Revisiting ‘Thinking the unthinkable’

In October, I wrote a post which gave an overview of a (failed) bid to JISC.

“What will happen to the provision of a technology dependent education when energy consumption is restricted by recurring interruptions in supply and significant spikes in costs?” This project aims to address this question by re-framing ‘Sustainable ICT’ within the context of an imminent crisis in energy supply. As we increasingly turn to ICT to enhance, support and deliver education and research, the prospect of an energy crisis within the next ten years becomes crucially important to our sector, its partners and stakeholders. The project will use JISC’s Scenario Planning tools to address this crisis and examine the wider energy context, which fuels the UK’s industrialised and globalising model of Higher Education.

I have added the feedback I received as a postscript to the original post. Needless to say I was disappointed that it did not receive funding at that time, but very encouraged by the positive response I received from the evaluation panel.

Since submitting the bid, I have continued to pursue this area of research and wanted to reflect on the last four months of intensively reading around the subject of energy, climate change and, to a lesser extent, the resilience of HEIs. I have written about some of this in other posts, but think that a summary update would be useful for me to gather my thinking and perhaps be of interest to you, too. I should say upfront, that today, as I write, I’m not especially optimistic about the ability for the tertiary education sector to continue in its current form beyond the end of this decade (mainly due to increasing economic pressures) and hope that I offer enough reasons below to motivate other people to join Richard Hall and I, in pursuing this research further.

Peak Oil (or an oil ‘supply crunch’)

As I was writing the original research bid, The UK Energy Research Centre published their Global Oil Depletion Report, a massive survey of recent literature on the subject of Peak Oil. They concluded:

On the basis of current evidence we suggest that a peak of conventional oil production before 2030 appears likely and there is a significant risk of a peak before 2020.

As I’ve noted before, there is reason to suggest that oil production has already peaked, since supply has effectively plateaued  since 2005, despite the annual price of oil steadily increasing in the midst of significant price volatility.

Since the UKERC report, there have been other notable reports which forecast a peak in oil production by 2020. For example, yesterday the Peak Oil Task Force, a group of six UK companies, including Virgin, Scottish and Southern Energy and Stagecoach, published a report which warns of the “urgent, clear and present danger” of an ‘oil crunch’ by 2015:

The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well. As we reach maximum oil extraction rates, the era of cheap oil is behind us. We must plan for a world in which oil prices are likely to be both higher and more volatile and where oil price shocks have the potential to destabilise economic, political and social activity. Virtually every sector of our economy is still dependent on oil.

This follows several other recent reports and warnings. For example, a Chatham House report forecasts a 2013 peak, the NGO, Global Witness, warns of an imminent supply crunch; Petrobras, Brazil’s oil company, a 2012 oil crunch; the CEO of Total SA, forecasts a peak by 2015Shell’s CEO likewise forecasts an end to easily accessible oil by 2015Chevron are vague on the date (2012?), but issued [PDF] a clear warning in 2005; the former VC of  Saudi Aramco, the world’s largest producer of oil, has said that oil production has peaked and is currently on a plateau. The International Energy Agency (IEA), representing OECD countries, has warned of an oil crunch from 2011, with production peaking by the end of the decade.

The conventional economic theory of demand destruction caused by the rising price of oil has had very little effect on the amount of oil consumed and conversely, price rises and therefore opportunity for investment over the long-term and incentives to produce more to sell in the short-term, have not resulted in a rise in oil production. Between 2002-5, “for every dollar increase in oil prices, three year cumulative global crude oil production increased at 167 mb per dollar.” However, between 2006-8… “for every dollar increase in oil prices, three year cumulative global crude oil production fell at 15 mb per dollar, again relative to the 2005 rate.” ((Comment on Oil Drum)) Similarly, the ex-VC of Saudi Aramco has said:

The evidence is that in spite of the increases – very large increases – in oil prices over the last four years, we haven’t been able to match that with increasing capacity. So, essentially, we are on a plateau.

