Category Archives: Energy

Comments on projects around the theme of Energy

Nef Energy crunch email

new economics foundation

Dear former ODAC subscriber,


Welcome to the first edition of Energy Crunch, the new newsletter from nef devoted to the crucial nexus between energy, the economy and the environment. Once a fortnight we plan to give you a concise summary of the most important developments, highlight a handful of stories you may have missed but really ought to make time for, and offer our take on what’s really going on behind the headlines. We’ll also point you to the ‘chart of the week’ or another piece of research that illuminates the debate – our first is a cracker. Or perhaps that should be fracker.


Best wishes,


Simone Osborn
Co-editor, Energy Crunch


Three things you shouldn’t miss this week

  1. US Gas: the law of diminishing returns

    Source: Drill Baby Drill – David Hughes, Post carbon Institute

  2. British Geological Survey Bowland Shale Gas Assessment – Arthur E Berman
  3. Peak oil isn’t dead, it just smells that way – Chris Nelder




The round-up


Energy Crunch? What energy crunch? To listen to news recently you could be forgiven for thinking all the energy supply worries of the last few years have been miraculously solved. Peak oil is dead, the UK is floating on a bed of shale gas and everything’s rosy. There has certainly been a shift in the debate, but when you dig beneath the surface, it’s not at all clear how much the energy supply picture has actually improved. Let alone the greenhouse gas emissions.


George Osborne fired the starting gun on what he hopes will be a shale gas boom by slashing production tax rates to just 30% – half the normal level.  The announcement came shortly after the release of a British Geological Society (BGS) report which doubled the estimated gas resource of the Bowland Shale formation under Lancashire and Yorkshire, leading to exuberant claims that this alone could cover Britain’s gas needs for 50 years. The government, gas drillers and some of the media would have you believe this locally produced gas will keep the lights on, kickstart the economy and slash gas prices. So what’s not to like?



First, there is a major question over how much gas is ever likely to be produced. Most of the optimism around shale gas is based on the US experience, but conditions here are very different. Art Berman, an American industry consultant, has analysed the BGS assessment and reckons Bowland has recoverable reserves – always much smaller than the total gas that exists in the rocks – of 42 trillion cubic feet, or about 15 years’ supply at current levels of consumption. To produce this would mean drilling around 30,000 wells, and that level of industrialisation seems likely to provoke a major backlash. Perhaps that wind turbine doesn’t look so bad after all?



Second, even if there were substantial shale gas production, it is unlikely to put much of a dent in UK gas prices, whatever ministers suggest. The Telegraph reported that an analysis by consultants for the Department of Energy and Climate Change had found that shale production could cut UK gas prices by a quarter, without mentioning this was only one of a series of scenarios. However, the overwhelming consensus among gas experts is that the impact would be minimal, since UK prices would still need to be high enough to attract imports from Europe, and would be buoyed by European demand for UK supplies. Those who argue this include: Oxford Institute of Energy Studies; VTB Capital; BP; the Energy Contract Company; Poyry and others.



Third is the issue of potential water contamination – always hotly contested by the frackers – which was raised again last week by Water UK, the industry trade body. Fourth is that burning all this non-conventional gas is in almost certainly incompatible with our legally binding emissions reduction targets.  But perhaps it’s no surprise this awkward fact has been conveniently ignored: it has been clear for some time that George Osborne has largely relieved Ed Davey of responsibility for UK energy policy.



Of course, fracking can be used to produce oil as well as gas, and this has led to surge in US oil output in recent years –  after decades of decline – prompting a rash of stories that ‘peak oil is dead’.  John Kemp of Reuters was one of a slew of commentators to claim that new technology has trumped the doom mongers once again.



These writers seem not to have noticed that the oil price is more than 10 times the level of the late 1990s, and last year recorded its highest ever annual average at just under $112. Nor that that the decline rates of the new shale oil wells are much steeper than conventional wells – losing as much as 40% of their production capacity every year – which means the industry really must ‘drill baby drill’ simply to stand still (check out our chart of the week). Nor that rising consumption among major producers is cannibalising exports – Saudi Arabia will become a net oil importer in the 2030s on current trends. Nor that – with much of the world economy in the doldrums – current prices appear to be an effective cap on economic growth. Perhaps the anti peak oilers are right to suggest we can produce some more oil at higher prices, but they seem to miss the broader point: we can’t afford it.  Far from peak oil being disproved, it’s right here; economic peak oil.



For a truly disruptive plan this week take a look at the Centre for Alternative Technology’s 3rdZero Carbon Britain report. Even the International Energy Agency is forecasting that globally renewable electricity will exceed output from natural gas and double generation from nuclear by 2016. The prospect of 30,000 gas wells might give the anti wind brigade pause for thought. Perhaps there is still a chance of a real energy policy rather than the Jekyll and Hyde struggle currently being played out in Whitehall.







