Peak Coal - Coming Soon?

By Shaun Chamberlin

Originally published at The Oil Drum: Europe on Apr 05, 2007.

Reaction and comments on the article can be found here.

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The general consensus view on coal supplies has long been that we have hundreds of years of the stuff left, and that oil and gas depletion are the pressing concerns. However, dissenting voices are emerging. Canadian geologist David Hughes recently claimed that "peak coal looks like it's occurred in the Lower 48 (US states)", and the consensus position on coal is also called into serious question by the Coal: Resources and Future Production report just released by the Energy Watch Group in Germany. I present a summary of its findings here.

Reserves

The report highlights that the "proved reserves at year end" published in the most recent BP Statistical Review of World Energy in June 2006 are stated as being for year end 2005, but are actually based on the latest World Energy Council (WEC) assessments, which contain data for the end of 2002.

So our best figures on this are actually over four years old. And our worst figures? Well, some haven’t been updated in 15 years (China) and some in up to 40 years (Vietnam, Afghanistan).

But really the key message in the global data lies in the rate at which reserves estimates have been revised downwards. As Peak Oilers well know, conventional wisdom has it that reserves will increase as more exploration takes place and prices rise. Yet, in truth, estimates for global coal resources have been consistently revised down, and by 55% over the past 25 years, from 10 trillion tons hce (hard coal equivalent) in 1980 to around 4.5 trillion tons hce in 2005. Certain countries (including Germany and the UK) have been revised down by over 90% in this period. The UK reported proved recoverable reserves of 45bn tons in WEC 1980, but these were continually revised downwards to reach only 0.22bn tons by the latest report. Cumulative UK production in this period amounted to only approx 1.8bn tons.

Even Poland, the biggest coal producer in the EU, reports reserves revised down by 50% over the last 10 years. Since production alone cannot explain such revisions, they are deemed likely to be due to improvements in data. The chief exceptions to this rule are India and Australia, both showing significant upward revisions, but as we have seen the global trend is firmly downward. Only South Africa shows continuously shrinking reserves roughly in line with cumulative production. Globally, the report concludes that data quality is very poor and that these downward revisions must be expected to continue.

China

So back to China, the world’s largest producer, with the fourth largest reported reserves globally. The 2006 Statistical Review of World Energy credits China with 55 years of remaining reserves at current production rates (depleting its reserves at almost 2% per annum). But as previously mentioned, the Statistical Review faithfully reproduces proved reserves figures which were last changed in 1992 (note that China’s cumulative production in the 15 years since comes to about 20% of those stated reserves), so we can knock 15 years off that number straight away, reducing the remaining total reserves to 40 years’ worth. The Energy Watch Group report gives projected production profiles showing that China is likely to experience peak coal production in the next 10-15 years, followed by a steep decline. It should also be noted that these production profiles do not take into account uncontrolled coal fires which – according to satellite based estimates – add around 5-10% to regular consumption. Since China’s production dwarfs that of any other country (being almost double that of the second largest producer, the USA) the global coal production peak will be heavily influenced by China’s production profile.

Types of Coal

Now, before I outline the situation in the USA, which comfortably holds the world’s largest reserves of coal, it may be instructive to distinguish the different types of coal. There are four basic types, starting with the most energy-rich – anthracite (about 30 MJ/kg), bituminous coal (18.8-29.3 MJ/kg), sub-bituminous coal (8.3-25 MJ/kg) and lignite (5.5-14.3 MJ/kg). Those towards the anthracite end of the scale are often termed ‘hard coal’, and those towards the lignite end of the scale as ‘soft coal’, although the exact definition of these terms varies. The softest coals are sometimes termed ‘brown coal’.

USA

The USA, then, as we have all heard, has reported proven coal reserves that would allow continued production at current rates for more than 200 years. Three federal states (Wyoming, Montana, Illinois) hold about 60% of US coal reserves, but the low production rates relative to reported reserves in Montana and Illinois cast some doubt on the reliability or suitability of those reported reserves. As many of these reserves are of low quality, with high sulphur content and/or other drawbacks, it may be considered doubtful that they will ever be produced. Measured in terms of produced tons per miner, US productivity steadily increased until 2000, but has declined since, which also implies that ‘easy coal’ is running short.

The USA had passed peak production of anthracite (by far the rarest form) by 1950 and peaked in bituminous coal in 1990, but sub-bituminous coal more than made up for this decline in terms of tonnage. However, the US has now switched from being a net exporter to a net importer of steam coal and the report argues that total (volumetric) US coal production will peak between 2020 and 2030. However, due to the lower energy content of softer coals, the total energy content of annual US coal production actually peaked in 1998.

Global Picture

So, having looked at the world’s biggest coal producer and the holder of the world’s biggest reserves, we may perhaps turn our attention to the global picture.

