Economic Lifeboat:   the Solution is Local
 

   Readiness   =   Planning   +   Preparation   +   Practice

      Peak Oil supply shock can be managed with Readiness.

Readiness:   Make energy/economic/survival decisions without being the turkey.
  • Each and every day, day after day, experience reinforces the turkey's sense of security as it awakes to be fed and cared for by kindly humans.
  • On the day before Thanksgiving, the experience of an entire lifetime undergoes a revision (based on the book The Black Swan).
  • Trusting in securely available oil is a turkey's bet.

Hitting an iceberg was not Titanic's disaster. Judgment was the killer; there was time to orderly load the lifeboats and transition people to the iceberg.

Today we face a similar need to transition the lifeblood of our economy from oil to ingenuity. Yet centrally planned programs of monetary policy, transportation and power generation, disallow deploying the lifeboats. Debt, Global Warming and Peak Oil are civilization killers we can defeat with self-reliance, empowering everyone. Self-relinace buillds economic lifeboats. The lifeboat paradox is that if everyone has one, they will not be needed.

"To be thrown upon one's own resources, is to be cast into the very lap of fortune; for our faculties then undergo a development and display an energy of which they were previously unsusceptible."—-- Benjamin Franklin
Mission: Build economic lifeboats; collaborate on the contingencies and execute actions to transition economic lifeblood from oil to ingenuity by 2018;
  1. 2008 in the process of cutting food-miles and openning regulated markets to innovation
    • Plan, prepare and publisize Victory Gardens and how we can transition to sustainable infrastructure.
    • Create free enterprise opportunities. Approve HR 4601 allowing Feed-in Tariffs, grant rights of way for the Pickens' Plan, Personal Rapid Transit (PRT) networks and launch collaboration engines (example, this site), other actions.
    • Initiate IEA Treaty obligations for oil depletion greater than 7% (based on World Oil Exports).
  2. 2009, end urban planning's pressure on increasing oil prices, shift to Performance Governing, involve many with widespread planting of Victory Gardens and ramp production of renewable options.
  3. 2010, build 4,000 miles of PRT (Physical-Internet), 4% power from renewables with a distributed smart electrical grid, grow 25% of food in Victory Gardens and others.
  4. 2016, have 1 million miles of PRT, 50% distributed smart grid, 40% of power from renewables, and sustainable self-reliance in food produciton.
  5. 2018, operating 1.4 million miles of PRT, 80% distributed smart grid and 70% of power from renewables. Economy durable within US domestic oil production. (Note, these milestones are guesses of what is possible.)
Situation:
  1. 700% oil price increase, 10 years.
  2. Oil is our economic lifeblood
  3. Oil is a finite resource
  4. Oil availability peaked in 2005
  5. Supply deficit since 2005 is 3 times the deficit from the 1973 Oil Embargo. Details

  6. Self-reliance is everyone's responsibility.
  7. Being self-reliant exercises ingenuity and builds a lifeboat.
  8. Unlike oil, ingenuity is unlimited. The more we depend on ingenuity, the more ingenuity we get.

  9. Lifeboat paradox, build enough lifeboats and they will not be needed.

Declines of 4% to 20% per year can be anticipated
without action to transition from oil to ingenuity.

EIA contingencies are mandated with a 7-12% oil shortfall.
World Oil Exports (size of the import market) peaked in 2005 at 46.3 mbpd.
The 2008 market has depleted to about 43.8 mbpd and with unstable oil prices.
Mandated contingency levels will likely be triggered in 2009.

One aspect of the contingencies is a mandated 20% cut in oil demand. Individuals, local and national governments can implement solutions before mandates requiring cut jobs and economic activities.
 

Demand Destruction equates to Economic Destruction

The gap between gas prices (red line) and disposable income (dark blue line) allowed many to risk their life's savings to buy a house. Rising gas prices force more and more people to choose between paying for their home or their commute.

