Correspondence : C J POLLITT @ Fuel & Nationalized Industries Policy Division, DTI

From the Fuel & Nationalized Industries Policy Division, DTI, 21 June 1973

Dear Miss Pick,

EARTH ENTERPRISE : PILOT STUDY

Thank you for sending me a copy of your pilot study following our telephone conversation some weeks ago. I am afraid it has taken me until now to go right through the document.

As I understood it and as you say in your opening summary, you are at the stage of presenting the first part of a much larger project so that “its implications can be tested on a wider audience”. The following comments - very much my own opinion - are therefore offered in a spirit of constructive criticism, and I hope you will not feel that I am in any way underestimating the effort you have invested in what is already an unusually comprehensive analysis.

First, I readily agree with your comment during our conversation that you thought you had hit upon an original approach. As you may imagine, I read a wide range of publications on energy matters in the course of my work, and I can recall none which use the business model in the way your pilot study. This is not to deny, of course, that others may have reached the same conclusions as yourself by different routes. There are also a number of individual passages where I believe you have expressed important but difficult concepts with great clarity - for example, the paragraphs on the price factor on page 19, and some of the section on resource costings on page 33.

It seems to me however, that while your business analogy is very helpful in many places, its complexity sometimes causes difficulty. Perhaps I am mistaken, and a businessman will find it easy to “read across” between your detailed analogues and the “real world” to which they refer. Even if this is so, however, the lay reader could well lose track here and there. In a sense this is a question of how wide an audience you are really aiming for.

My second point is one I feel sure you have already recognised. Your exclusion of any attempt to quantify energy stocks and flows sets a considerable constraint on the sort of conclusions you can draw. From the point of view of public policies, for example, the difficult decisions are often those of a “how much?” or “how far?” nature rather than simple “What to do”. I appreciate, however, that a heavily quantified study would both be more difficult to write probably of narrower appeal.

Finally a few more specific points: Page 1, paragraph 3 The statement “Man has not the resources to judge the monetary value of profit in the future” is perhaps a little bald. Do not discounting techniques enable one to find a value for any income stream over time, depending on what view one takes of the appropriate time preference rate? Page 2, paragraph 3 The preferred definition of the “corporate objective” is not an operational one until “good” is also defined. You tackle this problem on pages (3/6?) and 35, but without coming to a very firm or precise conclusion. Page 16 The penultimate word in the fifth complete paragraph would appear to have been misspelled - should not be “sppernoval”? Page 41 IN the first line of the second paragraph should “cloudes”  be “clouds”?

I hope these comments are of help to your continuing work on energy

Yours Sincerely,

C J POLLITT

jmp/26 October 2016