Claude Moraes MEP’s response to my letter concerning peak oil preparations
22 January 2010
Dear Mr Mowshowitz,
As a Labour MEP, all the issues surrounding European energy policy are very important to me, including climate change, economic prosperity, heating and maintaining homes and intra-European transport. On this basis, both the European Parliament and the European Commission are aware that some scientists assert oil production has peaked, or will peak in the next decade. At this stage, it is the case that these concerns constitute a theory. Other scenarios include the potential enhanced recovery of oil through new technology, and the further development of renewable energy sources. The European Commission is constatnly updated on developments in both peak oil theory and the debate surrounding it.
The European Commission is also following all developments affecting energy supply. In fact, the energy industry is also questioning whether supply can continue to keep up with increases in demand over short, medium and long term.
In addition, given the challenges and draw backs of using oil as an energy source, and regardless of peak oil theory, it is obvious that Europe needs a re-invigorated, common energy policy to cope with all the challenges facing energy use. The European Commission is thus currently building policy frameworks which should lead to a sustainable and highly efficient long-term energy profile within the European Union.
Yours sincerely,
Claude Moraes MEP
Labour Member of the European Parliament for London
Oil companies continue to spend more on buying back their own stock than on new exploration
Historically oil prices have always behaved cyclically. Whenever demand outstrips production levels for whatever reason, the price of oil goes up along with the value of oil company shares. Oil companies then have the financial incentive to fund more expensive exploration projects that were previously unaffordable. Eventually new sources of oil begin to enter the market and the prices are driven back down.
In recent years the oil companies have started behaving somewhat differently. A report published by Bloomberg.com in October 2007 stated the following…
There’s a steady liquidation of the world oil industry. […] Exxon is buying back about $30 billion of its shares each year. If that continues, Exxon will have repurchased all its stock by about 2024.
It has continued. In October 2008 CNN issued this report…
This behavior is not unique to Exxon – the ‘big 5’ (Exxon, BP, Chevron, Shell and ConocoPhillips) are all typically spending more on buying their own stock back than they are on new exploration. It seems that they are betting on the price of oil increasing astronomically enabling them to cash in on the ensuing energy crisis and essentially hold the world to ransome if they so choose.
Department of Energy and Climate Change responds to my letter regarding peak oil sent to Lord McKenzie of Luton
As you can see below, I’d sent a letter to Lord McKenzie of Luton largely concerning the urgency of preparing for oil shortages in the next few years. His office did not engage with the subject matter other than to forward it on the relevant department, in this case the Department of Energy and Climate Change.
The response from the DECC is even more worrying than that of the International Energy Agency and all of the other government responses I’ve received thus far. It is patronizing, dismissive and shortsighted. This to me epitomizes the ruling party’s general attitude towards its constituents. This attitude is totally inadequate with regard to any acknowledgement of the need for preparations for the impact of peak oil whether it begins in earnest within a 5 year period or by 2020. It confirms my worst suspicions that those in power skew even further towards business in terms of the interests they represent than I had previously thought possible.
Worst of all the correspondence officer is quoting last year’s World Energy Outlook (WEO ‘08) even though my letter was prompted by events pertaining to the release of WEO ‘09 which had occurred a week before I’d written my letter.
Dear Mr Mowshowitz
Thank you for your letter of 17 November to Lord McKenzie of Luton regarding peak oil. The matter you have raised is the responsibility of Department of Energy and Climate Change. The Energy Minister receives a large amount of correspondence every day and cannot answer all of it personally. I have been asked to reply.
As part of the Government’s goal to deliver affordable, secure and clean energy to UK businesses and citizens, DECC looks at a wide range of academic and industry studies that analyse future world oil supplies. DECC also meets with experts to discuss this and other oil market issues, including investment and exploitation of new reserves.