Energy Security

In the original bid to JISC, I framed the problems of Peak Oil and Climate Change as potentially serious impacts on the operation of HEIs and therefore the provision of tertiary education in the UK. Energy security is a broad term that covers the supply and distribution of the different fuels that we need to fuel a growing economy. Global economic growth (GDP) is closely coupled to the global consumption of oil, and while there are indications that the demand for oil by OECD countries has started to decline, global demand is still expected to rise because of the demand by developing countries.

So we have a situation where the global demand for oil will outstrip the available supply of oil, therefore impacting on economic growth. On today’s Financial Times ‘Energy Source‘ blog, Geologist, Colin Campbell was quoted from 2006, saying:

I think we are facing an oil price shock, 100 or 200 dollars a barrel, an economic recession that cuts demand, and I will not be at all surprised if a fall in demand would make the price collapse again. So we might be back to 20 or 30 dollars a barrel next year perhaps. And so you have a price shock, a recession, a recovery, hits again the falling capacity limit, another price shock. And so I think that in the next few years, we have a sequence of vicious circles and gradually the reality of the situation will filtered through. We are on for a very volatile few years with enormous economic consequences.

The FT reporter thinks this view is “on the money” and I am inclined to agree, too.

Peak Oil is not the only energy security problem that we face over the next decade. The year 2016 is commonly given as the point where our national infrastructure, in it’s current form, can no longer supply the energy we demand.

Planned closures of ageing nuclear plant and the removal, by the end of 2015, of a significant amount of coal and oil-fired power stations under European environmental legislation is likely to lead to a large fall in the electricity capacity margin. ((Project Discovery – Energy Market Scenarios, p.5))

Ofgem’s recent Project Discovery project produced four market scenarios for the UK’s energy future. Their worse case scenario, as I’ve touched on before, is a ‘dash for energy’ scenario ((Project Discovery – Energy Market Scenarios, p.16)), where “the recession proves short-lived. Demand bounces back strongly and then increases over time, although investment levels take some time to become re-established following the hiatus caused by the credit crisis.” The costs of this to consumers would be a 60% increase in energy bills by 2020. ((I’ve noted elsewhere that Ernst & Young have calculated a possible 400% increase in consumer energy bills by 2020.))

However, in December, after consultations with energy companies and academics, the Chief Executive of Ofgem thought that this was “too optimistic”. Conversely, earlier this month, Ofgem issued a warning that bills could rise by 20% over the next decade, presumably because they do not now expect a ‘dash for energy’ scenario, but rather an economic outlook of slow growth.

Ofgem conclude that we have a narrow window until 2013 to implement policy to address supply security from 2016:

Although our scenarios do not indicate concerns over supply security until beyond the middle of the current decade, the timescales required to secure finance, mobilise supply chains and deliver the infrastructure needed suggests that the period around 2012 and 2013 could be important for investment decisions critical to future secure and sustainable energy supplies. Hence, there is a window of opportunity between now and then to implement any policy measures that may be necessary to make sure that investment takes place in a timely fashion. ((Project Discovery – Options for delivering secure and sustainable energy supplies, p.5))

Whichever way I am able to understand it, the picture of energy security for the UK over the next decade looks uncertain and any response, costly. Dieter Helm, Prof. of Energy Policy at Oxford, thinks we’re in a mess and calls for “a more imaginative approach to infrastructure… The Victorians did it: the current generation needs to repeat it.” ((The Challenge of Infrastructure Investment in Britain, p.39))

The rebound effect of (technological) efficiencies

One of the measures to improve the security of our energy supply is to improve our efficiency of energy use. This effectively allows us to do the same (or more), with less energy than before. The subject of energy efficiency is also closely related to our carbon reduction targets. The 2008 EU directive on Climate Change sees energy efficiencies as “one of the key ways in which CO2 emission savings can be realised.” (p. 8) The target is a reduction of 20% by 2020.

