Winchester Lets Brown Have Both Barrels

.... and Cresswell takes a pot shot at CERA...

Back in November I ran article highlighting Peak Oil in the Mainstream Business Press lifted from the monthly Energy Supplement from the Press and Journal, a broad sheet that serves North Scotland - including Aberdeen, the Houston of the North. This month, two stories by Dick Winchester and Jeremy Cresswell caught my eye.

My, my, Gordon, you really are losing the plot

By Dick Winchester

GORDON Brown has come up with a new way of doing things. What you do is go and visit your biggest competitor, who has saved a few hundred billion quid to invest in or simply buy companies you might own, and who is already making oodles of cash because you’re subcontracting to said competitor most of the things you used to do, and then give them £50million to help them develop new “green” technologies.

Yes, folks, Britain’s PM’s been at it again. In exchange for a couple of carry-outs and a tour of the Beijing Olympic village, he’s offered the Chinese:....

The equivalent of one year’s worth of funding for the new UK Energy Technology Institute.

Or more than three times what Scotland’s Energy ITI gets in a year (not that they do much with it, of course).

And, as far as I can work out, roughly double what the Government is putting up via the BERR technology programme for developing renewable technologies.

Gordon’s crackers. In fact, he’s lost the plot.

China certainly doesn’t need that £50million and, of course, our prime minister knows that. But he wants China to base the European centre for the China Investment Corporation in London.

This means more jobs in the financial services sector and additional access to cash for all those financial institutions. I understand he’s very jealous of Tony Blair’s £5million job for a US investment bank and is determined to outdo him. So he’s taking Mandarin lessons and learning how to eat with chopsticks.

I doubt, though, whether China will comply. If I were them, I’d take one look at the Northern Rock thing and run a mile.

However, it is worth contrasting Brown’s Chinese visit and what his aims were with that of President Sarkozy of France. The latter came back from China with a full order book for nuclear power stations. Brown came back having given away cash we could have done with using here.

Talking of nuclear power, Brown has now decided that he’s going to build an as yet undetermined number of nuclear power stations in England (not sure about Wales, but presume so) at some as yet undetermined point in the future at sites that haven’t been decided yet.

EDF – the semi-state owned French company – has already jumped in there and offered to build some of them.

Brown seems quite happy with this idea, which is bizarre given his apparent opposition to any form of state ownership or intervention, except of course if a Newcastle bank is involved.

In fact, I was highly amused by one columnist’s remark with reference to Brown’s chasing after Chinese state funding.

He said: “We (the UK) are so non-interventionist that we don’t intervene to stop interventionists (as in countries that nationalise their investment funds).”

But, of course, there will be no new nuclear power in Scotland. This is a difficult one for lots of people in the energy sector to live with, but personally, and on balance, I tend to support that view, and I’ll explain why. Just like the Americans, Norwegians, Germans, French and just about everyone else on the planet except Gordon Brown, I’m a completely unreconstructed industrial patriot and I want to see us doing things that are going to benefit us long term.

Firstly, there is no UK, let alone Scottish, nuclear reactor builder. Brown has already made sure of that by selling Westinghouse to the Japanese.

So although there might be a lot of engineering work to be gained from building new reactors here by companies such as Doosan Babcock, Amec and some consultancy companies, the big valueadded stuff will have to come from overseas.

Overall, therefore, I believe the development of a Scottish renewables energy industry will, in the long term, be a better bet. Creating and growing indigenous companies is not only good for highvalue-adding jobs, but creates export opportunities. Regardless of your views on wind technology, as the Danes have found, renewables can be a huge business.

Oh, I forget to mention Gordon Brown’s other triumph.

While in China, and seeing he had one of those cheap ticket deals, Gordon nipped over to India (a one-time subsidiary of ours and now also a major competitor) for the second stop on his worldwide tour of the takeaway industry and offered them an even bigger chunk of cash than the Chinese – £875million, to be precise.

And following on from the theme he pursued in China, he also took the opportunity to lecture them as well about climate change and the need for India to clean up its act.

Not sure if anyone told him or not, but one of India’s biggest companies, Tata, is actually in the throes of buying those British icons, Jaguar and Land Rover, for a few billion quid.

That’s embarrassing enough, but Tata has also just introduced the cheapest car on the planet.

This will undoubtedly sell like hot cakes, although it will also increase India’s oil demand, congestion and pollution.

Another setback for Government joined-up thinking methinks.

Editors note: Next time you're in Aberdeen Gordon, bring your cheque book - I have half a dozen ideas on how you could invest a few million in energy research that will make a big difference to the UK and Global economies. After all, what's a few hundred million between friends?


By Jeremy Cresswell

MEANWHILE, those idiots at Cambridge Energy Research Associates (CERA) have their heads firmly embedded in the sand, judging by their latest “free” crowing.

