Mary Hegan. (photo supplied)

We're all in for a rough ride if global oil production dwindles as expected over the next 10 years, but the need to find alternative fuel sources creates huge business opportunities, experts say.

That was the message delivered at a forum last month hosted by the city's Environmental Advisory Committee (EAC).

Less than a week before U.S. President George Bush told Americans in his State of the Union address they were "addicted to oil," the 300 participants at the Crude Awakening forum were asked to consider how prepared Ottawa is to kick the habit when oil becomes too rare and expensive to fuel our economic and social structures.

The world's oil and natural gas supplies are not renewable and will eventually run out. Whether they run out with a bang or a gurgle is the subject of intense international debate, and has given rise to the concept of "Peak Oil." This refers to the point in time when world oil production crests, and then steadily and inexorably decreases. After the peak, which some analysts say has already occurred or will occur within a few years, supplies will plummet and prices will shoot up to unthinkable highs.

Organizers of the forum painted a bleak picture of city life in the aftermath of peak oil production:

"The chief effect in Ottawa of the decline of world oil production will be unemployment caused by the relentless slowing of the world economy. Many families will have no employed member. Unemployment is likely to be at least as severe as it was during the depression of the 1930s. Families on low and average salaries will be stressed by the rising real costs of transportation, food, and most goods," the audience was told.

In his remarks, Mayor Bob Chiarelli said finding solutions is "a race against the clock," and admitted that "there's a lot more we can do, and we're going to accelerate that agenda as much as we can."

The solution, however, lies well beyond the municipal sphere. "The legislative framework that's required to get significant movement on the part of business is federal and provincial. It's very difficult to have the city go (it alone)," the mayor said in an interview after the forum.

"What we are doing is trying to create the incentives for (business) to come on-side, for example by forgiving development charges in order to clean brown fields, and create environmental buildings," the mayor added.

Speaking at the forum, EAC chairwoman Mary Hegan said that, "the social impacts of the peaking of cheap and accessible oil are many and far-reaching." She urged attendees, in addition to making responsible individual choices about oil consumption, to lobby governments "to lay the groundwork for resiliency, and help us adapt to anticipated threats and crises as painlessly as possible." According to Ms. Hegan, preparing for Peak Oil means "rebuilding our community on a framework which includes social and environmental solutions as well as economic ones."

That's the right approach to follow says James Meadowcroft, a public administration professor at Carleton University and Canada Research chair in Governance for Sustainable Development. He believes Peak Oil is real, but admits that timelines for oil depletion vary extensively within the academic community.

The prediction of U.S. petroleum geologists in the 1950s that U.S. domestic oil production would peak in the early 1970s "was basically right," Mr. Meadowcroft said, but nailing down when the world's oil production will peak – and some credible experts believe it could be next year – is much more complicated.

"Our rate of use is increasing rapidly," he said, and discovery of new reserves has slowed dramatically in the past decade. "Since 1985, we've used as much oil as we used before 1985."

But there is a silver lining for business, Mr. Meadowcroft added. "There are huge opportunities for business to innovate, create new markets, and develop all sorts of new products and technologies that are going to be of interest." In many cases, the technology to save or manage energy does exist but it "hasn't been packaged in an entrepreneurial way."

Some Ottawa businesses have already taken up the Peak Oil challenge to turn a profit on going green and planning for spiralling fuel costs.

Paulina de Gonzague, an Ottawa sustainability coach, takes a strategic approach to big problems such as Peak Oil. She said the problem with many leadership challenges in business is not "how to get new ideas in, but how to get old ones out."

Much of her coaching is inspired by concepts and techniques developed in Scandinavian countries, widely considered to be leaders in sustainable development. She encourages clients to follow "a rigorous way of planning the new Industrial Revolution."

"The old Industrial Revolution – the one that occurred in the last 150 years – wasn't designed," she said. "It ended up putting billions of pounds of toxic material into the air, water and soil every year."

Sustainable development, on the other hand, is about "moving the human mind towards innovation for the 21st century that's profitable, and instead of thinking cradle to grave, it's thinking cradle to cradle."

Referring to Peak Oil, Ms. de Gonzague says "it's like a chess game: once you know the rules, your mind becomes very creative about your opponent, which is the unsustainable way we're now behaving."

Wilson Wood, co-owner of the Ottawa car-sharing company Vrtucar, offers a daily solution to high fuel and vehicle-operation costs.

He started in February 2000 with one car and four people who shared the expense of operating it. Now the company has a fleet of 25 cars parked in 18 locations with more than 500 participants. Car-sharers pay a membership fee based on frequency of use and go online to book when they want the car. Clients then pay a per-hour or per-kilometre rate, and return the car to one of the designated spots throughout the city when they've finished.

Mr. Wood said that, statistically, every car used for car-sharing keeps seven other cars off the road. The trend is really catching on with people who don't want the expense and hassle of owning a car, but who occasionally need the convenience of one.

"Business really picked up when gas hit $1 per litre," he said. "We're adding five or six new cars every year."

While managing vehicle usage is one way to fight rising energy costs, fuel management is another. J.C. Gervais is the Ottawa-area development manager of 4Refuel, a Vancouver-based firm that started in 1995 as an on-site diesel refuelling service.

But by the late 1990s, customers were becoming more interested in their consumption levels and patterns. In response, 4Refuel started focusing on fuel management and eventually went on to create Fuel Management On-Line (FMO). That database tool is part of a complete fuel management system that monitors and collects individual engine data – such as idling time and speed – and e-mails clients about their fuel consumption.

Mr. Gervais' operations in Ottawa have increased from 220,000 litres per month five years ago to more than 370,000 litres. His clientele includes the O-Train, Coca-Cola, The Beer Store, Dufresne Piling, M Roc Drilling, Natrel and ERB Transports.

4Refuel's owner Jack Lee said that for most of his clients, energy is the number two operating expense after labour.

"If you're a company using 100,000 litres of diesel per month, and we help you save five percent—and sometimes it's as high as 10 or 12 per cent – then that's 5,000 litres at $1 per litre, or $5,000 per month," he said. Those savings don't include wear and tear on the engine, reduced accidents or lost productivity time when a vehicle or machine is left idling. "If you have a $200,000 asset (like a tractor trailer), you have a right to say how it's driven or operated."

By Jeff Esau

Special to the Ottawa Business Journal