Without Oil. It’s not perfect – but: is it a sign of the return of the can-do nation? Photo by jurvetson via Flickr.

Formerly vibrant neighborhoods

The credit crisis is grabbing the headlines in America, as Fannie and Freddie starve on the empty calories of their bad loans, IndyMac Bank goes into federal conservatorship, and so on. The latest Harper’s Index gives the underlying numbers:

Chance that a U.S. home is currently vacant: 1 in 35

Rank of this among the highest recorded vacancy rates in U.S. history: 1

An article in The Economist (July 12) backs up the numbers: 18,600,000 U.S. housing units stand empty. It goes on to say that “formerly vibrant neighborhoods have taken on the dilapidated air of ghost towns” and “municipal taxes go unpaid” and “boarded-up homes invite looting, drugs and other criminal activity” – all outcomes foreseen in the WWO game. What we didn’t foresee: that cities would respond by demolishing the homes. But that’s actually being contemplated, according to the article.

The media hasn’t yet connected the 2008 credit crisis to the 2008 oil crisis, but again WWO teaches us the connection is there. As explained in an earlier post, the Petro Razor is at work here. Communities with forced commutes are on the wrong side of the Razor are likely never to recover; I’ve already heard anecdotal evidence that this process is underway.

Meanwhile, in a short article on Page 10A, we learn that Russia has reduced oil flow to the Czech Republic without warning or explanation. The move comes three days after the CR inked an agreement enabling the U.S. to build a missile-tracking radar station on Czech soil, So now begins the petropower plays among nations, also foreseen in WWO? The event that set off the global oil crisis was this: oil suppliers “unilaterally renegotiated their contracts,” delivering less oil than promised, which is exactly what’s happening to the Czech Republic. So is this a one-off, or a canary going thud in the coal mine? Stay tuned. Photo by judepics via Flickr.

More students are learning at home

In the oil shortage chronicled by the players of World Without Oil, the resistance to telecommuting quickly went by the wayside, so to speak. Employers were eager to relieve their workers of the commute burden – infinitely preferable, in their eyes, to helping them with their fuel bills.

And now, here in the real world, an article in the New York Times relates how gas prices have driven students, so to speak, to taking classes online. The article reports online enrollment is up 50% to 100% in some schools, and “the greatest surges have been registered at two-year community colleges, where most students are commuters, many support families and few can absorb large new expenditures for fuel.”

Can employee telecommuting and virtual business travel be far behind? Thanks to loyal reader Laurel for the tip. Photo by wrumsby via Flickr.

The Vulture Economy, San Diego

This from CNN in May:

The International Energy Agency gave advance warning that its previous forecast for supply and demand remaining in pleasant equilibrium over the next two decades was flawed. Its new projections, due in November, will say supplies may fall 10 percent short of demand, according to a report in the Wall Street Journal.

“Stephen Leeb, an investment manager who has authored two books on oil scarcity, said Russia was already seeing a drop in production, and there’s little evidence Saudi Arabia could increase production even if it wanted to.

“If the two biggest oil producers in the world can no longer increase production, that’s a catastrophe, not a bubble,” he said.

Others say there’s no way $130 oil is justified.

“This thing has to turn around, it’s insanity,” said Peter Beutel, an oil analyst at the consultancy Cameron Hanover. “Ultimately we’ll see a huge collapse in prices.”

Beutel doesn’t know when that collapse would come, but he predicts it will be within weeks or months, not years.

But he doesn’t know just what might bring it about - perhaps the Federal Reserve increasing interest rates or a big drop in consumption as people worldwide can no longer afford to fuel their cars or heat their homes.

“If these prices stick, you may see whole neighborhoods where people abandon their homes,” he said predicting that in the Northeast U.S. it will cost $5000 to heat a home unless prices fall.

OK, so this is scary. To my ears, this amounts to an admission that what was foreseen in the WWO game is indeed on the way. One of the experts says oil supply has failed, and so there will be a “catastrophe” as people worldwide run short of oil. The other expert says, no, the “catastrophe” is the high prices, which will cause people worldwide to abandon their cars and their homes. Either way, catastrophe ahead? Photo by gruntzooki via Flickr.