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The End of Oil - Conference on Peak Oil, Food and the Economy

The CII Hall, London, UK, Tuesday 11 October 2005

Notes by James Lea

Introduction

These notes were made at The End of Oil Conference, organised jointly by PowerSwitch, CRed and East Anglia Food Link. The event, which lasted from 10am to 4pm, was split into three sections - speeches and questions before lunch, followed by workshops in the afternoon. It was chaired by Dr Ian Gibson, Labour MP, and featured a range of speakers. The hall was packed out with three hundred delegates, indicating just how important this topic has become.

Michael Meacher, Labour MP and former Environment MinisterMichael Meacher

Outlined current situation, likely price rises and impacts.

A new Rimini Protocol will be put forward in Italy later this year, proposing that countries cut their imports to match available oil. The intention is to manage the diminishing oil supplies without profiteering. The biggest problem will be enforcement. It's a small first step but vital, first proposed by Colin Campbell.

China and India's greenhouse gas emissions will match the West in ten years time.

There's no technological bullet available.

As of this year, the UK has become a net importer of gas. By 2020 80% of UK gas will be sourced from Algeria, Libya, Russia and other states.

Some solutions:

  • gas as a bridge economy
  • hydrogen (from renewables)
  • carbon penalty
  • carbon budget for each sector following a national allocation plan
  • longer term: clean coal
  • a 'fee-bate', in which gas guzzling vehicles pay a fee, perhaps as much as £3000 to really make drivers think.
  • fuel cell research

There's also a very large potential for conservation - perhaps up to 75% without changing lifestyles. For example, only 15% of the energy in petrol is converted into forward motion, the rest is wasted. This could be improved upon.

Another example: all the energy wasted in US power stations matches the total energy consumption of Japan. If US car manufacturers improved fuel efficiency by only three miles per gallon, the US wouldn't be forced to rely on Gulf imports.

The UK could meet forty times its own electricity requirements from northern wind farms. We have a huge bounty of wind energy. To make these changes we must shift subsidies away from fossil fuel and nuclear into renewables.

He concluded by saying that fuel cell technology could be fully utilised within 25 years.

Chris Skrebowski, JournalistChris Skrebowski

Personal philosophy is to plan early and plan often, let the data speak for itself and never be afraid of your honest conclusions.

He spoke about the depletion challenge. Peak oil is when flows can't meet the required demand. If supplies can't expand, conventional economics requires high prices to 'destroy demand'. But economists also assume that supply can expand.

In 1998 oil was $10 a barrel. Recent bottleneck is refinery capacity.

In order to throttle back demand so that it can be met by available supplies of oil, oil prices must change as follows:

  • 2006 - $61 per barrel
  • 2007 - $70
  • 2008 - $80
  • 2009 - $90
  • 2010 - $101

and by 2010 there will be no demand growth!

Chris emphasised that peak oil is imminent. To increase supplies oil companies will have to undertake enhanced recovery. However future refinery plans are already established up to 2010, so there are insufficient resources to meet near future flow rates.

Regarding the date of peak oil, data taken from OPEC and other sources indicates a peak supply in 2006, diminishing thereafter. Many large oil companies reported declining production in 2005.

Furthermore, the US and the UK are first and third place in an international index of oil production declines for 2005. The data indicates that many more countries are about to go into decline in 2006/2007.

UK oil production from the Forties oil field in the North Sea rapidly peaked after it was opened up in 1975. The early high extraction rate and thus peak was necessary in order to recover investment in the field quickly.

Interestingly Russian oil production has fallen off lately - is this due to politics or geology?

Chris summarised that global oil production will peak within the next 30 months.

Keith Tovey, Energy ScientistKeith Tovey

Keith started with the evidence for climate change, which includes:

  • rapid increase in atmospheric CO2 concentration measured at Mauna Loa, Hawaii since the mid 1950s
  • increased winter precipitation in the UK between 1961 and 2001, and with decreased summer precipitation across the same period

Regarding our current choices, the government's policy is use of CCGT [combined cycle gas turbines]. UK nuclear power has just peaked last year. Clean coal is an option, but it produces high emissions when the cost of sequestration is factored in.

