for our future . . .







Santa Barbara After Cheap Oil

Richard B. Anderson

What would life in Santa Barbara be like if oil cost $200 per barrel? What if gasoline cost $10 per gallon, or $20? What if fuel were only available intermittently? These might seem like silly questions at the moment, but we need to begin asking them, because the world is about to change. Every aspect of our lives depends to some degree on the availability of cheap, abundant oil, but that abundance is only temporary, and it’s likely to be replaced by scarcity (and skyrocketing cost) sooner than we think. Sometime in the near future we won't be able to produce enough oil to keep up with demand.

This change will occur as we approach the peak of world oil production. A number of prominent geologists are currently arguing that production will reach its highest level sometime within the next decade, and then decline forever. At the same time, virtually every economist is predicting that demand for oil will continue to grow as the world’s economies expand.  If demand increases while production levels off and starts to decline, market forces will drive the price of oil upwards, and its availability will become intermittent. That’s where the possibility of $200 per barrel oil prices comes from.

Why believe the geologists?  Because oil production has peaked before, here in the United States. In 1956, the prominent geologist M. King Hubbert predicted that U. S. oil production would reach its highest level in the early 1970s.  Hubbert hit the mark almost exactly. The actual peak occurred in 1970 (today we produce about 60% of what we did then). Using Hubbert’s methods, the geologists predict a world peak between 2004 and 2008. Given the recent behavior of the world oil market, the peak could be happening right now.

If that is so, or even if there’s a reasonable chance that that is so, we need to ask ourselves how we can cope with the end of cheap oil here in our home town. Santa Barbara, like every other American city, is dependent on cheap energy. Our cars require gasoline; our food is grown with petrochemicals. A large proportion of the products we use are made of oil. Our water is pumped from Lake Cachuma with petroleum-based energy. Our economy is intricately dependent on the oil-based economy of the nation as a whole. How would we—will we—maintain a reasonable standard of living when cheap oil is no longer available? This is an adaptive challenge like no other we’ve ever encountered. Political change on a national level will probably come too little and too late. But on a local level there is much that can be done.

Santa Barbara is well situated for making the transition. We’ve managed to contain sprawl, and our settlement pattern is viable even with transportation much reduced. There is lots of potential for further in-filling, for encouraging redevelopment that concentrates population into pedestrian-friendly neighborhoods. There are plentiful possibilities for local and urban agriculture. Water might be a problem, but not an insuperable one. The changes that will be necessary are manifold, but they are within our capabilities. Perhaps most importantly, there are many people in government and local NGOs who are already working in this direction.

The notion of peak oil is controversial in the extreme. People will argue that huge new reserves of oil remain to be found, or that technology will save us, or that existing reserves are sufficient for decades to come. But oil is a scarce resource, and the evidence is mounting that the supply skeptics are right. Oil prices have quadrupled in the last four years, and the world presently operates with perhaps two million barrels per day of excess capacity--not much, compared with current demand of eighty-two million barrels per day. The prices and volatility in the oil market suggest that the peak is near, or even that it has already occurred.

Whether the peak is happening now, or if it’s coming twenty years from now, the certain fact is that it will occur. A colleague of mine compares the issue to earthquake preparedness. You don’t know when the quake is coming, but there’s no excuse for not reinforcing the walls immediately. The same is true for the monumental transformation that lies ahead of us. The end of cheap oil will change everything, and we need to be getting ready.

© Richard B. Anderson, 2004

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