Opinion - News Analysis
Faith in oil growth could bring economy crashing
George Monbiot Our future prosperity has been hardwired to rising
use of transport fuels, without a thought for the supply drying up.
MOTORISED TRANSPORT is a form of time travel. We mine the compressed time of
other eras the infinitesimal rain of plankton on the ocean floor, the
settlement of trees in anoxic swamps and use it to accelerate through our
own. Every tank of fuel contains thousands of years of accretions. Our future
depends on the expectation that the past will never be exhausted. The
energy white (policy) paper the U.K. Government published last week talks of
new taxes, new markets, new research, new incentives. Anyone reading the
chapter on transport would be forgiven for believing that the Government has
the problem under control: as a result of its measures, we are likely to see a
great reduction in our use of geological time. Buried in another chapter,
however, there is a remarkable admission: "The majority (66 per
cent) of U.K. oil demand is derived from demand for transport fuels which is
expected to increase modestly over the medium term." To increase? If the
government is implementing all the exciting measures the transport chapter
contains, how on earth could our use of fuel increase? You won't find the
answer in the white paper. It mysteriously forgets to mention that the
Government intends to build another 2,500 miles of trunk roads and to double
the capacity of our airports by 2030. Partly to permit this growth in
transport, another white paper, also published last week, proposes a massive
deregulation of planning law. There is no discussion in either paper of the
implications of these programmes for energy use or climate change. There are
plainly two governments of the U.K., one determined to reduce our consumption
of fossil fuel, the other determined to raise it. What happens beyond the
medium term is anyone's guess. But it should be pretty obvious that more roads
and more airports will mean that our rising use of transport fuel becomes
hardwired the future health of the economy will depend on it. So the
government must have examined this question. If our economic lives depend on
continued growth in the consumption of transport fuels, it must first have
determined that such growth is possible. Mustn't it? Last week I phoned
four of the government departments concerned in the hope of finding this
assessment. But it does not exist. The white paper and the civil servants I
spoke to referred me to a book published by the International Energy Agency,
set up by the Organisation fro Economic Co-operation and Development (OECD)
after the 1974 oil crisis. This in itself is odd. On every other issue that
might affect the U.K.'s security or economic growth, the Government conducts
its own assessments. But in this case it relies exclusively on one external
source. This reliance seems even odder when you read the IEA's book and discover
that it's as polemical as my columns. Before it presents any evidence,
the book dismisses people who have questioned future oil supplies as
"doomsayers." It announces that it has "long maintained that none of this [the
possibility that oil supplies might be reaching a peak] is a cause for
concern." Though it expects the global demand for oil to rise by 70 per cent
between now and 2030, and though it anticipates that output from the world's
existing oilfields will decline by about 5 per cent a year, it is confident
that new supplies will make up the difference. It bases this assessment on
the finding that "the level of remaining reserves of oil has been remarkably
constant historically, in spite of the volumes extracted each successive year."
As the IEA must know as well as anyone else, this is partly because the level
has been forged by members of the Organisation of the Petroleum Exporting
Countries (OPEC), the oil producers' cartel. The quota assigned to a
member of OPEC reflects the size of its reserves. All members have a powerful
interest in exaggerating their reserves in order to boost their quotas. The IEA
admits in another report that Saudi Arabia has posted a constant level of
reserves (260 billion barrels) over the past 15 years, despite the fact that it
has produced over 100 billion barrels in the same period. Where has the magic
oil come from? But it is the OPEC on which the IEA's optimism relies. The
growth in global demand will be met, it says, by a 150 per cent increase in oil
production from the Middle East by 2030. What if this oil doesn't materialise?
It is a question the IEA raises then rapidly drops. "Because of the
uncertainties over the respective amounts of resources and reserves, it is
difficult to predict the moment of peak oil, when production might be expected
to start to decline. Estimates range from today to 2050 or beyond." Isn't that
reassuring? Peak oil is not like climate change.
There is no consensus among scientists about when it is likely to happen. I
cannot state with confidence that the IEA's assessment is wrong. But a report
published in February by the U.S. Department of Energy shows how dangerous it
is to rely on a single source. "Almost all forecasts are based on differing,
often dramatically differing geological assumptions ... Because of the large
uncertainties, it is difficult to define an overriding geological basis for
accepting or rejecting any of the forecasts." The report then publishes a
long list of estimates by senior figures in and around the oil industry of a
possible date for peak oil. They vary greatly, but many are clustered
between 2010 and 2020. Another report, also commissioned by the U.S. Department
of Energy, shows that "without timely mitigation, the economic, social, and
political costs will be unprecedented." The disasters invoked by the peaking of
global oil supplies can be avoided only with a "crash
programme" beginning 20 years before it occurs. Non-conventional oil
The IEA believes that this crisis will be averted by opening new fields and
using non-conventional oil. But these cause environmental disasters of their
own. Around half the new discoveries the agency expects during the next 25
years will take place in the Arctic or in the very deep sea, between 2,000 and
4,000 metres. In either case, a major oil spill, in such slow and fragile
ecosystems, would be catastrophic. Mining non-conventional oil, such as the tar
sands in Canada, produces far more carbon dioxide than drilling for ordinary
petroleum. It also uses and pollutes great volumes of fresh water and wrecks
thousands of acres of pristine land. "In the long-term future," the IEA says,
"non-conventional, heavy oils may well become the norm rather than the
exception." If our future growth relies on these resources, we commit ourselves
to ever-growing environmental impacts. We don't need to
invoke peak oil to produce an argument for cutting our use of transport fuel.
But you might have imagined that the government would have shown just a little
curiosity about whether or not its transport programme will bring the economy
crashing down. - Guardian Newspapers Limited 2007
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