Consciousness of Sheep
Related Articles
Make way for yet another tedious round of green virtue signalling as people who should know better celebrate the UK government’s ban on new petrol and diesel cars. At first glance, it sounds like a great idea. The billions of cars and vans around the world that pump out noxious gases are a major contributor to climate change. Banning them at the earliest opportunity, then, must surely be a good idea. In reality it is no more than adding ministerial hot air to our climate change predicament.
Waiting until 2040 (by which time the UK will have to be sucking carbon dioxide out of the air to meet its Paris Agreement commitments) is simply too little too late. Norway is currently leading the way with a ban starting in 2030. But even that is too late if we are serious about climate change. Notice that the UK’s 2040 date is the point when new petrol and diesel cars and vans will be banned. But a used vehicle can be expected to last for a further 10-20 years, so it could be 2060 before these vehicles have been taken off British roads.
There is, of course, a very good – and in its way very unpleasant – reason why government hasn’t led the way to the proposed shiny new future of electric cars powered by clean renewable energy… it doesn’t, and probably cannot exist.
The most obvious problem with electric vehicles for the time being is that the world simply lacks the manufacturing capacity to build enough to replace the petrol and diesel cars and vans that we rely on. Of course, in time the petrol and diesel vehicle assembly lines can be re-tooled to build electric cars. Indeed, since there are far fewer components in an electric vehicle – which is essentially a big battery connected to a motor – these should be much cheaper to build.
Batteries are still a big headache. For now, lithium ion batteries – like the one in your phone – are about as good as battery technology gets. But anyone who paid attention during chemistry lessons will remember that lithium is pretty explosive when mixed with air or water. So the cost of batteries is high, among other things, because of the need to protect them against potential damage caused by road accidents. Around 45 percent of the cost of a new Tesla S (£49,000-£86,000) is the battery pack. Nor is the global supply of lithium infinite. And while the more lurid claims about lithium running out that surfaced a few years ago are unlikely to play out, increasing demand from developing states like China and India could see prices spiral much higher as the demand for battery-grade lithium increases.
These, though are trifling problems compared to the three real UK show-stoppers. First, and most obviously, if Britain is going to make the switch to electric vehicles, we are going to need a massive infrastructure spend to create the fast charging systems without which the country is going to grind to a halt. For most journeys – those of less than 5 miles – charging up at home overnight will be sufficient. But Britain is a nation of commuters who average around 700 miles a month. Anyone driving more than about 40 miles to get to work is going to need somewhere to charge up before they set off for home. Anyone driving more than 100 miles is going to need to use a fast charging station somewhere on their journey. On the few times a year that most of us make far longer journeys (such as on bank holidays) we would have to be able to stop several times to recharge – remember that by 2040 all of those other holiday drivers will also want to use the same “fast” (they currently take 20-30 minutes) chargers.
The charging infrastructure is slowly developing, but it also suffers from a chicken and egg problem – without the infrastructure, electric vehicles are less attractive than petrol and diesel cars (which can run for four hours or more on a full tank of fuel). Unfortunately, without greater electric vehicle use there is little incentive to build the infrastructure. Ordinarily, this is where government would step in; using its borrowing power to build the infrastructure. But the ideologically-driven austerity economics of the current government makes such investment impossible (to suddenly open the purse strings would be to admit that all of the cuts so far inflicted were unnecessary).
Even if government – perhaps in partnership with private companies – were to invest in the electric vehicle infrastructure, it would quickly hit the second – and far more dangerous – problem; Britain simply does not have the generating capacity to guarantee to meet current demand for electricity. The UK is already heavily dependent on imported electricity from Norway and France. But with both of those countries also committed to banning petrol and diesel vehicles, and with France facing generating shortages of its own, Britain will need to build the equivalent of 20-30 new nuclear power stations (on top of those already committed to) to meet the additional demand from electric vehicles. Even then, the Grid could struggle to meet demand because it will be concentrated in space (e.g. more in London’s commuter belt) and in time (e.g. overnight – when Grid engineers need to maintain the system).