However, there is a problem when claiming absolute targets for energy efficiency, which has been studied by the UK Energy Research Centre in a 2007 review of over 500 studies in this area. The report is called, An Assessment of the evidence for economy-wide energy savings from improved energy efficiency, otherwise known as The Rebound Effect Report.

As the report notes, there have been claims in the past that technological efficiencies result in absolute and predictable decreases in energy use, just as there have been claims that such efficiencies result in more energy being used (in the latter case, this is referred to as ‘backfire’). The basic point is that while technological efficiencies in the use of energy are real, the overall result is that only part of the actual efficiency is realised in society. This is because while we save energy through efficiencies, we spend part of those savings on other activities that use up energy.

An example of a rebound effect would be the driver who replaces a car with a fuel-efficient model, only to take advantage of its cheaper running costs to drive further and more often. Or a family that insulates their loft and puts the money saved on their heating bill towards an overseas holiday.

This was first identified as the Jevons Paradox, which I have written about before. The usefulness of the UKERC report is that it demonstrates the complexity of the issue, but also that it usefully summarises the individual and social consequences of efficiencies. Efficiencies can be divided into those that have a direct rebound effect and those that have an indirect, or economy-wide, rebound effect.

An example of a direct rebound effect quoted above is where a family drive more because they’ve bought a more fuel efficient car. The report concludes that in particular circumstances up to 30% of the intended energy ‘saved’ through efficiency might be ‘spent’ in this way, particularly in areas such as transport and heating/cooling.

An example of an indirect rebound effect quoted above is where a family insulates their loft and then uses the savings in heating costs towards a holiday. The report is hesitant to draw conclusions in this area, but indicates that up to 50% (perhaps more) of the intended energy ‘saved’ in particular circumstances through efficiency might be ‘spent’ in this way. Some studies suggest much higher numbers which, they say, should be taken with caution.

The UKERC conclude that the alarming claims of ‘backfire’, where energy efficiency measures result in an overall increase in energy used, cannot be verified but should still be taken seriously. There is more evidence of this occurring when technologies are pervasive (i.e. the steam engine or electric motor).

The conclusions of the report are now of great interest to me and have confirmed the direction my research was beginning to go: that is, the relationship between energy and economic growth. I mentioned this in my original ‘Thinking the unthinkable’ post, in terms of how economic growth, the use of energy and the production of emissions are all coupled. The UKERC report puts it like this:

In developed countries, energy use as conventionally measured has grown more slowly than the economy as a whole. From this, it is generally concluded that technical change has improved the efficiency with which energy is used and thereby helped to ‘decouple’ energy consumption from economic growth. However once different energy sources are weighted by their relative ‘quality’ or economic productivity, the coupling between energy consumption and economic growth appears far stronger. Taken together, the evidence reviewed in this report suggests that: a) the scope for substituting other inputs for energy is relatively limited; b) much technical change has historically increased energy intensity; c) energy may play a more important role in economic growth than is conventionally assumed; and d) economy-wide rebound effects may be larger than is conventionally assumed.

Claims of a decoupling of energy consumption and emissions from economic growth virtually always refer to a relative decoupling, rather than an absolute decoupling.

It’s vital to distinguish between ‘relative’ and ‘absolute’ decoupling. Relative decoupling refers to a situation where resource impacts decline relative to the GDP. Impacts may still rise, but they do so more slowly than the GDP. The situation in which resource impacts decline in absolute terms is called ‘absolute decoupling’. Needless to say, this latter situation is essential if economic activity is to remain within ecological limits.

Evidence for declining resource intensities (relative decoupling) is relatively easy to identify. The energy required to produce a unit of economic output declined by a third in the last thirty years, for instance. Global carbon intensity fell from around one kilo per dollar of economic activity to just under 770 grams per dollar.

