The good years have gone. We are now moving into a new era – the energy age – when the availability of energy will determine not only which nation is prosperous but provide us all with a different way of life
Fuel Prices – causes of price rises
First, let us look at energy, which in all societies mostly comes from fuel. Oil is now around $140 per barrel and is still rising. Optimists hope that speculation is creating the high oil price. Pessimists fear that we are running out of oil.
The truth is somewhere between the two. Speculators are causing price increases in oil, gas and coal; we have not yet run out but we are probably very close to a downward path for all these fuels, only a few years until there are less of these fuels left in the world than the amounts that we have already consumed.
Fewer carbon emissions as the fuel runs out
We will probably see more of the orgy of fossil fuel burning, with increasing emissions until we end those emissions, not by treaties or good behaviour or anything more than the simple running out of fuel.
As it is likely that all this fuel burning is creating climate change, it will probably take another fifty years (if you are twenty that will be when your grandchildren are in their teens) before we experience emissions being reduced by humans burning less fuel. As most of the emissions are carbon dioxide which lasts a hundred years in the atmosphere, there is not a silver lining to that particular cloud.
The treaties, like Kyoto, and the Emissions Trading Schemes will have had no effect on emissions because, simply, the figures will have been fiddled.
Panic buying
There will no doubt from time to time be more statements by governments assuring us all that there is plenty of fuel left. and that we should not panic. In some cases panic is useful. People can usefully panic by queueing at petrol stations, so that they may buy some fuel. People will keep panicking and probably panic more when Government tells them not to panic. When things like heating oil runs out and there are power cuts you cannot usefully panic. You have to adapt.
Who is to blame?
This is not a new phenomenon that has suddenly arisen. It has been around for at least ten years. Blame allocation is easy and it can be done right now. We have known about climate change for many years and governments have accepted that it is likely caused by humans for over ten years, except in the case of the USA who has accepted it for over two years.
Government has to take the blame for an inadequate energy policy
Governments have also known that oil reserves have probably been overstated since Shell came clean about having overstated theirs in November 2004. In the UK’s case they have not worked hard at assuring supplies of energy for its population. It has given energy the lowest priority and allocated no public money into long term renewables. It has not even allocated any money into nuclear energy generation.
Energy price rises from the utilities
In Europe and probably the United States we shall see large energy price rises that follow the fuel price rises. One study referred to in yesterday’s papers suggested that gas prices could rise 50% in the next few months and electricity prices 50%, simply as a reaction to the present high fuel prices.
Heating oil prices
No one, as far as I could see, has mentioned heating oil prices. Even the suppliers of heating oil do not mention the cost of it on their websites. I believe that right now the cost is around 60p a litre. If you can afford it, buy now in summer because I fear that by the winter the price would have increased to at least 90 pence a litre.
What’s going to happen next?
My crystal ball is just about as good as yours but this is what I think will happen. We are going through a period of pre energy price adjustment. Prices will probably fall back slightly and then continue an inexorable rise. By June 2009 I shall be surprised if oil is standing at less than $220 a barrel.
How do we adjust?
We can as a society adjust to all this but the consequences are not going to be easy or pleasant. It will affect our personal lives, I think, like this:-
- We all have to get used to using less energy. Efforts going into to energy efficiency will not be anywhere near enough; we need to get on with a greater take up of renewables.
- We will probably have energy rationing – petrol will be prohibitively expensive for most people driving today’s cars and we will only be able to afford the petrol for cars with very small engines. Luxury performance cars may well be taxed out of existence. We will share cars more especially for trips to those out of town shopping centres built miles from where we live.
- Flying will be at least as expensive as it was fifty years ago.
- Food will be as expensive as it was fifty years ago, in terms of our expenditure on food as a proportion of our income.
- Nations will large stocks of energy such as Russia, Kazakhstan, Iran, Iraq, Saudi Arabia and Venezuela will be extremely prosperous and nations without local energy, large stocks or an existing significant renewable energy infrastructure, such as the United Kingdom and the United States, will gradually descend into gentile poverty.
In other words, this is not the time to rely on the market to deliver our energy. In doing so we rely on companies like Shell and the large utilities; in a global unprotected market they will up roots and supply those who can afford to buy. They owe no national allegiance.
We elect governments to get a grip in these situations. Governing is superficially easy in good times, when mistakes can be disguised or airbrushed out of history. But the paint used for the air brushing of those mistakes always fades, exposing them again, and exposing the people to the effect of them.
Filed under: carbon emissions, climate change, energy, global warming, microgeneration, power, propaganda, solar energy, solar panels | Tagged: cause of high energy prices, effects of high energy prices, energy prices, oil prices, utility prices
Yes. Mike, I agree, Robert