Six countries (USA, Russia, India, China, Australia, South Africa) hold about 85% of world coal reserves, when this is measured in terms of energy content. According to the latest assessment by the WEC, total world reserves at the end of 2002 stood at 479bn tons of anthracite and bituminous coal, 272bn tons of sub-bituminous coal and 158bn tons of lignite, although for countries without large reserves, it is worth noting that only 15% of coal produced globally is exported, the rest being consumed domestically. Australia alone is responsible for almost 40% of global coal exports.

According to the Energy Watch Group, global coal production can increase for 10-15 years (mainly driven by China), but then production of anthracite and bituminous coal will peak around 2020 at a production rate around 30% higher than at present. Lignite production is predicted to peak somewhere between 2050 and 2060. However, as the quality of coal produced will be declining continuously the world coal energy peak is projected to come around 2025. It is also important to note that ‘peak coal exports’ should come even earlier, as lower-energy-density coals are not worth transporting long distances.

When we compare this with the scenarios (represented by the dashed and the solid line) from the IEAs 2006 World Energy Outlook (WEO) we get the following graph (click to enlarge):

As we can see, according to this report the WEO reference scenario is unrealistic, and only the production in the WEO alternative policy scenario (which assumed political measures constraining coal due to fears over greenhouse gas emissions) is actually feasible. The Energy Watch Group’s report, however, is not considering potential policy constraints, and is describing only what production may be physically possible.

I must stress that one of the key findings of this report is that data quality is very poor globally, and so all of the findings should be taken with that caveat, but the trends do seem clear. Indeed, we sent a copy of this report to Richard Heinberg and he has revealed that a Dutch study-in-progress using different criteria has reached preliminary results confirming this report’s findings. And the poor data quality is itself hardly reassuring for an energy source which is becoming increasingly central to our global future.

This report clearly carries many serious implications, but for now I’ll just share the information and leave these to be discussed on TOD. Further analysis of the report has also recently been released in Heinberg’s March MuseLetter.

Carbon Budget

By Shaun Chamberlin

Originally published in the March/April 2009 issue of Resurgence magazine.

A PDF of the full illustrated article can be found here.

Ensuring essential entitlements to energy for all whilst guaranteeing that the UK meets
its target of 80% emissions reduction by 2050.

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In these times of climate emergency, peak oil, economic turmoil and biodiversity devastation we are told again and again that large-scale problems require large-scale solutions - that we must channel our efforts into bigger, better global agreements to address these challenges.

As a young man searching for my calling in life I was being led in this direction until I attended the 'Life After Oil' course at Schumacher College and heard David Fleming utter a sentence that brought me up short:

“Large scale problems do not require large-scale solutions - they require small-scale solutions within a large-scale framework.”

At the time this was a radical new concept to me, but the more I considered it the more obvious it became, and the more it transformed my perspective. For example, I realised that while it is tempting to think of a tightening global cap on emissions as a solution in itself, such a cap is meaningless without on-the-ground solutions at the local and individual levels.

The true challenge lies not in the essential process of agreeing a cap, but in transforming our society so that it can thrive within this limit. If we fail in this, the pressure to loosen or abandon any cap will become irresistible - “enough talk of future generations, my children are hungry today”.

So now that the UK Government (and President Obama) have agreed to an 80% emissions reduction by 2050 the focus must shift to implementing national frameworks that can engage communities in the transition to a lower-carbon society. At present the UK Government has over a hundred policies that impact on emissions levels but has produced, in the words of the Parliamentary Environmental Audit Committee,

“a confusing framework that cannot be said to promote effective action on climate change.”

We need a clear, focused framework for reducing emissions in the kindest way possible, and this is what the TEQs (Tradable Energy Quotas) scheme - developed by Fleming over the past twelve years - provides.

TEQs is an energy rationing scheme designed to cover a nation’s whole economy, within which individuals would receive an equal per capita entitlement of electronic TEQs units, free-of-charge. Organisations, the government and all other energy users would have to buy their units at auction. Each TEQs unit allows the purchase of a set quantity of fuel or electricity, dependent on the lifecycle emissions associated with that energy source. This ‘carbon rating’ provides an incentive to purchase renewably generated energy, which requires fewer units.

The number of units issued in total is limited in line with the national carbon budget, which decreases over time. The system thus both assures essential entitlements of fuel and energy for everyone and, crucially, guarantees that the overall carbon cap is respected.

The purchase of goods other than energy (food, furniture etc) does not require the surrender of TEQs units since the producers of those goods have already surrendered units for the energy used in their production. Producers then pass on the cost of buying these units to consumers, who simply find that certain goods (those produced in a more carbon-intensive manner) cost more, giving these a competitive disadvantage. In this way, all emissions in the economy are covered by the TEQs scheme, since energy is necessary to doing any kind of work.

