SIMON SNOWDEN, OIL VULNERABILITY AUDITING

‘Here in the west we each have the equivalent of 120 slaves at our beck and call thanks to the recent abundance of cheap energy. That amounts to more than some of the emperors of Rome...’

So says Simon Snowden illustrating at his recent seminar on Oil Vulnerability Auditing organised by the Midleton Transition Town group the folly of the way we currently take energy for granted. Simon, head of the Oil Depletion Impact Group in the University of Liverpool Management School, specialises in auditing the vulnerabilities of individual businesses to changing oil prices, drilling down into supply chains and operating systems to unearth costly sensitivities.

The phenomenon of ‘Peak Oil’ – the point at which the production of oil worldwide reaches its maximum possible output - is well accepted to be imminent, if not already actually passed. Data from oil exporting nations (Saudi Arabia and Russia being the big two) appears to indicate that their production is declining while their own consumption is increasing. At the same time, China's thirst for oil is increasing rapidly and they are moving to secure their own supplies for the future. In October this year the Financial Times chose to feature a front page article warning readers that the subsequent drop in production is likely to be in the order of 6-9% per year, rather than the 3% figure previously assumed.

This reality paints a chilling picture. Should we be worried? Yes. Should we be so worried that we pull the blankets over our heads and stick our fingers in our ears? No, but Simon’s message was that there is no point in waiting for others to solve the problem for us, that adaptation and sensible reasoning can mitigate the effects for business and even give them a competitive edge.

Interestingly, cultivation is a particularly sensitive sector, being intensely dependent on not only liquid fuels, but also sprays (derived almost exclusively from petrochemicals) and fertiliser (also highly dependent on oil prices). This is a particular worry from a farming point of view if it becomes uneconomical (or not feasible due to volatile oil prices) for farmers to grow anything and food production could be under serious threat.

The individual solutions to these problems may depend on where we are in future. Rather than striving for the ‘silver bullet’ approach of the recent past wherein one solution is deemed universally appropriate, different solutions will suit different areas. Simon used the recent example of post-tsunami Myanmar (Burma) where aid workers eventually arrived expecting to find devastated villages. Instead, they found that many of the communities had already rebuilt or had begun rebuilding programmes independently of central government. This kind of community resilience (which is rare in the current climate) is what we should be seeking to build.