David Suzuki warns us about complacency with the story of the pond where the lily pad population doubles every week. Starting with one plant, a corner of the pond starts filling up. But the week before the lily pads smother the whole pond, half the water is still open, so choking from overcrowding still seems a long way off.
That's an apt metaphor to illustrate a report recently released by two highly respected United Kingdom institutions: Lloyd’s of London and Chatham House Royal Institute of International Affairs. The report dives headfirst into the doomsday pool by predicting "catastrophic consequences" for businesses that fail to prepare for a world of increasing oil scarcity, higher oil prices, and disrupted energy supplies. They're all on the way, says the report, because of soaring energy demand in China and India (40 percent growth projected in the next two decades in China), constraints on production resulting from the BP oil spill, and moves to cut carbon dioxide emissions to slow down global warming (and mitigate floods like the one now ravaging Pakistan).
"Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences," says the report. "Even before we reach peak oil, we could witness an oil supply crunch because of increased Asian demand. Major new investment in energy takes 10-15 years from the initial investment to first production, and to date we have not seen the amount of new projects that would supply the projected increase in demand."
Anthony Frogatt, a senior research fellow at Chatham House, points out that every three years another Saudi Arabia worth of oil has be to discovered and exploited just to maintain the current level of world output. "We are heading towards a global oil supply crunch and price spike," he concludes.
"Businesses can no longer rely on low cost traditional energy sources. As a result, “energy-intensive businesses that don’t find efficiencies will be uncompetitive in the near future," he predicts. "Businesses have to move away from a just-in-time approach to one that builds in resilience. In an energy-insecure world, resilience is a key factor."
Three current Metro Vancouver issues resonate in this scenario, clouded by B.C.'s access to plentiful green hydro and oceans of natural gas. The first is the debate over the proposed incinerator for the Lower Mainland. Nowhere in the discussion is anyone seriously advocating the importance of reducing our dependence on fossil fuels — as in burning residual waste with the goal of generating energy, rather than simply finding an alternative to land-filling.
The second is the province’s decision to bet the house on tourism as our economic saviour. The over-budget, under-target massive new convention centre is just a part of the much bigger spending on the Winter Olympics. The latest economic assessment shows that economic gains to date from the Olympics are negligible.
Traffic through the Vancouver airport was actually down in February 2010. All tourism is dependent on discretionary consumption of fossil fuels, no matter how green our hotel rooms might be. That future is far from secure.
Finally, there’s our shortage of regional funding for transportation alternatives to cars. While widening the Trans-Canada highway east of Vancouver and building the new multi-billion-dollar Port Mann Bridge are in full swing, funding for non-fossil-fuel transport is stalled and slipping backward. TransLink doesn’t even have a budget to add the buses that will be needed to accommodate all the post-secondary students getting new U-passes.
The Chatham House/Lloyd's report quotes from a U.S. Department of Energy report predicting economic chaos from declining oil production, and recommending a crash program to overhaul the transportation system. Richard Ward, chief executive of Lloyd's, warns that the failure of the Copenhagen climate change talks has seduced some businesses into thinking they can go back to business-as-usual.
"We are in a period akin to a phony war,” he told the Guardian. “We keep hearing of difficulties to come, but with oil, gas and coal still broadly accessible – and largely capable of being distributed where they are needed – the bad times have not yet hit.”
The pond is still only half full.
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