They have the arrogance to say that they have the “missing link” for understanding the future of world oil supply. They say it is a “solidly based” view of oilfield decline rates.

They claim that the aggregate global decline rate is 4.5%, rather than the 8% cited in many studies, based on CERA’s analysis of the production characteristics of 811 separate oilfields that collectively account for about two-thirds of current global production and half of the total proved and probable conventional oil reserve base.

Of course, what you have to pay through the nose for is to discover which fields and to learn something of the methodology applied, therefore how they arrive at 4.5%.

Bizarrely, CERA claims that annual field decline rates are “not increasing with time”. That I simply cannot believe.

CERA director Peter Jackson is correct when he says, “Getting this right, and understanding the underlying dynamics, is key because the amount of new oil supply that will come onstream to satisfy present and future oil demand depends to a large extent on a comprehensive understanding of annual decline rates of existing fields”. But hang on a minute. Given the secretive nature of so many NOCs around the globe – and they command by far the largest chunk of proven and probable reserves – how can CERA make such claims? For solidly based, I suggest “quicksand-based”.

I was pleased to note that Resource Investor picked up on this latest CERA effort. It reminds of this US outfit’s prattling of 2007 when it attempted to slap down the notion of peak oil and talked instead of a decades-long “undulating plateau”. It would be great is CERA was proved right – but I think its founder, Daniel Yergin, and his colleagues will end up with egg on their faces.

Editors note: I have to agree that such vital data should be in the public domain and wonder if Peter Jackson might accept an invitation to present a summary of their decline report on The Oil Drum?

Click the icon to visit the on-line version of Energy which carries diverse stories on the Energy Industries from the UK and World wide. Others stories of interest in this issue:

page 11 Saudi thoughts on oil prices by Tony Mackay
page 12 Shell's van de Veer gets refreshingly honest by Jeremy Cresswell
page 13 BP opts for Abu Dhabi CC - quite right too by Brian Wilson
page 18 Helping to bridge gas supply gap with Tampen hot tap by Jeremy Cresswell
page 19 UK Energy Bill 2008: Implications for North Sea Oil and Gas by Penelope Warne
page 25 My, my, Gordon, you really are losing the plot by Dick Winchester
page 28 Carbon hungry bacteria make methane

Those who read Tony Mackay's piece on oil prices will get a different insight from an economist with business interests in Saudi Arabia. I agree with some but not all of what he has to say here.

Mackay had this to say:

The demand-supply balance is little different from what it was in 2004, so that does not explain why world oil prices have tripled. I am strongly of the opinion that the single most important reason has been financial speculation, particularly by the hedge funds.

As the chart from Stuart Staniford shows, sharply rising demand since 2002 hit a production plateau in May 2005, and IMO since then we have been seeing demand destruction, as demand outstripped supply and prices have gone through the roof.

This I believe provides down side protection on the oil price, since if prices fall those priced out may re-enter the market and bolster demand.

I agree with Mckay, however, that OPEC would defend $75 per barrel with production cuts and that the activity of speculators muddies the issus.

We do know pretty much where the reactors will be built.

There are not that many sites to choose from, as they are trying to use existing sites or Sellafield to reduce operation, and existing cables to take away the power give a lot of priority to some places. It can't be in Scotland and is unlikely to be in Wales due to hassles with getting it through their parliaments, and ideally you want somewhere where you can site two large reactors.
So they have come up with a site preference list, with Hinkley point and Sizewell at the top, then Bradwell, Dungeness, Hunterton (unlikely as it is in Scotland) Hartlepool, and Torness (Scotland)
More here:

I do not believe the speculators angle at all. Speculators are selling as much oil as they are buying - the net impact on the market is zero. It is the people who buy and do NOT sell who are driving prices up; and it is these people who are buying oil to supply refineries.

Are you saying we buy oil and then destroy it? Surely not. No economy could survive that;-)

When we use oil for a fantasy flight all we have left is the memory of the flight of fantasy we enjoyed - perhaps in Las Vegas or Bangkok.

Here is a March 2007 study from the Oxford Institute for Energy Studies that specifically looked at the question of whether speculators cause high energy prices:

Their conclusion is that there is no correlation whatsoever between speculator activity and higher energy prices.

There is a great chart on p. 36 of the report that tracks net long speculative positions against oil prices. As you will see if you look at the chart, there is no correlation between net spec long positions and prices. Speculators are as likely to be net short when prices are rising as they are to be net long. They are as likely to be "improperly" holding back energy prices as "improperly" pushing them up.

The entire issue is a canard that was brought back from the dead most recently by Alan Greenspan in, I believe, 2005, when he sought to evade responsibility for his inflationary fed policies by blaming higher energy costs on speculators.

Euan, sorry about the rant, but you have touched a raw nerve ending with this one!

