The recent furore over the hacking of e-mails at the University of East Anglia’s Climatic Research Unit and the “revelation” that the Intergovernmental Panel on Climate Change got its forecasts on the rate of Himalayan glacier melt wrong are both rather “unfortunate” events
That is especially true if you are in the business of trying to prove that climate change and global warming are a reality.
Add to this the ongoing extremely cold UK winter, with its record snowfall, and the absolute farce of the Copenhagen climate-change summit and it is not at all surprising that an increasing number of people simply don’t believe what the politicians are telling us.
But then climate change must be a reality because you only have to look at how much money the US government, its industry and its investment community are putting into the sector to make it all happen. Yeah, right.
Our American chums don’t do this sort of thing without being pretty darn sure they’re going make a few dollars out of it. As I’ve said before, it’s the Silicon Valley thing all over again.
The same can, of course, be said of many European countries, and Norway, which has recently achieved second place in the table of venture-capital investment in clean technologies. Congratulations to it for its vision.
However, all of this bickering over climate change doesn’t actually matter.
Believe me, it really isn’t important whether you believe in climate change or global warming, whether we caused it or it’s a natural phenomenon. Be a climate-change agnostic or denier if you’d like to, and don’t feel guilty – and don’t let people harass you because of your beliefs.
When Gordon Brown or Miliband the Younger try to preach to you about how wonderful the UK has been in setting tough targets on emissions, just ignore them. In fact, switch them off. Nothing they have to say is even remotely relevant.
No – what you really do need to believe in and get really worried about is that the cost of doing pretty much everything you do that involves energy is not going to get just more expensive, but really, really expensive.
That’s the real reason all these countries are investing so much money.
There has been a discussion going on among oil&gas analysts and others for a long time about so-called “peak oil”.
The concept is simple and it’s that, at some point, global oil demand will exceed global production and that will be followed by a relatively rapid decline in production.
Enter Richard Branson of the Virgin Group, the international balloonist, airline owner, train operator, Formula 1 team owner and all-round good egg. Actually, I mean that. I have a high regard for him and his form of entrepreneurialism.
Virgin has formed a coalition called the UK Industry Taskforce on Peak Oil and Energy Security, which includes engineering group Arup, architect Foster and Partners, Scottish and Southern Energy, Solar Century and bus company Stagecoach.
The consortium has recently launched its second report looking at the oil supply issue. Have to admit here that I don’t remember the first report, but I made up for it by reading this latest one from cover to cover.
What the report says is that “the next five years will see us face another crunch – the oil crunch”, and “as we reach maximum oil extraction rates, the era of cheap oil is behind us. We must plan for a world in which oil prices are likely to be both higher and more volatile and where oil-price shocks have the potential to destabilise economic, political and social activity”.
None of this is necessarily new to me or, indeed, many of you, but the strength of the report is in who says it. These companies are not exactly shrinking violets and so should attract the attention of the Government.
I stress the word, should, because, unfortunately, the Department of Energy and Climate Change (DECC) told the BBC, “We don’t have a firm view on what the future holds for oil supply and demand, but we do recognise the risks”. Oh, goody.
That said, making such a precise prediction on when production will effectively peak is dangerous stuff.
It is highly dependent on a range of factors which, among others, include economic performance and associated demand levels; how much investment in new production is or is not going on, and how much is being spent on reducing decline rates.
If decline accelerates because oil companies making low profits aren’t investing, then the effect will be the same as if demand goes up. In other words, the price will eventually rise and so-called demand destruction will set in, which is when people won’t be able to afford to buy the stuff any more.
So is this really more important then climate change? Well of course it is because it could threaten not just every economy on the planet, but our entire way of life. The only countries that might escape are those that are still relatively undeveloped. It is also going to happen much faster than any climate-change impact.
The problem is, though, that the solutions proffered by this report are fairly predictable. In fact, the report calls them “countermeasures”, which sounds almost warlike – but the rhetoric, sadly, isn’t.
For example, the report says: “We call on the UK Government, local government, businesses operating in the UK market and other key stakeholders to join us in an effort to appraise the risk from oil-supply difficulties and plan proactive and reactive strategies – local and national – for facing up to the problem.”
Calling on the UK Government to do anything is a fairly pointless exercise, but I think that, with all due respect to Virgin’s consortium, the strategies we need to follow to deal with this issue are actually already pretty well understood.
What’s missing, of course, is the determination and funding to turn those strategies into reality.
But, first of all, we must be clearer about our priorities. Climate change may or may not be happening, but when you arrive at the garage to find that petrol is not £1 per litre, but £5, and when it costs you £2 per litre for heating oil, you really are not going to be worrying too much that somebody’s climate-change model has predicted that a small island in the South Pacific might possibly, maybe, in certain circumstances, at some indeterminate and variable point in the future, be flooded. Are you?
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