A report by the Lean Economy Connection in association with the 20 MP strong All Party Parliamentary Group on Peak Oil (APPGOPO) has warned that rationing will be needed to deal with energy shortages as well as helping us achieve our green targets.
The report, ‘TEQs (Tradable Energy Quotas): A Policy Framework for Peak Oil and Climate Change‘ cites the International Agency’s 2008 World Energy Outlook statement that ‘current global trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially’.
It also refers to the Industry Taskforce on Peak Oil and Energy Security’s report ‘The Oil Crunch’, which concluded that global oil production will be unlikely to grow after 2013. With Ofgems warnings in 2010 of shortages and breaks in supply.
The report’s favoured instrument for dealing with the imminent shortages as well as combating carbon emissions is the use of Tradable Energy Quotas (TEQ). And the time-scale of before 2020 seems to be the call.
TEQs are put forward as the solution in that they ‘ … would reduce our reliance on fossil fuels fast, guarantee that we meet our agreed emissions obligations and empower communities to address the challenges of our times, allowing us to move into a happier, thriving future‘.
A form of TEQs are used already in the EU with the Emissions Trading Scheme (ETS), which covers about 12,000 large facilities. But this latest report wants to extend this principle across the country for use by individuals and organisations alike. When you buy fuel you surrender some of your quota, your ration. That includes all types of fuel from domestic to transport.
The ‘people’ would get about 40% of the quotas by entitlement, with the total emissions allowed each year being set by the Committee on Climate Change. The outline procedure is shown here.
TEQ fig 2
John Hemming MP, chairman of the APPGOPO, said: “What is needed is an intelligent response both to climate change and to fuel depletion. We therefore welcome the model set out in the Lean Economy Connection’s report, which addresses both sides of the problem. It is the first coherent proposal to attempt to do this, and it merits close attention.”
This complex and unworkable set-up has the throw away line that ‘The number of occasions on which individuals actually purchase energy is quite limited – perhaps eight times a year for utilities, although it could rise to some thirty times a year for individuals with cars – and most TEQs transactions are done by card and direct debit.’
As the quotas are tradable they can be sold on and profit made. So that those that need to travel more have to buy more quotas. Those that work from home can make a tidy profits one supposes. How about allowances for children? Will those in prison and hospital get a quota?
Although the Department of Energy and Climate Change has said there are ‘no plans to implement such a scheme‘ just look at the choice of words. Why not just say we aren’t going to ration fuel?
Can you even begin to imagine the fraud, spivvery, mis-allocation, crime, forgery and corruption a scheme such as this would attract?
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Hold up, spivvery? Surely all the spivs were created because the wartime rationing had no legal trading?
I’ve been rationing my use for several years in the states in preparing for Peak Oil. I attached a video to help and show people what they can do to prepare…
http://www.youtube.com/watch?v=hHmXhgBhtWk
MrEnergyCzar
Problem with TEQ’s:
1. No mention of what the yearly domestic consumption targets for GAS/ELEC are.
2. Commuting – is that covered by domestic or company TEQ?
3. Flying , probably the worst use of oil – seperate TEQ for that?
4. If implemented in UK it will make companies here very uncompetitive.
Far better to:
1. Reduce speed limit to 60mph (or 55, even better).
2. Tax companies with more than 50% commuting to work by car.
3. Stipulate what the yearly domestic consumption GAS/ELEC should be and highlight on bills whether preforming OK or not.
4. Tax company air travel. Set a TEQ of 10000 airmiles max per person per year.(can rollover).
5. Bit radical but maybe turn off GAS supply from midnight to 5am to domestic.
6. Stop buying USA products (ipad/phone etc) so that dollar declines => oil goes up in dollars but hits USA the most (ie. £/Euro it stays same price)so pushing up petrol there from 0.56p to £1 a litre. => nearly $2.7 to the £.
Don Jensen is absolutely right. Unlike wartime rationing, there would be no upper limit on energy use. People with surpluses sell to those who need them. Simples.
Jules:
1. The TEQs scheme would flex to address shortages of gas/oil/coal as they come and go. No fixed targets
2. Commuting is domestic except in specific cases. Rules already in place for mileage payments.
3. No need for a separate TEQ for flying. In any case, by the time we really need some kind of rationing system, flying will be a minority activity.
4. Competitive companies. See point 3. The whole world will be in the same boat. Advantage will go to societies who are best aligned to deal with unpredictable supplies of fossil fuels.
As for a 55mph limit, all the folk round my way who just put £20 of petrol a time into their cars are already driving everywhere at 35mph to try to make it last.
That’s rationing at work…
Energy is sought, found, extracted, transported, refined and distributed by companies around the world on the basis of demand.
Rationing will start when the countries who licence the extraction decide that it is all required for domestic consumption and export is banned.
Hi Phil, so it’ll go on being exported until it’s worth more (in political terms-internal stability) to the exporting country to use it itself than it is to export it?
Hi Admin,
maybe, yes.
It’s value is hypothetical while it’s underground but actually that’s the easiest place to store it. Once extracted it becomes a storage problem until it is burnt. Therefore once extraction starts it tends to continue until the well runs dry. This is the age of fossil fuels so there’s not much point in leaving it underground for a hundred years and then realise nobody has a use for it anymore because the world has moved on.
There will come a point where the known reserves are in decline and extraction rates are as high as they can be yet demand outstrips supply. Obviously in a free market prices will rise. But the market probably won’t be free. Yes, those who have it will want to maximise revenues but not at the expense of the citizens of the country. It’s like Egypt banning rice exports in 2008 or coffee and Ivory Coast now.
Will Britain go down a purely rationing road? I doubt it. If petrol today doubled in price, would you pay £11 a gallon? How about £25? At the moment you’d probably drive fewer miles but at what price point do you stop driving altogether? Tax helps to reduce people driving and raises revenue for the Exchequer in a way that’s deemed to be green but if it restricts our economy and allows other countries to compete against us it becomes counter productive. I guess the argument also has a lot to do with what timescale you look at. Politicians get a decade if they’re lucky. A baby born in Britain today has a good chance of seeing the 22nd century. It will be a different world by then as it was 100 years ago
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