The Public and Social Services subcommittee examined a wide range of impact areas including health care and public health, education, social services, housing, energy utilities, police, fire, water, sewer and solid waste. In exploring the impacts of peak oil and natural gas on these essential services, the Task Force made several cross-cutting observations that are important to set the context:
The impacts of increasing oil and natural gas costs are felt first and deepest among vulnerable and marginalized populations. Rising oil and natural gas prices increase the cost of transportation, housing, food, and other goods and services. The sharp rise in gasoline prices in 2005 provided direct evidence of the effects of increasing fuel costs as people shifted their budgets from food to fuel. As a consequence of this, demands on food banks increased dramatically. In addition, the disabled, elderly, and people with the least economic resources are more likely to depend on public transportation. Increasing fuel costs and decreased social program funding may price even public transportation out of reach, or decrease special public transportation options. This can dramatically impact mobility and may lead to loss of jobs for some and further isolation for others.
Vulnerable and marginalized populations are already among the most at-risk members of society. They are least likely to have information or understanding about peak oil or to see it as a pressing issue. This population has the fewest resources to meet increased costs stemming from peak oil. Their housing and vehicles are often the least efficient, and they have little control over housing improvements or access to programs that would help.
In addition, these populations are the least likely to have the resources needed to protect their rights. Many are already vulnerable to being displaced by growth and development. Lack of integration or isolation of people and populations within Portland places them on the outside of both communication and information networks, as well as having fewer resources to adapt to changing circumstances. These are groups who are also frequently not represented in policy and planning discussions.
The economic impacts of peak oil will spread beyond those who are on fixed or marginal incomes. People who are currently better off will have less disposable income to spend on things other than energy and goods and services affected directly by peak oil. This is critically important, because public and social services are already highly dependent on private organizations to meet the demand for community programs such as food banks, cultural integration, services for the homeless and outreach to elders. Traditional citizen and business contributions to these private organizations will likely decline, as will foundation resources.
It is essential to recognize that marginalized communities have strengths, knowledge and skills that can benefit the broader community. The elderly have the experience of surviving in a much less energy dependent world, along with critical human skills that automation and mass production have replaced. Different cultural communities have social, health and other knowledge which has largely been lost in mainstream society. Poor people have skills for getting by with less and creatively stretching resources that the more advantaged population may lack. Most of all, different communities offer different perspectives and broaden the range of strategies and solutions brought to the table.
S2. Increasing costs and decreasing incomes will reduce health coverage and further stress the health care system, a system already in crisis.
About 16 percent of the population is presently uninsured, and another large proportion is underinsured Health care expenses have been rising at about 15 percent per year, four times the rate of inflation. In addition, an aging population is utilizing higher levels of health care. The medical/health care system functions on tight profit margins, and affordable health treatment for illnesses is becoming inaccessible for many. The effects of peak oil will exacerbate the trends of rising costs and decreased medical coverage.
Peak oil will cause several direct impacts on the medical/health care system. Peak oil will increase costs of medical services, from the cost of transportation and maintaining expensive facilities to the cost of medical equipment, supplies and pharmaceuticals. These increasing costs will accelerate current cost trends and could possibly result in reduced operating hours for clinics and/or closure of some facilities. As economic stresses stemming from peak oil take their toll, needs for mental health care and substance abuse treatment may increase.
The biggest impact, however, is the indirect impact of peak oil on health coverage. As the overall economy is stressed due to peak oil, businesses will continue to shift the costs of health coverage to employees and the number of uninsured and underinsured will increase. As a result, there will be less preventive treatment for a growing segment of the population. People will let health problems fester until they need emergency treatment in clinics and hospitals, at which point the advanced illness will be more difficult and expensive to treat. In combination with current cost trends, the conventional health care model may become unworkable.
Public health services (immunizations and control of contagious disease, sanitation, vector control, environmental health, etc.) are interrelated, and problems in one area may exacerbate problems in others. Increasing costs will challenge the budgets of governments, businesses and individuals.
To the extent that provision of public health services declines, associated public health risks will increase. This will put additional stress on the health care system, family budgets and absenteeism. The probability of these public health impacts occurring is uncertain, but impacts are serious if they occur. Putting resources into public health toward preventive care ultimately saves money for both society and individuals as later costs for medical health services decrease.
