This is not straightforward to grok, because there is a genuine paradigm shift involved.

The "Energy Standard" - call it a "Petro" - I propose is just a unit of measure for value (as a metre is a unit of measure for length). It could be the amount of energy the average Joe is capable of producing in an hour, or the amount given off in the decay of x grammes of isotope y or whatever.

But IMHO a Standard - in order to be generally accepted and hence be worthy of the name - must be an amount that actually means something to people - so that they can relate to it, and use it as a reference point in exchange transactions.

I propose the energy produced from the combustion of 1 litre of n-Octane at 20 degrees C.

The International Carbon Unit

An ICU is defined as the GHGE - GreenHouse Gas Effect (of the Carbon Dioxide) produced by burning 100ml of n-octane - the volume of n-octane measure at 20 Centigrade.

It's a definition I've lifted from Nick Bell except that the volume used is different, and Nick is referring to the monetisation by fiat of intrinsically worthless carbon emissions, whereas I am proposing the monetisation of the intrinsically valuable energy in carbon.....

What I am getting to is that we are used to the monetisation of IOU's issued by credit institutions, and do not understand the true relationship between credit (ie time to pay) and the circulation of "money's worth" such as goods and services, energy use value, and the use value of land.

I have recently made two major presentations in Iran. The first, last October, introduced the concept of the PetroTrust in the context of direct investment in energy production through the simple expedient of creating Units redeemable in energy use value.

The second in January was to a purely domestic - but extremely high-level - audience, and covered both credit and investment

Introducing the Petro

This presentation aims to show how Units of "Currency" - eg a Unit redeemable in a litre of gasoline - might circulate within what I call a "Credit Clearing Union". I take as an example of such a Union the Swiss WIR Bank where since 1934 Swiss businesses have extended credit to each other and settled debit balances with goods and services rather than with fiat Swiss Francs.

The point is that the WIR Bank

exists only as a bookkeeping system, with no scrip, to facilitate transactions.

In other words Swiss businesses using the WIR are essentially exchanging "money's worth" of goods and services, but it could equally be energy or land use value) not in exchange for Swiss francs as a fiat IOU object (Currency), but by reference to the Swiss franc as a unit of measure (Value Standard).

We don't realise this, but wherever a barter system incorporates credit or "time to pay" the result actually is a monetary system. It takes a bit of getting your head around.

Returning to your point, electricity, and carbon-based compounds such as natural gas, gasoline, fuel oil, heating oil, all have a use over time, and a fixed value by reference to the "Petro" value standard.

Producers of any of these are all in a position to issue Units redeemable in their production, and they will tend to have a fixed price against the Petro for use as fuel. It is of course the case that other uses might have a greater value than fuel use (eg as a petrochem feedstock) and that would be reflected in the price.

There are too many variations in oil and oil products - and too many vested interests - to even contemplate global implementation in those markets, but I believe that the unitisation of natural gas, and the creation of a new global market in gas is capable of forming a basis for the International Energy Clearing Union I envisage.

The beauty of "unitising" renewable "MegaWatts" and energy efficiency energy saving "NegaWatts" is that we may exchange for value now something that costs us nothing to redeem in the future. eg interest-free loans (in dollar terms) but denominated in energy; used for (say) retrofitting CHP and then repaid out of the energy savings.

It's not Rocket Science.

What an "Energy Standard" gives rise to is what the technocrats (Hubbert was one such) refer to as "Energy Accounting" and I believe that it is the only way in which the necessary transition to renewables may be financed.

Finally, note that while the energy standard may be generic - energy as currency has the ability to be transmitted across borders via electricity or through vectors such as hydrocarbon-based fuels, ammonia or even water (if you think about it) - the majority of value which circulates in economies is actually based upon the use value of land.

In summary, in a "Credit Clearing Union" Units (Currency) of Money's Worth will circulate by reference to a Value Standard (Unit of measure) within a framework of trust (Guarantee Society) which is backed by payments made by both seller and buyer in respect of a mutual guarantee of performance.

Nationally redeemable currency units based upon location rental value are, as they say, another story, and one I covered in Dublin

Equity Shares: a Solution to the Credit Crash

when I gave last year's FEASTA annual lecture.