Evidence for overall reductions in resource throughput (absolute decoupling) is much harder to find. The improvements in energy (and carbon) intensity noted above were offset by increases in the scale of economic activity over the same period. Global carbon emissions from energy use have increased by 40% since only 1990 (the Kyoto base year). ((Prosperity without growth? The transition to a sustainable economy, p. 8))

Despite efficiencies, energy use goes up

Despite efficiencies, energy use per capita goes up

Despite efficiencies, emissions go up

Meeting our carbon targets

While the ‘rebound effect’ may have some implications for our energy security in terms of how efficiency measures may or may not safeguard against a scenario of oil depletion and overall supply disruptions,  there are very clear implications for our carbon reduction targets. One of the issues, perhaps the biggest issue, is that of population increases, a subject that is often recognised in reports, but skirted over because of the seemingly hopeless task and political sensitivity of addressing it. Nevertheless, it needs to be recognised that population increases do contribute to overall energy use and emissions and need to be accounted for in calculations that inform Climate Change policy.

Richard Hall has recently begin to address this, referring to Ehrlich-Holdren’s sustainability equation

I = P.A.T

That is, the impact of human activities (I) is determined by the overall population (P), the level of affluence (A) and the level of technology (T). Quoting Tim Jackson, Richard writes:

However, a key problem is the dynamic of efficiency vs scale. Jackson notes (p. 3) that “Technology is an efficiency factor in the equation. Population and affluence are scaling factors. Even as the efficiency of technology improves, affluence and population scale up the impacts. And the overall result depends on improving technological efficiency fast enough to outrun the scale effects of affluence and population.” So these factors are not independent and “appear to be in a self-reinforcing positive feedback between affluence and technology, potentially – and I emphasise potentially – geared in the direction of rising impact”

A recent paper I have found helpful in terms of thinking about the UK’s Climate Change Act (2008) concludes that the Act is certain to fail, showing how the target of an 80% reduction in emissions by 2050 (and 34% by 2022) has no historical precedent. What I found useful, regardless of whether the targets are practicably achievable, are the author’s observations on population growth and economic growth (GDP).

In summary, Pielke shows that the UK’s population is predicted to grow by 0.7% per year to 2031, which would mean that the population will be around 67 million people. Extending this to 2050, we would have a population of about 82 million. He warns the reader that population growth forecasts are “notoriously uncertain, so caution should be used when using them, as actual future populations could be higher or lower.” (p. 2) He then considers economic activity and observes that the UK economy averaged 2.5% GDP growth (inflation adjusted) between 1990-2007. Combining the 0.7% population increase with a more modest 2% GDP growth rate, implies a per capita growth rate of 1.3% per year. Finally, Pielke factors in technological change and notes that according to the US Energy Information Agency, “from 2000 to 2006 UK energy efficiency increased by about 2% per year, while the carbon intensity of the energy supply was largely unchanged.” (p. 2)

Because the effects of technological change (including changes in the economy toward services and away from energy intensive industry) just about balanced the overall growth of the economy for the past decade, the UK has seen little growth in its overall carbon dioxide emissions (although the UK National Audit Office recently observed that the lack of growth in emissions is also due to accounting, as some economic activities, like air travel, are not included in official emissions numbers.

Following Dieter Helm, I’ve noted before that this method of accounting creates an illusion ((UK’s official CO2 figures an illusion – study. Source: Too Good to be True? The UK’s Climate Change Record [PDF])) around our official emissions figures, transforming a reported 15% reduction into a 19% increase in emissions since 1990.

It seems to me that Pielke’s observations complement Tim Jackon’s reference to the I = P.A.T equation as well as the conclusions of the UKERC’s Rebound Effect report. That is, technological efficiency, although vitally important, does not, as we might expect, lead to an overall reduction in emissions or energy consumption. It merely helps balance the impacts of population growth and consumption led economic growth. Of course, if we also take into account our emissions and energy use that we outsource to industrialising countries such as China, the balance is lost in favour of rising energy use and emissions.

