In a nutshell, what is The Energy of Nations about?
Brain scientists tell us we have a very worrying collective tendency for blindness to the kind of risks that can crash economies, and imperil civilisations. The shocking recent history of the financial industries suggests they are right. We need to worry about the energy industries as well. I describe four systemic risks being run by the energy incumbency in my book.
The first and biggest is climate change. We have way more conventional fossil fuel than we can afford to burn without wrecking the climate, yet the incumbency wants us to pile so-called unconventional deposits on the fire as well.
Second, we risk creating a carbon bubble in the capital markets. Right now we are allowing Big Energy to account fossil fuels as being at zero risk of stranding in a world wherein many policymakers view them as unburnable.
Third, we risk surprising ourselves with the so-called "shale boom" in gas and oil production. That too may prove to be a bubble, maybe even a Ponzi scheme.
Fourth we court disaster with our assumptions about oil depletion. Most of us believe the incumbency narrative that there will be adequate supplies of affordable oil for decades to come. I am in a minority who don't.
Given all this risk blindness, I conclude in my book that system collapse is probably inevitable. Better news is that there will be a road to renaissance, in the rebuilding, if we make the right decisions come the crisis. I do believe that is possible, and I explain why.
What led you to write The Energy of Nations?
In 2012, watching capital continue to flow into coal and tar sands, and the new story of shale riches emerging, I wondered how best I could make a personal contribution to sounding the multiple alarms needed. I zeroed in on another lesson of neuroscience and psychology: the one that shows people prefer stories to textbooks. So, I thought, I have a story to tell. A true one. I have seen these threats to society build over the years, frequently close to, oftentimes behind supposedly closed doors. Why don't I tell that story? As the drama unfolds, hopefully it will offer insights into how brains work in the energy incumbency that is stoking such catastrophe for the world. I thought hard about the wisdom of this. I would be irritating a lot of very powerful people in industry and government. Some would accuse me of breaking confidences, of talking about meetings that were implicitly private. But then I reflected, who cares: the stakes in this drama are just too big for that to matter.
And so I wrote the book. In it, I tell the story of the energy and financial markets from 2004, the year the oil price began its inexorable rise. I follow all the main subsequent events chronologically, through to April 2013. I have continued to follow them since in a monthly column for Recharge magazine, and on my website. In the book, I intercut the factual narrative with diary extracts, to show my own experience of the events and of key incumbency figures in industry and government.
What do you think is the one biggest thing that needs to change in order for us not to have face the risks you talk about in your book?
The way we allow capital to flow to expanding fossil fuel reserves without recognizing any risk whatsoever that those reserves might end up as stranded assets. If we required the capital markets to recognize the risk, disclose and analyze it, many investors would pretty soon stop investing in new carbon, and look for less risky places to put their money, like renewable energy.
What is the lasting legacy you hope your book is able to leave?
2014 needs to be a turnaround year, if society is to start combatting the dreadful threat of climate change. I want my book to be one of the many tools that will be needed to achieve that.
Tell us one thing that not many people know about you?
I go running with a mad whippet most days. He is somewhat faster than me.