Tuesday, March 2, 2010

The Coming Energy Shortage, Part 3: Sudbury at the Dusk of the Oil Age

On some nights, after the sun has set but before all light has fled the sky, in the gloaming of the evening as I walk through my neighbourhood retiring from my workplace for another day, the shadows falling on the houses play tricks on my imagination. For fleeting moments, I sense the future in the rising hairs on the back of my neck, and in the shuddering chill brought on with each footstep. I can almost see the boarded-up abandoned houses no longer homes, in my once vibrant neighbourhood. Gone are the cars, the porch lights, and the smell of dinner cooking, replaced with structures falling apart and weeks poking up through the snow.

Is the future I can expect for my neighbourhood? Will Sudbury endure a hollowing-out along the lines of what other North American cities such as Buffalo and St. Louis have experienced? Despite all of the optimism I feel daily in my community, I am concerned that the coming energy crisis will shrink my City in many significant ways. Yes, there may still be time to head off these dark visions, but we'll need to harness our resources for the betterment of our community very soon if we're going to succeed.

In the future I’ve only glimpsed in shadows during an evening walk, I don’t believe that Sudbury will be particularly unique in Canada. I believe that the end of cheap energy is a threat to the prosperity of all Canadians, no matter how one defines prosperity. As a nation, we will find ourselves living in reduced circumstances. For many Canadians, simply surviving will pose a far-greater challenge.

The specific circumstances of my community, however, will likely have an impact on the way things play themselves out. Sudbury still has not entered into "recovery" from the latest recession, as jobs continue to be lost here, and as the strike at my City’s biggest employer, Vale Inco, drags on now into its 8th month with no end in site. Although Sudbury has been diversifying its economy in the past several decades, what happens in the mining sector continues to significantly impact my City’s health.

And in the future, the mining sector in Canada will be in for a very rough ride. Already we are seeing energy-driven decisions being made in that sector, with Xstrata shuttering its state-of-the-art refinery in Timmins, citing the high cost of energy in Ontario. Now, refining of materials taken from the ground in Northern Ontario will occur elsewhere, perhaps in Quebec, where electricity produced from hydro power is cheaper than Ontario’s coal/natural gas/nuclear mix (and where proposed renewable energy initiatives and feed-in tariffs, may increase the cost of electricity even more), or potentially overseas.

The mining sector in Sudbury, now anchored by two global giants, Brazilian-based Vale Inco and Swiss-based Xstrata (formerly the Canadian-based companies Inco and Falconbridge), will also be affected by rising energy costs in Ontario. Already, many of the jobs which were being performed by local Sudburians in middle and upper management have been lost through "smartsizing" initiatives; locally, the independent mining supply sector has already taken a huge hit, as the international giants have displayed a preferences for their own contractors rather than deal with the locals. All of this will continue to be a drag on Sudbury’s economic health.

A high Canadian petrol-dollar, too, will make Sudbury industries that much more uncompetitive internationally. Sudbury already sits a good ways away from major international markets (although we are serviced well by both CN and CP rail networks, and with the four-laning of Highway 400 expected to be complete around 2020 or so, the highway connection to Southern Ontario will have greatly improved for trucking...if we can afford to maintain the highways and put gas in the trucks).

Since we can expect that a future where energy prices are much higher than they are today to cause international economic havoc, leading to recession and depression, most communities will not escape unscathed, and Sudbury is no exception. In times of recession, as we continue to witness, demand for minerals goes down as fewer industries operate which rely on our metal resources. As demand falls, so too does price, which leads to reductions in capacity, lay-offs, etc. In short, an international recession/depression will be very bad news to Sudbury’s mining sector.

And it is a reasonable assumption to believe that rising energy prices will lead to economic chaos. In North America, the health of our largest industries is predicated on cheap energy. And it’s not just our industries that will be affected. Our agricultural sector, reliant as it is on factory farms and petroleum-based fertilizers to produce cheap junk-food crops is also very vulnerable to rising fuel prices. And this is really bad news for Sudbury, as very little food is grown here locally, and as we are 3 to 4 hours away from the prime agricultural centres of Southern Ontario.

Along with the loss of industrial and mining jobs, Sudburians can expect higher food prices, due to the rising costs of food production, and also due to increased transportation costs. No doubt we can also expect to see many more urban gardens, as struggling Sudburians try to eke out produce production from our thin soils, possibly in the very locations where I foresaw the houses abandoned in my neighbourhood.

I expect that there will be a greater sense of community spirit as a result of these changes, as Sudburians will increasingly be forced to turn to one another for assistance, as services once delivered by governments and the private sector can no longer be relied on. Community gardens are just one possibility; community business co-ops which specialize in recycling, re-use and repair of goods are also likely to spring up. Potentially, barter and trade could replace more of our monetary transactions.

Expect more poverty and homelessness, and all of the issues which accompany that. As the provincial and federal governments’ resources are stretched even more thinly, expect them to look for innovative ways of delivering services. User fees, potentially including toll roads, and privatization of health care services will have to occur. The current debt we’ve racked up through stimulus spending, along with the needs of an aging demographic, will hurt future spending opportunities.