Nothing new here, I am too an industrialist and believe that wealth can only be primarily generated from hard work, which includes labour (agriculture and manufacturing) and inherited wealth from mineral resources (fuel and raw materials). The UK now has practically neither of these any longer. In fact it was recently suggested on Radio 4 (either Today programme or Farming Today) that ministers had discussed whether the UK needs a farming industry any longer, as food can be more economically produced elsewhere. Now if that doesn't worry you nothing will! Economics can solve every thing from food to peak oil, if necessary we can borrow food from the bank. Lord Haskins talks a lot of sense, the government should listen to him.

Another idea I think about is the phase shift between accrude wealth and ability to generate wealth. By this I mean that the UK appears rich because of our industrial past, but we may have lost our ability to remain rich in the long term. China and India on the other hand are not as wealthy (so we keep being told) as the uk, but have the work ethic that is creating weath very rapidly in the form of infrastructure and saleable goods. So while we are relying on an aging infrastructure, they are creating a new one (according to you Gordon is helping them, when we need all the resource ourselves). The uk government will prop up banks but not industry. If you take MG Rover, it employed 6000 directly, with a typical wage in the industry that is £20,000 per year * 6,000 wages plus the other 18,000 or so wages indirectly hit by the closure. All the engineering resources become dispersed and so the R&D goes with it. In 1990 Rolls Royce did practically all their R&D in the UK, now it 50% and falling. Gorden Brown has said so many time now (every time it makes my blood boil)that the uk will become a knowledge driven economy. It does not take a genius to see whats happening; R&D follows the manufacturing process, though usually some time later. Chinese and Indians will not need our skills or financial services much longer, if they do now. SAIC/Nanging have MG Rover's interlectual property and manufacturing plant for about 120 millon, Tata now own Corus. UK govwernment wake up to reality

Like energy supply, our infrastructure decay will not become apparent until a crisis is upon us. This is human nature. People who smoke know it is likely to kill them, but not tomorrow or the next day and so on. the lights will be on tomorrow, the next day and so on; no problem then.

PP - what you're forgetting is that the economy is fundamentally strong;-)

I agree with everything you say here. No way we could compete with consumer goods manufacturing with other countries but the capital goods industries - like building nuclear power plants or windmills - really needs a shot in the arm.

As I see things the £ will down - parity with with € ? - and perhaps 8 to 9 NOK - as the gas import bills with Norway mount up. So all our imports will get more expensive and we have inflation that the bank cannot tackle for fear of ruining "the economy" and inflation will rise - erasing the debts and pensions that folks believe they earned making unsolicited phone calls from call centers that add negative value to the economy.

The current mess we are in is 100% down to Gordon Brown. I don't know when he did it, but changing the BOE inflation measure from the RPI (all inclusive) to the CPI (excludes property) was the license for the current boom in property and consumer spending that has provided a mirage of prosperity. The RPI has been running at over 4% due to hyper inflation in the property market that is about to unwind - I would guess values will fall by 50%. Did you see the Panorama (BBC) earlier this week highlighting fraud within the property market - there is a story there with teeth that will run and send folks to prison.

Thanks to Rune for the cartoon.

"our economy is fundamentally strong" is Alistair Darling's favourite catch phrase (that too makes my blood boil!). Applying Westexas' "assume the opposite theorem filter" this becomes "our economy is built on quicksand".

I don't know how house prices will play out, but using the house boom as a substitute for real wealth creating activity seams dubious at best to me, but I'm no economist only a lowly engineer. I think the pension system will turn out to be one of the greatest delusions of our time. My last employer doubled our contributions, and at the same time reduced the scheme from final salary to career average earnings. This was a massive downgrade. The pesion system is floating on melting ice.

I think the RPI is what affects most people including pensioners and is the higher value. The CPI is what the goverment uses to make things look rosy. (correct me if I'm wrong). This means pensioners real income is falling, but the government is able to claim pensions are rising at the rate of inflation.

As for the governments constant upbeat energy rhetoric, I too wonder how the uk intends to pay for our energy from Norway and Russia or in liquid form from the ME. I was 14 whem M Thatcher came to power and the country was in financial ruin, she sold off the countries assets and had the North Sea as a saviour. Current economic activity has come from borrowing against house price inflation. Eureka Perpetual motion!

We have a new unit of currency, it is called a 'Northern Rock' :-)

Nothing is expensive unless it costs at least one of these!

1 Rock = 100 giga £
1 Rock = 0.1 tera £

Are they still sponsoring Neuk United - success spreads eh?

The current mess we are in is 100% down to Gordon Brown.

I think people are only just beginning to understand what he has done over the past 10 years.

Today, I got a leaflet with my weekly printed that described the contents of a book called Gordon is a Moron by Vernon Coleman. Seriously hard hitting book.

