Oil prices through the roof
May 22nd, 2008
The oil price today at $135 a barrel – twice as high as a year ago, a staggering 12 times higher than a decade ago – is a wake-up call to the Government which they have been shamefully neglecting for far too long. Whether it’s because of surging Asian demand (Chinese and Indian economic growth rates of 8-10% a year for the last decade, and set to continue), market speculators, or OPEC keeping more oil in the ground to maximize future profits, it is really pointless for DBERR and the hapless Minister Malcolm Wicks to make a humiliating appeal to OPEC to please increase oil supplies. There’s no more chance of that than New Labour winning Crewe.
With petrol prices now expected to hit £1.50 a litre by as early as September and oil prices expected to double again within the next 5 years – many think sooner – nothing will solve this problem except a fundamental shift out of oil as fast as is practicable. Oil is primarily used for transport and for heating, in addition to industrial applications. For heating, it means urgent switching out of fossil fuels to to renewables (solar, wind, biomass, ground/air heat pumps, microgeneration), replacing renewable obligation certificates by feed-in tariffs that have worked so remarkably well in Germany. For cars, it means putting far greater R&D resources into hybrids and into far faster development of hydrogen fuel cell cars. For planes, since there is no practicable alternative to oil/kerosene, and since biofuels are an even worse cure than the disease, the pressure is now on prioritising flights, switching wherever feasible to localised food production, and sharply regulating carbon emissions in the interests both of climate change and energy efficiency.
The irony of all this is that the Energy Bill now going through Parliament is already obsolete. It is a real tragedy that the drastic change in both climate change and energy policies are being driven abruptly and painfully by the inexorability of failing global supplies rather than planned for in a radical but controlled manner.
