Energy. Apparently, David Cameron has lots of it; Gordon Brown is strictly AC-DC; and Menzies Campbell is renewable. That is how the leaders of the UK’s main political parties (Conservative, Labour and Liberal Democrat) were being described at the beginning of October, in the aftermath of their respective party conferences and the general election false start. It is a reflection of the business-as-usual collusion between media and politics that energy is viewed through the prism of personality politics rather than as the critical policy issue of the century.
Our profligate use of fossil fuels is the cause of climate change, and unless we take urgent action to reverse this trend we face climate catastrophe; apocalypse now. Yet energy is also the lifeblood of modern society. Without it we don’t have heat, light, cars, computers and digital archives. On current proven reserves and predicted usage of the world’s remaining reserves of fossil fuels and uranium, we could be struggling to keep these functions going in as little as 30 years.
This then should be the best of times. The converging crises of energy security and climate change dictate what we should do: defend the climate and end the energy crisis. Stop using oil, gas and coal and we might just stabilise carbon emissions at a level to keep global climate temperature from rising far above a genocidal 2°C by 2050.
Policy in the UK is being set with this target in mind – by cutting emissions by 60 per cent against 1990 levels – although not the means of achieving it. This is starting to look like the worst of times, as the UK is the recognised world leader on the issue of climate change – a position it secured by virtue of being the first to articulate the threat posed by climate change and announce its intention to act to bring it under control. By taking the lead, the Government as a G8 economic superpower says it will set an example that others will follow. Sadly, the Government talks the talk but fails to walks the walk.
This month (November) the energy white paper (EWP) enters parliament. There’s something in it for everyone. An ‘energy mix’, trumpets the Government; an ‘energy mish-mash’, say its many detractors, fatally sending out confused signals.
In that way, it reflects its own genesis and the alarming downgrading of energy as a policy issue. Rather than being the responsibility of a dedicated ministry (as it was until 1992), the UK’s energy portfolio is scattered to the winds in Whitehall. Energy policy is, perhaps tellingly, the ultimate responsibility of the Secretary of State at the Department of Business, Enterprise and Regulatory Reform; is regulated by Ofgem; energy efficiency and climate change is the responsibility of Defra; and R&D innovation falls under BERR. There have been nine energy ministers and three energy reviews over the past decade. The end result is a white paper that has barely changed over that period and is evidently a piecemeal construct rather than a dedicated policy.
In May this year, the now Chancellor Alistair Darling was in the energy hot seat and made a statement to the House of Commons on the energy white paper. It sets out, he said, to address the two big challenges that we face: climate change and energy security. ‘Both are vital to our future prosperity... If not tackled, climate change poses catastrophic human consequences and economic costs.
‘Meanwhile,’ he continued, ‘world demand for energy continues to grow. It is expected to be 50 per cent higher by 2030 than it is today and is likely to be met largely by fossil fuels for some time to come. This means rising greenhouse emissions and greater competition for energy resources, which has massive implications for both climate change as well as security of supply.’
Yet you wouldn’t tell that this is the premise from the solutions posited in the paper. Renewables and energy conservation and efficiency are part of the mix, but it is coal, gas, nuclear and the creation of a strong carbon market that get the Government’s fulsome support.
Consequently, when the white paper is enacted – which it will be, barring an unprecedented volte face or rebellion – we are going to build a fossil fuel (and probably nuclear) infrastructure. On that, in 30 years’ time, there is a distinct possibility we will be unable to fuel with constancy and at an acceptable cost.
S. David Freeman is 81, one-time energy adviser to Presidents Johnson, Nixon and Carter, and career head of America’s largest public energy companies. In his latest book, Winning Our Energy Independence (An Energy Insider Shows How), he writes: ‘A continued massive use of fossil fuels and nuclear power is an almost certain path to havoc and destruction of the high-energy civilisation we enjoy.’
