NRA Still Building Roads Like There is No Tomorrow!

Mr. Peter Malone
Chairman
The National Roads Authority
St. Martin’s House,
Waterloo Road,
Dublin 4,
Ireland

16th of August 2010

Dear Mr. Malone

I am writing to you to seek your considered opinion on an issue of critical national importance – the imminent peaking of global oil supplies and, specifically, why the National Roads Authority continues to consider that ‘investing’ further in major national road projects is a prudent course of action and represents a discerning use of tax payers money?

There is growing international consensus, as expressed by Macquarie Bank, Goldman Sachs, McKinsey Consultants, the UK Industry Task Force on Peak Oil and Energy Security, the UK Energy Research Council, the International Energy Agency and the Saudi Oil Ministry together with, most recently, Lloyds Bank that the ‘era of cheap oil is over’ and that serious supply constraints and an oil supply crunch is likely in the short-to-medium term. You may also be familiar with the conclusions of the Hirsch Report commissioned by the US Department of Energy in 2005 which states: “The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.”

As you are no doubt aware, Ireland is amongst the most oil dependent countries in the world. The amount of oil used for transportation in Ireland tripled between 1972 and 2002, leaving Ireland consuming at least 50 per cent more per capita than the average of the EU-25 by the end of the period. The key issue with peak oil is that it is not an energy crisis so much as a ‘liquid fuels’ crisis, which will have immediate consequences for the main categories of oil usage, in particular transportation. As Ireland is particularly dependent on oil for transportation, it is important to start preparing for such an event.

Yet, despite this backdrop, Ireland, through the NRA, continues to ‘invest’ heavily in an outdated form of transport infrastructure that is designed almost exclusively for the current dominant transport technology, the private car and heavy goods vehicle, and which is entirely dependent on an ever-present and ever-increasing supply of cheap foreign oil. Furthermore, continued expenditure in road infrastructure promotes self-reinforcing car dependent patterns of spatial development, militates against efficient public transport provision and patronage, increases greenhouse gas emissions, transfers a significant portion of our national wealth (currently c. €5 billion) out of our economy to oil producing nations, promotes sedentary ‘obesogenic’ lifestyles and, as a consequence, entrenches deep long-term competitive disadvantages in our society and economy for which succeeding generations will be required to pay for.

While I recognise that it is the function of the NRA to execute Government policy and not to formulate policy directions, it is highly irresponsible for a semi-state organisation to publicise only the contended direct economic benefits of road ‘investment’ (The Irish Times, May 20, 2010) without factoring in the marginal direct, in-direct and long-term costs of infrastructure which is designed to last for several generations. I would respectfully suggest that the NRA should amend its cost-benefit analysis methodologies to capture the true externalised and long-term costs of road infrastructure ‘investment’.
References:

· A Baseline Assessment of Ireland’s Oil Dependence: Key Policy Considerations; Forfas 2006
· Sustainable Energy Security: Strategic Risks and Opportunities for Business; Chatham House/Lloyds 2010
· The Oil Crunch: A Wake Up Call for the UK Economy; Second Report of the UK Industry Taskforce on Peak Oil & Energy Security 2010
· Tipping Point: Near Term Systemic Implications of a Peak in Global Oil Production – An Outline Review; FEASTA 2010
· Growth Isn’t Possible: Why Rich Countries Need A New Economic Direction; New Economics Foundation/Schumaker College 2010

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