Rationing has acquired a bad name due to its association with shortage, yet it is a response to shortage, not the cause of it. Combining the necessary reductions in the use of high-carbon fuel with the depletion of global energy resources is sure to put increased pressure on energy supplies, and in times of scarcity we cry out for guaranteed fair shares. The purpose of TEQs is to share out fairly the shrinking energy/carbon budget, while allowing maximum freedom of choice over energy use. In the absence of such a framework we are currently seeing ‘rationing by price’ (i.e. the richest get whatever is in short supply), which creates massive inequity and attendant resentment.

The reasons for making TEQs units tradable are twofold. Firstly, prohibiting the exchange of rations in the past has always led to substantial black market activity, unnecessarily criminalising otherwise law-abiding individuals. Secondly, energy demand differs from food demand; while we all require comparable amounts of food, certain vocations intrinsically require more energy. For this reason a non-tradable equal entitlement would simply destroy many professions. With tradable rations those who live within their TEQs entitlement can sell their surplus onto the market, rewarding their energy-thrift and increasing the supply for those who need to purchase additional units. Since the poor use less energy than the rich, the scheme would also be redistributive.

The real beauty of the scheme though is that it provides the large-scale framework to encourage and empower those small-scale solutions. It effectively converts the national carbon budget into a personal energy budget for everyone, with the clear recognition that this budget will be decreasing year on year. The variations in the national price of TEQs units would be of interest to all, and since lower demand means lower prices the population would be encouraged not only to reduce their own energy use, but also to urge others to do so. Additionally, the substantial income from the auction of units to organisations would be accessible to communities to fund the building of new local infrastructure or otherwise support their energy transition.

It would be transparently in the collective interest to work together in finding ingenious ways to increase low-carbon energy supplies, reduce demand and move towards the shared goal of living happily within our energy and emissions constraints, with the TEQs price providing a clear indicator of how well we are doing.

This cooperation is essential, since the transformation in infrastructures necessitated by climate change requires collaboration between the different sectors of society, united in a single scheme easily understood by all. It is a critical feature of TEQs that it encourages constructive interaction between households, businesses, local authorities, transport providers, national government, and so on. In short, the scheme is explicitly designed to stimulate common purpose in a nation.

We may often be tempted to hold fossil-fuel companies and governments responsible for all our ills, but it must be recognised that even if they wished to they could not solve our energy problems without the engagement of the wider public. Our individual and community lifestyles need transformation too, and this cannot be done for us. No system can ever relieve us of our personal responsibility, and it is essential that we all recognise the need to change the way we live.

It is becoming ever clearer that current levels of consumption in the UK cannot truly be ‘greened’; they must be reduced. Done right, this reduction process could produce a better quality of life for all, but the process itself is inevitable. There are environmental limits, and respecting them is not optional.

TEQs provides the essential framework for this process, and once it is in place we can focus on the human-scale changes that could actually save our world, safe in the knowledge that our individual teardrops are no longer lost in an ocean of apathy, but are combining into an empowered - and sufficient - wave of change.

For more information on TEQs please visit www.teqs.net

Transition Timeline interview

By Shaun Chamberlin

Originally published in the Summer 2009 issue of Clean Slate - The Practical Journal of Sustainable Living.

A PDF of the full illustrated article can be found here.

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Blanche Cameron: What caused this book, The Transition Timeline, to come about?

Shaun Chamberlin: Primarily that Transition communities were asking for support. They were trying to form positive visions of the future for their communities, but were finding it a little foggy looking twenty years ahead, particularly with regard to the bigger trends and policy decisions around climate change, peak oil, food supply and the like. There was also a need to really make Transition’s vision of a resilient, satisfying future as tangible and fleshed out as possible.

BC: You talk about the four stories of the future: Denial, Hitting the Wall, The Impossible Dream and The Transition Vision. Where do we find those narratives in the UK at the moment?

SC: A good example of ‘Denial’ would be most government planning documents. Apocalyptic ‘Hitting the Wall’ scenarios are seen in many films, such as the recent Age of Stupid, ‘The Impossible Dream’ might be Star Trek, with its unlimited technological fixes, and the Transition Vision…well, the closest existing analogy Rob Hopkins could come up with was Wallace and Gromit!

What we need is for this positive, realistic vision to find a central place in the popular mindset, to really get people out of bed in the morning. The Age of Stupid has done a great job of showing how bad things could become, but we also need to set out the desirable, practical alternatives. We want to see these ideas spreading into films, soap operas and throughout popular culture.

BC: And doing it through stories – theatre, film, soaps and the like – makes it easier for people to absorb sometimes than preaching at them.

