In the last blog I was speaking about Peak Oil risks, and our ability to prepare for it by finding resilience in growing your own food (and becoming a rebelfarmer!). Today I was pointed to a blogger that calculated the peak oil not as usually by the point of maximum production, but by the point of maximum affordability. His question was: how much barrels of oil can you buy with S&P500, an index of the 500 important industrial stocks? This graph shows that since the 50’s we have experienced two peaks of affordability: before the oil crisis of the 70’s and one, the highest, in 1999. Since 1999 we can buy less and less oil for the same amount of stocks. The blogger argues that it is highly improbable that we will ever reach a higher affordability than in 1999. This would mean that 1999 was our “true” peak oil, as the oil price, corrected for inflation with this methodology, will only continue to go up from this moment on.

Another blogger on (post) peak oil, who is getting famous status at this moment in the USA, Dmitry Orlov, mentioned that peak oil will not be one moment, but a process of acceptance by different population segments with different timings. See here a lecture of him.  
His view is that because a societal collapse is psychologically so hard to accept, people who are able to postpone the consequences of the new reality, will regard people that are already feeling the consequences and are acting according to it, just as “poor people”or “the less fortunate”. Combined with the idea that Peak Oil already happened this is an eye-opener to me. Recently I moved from the Netherlands to France and the economic situation here was quite a shock to me. The welfare state in the Netherlands is quite good developed, not in the least thanks to our gas trade. Here in France, one can simply not survive individually without a job. Consequence: stay with someone else in a house or live on the streets. In fact there are two parameters that have augmented the last decade in a quite scary way in France: the age of youngsters the moment they move out of their parents’ place and the amount of people living on the streets. These people are already living in the post peak reality. No car, or a mini-vehicle that goes max 40 km/h. Shopping at give-away centres, eating over date food from the supermarkets, or gathering food from the markets at closure time. The creative among them are squatting and living from the land in the Massif Central, where a lot of land is barren or are living in mobile homes, and move where the jobs are or where the climate is moderate. They are now still considered as the marginal or as radicals by the “establishment”. But it could very well be the new normal.

The basis of the theory of Dmitry Orlov is a societal comparison of the USA with the collapse of the former Soviet Union. After the collapse of the USSR, the citizens were faced with severe unemployment and resource shortages. The reason why nobody directly died of malnutrition was that they have never completely trusted to depend on state social security. The only social security that is holy in Russia is the right on daily bread. And the state managed at least to get its distribution going. Together with the fact that practically all families have some kind of access to a private plot of land for additional food, the country dragged itself through mainly on the shoulders of the working women and pensioners (according to Orlov, a significant part of the men were busy with hassling, fighting, drinking and being depressed about their lost jobs). This kind of resilience we do not have in Europe and the USA. The general lack of resilience makes us very vulnerable for societal collapse. RebelFarmer was established in order to offer training how to live on local resources and get back in contact with nature. And the most serious training we offer is indeed in Eastern Europe!

There is a growing group of energy experts who believe that we are very near to a maximum global production of crude oil, the so-called Peak Oil. Until now, oil production grew steadily because of growing oil demand and cheap supply. Peak Oil defines the moment that, supply is no longer capable to meet growing demand. If there are no alternatives for oil, and if demand for energy still continues to grow, prices for oil will explode.  Some experts believe that we already passed this point (at a peak production of 88 Mb, all liquids, per day), and that only the current global economic crisis causes oil demand to stagnate, allowing the oil peak instead to transform into a plateau for a few years more. The estimations for production decline after the peak or plateau are between 2 to 6 % per year. There is a consensus among the expert community that within the coming 10 years, alternative energy sources can in no way provide the gap of energy demand that is left by such decline. So if the decline would start within ten years, there will be an enormous scarcity of oil and energy.

There are roughly two groups of opinions on the moment of peak oil. “Independent” energy experts, the so-called Peak Oil community, who are saying we already have peaked or that it will happen within the coming 6 years, and experts who are connected to official institutes, like the International Energy Agency (IEA), and oil companies, like BP, who are estimating Peak Oil to happen between 2020 and 2030 on a level of around 100 Mb per day.

