Oil plays an essential role in almost everything that touches our everyday lives. From the food we eat to the means by which we transport ourselves, our goods, and our services, to what we grow, build, have, own, need, and do, oil is almost always an important element. But the painful truth now and soon is that the ready supply of oil and gas that we almost always take for granted is on its way to becoming not-so-ready—recent production increases notwithstanding.
What happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? Who delivers that message to the designers and producers and shippers and end users? What’s their Plan B? And how will we respond when decisions are taken out of our hands? Where exactly will the dominoes tumble?
There is nothing on the horizon that will work as an adequate substitute for the efficiencies and low cost and ease of accessibility that oil has provided us. We simply do not have the means to make that happen—not the technological capabilities, not the personnel, not the industries, not the leadership … yet. Clearly, we do not have enough time to do it all with effortless ease and minimal disruptions.
Piecemeal approaches that address some small aspect of need for some short period of time in some limited geographical area for just a few consumers is in the end a monumental waste of limited resources, time, and effort. We can’t wait until we’re up to our eyeballs in Peak Oil’s impact to start figuring out what to do. We’re too close as it is. We’re going to have to be much better, much wiser, and much more focused. **
Here’s the latest contribution to my Peak Oil’s Impact series—observations and commentary on how Peak Oil’s influence will be felt in little, never-give-it-thought, day-to-day aspects of the conventional crude oil-based Life As We’ve Known It. Changes in all that we do, use, own, make, transport, etc., etc., are inevitable. A little food for thought….
I came across an interesting article I had saved from late 2011, discussing business strategies worth considering. The title alone: “Safeguarding Your Supply Chain Against Rising Oil Prices” suggests it would be worthwhile for corporate executives whose businesses require juggling inventory and labor costs along with issues surrounding one or more distribution center locations in their supply and distribution chain.
In an era of rising (or fluctuating) oil prices, business leaders would be wise to consider author Lorcan Sheehan’s advice:
The challenges that ensue can negatively impact your supply chain if your infrastructure is not equipped to handle quick adaptations. However, by planning ahead and reevaluating where your supply chain activities are performed, as well as your current processes, you can face these challenges head-on and lessen the impact on your operations and your bottom line.
I don’t even pretend to be an expert on business practices, but this brief read contains a range of solid advice about the need for planning in advance of escalating prices. Basic supply and demand tells us that as the demand for fossil fuels continues to grow, and the supply and/or energy efficiency of what is being supplied decreases, prices will rise. The dominoes for any one or all businesses of any size dependent at least in part on fossil fuels will then tumble quickly.
As I urge repeatedly, planning across the board is among our highest priorities, and well in advance of the more obvious and inevitable impacts Peak Oil will impose on all of us.
The scope of considerations Mr. Sheehan offers suggests that the planning and risk mitigation efforts are not something business executives can slap together in a half-day conference. Product needs; labor costs; taxes; environmental considerations; utilizing multiple routes to market; the possibility or or need to move supply chain activities; inventory maintenance; assembly locations; shipping, along with product packaging and redesign issues are all discussed in this article.
Similar considerations on both smaller and larger scales must be planned for by every business entity and government agency. Last-minute is not a strategy anyone should rely upon. Worth postponing?
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** Opening paragraphs adapted from prior posts: