Tuesday, February 15, 2011

Hasta la vista Jeremy. The end of the car is nigh.

  A hundred pounds to fill a tank. At first I couldn’t believe it - staring at the pump in disbelief.  Ok,  my VW campervan has a slightly larger tank than most cars.  And yes, I was up north where fuel prices are higher.   But still - a ton just to fill up!  How did we get here?   This is just not sustainable - economically or environmentally.  

  I looked around at the motorists waiting patiently to be fleeced after me.  How do they manage in rural areas  where there’s no public transport and fuel stations charge whatever they want?   What do small businesses do?  Perhaps there is some sort of black market in bootleg diesel - otherwise the place would come to a standstill. 

  But it’s not just an issue for the highlands and islands - everyone seems to be talking about the cost of fuel right now.   Expressing a kind of impotent rage - at ourselves as much as the fuel profiteers.  We all know we shouldn’t still be depending on cars;  that they are environmentally damaging, cause congestion and encourage laddish individualism.  But we’re all still using them.  With children it’s just not an option not to.  

    On my own, I use a bicycle around town, because it’s far quicker and I can park it anywhere - but I’m not fooling myself that this makes me any holier than thou.  I can bike it because I can afford to near the centre of town.  Most people can’t and have no choice but to use their cars in the suburbs or the country.  Try commuting by bike in Argyle in winter and you’re liable to end up with hypothermia.  Car transport is a collective addiction which is very difficult to kick on your own.


   But I think now,   with the hundred pound fill up,  we may  just have reached a kind of transport tipping point. 



    It’s clear to everyone with a wallet that this simply can’t go on.  Like houses, cars are becoming unaffordable, but unlike houses, the cost isn’t going to come down.   Fuel is set to rise to £8 a gallon, according to the RAC Foundation, which is hardly an independent voice -  but these forecasts have a habit of coming true.  We now expect fuel prices to rise year on year.   I suspect that this consumer fatalism is the reason why there has been no repeat, as yet,  of the fuel protests of 2000 which were provoked by average fuel rising to - wait for it - 85p a litre.   Now ten years on, and fuel is 50% higher without any serious political reaction.  Yes,  the Sun has been running its “Keep It Down” campaign to please white van man, and thay creepy petrol head, Quentin Willson, ex-Top Gear,  has been taking his Fair Fuel campaign to Downing street looking for a brake on April’s fuel duty rise of 1p.    The SNP have been calling for a “fuel price stabiliser” to smooth out the fluctuations in the fuel price, though I can’t remember when fuel last fluctuated downwards. 

    But there is not - as yet - any real anger in the streets - no blockades and demonstrations.  I genuinely believe that we are coming to the end of the car age - and that people will look back on this decade with disbelief at our futile attempts to deny reality.  If personal transportation has any kind of future it must be without the internal combustion engine. Everything is becoming too expensive: spare parts, insurance, but above all fuel.  The market is going to succeed where three decades of environmental campaigning failed.   We are simply being priced off the road. 

   How can I be so sure of this? Well, let’s start with where it all begins, under the ground where forests that flourished millions of years ago have been petrified into hydrocarbon sludge - or crude oil to you and me.  The world’s biggest source of crude oil is Saudi Arabia - which is why the Middle East has been the prime focus of American foreign policy for the last century.  Saudi oil determines the global price of oil.  As soon as the price gets too high, OPEC - the Organisation of Petroleum Exporting Countries which is dominated by Saudi - opens the taps to keep the price sustainable.  Why?   because the princes who rule that desert kingdom don’t want to cause a global economic crisis - as happened in 1973 when OPEC quadrupled the price of oil - and risk incurring he wrath of America and Britain, who supply the Saudi royal family with all the arms that make them feel safe from revolution.  However, in the last few weeks here have been two major developments that may have brought this arrangement to an end. 

  Wikileaks has revealed secret diplomatic cables to Washington from a senior Saudi oil executive, saying that Saudi Arabia has a lot less oil than people thought it had.  About 300 billion barrels less to be exact.  There has long been suspicion among oil analysts that Saudi had been exaggerating its reserves, but we have never had confirmation before. This has revived forecasts of "Peak Oil|, the day when oil production peaks and starts to decline. .  However, I am pretty confident that Peak Oil will never come because,  long before the oil runs out.  the sheer cost of it will have been forced the industrialised world to look for alternatives - like the abundant sustainable energy around Scotland’s shores, or the sun in North Africa, or nuclear power.  And America will eventually realise that it simply cannot allow its economic survival to depend on the continued rule of a handful of medieval Saudi aristocrats.  

   For, the second significant development in recent weeks has been the wave of revolutions sweeping the Middle East.  Tunisia and Egypt are in the throws of rapid modernisation, and time is being called on the brutal dictators, like Hosni Mubarak, whom Western governments like America and Britain have supported because they protected Western oil interests.   Egypt is not a big producer of oil, but a lot of the stuff passes through the Suez Canal and the Suez-Mediterranean pipeline: three million barrels  every single day. Which is why President Obama is being careful not to antagonise any of the groups likely to take over from Mubarak.

     Britain went to war against the Egyptian President Nasser over Suez in 1957 - with disastrous results.  That was the end of Britain’s imperial age, just as Iraq war was the end of America’s.  After Tunisia and Egypt, the future of autocratic and theocratic regimes like Saudi Arabia is in serious doubt.  The whole region is profoundly unstable.   America tried to ”stabilise” the Middle East, and its own oil supplies, by invading Baghdad in 2003.  That disastrous, illegal invasion has guaranteed that the new regimes, Islamic or secular, that take over from the dictators and kings will not be kindly disposed to the West, and will use oil, if not as a weapon, at least a means of exerting political pressure.  It is looking like game over for America in the Middle East. 

     Yet last year, America imported 4.25 billion barrels of crude oil a cost of $337 billion, mostly from countries in this very  region.  It cannot to allow this dependency to continue, which is why President Obama, last spring agreed to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas drilling, much of it for the first time.    Obama had grown tired of hearing crowds of Joe-six pack Americans echoing Sarah Palin’s chant of “Drill, baby drill” at Republican and Tea Party campaign meetings. So he signalled his intention to lift the moratorium on deep water drilling in Alaska that had been in place since the Exxon Valdez disaster in 1989.  Weeks later he had to contend with the greatest environmental disaster in American history: Deepwater Horizon. 

      BPs Deepwater Horizon rig was drilling five miles down under the sea bed at a depth and using technology that is at the very boundary of human knowledge.  On the 20th of April last year it exploded killing 13 oil workers and polluting the Gulf with 206 million gallons of crude oil.    When something goes wrong at a depth equivalent to the height of Mount Everest, there is very little you can do about it.   There have been claims that BP was negligent and had not observed correct safety procedures and maybe they hadn’t - but when you are drilling this deep there is only so much you can control.   But given the rate of depletion of the world’s existing oil reserves, the only way to go is down - to probe deep into the earth’s crust underwater of through ice,  in areas prone to hurricanes and worse.  

   No democratic government can allow disasters like Deepwater Horizon to happen again, so the precautionary principle is going to be applied to deep water drilling now as never before.   This why many oil analysts are saying that the price of oil is going to rise on a secular basis as we reach political peak oil, as opposed to geological peak oil.  Of course it will fluctuate wildly - oil is a speculator’s commodity.  Whenever there is political instability or a whiff of financial crisis, oil prices spike and clever traders buy another Ferrari.  It went up to $147 a barrel in 2008, only to collapse by half as the economy ground to a halt. Now it is back over $100 and it will probably fall again after the Egyptian revolution is played out.  But there is no doubt that the upward trend is well established. 

