Articles

British energy policy is a dangerous farce
Posted on Tuesday, July 24th, 2007

By David Strahan.

A year ago Tony Blair declared in the Energy Review that securing a ‘sustainable, secure and affordable energy supply is one of the principal duties of government’. He was right. But under New Labour energy policy has veered from criminal to farcical. And with the recent reappointment of Malcolm Wicks as Energy Minister that farce is ready to transfer from Whitehall to the West End stage.

It was unfortunate that the undeclared part of Tony Blair’s energy policy involved invading Iraq, causing the deaths of perhaps a million people so far. The policy has also been a disaster in terms of the oil supply. As I report in The Last Oil Shock, the plan was to defer the onset of terminal decline in global oil production (so called ‘peak oil’) by opening up Iraq as a free-market playground for the international oil companies and raising the country’s output threefold. But in the chaos and butchery that transpired, Iraqi oil production still languishes at about the pre-invasion, sanctions-bound level of less than 2 million barrels per day. Far from putting off the date of peak oil, the invasion may well have brought it closer.

After a blatantly temporizing energy white paper in 2003, Blair finally made up his mind about nuclear power two years ago – to renew the ageing power stations – and only then announced a ‘consultation’. Greenpeace exposed this sham through judicial review and forced the government to repeat the process. But in his first Prime Minister’s Questions Gordon Brown blew the gaff once again, declaring that that the government had already “made the decision to continue with nuclear power” and that “the security of our energy supply is best safeguarded by building a new generation of nuclear power stations”. If the new consultation proves as meaningless as the last Greenpeace will not hesitate to return to court.

This is bad news, since unfortunately the government is right about nuclear power. If Britain fails to renew its nuclear fleet, the next 9,000 (3 megawatt) wind turbines we build will do nothing to expand non-CO2 emitting generating capacity, but simply replace that which we have lost from nuclear. We currently have less than 1700 turbines in total. The plain fact is that we are going to need every last scrap of low-carbon generation we can lay our hands on, but the risk is that New Labour’s arrogant and incompetent handling of the politics will mean further delay. Its failure to secure the immediate construction of a prototype carbon capture and storage project is equally derelict.

The new prime minister has also miserably failed to deliver on hopes that he would reform the government’s energy policy-making apparatus into something remotely fit for purpose. Leaks earlier this year suggested Gordon Brown was planning to create a super-ministry of energy and the environment to be led by David Miliband. This would have given energy its own dedicated cabinet minister for the first time in 15 years, and one who backs the introduction of personal carbon trading – a system of progressively tightening energy rationing, and the only policy remotely likely to deliver reduced energy consumption and emissions. This would have been a real advance, but instead the DTI has simply been rebranded as the Department of Business Enterprise and Regulatory Reform, whose priorities remain the same; energy doesn’t even make it onto the nameplate and the portfolio has been consigned to a junior minister.

Worse, that junior minister is one Malcolm Wicks, who held the post until November last year, and has now been reappointed despite his evidently shaky grasp of the biggest challenge in his portfolio. During his first stint, when I quizzed him about the government’s view on when global production would peak, and how serious the event might be, his feeble reply ended: “But when it’s going to run out, do you know, can you tell us? I mean, I don’t know”.

Perhaps his ignorance should not have been surprising, since some of his officials appear equally clueless. As I report in The Last Oil Shock, they prepared a letter sent out under Wicks’s signature in May last year which played down the importance of oil depletion on utterly spurious grounds. The letter asserted that increasing exploration effort would in future lead companies to discover not only more oil, but also bigger individual oil fields. Since both the total amount of oil discovered annually and the average field size has collapsed over the last forty years, while the oil price has risen from $2 per barrel in the 1960s to near-record levels of just under $80 today, this is evident nonsense. Yet these energy-illiterates are apparently entrusted to run policy.

The British government has never produced its own forecast of when global oil production will peak, unlike France (2013-2023) or Germany (2017). The UK has long dismissed such alarmist talk on the basis of much more sanguine forecasts from the International Energy Agency. But now even the IEA has shifted position dramatically, predicting a global oil crisis by 2012. The Agency argues this will happen almost irrespective of the strength or weakness of economic growth – “the supply crunch could be deferred – but not by much” – and concludes that any attempt to boost oil exploration “might do more to fuel further [oil industry] inflation rather than generate extra oil”. Not only does oil look extremely tight in five years time, but this “coincides with the prospects of even tighter natural gas markets at the turn of
the decade”.