One of the more thorough analyses in the area of global oil reserves is conducted by the International Energy Agency (IEA), which published its World Energy Outlook (WEO ‘08) in November 2008. Based on its extensive analysis of oil reserves, demand trends and field decline rates, the WEO ‘08 states that, “[the] world is far from running short of oil” and that, “the immediate risk to supply is not one of global resources, but rather a lack of investment where it is needed”. This is based on a detailed analysis of, among other things, 800 of the world’s largest oilfields.
The UK is an active member of the IEA and also looks to other sources, but sees no compelling evidence that runs counter to the IEA’s assessment.
We agree with the IEA that the risk to supply is not one of resources but of converting these reserves into production. Thus, additional investment will be required to meet oil demand in the future and the challenge lies in bringing these resources to market in a way that ensures sustainable, timely, reliable, and affordable supplies of energy. We need to ensure that there is a well-functioning oil market that helps market participants have the confidence to make these necessary investments and respond in a timely manner.
The risks of underinvestment, which could imply higher fossil fuel prices in the future, are also a key reason why we are already putting in place policies that will reduce the energy intensity of the UK economy and help increase its resilience to shocks in energy supplies. Indeed, many of our climate change policies, such as the Renewable Energy Strategy, that will promote more renewable heat and transport, and the Government’s energy efficiency policies, have the added benefit, in addition to reducing carbon emissions, of increasing the diversity and hence resilience of our energy system.
In summary, with sufficient investment, the Government does not believe that global oil production will peak between now and 2020 and we are actively encouraging investment in the oil market to ensure secure, competitively priced supplies.
I hope this is helpful.
Yours sincerely,
Violetta Kucharski
Dear Sarah Teather,
Once again I thank you for all of your continued efforts and for all of your responses to my many messages, particularly the last one concerning Peak Oil. I must now bring your attention to an urgent matter, that of the humanitarian crisis in Haiti.
The US military is now occupying Haiti in earnest. US Commanders are actually turning away legitimate relief in favour of controlling the population for private, moneyed interests and to prevent refugees from entering the US. This is indicative of disaster capitalism and must not be tolerated by the international community. The following links illustrate these claims:
- Haiti’s suffering is a result of calculated impoverishment
- Doctors group complains Haiti supplies diverted
- Things to Remember While Helping Haiti
- In Rebuilding Haiti, Opportunity Knocks and Companies Profit
- What You’re Not Hearing about Haiti (But Should Be)
I urge you to raise this issue in Parliament and call for an an international forum demanding that the US government put a stop to these actions immediately and instead focus efforts on routing humanitarian aid to those who need it.
Yours sincerely,
Seth Mowshowitz
Syed Kamall’s final reply | Wed, 6 January, 2010
Dear Seth,
Thank you for clarifying the intention of your email.
I will investigate how we can prepare for oil shortages. Thank you for bringing this to my attention.
Regards,
Syed
SYED KAMALL
Conservative MEP for London
www.syedkamall.com
My response to Syed Kamall’s initial reply | Tue, 15 December, 2009
Dear Syed,
Thank you for your response. I do correspond regularly with my MP Sarah Teather who continues to do an outstanding job of addressing my concerns. She has received a similar letter from me already.
My comments below are aimed at all government representatives worldwide including but not limited to the British Government. I believe that anybody who is in a position to effect change in government policy whether domestic or international ought to be engaging seriously with these issues as they pertain to policy and society ubiquitously and immediately.
As Jimmy Carter said in the late 70s: “The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we must face them.” Following this statement we had three decades of reckless, wasteful abuse of hydrocarbon energy on an unprecedented scale at the expense of the environment, the labour force and the global economic system. This we can no longer afford.
I am not looking for a response from you. All I can do is appeal to your common sense and humanitarian instinct and hope that you will investigate these matters yourself and raise your voice whenever relevant.
Kind Regards,
Seth Mowshowitz
Syed Kamall’s initial reply | Tue, 15 December, 2009
Dear Seth,
Thank you for your email. I apologise for the delay in replying.
