3 Cats Stalking

Risk Aversion and Mitigation for Unstable Fuel Supplies

I live in a small community of RVers in the high desert region of southern California. RVers are people who generally live in, or at least use, a rolling home, either pulled by a pickup truck or containing a motor so it can drive itself (called a motorhome). There are about 290 retired families (some single) here. We are 14 miles from the nearest services: groceries, fueling stations, restaurants, general stores, and medical services. It is quiet and beautiful.

Our community functions largely on volunteerism. Every one does something to help. It may be repairing the roads, serving ice cream, cutting weeds, tending the irrigation system, and working on the Board and various committees to bring a semblance of order to our collective efforts. Part of my volunteerism is to study various risks to our community and way of life. I have looked at earthquakes and climate change and some economic risks. My latest request was to look at the risks regarding fuel availability and costs. What risks do we face in the next five years, and how may we mitigate them?

I have been studying Peak Oil and other resource depletion issues for the past five years. I see a growing consensus that Peak Oil has happened and within a few years (maybe by 2015) the USA will begin to see the effects of a world-wide diminishing production rate for fossil fuels. This consensus includes the IEA and the US Military. Of course, there are also those who say we will never be faced with a problem of diminishing resources -- but with my task I still have to consider what is the risk if those optimists are wrong.

There are two primary effects to be considered: supply and demand for fossil fuels. Best estimates at this point are that production supplies will be decreasing by 2% per year by 2015. At the same time, while demand in the USA is constant or maybe decreasing slightly, demand from China, India, and other developing countries is increasing at nearly double digit rates. Somebody in the world is not going to get the supplies of fossil fuels they want without paying big-time for it.

The nature of the world supply system is that shortages of fuel will develop in some locations. It will probably develop first in some of the poorer developing countries, but it could be here in the USA. We could find some day that at least a few fueling stations hang a sign out that says their tanks are empty until further notice. For example, this could be the knock-on effect of some oil tanker being diverted from the local refinery in Long Beach and sent to China because they will pay more for the oil.

If fuel shortages become a persistent problem, expect rationing. Our society must have fuel for the fire trucks and EMTs. Other vital services like food transportation will get priority. Ride sharing will again become fashionable. (I remember the shortages back in the 70s.) Sorry, RVers may the at the bottom of the totem pole. The people in my community should plan on filling their fuel tanks during times when fuel is available so they can still move when fuel is in short supply.

And there is the matter of cost. Here is southern California we are currently paying $3.40 per gallon for diesel, over $3 for unleaded. That is with the world price of oil at $89 per barrel. If demand keeps growing like everyone wants it to (it's called a recovery), the oil price could climb to over $100 per barrel, and the cost at the pump for diesel and unleaded could climb to over $5 per gallon.

In Europe the price of fuel is already over $5 per gallon equivalent, so we know society can live with that, but the lifestyle is very different. For one thing, they do not have so many RVs. They find other ways to get around.

People in my community should expect to see lifestyle changes. We must car-pool into town to shop; we must order more things over the Internet and have them delivered to us; we must look into grocery delivery services; maybe we should buy a community van. As RVers we will probably not travel so much and will stay at home more of the time. Of course, that means we are here during the hot summer and will use more electricity for air conditioning. The overall cost for maintaining our community will increase because we must use fuel to get some things done.

And by the way, if the cost of fuel goes up, expect the cost of electricity to go up as well. But that's another set of problems.

So you see some of the changes we have to look at, and they will probably start within the next five years. 2015 may be a very interesting year of adjustment.

sam

 

 

 

 

 

 

Risk Aversion Studies for a Small Community

My wife and I are retired and full-time RVers, meaning we spend our entire time living in a movable home on wheels. Our stays in one place range from a week to several months. It is a great life.

We own no physical real estate, no stick house, no place we are tied to, but we do maintain a base camp at a membership RV Resort park in southern California in the high desert of the "Inland Empire" where we spend most of the fall-winter-spring months.

Even though we are transients, our lifestyle offers all the aspects of a community, especially when staying at our base camp. There are another 280 or so family members, and we are required by law to work under the rules of a Community Association with by-laws and standing rules, a general manager and staff. We pay monthly dues for maintenance of the common area and staff salaries. Much of the work in the park is done by member-volunteers -- and that keeps the maintenance costs down.

Part of my volunteer effort is to be a member of the Long-Range Planning Committee, working on several Risk Aversion Studies for the park. These are used by other long range projects to help in the planning process. Our risks differ from other communities in our area.

Our water supply is a good example. Our park has two water wells that tap into an abundant aquifer of excellent quality water. There are few farms and homes around us to draw on that aquifer, and people are very water conscious in the desert. No one has large plots of grass, so we see our water supply as sustainable. But we monitor it very closely, watching for any disturbing trends.

Fifteen miles west of us are two cities, each of 150,000 population, that have seen tremendous growth over the past ten years. Their water comes from a rain-fed reservoir and links to the great California Water system supplied by the Colorado River and Northern California. For the most part the citizens of those cities seem almost oblivious to the risk of non-sustainability to their water supply.

An associated risk to our water comes from another risk: earthquakes. The fact that our park is 9, 13, and 35 miles from the three most active seismic faults in southern California does not inspire confidence. The USGS says it is highly probable that some kind of big shaker is going to occur in the not too distant future, close enough to cause us considerable damage.Our RV sites are situated on granite and decomposed granite hills which limits damage, but our infrastructure could suffer.

Our city neighbors are at more risk from the shaking. Situated on mostly alluvial soil, they sit astride one of the faults that is capable of producing a magnitude 7.0 temblor. They would suffer much more damage to both structures and infrastructure than our park.

However, our park's water system makes us particularly vulnerable if we cannot get water. We have no second source. Both our small community and our city neighbors are at risk for sudden interruption of our water supplies should the electric power fail for some reason. We would both be hard-pressed to pump water to the place where it is needed. This area has lost power for up to a day during wildfires, but in a large earthquake, one of the more vulnarable pieces of infrastructure is the power grid. Power could be lost for weeks, and it would be restored first to our city neighbors. Our little park would be on the bottom of the restore list.

If our park is suddenly without water for an extended length of time, our only choice would be to lock the doors and leave. At least with RVs that is possible. That is one method of Risk Aversion.

Risk Aversion also means finding alternatives that reduce the risk. I have proposed that our park could build a solar PV farm to at least generate enough power to turn the water pumps. Then in the event of a loss of power, we have a chance to maintain our water supply. We have a possible plan. Now, all it takes is money and effort and a driving force.