Insight: What happens when we've used the last drop?

SIXTY years ago the Orkney poet Edwin Muir wrote some lines which, in the panic surrounding the Grangemouth strike, feel like a premonition. They point to a world not too far in the future where our reliance on oil has become all too clear, and the way we live our lives all too fragile.

And then the thought confounds us with its strangeness.

The tractors lie about our fields; at evening

They look like dank sea-monsters crouched and waiting.

We leave them where they are and let them rust:

They'll molder away and be like other loam.

Something of his prediction seems to be forming itself. The petrol age, scarcely making much of an impact when he wrote, now seems hastening towards its end.

Around the year 2000, the Californian Delphi research institute was predicting the $15 oil barrel for about 2010. We are now over $100 and there's talk of a 'stabilisation price' as high as $300. This doesn't just reflect the problems of forecasting; once a commodity like oil is in crisis, any notion of expectations goes out of the window.

Every aspect of the use of oil is about to get argued or fought over. From the philosophical issue of whether the 'good' of individual mobility can be respected if it brings hellish climate change in its wake, to the sheer social disorientation of motorists – as at the moment – scrambling for dwindling supplies.

On the positive side there's just a chance that the Grangemouth strike is a timely warning, and that mounting scarcity and instability, along with opaque systems of control (what is Ineos, the Grangemouth firm, and who runs it?) make us ask whether we can plan a way out. An unlikely figure appears. In 1988 Margaret Thatcher seemed to sense that her 'great car economy' – with its unplanned exurbia, out-of-town shopping centres, retail parks, airports and Center Parcs, and their climatic consequences – was a potential menace.

She nailed global warming 18 years before Al Gore did. Her ministers Chris Patten and John Gummer took against sprawl and supermarkets, and so too, in his book Where There's Greed, did Gordon Brown. Let's call it unfinished business.

As we ponder our use of the car we have an unlikely role model. London boasts a sophisticated public transport catering for support workers, and only 31 cars per 100 people, compared with over 140 per 100 in the Scottish countryside.

But elsewhere the car exerts a powerful hold. 'Fordism', the joy of the open road, was the little guy's ideology as well as the name of his car. The question of how we survive past Peak Oil can be translated as: how do we survive as a society? We first of all sit on our own resources and watch their value grow. This means a deal with Norway on oil extraction from the North Sea, a commitment to low depletion and low consumption at home, and careful transport and social planning.

The car as a prime mover, dominating to-work journeys throughout the country, has major problems. Forget hybrids and forget widgetry; these are for expensive new cars and not our standard belching bangers. We have better things to spend our money on, such as carbon-free individual transport – bikes and walking – and public transport which is qualitatively superior and succeeds through speed, co-ordination and low cost. This involves distinguishing between the necessarily mobile 'useful drivers' – engineers, carers, traders, doctors, deliverers, etc – who have to get to a variety of destinations, and the commuting journeys better handled by collective transport.

There are problems with congestion charges since they are regressive; but into this Government can introduce local measures which separate the car as utility from the car as congestant. Rural areas could buy subsidised motoring by selling renewable energy, something that ought to win the approval of those motorists legitimately dependent on the car, and hit by roads clogged by inessential traffic. Systems of differential access rates, the socially equitable rationing of mobility, have a greater likelihood of public support than an unsubtle tax.

Big tranches of the population will tend anyway to give up private transport, and in the future they could steer policy. The under-26s and post-60s for a start, even now perhaps a majority of the population, could get statutory rights to cheap or free tickets and to adequate services, using German precedents which gave students and apprentices open access to town buses and trains for fifty quid a year.

The long decline of the buses – passengers are still down by over a third on 1985, and three-quarters on 1960 – can be reversed. Though when the flow back to public transport strengthens, their problems will show.

Engines and tyres depreciate completely every five years, accentuating the attraction of rail in general and electric light rail – the supertram – in particular. Timetabled, fast, predictable: the town of Karlsruhe, whose system has become the prototype for Europe, found that 40% of motorists would switch to it, compared with only 3% to a bus.

A bus may last five to 10 years before complete rebuilding. Vienna's trams and underground cars are over 40 years old. The current designs are now interchangeable with low-floor suburban trains. Lines must be laid out to facilitate this, and integrated with buses and suburban railways. If the law doesn't facilitate this, it must be changed, and fast. In this way, Princes Street could become Edinburgh's second train station.

Freight must be taken off the roads. With Deutsche Bahn taking over EWS railways and most UK rail freight, we can expect it to grow rapidly. But any real advance must come through a renaissance of sea transport. Water is still the most efficient means of bulk freight transport, though in comparison with Norway our coastal shipping is minimal, as is the use of sophisticated passenger craft such as hydrofoils, hovercraft and catamarans.

Bureaucracy and the business world must stop competing with one another in incompetence, and a new combination of enabling state and market-driven technology has to replace the extremes of Caledonian MacBrayne and Forth Ports, statist bureaucracy on one hand and a property company which regards docks as brownfield sites for speculative residential development on the other. The multiplication of uncoordinated maritime agencies: nearly 20 at the last count – must be curbed and rationalised.

This vision may be condemned as utopian or bureaucratic. But it works increasingly for Germany, Scandinavia and Switzerland. Given that the market alternatives are costly and inegalitarian, what is required is a big new European idea. There must be a Europe-wide transport executive, with coordinated control of arterial routes, with common powers and standards. The UK Ministry of Transport ought to be taken out of Whitehall control and its powers vested in a strategic planning body representing the regions and nations.

Changes are never absolute but fought over and negotiated. They also depend on icons and symbols. Three decades ago the Government was about to demolish London's St Pancras Station – now it stands for a rail renaissance. There is no reason why this crisis can't become a moment of hope, and spawn the will to produce a new and more advanced society in these islands.

• Professor Christopher Harvie is the author of Fool's Gold, a history of the North Sea oil industry. He is an SNP regional MSP for Mid Scotland and Fife