Behind government dismissals of 'alarmist' fears there is growing
concern over critical future energy supplies
Terry Macalister and Lionel Badal
The Observer, Sunday 22 August 2010
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Forecasts that crude oil production will reach 150m barrels a day by 2030 have been described as 'unrealistic'.
Photograph: Tatan Syuflana/AP
Speculation that government ministers are far more concerned about a future supply
crunch than they have admitted has been fuelled by the revelation that they are
canvassing views from industry and the scientific community about "peak oil".
The Department of Energy and Climate Change (DECC) is also refusing to hand over
policy documents about "peak oil" – the point at which oil production reaches its
maximum and then declines – under the Freedom of Information (FoI) Act, despite
releasing others in which it admits "secrecy around the topic is probably not good".
Experts say they have received a letter from David Mackay, chief scientific adviser to
the DECC, asking for information and advice on peak oil amid a growing campaign from
industrialists such as Sir Richard Branson for the government to put contingency plans
in place to deal with any future crisis.
A spokeswoman for the department insisted the request from Mackay was "routine" and
said there was no change of policy other than to keep the issue under review. The peak
oil argument was effectively dismissed as alarmist by former energy minister Malcolm
Wicks in a report to government last summer, while oil companies such as BP, which
have major influence in Whitehall, take a similar line.
But documents obtained under the FoI Act seen by the Observer show that a "peak oil
workshop" brought together staff from the DECC, the Bank of England and Ministry of
Defence among others to discuss the issue.
A ministry note of that summit warned that "[Government] public lines on peak oil are
'not quite right'. They need to take account of climate change and put more emphasis on
reducing demand and also the fact that peak oil may increase volatility in the market."
Those comments were written 12 months ago, but a letter in response to the FoI request
written by DECC officials and dated 31 July 2010 says it can only release some
information on what is currently under policy discussion because they are "ongoing"
and "high profile" in nature.
The letter adds: "We recognise the public interest arguments in favour of disclosing this
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information. In particular we recognise that greater transparency makes government
more open and accountable and could help provide an insight into peak oil.
"However any public interest in the disclosure of such information must be balanced
with the need to ensure that ministers and advisers can discuss policy in a manner
which allows for frank exchanges of views and opinions about important and sensitive
issues."
Yet the note of the workshop distributed last year talks about secrecy around the topic
being "probably not good", although it also suggests officials stick to the line that the
"International Energy Agency is an authoritative source in this field" and stresses how
the IEA believes there is sufficient reserves to meet demand till 2030 as long as
investment in new reserves is maintained.
But the Paris-based organisation has come under increasing scrutiny from a growing
group of critics who believe the IEA's optimism is misplaced. Last year the Guardian
revealed that the IEA was also riven with dissent over the issue with senior staff
members privately telling newspaper they thought the official numbers on future global
oil supply were over-optimistic.
The IEA predicted in the 2009 World Energy Outlook published last November that oil
demand would grow from 85m barrels a day today to 88m in 2015 and reach 105m in
2030. The organisation presumes the challenge of meeting that demand can equally be
met by a mixture of higher Opec production and considerably more output from
unconventional sources.
But an internal IEA source said: "Many inside the organisation believe that maintaining
oil supplies at even 90m to 95m barrels a day would be impossible, but there are fears
that panic could spread on the financial markets if the figures were brought down
further. And the Americans fear the end of oil supremacy because it would threaten
their power over access to oil resources."
The IEA has denied the claims of internal dissent and sticks by its figures. But Kjell
Aleklett, a professor of physics at Uppsala University in Sweden and author of a report
The Peak of the Oil Age, claims crude production is more likely to be 75m barrels a day
by 2030 than the "unrealistic" 105m projected by the IEA.
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