Industry Taskforce on Peak Oil and Energy Security

In London this morning (10th February 2010) the UK industry task force on peak oil and energy security launched a new report warning of the dangers of the forthcoming oil crunch.

Note: The Oil Drum post relating to this task force report is now posted. This is a link.

On 10 February 2010 at the Royal Society, six UK companies - Arup, Foster + Partners, Scottish and Southern Energy, Solarcentury, Stagecoach Group and Virgin - joined together to launch the second report of the UK Industry Task-Force on Peak Oil and Energy Security (ITPOES).

The report, titled “The Oil Crunch - a wake-up call for the UK economy”, finds that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity within five years.

The Task-Force warns that the UK must not be caught out by the oil crunch in the same way it was with the credit crunch and states that policies to address Peak Oil must be a priority for the new government formed after the 2010 election.

The report may be downloaded from the link above (about 860 KB). We hope to have a report from the launch later today or tomorrow. Discuss ......

For the information of foreign readers, Scottish and Southern Energy is a large UK utility and constituent member of the FTSE 100 index. Virgin, lead by Richard Branson, is an airline and Stagecoach is a global operator of busses (coaches). Both are substantial UK companies. This should attract significant MSM attention in the UK and was mentioned in our local press (Aberdeen Press and Journal) yesterday.

Virgin and Stagecoach are also rail franchise holders in the UK - this may in part be an effort to keep rail electrification plans alive post election.

But by saying so, is your emphasis that they should be seen merely as having 'ulterior motives', or would it be just as fair to say that they are invested in technologies that have some promise to help us (Britain) in a PO environment?

I imagine that there might be structural changes needed for British Rail policy, but all in all, isn't this an area that does deserve continued investment, and that it's not really a double-standard for it's owners or franchise-holders to argue that point?

Bob

My original reason for comment was just to put the two companies mentioned into further context for those in the US etc who are not familiar with the UK's convoluted rail system.

It is perfectly reasonable lobbying in my (highly pro-rail) book, the sad thing is that if British Rail as was had had the amount of extra subsidy the nominally privatised system has had everything worth electrifying could be done by now. My worry is that the proposed extensions to the electric network will be canned to save capital and the money will never be there to do it later.

This report made the morning rush-hour news headlines on (BBC)Radio 2 and on local radio. Plus there was a short interview on the (BBC) Radio 4 Today programme (An influential daily news, business & politics talk show). As a note, the presenters do appear to be talking about peak flow capability rather than reserves, which is progress.

We all have a legitimate need to travel and transport is key to the economy and so many aspects of society and our daily lives.

This blanket statement represents a clinging to BAU. It should instead say;

"There is a continuing legitimate need for greatly reduced travel and transport of vital, non-local materials is key to the economy. Frivolous travel and long-distance product importation should be recognized for what they are - addictions to oil."

On the recommendations;

Continue measures to improve energy efficiency and wean transport from its dependence on oil. These include promoting technological developments such as hybrid engines, vehicle electrification and weight reduction, both for cars and public transport.

I was surprised not to see biofuels listed here, which is one of Branson's shining hopes for continuing air travel.

Coordinate a package of measures to deliver behavioural change and secure modal shift
from cars to sustainable public transport.

This is sounds great, but the details talk mostly about cars and;

...giving the CAA a mandate to encourage the uptake of biofuels for aviation

This is unfortunately weak, and gives the impression that BAU-lite will be sufficient.

The ‘cleantech revolution’ in the use of renewable energy for generating electrical and motive power, and heating, requires continuing support.

I helpful recommendation.

The programme to improve the energy efficiency of buildings must be accelerated...Encouraging the use of heat pumps is one solution.

Taken together, this is helpful and steers away from BAU dependency on natgas.

So overall, the recommendations are a mixed bag; some appropriate and others a clinging to BAU habits and addictions.

Who in government and industry is reading and taking action on this report?
Also helpful

In Oregon, West Coast of the US have been requiring buildings to meet certain seismic standards (in case of the big one).

Why is it that we can foresee earthquakes as problems yet running low on FF hasn't been at least as big of issue. Other than the graphic images of places like Haiti, or the "party on" mentality, I don't understand this. Being practical sure is dull, and seems to be an invitation to be tarred and feathered.