In practical terms, the critical problem with fossil fuels is that in the very near future there is going to be no security of supply, as a result of their impending scarcity.
Without doubt, oil has peaked. Not only is less crude being found; known deposits have for years been exaggerated. Senior Shell executives in 2004 admitted hyping reserves by at least 20 per cent, possibly twice as much. Kuwait and Saudi Arabia have also quietly revised their claimed reserves downwards by around 50 per cent for their respective largest fields. Price is rising accordingly.
Middle East energy and oil analyst Ali Bakhtiari told Al Jazeera TV two years ago: ‘No one can restrain the price any more. For example, everyone thought that it would be OPEC who could manage demand. But that is now in the past. Now it is really peak oil that is behind the wheel of the car. Peak oil is driving the rise in price and demand is not the real question. We are entering a new era, but we are only at the very beginning of it.’ At that time, Bakhtiari broke ranks with the industry and predicted the price of oil hitting $50 a barrel by the end of 2005. He was right.
The latest prediction is for oil to hit $100 a barrel by the end of next year. Speaking at the 6th annual conference of the Association for the Study of Peak Oil and Gas in Ireland in September, CIBC World Markets chief economist Jeff Rubin told delegates that the export capacity of OPEC, Russia and Mexico will drop by 2.5 million barrels per day by the end of the decade.
‘Domestic demand growth of as much as five per cent per year in key oil-producing countries is already beginning to cannibalise exports and will increasingly do so in the future as production plateaus or declines in many of these countries,’ says Rubin. ‘OPEC members, together with independent producers Russia and Mexico, consume over 12 million barrels per day, surpassing Western Europe to become the second largest oil market in the world.
‘At current rates of domestic consumption, the future export capacity of OPEC, Russia and Mexico must be increasingly called into question,’ Rubin points out. ‘These trends are likely to result in a sharp escalation in world oil prices over the next few years.’
The impact to our economy is inescapable. In 2006 (at 2006 prices) the UK imported £24 billion worth of crude and refined oil. What the price will be in five years’ time, when the predicted ‘oil crunch’ hits, is anyone’s guess.
The imminent collapse in supply means oil companies are engaged in ever more extreme and costly adventures to find more. America, Russia, Norway and the UK are currently jockeying for position at the Arctic Circle to stake a claim to the oil deposits that lie below the melting ice. The UK is hovering in the Atlantic at Rockall, off the coast of Ireland, where it is believed there are oil and gas fields. The USA is set to tear up Alaska. China is quietly colonising Africa to get its hands on its oil and mineral wealth.
As they scour the earth for ever more remote and therefore ever more expensive reserves of crude, the oil companies are also turning to making oil for fuel from tar sands and coal shale. Both are environmentally devastating and both have risible energy returns on energy invested (EROEI, see graph). On the industry’s own most optimistic figures there is an energy return of three units out for every one unit in, for the process of extracting the crude from the tar and shale alone. If the energy used in mining and transportation are taken into account, the true return is at best half that; the net gain in energy is perhaps half a unit. This alchemy is only considered viable because of the incontrovertible fact that the cost of crude will continue to rise.
Oil’s primary use is for transportation. The likely price hike will hit the pumps and will force up the cost of everything that is transported, everywhere it is transported. If supplies are suddenly scarce, the only option will be enforced rationing. This was concluded at an International Energy Agency (IEA) conference, Cutting Oil Use In A Hurry, in 2005. The future is emergency rationing, tele-working and car-pooling.
Food supply wasn’t addressed at the conference but the oil crisis will certainly force up the cost of production. Oil is food, and has been since the ‘green revolution’ – which was how industrial farming was introduced in the Seventies – when it was discovered that oil, in the form of petrochemical fertiliser, increased crop yields. Today we are reliant on these oil-based yields but they won’t be there in years to come.
