Embed Size (px)
DESCRIPTION
Jeremy Leggett speaks at the Hillary Symposium on the 'Triple Crunch': economy, peak oil, and the environment
Citation preview
The triple crunch
and the road to Copenhagen and beyond
Jeremy Leggett
2nd Hillary Institute seminar
“The Real New Deal”
5 June 2009
We are living through a triple crunch
• Financial …the credit crunch
- the banking industry had its asset assessment
systemically wrong
• Carbon …the climate crunch
- a stable climate is not even valued as an asset
in our current operating paradigm
• Oil …the energy crunch
- could the energy industry have its asset
assessment systemically wrong too?
We are living through a triple crunch
• Financial …the credit crunch
- the banking industry had its asset assessment
systemically wrong
• Carbon …the climate crunch
- a stable climate is not even valued as an asset
in our current operating paradigm
• Oil …the energy crunch
- could the energy industry have its asset
assessment systemically wrong too?
“as long as the music is playing, you’ve got to get up
and dance. We’re still dancing.”
Welcome to the AGM
We are living through a triple crunch
• Financial …the credit crunch
- the banking industry had its asset assessment
systemically wrong
• Carbon …the climate crunch
- a stable climate is not even valued as an asset
in our current operating paradigm
• Oil …the energy crunch
- could the energy industry have its asset
assessment systemically wrong too?
430 ppm CO2e today means 1C minimum
Stern Review, 2006
We are living through a triple crunch
• Financial …the credit crunch
- the banking industry had its asset assessment
systemically wrong
• Carbon …the climate crunch
- a stable climate is not even valued as an asset
in our current operating paradigm
• Oil …the energy crunch
- could the energy industry have its asset
assessment systemically wrong too?
April 2009
March 1999
October 29th 2008
The first multi-company attempt to sound an
alarm bell on premature peak oil
www.peakoiltaskforce.net
US-48
0
5
10
15
20
25
30
1930 1950 1970 1990 2010 2030 2050
Dis
cove
ry G
b
010002000300040005000600070008000900010000
Pro
duct
ion
kb/dProductionbi
llion
s of
bar
rels
Source: ASPO
USA 48 production versus discovery
US-48
0
5
10
15
20
25
30
1930 1950 1970 1990 2010 2030 2050
Dis
cove
ry
010002000300040005000600070008000900010000
Pro
duct
ion
kb/d
Production
Source: ASPO
billi
ons
of b
arre
ls USA 48 production versus discovery
0
10
20
30
40
50
1930 1950 1970 1990 2010 2030 2050
Pro
du
ctio
n, G
bo
e/a
Non-con Gas
Gas
NGLs
Polar Oil
Deep Water
Heavy
Regular
billi
on b
arre
lsGlobal production of oil and gas
0
10
20
30
40
50
1930 1950 1970 1990 2010 2030 2050
Pro
du
ctio
n, G
bo
e/a
Non-con Gas
Gas
NGLs
Polar Oil
Deep Water
Heavy
Regular
Source: ASPO
billi
on b
arre
lsGlobal production of oil and gas
Source: IEA WEO 2008
mbd
100
95
90
85
80
75
Global production of oil
The gap to make up for depletion in existing fields: Six Saudi Arabias
Source: IEA World Energy Outlook 2008
The IEA is also concerned
Source: IEA WEO 2008
mbd
100
95
90
85
80
75
Global production of oilThe gap to make up for depletion in existing fields: Six Saudi Arabias
Global production of oil
Source: IEA World Energy Outlook 2008
The IEA is also concerned
• ..\y My Pictures\untitled.bmp
Dubai 1990
• ..\y My Pictures\untitled.bmp
Dubai 2007
Concerns pursuant to the 2005 US DoE Hirsch report of on oil security
1. Oil supplies and GDPs are coupled in normal times, and when sudden shortages have happened
2. World production has been on a plateau since 2004, because additions of new capacity are not exceeding depletion
3. Recession is meaning cutbacks in oil exploration and development investment: a recipe for declining world oil production in just a few years
4. This means global GDP will be dragged down by descending global oil production, causing ever deepening recession
5. The lag time for mitigation is long: alternative technologies will take at least a decade to have major effect
6. This means double recession, prolonged, before recovery
Source: Bob Hirsch, April 2009
ITPOES recommendations: 1. National
1. Appraise the risk from premature peak oil, and plan proactive and reactive strategies
2. Draw up a national energy plan to deal with the premature peak-oil threat • maximise energy conservation and energy efficiency • accelerate investment in renewable energy and sustainable
renewable fuels • national skills programmes in energy• expand national oil and gas programmes (if possible)
3. There is no time to wait in drawing up and implementing a new national energy mobilization planincluding:• The renewables industry is confident that 100% renewables energy
supply is possible in 20-40 years. Give them the opportunity to prove it.