Sensational and continious reporting of earthquakes both actual and potential is a handy and often used old standby that sells a lot of advertising and keeps earth quakes , or the POSSIBILITIES of earth quakes, in the public eye.

But talk of peak oil is not primed by actual shortages "none for sale here today" as a rule, and the corporations hat either own or advertise in the media are not happy about having thier boats rocked.Editors learn fast, or else get fired fast.

If you search thier web sites, you will find that coverage is minimal in the extreme, or non existent, in most American papers, especially the all powerful but nevertheless ailing NYT , from which the American industry is said to take it's cue.

I just spent thirty minutes searching all the American papers I have bookmarked, and only the Washington Post has any real coverage-they did a good series which is NOT behind a paywall.It is a little dated now, but still very good.

The British papers are doimg much better, but considering the gravity of the situation, rather poorly in my opinion.

The lowly and generally contemptously dismissed Washington Times, which is after all a very small paper in terms of staff and capabilities, has at least one short article, now four years old, which at least advises the reader to get on the net and explore the question for himself.Considering the relative status and resources of each, I would say the NYT should be embarassed.

Because earthquakes have happenned in the past - while we have never run out of oil in the past. Afterall terrorism was not taken as a credible threat until 9/11 ....

Unfortunately, in spite of the prominent reporting of this by the Guardian and BBC, the response so far seems to be the usual deafening silence. A smattering of of random comments on the web site and nothing else. Leggett is seen as just another ecofascist by the BAU crowd and they don't even bother reading his pieces.

(BTW, I do not condone the term ecofascist. However, I simply expect the word to appear on the Guardian website within the hour).

When was it that Colin Campbell reported too a Parliamentary committee concerning Peak Oil? I think it was in 1997. Napoleon's comment about the Austrians springs too mind they always come with too little too late. I give up on my Government. expect a lot of finger pointing and why wern't we told crap.

...too little too late.

Ah but there is even more to it. Several lines of evidence now suggest (strongly) that peak net energy has already passed, perhaps 30 years ago. It is net energy that makes the economy go, not oil per se. Peak oil recognition and planning are far too little, far too late I'm afraid.

Question Everything

George

I think it is more complicated then just 'net energy'. They are different kinds of energy and they are not perfect substitutes for each other.

Energy is not homogeneous.

'Net energy' is not a natural idea to someone trained in economics. When economists talk about the ideal economy, they are thinking about an allocation of resources that maximizes social net benefit. How net energy fits into that scenario I don't know ...

That's a puzzle for me.

No one will pay attention until we have another oil price surge. And even then it may not resonate if the global economy contracts in response. It will be attributed as just another 'speculative attack'.

The world will only awake to the reality once conventional oil production begins declining.

This issue will only emerge when we have four to eight quarters of declining oil production.

At that point, then panic sets in.

Their figures for megaprojects are much larger than those in the Wiki, differing by 1307 kb/d on average. This despite the Wiki being more inclusive - ITPOES is >40 kb/d. For 2010 ITPOES has 39 projects, Wiki has 49. ITPOES is 2460 kb/d larger. Where's all this extra oil hiding?

The EIA and IEA figures for spare capacity are 4.08 mb/d and 5.35 mb/d, yet the difference from the July '08 liquids peak to Jan '09 trough is only 3475.58 kb/d. Staniford points out that demand appears to be rebounding ca. 4.4 mb/d per year, far ahead of the OMR projections this report mentions. This would be a short term effect, I think projecting past demand shortfalls onto our current situation accounts for the discrepancy; little of the pre-2008 demand is gone for good, unless we in the US want to actively move away from diesel use in shipping, say. This chart shows demand in the US in various sectors 2005-2009:

Photobucket

Notice how gasoline demand has barely budged. From a peak in June 1978 it fell 9.1242%; YOY July '08 to '09 it increased 150 kb/d.

One of the interesting messages that came out of the launch was the issue of balance of payments, which was mentioned a number of times, and which I suspect was intended to remind an incoming (potentially Conservative) government of the danger of moving from energy independence to energy importing from a financial perspective. Buried in the report is a claim that the marginal utility of each barrel of oil is greater to developing countries than developed countries, which suggests that countries like China and India would (counter-intuitively) be willing to pay more for oil than we in the west currently are.