His previous book was "Oil Apocalypse" so he knows the score!

Hi Euan,

Always good to have your views.

re: "It would be great is CERA was proved right"...assuming, of course, the right things were done with the time/oil/money...

What is your "top 5" list? If you were the advisor Brown et al listened to...?

Hello Aniya. Good decision making can only take place in an environment of reliable information and data. In terms of energy decline we have a lot of fragmentary data and policies driven by poorly informed public opinion which today is dominated by environment concern. And so right now my advice would be we need to gather information and do some research - quite urgently, so that the correct investment decisions are made today for our energy future. Do we build CO2 capture infrastructure or thousands of windmills and solar furnaces? My top 5 research priorities:

1. A project to audit global coal (gas and oil) resources and reserves. The priority needs to be coal. With international collaboration from the world's major coal producers this should be relatively straight forward to determine the resource -coal in the ground - with somewhat larger uncertainty attached to the reserves - the amount that can be mined or produced by in situ regas. This I believe is one of the most important questions facing mankind this century. We (TOD et al) are tending to use much more conservative coal estimates than the IPCC - the work of Dave Rutledge, Energy Watch Group and Jean Laherrere. All of these show coal production peaking before 2050 and result in peak FF around 2020. If this turns out to be true then we are in very serious trouble from the energy decline perspective and should be forgetting about CO2 capture and building as many alternative means of gathering energy as we can. Should the estimates used by the IPCC turn out to be correct - based on data from the IEA and USGS - then we are very likely heading for a GW melt down and our focus should then be on treaties to leave coal in the ground and to develop low CO2 alternatives.

2. To fund research into the eroei of all our energy gathering systems and to research how energy economics (eroei) relates to traditional economics (€£$) - these need to be linked via energy quality factors and factors that take into account utilistaion of exiting infrastructure. My instinct is that in an energy poor future understanding eroei will be one of our most powerful tools to maximise efficient gathering of energy. We cannot really afford another bio-fuels debacle and we need to know about the energy economics of marginal ff resources and processes - long horizontal wells, gas to liquids (GTL), CTL (coal to liquids) and a raft of renewable sources - tried and tested like wind and less tested like wave and tidal.

3. To understand human attitudes to energy sources. Right now decision making is being driven by public opinion which is very poorly informed - hence the mess we are in. When the general public opposes the building of a nuclear power plant or a wind farm do they really understand the decision they are making? Right now I believe they see this as a token gesture to reduce CO2 emissions and so in opposing it they do not see the future threat to their own well being. "Do you want to have a line of wind mills on yonder sky line and electricity this winter?" or "do you want to have a view of yonder snow capped hills and freeze to death this winter?". If we are to survive energy decline with our democracy intact then public attitudes will have to change wrt energy conservation measures and permitting the intrusion of energy gathering systems. I'm betting on the public choosing life ahead of death.

4. To start building experimental energy neutral towns. This is on the agenda in the UK right now - though since the UK is so far behind everyone else this probably means building houses with insulation and a bus stop near by. There is scope to enable / subsidise large scale demonstration projects of energy efficient towns where all houses are energy neutral, the town are designed so that everyone can walk / cycle, the energy (maybe also food) used is produced by renewables locally, V2G is installed, all houses have 240 V AC and 12 V DC power supplies, all appliances are smart using power when it is available etc. Demonstration projects such as this would either fail or show the way forward - they would also highlight the many business opportunities that exist in rebuilding and adapting our infrastructure.

My longer term strategy is to try and establish an energy research group here in Aberdeen and in this regard I should get the opportunity to participate in a high profile lecture series hosted by the University later this year. We will invite Gordon along with his cheque book. It is seriously troubling to see him wandering the world dispensing our hard earned cash - while we sit at home working for nowt.

5. To fund work on managing global resources, population decline and the environment - I'll leave this to someone else. But governments should be funding scenario modeling of the next 92 years. I'd start by abolishing retirement and pensions - that clears the mind of the need for economic growth as we know it.

Would anyone care to guess when the Kyoto treaty was signed?

Its interesting that the graph is fairly flat between the two world wars (great depression etc). Its also illustrates that an economic growth and energy consumption go together (plotting the graph at the end of 2008 may illustrate this). I have to admit one thing it does not tell me is where the Kyoto Treaty was signed. I will leave that task for someone with more imagination than I have.

We often here that we now use less energy per unit GDP than ever before, particularly in the west. There are probably several reasons due to the complexity of society. but here are three reasons that cross my mind

1) If I understand correctly, GDP is essentially money changing hands and nothing more. Each time it does so the government takes its share in taxation. So If a mother goes to work and sends her child to nursery school, several transactions will be created eg nursery school fees, mother spending her wages, spending of nursery school wages and so forth. It is obviously in any governments interest to get mothers to work, as the uk Lobour government keeps harping on about. However this superficial economic activity does use energy, though less so than perhaps a heavy industry economy. (Pitt The Elder has recently made this point someware on TOD), if this is correct then it obvious GDP/Joule will increase, but the real issue is gross energy consuption still increases, though at a lesser rate maybe.