Contagious disease in particular may pose a specific risk to populations. These risks may occur for two reasons. First, the rate of immunizations may decline due to lower family incomes and loss of health coverage. The uninsured, low income, elderly and immigrant communities are likely to be most impacted. Second, people may be more susceptible to contagious diseases because of weakened immune systems due to physical and emotional stress.
Social services are most likely to be accessed by vulnerable and marginalized populations. This includes such services as child protective services, unemployment, food stamps, intimate partner violence, and private non-profit social services agencies like the Food Bank and Meals on Wheels. These services will also likely be utilized by low- to middle-income households that may not previously have needed them.
Many private and publicly funded social service organizations are already overstretched and cannot meet the needs that exist. Under a peak oil scenario, both the number of people needing services and the amount of services will increase. However, the ability to serve the increased needs will decrease as tax revenues and charitable contributions decline. In addition, current laws, statutes, administrative rules and standards may not apply well in a society struggling to serve those suffering the economic effects of peak oil.
S5. Heating, maintenance and monthly housing costs will consume a larger share of household budgets and push people toward lower-quality housing choices.
The housing options available to people form a hierarchy: 1) homeownership; 2) rental; 3) assisted housing (including public, subsidized and transitional housing); and 4) homeless shelters. It is in the community’s best interest to keep people as high on this hierarchy as possible. In Portland, it is becoming steadily more difficult to keep people adequately housed. This situation has been aggravated by the recent rise in home prices in the Portland metro market. Increasingly risky mortgage instruments (e.g., interest-only, 50-year, minimal down payment) have been used to make housing “affordable.” These mortgages pose potential financial concerns to homeowners in a severe economic decline, threatening to push people lower on the housing hierarchy.
Housing costs will continue to consume a larger share of household budgets due to higher heating cost and general economic pressures such as unemployment, wage loss and inflation. This would exacerbate an already over-leveraged housing market and increase foreclosures. There will be downward pressure on the hierarchy of housing options as more people slide toward shared housing, assisted housing or homelessness. Eventually, lower incomes may force housing prices and rents down, but not soon enough to avoid crisis situations for many households. As incomes are stretched, home and facility maintenance may suffer, causing the city’s housing stock to deteriorate. This would affect people’s comfort, and eventually safety or sanitation. The price of housing located near jobs, services, and accessible transportation may increase, forcing low-income and vulnerable populations to move to areas without these attributes, making it more difficult and expensive for them to get to services and jobs.
As the cost of heating a home increases, existing federal and utility bill-reduction programs will struggle to meet the increasing demand for their services. While Portland’s relatively mild climate may not place people living in unheated homes at direct risk of dying from the cold, both the frequency and severity of illness are likely to increase substantially.
Schools in the Portland metro area are exposed to a limited number of impacts due to peak oil, but they are critical issues, as the education system is a core societal activity. The cost of heating and lighting schools, especially older buildings, will rise. This could result in budget reductions in other areas, such as routine and capital maintenance expenditures, which are already squeezed. In addition, the cost of transporting students will increase, and some parents who currently drive their children to school may stop doing so, placing a greater transportation burden on the school system. As school budgets are squeezed by higher prices, the current trends of teacher, curriculum, school year and program cuts could get worse, and the quality of education could decline.
Public school enrollment may increase as private school tuitions rise and population moves back into Portland, although this could be partially offset by an increase in home schooling. Marginalized populations will be affected if there is a reduction in federal funding for food programs in the schools. Finally, there may be increased pressure for schools to become more of a multi-function community resource, putting more pressure on the schools’ maintenance and capital upgrade budgets.
S7. It is unclear whether demand for electricity will increase or decrease; electric loads served by natural gas-fired generation will have to be reduced or replaced by renewable energy.
Portland’s electricity is provided by Portland General Electric (PGE) and Pacific Power; natural gas is provided by Northwest Natural. To meet the demand for electricity, electric utilities must either produce power from their own generating plants or purchase electricity from other producers under contract or on the spot market.
