Kicking The Gasoline & Petro-Diesel Habit

Recklessly Taking On Unimagined Risks

April 20, 2011

When it comes to new technologies, the Precautionary Principle conservatively states: “Don’t build it if you don’t know and understand all the risks involved.” The disaster at the nuclear plant at Fukushima Japan dramatically illustrates that there are a number of complex modern technologies that are now built, and now in operation, but we don’t really understand what the risks are. In its full form, the Precautionary Principle states that: “If an action or policy is suspected of causing a substantial harm to the public or the environment, then the burden of proof, that it is indeed safe, falls on those taking the action or adopting the policy.” In other words, management must determine that high-risk technologies such as nuclear power are safe, and will remain safe, if they are to be used at all. Unfortunately, our modern industrial societies, with a few minor exceptions, do not enshrine the Precautionary Principle with the full force of the law.

Thus management is currently at liberty to take actions and adopt policies that recklessly take on unimagined risks. And thus management in many cases passes the costs of disasters occasioned by these unimagined risks onto third parties (economists euphemistically call these situations “externalities”). And that is exactly what management is doing in many areas, including the dependence on petroleum.

One Japanese governmental official claimed that contingency plans for the Fukushima nuclear plant “failed to anticipate the scale of the disaster.” The problems at Fukushima are so far “beyond the design capacity” of the plants that the Japanese are working in uncharted territory, said Michael Friedlander, a former senior operator at U.S. nuclear power plants. While the odds of a 9.0 earthquake and an ensuing huge tsunami may be low, scenarios like these are entirely within the realm of the predictable. Based on geological evidence, a number of such earthquakes have happened before, so it would stand to reason that a nuclear power plant should have to withstand stresses of this nature.

Let’s be clear that management at many organizations, non-profits, government agencies, and businesses, has failed to anticipate the likely disasters that could happen. We’re not talking about aliens landing on the planet and taking over with up-until-now-unheard-of technology; we’re not dreaming up some way-out crazy scenarios. We’re talking quite reasonable, absolutely predictable, threat scenarios that very likely happen at some point in the not-too-distant future, things like a large earthquake.

Yes, to not properly address these quite predictable risks is negligent, and there may be some serious legal consequences for the managers involved. But this author is not a lawyer, he is a technology risk management consultant, so we will focus on the latter topic instead. So if we admit that building and operating a variety of complex technologies, that are now in operation, has indeed been negligent, where do we go from there? What? You say you don’t agree with the assertion that a number of complex technologies now in operation are very dangerous, and the risks associated with these technologies far exceed our capacity to deal with them?

OK, before we get to the next steps, I’ll offer one other widely discussed example, but certainly many other dangerous complex technology situations could be identified. Consider the Deepwater Horizon drilling platform in the Gulf of Mexico. We, the industrial societies, are pushing the edge on oil exploration technologies, going to very inhospitable places, such as the bottom of the deep ocean, in order to maintain our addiction to petroleum. This is unchartered territory, and as the oil companies in charge of that rig so painfully made clear, they did not have the contingency plans to deal with an oil spill of the size that they encountered in the Gulf of Mexico.

So let’s take it as a given that, this reckless implementation of complex and dangerous technology has happened, and is also happening right now. Additionally, let’s take it for granted that, in large measure, we are unprepared to deal with the disastrous consequences that might occur thanks to the usage of these dangerous technologies. This is easily illustrated in the area of peak oil contingency planning. How many non-profits, how many government agencies, and how many business firms have seriously integrated peak oil, the certainty of the world’s peak in the production of oil, into their strategic planning and contingency planning processes? The answer: VERY VERY few (repetition added for emphasis).

So this author suggests three corollaries that should go along with the Precautionary Principle. These propositions that follow the Precautionary Principle are: (1) if it’s already built and in operation, shut it down, until we know the risks involved, and until we can satisfy independent third parties that those risks can be adequately dealt with, (2) if we can’t shut it down right now, we should invest a lot of money in contingency planning to come up with safety nets to deal with all the serious threat scenarios that might come to pass, and (3) if we can’t shut it down right now, we should immediately begin work to transition to other technologies that are much less risky, and much more likely to be sustainable.

To clarify the importance of these three corollaries, let’s imagine how these propositions might apply to a peak oil contingency planning effort at a major long-distance trucking firm. When prices for fuel go up in a big way, long-distance trucking is going to be seriously curtailed, and other less expensive transportation methods will instead be used. Railroads and boats for example will be used to move a lot more freight that is now handled by long-haul trucks. One serious risk here is to the viability of the long-haul trucking business. Management at the trucking firm may rightfully ask: “Is there even going to be a profitable long-haul trucking business when diesel fuel costs over $10/gallon?” Let’s be clear that peak oil is happening, the only question is when. And we will get to, and go far beyond, the $10/gallon level. Applying the first corollary would involve perhaps selling the long-haul trucking business, or localizing the routes so that trucks do things that railroads and boats cannot do, or in some other way shutting down the long-distance trucking system that we know will soon be unsustainable.

