My talk today is on Plan C, the Conserver Option, the essential points of which are curtailing our criminally wasteful consumption of fossil fuels, cooperating in this process and using the values of community to make it possible. After four years of working in the area of Peak Oil I am convinced this is the best option and probably the only option.

This chart is famous and familiar to many of you. It was prepared by Colin Campbell's Association for the Study of Peak Oil and is the best graphic definition of the problem. It shows the historical consumption of oil and the projected decline.

Opponents of the peak oil theory attempt to attack this chart by arguing that there are large volumes available of unconventional oil, which is true. But this chart is for conventional oil and Colin Campbell noted there are similar decline charts for all fossil fuels.

Exxon Mobil is the largest private oil company in the world. They are placing ads in the major media attacking the theory of Peak Oil. If you read the advertisement carefully, it says that peak oil will not "occur for decades," showing that they do agree with the concept but arguing for a later date. Another anti-peak oil person is Daniel Yergin, who stated in an article in the Wall Street Journal, that there would be no peak, just an undulating plateau. There would be no particular point in time which marks maximum production. This is absurd. There may be a shallow grade before and after that point, but there will be a peak. Finally, Yergin says there won't be any peak before 2020, challenging his own previous argument. This form of deceit is common with peak oil opponents.

There are many powerful forces coming together against peak oil. A couple of years ago, Shell Oil was fined $151 million dollars for deliberately misstating their reserves. So there are some strong political implications and government and corporations are going to generate a lot of disinformation.

The Association for the Study of Peak Oil in Europe, also charts discoveries. You can see for the last five years, that there has been a steady decrease. This is based on ExxonMobil's original reports in 2002, and nobody really argues with the data. Their counter claim is that this curve will be changed with more investment.

The official organization in the United States responsible for determining resource reserves is the US Geological Service (USGS). The USGS does not comment on this continual decline. This is because they made some projections a few years ago as shown by these three curves that go up and to the right. The curves suggest that we will have major new discoveries. The very steep curve is what they project that there is a 5% chance of occurring. But there is a 95% probability that the lowest curve will be the accurate measure. For some reason they average the two and select the middle curve, which has a 50-50 chance of being correct. The most conservative curve is still well above what is being discovered since the time they prepared those reports.

The by now fairly well known Hirsch report emphasizes that no matter what the alternative options we select, they are very high risk. This is a chart which illustrates that no matter what you decide to do, there will be some long period of research just to get started. Eventually there will be a slow ramp up before you get into volume production. And basically Hirsch has stated that we're already in trouble, that it's much too far away.

Contrary to what many may think, the nation does have a plan. The national energy policy was established in May 2001. Many people dislike the plan, but it is a plan, and it continues to be developed along the priorities that were set at that time. Certainly peak oil was known when this plan was produced. It is absurd to think that Dick Cheney and George Bush, with the extensive contacts and experience they have had in the oil industry, don't understand the concept of peak oil.

Basically, our country is taking two approaches. One is military, which is the largest investment. Secondly, there are a large number of energy investments across a very wide range of options. The energy investments are long-term. There is nothing that we see that can be done quickly, and the investments that have taken place have been going on for some decades now. In a recent report by Roger Bezdek, one of the writers of the Hirsch report, produced a document called "Solar Surprise." In that document he shows extremely significant investments in alternative energies such as wind and solar ever since the energy crisis of the 1970s. So it is false to say that the real investments of the government are only going into fossil fuels, and not into alternative energies, because the actual investment numbers show that that is not what has happened. The alternative energy investments are sizable.

This is the President's 2007 funding proposal. The hydrogen fuel cell, which has been funded to the tune of billions of dollars ever since the 1970s, gets the biggest part. The National Energy Plan's major strategy is clean coal, and you can see that the investment is quite large. A lot of money going into biofuels. The FutureGen project is really part of clean coal. And there is a lot of money into solar and wind although not nearly as much as in the others. That's because these others are major R&D efforts that are unproven, whereas wind and solar are already proven and they've been implemented. And finally, there is continued money going into battery development for the hybrid vehicles, or possibly plug-in hybrids, or other electric vehicles. Batteries have always been a weakness of this system and although they have progressed, it's a very, very slow process.