The IEA insists that its “supply crunch” will be caused by above ground factors such as Iraq, and is not the same thing as peak oil – the geologically-driven, irreversible decline of global oil production. But those living through it may be forgiven for failing to appreciate the distinction. The IEA’s predicted crisis falls squarely within the range of independent forecasts of the date of peak oil. Meanwhile, Goldman Sachs has predicted $95 per barrel as early as this autumn if OPEC fails to raise its production, which many experts doubt it can. The farce of British energy policy would hysterical if the challenges were not so deadly serious.

David Strahan is the author of The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man. www.lastoilshock.com



13 Comments on “British energy policy is a dangerous farce”

Nick Stewart Says:
July 24th, 2007 at 10:01 pm

Having just returned from the All Party Parliamentary Group meeting, at which you spoke tonight, it was evident from the low turn out of MPs that the government does not as yet realise what an important issue this is, That they haven’t seems particularly amazing given that the stakes are so high. On top of everything else (global warming, foreign wars, floods, etc) perhaps this is an issue too far for most and they are just not ready to get there heads around it.

I think that the aspect of Peak OIl that is most understated (underestimated) is the relationship of oil to all aspects of modern life: agriculture, manufacturing, chemicals, et al. Most think that we’ll just get something else, some other energy source to churn out all those synthetic materials, chemicals and machines that we so take for granted. The shock will come when most realise that the future of so much of this industrialised flotsam and jetsam that clogs our shops and supermarkets is dependent on a resource that will be increasingly expensive and increasingly unreliable. It’s not just cheap oil that’s the issue it’s the whole way of life of cheap and thoughtless consumerism that we all take for granted..



Eric Jacobson Says:
July 25th, 2007 at 2:36 pm

Excellent article; I’d only amend one key point: “…the next 9,000 (3 megawatt) wind turbines we build will do nothing to expand non-CO2 emitting generating capacity, but simply replace that which we have lost from nuclear.” In fact, wind generation doesn’t even ‘replace’ conventional–though windfarm developers claim otherwise.

The danger–the thing which makes such claims criminal in nature–is that Britain (and the US) are led to believe that ‘wind generation’ can ‘replace’ conventional generation. It doesn’t. In every single instance (Denmark and Germany being star examples) wind energy has never–not once–allowed utilities to ‘shut down’ conventional stations, which must continue to operate as backup regardless (due to the unpredictable nature of wind generation).

In short, wind can ‘supplement’ conventional to some (small) degree, but it doesn’t actually allow us to reduce fossil-fuel consumption. It is, in fact, a scam which ‘looks like it does something’, but all the while the conventional generation continues without any reduction at all. In some cases, conventional fuel consumption actually increases as power plants must rapidly ratchet their output up and down–a task for which they were never designed–in order to compensate for highly variable and unpredictable wind generation inputs to the grid (think of the relative fuel consumption of your car in city stop-and-start traffic versus open country driving).

Okay, enough yattering on about windfarms. The simple fact is that they save no conventional fuel usage at all, do not reduce CO2 emissions (and per some studies from Denmark actually INCREASE them–for the reasons cited above), and act merely as a means to generate profit for developers and landowners without providing any environmental or economic benefit.

This is, I fear, a chimera which is causing the UK to invest heavily in ‘wind’ rather than tidal or wave power–the former of which is genuinely capable of ‘replacing’ fossil fuel plants, and which is also highly predictable and reliable.



theham Says:
July 25th, 2007 at 6:31 pm

The only answer at this point in history is the one that your politicians, bankers and stock markets just faint at the sound of – gasoline rationing. Get used to those two words.



Romesh Chander Says:
July 25th, 2007 at 8:47 pm

The US has no energy policy. Britain has no energy policy. France and Germany are fully aware of Peak Oil. Even the Finns and Swedes have energy ‘sufficiency’ policies. What is wrong with English speaking people?



admin Says:
July 26th, 2007 at 10:05 am

Good question, Romesh. I think it’s to do with a touching faith that Anglo-Saxons have in the power of ‘the market’ to solve every problem, despite so much evidence to the contrary.



Curlew Says:
July 28th, 2007 at 8:55 pm

Just heard your interview on Global Public Media. Good to hear that the Daily Mail has picked up on this. If Joe Public starts to respond to conservation (rather than complain and demand lower prices) then the awakening begins. Perhaps the best way to get No 10 to react is to get the opposition involved in a strong way – votes are always close to the heart of politicians.