Not only will the oil not be there to stimulate crop growth, the degraded soil will take years to recover. This year, the ‘unpredictable weather’ has led to universal falls in yield of most staple food crops; and in 2006, the UK for the first time had to import more food than it produced. We have to brace ourselves for more to come. Around the world, the UN reports, 34 countries are facing long and sustained food shortages as a result of a changing climate.
Like oil, natural gas has peaked – we are using more than we are finding. On the most optimistic forecasts we can rely on supplies for perhaps 130 years on current rates of global usage. But because it is the cleanest of all the fossil fuels, and countries like America have seen their domestic supplies peak, demand is rising dramatically on the world markets and some analysts predict its long-term availability being half that. In May, the IEA warned that ‘there are prospects of even tighter natural gas markets at the turn of the decade’.
In the UK, the North Sea supply has peaked, so we’ll be increasingly reliant on Russia – the world’s now predominant energy superpower – for natural gas. Russia, which recently took to flying spy plane missions again and announced its intention to become the world’s largest manufacturer of military aircraft. Russia, which, last year, in a dispute over charges, turned off the gas supply to the Ukraine for two days. It will be both an increasingly risky and increasingly costly supply of fuel; a cost also reflected in influence as scarcity bites.
In 2006, the UK imported 22 billion cubic metres of natural gas at a cost of £2.5 billion. Ultimately, as with oil, we know it will be kept for the domestic market and use by allies.
Coal, then, is the last great fossil-fuel generator and is enjoying a renaissance. ‘Clean coal’ is how it is known these days. Of course, the coal isn’t clean. Instead, the carbon dioxide (CO2) from burning the coal is removed from the exhaust gases in a process known as carbon capture and storage (CCS) or zero emissions technology (ZET). Once the emissions are captured, the carbon is either piped or transported by tanker to a pump station where it is driven under pressure, to a geological formation like an exhausted oil well. According to Daniel Shragg, climate science advisor to Al Gore on An Inconvenient Truth, the east coast of America has many such formations. The 132 coal plants currently planned for America are in the mid-west and none have this technology installed. Nevertheless, this highlights a fundamental question about the viability of CCS: How do you police it? How do you calculate emissions where production is not constant? How do you ensure it is tankered and delivered, especially in times of energy shortages?
Ultimately, there is something of a myth surrounding coal. Deposits only look substantial compared to our dwindling supplies of oil and gas. In 2006, the UK imported 50.5 million tonnes of coal (90 per cent of current usage), at a cost of £2.2 billion. For how long will there be security of supply? If, globally, we burn it all, at current rates of usage, there’s enough to last 200 years. If, however, coal is used to fuel growth and compensate for shortages of oil and gas, its longevity diminishes proportionally – to less than 100 years if it becomes the world’s primary fuel – and the cost rises accordingly. From what little we know of the principles behind clean coal, the process reduces its efficiency as a power generator, further shortening its prospective long-term viability. Taken on its own, coal is nothing more than a crutch to maintain our current way of life for just a few more years.
The dynamics of simple supply-and demand economics highlights the fundamental problem of pursuing a hybrid fossil fuel future: it is going to become increasingly expensive as the raw materials get nearer to exhaustion. In 2006 we spent nearly £30 billion (at 2006 prices) importing fossil fuels, according to Defra.
We also need to consider the impact on climate change. If we burn all the known reserves of coal alone, the biosphere will suffocate first – global temperatures will rise by 10-12°C. That’s the temperature rise that occurred 250 million years ago and caused the Permian extinction – the most cataclysmic event ever known. On the Hadley Centre business as usual forecasts – based on current usage of oil, gas and coal – parts of the world (Africa and the Indian sub-continent) reach this temperature before the end of the century.
The energy white paper is fatally flawed in other ways, too, not least by promoting the belief that a techno-fix is waiting in the wings, which is at odds with its recognition of the fundamental need to curb energy use. What householder, let alone global businessman with his eye on the bottom line and annual bonus, is going to voluntarily turn off the lights if a techno-fix is on the horizon?