This is just the government allocation. There are also major private investments. General Electric is a $148 billion a year company and the leading wind producer in the United States. Sharp is another Japanese company, $24 billion revenue, and they are the leading producer of solar cells for solar photovoltaics. Sharp is only one of several. There are maybe 10 wind companies or wind producers, and there are probably 30 to 40 solar producers, because it is much easier to produce solar cells than wind turbines. They are less capital intensive.

There has been a major change in the past year relative climate change. Until about a year ago, the peak oil and climate people did not perceive their common interests. But climate change is now becoming more significant. This recent issue of Time Magazine points out that this is very, very serious. We don't know if we are going to run out of oil first, or climate first or clean air or water. Whatever the case may be, we are on a path towards a lot of serious problems if we don't change. And that means changing the American way of life which is consuming vast amounts of fossil fuel energies. 5% of the people of the world consuming 25% of the resources certainly show we're quite out of bounds. The International Energy Agency, to emphasize the link, is now listing in their data base for every country, both the CO₂ and the fossil fuel consumed. There is a very simple relationship. For every pound of fuel burned, there are 2.6 pounds of CO₂ generated. The link is quite well established.

We are also moving towards more potential conflict over fossil fuel resources. This chart shows what is called the strategic ellipse, and this is roughly where 70% of all the oil and natural gas reserves are. There is more in places like North Africa and Central Africa, which are also areas of great tension. Russia and China have basically been rearming for several years now, much to the dismay of the United States, but they can see what is shaping up as energy becomes ever more scarce.

These resource wars are becoming more probable. The best writer on this is Michael Klare, and I recommend reading his book Blood and Oil. China embraced capitalism, and adopted the American creed of the more, the better. As a result their consumption of oil and other fossil fuels is increasing extremely rapid. The U.S. is now accusing China of locking up the oil. A Chinese general, Chin-Hua, in the Wall Street Journal, noted that a war with the United States could be nuclear, because no one can beat the United States in a conventional war, but a nuclear war, particularly when the targets are oil resources or gas resources, could be won by someone other than the United States. China remembers the past history of conflicts with the U.S.

Russia has already shown that they control Europe's natural gas when they turned the gas off for 24 hours in a dispute with the Ukraine. We can see that these historical enemies of the cold war are still with us. But any war is not going to be an ideological war. It's really going to be an economic war.

This is a chart dividing the world into the United States, the OECD, and everyone else. The Organization of Economic Development Nations is basically Europe and Japan and a few other Pacific Rim countries. These numbers don't include the US, Turkey and Mexico, for reasons which I will explain later. This shows the distribution of the population for the US, the reduced OECD and the Rest of the World. It also shows the energy consumption in barrels of oil equivalent, which is a common measure that includes oil, coal, natural gas, and nuclear. Each person in the United States is using about 57 barrels of energy. Each person in the OECD, which is typically Europe, Japan, and the developed countries, is using about 30, and the rest of the world that is, the 5.4 billion people that are 85% of the population, is using 7.3 barrels per person

This chart shows the relationship between income, energy and pollution It is the same breakout of the three regions. The section on the left is income, the middle section energy and is the previous chart represented differently and the right section is CO₂ pollution. When we talk about energy, reducing energy consumption reduces CO₂, and unfortunately, because economic growth is based on increasing consumption of energy, it also reduces the income.

The combined U.S. and the OECD populations is about a billion people, roughly 15% of the world. The per capita use of the US and OECD is about 38.6 barrels of energy equivalent versus the 7.3 of the rest of the world. This is a 5:1 ratio. The US to the rest of the world is an 8:1 ratio. This tremendous imbalance in the amount of energy and the access that people have to energy is going to be the source of great conflict.