I appreciate your concerns about Peak Oil. Since your comments are aimed at the British Government, please may I suggest that you contact your
local MP regarding this matter. Your local MP is Sarah Teather and she can be contacted at teathers@parliament.uk.I hope this helps.
Regards,
Syed
SYED KAMALL
Conservative MEP for London
www.syedkamall.com
Mary Honeyball MEP’s response to my letter highlighting the urgency of preparing for the impact of oil shortages
Dear Mr Mowshowitz,
Thank you for taking the time to write to Mary Honeyball MEP.
The issue of Peak Oil is one which rightly will affect the future of the
developed and industrialised nations of the world.
It is part of the debate on the climate changes that are increasingly seen
to be the result of usage of fossil fuels.
We are seeing a series of engagements at national and international level
and increasing commitments to deal with the results of expanding
industrialisation.
Your MEP will be alert to the proposals and developments in this area and
thanks you again for sharing your views with her.Yours truly
Colin Ellar
Casework assistant
Charles Tannock MEP’s response to my letter highlighting the urgency of preparing for the impact of oil shortages
Having corresponded largely with my MP Sarah Teather of Brent East for the last year and with Glenda Jackson before that it seems I’ve become a bit spoiled in terms of government representation. Not only did Charles Tannock MEP not respond directly to my letter (please see my previous post of 16.11.2009), his PA has done nothing but limply regurgitate the Conservative party line. A disappointing response.
Dear Mr Mowshowitz
Dr Tannock is a foreign affairs specialist nevertheless takes a keen intersts in energy policy and is well aware of the peak oil arguments though as of yet the case for it to be an immediate concern is not proven and in the next few years it is posiible that large new gas finds will be made through shale, biofuels will be a significant source to replace oil use, clean coal technology will kick in along with more nuclear, and renewables (wind, tidal, wave, geothermal etc)so the amount of oil use is very unclear. The Conservatives are committed to Kyoto plus targets and are well aware of the impact of climate change on the globe and that oil is a finite resource even if the time frame for global reserves and peak production is far from clear. We will follow these mattesr very carefully and David Cameron as probable next PM of the UK is as you probably know particularly keen on the green agenda and conserving the environment.
Kind regards
Dr Silvia Janicinova
PA
The urgency of preparing for the impact of oil shortages | a letter to Sarah Teather MP and other elected representatives
I sent the letter below to Sarah Teather MP and a slightly reworded version to the following elected representatives of my constituency, Brent East
London Assembly Members
- Navin Shah (my London Assembly Member, Labour)
- Murad Qureshi (list member, Labour)
- Dee Doocey (list member, Liberal Democrat)
- Victoria Borwick (list member, Conservative)
- Mike Tuffrey (list member, Liberal Democrat)
- Caroline Pidgeon (list member, Liberal Democrat)
- Nicky Gavron (list member, Labour)
- Jenny Jones (list member, Green)
- Darren Johnson (list member, Green)
- Richard Barnbrook (list member, BNP)
- Andrew Boff ( list member, Conservative)
- Gareth Bacon (list member, Conservative)
Members of the European Parliament
- Gerard Batten (UK Independence)
- Marina Yannakoudakis (Conservative)
- Mary Honeyball (Labour)
- Syed Kamall (Conservative)
- Charles Tannock (Conservative)
- Claude Moraes (Labour)
- Jean Lambert (Green)
- Sarah Ludford (Liberal Democrat)
Last of all I sent the same letter to Lord McKenzie of Luton who seems to have spoken often about oil related issues. I will post each and every response that I receive (if I receive any) on this blog as they arrive.
Dear Sarah Teather,
First of all thank you again for all of your support and continued correspondence, for dilligently and faithfully answering each of my letters.
