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Energy Insights: Energy News: 'Peak oil' - the wrong argument for the right reasons

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'Peak oil' - the wrong argument for the right reasons


Dr Steve Melia

Recent falls in oil prices give 'greens' cause to rethink arguments about 'peak oil' and get back to why they are really opposed to fossil fuels, writes Dr Steve Melia. Ultimately, it's not the economic evidence that drives government decisions - it's the politics!

If we are ever to change the values and practices of elites and the general public we must remain consistent, even when our arguments seem to be falling on deaf ears.

Collapsing oil prices should give everyone in the 'green movement' cause for reflection.

With lower prices forecast to last for the next couple of years, two lines of argument for sustainable energy - economic and peak oil - are now looking rather weaker. Equally, the case for reconsidering the arguments and the tactics of political environmentalism has strengthened.

Peak oil as an argument for environmental change was always flawed, as recent events have illustrated. Some writers and environmental organisations mention peak oil alongside wider environmental arguments for a transition to sustainable energy use (see this review for example).

Peak oil supporters predict that the price of oil will inevitably rise as ultimate exhaustion approaches. Rising prices, not lack of availability, will make oil-based products unviable.

Making sure the oil is left in the ground

If everything is left to the free market that scenario would undoubtedly occur at some point in the future. But what if the green movement achieves its aims of lower consumption, and switching to renewable energy sources while there's still plenty of oil in the ground?

Remember the comment made 15 years ago by Sheikh Yamani, the former Saudi Oil Minister: "The Stone Age came to an end, not because we had a lack of stones."

His suggestion was that lots of oil might remain unused, as the world switched to superior alternative energy sources - much as our ancestors stopped using stone for tools and weapons because other materials were more effective, notably bronze, iron and steel.

But the analogy with the Stone Age is misleading. Sustainable energy does not have obvious advantages for industry or consumers, never mind its wider benefits.

And even with very cheap solar power and large, efficient industries dedicated to converting it into fuels for aviation and other transport uses, it's unlikely to compete on price with Saudi Arabian oil, whose production cost is around $5 per barrel

But if we are to avoid catastrophic climate change, most of the world's fossil fuels will have to remain in the ground, according to the IPCC. So the success of any transition strategy will depend on artifically increasing the price of oil (and other fossil fuels), and / or applying regulations that discriminate against their use.

Being economical with our arguments

Peak oil is one of several ways conventional economics have been used to promote sustainable aims. As economic growth has faltered and governments have become obsessed with 'the economy', campaigners, professionals and academics have felt compelled to express their arguments in economic terms.

This has produced what later, saner generations may regard as ludicrous extremes. Several reports have attempted, for example, to justify the benefits of walking and cycling or the disbenefits of pollution on economic grounds - as though longer healthier lives were not sufficient justification in their own right.

This approach has proved no more effective than other ways of influencing politicians and business leaders. Cost-benefit analyses of transport projects typically show that small-scale pedestrian and cycling projects generate the highest rates of return.

So why do politicians who say they believe in the conventional economics behind cost-benefit analysis pour vastly more money into road-building and high speed rail, than into far cheaper, more effective and sustainable options?

I have been to many conferences where the presenters seem to implore: "if only we can show them the right economic evidence they'll change their minds."

This wishful thinking misunderstands the role of evidence and economics in political decision-making.

Building roads, and ignoring the evidence

In the mid-1990s the Conservative Government of John Major abandoned the ideology and the practice of big road-building, prompting a lively academic debate about the real reasons for these changes.

Some writers pointed to an influential report by SACTRA, a parliamentary committee, which amassed a convincing body of evidence that road-building is self-defeating because it "induces" more traffic.

Two other influences on the Major Government were pressure from the Treasury to cut public spending and the anti-roads protests which delayed road schemes and increased their cost.

No convincing evidence has emerged to challenge SACTRA's findings since then, and yet those lessons have been comprehensively un-learned. The Coalition Government's Command Paper Investing in the Future does not even pretend to offer any evidence for its claims about the economic necessity of road-building.

The CBI's roads report Bold Thinking states that "the long-term benefits of road investment are well-known", which is all the evidence they need. A senior civil servant from another country with a neoliberal political culture recently visited our research centre on a fact finding mission.

He reported similar views in his own country adding that "there's a lot of scepticism about the health benefits of walking and cycling" as they appear in cost-benefit analyses. The evidence on road building and the economy is no stronger but these claims fit more easily with the values of political and business elites.

Faced with that reality, the argument that we must act sustainably for the sake of the economy was never going to persuade many decision-makers. In a context of low oil prices it will convince no-one.

Protecting the enviroment for its own sake (and ours)

When that argument becomes a common message people hear from the green movement, it weakens the values most readers of The Ecologist would share - that we must protect the environment for its own sake and for future generations (for a psychological analysis of the reasons for this, see the WWF report Common Cause).

If we are ever to change the values and practices of elites and the general public we must remain consistent, even when our arguments seem to be falling on deaf ears.

Comparing today's situation with the mid-1990s, the evidence on road building hasn't changed. The pressures on public spending are even greater. And yet the government is committed to spending 15 billion on building and 'improving' roads.

The fact that the bulk of the expenditure is being targetted at Tory and LibDem marginal constituencies tells us something important about how govenments really reach their decisions.

Make it political!

But that's not all. One important element we are lacking today is the mass campaign of civil disobedience that rose up against Mrs Thatcher's 'biggest roads programme since the Romans'. We can only conclude that it must have been considerably more influential than most of us realised at the time.

It also tells us that to persuade government to force the transition away from fossil fuels, making economic arguments - however sound and well founded on irrefutable evidence - is never going to cut the mustard.

We have to make the transition to sustainable energy a political decision in the run-up to the 2015 election - and do what it takes to make the issue one that politicians cannot afford to ignore.

Dr Steve Melia is a Senior Lecture in Transport and Planning at the University of the West of England. His new book, 'Urban Transport Without the Hot Air', will be published by UIT Cambridge in May.

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