If the Peak Oil community would be right, we have no time left to prepare ourselves sufficiently in order to develop alternative energy sources and prevent oil prices to go crazy. The “official” opinion leaves us another 15 years, which is still quite short to start an energy revolution. Surprisingly, the subject of peak oil is hardly debated.  

What will happen if oil prices will stay at high levels for a long time?  As we have seen last year, oil prices of 150 dollar per barrel, will hit especially the poorest countries, and the poorest segments of the population. It started food riots in many countries. There were violent strikes of farmers, fishermen and truck drivers, all oil intensive sectors, who couldn’t afford their petrol anymore. On the long term however it would even be difficult to sustain a “normal” life for the average citizen. The most oil intensive expenditures for citizens are transport, housing and food. When the oil price rises from the current level to 150 dollar per barrel (let’s say 300%), transport costs (for going to your work and do shopping) could rise 50%. Household and food costs could rise over 20% (see here and here two interesting reports on oil price vulnerability). As the 3 expenditures together are for most of us, more than half of our budget, a triple rise of oil can certainly result in a rise of the costs of living of more than 10%. Now, for households with an average income this would mean economising on luxury stuff, leisure and leisure time. Or investing in economising energy or in renewable energy production. But people with low incomes, with no reserves, risk to enter a danger zone. They could loose their jobs because they can’t afford to travel to it. They could loose their energy connections in their homes. Or they will endanger their health by poor diet.

It is for this, let’s say, 20% of the population that improved access to local natural resources might constitute a new safety net. In other words: grow your own food. This is actually already a very popular subject of discussion within the peak-oil community.

How would that turn out in practice? In the Isere Valley, where the RebelFarmer office is located there are numerous, historical, natural resources, that are currently underutilised such as communal forests and mountain meadows. Oil made labour-intensive agricultural practices less competitive. Since the WWII, practically all agricultural land above 500 meters altitude has been abandoned. Forestry has long seized to be profitable. Only a fraction of the pastoral system has survived under the flag of produit du terroir or organic agriculture. Others resources are artificially kept scarce by speculation practices such as construction land, and agricultural land (that might be transformed into construction land).

The French State did adopt already policies to counteract these tendencies. Municipalities are rewarded if they make available affordable construction land for people with low income. House designs are made available to make a “100.000 Euro for 100 m2 house”.  What would help also is if construction rules could be applied less strict, like allowing a longer maximum building time, and allowing more types of economic (and ecological) designs.  The Region “Rhone-Alpes” stimulates communal gardens for the lowest income categories and also local short product-consumer chains by annual project support. Other things that can be done in this field are transforming green spaces of communities into rentable gardens, and to plant fruit and nut trees in public spaces.
 
But the room for manoeuvre for citizens on local level to be more active in agriculture, is very limited because of European and global (trade) regulations. Many regulations suppress local, traditional, modes of production. As I have earlier blogged on this website, the WTO prevents most countries to protect their farmers because it will be regarded as unequal competition and distortion of the world market price. Although the EU supports different agricultural sectors, the subsidies are designed in such way that by far mostly large scale, industrial, farmers profit from it. Other market regulations defend the owner rights of genetic material for agriculture. But small-scale local producers depend on existing biodiversity for their own varieties. They use and develop hundreds of varieties for which it is financially impossible to ask official ownership. Finally, hygiene rules in cheese and meat production, developed to protect consumers against production flaws in industrial food chains, backfire on low-tech local producers, where sterile conditions or veterinary demands are either counter-productive, not desired, necessary and economically unfeasible.

Under these conditions, local small farmers give up. In France, there are 50 farmers more that quit than start each day. Unless we find our local way to go around some of these (inter)national regulations, and become a RebelFarmer, it would be cruel to ask people to engage themselves in local based small-scale agriculture. Maybe Peak Oil will force us to loosen the regulations. But until that time the currently under-utilised local natural resources of the Isere Valley will remain difficult to exploit.