National Commentary

The Peak Oil Crisis: The Secretary of Transition

As gasoline prices go higher and higher and as the polls show voters more and more concerned about how they are going to fill their tanks, the Congress is starting to stir.

Now mind you, they have passed a couple of major energy bills in the last few years, but these of course were drafted in the accustomed manner. Hoards of lobbyists from oil, coal, Detroit, agriculture and even a few environmentalists were on hand at every stage to ensure that no serious damage was inflicted on the status quo. The major result from years of hearings, horse trading and administration threats were bills that redirected a significant portion of our food supply into our gas tanks and put meaningful conservation measures so far down the pike that they are completely irrelevant to what is about to happen.

In recent weeks, efforts to treat the symptom (high gas prices) rather than the underlying problem (oil production no longer keeping up with global demand) have become more and more bizarre. We naturally have had proposals to cut taxes — by pennies at a time when prices seem destined to go up by dollars — and actually passed a bill to stop loading a few miserable barrels (about a tenth of a percent of daily world consumption) into our strategic reserve. Then we have had bills to drill for oil everywhere and, my favorite, the one to sue OPEC for not sending us cheaper oil. In recent days, we have had bills to punish the Saudis by not selling them guns if they don’t send us enough oil and to restrict futures trading on the grounds that evil speculators alone are responsible for the unaffordable gasoline prices. All this says the Congress, in the main, is detached from reality.

Someday soon, however, the Administration and Congress will realize that we have a real problem on our hands. This problem will dwarf any that our currently active politicians have ever known and will rival that faced by our leaders during the American Revolution, the Civil War, the great Depression and World War II.

So what needs to be done?

First, we have to wait for a critical mass to form in government that appreciates that major changes, pleasant or not, will have to be undertaken. This will have to wait until after the November elections and a few more dollars have been added to the price of gasoline. It may take actual shortages at the pumps, but I suspect somewhere this side of $10 a gallon will be enough to appreciate that it will take more than political posturing to fix the problem.

The next step is to realize the scope of the problem. Most realists watching the numbers believe that petroleum exports as opposed to production are going to go away real fast. Experience with major exporters that already have peaked – Indonesia, the UK and Mexico for example – suggests that in about 6-9 years after an exporter’s oil production peaks, they cease exporting. As Russia already is giving off peaking signals and the Saudis are not too far away, the evidence, whether we like it or not, is screaming that we will be importing a lot less oil and gasoline ten years from now than our current 12 million barrels per day.

Next, we have to appreciate the scope of the problem we face. Oil permeates everything we do and use 24 hours a day. We are going to have to stop doing and using a lot of things within the next ten years. Decisions by the tens then the hundreds and finally the millions will have to be made. Obviously we as a nation, and world for that matter, could just sit back and let the “markets” make the choices for us and there will be an element of this in what is to come.

Letting the richest five, ten or even 50 percent continue to drive around, watch their flat screens and eat their fill, while the rest abandon their cars, leave their homes and congregate at homeless shelters and food pantries is not acceptable. As long as we have something resembling representative democracy is this country, this is not going to happen – at least for long. We have become too complex and too specialized a civilization.

So the government obviously is going to have to do something. But what? The problems will soon be everywhere. Transportation, heating, electricity, food, jobs, education and the financial system — the list of problems goes on and on and on. Where to begin? Who other than the President and his immediate staff are in charge of the big picture? Can the Congress cope with hundreds of critical issues at once? What bills do they pass? Every government agency will be involved, but each will come with its own mission, biases, lobbyists and mindsets. Who, for example, is going to tell the Defense Department that they have to stop sailing so many ships and flying so many airplanes around because we need the fuel to harvest the crop this year.

All this is leading to the notion that at some point the U.S. going to need a person and agency to coordinate the great transition from fossil fuels to renewable energy that will take place in coming decades. This individual is going to require unprecedented, nearly dictatorial powers akin the War Production Board in World War II. Congress and the President are going to have to delegate a great deal to this individual for much of our civilization is going to have to be peremptorily torn apart and put together in a new fashion. There does not seem to be much other choice.

Given that we have to first back out of oil, then natural gas and finally coal, the transition to a sustainable, stable civilization will take decades or perhaps longer. We might as well make the new Department of Transition and its Secretary permanent. They are going to be around for awhile.