Keith then compared the energy efficiency of running modern office computers off solar photovoltaic arrays on the roof, emphasising that the system losses were very high because of:

  • conversion from PV DC to AC (inverter - typically 92% efficient)
  • conversion from mains AC back to DC within the computer power supply (very inefficient - e.g. 50%)

To solve this and reduce the PV payback period, a holistic approach is needed, in which all elements in the chain are considered and redesigned where necessary.

Keith discussed the use of biomass as a fuel source, by growing fuel crops. Unfortunately to meet current UK energy needs we'd need three times the land area of the UK! He described some other sources of renewable energy, including hydroelectric, wave power (a 'power snake' which was developed in the UK but is now being exported!) and geothermal. He mentioned the BroadSol project, a solar hot water panel [bulk-buy?] project to supply homes with hot water and reduce their dependency on gas.

A big problem is that power generation follows a conventional model, so we have some hard choices to make.

 

Andrew Simms, Policy Director of New Economics FoundationAndrew Simms

Andrew described how the expansion of the global economy increases the gap between the rich and the poor. Instead the poor get the costs without the benefits as they are particularly exposed. Indeed only 76 cents in $100 of growth trickles down to the poor.

30 out of 40 Highly Indebted Poorer Countries (HIPCs) are net oil importers. There is a growing ecological debt crisis.

To solve these problems we need more economic subsidiarity.

High oil prices are now leading to more sustainable agricultural practices.

A key factor in all this is knowledge that higher income does not always lead to increased well being. Conventional indicators do not reflect this. The New Economics Foundation are now developing 'The Happy Planet Index', which will encompass quality of life as well as conventional monetary measures.

 

Tim Lang, Centre for Food Policy at the City University of LondonTim Lang

Tim presented a talk entitled "Is there a food policy plan B?". He said his slides would be available afterward.

He began by comparing UK household expenditure on food. In 1950 the average family spent 30% of their income on food; now it is down to just 9%. This massive decrease can be attributed to the availability of cheap oil fuelling large scale agriculture.

There are many potential tipping points into a new food policy - most notably urbanisation - the movement of people into cities away from the land. We pay a high environmental and social cost for our food transport in the UK: some £9 billion, a large proportion of which comes in increased congestion.

Unfortunately the current political emphasis is on choice, so the political framework is part of the problem. Politics focuses on individual behaviour whereas it needs to change the circumstances in which those behaviours occur.

Tim summarised by noting that twentieth century food policies cannot go on - we must change and therefore need popular change.

 

Richard Douthwaite, author of "When the Oil Wells Run Dry"

The final speaker of the morning session began by describing Peak Oil as an opportunity to procure the type of world we're all campaigning for. Richard has been working with some decision makers in Ireland taking them through the consequences of Peak Oil up to 2015. He believes we must all face up to the climate and energy crises.

As a delegate at a recent conference on climate change in Buenos Aires he visited the International Energy Agency's (IEA) stall where he heard them say that the world economy can expand by 1.8% every year for the next 20 years. He remarked that they seemed unaware of the topic of the conference!

Richard believes we need a change in paradigm. We are already rich, so let's do other things and stop being so competitive! We can end the need for growth if we restructure our economy. Our present economy is based on the fact that nearly all of our money is lent into circulation. If due to a change in circumstances we stop borrowing, the whole economy slows down.

Unfortunately progress on solving climate change and energy crises is blocked by the fear of impact on growth. Should we leave scarce oil and gas supplies to the mercies of the tender market? If we do, the rich will get them. A good government would ration these resources for the benefit of all.

We need national and international fair distribution. We could adapt the Contraction and Convergence model to energy. Richard pointed out the inconsistency of the European Central Bank intervening to control inflation caused by high oil prices - surely adherents of the free market economy would leave everything to the market? It's vital that we allow the high oil price signal to permeate the market so that people start looking for alternatives. This intervention over inflation will break the market signalling mechanisms.

Higher energy prices will favour local producers. He gave the example of hand crafted fitted kitchens - at present mass producers dominate the market as they are so cheap. As peak oil impacts transportation and processing costs, local producers supplying hand crafted goods will become more viable again.