Yet, this is what the white paper implicitly expects. While openly admitting that coal is going to be used as a power generator for the abstract ‘some time to come’, the EWP proposes a competition to identify a CCS design that could be sent to prototype. Consequently we can’t expect to have developed a commercially proven system for clean coal for, at best, 20 years.
Its nuclear scenario is hamstrung in the same way. We are nowhere nearer addressing the safety issues surrounding nuclear or achieving fusion than we were 50 years ago, when the technology first materialised, promising electricity too cheap to meter.
Meanwhile, the white paper maintains that energy efficiency and conservation will be stimulated by the creation of a carbon market. It can be argued that the threat of an international carbon market is having a beneficial effect, driving industry to clean up its act. A recent Greenpeace audit forecast that renewables would be supplying 20 per cent of the world’s electricity supply by 2020. This reflects the piecemeal response to the converging crises that are emerging around the world: people, industry, nations acting autonomously.
It doesn’t bode well, however, for an international agreement on a carbon market being achieved, with all its inherent ramifications for world trade. Look at the refusal of the USA and Australia to ratify Kyoto and the treaty’s failure to secure its emissions reduction target of 5.5 per cent on 1990 levels; the intense negotiation already underway over Kyoto 2 (which is set to be signed in 2012), where the emissions reduction target is set to rise by an additional 30 per cent; and the failure to achieve consensus on how to address energy and climate at the 15th session of the UN Commission for Sustainable Development in New York in April and the belief that a carbon market worth its name will emerge looks fanciful.
As Nick Robins, the newly-installed head of the Climate Change Centre of Excellence at HSBC, wrote in the December 2006 Ecologist, if the carbon market set a realistic price per tonne based on the environmental damage it caused – a price set at $85 in last year’s Stern Review – then companies such as BP would be bankrupt.
Obviously any future carbon market is going to set a level sustainable to big business, particularly energy suppliers. And it clearly sends out the wrong message – it’s OK to continue emitting carbon, at a price.
A domestic carbon market (tradeable quotas) is also envisaged to curb residential use, although this would demand massive investment for what is essentially a short term measure. The reliance on a carbon market to deliver cuts in emissions can only work on a central grid; it would be unable to have a marked impact on a decentralised grid.
Finally, we discover what role renewable technologies have to play in our energy future. The EWP states that by 2015, 15 per cent of our energy needs will come from such sources, a staging post along the road toward achieving 20 per cent by 2020, which we are committed to as a signatory to the EU heads of state renewable energy obligation. However, a DTI briefing paper obtained by the Guardian newspaper over the summer exposed this as being beyond our reach. Currently, it says, renewables account for around 1.5 per cent of electricity supply in the UK and admits we don’t have a hope of achieving the EU heads of state agreement.
‘All scenarios represent a huge increase in deployment of renewable energy technologies from the UK’s base position in 2005 of 1.5 per cent and also from our forecast of around 5 per cent by 2020 (based on current policies),’ the briefing paper states.
It then posits numerous statistical devices that should be pursued in an endeavour to be allowed to offset emissions, in a way to seemingly meet the target: the key instrument being a carbon market.
The potential of clean hydrogen as a means of increasing the future viability of renewable technologies is noticeable only by its absence, although it is being promoted for London by the Mayor Ken Livingstone and is the subject of an EU declaration of intent, to which the UK is a signatory.
The raft of measures in the EWP, Chancellor Darling concluded in May– based on the unachievable 15 per cent renewable input – will by 2020 reduce the UK’s emissions by somewhere between 23 and 33 million tonnes of carbon (MtC), which is the equivalent of a 15–21 per cent cut in our annual emissions, as estimated by Defra for 2006. As the EWP is the big push in tackling climate change, the Government’s 60 per cent target currently looks unachievable, let alone the Tyndall Centre for Climate Change Research forecast, which says the climate science demands a 80–95 per cent cut by 2050.
