Onshore Energy Conference — London Onshore Energy Conference — London | Page 48

The average American
spends about a week a
year stuck in traffic jams
level, our planet will be dealing with the
limits of growth. And with that growth
comes some severe practical problems, one
of which is our transportation system
simply won’t be able to deal with it.”
Whilst it was possible to ignore Ford’s
commentary back in 2011, the subsequent
growth of Uber, car-sharing and autonomous
vehicles suggests it would be unwise to
continue to adopt a head-in-the-sands
approach to the secular changes underway.
In turn, this suggests that forecasts for
US GDP need to be revised downwards, to
take account of the impact of a downturn
in new car sales. It would seem prudent
to use Ford’s forecast of a potential 30%
downturn as a base case, which would mean
a $250bn loss in terms of the value of new
car sales by 2020, or perhaps earlier.

4

Hard choices near for
UK’s Brexit options

The famous Irish phrase seems to aptly
describe the present state of UK government
policy on Brexit. UK premier, Theresa May,
famously started her period in office by stating
that “Brexit means Brexit”. But unfortunately,
her recent speech to the Conservative Party
conference suggested that she has still not
decided which of the possible Brexit options
to pursue. Yet time is running out, as she did
reveal that she intends to begin Article 50
negotiations in Q1 next year, meaning that the
UK will be leaving the EU by March 2019.
May problem is that she will soon have to
choose which option to pursue during the
negotiations, unless she shares the belief
of her Foreign Secretary, Boris Johnson,
that it is possible to “have our cake and
eat it”. We rather share the downbeat view
of EU Council president Donald Tusk:
“To all who believe in it, I propose a
simple experiment. Buy a cake, eat it,

48

If you don’t know
where you’re going,
any road will do

and see if it is still there on the plate.
“The brutal truth is that Brexit will be a loss
for all of us. There will be no cakes on the table.
For anyone. There will be only salt and vinegar.”
This means that May is likely to have
to choose between five very different
options, as the authoritative Institute
for Government has confirmed:

• Membership of the European Economic
Area (EEA): the ‘Norway model’. This offers
almost complete access to the Single Market
in goods and services, with some restrictions
on agricultural and fisheries products. In
return for this access, EEA members must
accept free movement of people. They
make a significant contribution to the EU
budget and must accept all EU laws and
regulations related to the Single Market,
with minimal influence over their content.
• Membership of the European Free Trade
Agreement (EFTA) plus bilateral deals: the
‘Swiss model’. EFTA provides access to the
Single Market in all non-agricultural goods.
Switzerland has added a series of bilateral
agreements allowing for trade in some services,
and also has a treaty accepting free movement
of people. Switzerland contributes to the EU
budget to cover the costs of programmes
where it participates. It must also adapt
domestic legislation to meet EU laws in the
areas of the Single Market where it participates,
but has no formal influence over those laws.