Business leaders predict 'global oil supply crunch and price spike'
by Matthew Wild
The Chief Executive Officer of insurance giants Lloyds is warning that the world is facing a “period of deep uncertainty” over the decline of fossil fuels – and may soon be coping with $200-a-barrel oil.
It may be hard to believe now, writes Dr Richard Ward in his introduction to a “stark” report just published by Lloyds and an influential UK think tank, but that’s because “the bad times have not yet hit.” He warns business managers to be ready for “dramatic changes” as oil, gas and coal supplies will soon be “less reliable and more expensive.” The world “has entered a period of deep uncertainty in how we will source energy for power, heat and mobility, and how much we will pay for it,” he states.
And that’s just CEO Ward’s introduction. The rest of the report does not disappoint.
Titled Sustainable Energy Security: Strategic Risks and Opportunities for Business, it urges business leaders to adopt a “transition to a low carbon economy.” Those that do will thrive; the report talks of opportunities for forward-thinking managers that “prepare for and take advantage of the new energy reality.” However, “failure to do so could be catastrophic.”
Lloyds, which provides business services in more than 200 countries and territories (reporting profits of 3.9 billion UK pounds in 2009) produced this report with Chatham House, a London, England “world-leading source of independent analysis, informed debate and influential ideas.” Formerly know as the Royal Institute of International Affairs, Chatham House is independent, but works closely with the British Parliament. For instance, the organization facilitated the March 2010 meeting between British energy ministers and peak oil proponents.
...Time and space considerations prevent me from looking at the climate change sections in Sustainable Energy Security, but needless to say, they are equally well put together.
I cannot recommend this report highly enough. It’s a complete introduction to the whole peak debate. Sustainable Energy Security is an essential, must-read document.....
I’ll leave you with just two of the document's conclusions:
Traditional fossil fuel resources face serious supply constraints and an oil supply crunch is likely in the short-to-medium term with profound consequences for the way in which business functions today. Businesses would benefit from taking note of the impacts of the oil price spikes and shocks in 2008 and implementing the appropriate mitigation actions. A scenario planning approach may also help assess potential future outcomes and help inform strategic business decisions.
Energy infrastructure will be increasingly vulnerable to unanticipated severe weather events caused by changing climate patterns leading to a greater frequency of brownouts and supply disruptions for business. This throws out a critical challenge to energy providers, investors and planners in terms of choosing the location of new infrastructure and fortifying existing plants and networks. Those businesses for which uninterrupted access to energy is of fundamental importance should actively consider investing in alternative energy supply systems.