Fossil fuels vital to future development

The following comment by me appeared in this week’s Fund Strategy.

It seems virtually all politicians want to present themselves as enemies of “big oil”. It is a pity they have forgotten the huge benefits of fossil fuels.

One of the less noticed passages of Gordon Brown’s speech to the Confederation of British Industry in Scotland last week was his desire to “set a new ambition to free Britain from the dictatorship of oil”.
Exactly how a physical substance can impose a dictatorship over people he did not explain. Rights are normally curtailed by governments, such as his own, rather than by chemicals. But he is far from alone in his hostility to oil.

Al Gore, the former American vice-president turned environmental campaigner, told the Democratic National Convention in Denver on August 28 that America needed presidential leadership to solve the climate crisis. He is also supporting a campaign demanding “electricity 100% clean within 10 years” (www.wecansolveit.org). Obviously, the term “clean” is open to interpretation but Gore made no secret of his distaste for “big oil and coal” in his speech.

Nor is criticism of oil interests restricted to those who might vaguely be defined as on the left. On the Republican side the new vice-presidential candidate, Sarah Palin, is portrayed by her opponents as a supporter of big oil. But she presents herself as a populist critic of corporate interests.

Few seem willing to put the case that fossil fuel has brought enormous benefits to humanity and, if allowed, is likely to continue to do so. It is a relatively cheap and highly flexible form of energy. That is why the International Energy Agency estimates it is likely to account for 84% of the overall increase in energy demand from 2005-2030. Without oil the world economy would not have grown nearly as fast over the past century.

Although Brown and others offer alternatives, their claims to be able to replace fossil fuel bear little relationship to reality. Brown supports more investment in renewables and atomic power – which is fine in principle – but on nowhere near the scale needed to meet future energy needs. And, contrary to the common misconception, greater energy efficiency is likely to lead to more energy consumption rather than less.

One-sided attacks on oil do not help promote a considered debate on the future of energy.