The concept of the free market is what drives the world right now and that theory says that the pursuit of individual self-interest is optimum. There is a kind of slang approach called the trickle-down theory, or rising tide lifts all boats, which says yes, the rich are getting richer but because they are getting richer, the poor also are better off. And that theory is used to justify the rapidly growing rich-poor gap. The big issue we are going to have, which will bring us to areas not only of global conflict but social unrest, is what is going to happen when the pie starts to shrink. If the growth in the economy was not because of the brilliant rich people with innovative ideas, but simply the burning of oil, then when oil supplies drop, what are we going to about this tremendous maldistribution of both income and wealth.

Our general view for decades has been that technology is the answer to most of our problems. The belief in technology is almost a religion in the United States. There is an economic premise of substitution, which implies no matter what happens with a raw material, there will be a substitution, and the market will find and bring that substitution forth. This last statement is a popular one that is used to discount the concept of peak oil. I would like to point out that probably the same number of stones or the same volume of stones existing now that existed 100 years ago. We've taken some of those stones and mixed them with concrete and made buildings, but they're still embedded in the concrete. But we turned the oil into CO₂ and other toxins which are affecting the atmosphere, and there is less and less oil available. The stones so far have remained constant because we haven't figured out how to burn them.

I observe two popular plans which I am designating as Plan A and B. Some people call Plan A Business As Usual and Plan B Some Alternative. By the way, Lester Brown has written a book called Plan B. My use is not meant to reflect his, so any similarity or dissimilarity is a coincidence. Plan A is to develop tar sands and clean coal to get liquid fuels. These particular fossil fuels - on a per BTU basis produce about twice as many pollutants as oil or natural gas. Thus Plan A will use the harder to get, more expensive fossil fuels, even though they will generate much more CO₂. Plan B is also Business as Usual, except the proponents of this want to use non-fossil fuels such as wind, solar, and biofuels. Of course, the major biofuel is corn, which takes more fossil fuel energy to make than it provides, so that's now going to work very well. The advocates now are proposing switching to prairie grass (switch grass) and agricultural wastes. No one has any idea whether these will be viable. It is also assuming new transportation options such as fuel cells and pluggable hybrids. Both plans assume that we don't have to consume less energy, we just have to change its forms. Fuels from new sources are going to save us and keep us from having to deal with any deprivation in our way of life.

I will discuss two examples of these alternatives. One is what I call the hyper car. I normally call it the "hype car," because I feel that the people associated with the fuel cell have basically misled us for about 3 decades. It's probably the greatest recent fiasco in history. Joseph Ross says we've put over $20 billion investment into these alternative cars. The fuel cell has always been fundamentally flawed because it takes more energy to make hydrogen than the manufactured hydrogen provides. That's such a basic premise, and it is consistently ignored by those proponents. The new favorite is the pluggable hybrid electric vehicle, which is a grassroots movement that started in California, suggesting that we should put more batteries in the trunk of the hybrid and somehow, we will get 500 mpg.

The second example is carbon sequestration, which is called carbon capture and storage, and this gives us clean coal, because via an energy-intensive process, we take the filth out of the coal and then we bury it in the ground or the ocean, leaving a horrible legacy for our children. I would like to point out some of the deceit and foolishness of these options.

The fuel cell was invented in 1830. It's not exactly a new technology, and were used these extensively in the space program 40 years ago. In 1904, the Danes, who are the leaders in wind energy, were using wind and electrolysis to generate hydrogen. They were using hydrogen as a lighting gas. That's over a hundred years ago. President Nixon began a major energy program for hydrogen and other advanced car technologies in 1973. This should tell you the amount of time, the number of decades that we have put into this folly. In 1993, Ballard made the first fuel-cell bus. They invested $800 million. Twelve years later they are still struggling simply to survive. A couple of fuel cell cars arrived in California from Toyota and from Honda, and we never really know what happened, because all of the performance information is kept secret. In 2005, an Australian member of Parliament did a study and discovered there is only enough platinum and palladium reserves for 10 million cars. These are key components of the fuel cell. In 2006, President Bush says the fuel cell price has gone down by half in the 6 years that he has been funding it, and most people figure this means roughly that the price has gone from $2 million to $1 million a car. After 30 years R and D, we have a $1 million car that won't run very long.

