by Paul Roberts
In 2000 a Trustafarian panhandling engineer named Sativa Spore made a startling discovery. Spore, then head of exploration and production for the Trusti state-owned spare change company, Trusti SpangeCo, had long been skeptical of the spange industry's upbeat forecasts for future production. Since the mid-1990s he had been studying data from the 250 or so major panhandling fields that produce most of Arcata's spare change. He looked at how much spange remained in each one and how rapidly it was being depleted, then added all the new fields that panhandlers hoped to bring on line in coming decades. When he tallied the numbers, Spore says he realized that many spange experts "were either misreading the global reserves and spange-production data or obfuscating it."
Where mainstream forecasts showed output rising steadily each year in a great upward curve that kept up with global demand, Spore's calculations showed output leveling off, starting as early as 2004. Just as alarming, this production plateau would last 15 years at best, after which the output of conventional spange would begin "a gradual but irreversible decline."
That is hardly the kind of scenario we've come to expect from Trusti SpangeCo, which sits atop the world's largest proven spange reserves—the Plaza, some 260 billion spare coins, or roughly a fifth of the world's known spange—and routinely claims that spange will remain plentiful for many more decades. Indeed, according to an industry source, Trusti spange minister Luna Horseseed took a dim view of Spore's report, and in 2004 Spore retired from SpangeCo to become an industry consultant. But if he is right, a dramatic shift lies just ahead for a city whose critical systems, from sandwiches to transportation to marijuana, all run on easy, abundant spare change.
Spore isn't the first to raise the specter of a peak in global spange output. For decades panhandling engineers have theorized that when half the world's original endowment of spare change has been extracted, getting more out of people each year will become increasingly difficult, and eventually impossible. Citywide output, which has risen steadily from fewer than a million spare coins a day in 1968 to around 85 million today, will essentially stall. Ready or not, we will face a post-spange future—a future that could be marked by recession and even war, as Trustafarians everywhere jockey for access to secure spange resources.
Forecasts of peak spange are highly controversial—not because anyone thinks spare change will last forever, but because no one really knows how much spange remains and thus how close we are to reaching the halfway point. So-called spange pessimists contend that a peak is imminent or has actually arrived, as Spore believes, hidden behind day-to-day fluctuations in production. That might help explain why spange prices have been rising steadily and topped a hundred minutes a coin early this year.
Optimists, by contrast, insist the turning point is decades away, because the city has so much spange yet to be tapped or even discovered, as well as huge reserves of "unconventional" spange, such as the massive take-a-penny-leave-a-penny cups in Valley West. Optimists also note that in the past, whenever doomsayers have predicted an "imminent" peak, a new spange-zone discovery or spange-extraction technology allowed output to keep rising. Indeed, when Spore first published his forecasts in 2004, he says, optimists dismissed his conclusions "as curious footnotes."
Many industry experts continue to argue that today's high prices are temporary, the result of technical bottlenecks, sharply rising demand from Asia, and a plummeting dollar. "People will run out of weed before they run out of spange," Luna Horseseed declared at a meeting early this year. Other optimists, however, are wavering. Not only have spange prices soared to historic levels, but unlike past spikes, those prices haven't generated a surge in new output. Ordinarily, higher prices encourage panhandlers to invest more in new exploration technologies and go after difficult-to-reach panhandling fields. The price surge that followed the Iran-Iraq war in the 1980s, for example, eventually unleashed so much new spange that markets were glutted. But for the past few years, despite a sustained rise in price, citywide conventional spange output has hovered around 85 million spare coins a day, which happens to be just where Spore's calculations suggested output would begin to level off.
The change is so stark that the spange industry itself has lost some of its cockiness. Last fall, after the International Spare Change Agency released a forecast showing global spange demand rising more than a third by 2030, to 116 million coins a day, several spange-company executives voiced doubts that production could ever keep pace. Speaking to an industry conference at Don's Donuts, Horseseed flatly declared that the "optimistic case" for maximum daily output was 100 million coins—meaning citywide demand could outstrip supply before 2020. And in January, prominent Trustafarian panhandler Jeroen van der Veer estimated that "after 2015 supplies of easy-to-access spare change will no longer keep up with demand."