I must now bring your attention full circle to the first letter I sent you some 16 months ago with a particular emphasis on peak oil. I said then that time is already short to prepare adequately for the impact of a decline in oil production. In the year that’s followed I can safely say that not nearly enough has happened in the UK neither to make the public aware of the realities of peak oil nor to make real provisions in anticipation of imminent energy shortages and a transition away from hydrocarbon dependency. I do not hold you responsible for this nor am I writing merely to winge about it. You are my only approachable representative within the UK government and it is all I can do to place as great an emphasis on these matters as I possibly can speaking not just for the sake of your constituents but for the entire UK and mankind as a whole.
Figures published in the latest IEA World Energy Outlook have reportedly been distorted in order to massage US interests and keep global markets calm. I have corresponded with the head of energy diversification regarding this matter and he has not engaged with the allegations other than to say that they have been warning for years that projected demand will not be met with current investment levels in exploration and development. The point is that peak oil is a reality and it is merely a question of when the decline will begin – at what point will the supply fail to keep up with the demand. According to the more pessimistic accounts it will begin in 2013 (Uppsala University’s study entitled The Peak of the Oil Age), and the optimistic accounts put the date back to between 2020-2030 (International Energy Agency). This doesn’t leave us much time in any case.
We are now deep into a recession. As a nation we have already spent our future under the assumption that the economy will continue to grow and we will be able to pay it all back over the next x decades. What will happen when the price of oil begins its permanent escalation? The financial system will collapse. Furthermore it isn’t only transportation that runs on oil but the entire food industry (10 calories of hydrocarbon energy per calorie of food produced), the pharmaceutical industry, all plastics, etc. The implications are staggering. Without proper oil conservation in the wake of the decline not only would few commodities including food be affordable to anybody but we would no longer be able to make or distribute sufficient quantities of medicine or vaccinations for instance. Most medicines are made possible by petrochemicals. The healthcare industry relies massively on disposable plastics. Another outbreak of a swine-flu like virus could quickly decimate the population under those conditions. If there is any risk of this scenario being as close as 4 years away then surely we should be doing everything possible to insure erring on the side of caution?
I am aware that the UK government has over the past few years continued to be dismissive of the fact that oil production is peaking imminently or has already peaked. I continue to be shocked at this attitude. At a certain point this will be construed as criminal negligence on an unprecedented level. Concealing the true motives behind our presence in Iraq and Afghanistan or trying to prevent panic on the stock markets are not good enough reasons for withholding information from the British public that is directly pertinent to its survival. These are also not good enough reasons to neglect preparing for what is to come, whether in 4 years or two decades.
There is much that can and should be done now. I refer you to Mike Ruppert’s work – particularly his book A Presidential Energy Policy. Visit http://www.mikeruppert.blogspot.com/ for more information on Mike and one of the best collections of independent research on peak oil.
What worries me most is that our economic system is the greatest obstacle to a smooth peak oil transition. Required investment is stagnant when there is no profit to be made. In order to facilitate sufficient investment in renewables, demand destruction and improved public infrastructure the government will need to take extreme measures such as redistributing wealth by capping profits and levying severe penalties on polluting industries et al.
It is the overriding authority of profit that needs to be addressed immediately and the survival of our people and planet made the highest priority. I have no doubt that this will be a painful and arduous process with huge resistance from monied interests.
In short I urge you to raise your voice on preparing for oil shortages now. I urge you to continue demanding transparency along with uncompromising and swift energy reforms. I urge you to push for corporations to be made financially and legally accountable for their impact on the environment and cease to externalize their costs on the public.
