Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by PLATFORM (U15)

  PLATFORM is an interdisciplinary organisation working on issues of environmental and social justice. It specialises in research and analysis into environmental, development and human rights implications of the energy economy, with a particular focus on oil and gas corporations.


  It is essential that strategies for addressing climate change are long-term. Given the timescales of energy investment, we need to be thinking decades ahead. For this reason, we have focussed on energy research and development, in which the activities now can lead to energy infrastructure that will last into the middle of this century.

  Looking specifically at R&D carried out in the public sector (in higher education institutions), we find an enormous skewing towards fossil fuels. British universities carry out an estimated £67 million per year of R&D targeted at the exploration and production of oil and gas, about £40 million of this funded by the public purse. In contrast, Government spends only £19 million per year on R&D on renewable energy sources, shared between universities and the private sector.

  The role of research and development in making industries more competitive is well accepted. The consequence of the imbalance of energy R&D is thus an entrenching of fossil fuels, undermining the possibility of a transition to renewable energy sources.

  The policy context is the emphasis of science policy on "wealth creation". Applied in an unqualified manner as at present, this tends to reinforce the status quo in the energy economy, as the larger oil and gas industry has far more resources than nascent renewable energy companies to match government funds and to facilitate application of technologies.

  A key element determining the Government's success in addressing climate change will be its ability and willingness to address conflicts in other areas of policy—such as in this case, science policy.


  1.  The British Government is recognised as a world leader in calling for strong and effective action to prevent climate change. The Prime Minister has indicated that he will use the opportunity of Britain's chairmanship of the G8 in 2005 to press for further international action on climate change. This is a key opportunity not just to raise the issue but also to demonstrate leadership by example through Britain's own actions.

  2.  Climate change is clearly a long-term issue, with wide-ranging implications. In light of this, it is very welcome that the Government has not only set an ambitious target for emission cuts in the timeframe of the Kyoto Protocol, but also looked at a longer-term framework. In particular, the February 2003 White Paper "Our Energy Future—Creating a low carbon economy" set a target of cutting the UK's carbon dioxide emissions by 60% by 2050.

  3.  In order to achieve this target, changes will be necessary at a systemic and structural level, and not restricted to those areas that are currently considered within the domain of shorter-term action to mitigate climate change. In particular, it will clearly be necessary to reduce the use of fossil fuels. Part of this can be achieved by a reduction in total energy use, such as through efficiency measures and industrial reforms. A transition in energy sources will also be necessary, not just from oil to gas, but also from fossil fuels to renewable energies. Government policy is to increase the share of renewables in electricity generation to 10% by 2010, and 20% by 2020.

  4.  Energy investment decisions are inherently long-term. The lifetime of new energy infrastructure is measured in decades rather than years. For example, a new oil platform or power station built today might be expected to still be producing in at least 2030, and possibly beyond. For this reason, it is important to be thinking well-ahead. As the White Paper states, "Leaving action until the last minute is not a serious option . . . We need early, well-planned action to provide a framework in which businesses and the economy generally, including the jobs and skills base, can adjust to the need for change, and encourage new technologies".


  5.  However the element of energy development that impacts the furthest into the future is in research and development (R&D). Current R&D might lead to new technologies in which the actual investment occurs in 10 or more years' time, before the productive life of that investment even begins. In the case of fossil fuels, the same applies to geological surveys of available resource.

  6.  We have carried out considerable research into the R&D and training carried out in universities, in the field of oil and gas. In March 2003, PLATFORM, the New Economics Foundation and Corporate Watch published the report "Degrees of Capture: Universities, the Oil Industry and Climate Change". It was published both as a 30-page policy paper and as a 90-page full report. We would be happy to send these to the Committee if they would assist in its inquiry.

  7.  Since then, we have met with officials of the Engineering and Physical Sciences Research Council (EPSRC), and corresponded with the Natural Environment Research Council (NERC), the Office of Science and Technology, the Scottish Executive, the Scottish Science Advisory Committee and a number of academics and university Vice Chancellors.

  8.  Our research found that British universities carry out an estimated £67 million per year worth of R&D targeted at the upstream (exploration and production) oil and gas industry. This is heavily focussed on geological surveying and technological development, which aim to expand existing levels of oil production. Nearly two thirds of this amount—about £40 million per year—is funded by the public purse, largely through the two Research Councils NERC and EPSRC. Only 7% of the R&D addresses the environmental and safety aspects of oil production.

  9.  Although such analysis is not routinely published, these figures are not disputed by the Research Councils. NERC stated in its response to the "Degrees of Capture" report that it accepted that "the facts relating to NERC are largely well researched and correct".[32] Similarly, EPSRC did not challenge the factual content of the report, but argued that the extent of oil and gas R&D is beyond its control, and commented that it is declining over time.[33]


  10.  Given the long time frames of R&D and subsequent energy investment, this work in British universities is counter-productive to the aim of cutting carbon dioxide emissions by 60% by 2050, for two reasons.

  11.  Firstly, oil and gas R&D directly adds to the available oil and gas reserve base, both by finding new fields and by enabling technologies to extract previously uneconomic resources. As such, it pushes out the horizon of continued production. The current global reserves to production ratio is 41 for oil and 67 for gas—meaning that at current rates of consumption, oil and gas reserves will last respectively 41 and 67 years.[34] In general, once reserves are classified as proven, they are committed to being extracted: the considerable capital expended "upfront" in exploration and field development is required to be recouped through the income from production.

