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UK Energy Security
Euan Mearns, The Oil Drum: Europe
In 2006, 92% of the primary energy consumed in the UK was derived from fossil solar fuels – oil, natural gas and coal.
Not so long ago the UK was self sufficient in these energy resources but now we are importing increasing amounts of all three.
Dependency upon imported energy undermines UK national security and will have potentially dire consequences for the balance of trade.
…What needs to be done?
The answer here is very simple. Domestic energy production should be maximised whilst energy consumption should be minimised. The strategy needs to be set within the context of national interest and energy security instead of being obscured by the fog of climate change.
1. The primary energy policy goal should be for the UK to remain in balance with respect to primary energy production and consumption.
2. To achieve this, domestic energy production should be expanded and in the near term this will inevitably mean expanding domestic coal production, nuclear energy and renewables with proven high ERoEI which for the UK means hydro electric and wind power.
2b. Construct a network of combined heat and power generators running on combustible domestic, industrial and agricultural waste.
Expanding these energy sources will unlikely replace the decline in domestic oil and gas supplies and the other side of the equation is conservation.
3. Meaningful energy conservation measures requires a clear and detailed understanding of where most energy is consumed by our society and a first step to conservation should be to audit our energy consumption patterns. Where is most energy being wasted and where can the easiest and least painful conservation measures be made? I suspect that government buildings (schools, hospitals, government housing and offices) and industry are profligate wasters of energy.
4. Set staged targets for per capita energy use reduction and identify stategies to achieve them. This must be linked to the primary objective of achieving energy balance which will likely require large incisions to be made in energy consumption.
5. Cars / automobiles are an obvious target and I would advocate aggressive legislation on motor efficiency that will inevitably mean reduced engine size, power and weight.
6. The strategy for cars should combine with a strategy for phased electrification of the automobile fleet and a proper evaluation / feasibility study of implementing V2G (vehicle to grid) technology combined with expansion of renewable energy sources.
7. Electrified mass transit systems should be built where possible.
8. Encourage pan-European taxation of jet fuel.
9. Legislate to discourage single occupancy dwellings and to encourage multi-occupancy. This has the added benefit of solving the apparent shortage of housing and will save the enormous energy cost of building millions of new homes.
10. Legislate to upgrade building standards for homes, industry and public buildings including the incorporation of micro renewables. Enable the upgarding of the existing building stock to improve energy efficiency – ensuring all the while that measures introduced do actually result in significant energy savings.
11. Audit our food production and distribution systems. Legislate in favour of energy efficiency which will inevitably limit choice. Ensure the energy infrastructure exists to guarantee our future food supplies.
12. Mount a public awareness exercise aimed at informing the public about decisions about energy use that are to be made on their behalf and their best interests.
These may seem draconian measures but they are in fact intended to provide a “business as usual model” for the UK based on using significantly less energy. There will inevitably be certain business casualties. But many new business opportunities will also be created.
The alternative may be to face real energy shortages in 2 to 8 years time when the anticipated supplies of imported natural gas and oil do not appear. Energy shortages combined with spiralling energy costs and energy import bills may paralyse our economy.
(26 July 2007)
The World at $100 a Barrel
James Pethokoukis, U.S. News & World Report
Oil prices have surged again, and investment bank Goldman Sachs thinks they have the potential to spike to near $100 a barrel by the end of summer unless Middle East production increases. How would a rise to, say, $95 a barrel affect the global economy? Some key take-aways from a new analysis by the bank:
…My take: This is not a bank that expects oil prices to ruin the economy today or in the future. While theories about “peak oil”-that world oil production is about maxed out as demand keeps rising-are popular on the Internet, it is tough to find an oil analyst or natural resources fund manager with even the slightest sympathy toward them. Peak-oil guys are still outliers on Wall Street.
Oh, several readers think I may have misidentified Sen. Joe Biden in a recent post as a believer in peak oil based on some debate comments of his, when he claimed Iran would have to start importing oil in 2014. Perhaps Biden was referring to a future inability of Iran to pump oil because of a lack of investment in its infrastructure. Maybe, but 2014 is also a common date given for when global oil production will peak and begin to fall. As they used to say in Soviet Russia, “It’s no coincidence…”
(26 July 2007)
It’s encouraging to see James Pethokoukis’s “nose for news” picking up on peak oil. It takes a little digging to get at the truth though. Suggestions:
- “End of cheap oil” is the politically correct way to say “peak oil” – and a lot of people are saying that we’re at the end of cheap oil.
- To get beyond the conventional wisdom, one has to go beyond the conventional sources. For example, look at the work of retired and independent petroleum geologists.
- Look at what oil companies do, rather than what they say – e.g., the relatively small amount of investment in new exploration.
- Read between the lines of the recent IEA and NPC reports.
Reading Oil’s Tea Leaves
Toni Johnson, Council on Foreign Relations
A recent study from the U.S. National Petroleum Council (NPC), led by former ExxonMobil chairman Lee Raymond, asserts global energy consumption will increase as much as 60 percent by 2030 but assures “the world is not running out of energy resources.” The report says the world is entering an era of tight energy supplies where global oil production could drop to 5 percent below current output by 2030. The Financial Times says the NPC study represents “a defining moment in the history of the global energy industry” crystallizing the “unease about global energy supplies that has been accumulating over the past couple of years.”
The Petroleum Council recommends strengthening U.S. fuel economy standards, further developing biofuels, and increasing domestic drilling for oil and gas. It also calls on the United States to take up policies to curb greenhouse gas emissions, similar to recommendations made by a recent CFR Task Force on U.S. oil dependency. Such recommendations may be surprising coming from Raymond, well known for his skepticism about global warming, and the New York Times says they “probably far exceed” what the Bush administration was expecting when the U.S. Energy Department requested the study in 2005.
But the NPC study fed a new round of debate among energy experts about the availability of supplies. The Association for the Study of Peak Oil and Gas, a nonpartisan research organization studying global oil and gas depletion, says the NPC report “artfully camouflages the enormous near-term challenges in producing sufficient oil and gas to fuel the global economy” and contradicts a recent report from the International Energy Agency (IEA) indicating an oil supply “crunch” as early as 2012.
(26 July 2007)
Links and more text at original.
Even Oil Optimists Expect Energy Demand to Outstrip Supply
Richard A. Kerr, Science Magazine
Last week, a federally commissioned report warned that the United States must ambitiously develop sources of liquid energy other than oil in the next 25 years. And a second recent report foresees oil supplies tightening by as early as 2010.
(27 July 2007)
The article is behind a paywall, alas. -BA
Canada Round-Up: July 26th 2007
Stoneleigh, The Oil Drum: Canada
As oil threatens to go through the roof over concerns that OPEC may not open the spigots, exploiting Canadian reserves is becoming far more expensive. The threat of labour disruption in the oil sands will only add to the problem.
An OPEC equivalent controlling future LNG trade is seen as a threat to US security, even as natural gas prices decline and the drilling sector consolidates in Canada.
Burnaby BC comes to terms with a long clean up after an oil spill, as the aftermath of a Japanese earthquake rattles the nuclear industry, and Ontario’s nuclear troubles continue.
Risk aversion goes international as credit markets tighten around the world. Faced with threatened deals, banks are holding on to loans rather than hawking them to investors. The US sends another more senior figure to China to convince them to buy mortgage-backed securities. As bridge loans become pier loans in the developing credit crunch, Wall Street ‘heads for the diaper aisle’.
(26 July 2007)