SC: Yes, it’s the paradigm shift in our behaviour, which a character can play out for us first. It helps us visualise how we can do things differently.

We need to supplement the existing approaches of individual action and marches and protests asking government to do something, which can both actually be rather disheartening. This is where Transition comes in – getting together to act as a community, without asking permission, alleviates the sense of impotence in acting alone, and the fear of simply being ignored when asking for others to do something.

BC: Is The Transition Timeline a philosophical background to Rob Hopkins’ Transition Handbook?

SC: Well, it is at heart a very practical book, but I do feel that it is hard to do environmental work without some form of underpinning belief system to fall back on when confronting difficult realities, whatever that might be. So when it felt appropriate I do touch on those areas. So many people are feeling despair and burn-out, but in any situation there are always better and worse courses of action, and working together with our communities – acting on a human scale – has an amazing power in it. As Edmund Burke said, 'nobody ever made a greater mistake than to do nothing because he could only do a little.'

There’s also that wonderful Chinese proverb: 'If you don’t change direction, you are likely to end up where you’re headed'. The recent G20 meeting is a classic example of us not changing our direction, but rather pumping more and more money into our old ways to try to keep them alive. Many alternatives do exist, but fundamentally it seems that we need to get away from the idea that greater consumption automatically equals a better life. Although we are consuming vastly more energy and resources than ever before, we actually seem to be less happy. And we are destroying Nature’s ability to support us to boot. So given the choice between a happier life and a future or neither, I know which way I lean!

BC: So what’s next for Transition?

SC: Who knows? That is up to the huge numbers of people shaping its future, and that of our world. There are hundreds, maybe thousands, of Transition initiatives starting, and it is starting to become mainstream, which is both exciting and challenging – I was recently interviewed on Transition by Elle magazine! The future for The Transition Timeline is that we plan to put it up on Appropedia so that as many people as possible can get involved in revising and co-creating the vision of the future we want to build. There’s also a forum on the Transition website to discuss The Transition Timeline.

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Blanche Cameron is a community green builder, lecturer at the Graduate School of the Environment at the Centre for Alternative Technology and a director and trustee of RESET, a charity working with communities and organisations to increase resilience to climate change.

Applied Philosophy

By Shaun Chamberlin

Originally published in the March/April 2010 issue of Resurgence magazine.

The original article can be found here.

Don’t ask what the world needs. Ask what makes you come alive, and go do it.

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For me, there was a definite moment when my environmental awakening began in earnest. I was studying philosophy at the University of York a decade ago when, out of the blue, I received an email from my father alerting me that “a long-term survey of oil and gas resources shows that demand for oil will exceed the maximum possible supply by 2010 and the oil price will sky-rocket”. This was followed by his (enduringly plausible) outline of the likely consequences – economic collapse, mass starvation and war.

I took a deep breath.

My initial reaction, like that of so many in their ‘peak oil moment’, was one of shock, rapidly followed by disbelief. I wondered how there could be near-universal silence on this issue if it truly had such vast implications, and tried to assure myself that ‘they’ would surely find some solution. Nonetheless, I resolved to look into it, partly in the hope of reassuring my father. Needless to say, what I learned wasn’t particularly reassuring.

As my studies came to an end, I quickly found myself with some appropriately philosophical questions to answer. The familiar post-university concerns of finding a way to earn some money, enjoying myself and caring for friends and family had to be balanced with two added factors – a sense that a ‘sound career path’ might not prove so sound in a civilisation that might be heading for the buffers, and an understanding that the world desperately needed all hands on deck if it was to have a future at all.

My attempts to discuss all this with my peers met with limited success. They reminded me that many people, both in our culture and around the world, are struggling to get by, and that I would need all the time I had just to look after myself and my family. Some suggested that I should be wary of having my life derailed by all this environmentalist rubbish, which had predicted ‘the end of the world’ so often before.

Others argued sadly that we must accept that it is simply human nature to go on being short-sighted and environmentally destructive. But that just sounded like a self-fulfilling prophecy. The many inspiring historical examples of human selflessness, wisdom and foresight must, if nothing else, show that we have a choice in these matters. Indeed, it seemed to me that those of us fortunate enough to have the time, education and mental health to perceive and face the circumstances of our world have a responsibility to act. If many others cannot, that is all the more reason why we must.

As Paul Hawken has since put it, maybe those of us responding to these challenges may be considered part of the world’s immune system. And where would any of us be if our own immune system got distracted seeking its personal fortune, say, or pursuing hedonistic diversions?

But while this musing was all very fine sitting in my university common room, how could I apply it to my life? My degree had failed to provide a helpful module on such ‘Applied Philosophy’ so, like everyone else, I had to make it up as I went along.

Time for another deep breath.