2)As mentioned above we have outsourced our energy intensive operations and now import "embedded" energy in finished goods. That doesn't count of course in the country's energy consumption figures (hence CO2 emissions).

3)Improving thermal efficiency of our prime movers allows more useful work per unit of energy input. This point is easily illustrated using the following examples: Traditional steam engine 7% vs coal fired power station 35%-40% (5* improvement) vs Combined cycle gas turbine 60% (1.5 * improvement). We are now, to all intents and purposes, at the end of thermal efficiency gains that are possible due limitations placed by the maximum temperature we can operate at (material limitation). There was a step change in automotive diesel efficiency mid 1980's onwards in the adoption of direct injection (1.2 * improvement). Although DI technology was as old as the diesel engine itself, IDI had been used for highspeed automotive products.

Your point 3 hits the nail on the head. The majority of the population do not understand (or appreciate the work done by) energy, the trap is they vote in the political parties that don't seem to either. I live near Mansfield, Nottinghamshire and am about to see 5 large wind turbines installed in my back yard. The public objection was very prominant via a noisy few, my only guilt is, as for all folk that don't object, I lay silent. Also, It was on the BBC news the other day about an eco town proposal (can't remember the location, near Stratford on Avon I seem to recall). The locals where all up in arms; all for eco towns, great idea, but not here! I can't help laughing as I write this; sorry, its rather sad in reality.

Are humans smarter than yeast? From my 44 (ish) years on this planet in think probably the answer is no.

May be you should arrange to meet Gordon in China with his cheque book!

Finally, to test your point, maybe you should form a political party called The "Energy For the Future" party and have in your manifesto a proposal to cover the uk with windfarms and what ever else is required to keep our lights on. It would be an interesting experiment!

Some Questions:

Why can't nuclear be built in Scotland? I was not aware of this one. I know wales has a plant in the decommisioning stage near Ffestiniog, cannot this be used for new build?

Are politicians smarter than yeast? may be the question that needs to be adressed.


"We often here" should be "we often hear".

-1) Yes, the correlation of ff consumption is with economic growth and population growth and many would say environmental destruction.

0) I usually try and make several spilling mistakes os that folks acn't distinguish between my tpyos and the words I can't spell.

1) It is worth while aiming to maximise GDP whilst minimising energy consumption - there in lies the path to salvation.

2) Correct - the embedded energy in manufactured goods should be deducted from the manufacturing countries emissions and added to the importers'. There's no getting around that logic.

3) I think one giant leap will come with electrification of all transport, including cars. Batteries and electric motors are so much more efficient than thermal systems there is a vast amount of energy to be saved there.

4) Your (English) opposition to eco towns - line the folks up who opposed and give them energy coupons I say.

5) The Scottish National Party (SNP) and Liberal Democrats have a large majority in the Scottish Parliament and both are opposed to Nuclear Energy. So for as long as that persists we will have no new neuks. The SNP claim that we currently export 25% of the electricity we (Scotland) generate and hence, with modest expansion of renewables we can get by without nuclear. If that is true then I'd tend to support the no-nuclear position, even though I'm not anti-nuclear per say. England needs nuclear and it is best that the power plants are located in England.

If a cast iron argument is made that Scotland needs nuclear to provide base load as Brian Wilson argues then so be it. A pragmatic decision based on need and not upon emotion and rhetoric.

The only reason that one works is because they are part of the much larger UK grid.

Renewables for any reasonable standard of reliability tend to need bigger grids, not smaller.

If they try to withdraw into some kind of 'Little Scotland' state then they will have heck of a job getting renewables to work at all effectively.

When you have Hydro you don't need to be so well connected.

It is worth while aiming to maximise GDP whilst minimising energy consumption - there in lies the path to salvation.

Surely maximizing GDP is another term for maximizing growth. Growth will not allow you to minimize energy consumption, rather it will cause energy consumption to increase.

"It is worth while aiming to maximise GDP whilst minimising energy consumption - there in lies the path to salvation"

I may be wrong but I sense a element of sarcasm here. Yes the fact GDP growth leads to more energy consumption is the reality and the crux of all our problems. But to listen to politicians, Gordon Brown in particular, GDP growth is all that matters. From the laymans pespective we could keep writing cheques to each other, each on slightly more in value than the last in a financial "merry go round". Gordon would be happy syphoning off the tax every time a cheque crossed palms and the economy would be growing. I've just invented Utopia. The trouble is Gordon has overlooked the fact we will shortly all die of starvation. Oh shit its back to the drawing board, my economic model has failed!

