Peak oil is the villain governments needs

Climate change is a stealthy foe, hard to feel, see or identify. Unlike peak oil. So here’s another question: did western administrations know that the International Energy Agency (IEA) had been consistently concealing the imminence of peak oil? One might hope our leaders would know about something as serious as this. But if they did, why is it that renewable energy replacements haven’t been far higher on the agenda, for much longer and addressed with rather more conviction? This is the question George Monbiot put in a freedom of information request sent to the Department for Business in February 2008, asking for details of the government’s peak oil contingency planning.

“The answer I received astonished me,” he wrote in the Guardian. Hardly surprising, considering the answer: “The government does not feel the need to hold contingency plans specifically for the eventuality of crude oil supplies peaking between now and 2020.” Eighteen months later, the Guardian published the IEA whistleblower story and the 2020 cover was blown. Were the government really taken in by the duplicity of the IEA? Or were they in on the act, making it difficult to appear sanguine about an imminent and permanent disruption to energy supplies?

Outside of the fossil fuel industry, it is hard to know to what extent commerce is aware of the impending crisis or the speed at which it would envelop us. Either way, industries appear to have woken up with a start, at least if the white paper, Sustainable energy security: strategic risks and opportunities for business, is a guide. Produced by Lloyd’s of London and Chatham House, their assessment is sobering. They identify opportunities for the quick witted, as well as risks to the somnambulant. One statement by professor Paul Stevens in particular caught my eye: “A supply crunch appears likely around 2013 … given recent price experience, a spike in excess of $200 per barrel is not infeasible”.

What effect would a barrel price of $200 have on industrial economies, should that spike be sustained for any length of time? We would witness endemic global market disruption, reductions in agricultural yield, increased transport costs for both finished goods and raw materials (true pessimists would add an oil war or two for good measure). The shockwaves would be felt everywhere, although as ever, the poor will take the brunt of it.

And yet when the price of oil shoots up, we use less – meaning we output less CO2. So let me rephrase my question: what effect would a barrel price of $200 have on the CO2 output of nations? It would certainly force a substantial reduction. It would be violent change, but that is the price of hubris. The longer we wait, the greater the cost when we finally act, when everything is rushed because the public furore can no longer be ignored. Remember the fuel protests? The UK ground to a halt in a matter of days at the behest of a few thousand protestors. Scale that up by an order of magnitude and you can see what a $200-an-oil-barrel world might look like, at least until we got used to it.

Guardian UK