I did find one useful touchstone, a quote from the American theologian Howard Thurman:

“Don’t ask what the world needs. Ask what makes you come alive, and go do it. Because what the world needs is people who have come alive.”

Wonderful stuff, but to ‘come alive’ I also needed to stay alive, so when a job offer came on the very day my bank account hit empty, I decided to take it, working as an administrator at a project for marginalised groups where I had previously volunteered.

Over the next few years I worked my way up to a position I loved – managing the project’s learning centre – paid off my student debts, and spent much of my spare time learning more about the state of our world. Unfortunately, these investigations led to a growing sense that ultimately there wasn’t much point in helping people to reintegrate with society if that society itself really was running off a cliff. I realised this job was no longer helping me to come alive. I felt called to something else, but what?

I didn’t know, but I left the job anyway, and spent my time reading everything I could get my hands on regarding peak oil and climate change, attending events and asking questions. Where could I best put my energies to create a peaceful, creative, resilient and diverse world?

I slowly came to see that those common room discussions about human nature were touching on just one of a wide set of cultural stories that shape and define our perception of the world. That, despite its severity and urgency, ‘Peak Climate’ is just a symptom, a product of the ways of thinking we value, respect and adopt. And that it is at this level that radical change is both necessary and assured. Of course, many have discussed the need for a rapid paradigm shift – the Age of Aquarius, the Great Turning – but I was still struggling to find my role in supporting and shaping it.

The resolution came when I found myself at Schumacher College in 2006, where I studied for a fortnight and felt more intensely alive than I had in a long time. This was surely a good sign, and here I had my first encounter with the fledgling Transition movement, which even at that early stage recognised the innate importance of stories and visions in building thriving, resilient communities.

Over the last few years I have become ever more involved with this work, and 2009 saw the publication of my first book, The Transition Timeline, which grew out of requests from Transition communities to flesh out what a realistic, positive vision for our future might look like, and for more input on the major challenges we are likely to face as we try to create it.

This allowed me to explore my fear that the Transition movement may struggle to match up to the scale of these challenges, and I found that the process shifted my own perspective. Whereas I probably started out trying to resolve all of the world’s problems single-handedly (and demanded the same of such initiatives), I have since noticed that the people and projects I respect most aren’t those who’ve tried to do everything, but those who have done the thing that they love rather brilliantly. In so doing they have, sometimes quite by accident, contributed to shifting the stories on which cultures are built.

So now I see myself not only as part of a team in my local Transition Town, but as part of a global movement to which we all lend our passions. Transition may not single-handedly 'save the world', but those who are trying to do so are certainly glad of its contribution, which seems a decent test of whether it is a worthwhile project.

As my book has made its way into the world, I have found myself invited to speak and write for local groups, parliaments and everything in between, and it is good to feel that I am contributing. Yet somewhere in my soul I can feel my next move gestating. At some important level, I feel called again to re-examine my role in the world.

It is time for another deep breath.

Obituary for David Fleming

By Shaun Chamberlin

Published in The Ecologist on the 21st December 2010.

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Dr. David Fleming, a visionary Green thinker and one of the key whistleblowers on peak oil, has died aged 70. He was a significant figure in the genesis of the UK Green Party, the New Economics Foundation and the Transition Towns movement. His legacy also includes TEQs (Tradable Energy Quotas), the energy rationing scheme currently under consideration by the UK Government, his influential book Lean Logic and the real delight and inspiration he gave so freely to all who met him.

David was born on the 2nd January 1940 at Chiddingfold, Surrey, to Norman Bell Beatie Fleming, a Harley Street eye surgeon, and Joan Margaret Fleming, an award-winning crime writer.

After reading History at Trinity College, Oxford from 1959 to 1963, he went on to work in manufacturing, marketing and financial PR before earning an MBA from Cranfield University in 1968.

Despite being an avowed Conservative voter, he was a significant figure in the development of the UK Ecology/Green Party – his flat in Hampstead serving as its party office in the late 70s and early 80s – and urged his contemporaries to learn the language and concepts of economics in order to confound the arguments of their opponents. He practiced what he preached, and in 1979 began studies in economics at Birkbeck College, University of London, completing an MSc in 1983 and his PhD in 1988.

But Fleming’s true passion and genius was for exploring and understanding that mysterious thing ‘community’, in all its disparate forms. He admired tradition and ceremony for their ability to engender cultural stability, and was a lifelong member of deep-rooted groups as diverse as the English Folk Dance and Song Society, his local church in Hampstead, the Oxford and Cambridge Club, and ancient guild The Worshipful Company of Fishmongers. He was a passionate advocate for the critical importance of pubs, and memorably, when once asked how best to improve the resilience of one’s local community, he answered “join the choir”.