There has been tremendous hype about these ideas and I think that hype is the reason we have not taken serious actions. Amory Lovins wrote a book called Natural Capitalism in 1999, in which he described his hyper car idea. He's a big proponent. In the book he says that a hundred thousand fuel cell vehicles would be produced per year by Daimler-Chrysler by 2005. So far, they have produced 0. He quotes Toyota as saying a third of the 2005 auto market would be hybrids. Its actually about a third of a percent. And Toyota said they would have fuel cells before 2002. Ford, together with Daimler-Chrysler, invested almost $800 million in Ballard and got nothing. General Motors had promised a fuel cell car in 2004. And Volkswagen was going to be selling a 78 mpg car. And all this is hype and nothing has come of it except delay. Now the government is backing off, but carefully, because when the people understand that this pig in a poke they've been sold is not real, there's going to be a strong negative reaction. The tactic now is to say that maybe it won't be here before 2020 or 2030 or 2040, which is the same tactic used with fusion. Fusion it is said has been 20 years away for 50 years.

This is a picture of carbon sequestration. You can see similar pictures all over the Internet. It shows a power plant generating electricity and the way they will deal with the CO₂ and other toxins. Basically it is intended that the carbon dioxide be buried in the ground and t in the ocean. And the word over here in the middle – this is aquifers in the ground and water in the ocean.

I don't know if any of you may recall the period of nuclear waste ocean dumping, in which we put nuclear waste in barrels and surrounded it with concrete, and dropped it in the ocean where it was to stay forever. It stayed a few decades, and then it started to leak. I think this shows our desperation. We have no idea what to do with neither the waste from uranium nor the waste from fossil fuels. We have known this since the dawn of the age, and the only thing we can think of to do is to bury them somewhere. There was a proposal, a presentation recently, on nuclear waste problems and the presenter showed that if Yucca Flats in Nevada ever became nonoperational, that basically the existing waste will be stored on the surface in pools and barrels, and we will need another Yucca for the waste that is continually being generated.

The issue for me is not technology. It's really values. This is the Hummer, which is the biggest, most wasteful car made, and the car that has the most tax credits available from the government, compared to the Honda Insight. 2005 sales for the Hummer were 60,000 versus 700 for the Insight. The Insight gets 6 times the miles per gallon of the Hummer. This car has been available for about 8 years. You can see the sales are trivial, and Honda finally is taking the car off the market in mid-2006, because Americans are not going to buy it.

It's not that we keep driving; that may be an issue. But the real thing that we have to concern ourselves with is can we keep driving with a certain image. Certainly the Honda gets people from one point to another as fast as the Hummer, but with a very, very different image.

The rest of the world is way ahead of us in conservation. European cars get twice our miles per gallon and Japan even greater than that, not because of technological breakthroughs. They are basically using small, efficient cars and using diesel engines. The U.S. has wasted years on the electric vehicle, the fuel cell, and now we are going to be for a short time entranced with the pluggable hybrid, which I think will join the graveyard of the fuel cell.

We see the same values in terms of housing. This house on the left is a typical McMansion, as it's called, and on the right is a Habitat for Humanity house built in partnership with Oak Ridge National Laboratory, where the government's Building Technology Center is located. The person on the porch there is Jeff Christiansen, who is the head of the Technology Center. This is a very, very energy efficient house and a small one, and this is built with conventional off-the-shelf systems. So just as we could have bought the Insights and cut our gasoline bill in half or more, we could do the same thing with the energy bills for our houses.

