The Great Energy Con is On

For the average citizen, it has become our daily bread to be psychologically pressured to save every kilowatt hour of energy. A concerted media campaign impacts upon every aspect of daily life, from a drive towards smaller vehicles & car pool lanes, to expensive energy saving light bulbs & home insulation - we are even made to feel guilty about the stand-by light on our VCR. Well, perhaps we should, but despite a genuine collective effort by hundreds of millions of Americans and Europeans to cut down upon frivolous private energy expenditure, the corporate world of West Inc. carries on regardless, promoting cheap air travel (despite $ billion losses), manufacturing pointless products (at great cost in terms of energy and raw materials), and daily pouring millions of tons of concrete (responsible for 7-10% of CO2 emissions worldwide), into new malls, runways and road systems. You can bet your bottom dollar (and you probably will have to…), that while you make your token efforts for the green cause, that the growth in energy consumption by China, South America, South-East Asia, and our multi-national corporations will continue unabated...

Perhaps the most surprising aspect of our new climate of environmental consciousness, is the enthusiasm with which the energy firms themselves are falling over one another to convince us of our urgent need to cut down on our consumption of their product. It is most unusual within a ‘free market’ economy to see companies spending hundreds of millions upon advertising campaigns that are designed to persuade consumers to use less of their product and, at least at first, this strategy appears to make no sense whatsoever.

Upon closer inspection however, all is revealed. Within an unregulated free market, prices are of course set by the balance of the forces of supply and demand (and availability), but since when did we have a genuine choice between energy companies or suppliers? The provision of energy is of course determined by energy cabals and national governments who decide whether to ‘allow’ gas, wind, coal, oil, or nuclear to dominate the global and domestic energy markets. Such policies may take decades to come into effect and to see a return on the investment in their infrastructure. In fact we are still paying, literally and metaphorically, for the energy policies of the fifties, sixties and seventies.

So why are energy companies such as EDF and E-On pressuring consumers to use less of their product? The answer is simple: to reduce the strain on supply and to hold up existing revenue streams. By cutting consumer demand, energy companies can increase unit energy prices to the end user without increasing their energy bills, thereby maintaining healthy margins. Greed has gone green, but in actual fact it is not only the unit price of energy but also consumer bills which have increased sharply, as energy companies strive for greater profits.

So aren't the spiralling increases in energy prices simply a case of cause and effect within the global market of energy supply and demand? Well if you look at the figures, oil prices may have trebled since 2006, but demand for oil has not actually increased three-fold, and neither has global production been cut by a third. In reality you are witnessing OPEC’s laws of cartel & demand. With the increased number of wind farms and ‘bio’ fuel plantations, the global energy supply has if anything increased in recent years. Perhaps the recent spike in oil prices might explain the almost exponential rises in the costs of electricity in the UK? No, not really, as oil consumption for the purposes of electricity generation in the UK has slumped, as oil has been replaced by gas and wind alternatives. Energy companies use the cheapest available fuel for electricity generation. So, in theory at least, the UK should be experiencing some price stability, unless of course the energy companies and their shareholders have anything to say about it.

As Western governments cry green and court the electorate with their environmental credentials, they are of course meanwhile pushing relentlessly for and fighting over the world’s as yet untapped energy resources. Prospecting in Iraq's Western desert, the Arctic & the Sudan, they are threatening the planet's last unspoiled wildernesses. In TV ad campaigns, oil companies are showing frightening pseudo-color images of emissions from cars, planes and factories, as though we greedy private citizens were all individually & collectively responsible for the great greenhouse debacle, whilst the oil companies themselves rake in record profits with the price of oil now some 3 to 10 times the cost of its extraction. The only problem that faces the Arabs today is what to spend all of their oil windfalls on - new cities, super arsenals, or luxury cars & private planes? One thing is for sure, the West will soon get its comeuppance for meddling in Middle-Eastern affairs…