As demand for electricity grows, utilities must expand capacity to meet the load. The Oregon Public Utility Commission requires utilities to develop Integrated Resource Plans (IRP) identifying the least-cost ways to meet load growth, including energy efficiency and renewable energy. Since the early 1990s the least-cost way to meet load growth has routinely appeared to be natural gas generation. Natural gas currently is used to generate between 7 and 25 percent of the electricity distributed in Oregon, depending on weather conditions and utility company. Utility IRPs use or modify forecasts of natural gas prices from one of several national economic consulting firms. These forecasts show natural gas prices dropping for the next several years, then increasing back to current prices and holding steady for the foreseeable future. These price assumptions do not appear to take into account any impacts from peak oil on energy prices.
Though utilities serving Portland do not rely on oil as an energy source, they do use large quantities of natural gas. World natural gas production will eventually peak like oil; natural gas production in North America has already peaked, and it is questionable whether imported liquefied natural gas (LNG) will be sufficient to maintain current levels of natural gas use, much less allow an increase. In addition, since oil and natural gas are substitutes in many uses, higher oil prices are likely to drive up natural gas prices as well.
The biggest impact of peak oil on both electric and natural gas utilities will be the effect that rising prices and limited supplies of natural gas will have on their costs and rates charged to consumers. The more dependent electric utilities are on natural gas generation, the more electric rates will rise along with natural gas prices. In the long run, current natural gas generation will have to be replaced with non-fossil alternatives. Any utility commitments to more reliance on natural gas generation in the short run will increase long-term exposure to increased costs. Even if utilities generate electricity from alternative resources, these currently cost more than power from natural gas plants, so rates could increase in any event. Over the long term, however, less dependence on natural gas generation should reduce electricity prices.
The effect of peak oil and natural gas on demand for electricity is uncertain. As oil and natural gas prices rise, some businesses may scale back or shut down operations, which would cause demand for electricity to drop. In addition, business and residential electric customers will conserve electricity as rates increase and budgets and incomes are stretched. Significant demand destruction could cause rates to increase as utilities try to recover fixed capital investments. Over the long run, there may be an increased demand for electricity as consumers convert to electric heating, plug-in hybrid or electric cars and other substitutes for oil and natural gas.
Police and fire services are critical and are expected to be given priority access to fuel (whether gasoline, diesel or biofuels) at all times. Police are expected to be affected more than fire services.
In a scenario of gradual energy decline, peak oil will cause dislocations in employment. As neighborhoods, families and individuals become more stressed, there may be an increase in drug and alcohol use, domestic disputes and violence, loitering and property crimes (shoplifting, burglary, larceny, robbery, etc.). As social services are reduced, police may become the primary social service provider. Demand for fire protection services may increase because of unsafe heating methods and weather-related medical emergencies.
If peak oil is punctuated by sudden price spikes or supply cutoffs, impacts will be more severe and may include sudden and severe dislocations in transportation, employment and the price and distribution of goods. Tempers will flare and panic could set in. Police and fire personnel will be first responders in such situations.
These services are critical to the health of Portland’s citizens. However, the impacts of peak oil on these services would be minimal. Portland’s water system is primarily gravity fed, and most of the energy used in the water and sewer systems is electricity. To the extent that water and sewer services require energy to continue operation, they are anticipated to be given priority. Rates may rise slightly as a result of higher energy prices, but probably not dramatically.
Solid waste pickup depends primarily on diesel for its trucks, so would be more at risk than water and sewer. However, as with water and sewer, solid waste pickup is assumed to be a priority if resources become limited. It is also possible that solid waste may be reduced post-peak as packaging is reduced and people use less, make more efficient use of scarce resources, and recycle or compost more.
The worst-case scenario associated with peak oil and natural gas is the unraveling of the social fabric. The Task Force does not predict this will happen, and its recommendations are intended to help guard against it. However, the potential impacts are so large that social unraveling deserves mention.
Society will not collapse simply because of a sudden or extreme reduction of oil and natural gas supplies. Severe social disruption could occur, however, if the collective response breaks down. Without community cohesion, self-organization and teamwork, individuals may feel isolated and focus only on their own survival. This outcome would severely magnify the impacts of economic dislocations, mental health problems and crime described elsewhere in this report.
A strong community is therefore critical to finding and implementing solutions to overcome the impacts of peak oil. Equally importantly, a major part of the response to peak oil will come from the citizens themselves, not just government programs. These solutions will be fostered if there is a sense of community and stymied if there is not.