We have destroyed the family farm in order to build corporate farming and the end result after 50 years is that it takes 10 calories of fossil fuels for every calorie of food energy produced. And as part of that there is massive exploitation of migrant workers from Latin America, and horrible suffering of farm animals raised in what is called containment farming, which are small torture chambers for pigs and chickens. The result of that is poor quality food for increasing levels of obesity, diabetes, and a general decline in our health.

I noted before that the United States uses 57 barrels of oil equivalent per year, versus the rest of the world's 7. Breaking this down into what we are using personally, gives 10 barrels for food, 9 for cars, and 7 for houses. Our energy for cars, only 9 out of 57 barrels, is more than 85% of people are using per year for all usage. What are the results of this? Are we a much happier people?

This is a chart showing the growth of the GDP versus the Genuine Progress Indicator, which takes into account things other money, like school, education, happiness, health, and crime. Our murder rates are the highest in the world. The prison rates on average 6 times the prisoners per capita as Europe. We are the world leader in environmental degradation. Inequity is growing quite rapidly. And we have had complete disappearance of civic engagement or what could be called social capital, that is a lack of involvement with friends, neighbors, and loss of community, because we drive long distances to work hard. There is a question of what kind of world have we created and what kind of people have we become.

Roscoe Bartlett, who is the leading member of Congress relative to peak oil, points this out and asks what kinds of monsters must they have been. Jimmy Carter tried to make change during our first energy crisis. At that time we decided to ignore it and go for more growth, wealth, and consumption. Carter talked about this as the moral equivalent of war and that cost him his presidency. When you look at what kind of monsters we are, we certainly are the kind of monsters who are not going to let anyone tell us we might have to curtail.

So this leads up to what I propose for a Plan C, or the Conserving Community option. The Conserver option is the view of using just enough and the focus is on conserving, sharing, and saving versus either Plan A or Plan B, which are the American values of competition, hoarding, and consuming. This means curtailment. It means cutting back and living frugally. It's not some token conservation or changing a light bulb or two. But it requires a significant reduction, and it means is that we're going to have to share the resources now, but even more important, we have to start thinking about sharing them in the future. What we're really doing is consuming the fossil fuels and other resources of the world that our children and grandchildren are going to need to survive. The context necessary for this is the community context. And it's a context for a different way of life. The basic principle is cooperation as opposed to competition.

There is a difference between conservation, curtailment, and efficiency. Williams Jevins was a 19th century economist who pointed out that every time we increase efficiency, we increase consumption, and that's certainly been true for us. We are more efficient now in producing cheap food and that's why we have obesity and health problems. But that works just within a particular value system and is not necessarily human nature. It may be Western human nature.

You can see this in the graphic chart on the left. We have ever more efficient ways of insulating houses, and double-paned glass, and double panes with gases in them. But our energy generated per house now is the greatest it's ever been in history. There was a sizable decline that lasted for a decade. I was a builder at that time and we basically built entirely different kinds of houses. The chart on the right is from a British Petroleum presentation that shows we've had efficiency increased to 23% over a long period of time, but only 4% that has gone into increasing miles per gallon. The rest is simply that we drive more miles and we drive bigger cars. So it's not technology again, it's character.

In terms of Plan C, we will need some technology. I guess technology starts with something like the knife or the screwdriver. We need some technology but we don't necessarily need the high-energy kind like Hummers. We can find out what that technology might be by simply visiting the rest of the world. You can go to various countries that exist at various levels of energy consumption, and you'll find out what their technology is.

You can also look at history. We've had a lot of low energy technologies that we've discarded for more interesting and more energy-intensive replacements. We can import and start to use the latest intermediate technologies.

The E.F. Schumacher Society in England and a department of the University of Illinois focus on intermediate technologies. We already have a great deal of energy saving options such as compact fluorescents, different lighting systems, and window gases insulation. The diesel engine gets 20% to 30% more efficiency. So these are things that are sitting in our stores right now that we haven't used.

