As oil prices breach the psychological barrier $100 a barrel, and with petrol now costing well over £1 a litre, the world is coming to terms with the end of cheap oil, and beginning to wonder what the future holds. The price of oil may now soar further if we have reached the point of "Peak Oil", where more than half of available supplies have been used up, and from now on the price may be driven by panic buying and financial speculation, as much as by the rapidly growing demand for oil from industrialising countries like India and China.

At the same time comes news of double digit increases in the price of gas and electricity, and soaring food prices boosted by land being used for biofuels instead of food production. Economists are warning of recession in America, that may drag the rest of the world with it. For years environmentalists have warned of the "Limits to Growth". It seems as though we are now reaching a significant limit, where the human population is making such demands on the Earth's natural resources that those demands can no longer be met from conventional sources. We appear to be entering an era where oil can no longer supply our energy demands. So what will the future hold?

Several experts in the field have given their view on what will happen to oil prices from now on -

Julian Lee Senior energy analyst, Centre for Global Energy Studies

"On the one hand Opec has under-estimated the level it needs to produce, while also adopting a policy of keeping the market relatively tight to push prices up... This is a very short-term windfall for them, though. They seem to believe that the world can live with $100 oil... But this will ultimately drive the search for alternative forms of energy and greater efficiency."

Ian Henderson Manager of the JP Morgan Natural Resources Fund

"The average price for 2008 will certainly be higher than it was for 2007, but the implications for most us will be zero. It's a question of pain threshold. Just look at Perrier. Most people pay more for bottled water than they do for petrol. So then it becomes a question of what you are more willing to give up: transporting yourself to or from London, or having a bottle of water."

Janet Henry Global economist, HSBC

"If the oil price stays at these levels it will become more of a constraint on growth, especially as it increases pressure on corporate margins and squeezes household incomes, as people no longer have access to easy credit... Corporates have dealt with it so far by keeping a lid on other costs, principally wage growth, which has remained very low in an era of phenomenal corporate profitability."

Gerard Lyons Chief economist,Standard Chartered

"A permanent oil shock is one way of thinking about it.We think that the US will go into recession this year so the price could drop back down to around $70 or $80 per barrel. But any easing will be temporary. We currently have a firm floor and soft ceiling on oil prices. We are anticipating a price of $150per barrel in three to five years."

Jim Rogers Famed investor and commodities bull

"There has been no major oil discovery for the last forty years, and all the major reserves are in decline... When you have bull market like this, by the end prices get to hysterical levels that even bullish people like me cannot conceive. By 2018 or 2019, we could get to $200 or $300 per barrel. When it gets to $150 per barrel, they'll start drilling on the White House lawn."

This situation was predicted by Jeremy Leggett in his book "Half Gone", in which he argues that we have already passed the point of Peak Oil, and must now look to renewable energy sources for our future power needs.

However there are worrying signs that nations with significant coal reserves, including China, will turn to coal to meet the burgeoning demands of their rapid industrialisation, while other nations lacking fossil fuel resources will turn to nuclear power. The case against coal is clear. It is a massive producer of sulphuric acid which causes acid rain, and more importantly of carbon dioxide, the main greenhouse gas. Carbon sequestration, whereby filters are installed to remove the carbon dioxide and it is then stored, is an expensive and unproven technology. The case against nuclear power centres on the fact that no long-term safe storage solution has been found for nuclear waste, and the claim that it produces no greenhouse gases is flawed, as that does not take into account the emissions produced by mining uranium, which is itself a diminishing resource.

One solution to the energy crisis may lie in the "Transition Towns" movement. The first town in the UK to embrace a future without oil was Totnes in Devon in September 2006, which has for a long time been associated with alternative living and New Age thinking. Since then others, including Lewes, Stroud and Falmouth have joined it. However, it is not just rural towns. Bristol, Brighton, and London's Brixton district are taking the idea to cities, and Forest Row in Sussex has become the first transition village. The idea is also catching on aboard. In the US, over 400 mayors have signed up to the US Mayors' Climate Protection Agreement, which pledges to cut greenhouse gas emissions and meet the goals of the Kyoto protocol. There is even a Transition Town in Australia.

The idea of Transition Towns was started by Rob Hopkins, who comes from a background in permaculture, and lived in Ireland before moving to Totnes. It is based around community projects that prepare for life after oil. Hopkins developed his idea in Kinsale, a small town of 7,000 people in West Cork, Ireland. In Kinsale he developed an Energy Descent Plan, which was enthusiastically embraced by the local Council. He believes that to motivate people to change you have to present an attractive alternative: "We rely on oil so much, it is obvious that life will have to change dramatically when it starts to run out……A future without oil could be better than the present if we use our imagination and think creatively."

