|
| |
Published in The Japan Times 26th June 2006
By David Howell
End of the Oil Age? A Happy Coincidence.
LONDON- First there was wood. Then it was replaced by coal. Then coal was
replaced by oil. Is it now the turn of oil, which currently accounts for some
two thirds of the world’s primary energy, to be pushed aside by other energy
sources and devices?
Last time oil prices peaked dramatically, and global oil supplies were put in
doubt, in the mid-nineteen-eighties, there was a dramatic dash by consumers for
and corporations for more energy-efficient vehicles and devices in both factory
and home for using less oil.
But at the same time, as demand for oil fell round the world, governments pushed
for more supplies, the oil producing countries turned on the taps and new and
more remote (and costly) oil fields were opened up, encouraged by the high price
for a barrel of crude oil .
With bigger supply and smaller demand it needed no Phd in economics to work out
the consequence – namely that oil prices crashed, suppliers went bankrupt,
investments in alternatives were frozen, all plans for a post-oil age were put
on the back burner and the world went back with a sigh of relief to dependence
on cheap oil.
Could the same thing happen this time? There are grounds for thinking that this
time, at last, we really could be at the end of the oil age, and these grounds
rest on an amazing and enormous new coincidence of two forces, or trends, which
have happened to come together at this moment in world history.
These two forces are, first, growing concern for energy security and, second,
growing concern about climate change.
Of course the timescale in each case is quite different. Threats to energy
supply are here and now, with worries that in country after country supplying
oil to the world dangerous political and security threats are looming which
could not only jack up the oil price still further but actually interrupt the
flow . Threats of global warming and climate disruption are much longer term.
Indeed the Chief Scientific Adviser to the UK Government has said that while
these threats are serious it is probably too late to do anything that will
affect climate change in this century.
But that does not stop people, and especially young people, worrying deeply
about the catastrophic effects on the planet of more greenhouse gases and much
higher global temperatures. Policy-makers and vote-seeking politicians
everywhere are now crafting their appeal to show they take these issues deeply
seriously.
The good news is that steps to increase energy security, by cutting down
dramatically on oil dependency, and maybe in due course on all fossil fuels, are
also steps in the right direction on climate change issues. But the question is
whether oil-thirsty societies are ready to take the further necessary steps, and
that in turn depends on whether consumers really see, and demand, cheaper and
better alternatives to heavy use of oil.
That such cheaper and better alternatives already exist, and have done for some
years, is not in doubt.
For instance ,transport consumes well over sixty percent of America’s oil needs.
Ultra-light cars and trucks, fuel-efficient aircraft constructed of
revolutionary new materials, hybrid vehicles with fantastically high mileages
per litre of fuel – all these things are already coming forward. It needs only a
few well-placed incentives and tax breaks to unleash a vast cascade of
innovations and inventions which could reduce oil demand dramatically in the
advanced world, either through large efficiency gains – in other words simply
not using nearly so much oil – or through substituting other fuel sources, such
as natural gas, clean coal and eventually hydrogen, and at the margin wind power
and solar power.
This process of replacement will be driven mainly not by Government strategies
or laws but by profit-seeking enterprise. Immense new opportunities for
wealth-creation, plus new markets, many new jobs and whole new industries are
undoubtedly on offer for those smart enough to see the way things are going.
Political leaders are just beginning to understand that if they want to get
elected, or re-elected, they will need to spell out how they are going to unlock
this potential. They will also need to understand that the very large resources
spent on trying to safeguard oil sources - through big military commitments in
the Middle East, for example - could be saved and far better used in tax
incentives to innovation and enterprise, and in better targeted support for
development, and campaigns to raise health standards in poorer societies.
Lifting the burden of oil costs, including these hidden costs, from western
societies, by the obvious method of using (and therefore importing ) less oil,
is far the best and most practical route to greater energy security in all the
main oil-consuming countries, and especially in the USA, in Japan and now in
China and India. More than that, it paves the way for a carbon-free future one
day and for better lifestyles and environment. Since this future will also
include substantial quantities of oil from crops, such as ethanol and
bio-diesel, it also helps solve one of the biggest social problems in Western
societies – namely, how to keep the farmers happy without too much costly
protection.
As for the traditional oil-producing regions, such as the Gulf states, or
Venezuela, or Russia or Nigeria, – they may fear the loss of their main revenue
source , but in fact they will grow into far more balanced and stable societies
without the corrupting ‘curse of oil’. Even the big oil corporations could
become more profitable if they relied less on finding and selling more and more
oil, and turned to other energy sources and innovations instead.
ENDS
|