What is clear to me is that technology is being used as an excuse to avoid the greater issues of a broken and destructive (suicidal?) political economy and the consequences of an aspirational and growing population. Tim Jackson puts this nicely:

The IPAT equation appears to offer us broadly three ways of achieving overall reductions in energy demand (for example). One, reduce the population – not a popular choice. Two, reduce the level of affluence (again not high on political priorities – although an interesting avenue to explore at various levels as I shall suggest in a minute). And three, improve technology: specifically to increase the energy efficiency of income generation, to reduce the energy intensity of the economy.

Given the unpopularity and political intractability of routes one and two, it’s perhaps not surprising to find the mainstream response is to adopt route three as the preferred approach. Indeed an examination of the history of international policy from Brundtland onwards reveals quite clearly how route 3 allowed the world to steer an uneasy path between the demands of the North for population control in the South and the demands of the South for reduced affluence in the North. Option 3 emerges as an apparently politically neutral way through a tricky impasse. ((Rebound launch: keynote presentation))

Our technological subservience to economic growth

Technology emerges as an apparently politically neutral way through a tricky impasse.

This single line encapsulates a great deal of what I have been trying to understand through writing these posts over the last few months and it links to a question Richard raises in his recent post:  Is this all subservient to a view of economic growth? The answer has to be yes. The production and consumption/use of technology is not politically neutral. As we have seen, all the time we pursue economic growth, technology serves the objectives of capitalism. This is evident in the long history of capitalism, just as it is evident in Higher Education today.

In short, society is faced with a profound dilemma. To resist growth is to risk economic and social collapse. To pursue it is to endanger the ecosystems on which we depend for long-term survival.

For the most part, this dilemma goes unrecognised in mainstream policy or in public debate. When reality begins to impinge on the collective consciousness, the best suggestion to hand is that we can somehow ‘decouple’ growth from its material impacts.

Never mind that decoupling isn’t happening. Never mind that no such economy has ever existed. Never mind that all our institutions and incentive structures continually point in the opposite direction. The dilemma, once recognised, looms so dangerously over our future that we are desperate to believe in miracles. Technology will save us.

Capitalism is good at technology. So let’s just keep the show on the road and hope for the best. ((Prosperity without growth? The transition to a sustainable economy, p. 102))

Despite the genuine and overwhelming challenges of energy depletion and climate change, technological development as a means to solve these problems, is merely a sideshow. Technological innovation and the resulting improvements in energy efficiency and lower emissions are vital responses, but do little more than offset the exponential problems of an increasing population and economic growth. I am hesitant to call population growth a problem all the while the relatively few rich consumers produce the majority of emissions ((George Monbiot, The Population Myth)). Economic growth and and our notion of what constitutes ‘progress’ seem to me, to warrant much of our attention when considering these issues.

I think that’s where I need to go next. Only by understanding our role within capitalism can we attempt to address the problems I’ve discussed. What better place to do this than a Higher Education institution, a place where the impacts of these issues are evident everywhere and answers to these problems can be collectively sought. I recently applied to the HEA for funding in an attempt to begin to put this into practice and will continue to think along these lines.

Thinking the unthinkable

For the last couple of weeks, I’ve been dipping in and out of a bid that I am writing for JISC’s Greening ICT Programme. Those of you that follow me on Twitter will have seen me drop related tweets into the stream. I’ve been a bit nervous about doing so because they seem quite unrelated to my usual topics of conversation. Also, the subject matter can be pretty depressing and I worry that it might get on people’s nerves after a while. Oh, well. ((Somewhere in this post, I just want to say thanks to Richard Hall at DMU for encouraging me to write about this.))

