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Whitehall Place, London, location of the UK Deparment of Energy and Climate Change. (image: photos.igougo.com)
As reported by the Guardian, the UK government is responding to the report released last month entitled “The Oil Crunch: A wake-up call for the UK economy” by holding a meeting between energy minister Lord Hunt and the British business leaders responsible for the headline-grabbing report.
“We do this all the time; it is just a normal stakeholder meeting,” a spokeswoman for the Department of Energy and Climate Change said Sunday night, denying that the “private and behind-doors” meeting with peak oil advocates represented any deviation from status-quo approach to energy. However, the decision to take into account an independent assessment on the future of cheap oil supplies would be a radical departure from the UK government’s policy of silence on the issue.
The report released by the business group known as the UK Industry Taskforce on Peak Oil and Energy Security made waves in February by stating an oil crunch was imminent within the next five years and that society was completely unprepared for the consequences. The report was not a scientific study, but rather a collection of “opinion” pieces written by global oil supply expert Chris Skrebowski and London School of Economics lecturer Dr. Robert Falkner. Unlike other, similar warnings from the UK Energy Research Centre in October, and the International Energy Administration, the Industry Taskforce’s report has prompted a faster response, possibly because it comes from the business community, a sector that typically has the most to lose when it comes to environmental awareness, and because the individuals involved are very powerful. The taskforce’s business leaders include billionaire Richard Branson, founder of global brand Virgin Group; Jeremy Leggett, CEO of Solarcentury; and Ian Marchant, CEO of Scotland’s largest company, Scottish and Southern Energy Group.
The Dept. of Energy and Climate minister Lord Hunt and other unidentified energy civil servants started meeting with the taskforce Monday. That the meeting is located at the Energy Institute, the UK’s more expansive version of the (oil industry-supported) American Petroleum Institute, demonstrates an interest in grappling with peak oil issues by understanding the needs of industry. Contrast that to the US, which is involved with energy-efficiency initiatives, but has yet to hear from any private sector leaders even though any adaptive project in transport, agriculture, power generation, or heating would inevitably encroach upon existing commercial structures.
The lagging US response to peak oil issues was explored on the March 6 episode of Financial Sense NewsHour, where peak oil guru Matthew Simmons shared his reaction upon first reading the executive summary of the UK taskforce report, as soon as he found out about it:
I said to myself; You know this is exactly what Sam Bodman, when he was secretary of energy, actually asked the department of —the National Petroleum Council to do, and we basically punted the ball saying we don’t have a clue. And who would have ever guessed that it would be the Chairman of Scottish and Central Power, and Richard Branson, who would head this task force, that would effectively say to the United States —to the UK government, saying that we are in an unbelievably deep hole and if we don’t get out of it, the country will collapse. It’s no minced words, and it’s all the same figures that I’ve been using for the past ten years.
He continued, remarking on his impulse to email a copy of the report to Sen. Susan Collins (ME), Representative Chellie Pingree (ME), Governor John Baldacci of Maine, and Sen. Mary Landrieu (LA) within hours of reading its summary.
What is wrong with the United States? The United States government—that was such a striking report, they should basically either dig down and refute it, or they should say ‘whoa we screwed up.’ And we should not be listening to Dan Yergin, you know telling us everything is in great shape. And now we have basically entered into the greatest illusion I’ve ever heard of, that luckily if you never worry about this shale gas is going to last well into the 21st century.
The last oil crunch that affected the US and UK happened in 1973, when OPEC cut off oil supplies to Western nations to discourage their military support of Israel during the Yom Kippur War. The resulting price spike immediately required the use of strict measures such as fuel rations in the US and Sunday driving bans in the UK. The UK Taskforce report warned that a pending oil price spike would be greater in magnitude and harsher in consequences than the 1973 crisis, due to changes in the UK’s oil dependency (the UK was a net exporter during the 73 embargo, and now is a net importer), greater inelasticity (conservation measures in the past few decades took care of all the easier adjustments) and further diminished supplies worldwide.
The UK government’s meeting will likely bolster the validity of peak oil theory in the eyes of other governments, but then again, Britain has been slow to even acknowledge the issue. Years ago, France and Germany already completed government-sponsored studies on the date of the global peak , with France saying 2013 in a 2004 study, and Germany saying 2006 in a 2007 study. It’s also important to remember that despite the UK’s apparent change of position on peak oil, even emphatic acknowledgment within a culture can coexist with minimal change to a country’s political agenda.
However, the reason independent studies are so promising is because their proximity to government commands attention for the results in a way that outside recommendation does not. It is a positive sign that the UK is taking matters into its own hands. It would be logical that the US would be influenced by a new Anglo seriousness regarding the cheap oil problem, but whether the issue gains any political traction is up to the work of individual politicians.