UK Policy

Related Reports

Oil Substitution and the Decline of Conventional Oil – Stanford University Environmental Assessment & Optimization Group
Zero Carbon Britain – Centre for Alternative Technology
Drill Baby Drill – David Hughes, Post Carbon Institute

The Energy Crunch team: Simone Osborn, David Strahan, Aniol Esteban, Tim Jenkins

You received the newsletter because you previously subscribed to the ODAC newsletter which was taken over by nef in March 2012 . To see the archive of ODAC newsletters follow this link.

Closing the loop


Have you ever sat back and imagined what a perfect (Well, a very much improved one at least) local economy would look like. I was fortunate enough to have that invitation to reflect when I was involved in the dreaming up of the ideas and projects for our successful lottery bid.

Two of the strands that we entered into the bid were for a community owned energy services company and for the Harborough pound, as local complimentary currency that helps lock wealth into the local economy. The Energy services company would provide investment opportunities and the ability to benefit from the proceeds of renewable energy projects as an Energy Generator.

Now the disconnect to my mind is how could we link the currency to the generation…. we need to also sell that energy into our local populace who could then pay using our local currency thus creating a virtuous loop as an Energy Supplier.

I briefly looked into this over a year ago now and managed to ascertain that the departments I contacted at DECC and OFGEM did not know what the process was nor what was involved in becoming an energy supplier. A little worrying that.

But I did find that most of the big six, Cooperative Energy, Good Energy and Ecotricity all use the same software platform (Utility Group) which makes me feel that the platform might be the biggest barrier to accessing this market

This time I shall start will them again as one or the other should be involved, if I fail again I shall try Greg Barker and Ed Davies and push on from there.

Wish me luck and if you have any thoughts then please do not hesitate to get in contact.

The new economic frontier is a chance for community resilience


I spoke at the Hay Festival last week, a very well-attended and enjoyable session.  Every day during the Festival, the Daily Telegraph produces ‘The Hayley Telegraph’, a free magazine given away at the Festival, which includes articles by, or about, some of that day’s speakers.  Here is the article I wrote for the edition published the day I spoke.

The new economic frontier is a chance for community resilience

There’s a TV advert I remember from the 1980s that has stuck with me. It features a recently unemployed man telling his wife that he and his friend are “going it alone”, that “the bank says yes”, and that they are going to set up their own business. I think the ad was for a car or something. It captured the spirit prevalent during that decade, where business was the new frontier, anything was possible, and there were no limits.

I’m starting a brewery. I don’t know much about brewing, but with other driven and skilled people from the place I live we’re going to do it. We’re not going it alone, though: we are bringing our community along with us and inviting their support. We don’t need the bank, thank you very much, we have a local person investing in us, and plan to do a community-share launch so that the community gets the chance to invest in us, too. I think our brewery also captures a spirit that’s increasingly prevalent.

It is the spirit in which we don’t wait for an imaginary cavalry to come riding to our economic rescue, a spirit visible across the country in the explosion of local food businesses, pop-up shops, craft breweries, crowdfunding, community energy projects, and the revival of independent record shops. It’s a different, more suitable approach to economic regeneration than most, recognising that anything is possible, but within the limits of energy scarcity, austerity, and the reality of living on a finite planet.

Our brewery is part of a wider story. My town, Totnes in Devon, where it will be sited, is the UK’s first ‘Transition Town’ (there are now thousands around the world), a project I, along with others, initiated in 2005. It’s an experiment that shows a more localised and lower-carbon economy can be an opportunity for huge creativity and entrepreneurial spirit.

A coalition of our town council, the local Chamber of Commerce and the Development Trust recently published an economic blueprint showing how shifting just 10 per cent of what we spend on food, installing just 10 per cent of the area’s potential renewable energy-generation capacity, and starting to retrofit the most energy-inefficient housing could bring £5.5 million into the local economy each year. It’s a shift from dreaming of inward investment to a focus on internal investment, where we build more economic resilience in the local economy. We become our own cavalry.

This is already visible in a number of projects. Totnes now has its own community-owned energy company, the Totnes Renewable Energy Society, which is initiating a variety of renewable energy projects in and around the town. Transition Homes, a community land trust, now has a site on which it plans to build 26 pioneering affordable homes using local materials. The Atmos Project, a community-owned industrial and provident society, is close to bringing an eight-acre derelict former milkprocessing plant into collective ownership. The town’s local currency scheme, the Totnes Pound, which inspired the successful Bristol Pound, is preparing for a summer relaunch with a full set of denominations.

In my book, The Power of Just Doing Stuff, I draw together the experience of people trying to catalyse this new economy around the world, from Brazil to Brixton, and from Sarasota to Sydney. It’s a thrilling tale. Our brewery might well turn out to be a sign of the times, just as much as that 1980s advert was.

You can now pre-order The Power of Just Doing Stuff here.