Monbiot: Our blind faith in oil growth could bring the economy crashing down

Britain’s future prosperity has been hardwired to rising use of transport fuels, without a thought for the supply drying up

The energy white paper the government published last week talks of new taxes, new markets, new research, new incentives. Anyone reading the chapter on transport would be forgiven for believing that the government has the problem under control: as a result of its measures, we are likely to see a great reduction in our use of geological time.

Buried in another chapter, however, and so far missed by all journalists, there is a remarkable admission: “The majority (66%) of UK oil demand is derived from demand for transport fuels which is expected to increase modestly over the medium term.” To increase? If the government is implementing all the exciting measures the transport chapter contains, how on earth could our use of fuel increase?
You won’t find the answer in the white paper. It mysteriously forgets to mention that the government intends to build another 2,500 miles of trunk roads and to double the capacity of our airports by 2030. Partly to permit this growth in transport, another white paper, also published last week, proposes a massive deregulation of planning law. There is no discussion in either paper of the implications of these programmes for energy use or climate change. There are plainly two governments of the United Kingdom, one determined to reduce our consumption of fossil fuel, the other determined to raise it.

What happens beyond the medium term is anyone’s guess. But it should be pretty obvious that more roads and more airports will mean that our rising use of transport fuel becomes hardwired – the future health of the economy will depend on it. So the government must have examined this question. If our economic lives depend on continued growth in the consumption of transport fuels, it must first have determined that such growth is possible. Mustn’t it?

Last week I phoned four government departments – trade and industry, transport, environment, communities and local government – in the hope of finding this assessment. But it does not exist. No report has ever been commissioned by the British government on the issue of whether or not there is enough oil to sustain its transport programme.

Instead, both the white paper and the civil servants I spoke to referred me to a book published by the International Energy Agency, set up by the OECD after the 1974 oil crisis. This in itself is odd. On every other issue that might affect the UK’s security or economic growth, the government conducts its own assessments. But in this case it relies exclusively on one external source. This reliance seems even odder when you read the IEA’s book and discover that it’s as polemical as my columns.

Before it presents any evidence, the book dismisses people who have questioned future oil supplies as “doomsayers”. It announces that it has “long maintained that none of this [the possibility that oil supplies might be reaching a peak] is a cause for concern”. Though it expects the global demand for oil to rise by 70% between now and 2030, and though it anticipates that output from the world’s existing oilfields will decline by about 5% a year, it is confident that new supplies will make up the difference.

It bases this assessment on the finding that “the level of remaining reserves of oil has been remarkably constant historically, in spite of the volumes extracted each successive year”. As the IEA must know as well as anyone else, this is partly because the level has been forged by members of Opec, the oil producers’ cartel. The quota assigned to a member of Opec reflects the size of its reserves. All members have a powerful interest in exaggerating their reserves in order to boost their quotas. The IEA admits in another report that Saudi Arabia has posted a constant level of reserves (260bn barrels) over the past 15 years, despite the fact that it has produced over 100bn barrels in the same period. Where has the magic oil come from?

guardian