A DeWit Says:
July 29th, 2007 at 2:22 am

This is not merely an Anglosphere problem. The Japanese also have no serious energy policy, because “leave it to the market” thinking is dominant. The Japanese peak business association, Keidanren, insists that Japanese energy efficiency is so far advanced that it is not possible to improve it, and that only voluntary measures (as opposed to state-mandated targets) are acceptable. In fact, Japan’s efficiency is good (esp relative to North America), but for the most part ranks alongside the big EU states (ditto for per capita CO2 emissions). Japan is in the midst of elections today, with the opposition Democrats pressing for Renewable Portfolio Standards of 10% by 2020 and 50% CO2 emissions cuts by 2050 (versus 1990 levels). The recent nuclear reactor accident and maybe some additional mayhem in the Middle East (where Japan gets about 90% of its oil, which is also just shy of 50% of its primary energy) might open some eyes.



Willy De Backer Says:
July 29th, 2007 at 7:00 am

Don’t be too hard on your own country. The UK is not the only European country that is “peak oil illiterate”. As a European Union journalist, I am well placed to follow energy policies in the member states as well as the EU itself and I can guarantee that even the countries that you quote (France and Germany, the Scandinavian countries) have no REAL policies in place to deal with the upcoming energy descent. At European level (EU commission, MEPs), the situation is even worse. In Brussels peak oil is still a big taboo. At least in the UK, there are some journalists like David who have understood the urgency of the issue and newspapers like the Independent have discovered peak oil. In Brussels media circles you would have a hard time finding the same kind of media attention.



Shaun Chamberlin Says:
July 29th, 2007 at 4:26 pm

Re: theham. I suspect you may well be right that fuel and electricity rationing will have to come in at some point, and it is clear to me that the sensible way for this to happen is within the scheme David advocates in The Last Oil Shock – Tradable Energy Quotas. Check out the website (linked through my name) if you’re not fully familiar with the scheme. It is the most clearly-thought-through response to our times I have been able to find, and I am now working to push it towards implementation.



Keir Watson Says:
July 29th, 2007 at 5:55 pm

I disagree that nuclear is low carbon – include construction, fuel processing, national security activity, decomissioning, waste storage/disposal etc. – lots of carbon there. Fundementally too it uses a non renewable resource. Peak Uranium won’t be far away.

Regarding wind turbines – load levelling and electrical storage are possible on a renewable dominated grid by using redox flow-batteries (some island communities use these with wind turbines). Batteries in elecric cars can act as load levellers and storage too. Batteries that last 10 years+ in cars are being put in american electric vehicles right now. A market for old electric car batteries is developing to provide back-up supplies for buildings.

Coal-fired power stations and coal liquification may be acceptable in the near future even without carbon capture if this can be offset by widescale carbon-negative farming using agrichar(agrichar is charcaol made from agricultural waste by pyrolysis. Added to soil it locks up carbon for centuries, acts as a super fertilizer and produces heat/electricity in the process – fully scaleable win-win-win).

Concentrated solar thermal plants in desert areas can provide electricity 24/7 and have a development cycle of 2 to 3 years compared to nuclear.

Many of these solutions are low-tech and just waiting to be deployed.

Personally I want my whole roof to be photovoltaic so I am a net electricity exporter. Its only a matter of time before any of us could achieve this.



Curlew Says:
July 30th, 2007 at 9:42 pm

Sorry Shaun, but I’m not in favour of any of these quota trading systems.

Today’s high consumers of energy already have the money to do so and so will continue to buy their way out of trouble, overall this won’t reduce energy consumption it’ll just move it further to the well off.

If I use less than my quota then, excellent, let’s leave it that way – but don’t allow some other wastrel to consume more!



rbkpeak Says:
August 4th, 2007 at 5:03 pm

Curlew, the best scheme I have seen is contraction and convergence. Every person in the world is allocated a carbon ration, which they can then trade freely. Yes, those with more money can buy more rations, but only by transferring their wealth to those who sell. More important though, is that each year, the total size of the carbon ration is reduced, thus forcing even the richest to start to reduce their carbon emissions. Of course, you can always use less than your ration and not sell your excess, thus increasing the rate at which emissions come down.



Shaun Chamberlin Says:
September 1st, 2007 at 6:32 pm

Hi Curlew,

Thanks for your comments (and an interesting look around your website), but I’m not sure that you’ve actually taken the time to read about TEQs. The scheme is fundamentally based around a carbon cap, and provides a means to guarantee that the cap is actually achieved, rather than the unlikely ‘Government targets’ we have at present.

To back up what rbkpeak had to say, I am a firm supporter of Contraction and Convergence, and indeed C+C and TEQs are increasingly being presented as a package, with C+C providing the means for international agreement on emissions caps, and TEQs providing the means for nations to actually stay within those caps.

If you take a look at our website (particularly the links page) you’ll see that we are equally dubious about the existing cap and trade schemes, which are just producing vast profits for certain individuals and companies.





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