Anyway, Peak Oil and a related energy crisis is something I’ve been interested in for a few years and is a topic I discuss regularly with friends face-to-face. Over the years, I’ve found that a lot of people aren’t interested; either because the consequences are just too depressing and/or because the the other ‘big issue’ of climate change is surely what we’re supposed to be worrying about now. (It is, but peak oil is likely to increase our consumption of alternative fossil fuels and therefore increase our carbon output). When we hear politicians questioned about an ‘energy crisis’, they say there is no crisis as long as we concentrate on a shift to the use of a mix of renewables and greater energy efficiency. I tend to disagree because…

The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking. ((The ‘Hirsch Report’: Peaking of World Oil Production: Impacts, Mitigation and Risk Management (PDF). An often cited report commissioned by the US Department of Energy in 2005))

My bid to JISC comes under their ‘Small Scale Exploration Studies of Aspects of Green ICT’. It’s basically part research project and part scenario planning for HEIs and JISC to help them consider and plan for a long-term energy crisis. In JISC’s recent Strategy Review 2010-2012, they include a section on Priority Investment Areas, under which there is a sub-section called ‘Efficient and Effective Institutions‘. This includes providing ‘leadership on Green Computing and environmental sustainability‘ and ‘guidance on sustainable business models’. The sub-section is split into the Here and Now, On the Horizon (2-5 years), and Beyond the Horizon (3-10 years).

You’ll see from my comment, that when I read this, it occurred to me that JISC’s Strategy didn’t seem to recognise the possibility of disruptions to energy supply and significant spikes in the cost of energy over the next ten years. There’s the welcome and necessary acknowledgement of ‘Green Computing’, ‘sustainability’ and ‘efficiency’, but these don’t show an awareness of the fundamental problems that JISC’s Vision, Mission and Objectives would face in the event of an energy crisis.

“But what crisis?!?” I hear some of you say.

Well, there’s a lot of good research available from very credible sources. Today, the BBC and Telegraph reported on The Global Depletion Report,  from the Government-funded UK Energy Research Council. The report, launched today, is authoritative in that it’s a review of all the available evidence and arguments around the issues to-date. You only have to read the Executive Summary to find assertions which should cause us all significant concern.

It confirms what some of us have been reading for years, that global peak oil, the point where it becomes increasingly uneconomical to supply the oil that is demanded by the world, is imminent.

On the basis of current evidence we suggest that a peak of conventional oil production before 2030 appears likely and there is a significant risk of a peak before 2020.

The estimated range they give is actually between 2009 and 2031, but this doesn’t really matter because they quickly acknowledge that whether it’s already here, ten or twenty years away, the time frame is very tight when it comes to developing substitute fuels. Note that production of oil has actually plateaued since 2006.

Oil production

The report is up front in saying that it doesn’t discuss the consequences of peak oil or how we might tackle it:

The report does not investigate the potential consequences of supply shortages or the feasibility of different approaches to mitigating such shortages, although both are priorities for future research.

Which is why I hope JISC will recognise that this is a vital area of research they should be funding. I had no idea that this report was being prepared – there are plenty of others that offer the same conclusions – but it does seem very timely given JISC’s Greening ICT programme of funding. As I write in my bid outline:

As HEIs increasingly turn to ICT to enhance, support and deliver education, we ask the question: “What will happen to the provision of a technology enhanced education when the consumption of energy is restricted by recurring interruptions in supply and significant spikes in costs?”

In preparing my bid, I’ve obviously tried to pull a few key points together to convince the judges that this is worth pursuing. The first important point to get across is that oil is fundamental to the UK way of life. Pretty much every material benefit we enjoy can be traced back to the discovery, production, supply and exploitation of oil.  Not only does the supply of oil affect the supply of other forms of energy, as the graph below illustrates, it is used in the production of food, plastics, medicines, chemicals, lubricants… you name it and oil plays a part in the process somewhere.

Correlation of oil, coal and gas prices
Source: ODAC

The UK doesn’t rely on oil directly for the production of electricity. We get it from a mixture of coal (32%), gas (45%), nuclear (13%) and renewables (5.5%), importing a third of our gas requirements (this is expected to rise to around 85% of our requirements by 2020). However, we can see that when the price of oil rises, the price of other fuels and, in turn, electricity rises. We’ve all felt this over the last couple of years as we’ve seen consumer electricity prices rise.

