'Building more roads in response to congestion is the economic equivalent of telling an obese man to buy bigger trousers

Who will be the last man to use the last drop of oil in his car? Will he be a tyrant, a president or a billionaire? Maybe the last stash will come from a battered jerry can of petrol, which has been hoarded and squirrelled away for years. How much do you think the last drop will cost? How impotent will he feel as he watches the petrol gauge move to empty, never again to be replenished?

What will the world look like on that last day? Will it be a dystopian Mad Max type wasteland, destroyed by wars over the last drop of oil? What are the chances that the last day will be welcomed by a sensitive green society that has prepared for this eventuality for decades?

Human nature suggests that the green image of a tranquil last day is not likely and it is more likely the last day will be preceded by panic and anger. For example, how many people will have starved because the productivity of agriculture will fall precipitously as dwindling petrol supplies dry up? These are not questions we ask ourselves everyday, but surely this day will come and our own children might see it.

The world is involved in a monumental resource battle as the irresistible force of an exploding global population smashes into the immovable object of finite resources.

While cycling around Amsterdam recently, it struck me that cities like the Dutch capital will be among the best prepared for the end of oil. Of course, life there will change in a most dramatic fashion -- as it will everywhere. However, by creating a consensus around cycling, urban living, public transport and fuel efficiency, the Dutch are pre-empting the inevitable.

Maybe, every time they cycle to work, they don't see this decision as training for the last day, but this is exactly what it is. The people of Amsterdam are doing the hard part today to make sure that when the hard part really comes, that they will find it easy. The interesting aspect is the "hard part" isn't hard at all. In fact, cycling around on narrow streets with few cars gives you an almost childlike sense of freedom.

Contrast this Dutch approach to urban transport within Ireland. In our planning, with our refusal to go high-rise and our increasingly spread-out, car-dependent, commuting model, we are going in the wrong direction. By building more roads and buying more cars in response to congestion, we are fooling ourselves. This is the economic equivalent of telling an obese man that the solution to his fatness is to buy bigger trousers.

The news coming from the energy sector suggests we have precious little time left. Last week, both the Financial Times and the Wall Street Journal told us that Russian oil production had peaked. Russia is the world's second largest oil producer and the implication of this announcement from Lukoil, Russia's biggest oil company, is frightening. In addition, Mexico -- the US's third largest source of oil -- announced that it would not be an oil exporter in a few years. Meanwhile, the North Sea's output is declining rapidly.

What is the world doing about this? We have responded by bizarrely growing food to use as fuel! This, at a time when there are food riots all over the third world, seems almost grotesquely surreal. Corn -- the staple for the world for thousands of years -- is now being grown to feed engines, not people! This is not a long-term solution. In fact, the idea of food for fuel should be seen as an indicator of just how serious the energy crisis is and how close we are, not just to an uncomfortable spike in the price of petrol, but also to a monumental shift in the price of all energy.

Ireland should prepare for this now by using planning as the key instrument to change our behaviour. In fact, we should use the slump in the economy to take stock and learn a few lessons.

The major lifestyle lesson of the past few years is that sloppy planning leads to urban sprawl. If you combine this with the deregulation of financial markets, which allows credit to cascade into the economy, you get a housing bubble which results in lots of worthless houses being built in the wrong places.

This is what we have ended up with; loads of empty houses in parts of the country with few people and not enough accommodation in the part of the country with the most people. So we have thousands of once expensive, second homes unoccupied and not enough fairly-priced, first homes for those who need them!

One way to solve this is to build up not out, creating the population density to make new public transport investment in trams and trains affordable. In the 1970s, the Dutch decided to move the old port of Amsterdam out of the city, freeing up valuable land, reducing congestion and giving the new port access to the road and rail network. Dublin could do exactly the same. Dublin's port is a waste of space. It could be moved and built on. This idea is hardly new, it's been knocking around for a while, but the energy crisis makes it imperative.

Developments like the Point Village and U2's tower are the future. Similar ideas are being floated in Cork, down by Pairc Ui Chaoimh, while anyone who has tried to get around Galway at rush-hour will realise that it can't sustain more suburban sprawl. Creating new towns, with mixed use shops and residential developments in the one area is the only way to respond to the world running out of oil.

There are lots of ways that a government with a clear vision could do this. Give out free bikes, for example. I know this sounds odd but why not? No one could argue that free education did not prepare the society for the challenges of globalisation, why not prepare the population for the coming energy crisis -- where oil could be at $200 or $300 a barrel -- with free bikes?

The State could also cut public transport fares by half to encourage use. The basic tenet of economics is that people respond to price changes, so use economics creatively. We could reward development that is environmentally logical and penalise development that is not. These are all pretty simple things. Cost these initiatives, figure out how to finance them and do it.

The Dutch have shown us the way and have been repaid in spades by tourist revenue alone. So why don't we break the habit of a lifetime and prepare for the coming energy depression? Given the certainty of the last day of oil, we owe it to our children to ready them for the greatest revolution in living the world has seen for centuries.

www.davidmcwilliams.ie

dmcwilliams@independent.ie