Reaching our best-before date

As the world struggles with war, recession and global warming, Oliver Smith gives you another reason to worry yourself sick

Oil has an expiration date. Long have scientists claimed that we will see the depletion of oil in our lifetimes, but in reality we have a more pressing problem than this. It’s called ‘Peak Oil’ and many scientists think we may have already reached it.

Put simply, peak oil is the point at which our oil reserves have reached their highest output and after this point begin to decrease. And to put our current situation into perspective, 33 of the largest 48 oil-producing nations have already hit peak oil and are decreasing in their production of oil.

The debate around the timing of peak oil was kicked into overdrive a week ago when two whistleblowers from the International Energy Agency (the people who forecast our oil reserves and usage) revealed that the IEA had increased their forecasts so as not to scare the global financial markets. Three days later, researchers at Uppsala University in Sweden published a report that proves that the IEA’s forecast figures are wrong.

Unfortunately, it is difficult to accurately predict the remaining global oil supply as there are many different actors involved, all with financial interests best served by keeping the data secret. If the oil companies revealed their supply data giving us an accurate picture of how much is left, it is likely that we would begin to move away from oil as the supply runs out, resulting in lower oil prices. However, by keeping their supply secret the oil companies are able to charge full price until the last drop runs dry.

It is obvious that the IEA has lost much of its credibility in the forecasting of oil figures, and without a reliable source it will be difficult to plan for our future energy consumption. But what does peak oil mean for us in the UK? And assuming we are on the brink of peak oil, what can we expect to see in the near future?

The UK currently sits on the far end of an oil pipeline that comes from the Middle East. We have little oil reserves of our own and in a global energy crisis we will probably be hit sooner than those countries in central Europe. Already we have seen countries in similar energy situations as ours begin emergency measures to slash their dependence on foreign oil. The government of Cuba has ordered the closing of all non-essential factories and workshops throughout the winter, as they enter a “critical” energy situation.

Unlike America, the UK’s presence in the Middle East is unlikely to secure our supply of oil in a crisis. We have already seen fluctuations in the price of oil over the last year and these will probably continue and increase in frequency as the market responds to shortness in oil supply.

The future of oil is unsure. However, if the revelations from the two whistleblowers inside the IEA are anything to go by, our future dependence on oil is fast approaching an end. And as the crisis becomes more apparent over the next few years, governments around the world will be forced to take increasingly drastic action to secure their energy needs.

What a bunch of bankers!

As the government plans to sell on the banks it owns, Oliver Smith considers if this is just another bum deal for the taxpayer

Following the spending spree by the Labour government in October last year, the British taxpayer became the proud owner of a large stake in three of the UK’s largest high street banks. Now its time to sell up.

EU competition legislation, which bans governments from owning banks, will soon force the government to sell off its banking assets. But what effect will this have on the British banking system? And will the taxpayer be getting their money back?

In their current state the banks are undesirable to perspective buyers, so the first move by the government will be to split the banks up into profitable, desirable banks which will be sold, and ‘bad banks’, which the government will retain for the time being. There is speculation that prospective buyers could include Tesco, Virgin and other new entrants into the banking market. The government hope that this will boost “competition and choice”.

The proposed ‘good banks’ for sale include pieces of RBS, of which the government owns 70%, such as its Churchill and Direct Line insurance services, its Natwest branches in Scotland and its RBS-branded branches in England and Wales. Lloyds will suffer a similar fate with its good assets including its Cheltenham & Gloucester branches and its Lloyds branches in Scotland.

The Chancellor has called this move “a better deal for the taxpayer” and has said that the sale will only take place “when the time is right”. At the same time he has admitted that Gordon Brown was wrong by predicting that the UK would lead the world out of recession, though maintaing that we would be out of recession by the end of the year. But as the UK is still in recession (unlike France, Germany and the US), is this really the best time to be breaking apart banking groups?

Banking experts have described the move as a “big distraction”, during a time where banks should be working to support the economy and bring us out of recession. More criticism has been levelled at the foreign investors who look keen to buy up the ‘good banks’; names such as Santander and Zurich have been thrown around. In the high street this would represent another blow to the UK owned banking system as foreign investors continue to buy up UK banks.

In fact a lot of criticism has been aimed at the timing of the sale. Treasury spokesman for the Liberal Democrats, Vince Cable, thinks that there should be no urgency and that time should be taken to ensure that the best parts of the banks do not go to private investors and that taxpayers are stuck with the ‘scraps’. Peter McNamara, Managing Director of Alliance and Leicester, claims that selling off the banks now could be counter-productive:

“Half the banks in the UK are going to be reorganised when you could argue their day job is to support industry and consumers during the recession. Without that support, we are more likely to have a steeper rise in unemployment.”

So in the end it seems that the taxpayer will be left holding the toxic ‘bad banks’ while foreign investors could walk away with the prime cuts of the British banking system during a recession in a government plan that could even increase unemployment. Sounds like another raw deal for the taxpayer to me.

Guess who's back. Shady's back

Tony Blair plans to make a return to world politics. Oliver Smith explains how and wonders whether we want him back

The recent ‘yes’ vote from our Irish cousins has green-lighted the Lisbon Treaty to continue its unstoppable march towards Brussels, bringing with it a new role to the ever-growing sphere of European bureaucracy: the President of the European Union.

Not content to allow the identity of the holder of this position to be haggled over in the EU’s corridors of power, Gordon Brown has decided to throw the UK’s hat into the ring by backing his old friend as a candidate for the post.

He re-crafted the Labour Party into ‘New Labour’ following Peter Mandelson’s guidelines. He obediently followed George Bush into two separate invasions in the Middle East, a move that many blame for the ultimate demise of his premiership. But, not content to fade gracefully into the shadows, Tony Blair’s back.

After two years out of the public eye acting as the UN envoy to the Middle East, Tony looks set to launch his triumphant return to European politics. But with many people still viewing him as the Prime Minister who launched an illegal war in Iraq, there may be some hurdles for him ahead.

As the Chilcot Inquiry into the Iraq war kicks into gear, with Tony Blair as the chief witness, more awkward questions are going to be asked about his actions as Prime Minister. But, acting as Mr. Blair’s PR puppy dog, David Miliband has already jumped to his defense, downplaying his role in the inquiry as little more than that of a “retired prime minister”. Miliband announced his support for Blair’s candidacy declaring, “It’s not a time for shy retiring violets…Europe needs a strong, persuasive, articulate advocate.” According to Miliband, “Tony Blair would be good for Europe, and also good for Britain”.

Both the Conservatives and Lib Dems have criticized Blair’s candidacy. David Cameron commented that he stood against any form of office that took the “emblems of statehood” and applied them to the EU. Continuing that if there was to be a president of the EU then it shouldn’t be in the form of “some all-singing, all-dancing, all-acting president and I think I can see what sort of president Tony Blair would be”.

With Berlusconi attending, Sarkozi as a maybe and ‘still awaiting reply’ from Angela Merkel, Blair’s facebook group of supporters has real potential. So here’s the real question: is Tony Blair the “strong, persuasive, articulate” president that we need to represent us in Europe? Or rather will Blair be seen in Europe as the media-man, ‘all-singing, all-dancing’ but ultimately lacking the conviction to make the hard decisions?

Tony Blair has yet to comment on his candidacy, but it doesn’t look like he’ll have to say much. Supported by the key players in Europe, his position looks to be a foregone conclusion. But as Gordon Brown heads to Brussels to lobby support for Blair, the Iraq war inquiry will begin. And that might just be enough to cast some shadows on his candidacy. In the mean time, let’s hope we don’t get more Tony.