All of this points, in my mind, to an interesting debate which is starting in the UK about the role of the Foreign Office in guaranteeing fossil fuel supplies. Policy Exchange and Green Alliance (both UK based think tanks, the former right-leaning; the latter mildly-left) have published material recently including comment pieces on, respectively, the role of the FCO in guaranteeing LNG imports and the importance of reducing fossil fuel use from a national security perspective.

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Here is the visual review of the situation from the Energy Export Databrowser:

(Note: Vertical scales differ.)

Let's state the facts that are immediately obvious from these graphs:

  1. Britain's indigenous production of energy from all sources has declined by 40% in the last decade.
  2. Britain's total energy consumption has remained relatively steady over the last 40 years.
  3. The production trend since 2000 is down for each of the five main energy sources.
  4. Britain has switched from net energy exporter in 2000 to net energy importer today.

Not visible in the graphs but obvious to anyone who pays bills is:

  • The price of energy has increased since 2000.

Really, what more does one need to know? How much more obvious do things need to be?

The seemingly obvious conclusion from these simple facts taken together:

  • The UK is buggerred unless they radically alter how the obtain and use energy.

Anyone who actually looks at the data doesn't need a fancy report to determine that energy supply and use is the UK's #1 issue for the next 10 years. (And for probably a lot longer.)

For policy makers I have what seems like obvious advice:

  • The nation must immediately embark on a massive energy conservation campaign.

Just stating the obvious.

-- Jon

The executive summary of the report is talking all liquids - peak oil is not about all liquids, it is about the price of crude and condensate rising faster than consumers' income, making it less affordable.

The UK Government has comitted the UK to reducing CO2 emissions in excess of 30% by 2020 so they already know we will be using much less oil,gas and coal - that isn't BAU.

The writers of this report should know that they are going to have to run their business' using much less FF not the increased use of coal or natural gas that Chris Skrebowski proposes as part of any solution ... and if the world population keeps growing at the current rate and agricultural efficiency falls due to lack of inputs like fresh water and phosphorus, in 5 or 10 years there will be little agricultural land not required for food production, so biofuel is unlikely to part of an adequate,affordable solution.

The report's basic proposals point out that we won't have BAU - drastic changes to our way of life in the UK will have to be made! Make your long range air flights now, they are proposing a tax on aviation fuel!

they are proposing a tax on aviation fuel!

who are they?

Who are they? ... the people who wrote the report:

8.2 Transport policies

Introduce fiscal measures to
promote more carbon and fuel
efficient modes of travel.
For example, remove the current
annual £9 billion tax break
on fuel for domestic airlines
and channel the income to
public transport investment.

Firstly the UK Government has never had a 'coherent' energy policy, as it cannot offend the coal miners (Drax Power station emits 22million tons of CO2 per annum all Coal with No sign of Combined Heat and Power (CHP) that we see on the continent; This is only ~22% energy efficient and all those mining community votes to keep the MP's in expense fiddles), the gas lobby (remember that British Gas was only privatized in 1986 but has partially retained the mind-set of a nationalized industry; so the "rush to Gas" we saw in the 1990's has resulted in a future dependence on Gazprom!), North Sea Oil (just another tax collection exercise without any real thoughts of the future) or the nuclear lobby (what can anyone say about Windscale or now renamed Sellafield), I remember the message of the 1960's of free power for all.

It has also squandered all North Sea oil revenues on vote chasing. As we have "had it so easy" over the last 50 years UK never "needed" an energy policy - just bumbling along in the dark.

Whilst there are lots of alternative energy proponents in the UK, talk a great 'Carbon Talk', and plenty of energy efficiency experts, the conventional wisdom is predominantly still that of oil, coal and gas fired power stations without CHP. Now there are some exceptions but they are not Government led. And with respect to Oil and Petrol for transport, there is certainly no coherent transport policy in the UK either. Just tax revenues; thats all Government of any colour seem interested in.

So forget Peak Oil the UK it's heading for ruin on the civil service pension scheme future liabilities alone.

All this in a nation with some of the world's most beneficial wave and wind power resources. That's why I am devoting my time to the emerging nations in Africa. They can learn from the mistakes of the West, are rich in resources and are (often) willing to listen to alternative and integrated policies. So I will be leaving shortly!

bbbut you only just arrived! Welcome to TOD - u should be able to access us from Africa though.