Applying the second corollary, we can adopt a whole slew of safety nets, such as using the futures market to lock in fuel delivery at certain relatively low prices for a few years in the future. Of course, this is only a temporary measure, because ultimately the business will need to be reconfigured to be something else that is sustainable and economically viable. Another safety net that the business could adopt is to lock in long-term contracts with major customers, so that at least for the duration of these contracts, the trucking firm knows it has incoming revenue. Some of the profits from these activities should be reinvested in the business, coming up with other contingency plans, and also – as mentioned below — reformulating the nature of the business itself.

Applying the third corollary, we would rethink the “theory of the business,” as the famous management theorist Peter Drucker would call it. Management would need to admit that the theory of the existing business is no longer viable, and that a new strategy is essential. Management must not wait until an “unimaginable crisis” (such as a nuclear power plant accident) makes it painfully clear that what they’ve been doing doesn’t work. The assumptions on which the organization was built need to be rigorously challenged, need to be comprehensively revised, need to be substantially updated.

Our new and more modern understanding of what is happening in the world, such as the reality of peak oil, needs to be integrated into the very heart of the business strategic planning process. Management must then use that new perspective to show us the way forward, to transition the business so that it soon relies on new technologies that will be sustainable, profitable and viable. For the trucking firm, this may involve running trucks on bio-methane that is gathered from a local sewage treatment plant. There are many options, the critical part is that this work is underway now, before we have yet another crisis on our hands. This is because with each successive crisis, our capacity to redesign and rebuild will be diminished.


Charles Cresson Wood is a technology risk management consultant with Post-Petroleum Transportation in Mendocino, California. He assists organizations with petroleum dependency analyses, peak oil contingency plans, green energy transition plans, and green business strategic plans. He is the author of “Kicking The Gasoline & Petro-Diesel Habit: A Business Manager’s Blueprint For Action” (

Time To Evolve What It Means To Be Human

June 18, 2010

We’ve known about it for decades. It’s mentioned in the most prestigious of newspapers, such as the The Independent (UK) and The New York Times. It’s occasionally covered on the most heavily trafficked web news sites such as The Drudge Report and Prominent but retired figures like James Schlesinger, former US Secretary of Energy, have publicly expressed their concern about it. Even the most conservative of pro-business organizations, such as the International Energy Agency (IEA), have publicly expressed their alarm about what’s happening. Yet, not one prominent corporate leader or politician in America today has been willing to stand up publicly and take a stand about it. I am talking about “peak oil,” the fact that we have recently reached, or are very soon about to reach, peak world production of petroleum.

We’re now forced to go to very inhospitable environments to find more petroleum to feed the world’s voracious appetite. Perhaps the most salient of examples is the horrendous BP Gulf of Mexico oil spill, still gushing as I write this (June 2010). We, the people of industrialized countries, are so desperate to find more oil, that we now do things like go to the Artic, and risk severely damaging not just the Gulf of Mexico, but the pristine Artic National Wildlife Refuge as well. It’s peculiar that this doesn’t seem to strike most people as insane. That we are so dependent on petroleum that we would cause what may well be the most severe ecological disaster in America’s history in order to get more of it for our fix, that doesn’t seem to get many people talking about getting off the stuff. If they do talk about it, many people say things that only reinforce our existing dependency, words such as “drill baby drill.”

Meanwhile, those who would offer a fantasy, about how the peak oil conversation is a just a lot of hot air, they are given great prominence and a high pulpit from which to preach their fantasy. Perhaps most prominent of these are the economists who believe in a world without limits, where every resource has a readily-available substitute, and where every problem will be worked out by “the market.” They disparage conservation efforts with fancy theories like Jevons Paradox, which says that it doesn’t matter much if energy efficiency improves, because people will just use more of the fossil fuel involved. We will regret that we made them the high priests of American society. Meanwhile, the loyal and hard working geologists, environmentalists, and contingency planners that have been sounding the alarm about peak oil are largely ignored. For the most part, there’s not even an attempt to refute the statements of these Paul Revere types — they are simply ignored. So what’s really going on here?

