The world has decided that much of the blame for the rising cost of foods can be ascribed to the use of grains for biofuels. The case for the prosecution is simply made. About one hundred million tonnes of maize from this year’s US crop will be diverted into ethanol refineries, an increase of a third on 2007’s figure. The maize used for ethanol represents almost 5% of global production of all types of grain. One in twenty cereal grains produced in the world this year will end up in the petrol tank of US cars. Other countries are also pushing ethanol, but the US has moved most aggressively to increase the use of food for fuel.

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E.ON’s plan to install supercritical coal-burning technology on its Kingsnorth site in Kent was (unsurprisingly) supported by the planning authority. A more interesting question is why E.ON persisted with the application in the first place. Even carbon efficient power stations emit far more carbon than gas plants. A high price of carbon would make the Kingsnorth coal plant uneconomic. The answer to the question must be that E.ON is confident that supercritical coal plants can be economically retrofitted with carbon capture technology (CCS). So even if the carbon price increases dramatically, coal will still be competitive.

E.ON’s US operation is closely aligned with the co-operative FutureGen venture, which plans to build a coal gasification plant in the US within five years. This power station will then capture CO2 and store it in sandstone. FutureGen gasification carbon capture technology is ‘pre-combustion’, unlike the ‘post-combustion’ focus in Europe. US electric utilities are now assuming that coal plants without CCS will not be allowed. But in both the US and Europe there seems to be a prevailing assumption that a $30 per tonne CO2 price is sufficient to cover the cost of CCS technology, meaning coal will eventually be back in the power station mix.

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Agassi does not intend to make electric cars. Wisely, he is leaving this to the auto industry. He is focusing on the batteries. He’ll lease them to anybody with an appropriate car and he’ll develop large networks of ‘filling stations’ where the driver can quickly take out a discharged battery and swap it for a fully charged version on long journeys. By 2010, he wants a hundred thousands electric cars on the roads of California and elsewhere.

The obstacles are huge. Although lithium-iron-phosphate battery technology is improving rapidly, and will continue to do so for decades, full-size car batteries now cost at least €7,000. Getting mainstream manufacturers to build large volumes of electric cars that will take his batteries is another formidable challenge. Third, he has to persuade retailers to install the equipment to swap batteries automatically.

But our weary European scepticism needs to be rested for a moment. The long-run economics favour this idea. My sums suggest that at current UK petrol prices it costs at least six times more to drive a mile on petrol than it does on electricity. Battery prices will fall and performance will improve. At some point it is going to be so much cheaper to power a car with electrons rather than octane that even the slothful auto industry will switch. When the market has tipped it won’t be long before passenger cars are all electric. Agassi may be too early, and his business model may require too much capital, but electric cars are coming soon.

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The Peak Oil question is beginning to become a central part of the daily debate on energy matters. On one side is an increasing number of independent scientists and oil engineers who note that world oil production is barely rising. Existing fields are running down and new reserves are found rarely. On the other side of the debate are the major institutions of the global oil industry. The International Energy Agency sees world oil supply rising from about 88 million barrels a day now to about 116 million barrels in 2030.

This last week saw another analysis (from Germany’s Energy Watch Group) suggesting that world oil production actually peaked in 2006. From now on, the group says, we can expect rapid declines. Many people worried about climate change see Peak Oil as a good thing. They believe that a shortage of oil and natural gas will slow down the rise in energy consumption and therefore help reduce greenhouse gas emissions.

The argument is actually more complex – it may well be that Peak Oil will tend to increase CO2. We will not be saved from ourselves by running out of oil.

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