Since 2002 Jeremy Leggett, environmentalist and founding chairman of Solar Century, has been one of many industry experts advising the government on how to achieve its renewable energy obligation.
He recently wrote in the July/August Ecologist: ‘On renewables, at the heart of the mismatch between the Government’s rhetoric and the policy reality lies a stifling inability throughout Whitehall to do anything other than “think big”. This theme runs through the energy white paper at every turn. There is clearly a view at the highest level of government that ‘grown-ups’ don’t get their energy from renewable, community or micro-generated sources.’
As we show on pages 46-47, renewables can power the UK to the tune of 702 TWh (terawatt hours) of electricity and 429 TWh of heat annually, utilising known technologies. This compares to our current usage of 406 TWh and 710 TWh respectively. Taking into account electricity needed for a sustainable transport system (151 TWh, according to the Centre for Alternative Technology) we can see that the problem is heat, which can only be addressed by an immediate and wholesale renovation of housing stock and not some future carbon market.
Yet despite this – and the fact that renewable technologies are becoming increasingly efficient and price-competitive by the day – the Government remains resolutely unimpressed and is set to drive investment towards uncertain technologies, such as CCS and nuclear fusion, and towards heat-inefficient centralisation.
To coin what is fast becoming an anodyne phrase, this is business as usual. The business as usual that Sir Nicholas Stern warned would end in climate catastrophe. As the recognised world leader on climate change, the Government’s insistence that continued and sustained economic growth is inviolable is terrifying and baffling, and simply incompatible with what is known.
It’s not just fossil fuels that are running out. Most major raw materials integral to modern manufacture are following a similar trajectory, on slightly varying timelines, as was detailed in May in an investigation published in New Scientist. In 50–100 years, it concluded, the era of cheap consumer goods will be over. Indeed, the OECD has convened a task force to look at resource depletion.
Growth cannot address the converging crises. Unless we take this single concept on board we will not be able to move forward with any sense of purpose. The business as usual approach simply mortgages the future, as we can see by looking at the EROEI of competing energy supplies and their respective carbon footprints. These are the critical considerations when assessing a viable long-term strategy to deliver energy security and mitigate against climate change. By seeing how much energy is generated by a given technology in its lifetime and then dividing this figure by all the energy used to construct, install, maintain and decommission, it is possible to calculate where best to spend our remaining supplies of fossil energy.
We can also immediately see which sources of energy build in security of supply and resilience to climate change, and which ones leave us exposed to random blackouts and climate catastrophe, spiralling costs, terrorism and far-reaching foreign policy demands.
The EROEI exposes government policy as falling into the latter category. Essentially, it is proposing that we burn our fossil fuels simply to meet current consumer demand, with no end game in sight.
Not only does this contradict the stated aim of tackling climate change, it compounds the evident belief that a techno-fix will emerge, which in turn undermines the drive to get consumers to be more energy-efficient. Historically, whenever there has been a technological advance in electricity generation or delivery, usage has gone up. The only times it has fallen is during a recession.
The R-word, perhaps more than anything, explains the current reluctance to go down the renewable route. It will make us uncompetitive if we act unilaterally, the Government says, wheeling out its mantra that we are only responsible for two per cent of global emissions. However, if the City of London’s offshore investments – from which the UK directly profits – are taken into account, as they were in the recent Christian Aid, report Coming Clean, the UK is actually responsible for 15 per cent of global emissions.
Today, admittedly, fossil fuels remain cheaper than most renewable sources, but in a decade that won’t be the case, as the costs per unit of renewable energy are fixed – the sun always shines, the wind always blows, the tide always turns and once the technology is installed, it requires maintenance alone. Conversely, the costs of fossil fuel and uranium over the next 30 years will be inherently volatile as supplies run out. To stand the faintest hope of controlling our destiny and preserving the lifestyle choices we enjoy today we have to end our reliance on fossil fuels. Contrary to popular myth, it is the pursuit of some kind of hybrid fossil fuel future that will return us to the cave, not the pursuit of a renewable energy future.
