Crash plan to wean UK off oil is energetic irony

The Observer is reporting that the UK Coalition Government (consisting largely of Conservatives with a handful of Liberal-Democrats) is promulgating an emergency plan to "wean Britain off oil."

This is all rather breathless and I wonder just how much the ministers concerned know about how to actually do this.

Here's the lede:

"Ministers will be ordered to adopt urgent measures to wean the country off oil, amid rising concern that the Libya crisis has left the economy exposed to a dramatic rise in fuel prices.

With fears growing that the cost of petrol could hit £2 a litre if instability in the Middle East persists and deepens, every government department will be told this week to comply with a new national "carbon plan" aimed specifically at "getting off the oil hook".

The energy secretary, Chris Huhne, told the Observer that the UK had no option but to speed up efforts to move away from oil. "Getting off the oil hook is made all the more urgent by the crisis in the Middle East. We cannot afford to go on relying on such a volatile source of energy when we can have clean, green and secure energy from low-carbon sources," he said. "The carbon plan is about ensuring that the whole of government is engaged in a joined-up effort to lead us into a low-carbon world."

Well...

What do I think of all this?

(Apart from the fact that it's a job creation plan for Sustainable Energy graduates.)

For one thing, Britain doesn't need to, nor can it possibly, reduce oil consumption to zero in a short space of time. Britain is an oil-producing country, and although the North Sea oilfield, shared with Norway, is running down, it hasn't run out. Britain only imports around one quarter of its oil supply.

Britain also heats largely with natural gas from the same oil field.

(Unlike Maine, where we are good deal more exposed. Mainers have been switching away from oil heat to wood and pellet lately, but 70 plus percent of our heat energy comes from #2 heat oil, only about 50% of which comes from domestic US supplies. So if the Brits have a problem, we have a worse one.)

As a result, Britain uses oil primarily for transportation and industrial purposes. And it has a good public transportation infrastructure already. I use the train system whenever I go visit, and it's clean, efficient, and on time. There is scope to add services, and riders, but I shouldn't think it that great.

The bus system, on the other hand, is comparatively weak. It was previously superb, but Margaret Thatcher privatized what had been a massive interlocking system of municipally-owned bus services. The result was a general reduction in buses' availability and quantity and an increase in private car ownership and use. So they could rebuild the bus system.

As for cars and light trucking, British cars and the tiny vans used for delivery are already much smaller and more efficient than American ones, and so there isn't so very much that can be saved in fuel mileage. You couldn't, for instance, save very much oil from switching out of the sub compact gas and diesel cars that are most commonly used, to something like a Toyota Prius or a Honda Civic hybrid. The popular Ford vans used for delivery over there are not sold over here, but they seem to be built on something like a Ford Focus chassis.

So the UK's oil-reduction plan will have to concentrate on buses and on private passenger transport and delivery vehicles that run on electricity. And they can probably succeed with this over time. I wouldn't be surprised if a small mini-box type electrical vehicle, such as the G-Wiz isn't already cost effective, even at the relatively high price, for such a tiny vehicle, of $15K. British gas ("petrol") has been roughly two-and-a-bit times the price of American gas for many years now, and the current price is £1.30/liter, which is £4.95/American gallon, or $8. At this price, and the average mileage of UK passenger cars, which is 27 miles/American gallon, the price of gas per mile is ¢30, which for Americans is 22 mpg at $3.50 or so, or ¢6.5.

While British electricity is about ¢25-30 a KWH.

It takes probably a couple-three dollars to charge the G-Wiz up to a full charge, which would give a range of about 75 miles, thus providing a price per mile of ¢4.

Looking at these figures, it's hard to see why more Brits don't have electrical cars already. I expect it's the problem of range, but we can take care of that now with plug-in hybrids like the Chevy Volt or the new Prius.

The next problem will be generating all that electricity to run these electrical cars. Britain of course has North Sea wind, which is superbly reliable and plentiful and relatively easy to produce. The North Sea is relatively shallow continental shelf, one reason storms there are so fierce, but it's easy to build turbines on. And the government adopted a very high feed-in tariff for household solar PV a couple years ago, which will take the edge off this likely extra demand if the policy is continued. A good notion would be to provide the charging stations at work as well as at home, so the daytime solar power can be fed into the electric car batteries. One great asset will be that standard household and office power supply in the yUKe is 50-cycle, 230 volts (previously 240) and so charging from an ordinary household receptacle will work twice as fast as it would in the US where 120 volts is the standard.

