As it evolves to operate on domestic, renewable electric energy, the Steel Interstate supports a vibrant economy protected from potentially devastating consequences to transportation from "Peak Oil" or Climate Change abatement. Peak Oil refers to peak worldwide production of oil after which all production will continue in a downward trend, while the price of oil spirals upward as the market reacts to the increased value of this depleting resource.
The health of the North American economy is inextricably bound to easy mobility of goods and people. In an oil-constrained world, this vital mobility would quickly be threatened and quality of life as we know it would rapidly deteriorate. This subject is thoroughly explored in our sub-section, "Peak Oil - Ensuring Oil-Free Mobility" under our National Defense section because the implications are grave for national security and our democratic institutions as well as economic stability and maintaining quality of life. We urge you to examine this section thoroughly.
Western nations have refused to make public any investigation of or strategic planning for Peak Oil price escalation consequences on their national economies, politics, and international relations. In fact, it appears to be the policy of all nations to publicly ignore Peak Oil and stigmatize any suggestion of an imminent peak of worldwide production. However, a September 1, 2010, article in Der Spiegel lifted the security veil to offer a rare glimpse into what strategic investigators think might befall western economies and political systems in the wake of Peak Oil. The following conclusions are from a secret study by the German Bundeswehr Transformation Center, a strategic think-tank working exclusively for the German military, that were leaked to Der Spiegel:
- Oil will determine power: The Bundeswehr Transformation Center writes that oil will become one decisive factor in determining the new landscape of international relations: "The relative importance of the oil-producing nations in the international system is growing. These nations are using the advantages resulting from this to expand the scope of their domestic and foreign policies and establish themselves as a new or resurgent regional, or in some cases even global leading powers."
- Increasing importance of oil exporters: For importers of oil more competition for resources will mean an increase in the number of nations competing for favor with oil-producing nations. For the latter this opens up a window of opportunity which can be used to implement political, economic or ideological aims. As this window of time will only be open for a limited period, "this could result in a more aggressive assertion of national interests on the part of the oil-producing nations."
- Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. "The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts," the study states. In the long run, the study goes on, the global oil market, will only be able to follow the laws of the free market in a restricted way. "Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore."
- Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."
- Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."
- Global chain reaction: "A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil," says the study. "It is likely that a large number of states will not be in a position to make the necessary investments in time," or with "sufficient magnitude." If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it's so tightly integrated into the global economy.
- Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil "as a general systemic crisis." This would create "room for ideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely and could "in extreme cases lead to open conflict."
It is clear that the German military takes the issue of Peak Oil seriously, even though the German government had no plans to share that concern with the public. You can read further in "Peak Oil - Ensuring Oil-Free Mobility" recent reports that the British government and the American military have also quietly explored the strategic implications of Peak Oil.
The Bundeswehr predicts that the worldwide peak production of oil will occur this year, and that the fallout above will occur in a range of 15-30 years following the peak or 2025-2040. That would be more than enough time to plan and construct a North American Steel Interstate System in order to give us an oil-free transportation system. Independent transportation researcher Alan Drake projects in an unpublished article ("An American Citizen’s Guide to an Oil-Free Economy: A How-To Manual for Ending Oil Dependency With valuable bonus information on Saving Our Economy, Our Planet and Strengthening Our National Security") that a Steel Interstate System can be constructed in six years or less, front-loading the construction of the routes most vital to preserve economic prosperity and security.
In the introduction to his treatise, Alan Drake says,
We must create a viable, resilient and sustainable oil-free transportation and economic system that can operate in parallel with our existing petroleum based system. We can transfer our economy, bit by bit, to the new, more efficient and oil-free replacement as our present system becomes increasingly more fragile and eventually unsustainable. These plans all rely on mature, proven and economically viable technologies.
As new technologies develop, as they will, and are debugged and scaled up, our plans can be adjusted to incorporate these new solutions. Yet we can make a viable, workable plan with what we have “on the shelf”, ready to go today. We need not gamble our future on “Just-in-Time Technology” appearing at just the right time and with just the right technology. No miracles are required, simply foresight, persistence and hard work.
We can divert oil and other consumption that has no lasting value into long lived, productive and energy efficient infrastructure that generates increased high value employment.
If our future is to be energy constrained, as it appears likely today, there is no better legacy to pass along to future generations than a durable, energy efficient transportation system that operates on renewable energy.[Drake, A., An American Citizen’s Guide to an Oil-Free Economy: A How-To Manual for Ending Oil Dependency With valuable bonus information on Saving Our Economy, Our Planet and Strengthening Our National Security, unpublished manuscript, 2010, copied with permission of the author.]
Of course, the pace of implementation for the Steel Interstate could be accelerated just as the Manhattan atomic bomb project or Apollo man-on-the-moon commitment were, because these were considered national emergencies. Unlike these examples, fortunately, the technology necessary to construct and operate the Steel Interstate System is already available and in use in other parts of the world. We just need the foresight and the will to apply current technology.
Create an Oil-Free Transportation system that can out-compete our existing oil based system. Electrified and improved oil-free railroads can competitively attract much, and likely most, of today’s truck freight traffic under current conditions of $75 per barrel oil and tax subsidized trucking vs. unsubsidized rail. Extant rail freight plus the freight transferred from trucks can be carried faster, cheaper, cleaner, greener, safer, more profitably and largely without oil, while creating an oil-free passenger network...
A major goal of an electrified and improved rail system is that in the event of an oil supply shock (imagine $200 to $350 per barrel oil coupled with shortages), our oil-free transportation system can quickly expand to transport at least 85% of today’s inter-city truck ton-miles. This will allow food and critical materials to be transported oil-free and this shift will reduce the pressure on rationing oil to critical needs.
Much can be done in six years, but the horizon I am proposing is twenty years, with some additional “in fill” work for another decade. However, oil emergencies can develop in a matter of days. Therefore, infrastructure investment in oil-free transportation should be “forward leaning” to ensure greater elasticity of transportation supply and rapid expansion in the event of an oil supply shock.[Drake, A., Ibid.]