As you can imagine, for an organisation the size of a university, rises in the price of electricity can have pretty large financial consequences. Typically, a HEI will tender for a fixed term contract of a couple of years to protect from unforeseen spikes in prices. This is good if the price is relatively low at the time of your tender, like now, but what if your HEI had to renew its electricity contract last year when prices were very high? Our institution, small by comparison with some, is forecasting an annual electricity spend of £1.2m in 2009/2010, up 13% on 2008/9. Even with planned reductions in efficiency and consumption, we’re only likely to be able to reduce the increase from 13% to a 6% increase in spending. Gas, fuel oil and other utilities are in addition to this, too. I might add that we underwent a ‘server consolidation’ exercise last year and most of our server infrastructure is now virtualised, so we’ve already taken steps towards greater energy efficiency there. Of course, there is more we can do.

So, I’ve touched on the cost implications of a peak oil scenario. The bottom line is that it will get much more expensive to run a university, despite increased efforts to reduce energy consumption and improve efficiency. What’s also worth pointing out is that as we increase the efficiency of things that consume energy, we only counteract that by using more energy in other ways. So far, innovation, growth and progress has ultimately required more energy than it’s saved ((An extensive UK government-funded report that discusses this in detail is Prosperity without growth? The transition to a sustainable economy)) which is partly why we’re using 11% more energy now than we were in 1990. ((Digest of United Kingdom Energy Statistics 2008)) This is a global problem to which, despite our best efforts, we are not immune. The OECD European countries are slowly reducing their consumption of oil over the last few years ((Energy Information Administration, International Energy Outlook 2009)), yet consumption pretty much everywhere else is on the rise and so the supply and cost implications still affect us all.

It’s interesting to note that four out of five recessions since 1970 have been preceded by a spike in the price of oil ((What’s the Real Cause of the Global Recession? For a more detailed analysis of historical recessions, see Causes and Consequences of the Oil Shock of 2007-08)), as we saw last year when it hit $140/barrel.

Oil and Recessions

A report from Chatham House, last year (with a postscript in May 2009), concluded that a ‘crunch’ in the supply of oil (i.e. Peak Oil) is likely around 2013 with prices rising to around $200. They note that although recessions temporarily reduce demand for oil, the investment in energy efficiencies decreases during recession, too, and consumers prefer to hang on to less energy efficient appliances for longer because of income fears and unemployment, both of which contribute to an even greater demand for oil as the economy improves. In addition, investment in oil production drops during a recession, so innovation in improving oil extraction from existing reserves and discovery of new reserves is slowed. Any delay in the 2013 crunch which might have come from reduced demand is, according to Chatham House, negated.

It’s all quite complex, but happily (?), even for a lay observer like myself, there is sufficient comprehensible primary research and analysis that it’s not too difficult to get a decent picture of why an energy crisis is imminent and then consider the possible implications of such a scenario.

JISC have already funded work on Scenario Planning. They describe it as:

Scenario planning or scenario thinking is a strategic planning tool used to make flexible long-term plans. It is a method for learning about the future by understanding the nature and impact of the most uncertain and important driving forces affecting our world.

Many of the regular methods for strategy development assume that the world in three to ten years’ time will not significantly differ from that of today and that an organisation will have a large impact on its environment: they assume we can mould the future. Scenario planning however assumes that the future can differ greatly from what we know today.

Participants in Scenario Planning are encouraged to ‘think the unthinkable’ and ask the question, ‘what do we need to do (now) to be ready for all scenarios?’ This is what I propose to do, together with our Business Continuity Manager, Environmental Sustainability Manager, ICT Information Security Manager and other colleagues. We need to be thinking the unthinkable a lot right now and JISC’s Strategy for energy efficiency and sustainability needs to be informed by more than the climate change debate, important though it is.

We will seek to clarify the areas of uncertainty with respect to sustainable ICT by re-framing the provision of Higher Education within an energy crisis scenario that may arguably emerge in the next ten years – the reference period for JISC’s 2010-2012 Strategy.