Undoubtedly, the switch to renewable energy will slow growth but the impact will be negligible compared to what we can expect if we crash into recession as a result of inflationary pressures arising from fuel scarcity, or suffer climate shocks of which the floods in Tewkesbury were just a foretaste. The impact of these converging crises is already emerging in the form of higher fuel prices, higher food prices and higher insurance premiums.
In July the Centre for Alternative Technology (CAT) released its report Zero Carbon Britain. This does what it says on the tin: it tells us, in great detail, how we can become a renewable society by 2030. In America, S. David Freeman has delivered a similar blueprint, showing how the USA can become wholly powered by renewable technologies in 30 years. How starkly these compare with the Government’s approach.
As the white paper was being finalised, the Government reduced the grant-funding available for households wishing to install renewable technologies by around 75 per cent, crippling demand. It remains noncommittal on feed-in tariffs to encourage micro-generation, an incentive that has driven Germany’s renewable energy supply to above 20 per cent.
There is a raft of dramatic adverts exhorting us to conserve energy, and a rollout of smart metering is on the horizon. And latterly, coming in a poor third behind climate-change sceptic Australia and California, it announced that the sale of incandescent lightbulbs would be phased out in four years. Yet there has been no similar action on white goods, even though most major manufacturers don’t place their top rated energy-efficient models on the UK market. Nor has there been any action on fuel efficiency or against the petrol engine, although plug-in technology exists and should be clearly heralded as the future.
As with refurbishing the housing stock to make it more heat and energy efficient this could be achieved with negligible tax and incentive measures. The Tyndall Centre’s assessment of the EWP is damning and precise: ‘The climate change premise of the energy white paper is admirable. By contrast, the content is not commensurate with the Government’s 2°C commitment nor its claim to be providing ‘international leadership’ through ‘the credibility and influence’ of its domestic policies.
‘Given the Government’s acknowledgement of the seriousness of the climate change threat, the EWP only serves to reinforce the shameful political expedience of current UK policy.’
If we do act to use the world’s remaining meagre reserves of fossil fuels to switch to renewable technologies over the next 23 years, the future is bright. We will still have the security of a home, that is energy-efficient, we will still be able to enjoy our electrical gadgets, we will still be able to drive.
There will be constraints on production, but productivity will become to be measured on quality (longevity) rather than quantity of units produced, to conserve resources and energy use. But while there are potential job losses in manufacturing there are potential job gains in the service sector. The growth potential for small and medium enterprises is immense, as would be the export potential to our knowledge economy of gaining the firstmover advantage in switching to pioneering renewable technology.
The billions of pounds we currently spend on importing fossil fuels would instead be spent within the UK. The switch over will change our working patterns and habits, as is to be expected from what is essentially the third industrial revolution. As a semi decentralised system, it will be resilient to failure or attack and eventually supplemented by a smart grid where households become renewable generators.
If we don’t make the switch, our horizons will narrow to a degree that few of us in the developed world can begin to imagine. If we fail to embrace the future we will be left hostage to fortune.
As Colin Challen MP, chairman of the all-party committee on climate change, said at the launch of the CAT report: ‘We should not be asking our politicians can we do this – we should be asking why aren’t we doing this.’
Some alternatives to current sources of energy:
Energy glossary
Kilowatt-hour (kWh):
A kilowatt-hour is the standard ‘unit’ of power that appears on your bill. In the UK, the average household uses 3,300 kWh of electricity and 20,500 kWh of gas every year.
Megawatt-hour (MWh):
One megawatt hour is equal to 1000 kilowatt-hours.
Gigawatt-hour (GWh):
One gigawatt-hour is 1000 megawatt-hours.
Terawatt-hour (TWh):
One terawatt-hour is 1000 gigawatt-hours.
This article first appeared in the Ecologist November 2007
