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Carbon warrior

Jeremy Leggett on the pending crisis in the energy industry

Jeremy Leggett on the pending crisis in the energy industry

Solar entrepreneur, author and activist Jeremy Leggett talks to us about the pending crisis in the energy industry, the role human psychology has to play in it, and how we have to nurture clean energy industries and accelerate them as though mobilising for war.

Neurological disorder

Everything that happened through the nightmare of the financial crisis really doesn’t surprise some of the professionals in the neuroscience vocation. Neuroscientists talk about us having a predictable irrationality as individuals and groups in the way that we think and make decisions.

“There are innate problems in the fossil fuel industry.”

Jeremy Leggett

They talk about our endowment effect, whereby we favour things we have over things that we mightn’t have, irrespective of the downsides. So when they look at the financial sector and see a great industry actually making a catastrophic misjudgement about its asset base, they’re not surprised.

People have a great propensity for individual and collective silliness in the face of what with the benefit of hindsight looks blindingly obvious data. I look at the energy industry and ask myself the same question. Could there be similar things going on here? Are problems of the human condition resulting in massive over-evaluation of asset bases? My answer of course is yes.
There are innate problems in the fossil fuel industry.

“The idea that we can import the shale boom into Britain is going to stand exposed as laughable and lunatic.”

Jeremy Leggett

They are making a terrific fist of losing the coherence of their business models – the dramas to watch there are huge. But there’s still too many people going with the happy, conventional incumbency narratives on energy. You’ve still got people desperate to believe that we’re sitting on all this gas and oil, waiting to be fracked. We’re going to find out how far these people are prepared to push their crazy narrative. Right now many of them are willing to go so far as to actively suppress renewables.

Shale shock

The idea that we can import the shale boom into Britain is going to stand exposed as laughable and lunatic, given what’s happening in the US as we speak. It’s not working economically in the States; they’re losing money hand over fist. There’s too much hype around the asset base they think they have, they’re deliberately hyping it to try and keep the narrative pumped up for as long as possible.
The boom is going to turn to bust in America, just for economic reasons – on the massive balance of probabilities.

“You’ve still got people desperate to believe that we’re sitting on all this gas and oil, waiting to be fracked.”

Jeremy Leggett

Then you’ve got all the compounding local environmental problems, the global environmental problem of how much leakage there is across the system, and on top of that the politics. It’s been banned in New York state, with massive support from across the state, not just in the city. So it’s not just here that fracking will be facing such political opposition – increasingly it’s also the case in America.

Primed for crisis

We’re not going to be able to rationally talk our way to a great turnaround. I think there’s going to be a crisis of some sort and the system is primed for one.

“We’re not going to be able to rationally talk our way to a great turnaround. I think there’s going to be a crisis of some sort and the system is primed for one.”

Jeremy Leggett

The hope then is that, with evidence of clear and present danger and possibly even no alternative – some sort of collapse of global oil supply for instance – then people will be forced to go for the survival technologies and accelerate them as if they’re mobilising for war. When we get to that point I think that people will be really surprised about what they can do, in the same way that my parents’ generation were surprised by how quickly they could mobilise for war in the late 1930s and early 1940s.

It’s going to be a sorry story when the history books are written. With the evidence on the table and the blinding light of hindsight, people are going to look as stupid as most of the financial services industry did in the analysis phase of the financial crisis.

Jeremy Leggett

Jeremy Leggett is a social entrepreneur and author of The Carbon War, Half Gone and The Energy of Nations. He is founder and chairman of Solarcentury, the UK’s fastest growing renewable energy company since 2000, and founder and chairman of SolarAid, an African solar lighting charity set up with five percent of Solarcentury’s annual profits, itself parent to a social venture, SunnyMoney – the top retailer of solar lights in Africa. He chairs the financial-sector think tank CarbonTracker, and is a risk consultant to large corporations. He is a guest contributor to the Guardian and the Financial Times, lectures on short courses in business and society at the universities of Cambridge and St Gallen, and is an Associate Fellow at Oxford University’s Environmental Change Institute.

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Mikegogan 6 years ago

Was it lack of space that prevented the author from providing any evidence to support his assertions? There is a common perception, for example, that the success of fracking is making the US self-sufficient in oil and gas and that this is responsible for a significant fall in prices.

Reply to Mikegogan
Threlkeld 6 years ago

‘Tight’ oil and gas from shale is expensive to produce, and there is plenty of evidence that it isn’t economic at current prices. http://www.bloomberg.com/news/2015-01-22/oil-drillers-going-to-die-in-2q-on-crude-price-swoon.html And the fracking boom is based on borrowed money. Ask yourself why they have produced so much gas that the price crashed in the US even before the oil price fell. The answer is that they had to get cash-flow at any price to service their debt. They were running up a down escalator BEFORE the oil price fell. Those who lent the money should be very afraid now.

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Rich Whitehouse 6 years ago

I encourage people to think of them as ‘finite’ fuels, rather than fossil fuels. They may keep finding new crumbs of oil and gas down the back of the sofa, but by their very nature there only ever was a fixed amount created. With energy consumption on the rise to exacerbate their decline people are in denial.
Importantly I think that the green movement is making people feel like they still have a choice right now; they believe they can ‘opt out’ of moving to renewables since they’re equating it with ‘caring for the planet’.
No one is presenting the economic and societal consequences of running out of the oil and gas we’ve built our very civilisation on. Tell people it will affect their wallets and their lifestyle first and you’ll have their attention…

J Mark Dodds 6 years ago

Short of climate catastrophe crashing around their heads and impacting on their lives, people in comfortable existences need examples – hard evidence in buildings and lifestyles that work perfectly well in ways they can relate to without fossil fuels – before they will be convinced to make the effort to change their every day habits.

This can be done through a network of low carbon economy pubs set up all over the country – retrofits of existing buildings, in the middle of communities places strategically throughout the regions. Traditional pubs retrofitted with on site generation and low impact building services, evidencing economically and ecologically sustainable local and regional supply chains with zero fossil fuels dependency… Comfortable, attractive and welcoming. Pubs can be the heart of the start of the future.

Reply to J Mark Dodds
disqus_k6gE4UtAlV 6 years ago

Like it, good creative thinking.

Steve Lawless 6 years ago

It was the laying down of carbon as plant fossils into the ground, i.e. sinking carbon, that put oxygen into the atmosphere and made it breathable. Burning fossils reverses that process, locks that oxygen back up onto CO2. There is a need to win hearts and minds for degrowth, leaving fossils in the ground and changing our lifestyles and distribution systems.

Peter Taylor 6 years ago

If governments really took the climate threat seriously. they would outlaw all unconventional oil and gas sources, and this would keep the price up enough to encourage more sustainable energy use. But lets stop this ideological ‘switch to renewables’ greenwash peddled by its merchants (and their bankers!). The EU is already at its biofuels limits and the global impacts are horrendous (on landscape, community and biodiversity); are we to turbinise the countryside?; and take a look at the planned hydropower schemes in wild places across the world – impacting indigenous peoples and biodiversity. We have to stop being mesmerised by the ‘supply-side’ arguments and scale down energy use across the board – but of course, there is no profit there for the energy companies. All this talk of carbon war and mobilisation betrays the real mindset of the entrepreneur – technocratic machismo! That is not going to generate real solutions.

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