In Ontario, for municipal governments, this could initially be a good thing, as I expect that there will be increased autonomy for these "creatures of the province", including taxation and other monetary powers currently reserved for senior levels of government. Of course, with increased power should come increased accountability. A lack of oversight is a concern of mine, particularly as local media operations continue to fold or be folded into national conglomerates. Already, we’re seeing less and less coverage of issues important to Sudburians in this community, replaced by national editorials written in Toronto, Calgary or Ottawa. Expect that trend to continue. Low voter turn-out at municipal elections also leads to increased citizen disengagement.

With new abilities to raise revenues, and little in the way of formal oversight processes, the prospects for a healthy local democracy are likely to decrease over time, especially when more and more people will be focussing on simple survival. Already, the volunteer sector is stretched thinly; in the future, although the need will be greater, it’s not clear to me that the existing formal networks will continue to hold on. And this spells really bad news for my community.

Sudbury, with a population aging a greater rate than Canada in general, and with a built infrastructure centred around the car rather than the community, will be faced with making difficult economic decisions. I expect our municipal decision makers to continue to largely opt for the status quo in the face of these problems. After all, those engaged voters who primarily elect municipal politicians tend to be older and better-off financially, so the expectation will continue to be that decisions will be made in the interests of these people. And unfortunately that’s not going to help shape my community for the coming crisis. Roads will continue to win out over transit; property tax freezes and increased user fees will go hand in hand, which the rich can afford but which will negatively effect the middle class and the poor more significantly.

I expect increased investments in police resources, as crime and security become more important to the wealthy. Where the wealthy congregate, I expect to see gated communities, even in locations which are now currently open to the public. If we can privatize health-care, and services such as water, why not privatize the streetscape and the commons as well, especially if money can be made through the sale of public lands.

In part to address an expected growing lack of accountability, and in part to engage more citizens, I fully expect that political parties will begin to operate at municipal levels in Ontario in the near future. However, I don’t know that the outcomes of increasing accountability and engaging citizens will follow in the long run, even if it makes voting for a local councillor an easier choice, as the electorate will be able to cast their ballots for their favourite political colour. This could lead to some change, though, as sitting incumbents may face real opposition from organized municipal political parties who run candidates in each ward.

I believe, though, that Sudbury will be overwhelmed by the coming crisis, which will hit hard globally, relent for a while in the face of recession and falling prices, and then sweep us all up again like waves crashing against a rocky embankment. We’ve already experienced the first energy-fuelled recession wave, which we’re just now coming out of. We can continue to expect this wave-cycle for a few more years yet. All recoveries will be temporary, and with each crash of the wave against the rocks, an increasing number of citizens in my community, and around the world, will be pummelled by forces beyond their control. They simply won’t be able to hold on to their current economic circumstances, or their current lifestyles. And as a result, our local, provincial and national prosperity will erode over time, until there comes a point that the last wave simply washes away the understructure holding everything up.

In Sudbury, our prosperity has already begun to wash away. A temporary recovery which increases base metal prices (and an end to the current labour disruption) might lead to good times again for a short while. However, Sudbury has not invested significantly in its own future, and is, in my opinion, very vulnerable to the forces about to be unleashed in the coming energy crisis.

The abandoned homes and streets emptied of cars are likely to be the haunts of those forced to live, at least in part, outside of the boundaries of "civil society". Access to health care and public services will suffer, and you can forget about expensive environmental initiatives. When the economy begins to falter, you can expect coal and natural gas to experience a temporary resurgence, as we scramble just as the Easter Islanders did, to burn that last tree.

As you can see, I’m not at all optimistic that we, as a Society, will get our act together in time to make the necessary adjustments to our economy before the waves crash into us and carry us away. The problem, as I see it, is that those who benefit disproportionately from our current economic system can continue to thrive even during a time of collapse, as there will continue to be opportunities for those who can afford to profit (remember when the Prime Minister said that a recession was a good time for investors?). As those who can afford to profit will experience the least in terms of personal disruption during a collapse, they likely stand to gain more should things fall apart. It sounds like an absurd situation, but that’s the reality of our current capitalist system. We must begin to make decisions to modify the current economic system so that the system is more sustainable, and flexible enough to deal with the coming energy crisis. We can do this, but their needs to be the will to move towards bettering our system. Practical decisions on resource allocation which benefit our communities and create local prosperity need to be the priority, and not treated as an afterthought.

We must understand that tomorrow will not be like today, and we need to start making better decisions for our communities with regards to how we spend our resources. While I am skeptical that we’ll come to our senses, I will continue to raise the alarm as best as I can. In the face of ever-concentrating power, though, it’s not clear to me that I’m going to make much difference in the long run. But at least I’ll be able to tell my daughter who is not yet born that I tried the best that I could to change the darkening world she’ll inherit. We must try.

It’s no wonder that I shudder when I catch a glimpse of these shadows while walking home at the dusk of the oil age.

(In Part 4, I'll look at what Peak Oil might mean for all of Northern Ontario)

1 comment:

Anonymous said...

hey man I like it. I'm about to write more articles and put your ideas to the test. After all, we always have something new to learn and being humble, I came here to learn. Bookmarked.

- John