 

Question and Answer session

A wide range of questions were raised and put to the panel, who then took it in turns to answer. A summary of some key responses:

Q. [Population growth - can we produce enough food for our population?]

A. Richard Douthwaite - 1950s were a period of rapid population growth due to fossil fuel. However polyculture could provide sufficient food for today's population. Permaculturists and others have already started this.

Q. [Supermarkets?]

A. Tim Lang - Supermarkets are locked into an investment pattern. Their plan B will be top-down food control.

Q. [Campaigning?]

A. Chris Skrebowski - there are two divergent strains of campaigning: the need for us to take action, and the need for the government to take the initiative. Bottom up vs. top down respectively. We have a democratic system we can engage with in the UK, but that isn't the case in all countries.

Q. How do we market austerity?

A. Tim Lang - we must get better organised and show the benefits not the disadvantages. Simplicity is better than austerity. Have to take the long view.

 

Lunch 1 pm-2 pm

 

Food Workshop, facilitated by Tully Wakeman 2pm-4pm

A short introduction to organic farming was given by Gundula Azeez, from the Soil Association. She compared potential yields from organic farming against existing yields.

  • NW Europe: 5 to 50% less yield
  • N. America: 5 to 10% more yield
  • Developing world: up to 150% more yield

She explained the reason why NW Europe yield could fall was because at present farming is highly energy intensive, getting the most out of land but at a great cost. By contrast, developing world farming is less energy intensive, so there are greater area yield gains to be had through organic farming.

Gundula explained that there are many benefits to organic farming, including greater drought tolerance and independence from oil-based mechanisation and natural gas-derived fertilisers.

Key Questions

We spent ten minutes raising some questions we'd like to discuss, as a means of focusing ourselves on the workshop and getting warmed up. Tully noted these down on a flipchart.

Open Discussion (highlights)

We then had an open discussion, various points of which are noted here:

Farmer: Our energy costs are going up yet we're not earning any more money.

Supermarkets will find a low energy option. e.g. home deliveries. Others thought their response will be limited in that they will follow a low cost option rather than a low energy route.

Growing your own food - good education for children.

We need land to grow our food - collective access to land. Urgently need reform to the 1947 Town and Country Planning Act to eliminate the urban/rural divide that has driven up cost of building land while agricultural land remains cheap, and increases need for/distance of travel and commuting.

Also need to address land ownership.

Central London - tower blocks are unsustainable for food production

Settlement design is important when planning to meet our food needs. Some examples: edible landscapes, urban food trails.

The underclass should be put to work on the land (i.e. create a new peasant class, freeing up the "educated" to do more "important "things)! Robustly responded to with the assertion that we should all grow food - it can be enjoyable too. Some of us want to be peasants. It's possible to be a peasant with internet access - stop knocking peasants!

What would happen if catastrophic climate change occurred and the Gulf Stream shut down? UK climate would resemble northern Canada at the same latitude and it could be 5 to 6 degrees colder. Could we still meet our food needs then?

Mixed opinion about whether or not we could be self-sufficient in the UK for our food.

Concept of Emergy introduced - embodied energy. An important concept when working out the best course of action.

One person was worried that a return to a peasant culture would lead to a population growth! Again, others didn't think this was likely!

Developing countries - problem because of migration from rural to urban areas and loss of skills; peasants seen as low status.

Green Revolution - artificlal fertilisers enable a drift to cities caused by abundance of cheap energy.

At present in UK mental and academic skills are valued over physical skills. People are urged to acquire degrees which could become useless in the future.

Cuba - organic growers earn more than engineers!

Who will want web designers on a desert island?

Transition to a new way of living will be painful but by planning carefully we can ease the transition.

Need both a top down and a bottom up approach.

Need to move farmers away from net energy consumers to net energy producers.

However farmers find it difficult to go organic as it takes time, and they have no safety net if it doesn't work out. One strategy is to introduce an intermediate use of land, such as wind power, that generates revenue while the land is in transition.

Next Steps

Tully asked us what we should do next. Suggestions included:

  • website links - see powerswitch.org.uk resources
  • recreation of Rob Hopkins 'Kinsale 2001 - An Energy Descent Action Plan 2005' across all communities, linking political and practical actions on a local scale', with the results used to lobby councillors, MPs and MEPs
  • joining up with the Campaign against Climate Change international day of action on 3 December

 

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