Always something of an intellectual whirlwind, Fleming found time to be Honorary Treasurer and then Chairman of the Soil Association between 1984 and 1991; to help organise ‘The Other Economic Summit’ (TOES); and to edit the 1997 book The Countryside in 2097 before making a major contribution to the world’s awakening to peak oil.

“The next oil shock?”, Fleming’s April 1999 article for Prospect magazine, argued that the International Energy Agency (IEA)’s most recent report represented a coded message, warning of an impending energy crunch with potentially profound impacts. After publication, to Fleming’s surprise, Fatih Birol – the future Chief Economist of the IEA – suggested a meeting, at which Birol intimated that “you are right… there are maybe six people in the world who understand this”. This encounter gave greater impetus to Fleming’s drive to see an effective energy rationing scheme put in place. Having first published on his TEQs scheme in 1996, 2008 saw a UK Government funded pre-feasibility study into the idea, which will be followed by the All Party Parliamentary Group on Peak Oil’s report in January 2011.

Yet perhaps Fleming’s key focus over recent years has been the preparation of his magnum opus, Lean Logic: A Dictionary for the Future and How to Survive It, the work that pulls the various strands of his thinking together into one cohesive vision. As those who knew him recall with sighs and smiles, his perfectionism had led to numerous delays in the publication date, but Fleming was making final preparations for publication before his death. It will now be published posthumously, thanks to the determination of the many readers Fleming asked to comment on early drafts, many of whom claim it as a key influence on their work and thought. A good example is Transition Towns movement founder Rob Hopkins, who once humbly described his own work as “simply taking Heinberg’s insights into peak oil, Holmgren on permaculture and Fleming on community resilience, rolling them together and making the whole thing comprehensible”.

Indeed, so many of the seeds Fleming planted will continue to bear fruit long after his untimely passing. In his wry way, he would often describe himself as having failed at everything he turned his hand to, but the truth was anything but. As a young Transitioner put it, remembering his first meeting with Fleming, “I was left thinking that this was the sort of man I would aspire to be”.

Fleming was a sparkling conversationalist, an often hilarious writer and a remarkably attentive listener. Compassionate and encouraging, almost all who met him were utterly charmed. The vast wealth of reading and knowledge he could call upon, and the unusual connections he drew in the course of any conversation (or helter-skelter lecture) led him to produce content fit for weeks of dissection, if sometimes too rich for immediate absorption. Fortunately, Lean Logic should preserve his thought in a format well suited to lengthy contemplation.

Fleming is survived by his sister Penelope, his niece Lucy, nephew Ben and his extended family.

Dr. David Fleming (2 January 1940 – 28 November 2010)

More on Fleming’s work at: www.theleaneconomyconnection.net
The All Party Parliamentary Group on Peak Oil launch their report into TEQs on January 18th 2011.

My more personal tribute to David, and links to the other tributes paid online, can be found here.

Tradable Energy Quotas: A Policy Framework for Peak Oil and Climate Change

By Shaun Chamberlin

Originally published at The Oil Drum on Jan 24, 2011.

Reaction and comments on the article can be found here.

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On the 18th January 2011, the UK’s All Party Parliamentary Group on Peak Oil (APPGOPO) launched their report into the TEQs (Tradable Energy Quotas) system of energy rationing.

Speakers included two Members of Parliament – John Hemming MP, Chair of APPGOPO and Caroline Lucas MP, author of the 2006 peak oil report Fuelling a Fuel Crisis. Also speaking were Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security and Shaun Chamberlin, co-author of the new report. Copies of the report, answers to Frequently Asked Questions, video footage of the launch event and links to the media coverage can be found at: http://www.teqs.net/report/

John Hemming MP, Chair of APPGOPO: “I believe TEQs provide the fairest and most productive way to deal with the oil crisis and to simultaneously guarantee reductions in fossil fuel use to meet climate change targets” (the UK Climate Change Act mandates 80% emissions cuts by 2050).

Political progress

APPGOPO’s endorsement of TEQs comes at an interesting time in the rationing scheme’s progress towards political acceptability. The inventor of TEQs, Dr. David Fleming (who passed away in November 2010), was a close friend of ASPO’s Colin Campbell and one of the early whistleblowers on peak oil, and designed TEQs explicitly to address peak oil as well as climate change. He first published on the scheme in 1996, but its profile has grown in tandem with that of the challenges it was designed to address.

TEQs first received a Ten Minute Rule Bill reading at Parliament in 2004, before extensive interest from research centres led to a Government-funded scoping study in 2006. This reached positive conclusions, and was followed by expressions of interest from successive Secretaries of State for the Environment.