Without action, rising gas prices will soon force unemployment, inflation and a more severe wave of foreclosures.
Risk Scenerios, Summary
Case Spot Outages
Low Inventory 		7% one time
Existing Plans		 4-20% year after year
Peak Oil		 40% one time
Iranian Crisis		 70% one time
Dollar Crisis
Indicators 2007 diesel outages in the Dakotas during harvest. 1973 Oil Embargo
  • 700% oil price increase over last 10 years
  • Peak Wood in late 1800's
 2008 Russian invation of Georgia, Iranian nuclear program, depressions, wars Great Depression, World Wars, Bear Stearn
I.O.U.S.A
Probability 90% every year in some spots 100% every 12-40 years 100%, World Oil Exports declined from 46.3 mbpd in 2005 to 43.8 mbpd in 2008 or 5.4% 90% every 40 years 70% every 70 years
Duration Short 10 years 40 years 20 years 40-80 years
Action Build inventories Conserve & increase supplies Re-tool Conserve, increase supplies and re-tool Re-tool
Famine

Without Victory Gardens our 97% oil dependency for weekly grocery deliveries virtually mandates famine. Do you have enough groceries in your home to weather a trucker strike? An oil embargo? A hurricane? A war? An economic collapse? Do your neighbors have enough food?

The economy is a confederation of up-side-down pyramids that supports leveraging natural resources and population overshoot. It is knit together by abilities to trust, transact and transport. Oil price instability threatens the fabric of the economy. Reducing the oil supply will force too many people to compete for too few resources unless we increase self-reliance. Victory Gardens are a start.

Currently Urban Planning and utility regulation prevent small businesses and innovation in transportation and power generation. The great innovations of Bell, Ford, Edison and the Wright Brothers were locked into regulation when bureaurcracies regulating them were form early in the 20th Century. The result, until de-monopolization in 1984 of communications infrastructure, there has are fewer and fewer small business and less and less innovation. When the emphasis is on planning, consistency in executing the plan becomes primary. We get better at HOW we do the things we known. Innovation is abherent.

When facing radical changes, the 700% increase in oil prices, we need to shift from regulating better at know-HOW and inventing better at know-WHAT.

Examples Improves know-HOW Improves know-WHAT
Typical of: Institutions and regulated markets Free markets where Performance Standards encourage multiple, competing plans that incrementally churn and adapt to changing circumstances and opportunities.
Commuinications Wall mounted to desktop rotary telephone in 50 years. The Internet, Wi-Fi, cell phones with more since de-monopolization in 1984.
Transportation Car crash testing improves car crash survival. Do not crash. Morgantown's Personal Rapid Transit has delivered 110 million injury-free, oil-free passenger miles.
Power Generation Larger centralized power plants that are 33% efficient. Germany's Feed-in Tariffs with 250,000 jobs created building solar and wind installations so 12% of power is generation independent purchases from Russia.
Academics Reputations matter more than insight. Einstein’s 1905 burst of creativity was astonishing. From articles published the be most prestigious physics publication of the day, he quantified quantum mechanics, helped proved the existence of atoms and molecules, explained Brownian Motion, up-ended the concepts of space and time with the Special Theory of Relativity, and produced science’s best know equation, E=mc2. Yet despite repeated efforts, it took another 5 years to be offered an academic position. (from Isaacson's biography of Einstein)
Companies 14 publishers rejected the first Harry Potter book until the 8 year old daughter of a CEO recommended it. Lack of insight by a company is fine. Free marekts allows parallel paths and luck for breakthrough ideas. Nature does not send a single sperm to fertilize an egg.
IEA Treaty will trigger Emergency Action in 2010 or before
  • IEA web site and written summary. Summary of IEA member obligations.
    • Maintain emergency oil reserves equivalent to at least 90 days of net oil imports;
    • To have ready a programme of demand restraint measures equal to 7% and 10% of national oil consumption (trigger most likely in late 2008 to mid-2009);
    • To participate in oil allocation in a severe supply disruption through IEP emergency measures.
      • Co-ordinate emergency operations, Coordinated Emergency Response Measures;
      • Collect and submit emergency data;
      • Implement national demand restraint measures;
      • Organise national emergency oil sharing;
      • Liases with IEA Secretariat and IEA reporting companies and industry.
        • Industry currently limited to the 30 oil companies in IEA countries
        • Consider Scheer, Feed-in Tariffs and renewable energy industry coordination
        • Consider Personal Rapid Transit and other non-oil powered transportation industry coordination
    • Key Components of Our Operations Strategy
      • Continuous assessments of the market situation
      • Permanent dialogue with Member countries and with OPEC and non-OPEC producing countries and several major consuming IEA non-Member countries
      • Pro-active media strategy
      • Effective and credible emergency preparedness and on-the-shelf plans
    • Key to our Credibility – Strategic Stocks, As at 1st April 2003 (2008 stocks are unresearched)
      • Net importing countries held an amount equivalent to 112 days of net imports
      • Net exporting members are also taken into account, average stock coverage rises to the equivalent of 152 days of net imports
      • Note: This is not half the oil needed to manage an agricultural cycle
  • US, State and local plans are inconsistently available
  • Other IEA signator's have varying degrees of plans published.
    • Australia seems to be the most published
      • The Discussion Paper presented by Tasman in Aug. 07, which poses some very insightful questions & discussion points Tasman Aug 07
      • The Final Report by Tasman in Dec. 07, which offers various numerous recommendations re. preparedness. Tasman Dec 07