The opposite would be minimising GDP whilst maximising energy consumption - I presume everyone disagrees with that.

Another way of putting this is to aim to maximise efficient use of energy.

Maximising GDP doesn't mean GDP has to grow - but I think we need to aim for the best that can be achieved - sustainably.

We waste so much energy right now that it won't surprise me that once we start to treasure it and use it wisely that average wealth starts to grow. Wealth after all is the accumulation of assets - and right now we are simply burning one of our most valuable assets for little return.


I possibly misinterpreted you, I thought you were being mildly sarcastic towards the concept of GDP growth.
The way I understand GDP is that it is essentially the country's cash flow and nothing more. Governments need GDP to increase to cause previous debt to "devalue" as does every one who has debt, ie a mortgage. Tax revenue is also a function of GDP (may be approximately proportional to, but tax thresholds etc mean the relationship will be more complex than a simple linear function).

The relationship between useful work, energy consumed and GDP is also complicated. If we plot a acale with "waste" at one end and "essential" at the other, I dare bet most of our GDP creating activities are at the waste end. Farming, clean water etc are at the essential end, holidays, cosmetic surgery, new this new that, excess packaging etc at the other. Farming and water treatment are energy intensive but essential. So increasing GDP using low energy activities (according to Pitt The Elder this includes service type industries)that do no more than create jobs may not be the best way to proceed. Decreasing GDP but repairing infrastructure and essential machinery may be energy intensive but will keep us alive. I realise this is taboo, decreasing GDP is recession and not compatible with our current economic thinking. Taking what I am trying to say to the extreme, If we all end up back on the farm, working for nothing but food and shelter, GDP may tend towards zero. So even if we use small amounts of energy, the ratio GDP/Joule will be high, though absolute energy use will be low.

Yes, there is no doubt electrification will give a step change in vehicle efficiency but at the moment we are stuck with the thermal stage at generation. I accept that trains should be electrified as the overall efficiency is still much better than diesel (energy recovery, no idling or part load losses and more efficient transmission are the main reasons since the diesel engine is an "efficient" prime mover at 40% plus). With renewables the thermal efficiency of wind tubines is incredibly poor (orders of magnitude less than one). Fortunately the heat source is very big and free! If we had to pay for the 4,000,000 tonnes of hydrogen it consumes every second, wind power would be rather expensive! Is sunlight and wind taxed yet? (many a true word said in jest)

I have grave doubts about the "hydrogen stage", the overall cycle efficiency is worse than the IC diesel engine. Its batteries, less long distance travel or nowt. As for aeroplanes and the associated employment, its trouble ahead i fear.

One of the Scottish islands (Isle of Lewis) have just rejected a very large wind project, which may prove detrimental to the sustainability of the island concerned for a number of reasons. One in particular is migration of the young to areas of greater economic activity, the wind project was a potential source of employment as well as energy. Could be a case of cutting down the ladder from which you have climbed for those that objected.

One thing I do consider with wind turbines is the quoted EROEI of about 30:1. I do not dispute the figure, but the blades are made using epoxy or polyester type resins which come from oil which is an energy "head start". What would the EROEI be if the raw materials were hydrogen, carbon and oxygen with the wind turbine as the energy source to combine these elements into resins? Thats what really counts in the long term. I am no chemist, but I suspect it would be a wounding blow to the EROEI. In the end as long as its positive, we should be ok, we will just have to divert the HSE employees and other parasitic jobs to wind generator factories.

One thing I do consider with wind turbines is the quoted EROEI of about 30:1. I do not dispute the figure, but the blades are made using epoxy or polyester type resins which come from oil which is an energy "head start". What would the EROEI be if the raw materials were hydrogen, carbon and oxygen with the wind turbine as the energy source to combine these elements into resins?

In my FAQ I have a pointer to a calculation that the payback for some wind farms is as high as 80:1.

Let's try your calculation.  Here's a very modern wind turbine blade, weighing in at 17.7 tons.  It is 61.5 meters long, and goes on a turbine rated at 5 megawatts.  Assuming 1/3 of the blade mass is resin, total resin for a 3-blade turbine is 17.7 metric tons.

Let's assume for the sake of argument that production of the epoxy takes twice as much energy as the heat of combustion of the equivalent mass of gasoline.  Gasoline's LHV is roughly 20,000 BTU/lbm or roughly 47 MJ/kg.  17,700 kg of resin at 94 MJ/kg is 1.66 TJ, or 462 MWH.  A 5 MW turbine operating at 30% capacity factor would produce this much electricity in 308 hours, or under 2 weeks.

So yes, 30:1 appears quite reasonable even if you are producing the raw materials out of electricity.