The UK has lost its way completely. No longer able to make the simple distinction between right and wrong on a multitude of issues from banking, across a spectrum, to science. Corrupted simple minds are an evil thing.

E

It's what we do best; getting things wrong!

Britain had an energy policy. It was based on coal, Unfortunately Atilla the Hen Margaret Thatcher when the windfall of the North Sea came on stream thought she would teach the Miners a lesson. I should know she broke us She closed over 80 mines in Yorkshire there are only 4 left over destroyed villages and communities. Oil has been a curse for Britain the revenue was spent on goodies for the electorate and not invested, I would love to know where our sovereign funds are. It forced the pound up which make what industry that we had uncompetitive. It was a double wammy as the Americans say. Short term greed over long term need the curse of believing in that the market knows best. I only hope that when that lady dies I can get into the mortuary one to check to see if there is a pair of testicles under her dress the other to drive a stake through her heart I don't want the likes of her coming back. The insanity of her economic ideas and incompetent chancellors is what set my country on the road to oblivion. The lot we have got now are even worse Mr Narcissism his self St, Tony and that incompetent yoghurt knitting porridge wog who calls him self Prime Minister is even worse. Sorry for the rant I feel a lot better now.

Don't mind the rant yorkshire miner. I may or may not agree with you concerning the people you have decided to attack, but you have, for the most part, avoided a pet peeve of mine which is vicious personal attacks without dealing with the policy issues that create the animosity. I was offended by Obama's mouthpiece, Gibbs, making a joke about Sarah Palin's use of a couple of words written on her hand during a speech. This from the guy whose boss can't seem to put two coherent words together without reading them from a teleprompter. Don't get your left wing tits in the ringer, I would have been just as offended no matter wio was the butt of the joke, I just hate hypocrisy.

Well put treeman. I also have some very personal and harsh feeling towards any number of politicians...even some of the ones from Texas. But it doesn't add to the discussion to fling them about IMHO. But I also don't mind too much if some folks take advantage of TOD to vent...a little anyway.

I wish I could say England coasting on temporary oil riches was unique to that country. It's become so common for all politicians to take advantage of the present and ignore a future when they won't be in office as the bill comes due. Even in an energy savvy environment as Houston, Texas, it was pervasive back in the late 70's. Times were great after the embargo induced price spike and we reaped the benefit of jobs and increased tax revenues. Spent money like the proverbial drunk sailor. Everyone: politicians, oil patch workers, businesses, etc. And the when the bust came it was all the more painful for the lack of planning.

We’ve chatted many times about potential modifications to society that could at least lessen the full impact of PO such as increased motor fuel taxes to encourage conservation. But any effort that would cause the current political powers to take some heat today while, at the same time, not be around when the benefits become obvious, seem very unlikely to be implemented. As other have said: the U.S. is not very good when it comes to long term planning but are hell on wheels when it comes to reacting to a crisis. But hell on wheels doesn’t always produce the best results IMHO.

Treeman,

The US Right is quite vicious. Obama is a perfect gentlemen compared to his opponents. And yes, Sarah Pallin is an idiot.

Had a look in the metro. The article was a quarter page bit of text on page 20 or thereabouts. Says it all really.

It is clear that Britain is entering uncharted waters, having been blown along for the last 35 years - having been in the envious position of more energy than it needs and being a net exporter. The tables have turned and this situation is rapidly changing and politicians and industry have to get their acts together.

The report also mentions shale gas as becoming a major contender in early 21st century energy supplies and that most global oil companies are now starting to take a long hard look at shale gas.

If there is an abundance of shale gas - and it is available on the global market at the right price - how well is Britain set up to adapt to a shale gas based energy future, moving away from conventional petroleum?

Power stations (CCGT) will run happily on shale gas
Road Transport can be modified to run dual fuel on diesel and shale gas
Houses can be heated using shale gas distributed by the existing gas pipeline network.

Aviation cannot switch to shale gas - they will remain on kerosene, and possibility of some biofuel usage for the foreseeable future.

To make this happen, shale gas has to come on line sometime in the next 10 years, and Britain has to get its gas transportation (CNG shipping) and storage facilities underway - ahead of the herd.

What are the forums thoughts on the predictions being made about shale gas?