Accordingly, the Government commissioned a pre-feasibility study into the scheme, which concluded in May 2008. The headline finding of this was that TEQs “has potential to engage individuals in taking action to combat climate change, but is essentially ahead of its time and expected costs for implementation are high… The Government remains interested in the concept and, although it will not be continuing its research programme at this stage, it will monitor the wealth of research focusing on this area and may introduce (TEQs) if the value of savings and cost implications change”.

The new APPGOPO report pulls together an impressive range of research to demonstrate conclusively that this condition has now been met, with bodies such as the Institute for Public Policy Research, the Lean Economy Connection, the Centre for Sustainable Energy and the UK Parliament’s own Environmental Audit Committee all having criticised the pre-feasibility study’s methodology and the decision to delay further moves towards implementation. One of the key criticisms is that the pre-feasibility study’s cost-benefit analysis was overly focused on carbon emissions, and entirely failed to take into account the benefits of ensuring fair access to energy.

More detail on the political progress to date is in Chapter 6 of the report, and links to the various reports and articles examining TEQs have been collected on the TEQs website here, including details of the world's first tradable carbon rationing scheme in a 'closed system' island environment, being run by Australia's Southern Cross University and starting in 2011.

Caroline Lucas MP, Leader of the Green Party of England and Wales, and author of Fuelling a Food Crisis: “The TEQs scheme would guarantee that the UK’s targeted carbon reductions are actually achieved, while ensuring fair shares of available energy”.

How TEQs would work

So how does TEQs work, and how does it deal with the challenges that all rationing systems face?

TEQs is an energy rationing scheme designed to cover a nation’s whole economy, within which individual adults would receive an equal per capita Entitlement of electronic TEQs units, free-of-charge. Organisations, the government and all other energy users would have to buy their units at a Tender, or auction. The number of units issued into the economy via the weekly Entitlement and Tender would be determined by either the availability of energy resources or the national carbon budget – whichever represents the tighter constraint on the national economy at any given time.

The weekly auction would also generate a price for TEQs units, and all buying and selling of units within the nation would take place at that price (which would, of course, fluctuate in line with demand).

The purchase of any fuel or electricity within the national economy would require the surrender of TEQs units, alongside the usual monetary payment. Each TEQs unit would allow for the purchase of a set quantity of fuel or electricity. If the scheme were being used to address energy resource shortages, this quantity would simply be a proportion of the total resource available. If used to implement a carbon budget, it would be dependent on the lifecycle emissions associated with that energy source.

The TEQs design is based on the insight that all emissions from energy use within a national economy can be measured simply and efficiently by assigning a ‘carbon rating’ (e.g. 0.2 units per kWh, or 2.3 units per litre) to fuels and electricity, based on the quantity of carbon dioxide and other greenhouse gases generated by their production and use. Once this is established, the total emissions attributable to a given purchase becomes implicit in the quantities listed as usual on invoices, utility bills and till receipts.

The TEQs system simply uses this information, making it unnecessary to measure carbon emissions directly, or to grapple with the endless costs, complexities and compromises of embodied emissions calculations and carbon labelling. This ‘carbon rating’ for fuels and energy also provides a competitive advantage to retailers of more efficiently or renewably generated energy, who would not have to require their customers to surrender so
many units.

The purchase of goods other than energy would not require the surrender of TEQs units, since the producers of those goods would have already surrendered units for the energy used in the production of the goods. Producers would then pass on the cost of buying these units to consumers, who would simply find that certain goods (those produced in a more energy-intensive manner) cost more.

Lord Smith of Finsbury, Chairman of the UK Environment Agency: “Rationing is the fairest and most effective way of meeting Britain’s legally binding targets for cutting greenhouse gas emissions”.

Rationing? Really?

Rationing has acquired a bad name with the public due to its obvious association with shortage, yet it is clearly a response to shortage, not the cause of it. It might be argued that the word rationing contains two intertwined meanings. The first is limits to what people are allowed to consume, the second is guaranteed minimum shares for all. The first of these can cause resentment, but in times of shortage populations cry out for the second.

TEQs are rationing in the second sense as they guarantee an Entitlement to minimum shares for all, but they are not rationing in the first sense as they allow individuals to exceed their basic Entitlement (if they are willing to pay those who choose not to for the privilege). The purpose of TEQs is not to limit the consumption of individuals per se, but rather to share out fairly the shrinking energy budget required by national circumstances, and to allow maximum freedom of choice within that.

In the absence of such a framework, resources in short supply would simply go to the richest (“rationing by price”), strongest or quickest, creating massive inequity and attendant resentment. With TEQs everyone is guaranteed a basic Entitlement.

The reasons for making TEQs units tradable are twofold. Firstly, prohibiting the exchange of rations in the past has always led to substantial black market activity, unnecessarily criminalising otherwise law-abiding individuals. Secondly, energy demand differs from food demand (the most commonly quoted example of rationing, at least here in the UK); while we all require comparable amounts of food, certain vocations intrinsically require more energy. For this reason a non-tradable equal Entitlement would simply destroy many professions.