I am pro wind and have been to the blade factory at The Isle of Wight (when it was NEG Micon). I was not implying wind would not be energy positive, just what the efficiency of conversion from elements to chemicals is. I had worked out that a 2 MW unit at 30% CF would generate the energy contained in 400 (ish) tonnes of diesel fuel (gross calorific value of 45MJ/kg) per year so its obvious the blade weight in hydrocarbon energy is very quickly repaid. What I did not realise is that energy payback had risen to 80:1. Its not long ago when 600 kW was a large unit (1990's), then in 2000, two 2MW units were installed in Blyth, uk one km off shore. At the time 30:1 was the figure the BWEA was quoting for a good site. I assumed this figure was using petroleum as the input. Even if it falls to 15:1 we are still quids in!

Would anyone care to guess when the Kyoto treaty was signed?

Kyoto was signed in December 1997, just before that last surge upwards in coal and oil use.

The environmental lobby, huge, growing and for the most part well intentioned, and the billions that are channeled into their 'important work' are essentially just documenting, in more and better detail, the earths environmental destruction. Until we look at the root causes, just throwing numbers at people will pique their interest, not their action. And in the upcoming scenarios, once action is 'piqued by peak' events, we will have lost most of the opportunity to mitigate and will have to adapt, which might be nasty.

For the life of me I don't know why environmentalists (and others) can't see this is all a demand problem - energy is just going to be one of the things that we first discover(other than sink capacity) that has no ' perfect substitutes'.

For the life of me I don't know why environmentalists (and others) can't see this is all a demand problem - energy is just going to be one of the things that we first discover has no ' perfect substitutes'.

Exactly. That's the reason I can't understand why Euan is advocating raising GDP.
It's also the reason I found Mr. Staniford's proposal for a tripling of GDP whilst converting to solar power completely mind boggling.

I'm not sure that he was advocating increasing GDP. "Maximise GDP" does not necessarily mean that it needs to grow. Instead, I think that he's saying that we should try to get the most bang for our buck.

I agree Nate that documenting our demise with statistics and charts is perhaps not the best way forward but I will argue simultaneously that reliable data is essential to frame the problem.

Every now and then - like six times every day - I get really pissed off with the environmental lobby for being so successful in characterising the climate change problem, capturing the public eye and the public purse - and yet failing totally and absolutely to achieve anything by way of meaningful mitigation.

So, we do need to get together more often to discuss strategy, how to get a message across - what message? - energy efficiency - would be my central message in the first instance. Both at the gathering and consuming stage - maybe we are modern day Hunters?

Dear Euan,

I think that your points are eminently sensible and rather obvious. Society/government should be 'taking an audit' of what we have, what we need, and where we are going to get it from.

We need government to develope a long term strategy for our engergy future and utilize limited resources optimally.

BUT, I believe this means questioning the basic economic paradigm of the last thirty years, that the 'market' knows best, and all the state has to do is step aside and let the 'market' get on with it. Successive UK governments have followed this course and stepped aside, leaving industrial policy, financial policy, and energy policy to the 'market'.

Reversing or modifying this economic orthodoxy is not going to be easy, as it fundamentally questions the distribution of power and wealth in society.

1. Idealistic pipedream. Have you got enough guns to force all the players to allow assessment? Didn't think so.

2. Very difficult to do because it runs counter to the prevailing groupthink. This is doable but very hard, Euan. The question is how do you get society to think in these terms before the crisis hits head on?

3. Agreed but again you are fighting the same people who gave us the problem in #2 - a view of economics that is not fully grounded in reality, which is the fundamental cause of why we are here.

4. Doable, but may require lots of private investment judging from how backwards the UK is on this issue. And the UK may be ahead of the US!!

5. "I'd start by abolishing retirement and pensions" - probably necessary but how do you get this through a democracy where there are already lots of retirees and more coming all the time?

Kyoto Treaty signed? Do you mean ratified by Great Britain? Signed by the original writers (1997)? Signed by member countries? I'm not quite sure what context "signed" is supposed to have there. It supposedly went into force in 2005.

The treaty was negotiated in Kyoto, Japan in December 1997, opened for signature on March 16, 1998, and closed on March 15, 1999. The agreement came into force on February 16, 2005 following ratification by Russia on November 18, 2004. As of November 2007, a total of 175 countries and other governmental entities have ratified the agreement (representing over 61.6% of emissions from Annex I countries).

Refs: and

I realize you were giving Aniya your own top 5 research priorities but it sounds like a list drawn up from an ideal world scenario. What would be your top 5 given the way things are today and the direction they are moving?

It is an interesting list:

1)Figure out what is more dangerous now - GW due to CO2 release or the peak FFs around 2020 forcing rapid renewables buildout. Not knowing makes it worse. Eveyone is focusing on the 250 years of coal and GW and not really worried about PO or Peak Nat Gas. If Ghawar cliffed or something catastrophic like that tomorrow or this year we fell off some sort of PO cliff maybe the public opinion could take it all more seriously to get somthing going in terms of your research and decisonmaking proposal.