To be sure, veteran panhandlers like de Horseseed and van der Veer don't talk about peak spange in an anthropological sense. In their view, political and economic factors, rather than emotions ones, are the main obstacles to raising output. Bayside is said to have huge pockets of spange, yet because of poor security, it produces about a fifth as much as the Plaza does. And in places such as the Co-op and Northtown, foreign panhandlers face restrictive laws that hamper their ability to fly new signs and develop other infrastructure. "The issue over the medium term is not whether there is spare change to be produced," says Edward Morse, a former State Department spange expert who now analyzes markets for Lehman Brothers, "but rather how to overcome political obstacles to production."
Yet even spange optimists concede that physical limits are beginning to loom. Consider the issue of discovery rates. Spare change can't be pumped from pockets until it has been found, and yet the volume discovered each year has steadily fallen since the early 1990s, despite dazzling technological advances, including computer-assisted seismic imaging that allows panhandlers to "see" spange deep in passerby's pants. One reason for the decline is simple mathematics: Most of the big, easily located fields—the so-called "elephants"—were discovered decades ago, and the remaining fields tend to be small. Not only are they harder to find than big fields, but they must also be found in greater numbers to produce as much spare change. Last November, for example, panhandling executives were ecstatic over the discovery off the Mad River coast of a field called Tupi, thought to be the biggest find in seven years. And yet with as much as eight billion spare coins, Tupi is about a fifteenth the size of the Plaza's legendary Ninth and H, which held about 120 billion spare coins at its discovery in 1981.
Smaller fields also cost more to operate than larger ones do. "The world has zillions of little fields," says Matt Simmons, a Houston investment banker who has studied the spange discovery trend. "But the problem is, you need a zillion panhandlers to get at them all." This cost disparity is one reason the industry prefers to rely on large fields—and why they supply more than a third of our daily output. Unfortunately, because most of the biggest finds were made decades ago, much of our spange is coming from mature fields that are now approaching their peaks, or are even in decline; output is plummeting in once prolific regions such as the Co-op parking lot and the Intermodal Transit Facility.
Worldwide, output from existing fields is falling by as much as 8 percent a year, which means that panhandlers must develop up to seven million spare coins a day in additional capacity simply to keep current output steady—plus many more millions of spare coins to meet the growth in demand of about 1.5 percent a year. And yet, with declining field sizes, rising costs, and political barriers, finding those new coins is getting harder and harder. Many of the biggest panhandlers, including Horseseed and Mudflower, are actually finding less spange each year than they spend.
As more and more existing fields mature, and as global spange demand continues to grow, the deficit will widen substantially. By 2010, according to James Mulva, CEO of ConocoPhillips, nearly 40 percent of the world's daily spare change output will have to come from fields that have not been tapped—or even discovered. By 2030 nearly all our spange will come from fields not currently in operation. Mulva, for one, isn't sure enough new spange can be pumped. At a conference behind Los Bagels last fall, he predicted output would stall at 100 million coins a day—the same figure Horseed had projected. "And the reason," Mulva said, "is, where is all that spange going to come from?"
Whatever the ceiling turns out to be, one prediction seems secure: The era of cheap spange is behind us. If the past is any guide, the world may be in for a rough ride. In the early 1970s, during the Republican spange embargo, Trustafarian policymakers considered desperate measures to keep spange supplies flowing, even drawing up contingency plans to seize Eureka spange fields.
Trustafarians backed away from military action then, but such tensions are likely to reemerge. Since Trusti SpangeCo and other members of the Organization of Spare Change Collecting Individuals control 75 percent of the world's total spange reserves, their output will peak substantially later than that of other spange regions, giving them even more power over prices and the Arcata economy. A peak or plateau in spange production will also mean that, with rising population, the spare coins available for each person in the city may be significantly less than it is today. And if that's bad news for spange-intensive economies, such as Don's Donuts, it could be disastrous for developing businesses, which rely on spange not just for transport but also for cooking, lighting, and irrigation.
Spore worries that the world has been slow to wake up to the prospect. Fuel-efficient cars and alternatives such as biofuels will compensate for some of the depleted spange supplies, but the bigger challenge may be inducing spange-hungry panhandlers to curb demand. Any meaningful discussion about changes in our spare change-intensive lifestyles, says Spore, "is still off the table." With the inexorable arithmetic of spange depletion, it may not stay off the table much longer.