While the policies to mitigate an energy crisis are often complementary to those required to combat global warming, the explicit policy-making in the UK for global ‘Peak Oil’ is nothing like as advanced as climate change, yet the threat to institutional business continuity is arguably greater in the short to medium term. The project will seek to effect attitudinal and behavioural change across the sector by developing scenarios for HEIs that examine the provision and continuity of education within the context of a long-term global energy crisis and suggest actions that JISC and the community may make to forecasts widely held by energy analysts though rarely acknowledged by government policy and strategy.

This is important to me, not least because the social implications are so great, but because increasingly I’m thinking that Educational Technologists are building a house of cards. We’re investing our occupation in developing a vision of the future which there is good evidence to suggest, won’t exist.

Everything is put at risk by peak oil. The manufacture of microchips and hard drives ((I ran across an article yesterday that describes how Intel Executives are trying to petition the US government to focus on the problem)), the transportation of ICT equipment to consumers, the reliable supply of electricity to power equipment. ((See also, the report by the UK Industry Taskforce on Peak Oil & Energy Security, which includes Yahoo! and Virgin, among others.))  And it’s not just the obvious things that it will affect. I was discussing this with our Business Continuity Manager recently and she pointed out that if there is no power to the fire detection and alarm system, the building has to be evacuated. ((UPDATE: If they cannot be powered the Unviersity will either have to employ fire marshalls patroling buildings keeping a fire watch or when the battery power backups fail they will have to move to another building. In addition the University would have to go back to manual fire alarm e.g. bells, or an alternative manual warning system (e.g. person shouting being the last resort).)) Our UPS and backup batteries will allow for a graceful power down in some parts of the campus in the event of power cuts, but they won’t maintain business as normal. We had a three-day-week in the UK for three months in 1974, in order to conserve electricity. ‘South African style power cuts’ are forecast for the UK by 2015. What might be the government’s response to an energy crisis and how might it affect HEIs and our provision of an industrialised education? Some local authorities are beginning to take the issue into their own hands. ((See the The Welsh Local Government Association’s Peak Oil and Energy Uncertainty,  and ODAC’s Preparing for Peak Oil: Local Authorities and the Energy Crisis)) I think Educational Technologists should be leading on this in our sector, too.

Postscript

The bid to JISC was not funded though I quote their feedback below:

The main reason that your proposal was not approved for funding was that, although the evaluators thought the question you posed was of great importance and one that really ought to be answered, they decided that it really did not belong in a JISC funded call for projects around Green ICT.

For example, in the question of the overall fit to call, they said:

“Whilst in the general area of sustainability and a piece of useful work, its link to the specifics of the programme is a little thin. Not about Green IT but energy uses response.”

and

“The proposal is very left of afield (sic), it is a good idea and while I am sure it would be extremely interesting to pursue; it does not, I feel, fit within the scope of the call.”

and

“Think this is a very interesting bid that is likely to produce some very thought provoking outputs. It does seem to be slightly orthognonal to the issues described in the call but I think that it would be very useful despite that. It is very clearly written and makes its case well.”

Under the question of the workplan one said:

“Most of it seems well planned. However, I am concerned about only allowing a month for the survey and dissemination. The recruitment risk is significant. Dissemination is very strong.”

In terms of value for money concern was expressed at the high cost of the scenario planning exercise and it was felt overall to be not good value for money.

Overall Comments from the evaluators were:

1. A good proposal, of value to JISC but consideration needs to be given to its relationship to the programme. It appears to be out of scope.

2. Quite interesting as a proposal and possibly work that JISC might want to consider funding under a future call. However, this does not fit well within the current call.

3. An interesting and thought provoking bid that looks to be very useful I would like to give it an A but I have a number of minor concerns as discussed above.

…the evaluation panel came to the conclusion that it was too far from the scope of the programme that we could not fund it. However the panel wanted to pass on their encouragement to seek other sources of funding for this idea and keep in touch with JISC.