Branson and business leaders warn UK over ‘oil crunch’
because it is unprepared for surging oil prices, Sir Richard Branson and other
business leaders have warned.
warns the world is running out of oil and predicts shortages and price spikes
as soon as 2015.
crisis and said the poorest in society were most vulnerable to potentially significant
contingency plans for transport, retail, agriculture and alternative power.
where fuel price unrest could lead to shortages in consumer products and the UK’s
energy security will be significantly compromised,” it said.
a group of private British companies whose members include Sir Richard; Brian
Souter, chief executive of Stagecoach; Scottish & Southern Energy boss Ian
Marchant and Philip Dilley, chairman of consultancy firm Arup.
to volatility in the cost of crude – said businesses and Government should work
together to prepare the economy. “UK competitiveness will be hampered unless we
can develop viable, affordable and secure long term sources of alternative energy,”
areas of overlap” between the issues of depleted resources and pollution. It said
transportation was particularly vulnerable to rising oil prices, with businesses
from supermarkets to manufacturers reliant on delivery networks. The group said
alternative methods of powering vehicles – for example electrification of the
railways – should be explored and infrastructure developed.
on oil-related products such as fertilisers.
the UK. Energy watchdog Ofgem has warned electricity and gas may become unaffordable
for an increasing number of households unless drastic action is taken to secure
Business calls for urgent action on "oil crunch" threat to UK economy Taskforce warns Britain is unprepared for significant risk to companies and consumers Poorest to be hit hardest by price rises for travel, food, heating and consumer
New policies must be priority for whoever wins the General Election Recommended packages include legislation, new technologies and behaviour-change
Fundamental change in demand patterns triggered by emerging economy countries
UK for Peak Oil. The second report of the UK Industry Taskforce on Peak Oil and
Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price
volatility will destabilise economic, political and social activity potentially
by 2015. Peak Oil refers to the point where the highest practicable rate of global
oil production has been achieved and from which future levels of production will
either plateau, or begin to diminish. This means an end to the era of cheap oil.
of a coalition of government, business and consumers to address the issue.
cost of travel, food, heating and retail goods. It finds that the transport sector
will be particularly hard hit, with more vulnerable members of society the first
to feel the impact. The Taskforce warns that the UK must not be caught out by
the oil crunch in the same way it was with the credit crunch and states that policies
to address Peak Oil must be a priority for the new government formed after the
coupled with the projected growth from non-OECD countries, ITPOES predicts Peak
Oil will occur within the next decade, potentially by 2015 at less than 95 million
barrels per day. (In 2008, production levels were 85 million barrels per day.)
The study finds that the recession has delayed the oil crunch by two years. This
provides invaluable time to plan for a future which will see structural increases
in oil prices coupled with shortages and increased market volatility. The UK will
be particularly badly hit by these factors with a tightening of supply leading
to greater oil import dependency, rising and volatile prices, inflationary pressures
and the risk of disruption to the transport system.
revolution" to see the ongoing introduction of lower carbon technology and trials
of sustainable bio fuels. This would cover private vehicles, but also extend to
the general transport network, with the government urged not to cut investment
in public transport. A focus on new clean technologies should be combined with
wide scale behavioural change promoted through incentives and education to produce
a modal shift to greener modes of transport.
Solar Century, Stagecoach Group and Virgin Group. The report will be launched
at an event at the Royal Society with presentations from Richard Branson, Founder
of Virgin Group; Philip Dilley, Chairman of Arup; Ian Marchant, CEO of Scottish
and Southern Energy; Jeremy Leggett, Chairman of Solarcentury; Brian Souter, CEO
of Stagecoach Group; and Will Whitehorn, President of Virgin Galactic.
is now flat or declining but also recognises that demand in non-OECD (developing
countries) continues to expand rapidly, having already recovered from the recession.
Demand in the non-OECD areas already accounts for 45% of global oil demand and
is expected to reach 50% by the middle of the decade.
Government, local authorities and business must face up to the Peak Oil threat
and put contingency plans in place
A package of policies are required to deal with the economic, financial and social
impact of potential high oil prices
There is a need to accelerate the green industrial revolution Government support should be boosted for alternative technological solutions
and associated infrastructure, such as electric vehicles
Policies and fiscal measures to support and incentivise a shift from the traditional
car to more fuel- and carbon-efficient modes of transport to be established
Government investment in public transport must be maintained Government must provide a stable pro-investment regulatory and political climate The nation’s power generation and transmission distribution infrastructure must
be changed to adapt to new demand patterns, price spikes and supply interruption
Measures must be taken to protect the public, particularly the most disadvantaged,
from the impact of rising fuel costs on food and other consumer goods prices
the impact of the oil crunch and ensure the UK is better prepared to withstand
higher and more volatile oil prices. UK competitiveness will be hampered unless
we can develop viable, affordable and secure long term sources of alternative
energy." Richard Branson, Founder of Virgin Group.
dependent on oil. The twin threats of the oil crunch and climate change make that
unsustainable. We need urgent Government action to support alternative technologies
and incentivise behavioural change to protect business, consumers and our environment."
Brian Souter, CEO of Stagecoach Group.
get hit the hardest by higher prices. Economic growth will be endangered as prices
rise, costs of raw materials increase and consumer spending ability is suppressed."
Ian Marchant, CEO of Scottish & Southern Energy.
us. We must plan for a world in which oil prices are likely to be both higher
and more volatile
and where oil price shocks have the potential to destabilise economic, political
and social activity." Philip Dilley, Chairman of Arup.
technologies able to soften the blow of the energy crunch while abating climate
risk, given the chance. At one level, only two things are standing in the way:
a collective sense of urgency consistent with peak-oil risk, and effective yoking
of industry and government in strategic harness." Dr Jeremy Leggett, Chairman
The 2010 Peak Oil Report
Scottish and Southern Energy, Solarcentury, Stagecoach Group and Virgin – joined
together to launch the second report of the UK Industry Task-Force on Peak Oil
and Energy Security (ITPOES).
economic, political and social activity within five years.
the same way it was with the credit crunch and states that policies to address
Peak Oil must be a priority for the new government formed after the 2010 election.
individuals – major British companies and oil CEOs are now sounding the alert
are flagging the danger, in today’s report from the
of other senior oil industry figures, usually recently retired. Even the