  And this takes us right back to motorists on the forecourts as they watch their spending power disappear into their fuel tanks.  All of these complex geological, environmental, technological and geopolitical issues ensure that the cost of motoring is not going to fall any time soon.  Eventually, the government will get the message - and actually, I believe the government probably has got the message, but isn’t sure what to do about it yet.  George Osborne, the Chancellor, hasn’t done a knee-jerk response to the Fair Fuel campaign and agreed to cut or freeze fuel duty.  The £1.28 litre is not creating the political reaction that was caused ten years ago by 80p  Instead, car sales last month fell by 11.5%, the second biggest drop in a decade. This was partly down to VAT and the ending of the car scrappage scheme, but motor manufacturers are getting worried. 

  Of course, the salesmen confidently expect demand to return, if only because the car still has a virtual monopoly of family transportation.   Rail prices, already high, are set to rise exponentially, and of course trains only go between big cities.  Bus transport is being decimated by government cut backs and the end of rural bus subsidies.  The electric car has a very long way to go before it is accepted. We have become accustomed to driving around in immensely powerful and large machines - just look at the Mini today compared with the original Mini of the Sixties to see how obese cars have become.   Small electric town cars are driven off the road because of safety.  

   Similarly cycling.  It’s not for everyone, even though electric bikes are cheap, and you don’t have to wear lycra or have a shower when you arrive at work. For unfit people, they are an excellent alternative mode of urban transport  - except  for one drawback: safety.  You can’t help feeling vulnerable when you are sharing the road with two ton monsters like Range Rovers.  And few mothers, or fathers, are prepared to risk their kids cycle to school.  

    But look: it’s coming yet, for all that.  Now that we are in the age of the hundred pound fill up, people are going to look for alternatives. And in adversity people can be very versatile.   If the government was sensible, it would start planning for this now by rearranging cities around electric personal transportation and public mass transportation. There should be tax incentives to get people into small, light electric vehicles.  Larger vehicles could be made to observe slower speed limits in towns to ease safety concerns.  City Car Clubs should be extended for people who want to travel up country.     It’s not going to happen overnight, but it would only take a decade to transform our cities and release us from dependency on oil.   The sheer cost of continuing along our present course makes it unavoidable.   And just think of the benefits: no more Top Gear. Hasta la vista, Jeremy.

7 comments:

Despairing said...

You've hit the nail on the head (repeatedly)!

I'm hopeful that the public will see what is coming, though. They have a tendency to, as a whole, turn on a sixpence. Witness the collapse in SUV sales in America in 2008 when oil reached $150. An electric car with a decent range is maybe 5-10 years off, but hopefully smaller electric cars may open up mindsets before then.

Incidentally, if I can correct you on one thing. You say that you don't think we'll ever see Peak Oil. I suspect we already have, so perhaps you meant we'll never see the end of oil?

sideshowmanny said...

" If the government was sensible, it would start planning for this now by rearranging cities around electric personal transportation and public mass transportation. There should be tax incentives to get people into small, light electric vehicles. Larger vehicles could be made to observe slower speed limits in towns to ease safety concerns. City Car Clubs should be extended for people who want to travel up country. "


Luxembourg, who already have some hydrogen fuel cell buses and a public bicycle scheme are now looking like they might introduce public electric cars:
http://hello.news352.lu/edito-105670-car-sharing-to-land-in-lux.html

Anonymous said...

There are already tax incentives (for company cars) to go electric. I'm tempted once my current lease expires.

Mev Brown said...

Yesterday the media was reporting that inflation had reached 4% which would put pressure on the Bank of England to increase interest rates.

The main factor for increased inflation, we were told, was increased commodity prices.

However, Euro inflation is 2.5%, while Germany's inflation is 1.9%.

Clearly, other factors are at play, and I suspect UK fuel costs are playing their part.

CWH said...

Mev,
Yesterday they also reported the Q4 growth figures for various European countries and they all showed inreased growth in Q4, albeit not by much in some cases but growth none the less. Whereas, if you remember, the Q4 figures for the UK showed a drop of 0.5% and this was blamed on the snow in December.

But Europe also had snow in December but their economies managed to grow. I guess we got the 'wrong type of snow'!

Anonymous said...

apparently one million electric cars will require three mega nuclear power stations to be built just to feed them overnight, and as for peak oil or any other peak of any other commodity nothing is finite

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