A couple of years ago the government released The Wicks Report on energy security. It was an almost stunningly complacent piece of work from the former energy minister, claiming in the first paragraph that “there is no crisis”. Using the IEA’s rosiest figures and ignoring the government’s own cross-party working group on peak oil, Wicks concluded that the world could look forward to 40 more years of easy oil.
Today I learned that this was actually one of two peak oil reports produced by the Department for Energy and Climate Change. The other was not published, and has only now been released after a series of Freedom of Information requests.
‘Report on the risks and impacts of a potential future decline in oil production’ is the result of an internal study by the Business Department, and its conclusions are rather different from Malcolm Wicks’. They suggest that a permanent decline in oil production is “unlikely to take place before 2020”, but that it is impossible to predict, the consequences would be serious, and that “the lead-times for Governments and economic systems to adjust to peak oil could be several years or even decades.” Considering the IEA have changed their tune and started saying the conventional oil peak is already 5 years behind us, this is a little concerning.
DECC declines to produce their own estimate, but it does include this handy summary:
For the first time I’ve seen in a government publication, there is an acknowledgement that OPEC overestimates:
OPEC data on reserves rarely changed despite ongoing production and exploration and no objective review of reserves has been possible. Also, there may be periodic incentives for OPEC members to overstate reserves in order to increase OPEC production quotas. International Oil Companies may have an incentive to overstate assets to boost share prices but to underestimate resources to negotiate better exploration conditions.
This is important, as without transparency in stated reserves, we just don’t have any idea how much oil really is left.
The report is also pretty clear about the potential effects of peak oil, including inflation, falling GDP, and even social unrest:
Finally, the report concludes that there are no policies the government could pursue to avoid peak oil, but that we ought to be ready and move faster on creating a low carbon economy. In classic have your cake and eat it government fashion, they end by declaring their intentions to both maintain oil supplies and reduce carbon emissions:
“Whilst we are committed to delivering the required investment in both conventional and new sources of oil in order to maintain sufficient supply to meet existing and future demand, it is important that as Government we help manage the transition to and opportunities of a low carbon economy.”
Perhaps it’s easy to see why this report was buried. Finalised in November 2007, the financial implosion was already underway. The last thing the markets needed was more bad news, presumably. So they sat on it for two years, updated it, and then sat on it for two more until forced to release it.