They Blog For You

Latest evidence indicates that the Government realises (but won’t tell us) that Britain faces, not just the most horrendous public spending cuts since the last World War 70 years ago, but also a painful and costly recovery if and when it finally materialises.   Secret talks with the oil industry and with geologists show the Government is seriously worried about ‘peak oil’, i.e. the point at which global oil production reaches its peak and then starts slowly to decline despite steadily increasing demand from China, India and other big developing countries still driven by pell-mell growth.   The price of oil today is $75 a barrel: once global recovery starts it will probably double within a year.

Government knows this, but won’t admit it.   FOI requests meet with a blank wall.   A letter from DECC officials sent 3 weeks ago acknowledged that “We recognise the public interest arguments in favour of disclosing this information…..But that must be balanced with the need to ensure that Ministers and advisers can discuss policy in a manner which allows for frank exchange of views and opinions about important and sensitive issues”.   In other words, if something’s really important and sensitive, even if it’s going to affect your future drastically, we’re not going to tell you about it.

This is what they don’t want you to know.   Global oil supply, on which our whole civilization depends (industry, transport, agriculture, domestic heating, war), is on a knife edge.   Global production has previously peaked at about 86 million barrels a day, and most authorities believe that peak oil will be reached within the next 5 years.   A central problem with this prospect is huge price volatility.   In a recession demand for oil drops substantially, leading to an even bigger fall in investment.   Even a small economic recovery then pushes up the oil price sharply because of the previous squeeze on investment, and continues to escalate prices until a lagged rise in investment begins to restore balance between demand and supply.   However, when  global capacity in oil production is reached or passed, the rise in the oil price becomes virtually unstoppable.

At present the world’s safety cushion – the amount of readily available oil that could be pumped in a moment of crisis – is down to about 2 million barrels a day, about 2.3% of daily demand, and nearly all of the safety cushion is in one country, Saudi Arabia.   Moreover 60% of the world’s oil is in just 5 Middle East countries which are also responsible for 90% of the world’s exported oil.

Fast upcoming peak oil is a momentous issue of global proportions.   It should be a matter for urgent and transparent political and economic debate now, not holed up in dark corners of government, and it should propel a much faster transition to renewable sources of energy – which is why the oil industry as well as the government want to keep it firmly under wraps.   Don’t let them!