What happened when the oil ran out
(This story/scenario was written as part of the preparation for the visioning exercise for Bowen In Transition, the local Bowen Island, BC chapter of the Transition Initiative, which is helping communities all over the world to prepare for the threat of energy, economic, and ecological collapse, and to transition to a post-cheap-oil, post-global-industrial-economy, post-stable-climate future. The visioning exercise is a collective collaboration to imagine how these crises will affect the local community, and what could be done now and in the near future to prepare for and adapt to these crises and increase local resilience. I’ve written this story because I think there’s a risk that those in my community may significantly underestimate the severity of the challenges the world will soon face, and hence how much work we need to do on our little (4 mile-by-5 mile, 3800 people, three miles west of Greater Vancouver) island to be ready, and to change. They will likely find my scenario too pessimistic, too dire for their liking. We’ll see I guess. I’m not prescribing solutions here, especially as the crises become more complex and start cascading into each other: This is the work that our Visioning Team, and then the Transition Working Groups, will have to do. I’ve therefore left the story unfinished, and if we want it to have a happy ending, I think we’ve got our work cut out for us.)
At first we hardly noticed the changes. The price of gasoline went up, but we were used to that. It hit $1.50 and then $2 a litre. Because of the Canadian taxes and the American subsidies, at this point Canadians started flocking across to border to buy it for only US$5.50 per gallon, $1.50 less than what we were paying in Canada.
The Americans then started the first rationing — those with Canadian licence plates were restricted to just four gallons per purchase. It was a bit ironic, considering how much oil was flowing from the accursed Alberta Tar Sands into the US. They were, in a sense, restricting us from buying back our own oil!
We had always expected that the government would just let “the market” deal with the Peak Oil problem. We were told that if there was a shortage, prices would rise, which would both reduce demand and encourage innovation to find new sources for oil, and new alternatives.
But “the market” didn’t help at all. The demand for oil proved to be inelastic, and the rise in prices hardly dinted demand at all. After all, most of us just filed our expense reports with our employers, who reimbursed us for our gasoline costs and then wrote the soaring costs off as a tax deduction. And the low price for oil in the first decade of the 21st century had so suppressed the profitability of new oil exploration, that when the prices skyrocketed all that happened was that governments, short-term thinkers to a fault, yielded to the pressure from corporations (and taxpayers) to deregulate and increase subsidies to Big Coal and Big Nuclear and indemnify them from environmental laws. The “green” alternatives — solar, wind, biothermal — turned out, as George Monbiot had warned in Heat, not to be plentiful enough, no matter what the price, to have much impact on the growing oil shortage.
So we were a bit surprised when the government, despite the howls from corporations and citizens alike, began to introduce rationing. Some of us remembered 1973 and 1979, when, due to constraints of supply from the Middle East, the refineries ran out of oil and gasoline stations, unable to get it at any price, simply shut their doors, regularly, sometimes for weeks at a time. There were long lineups for gas then, but at least we could buy it when we waited long enough, and the price wasn’t too bad either. Heating oil subsidies, back then, were increased to ensure no one froze in the winter.
The first stage of the new 21st century government rationing was a bit like that. We were restricted to how much gasoline we could buy per day, and on which days of the month we could buy it. Tax credits to compensate residents for the doubling of heating oil costs were introduced.
But this time, that wasn’t enough. This time, the drop in oil production and availability wasn’t temporary or political, it was real, an economic fact. The huge surge in Asian demand had pushed OPEC countries to force as much oil as possible out of exhausted wells, and accelerated the collapse of supply when the big wells just ran out, and the technology to find new, more expensive oil supplies proved to be both prohibitively expensive and horrifically environmentally dangerous.
The second stage of government rationing was much more severe. Rationing coupons, like those used in wars and depressions, were printed, and they applied not only to oil but also to selected high-energy-consuming products (some foods, clothing, and household products and most pharmaceuticals, electronics, furniture, appliances, and cosmetics), to all forms of transportation and energy consumption, and to all imported goods, since these required lots of oil to bring to market (NAFTA, already faltering, was an early casualty of Stage 2 rationing).
