The commitment of this government to be the greenest ever – let alone Mr Baker and his party’s much vaunted environmentalism – is on the line with this deal.

whilst I am not clear about the relative merits of Nigerian and Angolan crude oil (Tar sands status as a damaging industry is well established), I am clear of one thing:

The government’s commitment “to be the greenest” is no longer on the line: Osborne said last Autumn that his environmental ambition is mediocrity. The conservative led government fall short of even this ambition. The Lib-Dodos’ view is of course irrelevent.

As so many bankers forget, the economy operates within the confines of the environment, and not the other way around. Again this is something that Osborne forgets at our peril.

I am sorry, I may not be at my best this time of day. Is the tl;dr version of this that the Greens have woken up to the fact that we have enough unconventional hydrocarbons to last us for the foreseeable future and that if this is allowed to go ahead, our wealthy, prosperous First World lifestyle will continue, so that they must be banned?

I would have thought that this was a source of national happiness myself. Especially as they are in stable Canada and not horrible places like Saudi Arabia. Still each to their own.

I will just note that this is precisely what some people have been saying for nigh on three decades now – that oil will not run out because as prices rise, unconventional sources will become economic. Abuse has been the usual response.

2@SMFS

The flaw in you argument is precisely that if this is allowed to go ahead, our wealthy, prosperous First World lifestyle will not continue.

There are many in business who now recognise the clever money is spent on shifting away from a carbon based economy, rather than delaying the shift and increasing the pain. It is in the shift away from carbon that new industries are being developed. Osborne’s stated ambition of mediocrity in this sector is the worst of approaches for investing in the future.

As I said, the economy operates within the constraints of environment and not the other way round. Your perspective of “hurrah business as usual” is committing your grandchildren to deal with the market correction.

I note today an RSPB / You Gov survey no more than 2% believe this is the greenest government ever government – and only 4% share Osborne’s view that wildlife protection is stifling business (40% believe protection is too weak).

http://www.independent.co.uk/news/uk/politics/government-not-keeping-green-vows-7576980.html

@SMFS #2:

I will just note that this is precisely what some people have been saying for nigh on three decades now – that oil will not run out because as prices rise, unconventional sources will become economic.

And others have been saying, for a little over three months now, that the US has now become a net oil exporter, with a similar degree of truth (https://liberalconspiracy.org/2011/12/15/support-grows-for-wind-energy-jobs-and-power/#comment-341475)

Back here in the real world, there are three difficulties with this scenario. Firstly, we have built our global economy on the availability of plentiful cheap oil. As oil becomes expensive enough to support the extraction of reserves such as the Athabasca tar sands, it impacts upon everything from food production to transport and manufacturing industry.

Secondly, “reserves” != “output”. As you will recall from the thread referenced above, the US has enough oil reserves to last it for only 40 years – but it can’t get them out of the ground in less than 100 years. Global oil production is now either at or very near its peak. It’s that constraint in supply that gets you the increased oil prices that make tar sand economic.

Thirdly, unconventional oil production uses a lot of energy. Tar sands oil production uses 30-35% of the bitumen produced simply to provide that energy.

3. davidh

The flaw in you argument is precisely that if this is allowed to go ahead, our wealthy, prosperous First World lifestyle will not continue.

How do you reach that conclusion? On the one hand we can continue to burn fossil fuels and live pretty much the lifestyle we have now while on the other we can reduce our consumption levels to those of Haiti and adopt a mediaeval style source of power. You think the latter is the way for our lifestyles to continue?

There are many in business who now recognise the clever money is spent on shifting away from a carbon based economy, rather than delaying the shift and increasing the pain. It is in the shift away from carbon that new industries are being developed. Osborne’s stated ambition of mediocrity in this sector is the worst of approaches for investing in the future.

That sounds like a puff piece. Who? Who is investing this clever money? Who that is, who is not being bought off with taxpayers’ money. There is no reason to think that a later shift will cause more pain than an earlier one. We will look back on modern Britain the way we look at Haiti. It is absurd to think Haiti can shift to even more poverty less painfully than we can.

As I said, the economy operates within the constraints of environment and not the other way round. Your perspective of “hurrah business as usual” is committing your grandchildren to deal with the market correction.

I agree. The environment is placing no constraints on us so far. So what if it is true – and it is not? First all of, my grandchildren will be massively richer than I am. They will be better placed to pay for any problems, if there are any. And the science will be better. Second my grandchildren will probably be Urdu speakers who despise my guts. Why the hell should I save anything for them? What have they done for me lately?

I note today an RSPB / You Gov survey no more than 2% believe this is the greenest government ever government – and only 4% share Osborne’s view that wildlife protection is stifling business (40% believe protection is too weak).

So what?

Robin Levett

And others have been saying, for a little over three months now, that the US has now become a net oil exporter, with a similar degree of truth

Which it has I believe.

Back here in the real world, there are three difficulties with this scenario. Firstly, we have built our global economy on the availability of plentiful cheap oil. As oil becomes expensive enough to support the extraction of reserves such as the Athabasca tar sands, it impacts upon everything from food production to transport and manufacturing industry.

Sure. Although we have not built our economy on any such thing. It helps but no more. But the flaw in this argument is assuming that massively more expensive wind power (and not to mention unreliable and so on) is somehow better for us than mildly more expensive tar sands.

Secondly, “reserves” != “output”. As you will recall from the thread referenced above, the US has enough oil reserves to last it for only 40 years – but it can’t get them out of the ground in less than 100 years. Global oil production is now either at or very near its peak. It’s that constraint in supply that gets you the increased oil prices that make tar sand economic.