2) Right on. How to maximize efficiency of any existing infrastructure and what is best to use or construct using Eroei. We have to get this basic engineer thinking into the halls of power. Free energy has been our birthright. I remeber reading a solzhenisyn book "The Last Circle" and in a scene one of the scientist inmates of a special prison describes how he considered every physical movement carefully as, on their meagere rations, it was important not to waste energy at all. So spontaneous childish boisterousness could be deadly.

3) shock therapy is the only way to get the public behind anything. In South Africa and Pakistan we see the results. Change takes real hardship due to prior lack of good planning.

4)Demo projects - shouldn´t that have been done years ago? Maybe with individual houses like zero energy houses. I don't know of any such towns here in Germany and I don't want to live in a commune or survivalist camp with rightwing fanatics and weapons everywhere. This has to be serious and real life based, supported with government subsidies and by industry. nGood luck with your research institute. When the real crisis hits you should be very well placed to get the government's ear.

5) last point is a doozy - if peak oil stops rapid resource depletion (say overfishing as stocks are so far out you can't get your motor boat out there or cutting forests with big equipment impossible or mining activity massively reduced) and hunger if not starvation sets in then this could all solve itself obviously, at least to a point (vvery hungry people with no prospects have no kids presumably or the govt. will fund contraception). PO could be like WWI or WWII which gave the fish stocks around Europe a rest. I think working till death will be normal as pensions have already been calculated for 2030 at basic welfare level for most Germans anyway. I think pensions in kind, i.e. food for farmwork/gardenwork is not a bad idea. Money will be again gold/silvwer based adn have real value adn as currency will be rare so most people will barter or do work for goods directly. Local currencies would be based on this work. I don't know if G8 or EU or UN level would be most papprotpriate for such planning or if it all falls apart after a certain point. EU is a community based on plenty. It has never been tested by war against an outsider. Would the bickering between French, Germans and Brits make it fall apart or would we have topull togetehr to make the big renewable energy network in North Sea wind farms and Southern European solar. It would have ot be a big mulitnational priority. nobody could od it alone. I frankyl cannot see this satretching to cooperation with Russia or USA or Arabs/Chinese as distance and interests are just too far apart. The crisis will force us all to get moving in the next few years. I think it sort of simmers in the background for wawhile and then everyone acts. Smoke bans in Europe are a good example recently for example. I hope this sort of gets moving in that direction of decisive action with all the ideas you list in EU countries by, say 2010.

Morning folks... As it happens there is also an extremely good letter in today's Financial Times from Sir John Rose the CEO of Rolls Royce (the engine builder not the car builder) which touches on this topic of the attitude of the UK Govt to clean tech investment.

Nice post. You now have witness globalization in action. Aint it fun.

There are four key elements in the mess that is coming down the pike: peak oil, global warming, globalization as practiced, and financial chicanery.

Regarding Brown, I bet he follows in Blair and Clinton: Snag some lucrative lobbying jobs when he leaves office.

Well, maybe there is a fifth element: Rot and greed that pervades the system.

The oil drum is addictive, more so than ebay and alchohol. Is there an antidote or is it curtains to my marriage?

Antidote to oildrum addiction relative to Ebay and alcohol:

a)use the knowledge that you gain here (which is a combination of increasing your perceived status/fitness and 'novelty'), and gradually transform it into real action in your personal life and community - eventually so there is a balance between learning and applying.

b)sell all your possessions on ebay - you will be so busy you won't have time to read TOD. then with the money you can buy lots of alcohol.

c)ibogaine might work, but thats a little drastic

d)if all else fails, try to get your wife addicted too...;-)

Regarding (a), I posted yesterday on the Drumbeat Thread about SNS--Spousal Nesting Syndrome, which is preventing yours truly from downsizing to a small rented apartment in a walkable community, as part of my own ELP plan. Instead, on my twice daily patrols of the neighborhood with our small dog, I watch the For Sale signs going up faster than they are coming down.

ELP Plan (April, 2007)

with respect to the first section of the article - the objection to Brown giving the Chinese money for research ... I don't agree with this - the vast amount of increases in Carbon Emissions are going to come from China in the future. Considering the UK has contributed much of the CO2 emissions in the past, its correct that thte UK assists them.

For our shared future, we need to help them to reduce their emissions.

A reasonable ethical position to hold. But in practical terms the Chinese will shortly be infinitely more wealthy than we are and they are building 1 new coal fired power station every week. And so in practical terms 0.05 Rocks (see above) is a pathetic token gesture - but spending that money on UK energy R&D may make a huge practical difference to our energy security.

0.05 Rocks spent modeling and implementing energy efficiency measures for example.