Given the fierce anti-government sentiment of the time, especially in the US, and the propensity of rich North Americans for buying their way out of (or around) inconvenient regulations, complex avoidance schemes thrived, and a huge black market for these products arose. Much of the outrage over the rationing resulted not from the rationing itself, but from the fact that governments were unable to enforce it equitably. Gasoline pumps had slow-release valves and cutoff timers installed. Thermostats had maximums and minimums set, and rations on daily energy use per household, after which energy was simply cut off for six-hour periods. Mandatory per-employee business travel limits were imposed, along with a 100% surtax on airplane travel.
But abuses abounded, and many citizens openly bragged about how they had skirted the restrictions. In impoverished areas, hidden or inaccessible to government inspectors, illegal gas pumps popped up to exploit the high prices and the desperation of big energy users, and they ignored the rations. Contractors found ways to reset and bypass thermostat restrictions. Counterfeit ration coupons were everywhere. Private airplane and jet owners “forgot” to log passenger information. And with a whisper in the right ear, almost any amount of anything could be purchased, without coupons, from the public used-goods markets that had sprung up (since used goods were exempt) — if one paid enough.
Not surprisingly, it was the poor, the ignorant, the sick, and the honest, who suffered most.
The Stage 1 rationing did not have a major impact on those of us living on Bowen Island, despite our dependence on imports from the mainland for virtually everything we needed to live. There was enough accumulated wealth on the Island to weather the storm. The distance from our Island to the mainland was so small that most of us, even those who commuted to work by car and ferry each day, were not spending all that much on gasoline anyway. And our climate meant that our heating costs, by Canadian standards, were modest and our air conditioning costs negligible.
Stage 2 was a different matter, however.
In addition to rationing all Bowen residents (and visitors) to three round-trip ferry trips per week, Stage 2 effectively doubled the price of the ferry for automobiles, while keeping pedestrian and passenger fares unchanged. It also halved the number of scheduled ferry crossings per week. This was initially cheered by Bowen’s “dark Greens”, but it outraged the 50% of Islanders who commuted daily to the mainland to work, and raised doubts, concerns, and finally protests, that Bowen would end up being abandoned by all except wealthy retirees, because working Islanders simply could not afford to live here anymore.
To our astonishment, while rising supply and drop in demand caused prices for smaller homes and lots on the Island to plummet, losing half their value in two short years, the prices of estate homes and large lots held firm — almost the opposite of what we, in our Official Community Plan, were striving to achieve. We were so small and extraordinary, and the supply of global billionaires looking for idyllic places to retire (and/or launder illegal money) was so large, that the desire for oceanfront mansions on estate lots on our little island never waned.
The businesses on Bowen, faced with an exodus of residents and soaring costs for their products, began to fold. Construction, for years the lifeblood of livelihoods on the island (and of many contractors who worked mainly on the island), came to an almost complete halt. Because so little of Bowen was arable, the soaring price of imported food could not be offset by increased local production. Owners of large (and older, energy-leaking) properties were hard hit by the energy rationing, and many had to shut off parts of their homes over the winter.
A few things helped us cope as the situation deteriorated. The tourist industry stayed healthy, since the two million residents of nearby Greater Vancouver, enjoined from long-distance travel, walked, biked, back-packed and hiked our island in ever-increasing numbers, though most were self-sufficient and bought little during their visits. Much of the smaller-sized property on the island became affordable for the first time in decades. We had sufficient water for our needs, unlike many in the world who relied on importing theirs. We were significantly more physically fit than most North Americans, which helped wean us off our cars as these became unaffordable luxuries, and we had evolved a long-standing culture of generosity. And the exceptional skill, knowledge, imagination and intelligence of Bowen natives was harnessed, largely through the Bowen In Transition initiative, to begin the task of reinventing the Island as a place that was at least somewhat self-sufficient and sustainable, and resilient to whatever was to come next.