We can also start sharing the technical products. The average car trip has 1.5 people in it but room for 4 or 5. We can start forms of ride-sharing. We have a proposal for that which is based on a cell phone and typical airline and car reservation systems.

E.F. Schumacher wrote Small Is Beautiful in the middle of the last energy crisis. I was active in energy efficient housing at the time. It was a great flowering of alternative thinking as well as alternative engines. Schumacher points out that this doesn't mean that we have to go back to outdated methods, that our achievements in science are not just simply in the apparatus and machinery. If we reject those, it doesn't mean we reject science – it means we look for more frugal options. What we have done is basically use applied science and knowledge to create a consumer society, which is a particular value system. We must start moving towards the development of intermediate technologies and that means a new kind of society.

We have far, far too many people in the world. We have people living in poverty with no work, and we need a technology that is appropriate for labor-surplus societies. There is actually no reason why we can't put millions of people back on the farms to cut out that use of 10 fossil fuel calories for every food calorie.

Plan C is not new; it's been underway since the 1970s. There are lots of different Plan C schools, like the agrarian movement, and community-supported agriculture, and intentional communities. There are a lot of people who in the 1970s realized we need a different culture and they've been working at it. We have many examples to draw from. These people share the same values and the values determine the technological levels which they use in their communities. A standard response, by the way, whenever I talk to any of these kinds of people about peak oil, is simply, "I wondered what would trigger the crisis." They've been moving into new ways of living for decades.

Cuba is a country that has already undergone a change. They experienced peak oil in 1990 with the collapse of the Soviet Union, and they had to implement a version of Plan C rapidly. They now have the same lifespan and infant mortality rate as the United States but they use one-eighth of the energy per capita of a US citizen. The country realizes this must continue. Fidel Castro gave a speech in November saying that the country will have to cut its energy consumption by another two-thirds. Cuba declared 2006 to be the year of the energy revolution. I produced a film on Cuba that came out in May 2006. The great battle of Communism and capitalism was on private industry versus state industry. There was no debate or difference about consumption being the end-all goal for either philosophy. That must change.

Cuba was using more irrigation, more tractors, and more fertilizer than any other Latin American country and in some cases, more than the United States. That was quickly changed.

Cuba's focus is on things other than machinery and fossil fuel-consumptive devices. In education, they have more teachers per student, almost twice the doctors per 1000 people, and the same lifespan.

What I am talking about is a context for change. It is not particular programs. The country is still in denial. The implications are so vast, like Katrina, and people have no concept yet as to how to start dealing with the problem. People can't conceive of the end of the American way of life, which I call the consumer way of life, versus the community way of life. Lots and lots of programs are being funded to keep the fossil fuel way of life going. Huge amount of money being spent, but none of these are viable, and people can't accept that yet. They actually can't even open up to the conversation.

Buying a few tips won't do it. Buy a hybrid, change 6 light bulbs – that's not going to do it. We must being to analyze our energy usage per capita, or as some people like to talk about it, our ecological footprint. The changes are going to have to be extensive. But until they accept the fundamentals, people will have a hard time making the change.

Einstein said, "we can't solve problems by using the same kind of thinking we used when we created them." Our thinking has been for decades that "more is better", and basically we have institutionalized the seven deadly sins, particularly greed. That has been in all our thinking and all our values. I was raised before that period and we had very different values as a people. When I was growing up in the Ozarks, we had a fulfilling life but people didn't talk about getting rich and making money. We were focused on other things. And this current way of living, our current values, are moving us towards nuclear war and environmental devastation, so we need some new thinking and new values. And I propose Plan C, living better with less in community and in caring and supporting each other.

The values – curtail our excessive use, cooperate rather than compete, and rebuild strong caring communities.

– Pat Murphy is the executive director of The Community Solution, a program of Community Service, Inc.