The "Peak Oil" phenomenon effects the basis of our economy. The black gold is getting rare, increasing prices are just the beginning. A regional oriented mode of economy that reduces the dependence on oil might be a solution for this problem.
What is “Peak Oil”?
Peak Oil is the situation when the global production of oil can't keep up with the global oil consumption. The oil deposits will last for some time but it is getting more and more difficult to maintain the production speed that is required to satisfy the demand. The point when the demand for oil exceeds the available capacity will go down as “Peak Oil”.
What is the effect of “Peak Oil”?
It is essential that the scarcer a good is (reffering to its demand) the higher is its price. Mineral oil is the basis for every industrial nation. Because these nations are further growing the demand for the liquid energy storage “oil” is increasing. The current price development at patrol stations was easily predictable with this knowledge. (See C.J. Campell in his presentation at University of Clausthal in 2000: Peak Oil – A turning point for mankind). In future the rising prices will be accompanied with the fact that mineral oil will simply be not available any more.
For the industrialised countries in the world this is a dangerous situation. Its economies are highly dependent on the black gold. Without oil the fewest employees could get to work. Without oil the fertilizer production for conventional agriculture is at risk. Without oil the chemicals industry misses an important basic material. Without oil hundreds of thousands oil heaters can't be used. Without oil no truck will bring goods to the supermarkets. Without oil the supply of the people is not warranted if there is no change in the current mode of economy. What can be done against these threatening tendencies?
Abstract: What are regional currencies?
Regional currencies (regional money) are a relatively new tool for economy. Nowadays in Middle Europe they are used as secondary currency besides the Euro as a mean for exchange. (BBC: Germans take pride in local money). In times of general low liquity and mass unemployment more and more people are interested in the new groups emitting regional currency. Regional currencies are only used within the specific region for which they are made. These regional means for exchange complement the Euro. They have names like "Chiemgauer", "Berliner", "Lausitzer" or "Urstromtaler" (examples from Germany).
The purchasing power which is attached to this currency can not – contrary to the Euro – outflow the region because they are not accepted as means of payment somewhere else. Because this purchasing power remains within the region it supports primarily local small and medium-sized businesses. These markets are not very interesting for large-scale enterprises because regional currencies are only useful for regional exchange and not for global trade. Regional currencies help to exchange regional generated goods and services and support regional economic cycles.
Are regional currencies useful when dealing with the “Peak Oil” Problem?
Regional currencies create regional markets besides the Euro-market. The turnover in regional currency must again be spend within the same region. Therefore people who use the Regio-money are looking for providers and suppliers in their own region whereupon regional economic cycles start working. That is why regions with regional currencies tend to become self-supplyer without abstaining from the global division of labour which is further available by using the Euro.
A regional self-sufficiency shortens travel and transport distances. Shorter transports preserve the nature and is an answer to the “Peak Oil” problem.
Complementary possibilities for development: “regional oil production”
Initiatives like regoel try to encourage the “regional oil production”. The idea is to compensate parts of the oil demand with oilseed like sunfower, rape seed or hemp. The oil in these plants make “regional oil” possible even though it is not possible to produce so much of it to satisfy completely the needs of an capitalistic economy. The development of the economic structures that are needed in order to use and benefit from the “regional oil” potential are currently in progress.
“Oil production” with plants is CO2 neutral. The carbon dioxid emission that occurs by the combustion of the oil was absorbed by the plants while growing.
A regional cultivation of oilseeds complements the concept of a regional mode of economy: the agriculture could generate an extra income as supplier industry for energy. Further, a plant like hemp is not merely oil producer but also interesting for medicine and the paper and textile industry. The complete value creation chain – from the production and processing to the distribution – maintains within the region and creates local jobs.
Due to “Peak Oil” it is not possible to keep the current mode of economy. With the help of regional currencies a regional orientated mode of economy can be initiated and formed. This helps to transform the economy to handle the Peak Oil problem.
Norbert Rost, www.regionales-wirtschaften.de, last update: 09.12.2007, translation by Friedemann Ebelt, Original article: Regionales Wirtschaften mit Regionalwährungen kontra Peak Oil