We’re up against the power of denial. This stubbornness and unwillingness to deal with reality is actually quite dysfunctional. If you were a passenger driving in a car with a friend, who was under the influence of a few drinks, and he or she seemed to have fallen asleep at the wheel, would you try to wake them up before the car you were both in crashed into something hard and immobile? Or would you just sit there, remaining silent? The analogy is actually quite apt. We — the people in the developed world who are so very dependent on petroleum — are on a crash course with reality.

Unless we start dealing with this reality immediately, and do so quite intensely, we are going to bring on much more serious repercussions than would have been suffered had we told the truth and promptly dealt with the problem. Some of these severely negative effects are probably unavoidable, given that we have ignored the problem for decades. But we make them still worse, the longer we wait to get out of denial. These repercussions include massive unemployment, a crashing stock market, a crashing real estate market, and widespread bankruptcies. I’m talking about shortages and rationing of motor fuel, blackouts of the electrical grid, and the failure of government to do much of anything about it. I’m talking about still more environmental degradation, shortages of other natural resources, and a surging population whose basic needs are not being met. In some places, widespread hunger, and even starvation, is also likely to result. I’m not making this stuff up, just summarizing what we’re clearly headed for.

Many of us humans tend to deny what’s going on when we don’t like it. We fall into this place of being frozen and paralyzed by our fear. I’m not a psychologist, but I would guess it has something to do with the desire to avoid pain. But the pain of confronting the truth is going to be nothing compared to the pain of the collision just ahead on the road.

The task for us all starts with an end to our preoccupation with our self, with a going beyond our selfishness. We need to stop putting our own feelings (discomfort about what the future will bring, looking foolish, being wrong, whatever) ahead of what’s right, ahead of what needs to be done, ahead of what would be respectful of both nature and future generations. We need to start envisioning what life is going to be like for our children, and our children’s children, if we don’t quickly change the direction in which we are speedily traveling. This visioning process has an official name: scenario analysis. To help us with this effort, there is a large body of research and a large body of experience already available in the contingency planning community. But even those people who are not working in the contingency planning field can and should still prepare their own future scenarios.

It’s time that we started modeling a new type of human being, and here I’m talking about someone who is willing to put their petty selfish feelings aside, someone who is willing to roll up their sleeves and get down to work doing the work that must now be done. I’m talking about a new type of human being, a more evolved human being, someone who deeply gets that we are all in this together. This human being knows that what we do today (such as driving a SUV long distances to commute to a job) has a significant impact not only on themselves, but also on other human beings, on animals, and on nature.

This new human being will also need to admit that there are no shortcuts, that to create a certain result, such as a new economy that is no longer dependent on petroleum, a great deal of serious work must be done. Denial and stubborn refusal to grapple with the truth does not make it go away. Denial of the truth does not mean that the truth is an illusion, it only means that the individual adopting this strategy is ill-prepared and poorly-adapted to the reality of what’s happening. The part of us that thinks we can deal with something by denying it, that is the part that thinks that we can use shortcuts, thinks that we can get away with cutting-corners. That is magical childish thinking, and it’s time for all adults in the industrialized countries to start thinking like, and acting like, responsible adults.

Denial can be tricky, and it does this in an effort to try to maintain its position of prominence in the consciousness of those who have adopted this dysfunctional position. For example, that part of us that likes denial, also likes to color issues in black-or-white (dualistic) terms. For example, either peak oil is a non-issue that we shouldn’t even to talk about, or else we’re all going to die as a result. If today you believe that it’s a non-issue, then you rationalize that you might as well continue your denial. If instead today you believe that everybody is going to die as a result of peak oil, then you can figure “there’s nothing to be done, so why bother worrying about it?” And so you then are back to denial, with perhaps another mask put over the truth. It’s only in grappling with reality, which will be something in between these two extremes, that we can discover what for us would be a right response to peak oil.

It’s time that we all looked at our own personal process surrounding denial of the reality of peak oil, and for that matter, our denial of peak natural resources as well. What part in each one of us has been selfish and unwilling to broaden our perspective to include our impact on other beings and the planet? What part of us has been thinking that we could get away with shortcuts, when we know darn well that we can’t? What part of us has been engaging in mind games, like dualistic thinking, in order to be able to continue with our denial?

To the extent that we can move through these blocks to encountering the truth, in its full impact and implications, to that extent we can start to evolve into the new type of human being that we all potentially are. And by the way, I’m working on it too. For us all, this will require on-going effort to keep confronting the truth as it is revealed. I hope to see you all, the new human beings, after we get through these turbulent times.


Charles Cresson Wood, MBA, MSE, CISA, CISSP, CISM, is a technology risk management consultant with Post-Petroleum Transportation, in Mendocino, California. His most recent book is “Kicking The Gasoline & Petro-Diesel Habit: A Business Manager’s Blueprint For Action” (see