So by the time of what would come to be called the Slow Collapse, we’d been working on our Transition programs for nearly a decade, and we had community-based initiatives underway in nine areas, being stewarded by nine very active working groups of Bowen Islanders:
- Energy working group: initiated conservation and energy re-fit programs, and large-scale wind farm and mountaintop solar array
- Food working group: established six large community gardens and a food delivery cooperative
- Transportation working group: established a community-based bus and water taxi service, and a free taxi service run by retirees
- Livelihood working group: created Enterprise Bowen, a co-op business that grew to employ 10% of the island’s workforce in twenty innovative lines of business that previously didn’t exist on the island (or in some cases at all)
- Waste and water working group: developed an on-island organics composting program, recyclables pickup service, and water conservation program
- Local finance working group: established “Invest in Bowen” program with thirty investment funds that attracted 60% of retired residents’ savings and invested them in mortgages, businesses and co-ops right on the island; initiated Bowen Bucks, a new local currency
- Building working group: initiated four co-housing developments to make housing more affordable and dense on the island; established a local recycled building materials depot
- Education working group: created a “virtual high school” (previously high school students had to take the ferry to Vancouver to continue their education after grade nine); participated in establishing the Gulf Islands University; created an Unschooling Co-op
- Youth working group: leased and managed a fleet of three small electric buses specifically for travel to youth-oriented events; developed the Apprenticeship Bowen program; participated in the BC-wide First Home program for first-time homeowners
Just as were starting to become more resilient through these and other programs, we were hit with the Ten Crises, during what came to be known as the Slow Collapse: over a period of twenty years, we had to cope with:
- The Rotating Blackouts: A global phenomenon as oil supplies began to run low. Started with 6-hour blackouts and brownouts, but then they increased in frequency and duration, sometimes lasting three days or more.
- The Debt Crisis and Currency Collapse: As debt-holders began to realize that borrowers, individual, corporate and governments, simply would never be able to repay their crushing debts, defaults became common, bankruptcies soared, and lenders who were unable to collect on their investments failed. When large nations started to default, some other countries stopped accepting the defaulting nations’ currencies, leading to a whole series of currency collapses.
- The Long Deflation and the Long Depression: Prices, especially for real estate and automobiles, dropped for ten successive years, aggravating the debt crisis and plunging the world into another depression. Wages also dropped, year after year, to half what they had been a decade earlier. Unemployment soared and half of the 500 largest companies in the world folded.
- The Bankruptcy of State and Local Governments: While many national governments teetered, their regional and municipal governments simply stopped functioning, laying off all their employees and leaving citizens to manage health, education, roads and other services themselves. On Bowen, the ferry service was shut down entirely when the province ran out of money and laid off 90% of its workers.
- The Failed State Crises: Dozens of countries drifted into lawlessness as federal governments became incapable of operating. The two biggest were Mexico, which fell to the drug cartels after the Corn Drought, and China, which brought a charismatic leader to power in a coup after exports collapsed, fuel ran out and desertification devastated the country.
- The Energy Riots: All over the world, but especially in the US, citizens took to the streets when oil became so scarce they had to abandon their cars and shutter their homes. Rogue operators began cutting public forests for fuel and building materials.
- The Great Pandemics: The first major impacts of climate change were tropical diseases and pests that moved to temperate areas and wiped out factory farms, boreal forests, fish and monoculture grain crops in successive waves.
- The Food & Pharma Riots: Areas that depended either on food imports or on oil-based fertilizers and chemicals to sustain their crops saw shelves emptied and farmlands turned to dust and abandoned. And other petrochemicals, notably pharmaceutical products, also became scarce. Angry citizens dumped their unaffordable cars in government parking lots and set them ablaze in protest. Operating food banks became the principal remaining activity of many governments.
- The Vanishing Forests Crisis: As insect pests eradicated the boreal forests, desertification and rampant illegal logging destroyed the tropical forests. When citizens saw photos from space showing how rapidly the forests, ice caps and glaciers were disappearing, the grim reality of climate change finally sunk in. Panic, radical political movements, nihilistic religions and large-scale depression and suicide became endemic.
- The Year of the Great Storms and Water Riots: As climate change rapidly altered the face of the land everywhere, huge shifts in ocean currents and wind patterns produced a self-reinforcing pattern of massive storms, which leveled major cities, flooded coastal areas and polluted much of the world’s remaining fresh water supply.
Although the Slow Collapse hit us hard, it would have been much worse without our Transition programs. By the time of the big blackouts, we already had a blackout contingency plan in place, and we’d even done some island-wide rehearsals, complete with simultaneous potluck barbecues in eight communities around the island. But when the blackouts got longer and more frequent, the contingency plan had to be completely revamped.
