Peak Oil, For Beginners

The following are facts. Important ones.

1. Oil is a fossil fuel. It is the concentrated remnants of stored solar energy in the form of hydrocarbons. Once it is pumped out of the ground it is gone forever. 
2. The world uses 85 million barrels of oil per day (mbpd). The world economic crash (caused by Mortgage Derivatives) has reduced consumption to that from the projected 115 mbpd they thought we'd be using back when exponential growth was still a happy delusion. The USA was using 19.5 mbpd in 2006. It is using 14.5 mbpd now, due to the destroyed economy. This number must continue to fall, as domestic oil production is less than 5 mbpd. Ideally, we would match consumption to production. If our currency crashes we will have to.
3. Since 1970, the USA stopped exporting oil and started importing it. This is the primary source of our trade imbalance and the major cost being shifted onto our grand children and the primary reason our economy is crap. We're spending large sums of money on oil imports, often from people who genuinely hate us.
4. Oil production is declining worldwide. Some fields are bringing on new production at higher cost and lower quality, but most large fields are declining or going dry. Wars have been fought over oil for the last 100 years. We are fighting wars over oil right now.
5. Govts and big businesses know about the end of oil and are planning for major disruptions as there's no effective work-arounds. There are expensive work arounds that benefit very few people, but nothing for everybody. This instability may lead to civil war.
6. Without cheap energy, the economy must shrink. 
7. Typically, when an economy shrinks, people have less to eat and fewer means to support families. This leads to the population shrinking too. That means death, lots of it. Most will die of cold or flu or other famine related weakening of the human immune system. Most of the deaths will be very orderly, not riots in the street.
8. Oil was discovered in 1859 in Pennsylvania, just prior to the start of the Civil War. After the war, it resolved the fuel crisis associated with coal (which heated homes and powered trains) and whale oil (lamp oil), allowing our civilization to expand, along with our population. 
9. The Olduvai theory (hypothesis), which ties cheap energy to large population, might be right. How far we fall due to energy scarcity is directly proportional to how much of our libraries survive, meaning we won't fall as far as previous Dark Ages. 

How can we deal with the end of Cheap Oil and the Energy Crunch? 

1. Cheap solar can prevent the worst effects of the energy crunch, but may not be able to stop the deaths of a few billion people. Farmers don't work for free. Poor people don't eat. This is Scarcity economy so finger pointing and blame shifting is already happening.
2. Synthetic fuel is possible, using algae or other feeder materials which extract sunlight and generate oil instead of sugar. They are not very fast or efficient methods. The best of them cost around $33/gal for biodiesel. Brazil's sugar cane ethanol is cheapest and will probably end up being imported, but it is still more money than oil... for now. Work is still being done, but there are no easy answers for sustainable fuel. Anyone who says it's easy is trying to sell you something.
3. Cheap solar is possible and already discovered, just not implemented since the pieces are not together in a single patent, nor are the various patents actually being produced or widely installed. It needs to be on every roof and every field beside the railroad tracks so there is power for freight trains and homes after the oil runs out.
4. Lithium is a rare earth element. It is very uncommon and there's only enough lithium for batteries for around 2 million vehicles. As this is the best power to weight ratio battery for electric vehicles, only the very rich, or the military, will have electric cars.
5. Grid tied electric vehicles, such as Trams (aka Streetcars and overhead-electric buses) will need to be expanded into most cities and large towns to enable people to reach their jobs and retain specialized skills and products if the economy is to survive. We had these until 1925 when Standard Oil bought them out to force people to buy cars and gasoline. This was legal, at the time.
6. Without electric vehicles, our only options are self powered vehicles (bicycles, sailboats) and high efficiency vehicles using expensive synthetic fuel. The highest efficiency vehicles are freight trains (which should all be electrified), barges, cargo ships (with kite sails), and motor scooters. Notice that the first few are huge, using bulk tonnage as a measure of efficiency. 
7. A scooter can carry you and a surprising amount of stuff at a very high fuel economy. They have been around for nearly a century.
8. Cars can be efficient with fuel economy, provided the engine is small and the driver is willing to go slowly, under 45 mph. Under 45 mph wind drag is much lower so less fuel is wasted moving the vehicle and people inside it. A 1958 Bugeye Sprite gets 36 mpg. Good car for pulling girls. And this was before fuel injection.
9. Modern ultralight materials and a motorcycle engine should be quite capable of duplicating or improving on the Sprite convertible. The Smart is trying to be this, but they're too expensive for what they are. If a competitor were willing to produce a similar type of vehicle at a lower price, geared for fuel economy at lower speed, then 60 mpg is entirely possible in a sub-compact car. Car companies have no motivation to do this, and slower cars don't sell well on modern 85 mph freeways. Most cars today reach Overdrive gear at 60 mph. This is engineered, and Overdrive is where you get your best fuel economy.
10. The above facts mean we MUST reduce fuel consumption. If we improve fuel economy, that benefits us the most for long enough to build alternatives (trams), which take years to put into place. Historically, the public votes to fund things AFTER they have a disaster and suffer the consequences personally. Without disaster, there is no funding. This means it is probable we will experience a temporary fuel shortage sufficient to not be available at all. Maybe only a week or two, but still, such things have happened before: 1973 Oil Embargo and 1979 Energy Crisis. Each of these caused gasoline rationing.
11. The sanest and most equally irritating means of national fuel economy is reducing maximum speed limits nationally. The President can do this, at his own discretion. The congress can ratify it within 60 days. Jimmy Carter forced 55 mph max speed limits on the nation back in 1976. It was unpopular and led to his not being re-elected. The current president is a lame duck. Forcing this speed limit has no impact on him so it would be sane and rational if he did so. Daily commutes at 45 will take twice as long as 85 but also use half as much fuel due to hugely reduced wind drag.
12. The next method of fuel economy is deliberate rationing. The congress can institute this legally after a Presidential "Emergency Measure" under some pretext. That's what I would do. Violence in the Middle East is ongoing. You don't have to do anything but wait. Rationing can be sensible, but still irritating and painful. Once the public is used to rationing, those rations can be cut, forcing carpooling and higher efficiency vehicles. Businesses on the edge will fail if they don't adapt effectively. So will families.
13. Local food production is important thanks to frequent disruptions of transportation as the economy shifts from prior high-energy systems to more efficient ones. Farmers markets, sales of local farm products to supermarkets and restaurants, and construction of warehouses to replace the high-energy JIT systems is necessary. 
14. Local rail spurs may be necessary to make towns worth resupplying with food and medicine. Failure to make delivery energy costs as low as possible will likely lead to non-competitive shut-out and collapse. 

