Data visualisation specialist Jonathan Callahan has produced by far the most interesting response to the death of Margaret Thatcher I’ve yet to see, originally posted as a comment on The Oil Drum and reproduced below. Using his Energy Data Browser he has linked significant points of Thatcher’s career to the North Sea Oil boom. This connection is useful to further unpack issues around the vulnerabilities of nations [and governments] more generally to oil dependancy.
Before having a look it is worth noting a couple of things. The Data Browser turns the figures from the annual BP Statistical Review into visualisations of where regions and nations sit on the Energy Import/Export seesaw. As such it depends on BP’s policies and accuracy. For instance the oil category is an ‘all liquids’ measure not crude oil only [the best stuff], so biofuels, lease condensate, bitumen and all sorts of products with different energy content and utility are all included. The key issue, however, is illustrated very clearly: North Sea Oil gave the UK some 25 years as a net exporter of liquid fuels. And that’s now over. Thatcher’s achievements, whatever your view of them need to be seen in the context of this temporary boom, as do Blair’s. For example; it is easier to close down one energy industry [coal mining] when you happen to have a new one just coming on stream [North Sea Oil].
This approach should also be extended to include the Prime Ministers that followed Thatcher: Major and Blair both also had the good fortune to preside over the North Sea oil bubble. And Blair, like Thatcher, took his country to war and failed to plan for the decline of this energy windfall. Neither of these following PMs deviated from Thatcher’s line; taking the short term opportunity offered by this finite resource with no attempt to either husband it nor use it to invest in its replacement [unlike the other beneficiaries of the North Sea resource; The Netherlands, Denmark, and Norway, all of whom have been more circumspect with their shares]. Also the focus through this period in the transport sector was all on privatisation, PPPs, and other financial rearrangements but nothing on core issues like energy security [part of what is meant by the term sustainability] just gaming the market. In the UK the North Sea hydrocarbon riches have been used by both Parties to pursue social agendas and to fund foreign adventures.
This energy-centred analysis can also be extrapolated to the present which is looking increasingly like a direct continuation of the difficult economic crises of the 1970s in Britain [energy supply costs as cause of economic and social problems]. It’s almost as if the North Sea bounty never happened. Much harder for Cameron to continue Thatcher’s social confrontations without the happy boon of both the oil and its excise revenue. With North Sea production now increasingly in the rear view mirror, it looks very much like a wasted opportunity, most of it sold, after all, at around $10-15 a barrel. Nothing like an unrestrained free market to efficiently strip a resource as quickly as possible [again; compare and contrast to the more controlled exploitation by the other beneficiaries of this same resource]. So whenever I read praise of Thatcher’s or Blair and Brown’s financial management with no mention of the North Sea largess I find it hard to take seriously.
Given the example of Thatcher’s long hold on power and the lasting changes her government was able to make to British society it is easy to see why our current government is so keen on the idea that there must be oil under our land or seas somewhere; bending over backwards with sweetheart deals and law changes to try to entice oil companies to look for it. The search for oil has been going on for many decades here yet New Zealand has always been a net oil importer and the gap between production and consumption [see below] has widened considerably over the last 20 years. Our entire economy is extremely vulnerable to either restrictions in supply or rises in price of this commodity [two sides of the same coin].
Therefore I would argue, and the example of the UK North Sea resource supports this, that the far better direction for any government is to work on reducing our dependancy on this very hard to replace input. With urgency. To work towards a situation where the quantities we are either producing or importing are used in the most value-added and vital parts of the economy and not simply squandered on more inefficient and wasteful uses.
Oil can be replaced by other energy sources in many applications [like electricity generation, which largely happened after the 1970s oil shock] but this is most difficult in the transport sector, oil is by far the best and most efficient source of liquid fuels: Oil issues are transport issues and visa-versa.
Because the vast majority of the use [and waste] of oil products is in the Transport sector this is the area that desperately needs new thinking and leadership from all levels of government. This is not easy but there are significant things that can be done now, changes that do not require currently unavailable or unaffordable technologies. For example the provision of much more effective urban public transport and in the electrification of as much of freight and passenger transport systems as is possible. As well as much more imaginative management of alternatives systems like our legacy rail network that are almost certain to become part of the answer to this problem.
The more we can bring that pink line in the chart above down, and in a structural way, the better. Consumption has plateaued since around 2004 but it will take a great deal more effort than just hoping people will buy smaller/hybrid/EV cars or spending enormous sums [virtually the entire transport budget] to straighten out some State Highways to get it meaningfully lower. This is true whether someone gets lucky and finds significant new oil or not; the less we are wasting the more beneficial any find would be [as well, of course, helping to reduce the production of the negative externalities that comes with burning all these fossil fuels]. The key metric for every country is the net figure; imports minus exports and the closer consumption is to zero the better this this sum will always be.
We are, unlike the UK, in a very much better position with regards to electricity generation, and there is still a great deal that can be done to improve from the current 80% renewable figure. 100% renewable generation is an important task; it certainly would be better to not be burning gas and coal to make electricity. [Although they are making some good moves in the UK now too].
Unfortunately I guess our extremely short election cycle is one thing that works against longer term views, but then the UK’s five year cycle didn’t help them plan better for the future either. So the lack of any vision simply beyond trying to maintain ‘business as usual’ for a just little bit longer is really the problem. Shame.
And there is less excuse now with the very clear example above.