At the peak of our oil addiction (another article for the company's magasine)

As we pass the point of global peak production of oil, now is a good time consider just how addicted you and your business are to oil and your exposure to increased oil prices.

The end of ‘easy oil’

Almost every year for 150 years, the oil industry has produced more than it did the year before and demand for oil increases at 2 per cent per year. For all practical purposes oil is a finite, fast-diminishing and, perhaps more importantly, unique resource that no amount of so-called alternatives can replace. Many experts now warn that we have passed the point of global peak production. The issue at hand is the long downward slope that opens on the other side of peak production.

The end of ‘cheap oil’

Statistics New Zealand reports of more volatility in petrol prices since 1999: Some of the factors contributing to this volatility have been concerns about security of supply caused by political uncertainty in the Middle East and growing demand from China and India to name but a few factors. At the time of writing, September 2007, the price of standard crude oil was at historic high of US$83.90/barrel, which is a dramatic increase compared to the long-term average of around US$25/barrel.

Oil to burn and oil to build

Consumers tend to think of oil largely as a fuel that powers cars and airplanes, fuels industry or heats homes. But oil and natural gas is also used as a raw material for manufactured goods including carpets, PVC pipes and window frames and plastic boxes that use a blend of chemicals from oil and natural gas and foam cups and nylon, which are largely made from oil-based chemicals. In other words, with a global decline in oil production the cost of everything from travel, transport, heating, agriculture, trade, and anything made of plastic will rise.

Strategies to adapt

Instead of a take-make-waste approach the end of cheap and easy oil will inevitably drive us to re-evaluate our use of oil-based products. Just as scrap metal can be more economical than newly mined and smelted material, scrap plastic comes into its own as the price of oil and gas for fresh plastic climbs.

For transport there are substitutes to fossil fuels in the form of biofuels or electric vehicles, which is particularly sensible in NZ if demand can be matched met with clean electricity supply from hydropower.

Price sensitivity may be a motivator enough to reduce private and business dependence on oil, but environmental and equity concerns are equally valid considerations. Environmentally, carbon dioxide and methane from production and burning of oil and gas are major contributors to global warming and climate change. Morally, one may question our right to be the last generation with access to economically viable oil. It is hard to imagine a world without oil but this may very well be reality by the middle of this century unless we cut down. 

Nine months later - it's finally out!

When I started working with BRANZ in September 2006 I got thrown right into project managing an assessment of the need to to adapt buildings in New Zealand to climate change. Granted, I had no idea that buildings needed adapting to climate change, even less so how one would assess it. And New Zealand,,, well I could find it on a map and I knew they are fiercely good at rugby. Of course I had seen all three Lord of the Rings movies. And kiwi fruit is not only tasty but also healthy. However impressive, it was doubtful how far this knowledge would get me in the capacity of sustainability scientist?

But all was considered and planned for. I was reassured that first there would be training and a gradual honeymoon into this new world. A workshop had been planned for me to meet and greet with the project team.  All under the supervision and capable lead of the woman who currently was managing the project. Eventually she would go on maternity leave and I would take over, but before that she was going to hold my hand for a few weeks and make the transition very smooth.

On arrival my first day she was already in labour. Absolutely not according to the agreed schedule! The project was handed over in less than an hour before she rushed off to give birth. One of the executives dryly observed, how rude of her... Of course I ended up in charge of my own - smooth start - workshop. Will never have any illusions what so ever that the flown in and gathered experts around the table were too impressed at all with the new adopting father's experience and authority in the field.

Nine months later in this brand new world of buildings scientists, climatologists, social scientists, economists and government people - we've finally given birth to a 160+ pages baby. The next step is to get over to Wellington to show off and baptise this little beast in front of government and insurance people. Then, with some luck, we might even get to graduate the bastard at the Sustainable Buildings conference in Auckland in November. Who would had imagined? And it's even available at UNFCCC's web library (but then again if you know what that acronym means you're likely a fellow carbon counting tree-hugger nerd).