What about Collapse? Where are things going? 

1. Collapse has already happened to Detroit. Detroit refused to adapt to modern reality, hiding behind Cheap Oil inefficiency and High Profit vehicle sales (SUVs). While oil was cheap, their Compensation Vehicles sold well. When oil hit $4.50/gal in 2007, that Ego bankrupted those unable to adapt. The tax dollars went away, the lights and water are getting turned off neighborhood by neighborhood and the murder rate is one of the highest in the civilized world. Smart people have already left, nearly half the population at this point. Detroit was arrogant, and their city died. There are hundreds of Ghost Towns in the Western USA that are examples of what happens when a town doesn't matter anymore. This will continue. 
2. Collapse happened to New Orleans. Most of the people who fled Louisiana to escape Katrina did not return. They took their check and settled somewhere else. The US govt has not rebuilt the 9th Ward, merely paid men to clean it, badly, and didn't bother rebuilding the Mississippi coast either. It doesn't get as much press, because they're ugly poor people so who cares, right? Its not like Ugly People deserve to have civil rights or respect. This is how Americans feel about each other. The cult of celebrity is evil.
3. I am noticing repairs in New Jersey seem to continue with that pattern of New Orleans and Detroit, of deliberate and methodical economic abandonment. I expect that legal requirements to construct to current building code is a cost effective way to force poor black people out of those towns, and replace them, after sales of the land, with mansions full of rich white people. But New Jersey isn't racist.
4. When the Big One hits SF and LA, those will likely only face partial reconstruction, and only for the very rich areas. Underground utilities tend to be completely destroyed in the ground waves from earthquakes. The 1989 Santa Cruz quake caused most water and sewer pipes in the entire bay area to crack and required replacement. This took years and billions of dollars. A big quake today would result in instant loss of water and sewer, with potential cuts in natural gas lines, fires, and no water for fight fighting. Most of the damage in the 1906 quake was from fire. Even if there's no fire, or they don't spread, the cost of replacing all those pipes is in the trillions today. And that will cost tax dollars, probably from sales and property taxes. Think triple rent, with no showers and water that smells like sewage for several years. The rich will get fixed first, because they can PAY. The poor will get screwed, as always. Those apartment buildings and middle class homes that survive the quake will be torn down or left as ruins, perhaps claimed as "National Disaster Areas" permanently. Or turned into wildlife habitat parks. It has happened before. 
5. The part of Anchorage Alaska destroyed in the 1964 earthquake was turned into a park and a new city was constructed nearby on more solid ground. I have been there.

Economics is brutal. It isn't nice. Energy is all about what you can do with it. We've wasted a lot making big noises and having fun with monster trucks and muscle cars. It was great fun. But it's over now. Or will be very soon.

In a few short years, whether the President enacts speed limits and rationing or leaves it alone, we'll be paying more than we can afford for fuel and all the goods shipped by it. People are short sighted and greedy. It defines our species. I learn about scooters and motorcycles and home cooking and gardening because I am trying not to get surprised by terrible events that I have no ability to stop or even deflect.

Optimists pretend that we can thrive in a future bound by expensive oil, high unemployment, worthless currency, travel limitations, and ongoing tendency towards Totalitarianism (no civil rights). The needs of the many, the greater good. That's the same excuses used in Bosnia, remember. That's another human failing.

I encourage my readers to learn about scooters, bicycles, cooking, and developing salable skills outside of information processing. Stuff you can do with your hands, locally. Someday you will probably find yourself eating or not because of them. There's little point panicking due to Peak Oil. Its reality. It is reflected in actual economic trends being tracked by people who get paid a lot of money to advise others on what to do.

Poor people like us will die if we don't do our part to weather this particular storm. Someday, if our species isn't massively stupid, we will stabilize again and recover much of what is going to be lost in this Civil Interruption. After all, food still grows whether there's oil or not. Not as much, not as easily, and with a lot more labor required, but we don't HAVE to starve. We just have to work harder doing dirty jobs we never thought we'd have to do. Nobody goes to college dreaming of dirt under their fingernails, or feeling grateful towards a field of carrot or wheat or soybeans. That's our future.