  12.  Secondly, oil and gas R&D enhances the competitive position of these energy sources relative to their alternatives, such as renewable energy sources, not just in terms of price, but also in terms of delivery capacity or deployability—such as the gearing of infrastructure and resources to renewable-based production. In other words, R&D that contributes to oil and gas production serves to entrench those fuels' role in the energy economy.


  13.  The Government has made some welcome moves to expand renewable energy R&D. The 2003 Energy White Paper announced the provision to the Research Councils of £8 million of research funding for renewable energy over three years, as part of a £28 million total investment in sustainable energy research.[35] According to Department of Trade and Industry figures, the Government spends £19 million a year on renewable energy R&D in total, shared between private sector and universities.[36]

  14.  However, these figures are dwarfed by Government funding of oil and gas R&D, even in universities alone. When it is borne in mind that the oil majors carry out far more of their R&D in-house rather than in universities, we see a considerable imbalance in the total innovation investment between fossil fuels and renewables. This is not an imbalance to which the Government needs to contribute.

  15.  If the approach to technology substitution, from fossil fuels to renewables, is to be a market-based one—as government policy intends—reduction of the costs, and increase of the deployability, of renewable energy sources themselves is not the only thing that is required. Within a market approach, renewable sources are employed in competition with other (conventional) sources, so it is the relative rather than absolute price and deployability that are relevant.


  16.  As such, there are strong arguments for the phasing out of Government support for oil and gas R&D over the short term, with the exception of those which directly relate to mitigating the negative environmental and safety impacts of operations. This would make sense not just in relation to climate change, but also in the interests of competition and innovation—for small, nascent industries, such as renewable energy to receive more government support in order to get established, than mature, profitable industries such as oil and gas, which have the resources to fund R&D by themselves.

  17.  The policy context of this situation is the gearing of science policy, especially since 1993, towards industrial applicability—indeed, "wealth creation" is a key element of the mission statements of the Research Councils. Since bigger industries have more resources to match funding for research, and more capacity to commercialise the results, current government research policy is de facto biased towards projects that support bigger industries and, as a result, favours oil and gas over renewables.

  18.  Given the wide-ranging implications of climate change, the key to effective Government policy will be its ability to address conflicts with other policies—in the jargon, to approach the issue in a "joined-up" way.

  19.  The 2003 Energy White Paper identifies the role of Government as being "to create a market framework, reinforced by long-term policy measures, which will give investors, business and consumers the right incentives to find the balance that will most effectively meet our overall goals." However, at present, in relation to higher education R&D, science policy considerations are taking precedence over climate change policy. As a result, the opposite incentives are being given to those that will meet the Government's goals.

  20.  Following publication of our "Degrees of Capture" report, we wrote to a number of Government departments, including DEFRA and DTI. The Office of Science and Technology (OST) replied on behalf of all Government departments. It restated Government policy to ensure "that higher education institutions collaborate with industry and other organisations to achieve long-term economic and social benefits from the work they undertake". Our concern was not at this policy per se, but at its unqualified application, regardless of other priorities.

  21.  The OST letter suggested that "to provide incentives for, or to discourage activity in, particular areas" would be a constraint on academic freedom. However, this appears to miss the point. Government sets the framework for higher education research priorities, and in particular the focus on industrial applicability—and academic researchers must already make their choices within this framework. A more sophisticated approach is needed, to recognise that not all business applications of university research are necessarily in the public interest.

  22.  Furthermore, it is not correct to state that particular sectors are not encouraged by the government. For example, pushing for greater oil and gas R&D within universities is one of the key aims of PILOT, the Government-sponsored taskforce on North Sea oil.


  23.  Government science policy is well aware of the role of research and development in contributing to industrial competitiveness. However, in the case of energy, the skewed balance of R&D will enhance the competitiveness not just of British companies over foreign ones, but also of oil and gas over renewables.

  24.  Oil and gas companies already invest considerable resources in the research and development which underpins their future success. There is a strong case that government support is not required to supplement that, and indeed is counter-productive in relation to climate change policy, and should therefore be phased out within a short timescale.

  25.  To decline to address the impact on the energy economy of research and development risks locking Britain in to dependence on fossil fuels—and undermining the Government's commendable moves to address climate change in other areas of policy.

30 September 2004

32   Letter from Andrew Richardson, Secretary to Council, NERC, to PLATFORM, 28 April 2003. Despite accepting the factual analysis of "Degrees of Capture", it criticised the report's lack of discussion of NERC's renewable energy funding, as outlined in NERC's five-year strategy, "Science for a sustainable future 2002-07". Since then we have written to NERC with comments on that strategy [29 July 2003]. A reply to those comments was promised [on 12 August 2003], but never materialised. Back

33   Meeting of Greg Muttitt and James Marriott of PLATFORM, with Peter Hedges and Alicia Greated of EPSRC, 30/7/04. Back

34   BP Statistical Review of World Energy 2003. Back

35   Energy White Paper, "Our Energy Future-Creating a low carbon economy", February 2003, p 60 (para 4.60). Back

36   Department of Trade & Industry press release, 22/10/02, "UK needs to catch up with Europe on renewables". Back

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