• Nuclear decisions should be taken rapidly, and governments should ensure that uncertainties over the nuclear renaissance should not act as barriers to the mobilization of energy efficiency and renewables.
Mobilisation rates
Climate change policy response scenario
Peak oil “descent”scenario
Peak oil “collapse”scenario
End goal for replacement of oil use
Within 42 years
Within < 20 years
Within < 10 years
Annual rates of oil replacement with respect to 2008
2.38% c. 5% >10%
Source: ITPOES 2008
ITPOES recommendations: 2. International
1. Call for, or enact, greater transparency about oil reserves including• minimal programme of verification by a small United Nations team
as a confidence-building measure has been proposed by G-8 governments.
2. Combine multi-lateral efforts to deal with oil depletion and climate change in the post-Kyoto climate negotiationsincluding • rapid trialing of CCS• unconventional oil should not be exploited if its net carbon footprint
is higher than that of conventional oil
3. Accelerate “green new deals” already underway, at home and abroad.
Mobilisation forces
Governments Business People
Survival trajectory
Status quo trajectory
www.nef.org
21 Ju
ly 20
08
Governments
• Green new
deals
• Grey new
deals
Surv
ival
Sta
tus q
uo
The potential for energy efficiency and RE
Invest £ 1 billion:
….create 20-40,000 clean jobs
….save minimum £ hundreds of millions per year, rising to billions
Governments
• Green new
deals
• China - US
leadership?
• Grey new
deals
• The “return
to 2007”
syndrome
Surv
ival
Sta
tus q
uo
FEBRUARY 2009
Business
• The cleantech
revolution
Surv
ival
Sta
tus q
uo
UK’s first solar street: S Yorkshire HA
FT, 21st Oct 2006
Source: UK PV Manufacturers Association, May 2009
Feed-in tariffs and jobs: the case of UK PV
Business
• The cleantech
revolution
• Enlightened
leadershipSurv
ival
Sta
tus q
uo
Business
• The cleantech
revolution
• Enlightened
leadership
• Big oil
recarbonising
Surv
ival
Sta
tus q
uo
Gulf of MexicoBusiness
• The cleantech
revolution
• Enlightened
leadership
• Big oil
recarbonising
• No room for
serious
renewables
Surv
ival
Sta
tus q
uo
MARCH 2009
People
• No return to
2007
• Self-help
innovation
• Top Gear
etc
• The rise of
the Far
Right
Surv
ival
Sta
tus q
uo
A battle for hearts and minds
Governments Business People
Survival trajectory
• Green new
deals
• China - US
leadership?
• The cleantech
revolution
• Enlightened
leadership
• No return to
2007
• Self-help
innovation
Status quo trajectory
• Grey new
deals
• The “return
to 2007”
syndrome
• Big Oil
recarbonising
• No room for
serious
renewables
• Top Gear
etc
• The rise of
the Far
Right
Who to believe?
oil
gas
gas
oil
LCBP (Low Carbon Building Programme)
SEPTEMBER 2009
Num
bers
Time
The Law of the Few
The Stickiness Factor
The Power of Context
“Look at the world around you. It seems
like an immovable, implacable place. It is not. With the slightest push – in just the right place – it can be tipped.”
Malcolm Gladwell
TIPPING POINT
The “seeing is believing” effect
