Opening up debate

Reflecting all the hidden costs and savings that different options ever bring

Break the ‘code of silence’ within the oil industry and debate True Costings of oil reserves and help tie plans on climate-change into parallel plans relating to peaking economic-oil


IF OIL COMPANY top-executives were running the world, they would not be behaving as they currently do. That is nobody’s fault – but it is a wake-up call that their companies currently operate under a business model that assumes certain fundamental divergences between what is good for oil and energy producers (at least in the short-to-medium term) and what is good for the global economy as a whole (especially in the long-term).

Some of those oil executives have admitted to me that, as a result, they feel forced in public to be economic with the truth. Indeed. Less charitable commentators might accuse them of ‘economizing’ through their teeth. It is not a sustainable position. Some excellent people are setting up themselves and their industry for an irrecoverable backlash. There is a better way. Those in positions of greatest leadership can instead take the initiative – and forever change the unwritten rules of their industry.

I have already suggested that, in order to counter the types of systemic backlash to which they are particularly susceptible, sectors such as Banking and the News-Media need to extend the scope of their activities to include aspects of Unelected Responsibility. A major realignment is also needed by the oil industry, but in their case it is even more complex. Certainly they too – along with almost every other influential corporation – must accept Unelected Responsibility. But on top of that they must inject some realism and professionalism into the worldwide attempts to wean off fossil-fuel addiction without unacceptable withdrawal symptoms.

That level of realignment necessarily takes them into the heart of global politics – as detailed later under the topic of ‘Global Guilds’, which examines the overall approach that they and other industries could use to achieve such radical realignment. But in this section I will focus only on the initiatives that are particularly relevant to avoiding Industrialization Crises.

Addressing pollution and depletion side-effects demands True Costing, that is, a full reflection of all the hidden costs and savings that different options bring throughout their whole life. But at the moment no one even agrees the basics. So, by one means or another (perhaps using a self-generated intermediary that acts as Trusted Observer, as explained on the tabs about ‘Global Guilds’) oil companies, energy companies and utilities must at last negotiate with governments – and with each other – in ways that they never could face-to-face. Those pioneers with the greatest influence must persuade the rest to transition away from the currently unstable situation in which it is in too many people’s self-interest to maintain an unacceptably risky status quo.

They must agree how much economically-extractable oil there really is, and the true net-energy of that oil, and the hidden pollution costs and other risks of extracting it, and the equivalent True Costings of all the alternatives. And then, based on everything, they must work out how best to manage the strategic transition of the world’s energy economy over the next several decades. Throughout all of this, oil companies must keep at the back of their minds the recognition that in the absence of such leadership many of their biggest national customers could, if they ended up feeling too powerless and too put upon, band together to do something like setting up a Buyer Consortium intended to discourage Oil Suppliers (including the OPEC cartel) from attempting to profiteer from the prolonged downward trend of oil production. And that could result in severe restrictions to everyone’s strategic options.

In addition, oil and energy suppliers must help governments tie all plans relating to climate change into parallel plans that relate to an accurate reflection of peaking economic-oil. The full circumstances of the ease, efficiency and costs of extracting future fossil-fuels cannot simply remain somehow separate – let alone unacknowledged as they are in all the current negotiations (such as those in Durban 2011). It will continue to be impossible to harmonize global actions until these sorts of plans are coordinated.

The world’s governments were unfairly and impossibly hampered in trying to address climate-change in Copenhagen and then in Cancún and then in Durban by the very fact that they were only addressing climate-change there. Delegates were, in effect, artificially butchering apart a highly-integrated system in which manmade-CO2 is merely an unintended consequence of enmeshed strands of cause-and-effect that make little sense (or even appear to operate differently) when cut into pieces.

There can never be joined-up thinking about managing Industrialization backlashes while some important factors are denied even to exist. What is more, as addressed on the tabs about Population Crises, any and all of those plans must likewise be tied into the additional – but interconnected – plans needed to tackle major issues such as food security.