With tradable rations those who live within their TEQs Entitlement can sell their surplus onto the market, rewarding their energy-thrift and increasing the supply for those who want or need to purchase additional units. Since the poor use less energy than the rich, the scheme would also be redistributive.

The actual use of TEQs units would be very straightforward. As units are only required for direct purchases of energy, utility bills and fuel purchases are likely to be most people’s main direct engagement with the scheme. Utility bills are already easily paid by direct debit, and the TEQs cost of fuel purchases could either be paid together with the cash cost via a credit card linked to an individual’s TEQs account, or a separate TEQs card could be carried and swiped alongside the money transaction. If an individual had no card and needed to buy additional TEQs units the cost of these (at the current national price) would simply be added to their bill at the point of energy purchase.

Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security: “What I like about TEQs is the fairness of it. When the energy crunch hits us, it will behove government and industry to ensure equitable access to available energy, within a national budget. TEQs is a route to synergisitic efforts of the kind we will need if we are to mobilise the infrastructure of a zero-carbon future fast, under pressure. It would increase the chances of working our way through the grim times to renaissance-through-resilience.”

Popular engagement

TEQs would have a price-balancing effect that would benefit the planning of energy consumers. The price of energy and the price of TEQs units will tend to move in opposite directions. When oil prices increase, this will reduce the demand for oil (at least to some degree), therefore reducing the demand for units and thus their price, so that the net price paid by consumers (oil + units) is more stable than the price of either oil or units alone.

Since the scheme covers the entire national economy, the variations in the national price of TEQs units would be of interest to all. And since lower demand means lower prices the population would be encouraged not only to reduce their own energy use, but also to work with other individuals and organisations and urge them to do so. Additionally, the substantial income from the weekly auction of units to organisations would be accessible to communities to fund the building of new local infrastructure or otherwise support their energy transition.

It would be transparently in the collective interest to work together in finding ingenious ways to increase low-carbon energy supplies, reduce demand and move towards the shared goal of living happily within our energy and emissions constraints, with the TEQs price providing a clear indicator of how well the nation is doing.

This cooperation is essential, since the rapid transformation in infrastructures necessitated by peak oil and climate change requires collaboration between the different sectors of society, united in a single scheme easily understood by all. It is a critical feature of TEQs that it encourages constructive interaction between households, businesses, local authorities, transport providers, national government, and so on. In short, the scheme is explicitly designed to stimulate common purpose in a nation.

The public may often be tempted to hold fossil-fuel companies and governments responsible for all our ills, but it must be recognised that even if these bodies wished to, they could not solve our energy problems without the engagement of the wider public. Our individual and community lifestyles need transformation too, and this cannot be done for us.

Jonathon Porritt, Founder Director, Forum for the Future: “This eloquently presented proposal merits very serious consideration by all political parties. There remains an undeniable gap between the current policy mix and what we actually need to do urgently both to reduce emissions of greenhouse gases and to avoid the potentially devastating consequences of declining fossil fuels. Tradable Energy Quotas offer significant policy advantages in addressing both those pressing imperatives”.

Policy advantages

As is widely recognised, we currently have a contradiction at the heart of our energy/climate policy, with proposals for emissions caps to deal with climate change sitting alongside support for coal, tar sands and the like to address our energy challenges. It is increasingly clear that the common solution is to reduce fossil fuel usage, but the key approach to this thus far has been to focus on raising the carbon price.

Unsurprisingly, it has been hard to gain popular support for increasing the cost of fossil fuels, since people rightly perceive that this increases their cost of living. And this approach also leads us towards the self-contradictory pursuit of trying to raise the carbon price while striving to keep energy prices low.

TEQs offer a fundamentally different approach. Rather than raising the price of carbon/energy and hoping that this reduces demand sufficiently, TEQs start from a strict quantity-based budget, and allow price to find its level in response to that. This restores straightforward motivation for individuals, organisations and nations. Once you guarantee people a fair Entitlement, in line with a declining cap, society can then collectively focus its attention on finding ways to thrive on reduced demand, and thus keep the price of energy/carbon as low as possible. This is a simply-understood task that everyone can buy into with enthusiasm.

TEQs might also make a difference to negotiations at the international level, where agreements are proving so elusive. Introducing national TEQs schemes would allow leaders to have confidence that the national emissions reductions they are discussing will actually happen, emboldening them to throw down the powerful challenge: “we are acting, so must you”.

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More detail on every aspect of TEQs, the scheme’s fit with existing UK and European policies and the energy and climate challenges it is designed to address can be found in the APPGOPO report, with Chapter 2 focused entirely on TEQs’ role in assuring entitlements to energy.