The place to start is the call on the government from the UK Industry Taskforce on Peak Oil and Energy Security ‘to reassess its dismissive views about the potential threat and impact of oil shortages.’ (The Guardian)
Yours sincerely,
Seth Mowshowitz
Second response to whistleblower allegations from Ian Cronshaw, head of the IEA energy diversification division
As you can see in my previous post below, I specifically asked Mr Cronshaw if the IEA would provide some clarification on the alleged differences of opinion regarding achievable oil production targets within the organization. This was his reply:
Again all I can say is we continue to note that to achieve the output levels needed to meet the demand projected we need considerable investment in exploration and development, investment which we see as essential to energy security, and affordable energy, and investment that we are worried is not happening at the pace needed. This has of course got worse since the global recession. We have said this loudly and often, I don’t know how often we can say this. This is not about peak oil, but about investment. We also note that under almost any forseeable scenario, OPEC increases market share and absolute oil output, with consequences for energy security. The reference scenario is unsustainable, in the truest sense of that word.
Ian’s response does not directly address the main issue that I raised. However, reading between the lines he is clearly saying – with an undertone of frustration – that any bickering within the IEA is irrelevant because we are heading for a global crisis of epic magnitude by 2030 as long as investment in exploration and development fails to reach adequate levels. If I understand correctly his emphasis in this context does seem to be on meeting the demand projected rather than a policy of demand destruction, but perhaps that isn’t even relevant here.
Ian’s point that more investment is an absolute requirement and is not happening at the pace needed is absolutely crucial. Why the lack of investment? Investment will only happen if it is profitable to do so. As oil becomes more scarce the price goes up but it also becomes more expensive to recover. The figure to watch out for is the cost of bringing a barrel of oil out of the earth in any specific location. The ratio of the cost of a barrel of oil and the cost of extracting a barrel of oil keeps shifting and investment shifts along with it.
What’s becoming more and more obvious is that our way of life, the economic system, is being exposed at last for what it is – a pyramid scheme. The economic system places the accumulation of private wealth above all other priorities and considerations. This is the glorification and institutionalization of Greed. It has facilitated the vast accumulation of our collective wealth into a small number of hands in no small part through the mass exploitation of fossil fuels and through institutions such as corporations and banks over a relatively short period of time.
In the long run it is profitability that we must question as a form of overriding authority. We do need investment, particularly in development of alternative energies, and it will not in all likelihood be profitable. That which benefits us collectively is seldom profitable. Take the example of schools, national health care and public transportation. If these services are managed properly and treated as services to people rather than businesses for profit then they tend not to profitable. Profit from business benefits the few, public services benefit the many. They are not compatible so long as profit is accumulated privately.
Herein lies the clash between the need to preserve and protect our world – the real world of mankind and the planet we depend on for life – and the need to protect this artificial world of self-motivated proftiteering. This in my opinion is the essence of our time.
Dear Ian,
Thank you for responding. I have read last year’s World Energy Outlook and of course we all agree that drastic action is required across the board both to meet increased fuel consumption and to simultaneously make efforts to reduce it. Your report was not regarded as alarmist by the same media, specifically the Guardian, when it came out last year:
http://www.guardian.co.uk/business/2008/nov/12/oil-gas-companies-credit-crunch
The whistleblowers and other independent researchers (and now a number of MPs here in the UK) are questioning whether the figure of 104 mb/d by 2030, the result of an increase of at least 40-45 mb/d that you cited, is attainable.
The whistleblowers suggest that many inside the IEA believe that we can only feasibly achieve an absolute maximum of 90-95 mb/d. If there is any reasonable doubt about achieving 105 mb/d by 2030 then we need to collectively revise our targets and policies immediately.
Surely of all the decisions in human history this is the one in which we would be wisest to err on the side of caution?
Forgive me for stating the obvious but you are the energy watchdog and your role is extraordinarily pivotal in the world political theatre. My government relies on your assessment to create or adjust energy policy. As a concerned constituent and as a human being I have cause to sound an alarm when I read in a trusted publication that there is disagreement within your organization as to the reliability of your own assessment.
I believe I speak for many when I ask that the IEA publicly address these suspicions as soon as possible.
Sincerely,
Seth Mowshowitz
As far as I can tell there hasn’t yet been any public address by the IEA to shed light on the suspected internal disagreement.
