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Friday, March 26, 2010

Government wakes up to peak oil

The British government is taking peak oil very seriously, according to a participant at a behind-closed-doors ministerial meeting earlier this week.

Rob Hopkins blogged about what he saw when he represented “energy descent” group Transition Network at the UK Department of Energy workshop on Monday, March 22.

It is essential reading about the “fascinating and frustrating” process of attempting to alert government to an issue that it would probably rather ignore, if it could get away with it. Hopkins (right) suggested that, in retrospect, it may be regarded “as the day when UK government finally starting to ‘get’ peak oil.”

The event – which was supposed to have been kept secret but got leaked in the press – featured four peak oil presentations: reports from both the UK Energy Research Centre and the UK Industry Taskforce on Peak Oil and Energy Security (see below), an oil industry perspective, and Hopkins’ talk about "local communities and energy efficiency"

It’s the inside view from the oil industry that makes the most interesting reading. According to Hopkins, the presenter – he’s not allowed to name him – stated:

. . . That it was in the world’s interest to slow down on approach to the
peak, in order to lessen its severity. He said that according to his
company, 2004 was what he called the ‘inflection point’, the beginning of the
global production plateau for conventional oil. In 2005 oil stopped being
cheap, and will never be again. He stated that it is supply flow that is
more important than reserves. We know now, he said, that $150 a barrel
‘breaks the machine’, that the world can’t function above that price, it is the
price that causes recessions. If something is very expensive, it doesn’t
really matter how much is left if we can’t afford it. He gave, as an
example, the fact that there are minute amounts of gold in sea water. We
know it’s there, but we can’t do much about it, in the same way that we know
there is loads of oil spilt into garage forecourts across the country, but we
are not going to dig them all up and steam the oil out of them!

In order to power the transition, he said, we would need to produce
more oil and gas over the next 10 years. The two things that would make
this possible, he speculated, were what he called ‘unconventional gas’
(extracting gas from oil shale), and how quickly Iraqi oil is brought on
stream. Cheap energy prices are not good for energy transitions, we need
high prices in order to incentivise the kinds of change we need.
The subsequent discussion included the suggestion that the matter be best left to the market alone, but one of the participants observed “one of the key roles of government is to make it possible for people to live with less energy, and that land use planning has a major role to play here.”

Of course, the minister present – presumably Energy Minister Lord Hunt – engaged in various “techno fantasies” including the “complete creation of an electric car fleet, with a recharging network and sufficient electricity to keep the whole thing going” without considering where the electricity, or money, would come from.

The good news, of course, is that Hopkins suggested follow-up meetings are on the cards: "Although Chatham House rules prevent me from stating what the Minister said, there is clearly a desire to continue this dialogue on peak oil. "

Of course, not much of this got picked up in the media – just lots of froth about oil prices having stabilized near $80 a barrel. For now.

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