If government investment in roadside charging infrastructure is not on the table, then the kind of investment needed to provide the UK with adequate generating capacity – particularly if the aim is to reduce fossil fuel use to zero by 2050 – is nothing more than a pipe dream. And the British government – if not individual ministers – must know this. The cost of just one new nuclear power station (Wylfa in North Wales) was put at £14bn. If problems at Hinkley Point are anything to go by, we can expect that price to double before the project is finished. Building 30 new nuclear power stations (or their output equivalent) could add more than £1tn to Britain’s national debt when we include the additional grid infrastructure needed to move all of that electricity from where it is generated to where it is needed.
The third – and most worrying problem of all – makes the entire discussion above more or less redundant. This is because sometime between now and 2030 almost all of us will have stopped using our own cars.
This is not because of the techno-fantasy of self-driving electric cars causing “peak oil demand.” It is for the simple reason that the cost (rather than price) of petrol and diesel is rising remorselessly. Indeed, the $140 per barrel oil in 2011 was the last time that the oil industry as a whole was profitable. But the result, globally, was that sufficient demand was destroyed to crush the price back below $50 per barrel in 2014, and to create the oil glut that we are slowly burning our way through.
There is nothing particularly complicated about this. It is simply that we have burned our way through the easy, land-based oil fields where we could get an awful lot of oil energy back for the equivalent energy required to produce it. Fast forward to today, when we are extracting highly toxic sour (i.e. sulfurous) crude from the Caspian region, sticky oil sand from Canada and Venezuela, ice cold oil from beneath the Arctic shelf, hydraulically fractured shale oil from the USA, and ultra-deep water oil from beneath the Atlantic and the Gulf of Mexico. Technology has, to some extent, helped us lower the amount of energy required to get at this costly oil, but whichever way you cut it, it is far more expensive even than the oil we were using at the turn of the century.
Add to this the fact that new oil discoveries have been plummeting and, without prices north of $200 per barrel, are unlikely to bounce back, and it tells us one – highly unpleasant thing… petrol and diesel prices are going to bounce back a few years from now, once the current glut is over. That is great news if you work for an oil company or if you are a government that depends upon the taxes from oil exports to pay your debts. But if you are a country whose oil industry is in terminal decline, and whose decommissioning costs are greater than the export value of your remaining oil reserves – a country, that is, like the UK – then you are about to find yourself competing for dwindling oil supplies against far richer countries like the USA and China. This will be a particular problem if you are foolish enough to leave the largest free market on the planet and expose your over-valued fiat currency to the vagaries of the international money markets.
Don’t mistake this for the fuel shortages and long queues that Britain experienced in 2000 (as a result of the fuel protests) and 1973 (as a result of the OPEC embargo). The UK is not facing a shortage of petrol and diesel in the near future. Quite the opposite; we are looking at a situation in which fuel prices are so high (probably double what they are today) that drivers are forced to cut back on all but essential journeys. Indeed, in the face of stubbornly depressed real wages and heavy debt, we can expect to see large numbers of us giving up car ownership altogether… even if this means trading down for a lower-paid job closer to home.
Prices will come down again eventually. As demand collapses, we will likely face another round of oversupply and collapsing prices. But this, in turn, will lead to even less investment in new oil field development. This growing price volatility, swinging between prices so high that people stop driving and prices so low that oil companies go broke, is what will drive the move to automation.
Low oil costs in the twentieth century meant that it was convenient to own private vehicles that were idle most of the time. But as fuel prices become more volatile, a return to various forms of public transport (as well as cycling and walking) will become more attractive to most people. Into this mix, Uber-like services using electric vehicles and at some point doing away with the cost of a driver altogether will become far more attractive than personally owning a car; especially in urban areas. In the longer-term, unless we see some kind of international “War on Climate Change” to provide us with high-density energy alternatives to fossil fuels, then nobody is going to be driving anywhere anyway; because by 2040 the UK economy will be out of power. Without the energy to continue growing, our economy will simply relocalise – as, indeed, it has slowly been doing since the crash of 2008.
Without an energy revolution, by 2040 so few of us will be driving to work that the proposed ban on petrol and diesel vehicles will be as redundant as the government that just proposed it.
