Wednesday, 19 March 2008

New Article for Mediacat (comments?)


LIFE AFTER OIL

For the last year I have mostly been writing about business and marketing’s response to climate change. But there is another agenda that has been steadily gaining ground as the key thing to focus on: Peak Oil.

In the fortunate circumstance of historians looking back on today (as opposed to our entering a dark age, and much of that heritage being lost) they will call the last 100 years “The Oil Age”. Oil (and natural gas) are the energy source which built the modern economy. They fuel our vehicles, and hence the movement of goods, our agriculture, our modern materials, our heating. The entire modern economic miracle was built upon the cheapest (in terms of energy expended to get it) and most transportable fuel ever.

I say ‘was’ because oil is not an inexhaustible supply. In fact we are almost at the peak, after which the oil that is left will get harder and more expensive to extract. That’s not the end of oil, but it is the end of affordable oil. Which is tantamount to the same thing. Expensive oil changes everything. Most industries' business models are built on the assumption that goods are cheap to make, to transport and so on.

So how close to this mythical peak are we? Until quite recently, the oil industry used to date it towards the end of this century. But recently it has become apparent that it is much closer. Although experts disagree how much closer: The OECD’s expert body, the International Energy Agency, says the peak will come somewhere between 2020 and 2030. BP (British Petroleum) believes it will occur in the period 2015-2020. The expert group ASPO, the Association for the Study of Peak Oil and Gas expects a peak before 2010!

The recognition that we have hit peak oil would trigger hoarding and instant shortages. As a matter of fact the price is so high at the moment (over $100 a barrel) because there were difficulties matching current demand, when oil production dropped slightly in the last few years. A city like Los Angeles would literally grind to a halt. Not only that but LA has only two days’ food supply in its warehouses, everything else arriving on a constant stream of trucks.

No wonder politicians are worried about peak oil. Sweden already (since 2006) has a national plan to be oil independent by 2020. The French Prime minister François Fillon made also announcements on this issue last week: “Speaking of gas, we have to get in our minds that there is no other solution to this question than to move to other energy sources because we are facing a forewarned shortage. If we tell the French: 'don't worry, we'll find artificial ways to lower the price of gas and you can continue to use gasoline as before', it's a lie. We have to put all available money on alternative energy R&D."

This whole issue pulls largely in the same direction as climate change. On either view: we have find ways to reduce energy dependent activity, to ensure energy is used efficiently and to transition as fast as possible to renewable (non oil, non coal) forms of energy generation.

The difference between the two issues lies more in the psychological impact on people, organizations and governments. Climate change has proved rather disabling, it is so global, diffuse and hard to grasp and it plays on feelings of guilt as most of our daily activities seem to do some harm. It just isn’t entirely credible that little things we can do to make a difference will really affect something on the scale of the planetary ecosystem. It’s true by the way that light bulbs do make a difference; just one incandescent bulb, used 4 hours a day, uses over $8 worth of electricity a year. But it doesn’t feel like actions in areas like this can make any difference. Whereas we seem to know immediately where we are with peak oil. It is much easier to integrate with the way we see the world now, and acts as a much more direct spur to action: There is a crisis looming a readily understandable one, almost like a countdown. We are not yet resilient ie ready to withstand the shocks that this crisis will bring. Hence there is an immediate response; we need to make preparations and we need to do it urgently.

In the UK our government has been slightly slower to act on peak oil, although the insecurity of energy supply (our gas coming increasingly from Russia) has been a factor in energy policy for some years. But instead we have a flourishing movement of small (and some large) towns, which have chosen to act independently. It’s called the Transition Towns movement and it is a remarkable exercise in citizens taking the initiative. It’s well worth reading the book by the founder of this movement (“The Transition Handbook”, by Rob Hopkins) because it has many valuable lessons on how to mobilize any community – including a company – around the issue of what they call ‘energy descent’.

What does this mean for your business? I’d recommend that you do what they did in the 1970s when they saw a global energy crisis coming; educate yourself about what this means, and make plans now; so that you are ready. This will mean rethinking everything; where your factories are, how people get to them, what they make, how they are powered, how you bring goods to market and so on. It’s a huge challenge but many have already risen to it. It would actually be rather negligent to know this was coming and not to have prepared. But those who have been preparing – like Timberland which is taking its factories off the electricity grid – are already seeing cost benefits, not to mention the galvanizing effect on the culture and sense of mission in the organization.

