The recent drop in oil prices – by what an entire barrel of oil cost just a few years ago - is a correction in the market and should not cause complacency. The fundamentals are in place for even higher prices. (For details and references, see our full report, “Sustainable Energy Independence for NYC,” endorsed by over 20 groups, and a 5 page fall update, both at www.beyondoilnyc.org). World oil production will either hit a ceiling, or peak and begin permanent decline by 2010. Because demand for oil continues to rise, the gap between supply and demand will keep growing. Prices will be increasingly volatile. Many experts predict oil to rise to $200 or $300 a barrel in the next few years. Even if a weakened economy lowers demand, driving prices down temporarily, cutting fuel use will still be increasingly important.
Drilling for more U.S. oil won’t help. It will take 10 years to bring any new oil production from U.S. offshore and ANWR fields to market, but even in the best case scenario, their maximum yields after 2030 will still be insignificant compared to world fuel flows, and will be dwarfed by falling rates of production from major suppliers around the world. More drilling will do nothing to lower prices now.
As important as it is to stop climate change, buffering the economic impact of higher energy prices is the more immediate reason to end reliance on fossil fuels. Acknowledging the full scope of our energy dilemma will enable us to choose and implement the necessary effective responses, while building a sustainable economy. To prepare for our future, we must begin to move beyond oil now by conserving, radically increasing efficiency, and using energy smart technology. Next steps for New York City include revising plans and budgets for higher energy costs, creating contingency plans for energy price spikes and fuel shortages, and expanding PlaNYC 2030.
Sierra Club NYC recommends:
1. Revise plans and budgets for higher energy costs. Convene a Council Energy Price Task Force to identify mitigations for future energy price and supply scenarios, as has been done by San Francisco, Portland, Oregon, and Cleveland, Ohio. Although city leadership is crucial, all levels of government, business, and civic networks can immediately begin their own planning efforts. Councilmember Tony Avella has requested the drafting of legislation to create such a task force.
2. Create contingency plans for price spikes and fuel shortages. City government should anticipate fuel disruptions and make plans to deal with price spikes or shortages of motor fuel, heating oil and/or natural gas, whether the cause is economic, geological, or political. An energy shortage contingency plan was considered but not passed by the City Council in 2004. This issue has not been addressed by City sustainability initiatives or the NYC Office of Emergency Management.
3. Expand PlaNYC. Building on PlaNYC, we need to start building a post-petroleum economy now. A transition to a clean energy economy will restore domestic manufacturing and create millions of green jobs that can’t be outsourced. New York’s national leadership will bring local economic benefits. Many bold sustainability initiatives were not politically viable when originally introduced, but are now or soon will be. Here are just a few.
Increase Local and Regional Food Production. Our current agricultural system uses enormous amounts of energy and is economically vulnerable to fuel price increases. To minimize dependence on long-distance food, we should expand farmers markets, encourage backyard food gardening in cities, suburbs and rural communities, and provide farmers with the incentives and training necessary to rebuild New York State’s agricultural capacity and upstate economy. NYC institutions like schools and hospitals should be required to purchase a substantial percentage of their food from within the region.
Scale up solar and wind power. New York State just expanded net metering, which allows homeowners and businesses with solar photovoltaic systems to sell excess electricity back to their local utility. This will encourage greater investment in renewable power and will attract renewable energy manufacturers and installers to New York State. NYC now has 12 MW of solar power installed. We should raise it to 2,000 MW by 2017. Next steps include distributing smart meters/time-of-use meters, raising the NYS Energy Efficiency Portfolio Standard to 30% reduction of 2006 electric and gas usage rates by 2015, and accounting for energy volatility in the revision of the State Energy Plan.
New York City needs a smart Federal energy policy, and as a financial and media center, we can leverage national progress. So let’s focus on real solutions nationally as well as locally. Creating liquid fuels from coal, tar sands or oil shale requires enormous amounts of energy, and none can be scaled up to replace more than a fraction of our gasoline use. Even if they were economically viable, they’d push us rapidly into catastrophic climate change. Corn-based ethanol is a boondoggle that can’t be scaled up. Cellulosic biofuel is still experimental.
Fortunately, we already have technologies that can respond to both climate change and fuel depletion. We can use existing transportation as efficiently as possible, build more much mass transit and rail, and power them increasingly with electricity. Unlike coal and nuclear, the renewable power sources of solar, wind, tidal and geothermal don’t pollute, can be scaled up in an economically practical way, and can be plugged into a stable, decentralized national grid. What we need is the political will to implement Al Gore’s challenge, not only to stop climate change, but to protect New York City and State residents from the economic impacts of higher energy prices. Changing the energy conversation is a win-win solution.
beyond oil
