Independent UK: Shocked! How the oil crisis has hit the world

[marmar]

Shocked! How the oil crisis has hit the world

By Andy McSmith, Jerome Taylor and Nigel Morris
Saturday, 31 May 2008

British pensioners who cannot afford to heat their homes. European hauliers and fishermen whose livelihoods are under threat. Palestinians forced to fill up their cars with olive oil. Americans asked to go down to a four-day week.

All around the world, in a multitude of ways, the soaring price of oil is hurting rich and poor alike. For the lucky ones, it is simply a matter of changing their lifestyle. But those most vulnerable to the price of oil have been driven on to the streets in angry protests, which raise a fundamental question: what can we do to survive in a world where a barrel of oil costs $127 (£64)?

Great Britain

The rise in the oil price could not come at a worse time for Gordon Brown. After a week that has seen hauliers blocking roads and air passengers facing higher surcharges, yesterday it was the impact on fuel bills that came to the fore. The Prime Minister's attempt to ease the pain felt by pensioners and low-income families from rising fuel bills was dismissed as a "sticking plaster to hold back a catastrophe". It consists mainly of advice on coping with the cost of heating rather than extra money.

The number of Britons in "fuel poverty" – 10 per cent of their income goes on energy – is thought to have reached four million. The average annual household bill for heat and light is now more than £1,000. The Government plans to reform data protection laws so that low-income families can be contacted directly by the companies and offered help. The aim is to ensure that the "social tariffs" get to the people that need them most.

Alistair Darling, the Chancellor, said the energy suppliers had agreed to increase "social assistance" from £50m a year to £150m by 2011. The money will be used to switch consumers to lower tariffs and insulate homes.

Kate Jopling, the head of public affairs at the charity Help the Aged, described the measures as a "sticking plaster to hold back a catastrophe". She said: "While it is welcome news ... this initiative does not go nearly far enough to deal with the looming fuel poverty crisis."

The Government's announcement came at the end of the week in which Mr Brown saw a rerun of the political crisis he faced in his early years as Chancellor. Lorry drivers blockaded roads into London and in Wales to demand that a planned 2p rise in fuel tax be scrapped and that "essential users" should be granted a rebate. The only time between the 1997 and 2001 elections when the Labour government looked vulnerable was when Mr Brown suspended rises in fuel taxes after a similar blockade.

Separately yesterday, Britain's Silverjet airline announced it had stopped flights after failing to get a $5m loan from Abu Dhabi-based investors, becoming the third London to New York business class-only carrier to run out of money.

Europe

Luxembourg's Finance Minister, Jean-Claude Juncker, who chairs the commission of European Union finance ministers, issued a call to all EU governments yesterday to hold their nerve and avoid the temptation to use the tax system to relieve the misery of high oil prices. He reminded them that, when they met in Manchester in 2005, they agreed that such a move would encourage demand and send the wrong message to oil producers.

That is not what France's President, Nicolas Sarkozy, wanted to hear yesterday, after a week of protests by French truckers and fishermen left several motorways blocked and ports paralysed. M. Sarkozy suggested capping fuel taxes if the oil price rose further.

In the Netherlands, the protests caused less inconvenience, but made more noise when, at 11.45am on Thursday, lorry drivers across the country simultaneously blew their horns in protest at diesel prices. In Bulgaria, lorry and bus drivers launched a joint protest.

The protest spread to the seas yesterday, as fishermen across Europe went on a one-day strike, blocking ports. The biggest demonstrations were in Spain and Portugal where 10,000 protesters converged on Madrid. Some handed out free fish to underline their point that, with the current cost of fuel, they are practically giving their catches away. Passers-by pushed and shoved to get their hands on the free hake.

Meanwhile, the Newcastle to Scandinavia ferry route is being cut by the Danish company DFDS Seaways, who said it was a loss-making service incapable of being turned around. The company blamed "dramatically increasing oil prices, over-capacity in the travel marketplace and the economic slowdown".

The United States

There are signs that the fuel crisis is persuading Americans to think about leaving the car in the garage. In March this year, the number of miles driven by American motorists was 11 billion fewer than in March 2007, according to the Transportation Department. That is the sharpest drop year on year that the department has ever recorded, and the first fall of any kind recorded in the month of March since 1979.

The US Energy Department projects that this year, domestic gas consumption will drop by 190,000 barrels a day and overall petroleum use by 330,000 barrels a day, the first annual fall since 1991. But those figures look less impressive when expressed as percentages. Eleven billion fewer miles is a drop of 4.3 per cent and 330,000 barrels is less than 1 per cent of the country's total daily consumption.

Even so, this is good news for the environment, since the US's greenhouse gas emissions fell by nine million tonnes in the first quarter of 2008. And insurance companies report a sharp drop in road accidents.

An increasing number of employers, anxious to keep their staff, are offering them the option of working longer but fewer days, to cut out journeys to work. There is a plan to offer public employees on New York's Long Island the opportunity to work four 10-hour days, instead of five eight-hour days – a move which, it is reckoned, would save more than 30 barrels of oil a day. When Kent State University, in Ohio, offered this opportunity to 94 security staff, 78 of them snapped it up.

But the changing travelling habits have created problems for America's bus and subway systems, which are having to cope with a sudden increase in passengers at the same time that they are paying more for fuel. In Eugene, Oregon, 16 per cent more people took the bus this month than in April, but the town's main bus company, Lane Transit District, is losing money and cannot afford to expand. ..........(more)

The complete piece is at: http://www.independent.co.uk/environment/green-living/shocked-how-the-oil-crisis-has-hit-the-world-837477.html

[conspirator]

1. A four day week would be good though. A big step forward in people's quality of life n/t