8 comments:

James said...

Very good read John, if not a little frightening and prompted much Wiki'ing.

Osbert said...

"...climate change. But there is another agenda that has been steadily gaining ground as the key thing to focus on: Peak Oil."

Yes peak oil is certainly a crucial issue. But I feel part of the difficulties with raising awareness and encouraging action is the highlighted by the phrase you use: "the key thing to focus on".

It's focusing on just one thing, and ignoring the implications of that in the wider system, that leads to new, unintended problems (eg 'biofuels are the answer' without considering impact on food supply.)

Another example, focusing on just climate change, and ignoring wider ecosystem health, leads to advocating techno fixes. If we find a source of 'free' energy, we may reduce CO2 emissions and halt climate change, but unless we reduce our other impacts on the environment, we are likely to soon destroy ecosystems providing a range of other live support system. (See eg the Millennium Ecosystem Assessment).

I can't remember if you touch on this in your book? (Can't check as I've lent it to someone). I'd appreciate your thoughts from marketing perspective on how we can communicate complex issues simply, without being simplistic!

cheers

Osbert

John Grant said...

remember that this article is for a general business audience not 'the government of the world' :)

knowing about peak oil is in my (limited) experience a really good prompt to get people thinking about the problems of the world overall - to realise we are running out of planet - to get them considering real movement towards a low(er) carbon economy

I think it would be a really good thing to focus on this year, the climate change agenda has been slipping (according to Al Gore at davos it got 3 mentions to that point in the US primaries - as many in fact as UFOs!)

is converting people to a systemic, holistic worldview achievable (absent a religious type conversion - if everyone converted to buddhism we would actually be fine I suspect and its a really good system for making human life liveable too)?

using your analogy of planetary health, what I am advocating is get the patient to give up smoking

& technofixes generally dont work in their own terms - they are the 'filter tips' (see current EU debate on the actual lifecycle analysis of biofuel - before you even get onto the ethics of turning food/fertile land in developing world to this use)?

there's no single answer, in simple terms I'd agree

but focusing on single issues and making progress against those is potentially quite a systemic approach, cumulatively?

Nyree said...

It would be interesting to see Sweden's plan of action!

According to the reserach carried out by Defra (in 2006, although backed up by more recent but smaller scale research) on the way that people feel about climate change, one of the reasons people do nothing is that climate change is seen as a huge, untouchable issue that a single person cannot affect. One way of encouraging people to take action is to empower them - make them feel they can make a difference. A single point to focus on is a good way of a) making the problem seem real
b) showing that it will affect average Joe's life
c) encouraging action.

I often think that when we try and communicate green issues we get caught up in 'green speak' a mixture of complex jargon - words like 'sustainability' that mean nothing unless you have been indoctrinated in to the green world!

Futerra's golden rules of eco-communication need to apply to peak oil to make it pallatable to the masses:
1) make it exciting - who cares about peak oil? Even transition towns doesn't entirely grab me...
2) Make it relevant - how will it afect my life?
3)Less doom and gloom, more positivity.
4) Tell people what a difference they are making and thank them.

We are trying to set up Peterborough's version of transition towns at the moment - and getting people excited has taken a few attempts.

John Grant said...

hi Nyree

I like your three steps a lot & making it seem real is the key first challenge I agree, Having said which helping people see a different reality than the one they are used to assuming isn't the easiest task as perhaps your experiences in the real world of trying to get a town interested indicate.

Slightly long comments follows so you might just want to take it that I sort of agree with you :J

Lots of us who work with sustainability and marketing (I've had this conversation quite a few times recently) would tend to say there are no golden 'rules' where one type of approach to communications - for instance one set of right words, one class of imagery, one sort of 'right message' - is 'best'. It depends who is talking to who, and crucially in a highly media literate and sceptical age - 'why are they saying this to me?

effective climate change related messaging (effective in its own terms at least) has come from organisations as diverse as GE, innocent and Plane Stupid - there is no one right tone of voice, or set of 'magic words'

we are however starting to learn some things that arent working - predictably many are the 'easy formulae' that everyone leapt on - eg this comment from the IPPR "Positive Energy" report late last year:

“The two most dominant approaches are the alarmism repertoire and the ‘small actions’ repertoire… frequently paired as in ‘20 small things you can do to save the planet from destruction’. The problem with this combination is that in the end it just isn’t convincing. The juxtaposition… raises the question of how (small mundane responses) can really make a difference to things happening on this epic scale. The question is left unanswered and the public is not motivated enough to act.”

there's a broader discussion that's been around for a while in politics (eg I am thinking of Roberto Unger) about how to get people to realise that:

1. the world as it is is the result of compromise, accident, chance and struggle - it is not necessarily so, even if it appears so 'normal' to live like we do - and it is quite possibly going to change beyond recognition, just as it has in the past

2. we can remake the world, it isnt a question of communication, it's just the systematic will and creativity to re-imagine the world and make endless reforms, as people, communities, businesses and societies

It all sounds a bit impossible until you realise that it happens all the time; for instance the way that we have all become 'journalists' to the extent that we are sharing thoughts like these

I find transition towns exciting because it's an empowered democracy movement - it's not a communication campaign telling people what to think or do, it's a process (that leads them to think differently almost as a bi-product) - that's actually where consumer marketing got to in the last ten years too, the brands that behave in a dizzily optimistic way, like Futerra's rules (Coca-Cola springs to mind) are struggling in today's context

having said which if anyone reading this hasnt watched films like 'escape from suburbia' on peak oil, do have a look before you make your mind up!

anyway the Futerra frame is 'how do you communicate about sustainability':

"Futerra is the sustainability communications agency; from green to ethical, climate change to corporate responsibility. For over seven years we’ve helped you save the world."

... which as you say may always already be a difficult project absent a way of mysteriously converting people into full environmentalists.

Having said which 90% of sustainability comms work (at least in the UK) is around announcing gov/company/NGO initaitives to iniatiates. Plus some corporate ads and nice sponsorship ideas. & the remainder is more like public health & safety communications. Companies like M&S that have really tried to educate people are doing so alongside quite big innovations; they are just telling people why they should go with them, it's quite a different model than 'communicating climate change'

What's most exciting to me are the many new SCHEMES be they online communities, concierge services, things that make reducing waste a doddle, ways to hire rather than buy/own & so on.

But it's also barely started. Someone I met a few weeks ago that's a leading figure in ethical investment made the point to me that while we know where we need to get to (a low carbon society, and fast) we cant yet imagine all the things that are going to get us there - we are still to think them up, and some of them are unthinkable given current assumptions (eg rationing might feel unthinkable, until you realise that in countries like Iran its a daily reality and life goes on)

Buckminster Fuller was fond of saying you cannot teach people a new way of thinking, you can only give them the tools that they would use if they thought that way.

I'm all up for a miraculous conversion by the way, the major 'axial age' world religions and philosophies, while they did grow out of their historical contexts and precedents, also to some extent just represent a step change in consciousness - maybe there is a more holistic mindset that is emerging without the need for it to be 'marketed' per se. I've certainly met people that think that's the case. I'm not sure I entirely trust that view enough to leave it and see what happens, I'm with Roberto Unger on imagination, leadership, struggle, reform and a lot of effort (just in case)

Meantime my own vision for green marketing is all about innovation not presentation; reinvent your business, your town, your school and so on - and then educate people to find that once they get over the novelty its actually usually much better anyway; whether its saving money, being healthier, living in a less robotic and isolated fashion...

That's all my view this month - I keep learning, it's such a fast moving area, and such a complex one if you let it be. I think the key is probably down to a human spirit which will take setbacks as they come, ignore the experts, roll its sleeves up and cheerfully get on with it. The bit of Futerra's thinking I wholeheartedly agree with is not being too miserable about it all. Once you get it going it sounds from what I've heard like the transition town thing is a lot of fun.

Nyree said...

I love the idea that we are still thinking up solutions - our lives will be amazingly transformed and we can't yet imagine it...Big fan of this website:
http://www.forumforthefuture.org.uk/lowcarbonliving2022/products

John Grant said...

oh yes
(I was actually 'an official brainstorm facilitator' at the launch of that whole thing as it happens :)
http://greenormal.blogspot.com/2007/10/i-was-at-forum-for-future-low-carbon.html

my suspicion is that the big breakthroughs will come not just from bright spark innovations alone though, but the much tougher work of rethinking assumptions that support the status quo - still re-imagination but more like 'new science', if that makes sense?

Nora said...

It does make sense! Which are the politicians most swtiched on to green issues? Does green change need to come from them do you think?