By late 2008 and no later than early-2010 the desperate and irreversable declines in World Oil Exports will be painfully obvious. IEA Treaty obligations will trigger.

Reference:
Net Oil Export Blog/
World Liquids Exports
Better Transport
When Will the Peak Perk?
World Energy and Population
World Oil Exports: A Comprehensive Projection

Build a lifeboat

Self-reliance is a survival characteristic. As with the Black Death (plague) of the 14th Century, the solution is local: kill the rats and do not live in your own waste. Be efficient and do not live in our own waste. In urban transport we waste 96% of oil; 4% moves the person, 96% moves a ton of parasitic mass. Things you cannot see, can matter. In the 14th Century they could not see micro-organisms; we cannot see CO2.

In times of uncertainty, self-reliance becomes critical. Here are my recommendations for policies:

  • Grow 1/3rd of your own food. It will take 3-5 years to get 50% of people to be competent gardeners to reach that level. This will not save the world but it will
    • lighten the logistical load
    • provide a sense that we can save ourselves
    • provide a sense of community and mutual protection of gardens
    • provide starvation rations
  • Churn, economic evolution (process of invention, collaboration to scale, breakthrough, commercialization)
    • Alternative to losing jobs:
      Key components of contingency plans are noted by IEA are Fuel Swithch and Demand Restriction. Allowing non-oil industry participation in IEA (such as Feed-in Tariffs and Personal Rapid Transit industries) these components might be filled with new resources and efficiency gains that will not require a radical 20% loss of jobs and slowing of the economy.
    • De-monopolize power generation. Feed-in Tariffs (Congression, HR 6401). Reliable electricity 5 hours a day provides hope.
    • De-monopolize mobility networks. Allow the success of Morgantown to propagate with Personal Rapid Transit, PRT.
    • Churn requires shifting from Urban Planning to Performance Standards and free markets.
  • Secure your community. Universal state militia service. Individuals cannot survive by themselves. Peak Oil is going to be great for world peace and hell on local peace. Competition is the natural state; peace is the enforced absence of war.
  • True costs. Government charge for non-commercial costs of carbon, other emissions, unclean water, oil supply defense, etc....
Contacts:
  1. Bill James. Founder of JPods, a manufacturer of Personal Rapid Transit. Please contact me if you are interested in helping with contingency planning and actions.
  2. Rick Munroe. Rick is with the Canada's National Farmer's Union.
  3. Chuch Mahan. Retired Army general, former logistics chief. Currently business consultant on contingency planning.
  4. Charlie Fletcher. Retired Army general, former operations officer for TRANSCOM. Currently business consultant on contingency planning.
  5. Ron Swenson. Solar industry and Personal Rapid Transportation networks.
  6. Jim Medlen. Manager of this web site.