Scenario Contest for Peak Oil

Honorable Mention

Overview of Enforced Localisation

By Phoebe Bright (Energy Scenarios Ireland)

The world is unprepared for the oil peak when it occurs in 2007. The European central bank panics and increases interest rates in order to try and control inflation. Instead of allowing the increases in energy prices to work their way through the markets, business is stifled by increasing costs on all sides.

The lack of demand for energy causes a drop in price and supply is once again able to meet demand, but as the economy picks up, the need for fossil fuel generated energy also increases and since there has been no investment in alternatives, this quickly leads to supply shortages and the cycle repeats itself.

By 2015, oil prices are low, but unemployment high and business people are reluctant to invest having been stung by the instability of the previous years. Those businesses that survive are focused on delivering locally sourced products to local markets.

Localisation Summary

The economy contracts and collapses with the rising oil prices. As oil prices rise economic growth declines resulting in the demand for oil getting less, which may temporarily reduce the price of oil causing an initial economic recovery but only to collapse completely again. The economy gets a real battering under the localisation scenario, from which it can't recover.

Characteristics of Localisation

Government Policies

Investment in capital projects, incinerators, renewables, roads etc. cease through lack of funding
Interest rates are increased to counter inflation caused by high fuel costs.

Business

Property values at first boosted by a flight from equities, collapses in the face of increased interest rates and depressed economy. Construction ceases completely.
Businesses which adapt to doing business with local suppliers and local customers survive. Those with the knowledge and skills to repair machinery are in particular demand.
Everyone with a patch of land starts growing food for personal use and to barter for other services.
Urban residents invade and squat well located agricultural land.
Local currencies develop.
Multinationals decentralise to try and adapt to changing supply and demand.

Household

Foods we have become used to are rarely available: bananas, cheap frozen meals, coffee, tea!
Maintaining a car and obtaining fuel for it becomes increasingly difficult, although periods of low oil prices help. We no longer travel on a whim, but plan our trips to make best use of fuel. Neighbours share trips to town for shopping.
Most food is grown at home or supplied from local producers.
People develop micro-businesses to supply goods or services that can be used to trade for essential needs.

Timeline for Localisation

2005 - 2015

Worldwide depression develops due to the failure of the oil and gas producing countries to spend their windfall profits back into the global economy.
Ireland hit more seriously than most other EU countries because of its higher dependence on imports of fossil fuels and on export markets for its products. Unemployment soars.
Rapid collapse of activity in construction sector. Housing market plummets. Banks in difficulties as house buyers are unable to repay loans and find themselves deeply into negative equity.
World food prices drop because the marginal buyers cannot afford to pay as much as previously. Farms quickly start to produce locally required foods as they can get better prices for them. Farmers� markets open in every town.
Internet access is unreliable as many servers are no longer available 24/7.
Oil prices peak and then drop back to around $12 a barrel. Exploration and reserve development projects are cancelled. Shell mothballs its Athabasca tar sands project. Ireland finds itself with excess electricity generating capacity. No further wind farms are permitted to connect to the national grid.

2016-2055

By 2020, another 2-year oil price peak has happened, only to see prices collapse back to the $12 a barrel level.
The world economy is contracting, with firms closing and their equipment being scrapped during each downturn of the cycle. A limited amount of investment takes place during the recovery phase of the cycle but previous output levels are never achieved again. Each peak in global production, and in total energy use, is lower than the one ten or fifteen years previously.
People do what they can to meet their own needs. Energy is expensive in their own terms because their earnings are low.
A transition to low energy, labour-intensive ways of doing things takes place because money (and energy) for capital equipment is not available.
Households will need to repair possessions as they will not have the money to dump worn or broken goods and buy new ones. Machines will have to last a lot longer. Cannibalisation for parts will be common.
Travel will be limited because it will be expensive and people will have less need to travel.
Local and regional governments, strapped for money to pay their workers, will begin to issue their own currencies as happened in Argentina.
The Internet will be an important source of information about ways of adapting to the new conditions. E-commerce will be almost entirely local except for the supply of rare parts to maintain equipment
Local sources of energy such as biomass will be developed where possible.
Little used, the national electricity grid may prove too expensive to maintain in view of the high cost of repairs and the loss of 10% of the power passing through it.
Local energy supplies will develop that use the local electricity distribution system but not the grid. Slowly a new grid will develop from a web of interconnecting mini-grids.
Almost no new building will be carried on. What construction activity there is will be the adaptation of existing buildings for new uses, usually by the occupants and local builders, using recycled materials. Big houses will be shared.
The massive drop in energy use will remove the pressure to act to prevent climate change.
Localised famines will develop because of the difficulties with long-distance transport
Transport by sea will become more important - settlement patterns more coastal. Irish Rail will run its trains on rapeseed oil. Tractors will run on biodiesal and (a very few) cars will be run on methane from digesters.
The government will find it increasingly difficult to maintain control because it will be harder for people to travel. This will give an impetus towards a real decentralisation.
Very little production will be based on 'new' resources. Most materials will be recycled. For example, what little steel production is carried on will be based on scrap metal.

2055:

New things becoming possible with the growing sophistication of local economies.

Localisation Life

Key Localisation Facts in 2015

Investment in capital projects ceases through lack of funding
Interest rates increase to counter inflation caused by high fuel costs
Government is destabilised due to restless impoverished citizens Economy
Energy prices are destabilised
need some percentages in here sim to other factsheets
Unemployment is widespread Business
Multinationals decentralise to try and adapt to changing supply and demand
Construction ceases completely due to prohibitive energy costs and lack of buyers' market
Business with local suppliers & customers thrives; repair services also in demand Households
People start growing food for personal use
Local currencies develop
Debt crisis as home-owners caught in negative equity Culture

Culture

What are we eating?

Local farm & home grown produce
Nuts, berries & roots
Tinned goods stockpiled by survivalists
Atlantic seaweed

What are we watching?

Ground Force are now converting gardens for vegetable growing
Starship MicroEnterprise
Jim'll Fix It

What are we selling

Working horse for sale. One owner, in good condition with new set of steel shoes. Doesn't eat much and high emissions will help grow your cabages! Loves to work.
Best wheelbarrows in town for sale in exchange for cars in sound condition.
Mobile Super Shop Bank - Post Office - Library
Bouncy Castles - Closing Down Sale - Everything Must Go
Veg growing classes start next Wednesday at 7pm in the Community Centre.
We own an old landfill. Do you want what�s in it?

Headlines

Irish draft horse prices now higher than those of new tractors - Horse make a return to the farm.
Survey reveals Irish now slimmer and fitter than 2005 - We are living healthier lives - better food and more excercise.
Liffy hand-dredged for bikes and prams - One of the big differences between 2015 and 1805 is that we have Junk. All kinds of junk is being given a new lease of life.
Castlecomer coal mine reopened - Ireland's limited coal mines are being reopened.
Cork warlords declare independant state - Law and order has broken down in some areas.
Riots at allotments over cabbage - Food supplies can be very limited at the end of the winter and in some areas there are fights over remaining food supplies.
Foreign correspondants sacked as Ireland looses interest in outside world - We are foced to become virtually self-sufficient for our essential needs and therefore have little interest is what is happening out there.
Bicycle factory fueld by biomass and wind opens in Westport - Many businesses are gone bust, but many more, usually small scale and local, are opening.

Winners

Beyond Peak Scenario Contest