A country’s government is a typical decision-making body, which sets courses of action for an entire nation. Enforcement of a new policy may seem desirable and feasible in the minds of the country’s leaders, but when policy decisions are made with no respect for the natural processes already established, the results can be negative and provoke embarrassment if not violent opposition. I will give two such examples, both of them concerning the important subject of planning for primary energy sources.2
The first example takes us to the United Kingdom, one of the world’s major coal producers. In the substitution between primary energy sources presented in Chapter Seven, we saw that the relative importance of coal has been declining in favor of oil (and to a lesser extent natural gas) since early in this century. This substitution is natural and valid in general even if the amount of energy obtained from coal today is far from negligible. Coal’s share of the total primary energy market has been decreasing worldwide for the last fifty years. Coal production in the United Kingdom started declining in 1950 and followed a usual “phasing out” course (see Figure 11.1). The projection based on the first half of the curve suggested that production should drop to less than 20 million tons a year by the end of the twentieth century. For the government of the United Kingdom, however, such a vision was completely unacceptable.
The Decline of Coal Production in the United Kingdom
Figure 11.1 Annual coal production in the United Kingdom, with an S-curve fitted to the data of only the historical window 1950–1975. The miners’ action of 1984 went in the direction of restoring the natural decline halted by legislation in 1975. The circles indicate how things evolved after the declining trajectory was determined.*
In 1975, as a mechanism to absorb oil shocks, the government halted the decline in coal mining by a legislative act that fixed production at 125 million tons a year. The act caused a clear deviation from the declining course of coal production, which lasted nine years. At that time miners staged the longest strike ever, bringing coal production down. The fact that the level of production dropped to what it should have been had it followed the pre-decree trajectory made one wonder whether renewed high-production levels would portend another incident that would drastically reduce production levels.
Ten Years Later
In 1992, one month after the first publication of this graph, the prediction came true. The miners did not stage a new strike, but the government ordered the closing of 61% of the country’s mining pits, in a move that would bring production down to the level of the dotted line in Figure 11.1. The move created an uproar among mine workers, whose vehement objection reached the limits of a social revolution. I sent a copy of my book to then Prime Minister John Major telling him that what he was trying to do was perfectly natural but that it was previous governments’ decisions that made his job difficult.
The miners’ opposition cushioned the fall but coal production did drop, as show the circles in the figure. Two years later (1994) coal production in the U.K. was close to the dotted line and five years later (1999) it was even closer to the level of production that could have been predicted back in 1975, before any interventions by governments and miners.
* The data on U.K. coal production come from The Annual Abstract of Statistics, a publication of the U.K. Government Statistical Service.