One of the key motivations behind Transition Towns is the concept that we are on the threshold of "Peak Oil", the year when oil extraction peaks, after which we will all have to manage with an oil ration that will drop by 3% every year. The cumulative impact of this is a 50% reduction in oil by 2030. It is estimated the world currently consumes 84m barrels of oil a day and that the International Energy Agency predicts this will rise to 116m barrels by 2030. It is clear from these figures that there is going to be a crisis of supply being unable to match demand, particularly as the remaining oil becomes of a lower quality, and increasingly comes from sources from which it is more difficult to extract, requiring more energy in the process. As demand outstrip supply, the price of oil will rise rapidly, pushed ever higher through financial speculation. The Association for the Study of Peak Oil says that of the 65 largest oil-producing countries, 54 have passed their peak of production. It is estimated there are only around 1 trillion barrels of oil left and the world currently consumes around 29bn of those a year.

The first Transitions Town, Totnes, has introduced its own "Totnes Pound" that can only be spent in local shops. The idea is to keep local wealth in the community rather than see money swallowed up by multi-nationals as part of the global economy. Totnes already had a thriving L.E.T.S (Local Employment and Trading Scheme) before it became a Transition Town, and was therefore a receptive audience for Hopkins’ concept. As part of the process of launching the project in Totnes, Hopkins and friends conducted "oil vulnerability auditing workshops" with local businesses to see how they can reduce their reliance on oil. Meanwhile, they have also been working on re-skilling the local community, running workshops on growing fruit and vegetables, bread-baking and sock-darning.

Transition Towns mean different things to different people. For example Duncan Law, a volunteer for the Brixton project, was attracted to the concept because it promotes community spirit, and and make a difference quickly: "I've found that climate change deals with the invisible and has very little positivity about it, whereas this is all about positivity. Everybody can get stuck in and design the change - it is very much a bottom-up initiative."

Transitions Towns are catching on fast, and have led to the establishment of a charity, Transition Towns Network, which Rob Hopkins has founded with colleague Ben Brangwyn. They aim to support new additions to the network, and inspire other towns to join them. The process of becoming a Transition Town is very much in our own interest as they explain:

“Transition Towns draws on the collective genius of the local community to build resilience through a process of relocalising, where feasible, all aspects of life. A town using much less energy and resources than currently consumed, could, if properly planned for and designed, be more resilient, more abundant and more pleasurable than the present. A resilient community which is self-reliant for the greatest possible number of its needs, will be infinitely better prepared than existing communities with their total dependence on heavily globalised systems for food, energy, transportation, health and housing.

The Transition Towns Network have produced a primer to help new additions. They recommend the formation of a formal organisation with a constitution and promote working with local government to achieve change. The primer deals with “7 Buts”, possible objections to the idea of Transition Towns, and sees the establishment of a Transition Town as a 12-step process:

1. Set up a steering group and design its demise from the outset

2. Awareness raising

3. Lay the foundations

4. Organise a Great Unleashing

5. Form working groups

6. Use Open Space

7. Develop visible practical manifestations of the

project

8. Facilitate the Great Reskilling

9. Build a Bridge to Local Government

10. Honour the elders

11. Let it go where it wants to go…

12. Create an Energy Descent Plan

Transition Towns are something we are going to hear a lot more about in coming months as the mainstream media catches on to the idea, and people realise that it is in our own interest to reduce our dependence on oil.

Transition Towns

http://www.transitionstowns.org - the homepage of the Transition Towns Network, based on a Wiki that some of the Transition Towns use to communicate with residents and each other.

http://www.transitiontowns.org/TransitionNetwork - information about the Transition Network, a charity set up to promote the concept of transition towns

http://www.transitiontowns.org/TransitionNetwork/Mulling - listing of communities that are talking to us regarding the possibility of adopting/adapting the transition model for themselves

http://www.transitiontowns.org/TransitionNetwork/Newsletter - including details of new transition training courses

http://transitionculture.org/ - Rob Hopkin's blog

Peak Oil

www.peakoil.net

www.energybulletin.net/primer.php - a Peak Oil information site

www.energybulletin.net - news on energy issues

www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf - the Hirsch report, produced for the US government in 2005. A call to urgent action to mitigate the effects of Peak Oil.

Robert Heinberg, author of “The Party’s Over: Oil, War and the Fate of Industrial Societies”, “Powerdown: Options and Actions for a Post-Carbon World”, and “The Oil Depletion Protocol : A Plan to Avert Oil Wars, Terrorism and Economic Collapse”

Climate change

http://www.ipcc.ch/ -The Intergovernmental Panel on Climate Change

?http://www.realclimate.org commentary by working climate scientists on breaking climate news stories

http://www.metoffice.gov.uk/research/hadleycentre The Hadley Centre – the Met Office’s bureau for researching the potential effects of Climate Change.