When the US began reneging on debt repayments, and its currency slid, Asian and Mideastern nations refused to accept their currency, creating a new “basket” currency as the global standard. The US dollar then plummeted, and the Canadian dollar followed. Imports from Asia largely ceased at this point, creating scarcities of many manufactured goods, but an opportunity for new domestic manufacturers to fill the void. When Asian nations outbid the US for Canada’s filthy Tar Sands oil, which had become a critical source of supply as all the major oil fields were exhausted, the US threatened military action if Canada didn’t honour the North American energy security agreement that had been part of the abandoned NAFTA. Our Bowen Bucks began to be worth more than Canadian dollars, a Gift Economy began to take hold on the island, and fortunately we were a small enough community to know who and what was, and wasn’t, credit-worthy.
The Long Deflation and the Long Depression were the inevitable result of the debt crisis and the end of cheap oil. People everywhere just stopped buying, as they waited for prices to fall further and struggled to pay off pre-deflation mortgages and huge debts with lower take-home pay. When foreigners started buying up local real estate at bargain prices, governments, including BC’s, banned non-resident purchases of property, driving prices lower still. Although we had created two hundred jobs on Bowen through our entrepreneurial co-op, now we needed to create two thousand more.
When the provincial government almost went bankrupt, it shut all “non-essential” activities, including the (essential to us) provincial ferry service. Our local transport initiatives were designed to save energy and reduce car dependence, not replace the ferry entirely. But with many of the daily commuters to the mainland laid off, volume was way down on the ferry, so finding ways to replace it entirely were not as daunting as they would have seemed before. And with such a highly-educated citizenry (many of whom were either retired or unemployed), taking over the local schools from the province wasn’t that hard either. A bigger challenge was health (there were no hospitals and few doctors on the island), and we had to scramble to initiate self-diagnosis and self-treatment facilities, a fund to encourage doctors to relocate here, and a volunteer ambulance service. Taking over our own road maintenance was also going to be a huge challenge.
When Mexico and China failed, the oceans filled with boat people and, being an island, we got our share of them. Vancouver got hundreds of thousands, and anti-immigrant sentiment there got really ugly.
Because most of our electricity came from hydroelectric power, we were not affected as badly as most by the energy scarcity, and there were no riots or people freezing to death here, or in Vancouver. And being on an island, timber poachers found our abundance of forest just too hard to get at. But with blackouts commonplace and no oil for generators or oil heaters, a disturbing amount of forest was “disappearing” and the only possible culprits were we islanders ourselves.
Likewise, with no large-scale farms, we escaped relatively unscathed from the crop and factory farm pandemics. But we were very worried about the risk of insects to our forests, as several new species of beetles had devastated much of Canada’s northern boreal forest — millions of acres of trees lost. Would three miles of ocean be enough of a barrier to keep them away from our island? And while the pandemics had (so far) few human victims, they had become so common that a panic mindset had set in, especially in port cities like Vancouver. Some of our “dark Greens” even suggested establishing the island as a permanent quarantine zone.
And while we didn’t have rioting here over food or pharmaceuticals, the skyrocketing cost of food caused great hardship for many (our Bowen food bank was helping as many as half of all residents now), and because of the shortage of prescription pain-killers, illegal substitutes were a huge black market activity, and addiction was becoming a major problem among older residents.
We were not immune to the Great Storms, either. Hundreds of homes were damaged by winds and fallen trees, and storms often left our roads impassable. Home insurance was now unavailable (all the insurance companies had closed up shop when the Great Storms resulted in claims many times greater than their reserves), so many islanders pitched in after each storm to repair structural damage or resettle the affected residents. After the great Seattle earthquake, some wondered if it made any sense to live here at all. But where else was there to go? And at least we had fresh water.
Transition was no longer a local initiative or a movement — it had become a way of life. We had thought that what we mostly had to worry about was the end of cheap energy, but we ended up facing a lot more — and more severe — crises than just energy shortages. The problem was that there was no “problem” — something that could be fixed quickly once and for all with the right “solution” — but rather a complex, lasting predicament, of cascading crises with no end in sight. We were exhausted, tired of dealing with catastrophes and threats and permanent disruptions to the way of life we loved, the way of life we had come here to enjoy.
The world had become much smaller again, as globalization abruptly ended and society once again began to revolve around local communities. And although we watched anxiously as the flood of refugees pushed the city of Vancouver, just a few minutes boat-ride away, to the breaking point, we were lucky. We had prepared. We lived in a paradise. We were small enough to be agile. We had an exceptional citizenry, with extraordinary talents, knowledge and creativity. And we had each other.
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