Post Summary
The party could soon be over and Peak Oil could start to radically upset our current notions of travel and tourism. As costs rise, the world will become smaller again although there will nevertheless still be opportunities.
While the full impacts of global warming and their timings continue to be debated, the effects of a post-Peak Oil world are more certain and threaten to have deeper and more immediate impacts on the travel and tourism industry.
The idea behind this post then is twofold - 1) to determine whether I’ve got a little over-excited or whether this is a genuine problem and 2) assuming it to be an issue, what will be the effects?
What is Peak Oil?
The concept of peak oil is simple - there is a finite amount of oil in the ground and we have reached (or about to reach) the peak of the supply. Hereafter, there will increasingly be less oil to meet demand.
Arguably, fossil fuels and oil especially are the key to the modern world - they make nearly everything we take for granted possible - from mechanized travel through to abundant food, plastics, heating and most modern industrial processes. A world completely without oil is the childhood world of our grandparents - a world smaller and harsher in many respects.
I’ve raised the issue of peak oil with a number of knowledgeable energy industry people over the last few years and, to be honest, never received wholly comforting answers answers. The oil industry acknowledges that peak oil is an issue - we will start to run out of oil at some point. One industry insider told me that 2008 will be the first year when supply cannot meet global demand.
The best I’ve had by way of reassurance is , “Oh well, something will come along, it always does.”
So how will this affect tourism?
This isn’t just about the cost of travelling. The modern western agricultural model, for example, depends on fertilisers which heavily use oil in their preparation. Without them, crops will be less productive, meaning that food (whether animal or vegetable) becomes more expensive. By way of another example, think about plastic, another oil based product and just think how much in your house is plastic and how integral it is to modern life. Finally, if the cost of living rises, so do the wages needed to sustain employees. This list could go on but, in summary, nearly every aspect of our lives would become more expensive in a future where there is not enough oil to satisfy demand.
This will affect travel just as much as any other sector and here are a few thoughts on how this could affect the sector.
- It puts a brake on tourism expansion
As costs start to rise, people’s ability to take more and longer holidays becomes constrained. Long haul destinations start to become luxuries instead of one choice among many.
- People choose local
I recall that when I was young, my father told me that he had to wait until he was almost 20 before he got the opportunity to travel abroad - to France, some 100 miles from where he lived. I also recall how of all my school mates when I was young, only one came from a family rich enough to afford to fly overseas - and that was to Spain, incomparably exotic at the time but now just one choice among many. The rest of us had holidays that were more local and it seems to me that this will become more likely again.
Which is possibly good news for local destinations. Anyone who grew up in a coastal town in the UK is usually surrounded by the evidence of a once thriving holiday industry that went into severe decline when local people were no longer bound by economics in having to chose the British seaside over somewhere abroad. However, if the world becomes smaller again, these areas could see a renaissance in their fortunes.
- Travel becomes less convenient
Expensive oil starts to make public transport a more appealing option - but this means that travelers will be more at the mercy of the timetables than they are presently. In the event that air travel became probitively expensive, then rail transport (in Europe anyway) could become the dominant means of long distance travel once again.
Europe still has a working legacy of good public transport (however frustrating it is in reality sometimes) - I fear that this is not the case in much of North America.
- The Curse and Benefits of Petro Tourists - or how Canada can travel the world but become too expensive to visit
Of course, some areas will benefit in the short and medium term from oil shortages. These include primarily those countries with oil reserves and which will continue to suck in money from the rest of the world. At a geopolitical level this is a serious concern as many of the countries that stand to benefit the most are often the most unstable or are (potentially) inimical to the West’s current interests.
It also means that those petro-currency nations will become increasingly expensive to visit (think Norway already) but their citizens will enjoy higher standards of living compared to many other countries.
I suspect that Canada (whose oil reserves are second only to Saudi Arabia) will fall into this category - and I think the current strength of the Canadian Dollar vs the US Dollar is propelled as much by this as any mismanagement of the US financial system. I’m sure it’s great if you’re Canadian but, from a foreign travelers perspective, it’s already cheaper for me to visit the US if I’m prepared to substitute, say, Washington State for British Columbia.
But of course there will also be opportunities for non-oil nations that are seen as good value by travelers from the oil nations of Russia, Canada and (potentially) Venezuela, Nigeria and the Middle East. People in these areas will have money to burn and I’m sure some travel operators will become adept in helping them do that.
Suggested Links
James Howard Kunstler: The Long Emergency
Wikipedia:
Peak OilLincoln University, New Zealand: “NZ Government acknowledges seriousness of tourism researcher’s ‘peak oil’ claims”
VisitScotland: Scenario Planning: What if the Oil Runs Out?
We’re all doomed!
My feeling is that tourism and travel will be very different in forty years time but that it will not necessarily have continued on the growth curve we are currently used to. I think there will be a slow contraction in some areas and the current model of of tourism with its opulent abundance of choice will increasingly be a luxury.
However, there will be opportunities as well as challenges but I would be really interested to her your views on what I have written.
I’m aware that when you make guesses about how the world will be in the future, you invariably fall flat on your face. But, rather like the mid-20th century idea that we would all travel around strapped to atomic jet pack by the turn of the century, these guesses are as interesting for the way they reveal contemporary thinking as for the quaintness of their vision. So, if what I have written in baloney, I’ll be glad to have a laugh about it with you in 30 year’s time over a glass of rare Himalayan whisky served by a floating robot waiter in a geo-stationary luxury resort 100 miles above Africa.
This entry was posted on Wednesday, March 19th, 2008 at 7:59 am and is filed under Future trends, Opinion, Peak Oil Travel. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
