Every day, businesses, government agencies and households around the world plan and make decisions based on the assumption that oil and natural gas will remain plentiful and affordable. In the past few years, powerful evidence has emerged that casts doubt on that assumption and suggests that global production of both oil and natural gas is likely to reach its historic peak soon. This phenomenon is referred to as “peak oil.” Given both the continuous rise in global demand for these products and the fundamental role they play in all levels of social, economic and geopolitical activities, the consequences of such an event are enormous. This report assesses Portland’s vulnerabilities in the face of wide-ranging changes in global energy markets and provides an initial set of recommendations for addressing that challenge thoughtfully and prudently.
In May 2006 Portland City Council adopted Resolution 36407 establishing the Peak Oil Task Force consisting of 12 citizens from a wide variety of backgrounds. The resolution charged the Task Force with examining the potential economic and social consequences of peak oil in Portland and developing recommendations to mitigate the impacts of rising energy costs and declining supplies. Over the past six months, the Task Force held more than 40 meetings and involved more than 80 stakeholders and interested citizens in gathering information.
Fifty years from now, the peak of global oil production will be a distant memory. Predictions for the year oil production will peak range from present day until 2040, with the most common estimates between 2010 and 2020. Despite the apparent breadth of current projections, even the most optimistic forecasts offer little time to adapt given the very long lead times required to change such things as transportation and building infrastructure.
Of all the impacts from rising oil prices, the clearest are those on transportation, which will experience profound pressure to shift toward more efficient modes of travel. For personal travel, this means transit, carpooling, walking, bicycling and highly efficient vehicles. Transportation of freight will become more costly and either decline or shift modes from air and truck to rail and boat. Population may shift to city centers, and density and mixed-use buildings will increase.
<!--[if !supportEmptyParas]--><!--[endif]-->Food is a critical resource, and the American food system has become highly dependent on fossil fuels. Food production and distribution accounts for 17 percent of U.S. energy consumption. Because of this, higher oil and natural gas prices are expected to lead to a decline in the amount and variety of food produced and available locally, even with Portland’s proximity to the agricultural production of the Willamette Valley. Food prices will rise, further straining the ability of low-income households to put food on the table.
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Like agriculture, the economy as a whole is expected to experience significant disruption and volatility. Impacts will vary widely by industry and firm, and Portland has strengths in high technology and a relatively diversified transportation system. Portland also enjoys a strong and growing clean energy sector, which is likely to see increased demand. Nevertheless, many of Portland's industries are dependent on national and global markets, and business start-ups and failures are likely to increase.
Unemployment could be a major economic and social issue. This is of particular concern, since social services are already stretched to the