Green shoots: Lord Oxburgh, Chairman, D1 Oils
Can crop-powered cars make a difference in the fight to stop climate change? The ex-chairman of Shell thinks so
Sunday 14 January 2007
Even though the plastic nametag on his rucksack identifies him as "Ron", Lord Ox- burgh is very much a scientist of the donnish variety. Pen neatly secured in the top pocket of his dark-green shirt, wearing grey slacks and a tie bearing a coat of arms, he has the air of a professor rather than a company director.
But tomorrow the former chairman of Shell will continue his transformation from Big Oil man to green champion when he becomes the new chairman of biofuels company D1 Oils.
His eyes twinkle as the former science professor reminisces about being president of Queens' College Cambridge: "I used to be wakened by the Women's Eight rowers going down to the river at 6am. Flap, flap, flap on the flagstones."
Like most scientists, Lord Oxburgh, 72, loves to know how things work, even asking about the digital dictaphone on the table. But he has more pressing matters to discuss: the former chairman of the House of Lords Science and Technology Select Committee is convinced that climate change is the greatest challenge facing the world.
Unlike many parvenus to the environmental cause, he seems actually to practise what he preaches: he mostly gets around in London by bike (with no car following behind, David Cameron take note) and complains that he is already on to his fourth fold-up bicycle because the others have been stolen. He admits to owning a car, but it's a small Toyota model that does 60 miles to the gallon. "I use my car as little as possible," he adds solemnly.
Biofuels blend crops such as sugar and corn with conventional petrol or diesel. They reduce carbon emissions because, unlike fossil fuels, the crops can be regrown, absorbing carbon dioxide from the atmosphere in the process.
He insists there was no Damascene conversion from working for Big Oil (he was UK non-executive chairman of Shell from 2004 to 2005) to tackling climate change. "It's not a contradiction at all. Shell is one of the largest renewable-energy vendors in the world. It [D1 Oils] seemed to me a novel and sustainable approach and well worth supporting. I am on the same side."
But Lord Oxburgh is convinced that neither governmental nor individual good intentions will be enough on their own to stop the world self-destructing. He says governments must set the regulatory framework - by introducing a tax on carbon production, for example - and then let business get on with it.
"I don't have a great deal of faith in guilt feelings to affect people's behaviour," he explains. "What gets people's attention is regulation or price."
It's a view that many high-profile businessmen now ascribe to. But Lord Oxburgh is disdainful of those who see climate change as nothing more than a commercial opportunity (presumably this does not include shareholders in the AIM-listed D1 Oils). "I find it extraordinary there are still a significant number of people who don't seem convinced about the fact of climate change. There must be a significant amount of entre- preneurs among that group whose actions are largely driven by the idea that they may make some money on what they might think is a passing fad."
In the UK, the Government has introduced legislation requiring that 5 per cent of fuel sold on petrol forecourts is made up of biofuels by 2010. This target will rise, though the Society of Motor Manufacturers and Traders says the standard biofuel component that existing cars can take without affecting their performance is 5 per cent. The industry is working towards introducing new models such as "flexi cars", which can take up to 95 per cent bioethanol (a biofuel that uses sugar).
Another challenge is the amount of land needed to grow the crops. According to a report by investment bank Goldman Sachs, for the UK to meet a target of 5.8 per cent biofuel would require the use of more than a quarter of the total land available for farming. A target of 20 per cent would take up around nine-tenths of agricultural land, it estimates.
Lord Oxburgh admits that the European Union (which has recommended a 5.75 per cent target by 2010) will not be able to become self-sufficient in biofuels because of the lack of land and a suitable climate. So most crop planting is taking place in some of the poorest countries in the world, particularly in Asia. Critics fear food production will fall as crops are instead used to make biofuels for the estimated 800 million people who own cars globally, making food more expensive for the three billion who live on under $2 a day.
"If you're growing corn and not giving it to people, clearly there's competition," Lord Ox- burgh concedes. He says the main reason he joined D1 Oils is that the biofuel crop it grows is an inedible plant called jatropha, which can be grown on marginal land not used for food.
He also concedes that some forms of biofuel do more harm than good - witness the destruction of thousands of acres of rainforest in Indonesia to produce palm oil. The efficiency of biofuels also varies enormously.
Lord Oxburgh admits that biofuels are not a perfect solution yet, but insists: "It's not a con. It's important that NGOs and others don't push too hard and damage what is movement in the right direction. We have no time to wait at all. The climate change problem is so urgent that we must start with what we have and improve as we go along."
He points to the "second generation" of biofuels that use household waste and sewage; once developed, these promise to be much more efficient.
Analyses of the economics of biofuels diverge wildly. Based on 10-year average crop prices, says Goldman Sachs, biodiesel is economic only when oil prices are $80 a barrel; last week they dipped below $55 for the first time in 18 months. But Lord Oxburgh puts the figure for economic production of biofuels at around $60 a barrel.
He jokes that when he was at Shell, the company was reluctant for him to be photographed on his fold-up bike because it made him too identifiable for disgruntled opponents of Big Oil. Now the free thinker is fighting the good biofuel fight, he is out - and proud.
Lord Oxburgh: BIOGRAPHY
BORN: 2 November 1934.
EDUCATION : Liverpool Institute; Oxford University - BA, natural sciences (geology); Princeton University, US - PhD, geology.
1960s to 1980s: academic posts at Cambridge and Oxford.
1988-93: chief scientific adviser, Ministry of Defence.
1993-2001: rector, Imperial College of Science, Technology and Medicine, London.
2004-05: non-executive chairman, Shell Transport and Trading.
2005 to now: adviser, Climate Change Capital.
1999: made Baron Oxburgh of Liverpool (crossbench peer).
2001-05: chair of the Science and Technology Select Committee.
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