How fast they can get them out of the ground is not fixed. It depends on price. We have no idea what global oil production is like but in so far as there have been price spikes, these have been caused by threats of war in the Gulf. Not supply constraints. It is true that oil prices have gone up. So the tar sand investments have taken place. And they will help keep oil prices down.

Thirdly, unconventional oil production uses a lot of energy. Tar sands oil production uses 30-35% of the bitumen produced simply to provide that energy.

So they will have to dig a lot of tar sands. Although as the technology gets better and better this will become less and less of a problem. There is nothing that says this has to be done this way. It may be possible to find bacteria to do it for you for instance. Science improves. If left alone. It is becoming less and less energy intensive all the time.

And it is still better than the renewable alternative.

Worth noting that the Lib Dem party in the European Parliament is taking a different line from the government (as represented by Norman Baker).
http://www.libdemvoice.org/chris-davies-mep-writes-slipping-deeper-into-the-tar-sands-26115.html
This is important because the EP has equal decision-making powers with the Council on EU law, and the position taken by LibDem MEPs (who are not encumbered by coalition politics) can be seen as a truer reflection of actual party policy than that taken by Lib Dem government ministers.

Worth noting that the Lib Dems in the European Parliament (as represented by Chris Daves) are taking a different line from the government on this issue:
http://www.libdemvoice.org/chris-davies-mep-writes-slipping-deeper-into-the-tar-sands-26115.html
This is important because the EP has co-decision powers with the council on EU law, and because the positions taken by Lib Dem MEPs (who are unencumbered by Coalition politics) can be seen as a truer reflection of party policy than those taken by Lib Dem government ministers.

“The environment is placing no constraints on us so far”
– Matlhus seemed to think it does. If you have evidence to the contrary, then it would be good to cite these examples, rather than make such a sweeping generalisation.

In return, I am just going to put you in the direction of the Geneva Society, which look at global insurance economics. It references a Morgan Stanley assessment, which forecast global stagflation.
http://www.genevaassociation.org/PDF/Geneva_Reports/Geneva_report%5B2%5D.pdf

“There is no reason to think that a later shift will cause more pain than an earlier one.”

Did you really write that? OK, well read the Stern Review for a rebuttle on that one – it was quite unequivocal, “The benefits of strong, early action on climate change outweigh the costs”.
http://webarchive.nationalarchives.gov.uk/+/http:/www.hm-treasury.gov.uk/sternreview_index.htm

“First all of, my grandchildren will be massively richer than I am.” – not sure which age group you are in, but try this:
http://www.ft.com/cms/s/0/c3cc07bc-1b3c-11df-953f-00144feab49a.html#axzz1pewKpTMA (Never thought I would have David Willets to help me rebut a troll)

SMFS it is clear you have a position, and you are only interested in reasons that support your position. You will not change your position based on reason, no matter how idiotic your position becomes. I’m posting really for the benefit of some more open minded readers who will explore the argument.

@SMFS #5:

And others have been saying, for a little over three months now, that the US has now become a net oil exporter, with a similar degree of truth

Which it has I believe.

I beg your pardon? I referred you, three months ago, to the US Energy Information Administration figures showing that the US is still a net importer of oil.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wttntus2&f=4

Look at the EIA’s Annual Energy Outlook Summary for 2012:

http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2012).pdf?bcsi_scan_6ff3f37d49d6906c=4dC9BqeOY86vKVp7/kDrcJIndNRaAAAA35IXIw==&bcsi_scan_filename=0383er(2012).pdf

Table 1 on page 12 includes a section showing net oil imports of between 7.36 and 9.72 mn barrels per day out to 2035.

But the flaw in this argument is assuming that massively more expensive wind power (and not to mention unreliable and so on) is somehow better for us than mildly more expensive tar sands.

“Mildly more expensive tar sands”…

In 2008, conventional oil production costs were from $6-39 per barrel; heavy oil/bitumen from $32-68, and oil shale from $54-113.

http://www.reuters.com/article/2009/07/28/oil-cost-factbox-idUSLS12407420090728

That’s simply getting it out of the ground, not well to wheels; and pipelining bitumen-produced crude is a problem – it requires upgrading by mixing with lighter oil to get it to flow.

How fast they can get them out of the ground is not fixed. It depends on price.

There are technical constraints as well as economic constraints. It may be technically possible to increase production somewhat – but economics is only a part of it.

We have no idea what global oil production is like but in so far as there have been price spikes, these have been caused by threats of war in the Gulf. Not supply constraints.

That may – may – have been true up to now; but when demand overtakes supply (and supply is going nowhere fast), as is predicted for this decade, then this will impact upon prices. Certainly the EIA see demand overtaking supply with consequent impact upon prices – see the AEOS linked above.

It is true that oil prices have gone up. So the tar sand investments have taken place. And they will help keep oil prices down.

Do you not see the contradiction in these sentences? It is only if prices both go up and stay up that tar sands etc can be or become economic. Tar sands coming on stream will not reduce prices, since a reduction in prices will choke off the investment necessary, although they may slow the rate of growth in oil prices. The oil companies know that the easy, cheap oil has all been found and is in production; to quote Lord Oxburgh in 2008:

“It is pretty clear that there is not much chance of finding any significant quantity of new cheap oil. Any new or unconventional oil is going to be expensive.”

But given your views on whether the US is a net oil importer, I hold out no hope that you will accept any of this…