energy

I see no peak – the Wicks Report on Energy Security

wicks-reportThere is so much going on at the moment it’s hard to keep up. Last month we had a series of climate change initiatives from the government, culminating in the UK low carbon transition plan. Then we had food security. The one thing that’s been missing has been the peak oil perspective. Turns out the government released that a couple of weeks ago, while I wasn’t paying attention.

The report is from MP Malcolm Wicks, former energy minister and now the Prime Minister’s special representative on international energy, and is entitled ‘Energy Security: A national challenge in a changing world‘. Between 1981 and 2003 the UK was a net energy exporter, which means we’ve had a generation of politicians who have been able to complacent about our energy supplies. Unfortunately, they appear to have asked one of those complacent ministers to write the report.

The International Energy Agency sounded the alarm last year in its annual World Energy Outlook report. That seems to have gone unnoticed – as Wicks says in the first paragraph: “there is no crisis.”

Consequently, the report is a broad and optimistic view of the UK’s energy needs for the next thirty years. Wicks notes that we depend on fossil fuels for heating and transport, and that “global growth is strongly correlated with oil prices”. Rather than recommend breaking that addiction, he suggests we will need “better functioning oil markets”. The government just operates on a different paradigm, really.

However, it wasn’t so long ago that we could have said the same thing about climate change, and now it’s being woven through policy in every department. Not always well, but it is at least on the agenda. It is here too: “We must not pursue energy security at the expense of achieving our climate change objectives” says Wicks. So far the main government engagement with peak oil has been the US’ Hirsch report, which flew in the face of climate change, recommending tar sands here and coal there. This is a big step forward, and there is hope that one day, we might get some joined up thinking on energy security.

Nevertheless, just as the government’s Transition Plan ignored peak oil, so too does its energy security report. There’s talk of new gas pipelines, a new role for ‘clean coal’, and just one mention of peak oil. In a box, apart from the main argument, Wicks gives a brief history of the theory, and notes that “estimates of when oil production will peak vary from ‘imminently’ to ‘not before 2030’. Few authors advocating an imminent peak take account of factors such as the role of prices in stimulating exploration, investment, technological development and changes in consumer behaviour.”

For one thing, his claim isn’t true – most peak oil authors are very thorough, and can tell you in great detail about exploration and investment. I don’t know who he is listening to, but it isn’t any mainstream peak oil theorist that I know of.

Secondly, the government is being very selective with its data sources. It quotes the International Energy Agency (IEA) throughout, but then ignores their opinion when it doesn’t suit them. Wicks surmises from the IEA figures that we have enough oil for 40 years at today’s level of demand, but you’ll never hear such an cheerful conclusion from the IEA themselves. As the IEA’s chief economist Fatih Birol said recently, “The International Energy Agency believes peak oil will come perhaps by 2020. But it also believes that we are heading for an even earlier “oil crunch” because demand after 2010 is likely to exceed dwindling supplies.”

Third, Wicks is out of step with the industry. The report suggests that world oil demand will be 106 million barrels a day by 2030. The head of Total, Christophe de Margerie, doesn’t think the industry will ever be able to deliver more than 100 million a day. The head of Libyan oil has said the same thing, and the former head of Saudi Aramco. It’s not just the oil industry either – a UK business initiative called the Peak Oil Taskforce, incuding Virgin, Stagecoach and Southern Energy, estimates a peak in 2013. Jeremy Leggett points out that Wicks has even attended their meetings, but makes no mention of the taskforce or its findings.

I don’t want to be overly critical, as there is still some useful reading in the Energy Security report. If nothing else, it is good to see it being addressed. If this is the advice the Prime Minister is getting however, we are doomed to remain completely unprepared for peak oil. Like Darling’s budget, our policies will be based on the most optimistic of scenarios, with no margin for error.

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