But adding all these wind farms and rooftop solar power stations would make the most sense if it could be done using British turbines and solar modules. The economic multipliers from making the turbines and panels are probably of the same kind of order of magnitude of the multipliers from owning Danish or American turbines, or Chinese panels, and not having to buy foreign oil. In other words, if you use your own power that's a boost to the economy, but if you make your own power equipment, that's a bigger boost. The UK turbine industry is not yet able to make these turbines, although plans are in place to expand the industry in east coast ports where skilled workers can be found. I'm not sure how large the solar module business is in the UK, but if it's anything like the US one it's been losing ground to China.

So this is a huge opportunity to grow some new industries, not just buy someone else's stuff. But this will take time.

But Britain also has coal. Masses of coal remain underground in the UK. Margaret Thatcher gutted the nationalized coal mines in the 1980s, mostly to break the powerful miners' union. She denationalized the industry and closed dozens of high capacity collieries. She was able to succeed only because of the conversion to North Sea gas for home heat. All those police chasing miners in the background to Billy Elliot? It happened. I was there, living not twenty miles away at the time.

And UK coal production shrank by 90% after that. Let's just say that again:

A cost-effective, sovereign, domestically-produced energy source shrank by 90% because of government policy.

Off with the nose, to spite the face.

Maggie, like Ronnie Reagan over here, thought oil was the energy source of the future. Cowboy economies used oil, not coal, and Maggie wanted soooo badly to be a cowboy. But Reagan just had Jimmy Carter's solar panels taken down from the West Wing's roof. He didn't deliberately destroy an entire domestic energy industry for purely ideological reasons.

(Although there are some that will argue that he did just that to the then-nascent US solar power industry.)

The danger now, of course, will be that Britain decides to run all these electrical cars on coal for the long term. Which will exacerbate climate change. So they shouldn't. But in the short term, that will be where most of the power must come from. Charging power is base load, and being base load will be made by coal until we begin to get wind, solar and nuclear build-out. It will take time to add all those North Sea wind turbines and all that rooftop solar and re-jig the grid to power all those cars. They will need to build some nuclear plants. All of this takes many years to do, probably several decades.

It will be somewhat quicker to shift car purchases from gas to electric and hybrid electric. And it would be better if those too were made in the UK.

So there's no such thing as a "crash plan" to reduce exposure to high foreign oil price. There's a way to begin to reduce exposure by encouraging electrical car sales as older gasoline vehicles wear out and by running them on British made wind, solar and nuclear power. But if this is done in a big hurry, if the cars and turbines and panels are bought from China, a huge opportunity will be lost. Luckily, Britain still has lots of oil and its own coal, so all that is really necessary is to reduce oil demand a little bit each year by phasing in domestically-produced electric vehicles, using coal first, then adding more domestically-produced renewables and nukes and phasing out the coal.

And by adding those bus services.

And if they did all this, wouldn't it be ironic?

A conservative UK government runs back to coal and rebuilds the British bus system.

What we are seeing here is of course the economic impact of all those Thatcher/Reagan policies in the 1980s, when Keynesian central planning was thrown out. But, of course, someone needs to plan the economy at some level, or all of a sudden we will find ourselves staring at shocks like high oil prices. The Milton Friedman idea that we don't need economic planning of any kind, except to maintain money supply, would only be true if the economy was the cartoon version that Friedman-ites believed it was.

But the economy is a whole lot more complex than that.

This is just the first step in economic planning that the Brits will need. Reducing oil inputs to transportation is first. Reducing natural gas inputs to heating is next. because when that North Sea gas begins to run out, you don't want to be going cap in hand to Vladimir, now, do you? Although there will be some shale- and coal-bed gas to find in the UK.

Maine, of course, lacking gas and oil completely, needs to insulate and weatherize and use wind and solar and nuclear-powered electricity for the majority of its home heat and transportation. One day we're going to be very happy we solved all those technical problems for offshore wind. We are also lucky to have such a thick forest, and we can use some of that for heat fuel. But we'd better not be feeding that heat into the shoddy housing stock we have right now or we'll all be in trouble. Demand will skyrocket and forests will fall and we'll put up more turbines and panels than we really need.

And even at $3.50 a gallon, it makes a lot more sense to get your house fixed up than it does to buy heat oil right now. So why wait? Put someone to work, and save money too? Why wouldn't we want to do this?

I sure hope Governor LaPage is not nearly as much of an idealogue as he seems to be, because we really need some economic planning if we're to get the most jobs out of this opportunity.