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Act now on peak oil, say business leaders
Peak oil poses a far more immediate risk to the UK economy than climate change – but decisive action now could help address both challenges, says a group of leading businesses.
Their report, The Oil Crunch, warns that cheap, easily available oil production is likely to peak by 2013, sending the oil price soaring to levels well above this year’s $147 record. While some volatility may remain, high oil prices will be the dominant long-term trend.
This will affect industries from energy and transport to agriculture and manufacturing, threatening a series of “macro-economic shocks”, including surges in inflation and the balance of payments deficit, and reductions in consumer demand.
These will hit the UK well before the full force of climate change is felt, says the taskforce. In response, it argues, the government should prioritise action on peak oil – reversing its current emphasis on tackling climate change and energy security as the most important issues in the sector.
The taskforce comprises eight companies: Arup, FirstGroup, Foster + Partners, Scottish and Southern Energy, Solarcentury, Stagecoach Group, Virgin Group and Yahoo.
Specifically, it calls for the Department of Energy and Climate Change to develop a national plan on peak oil, with four key themes:
• Expanding exploration for and production of conventional oil (to help delay the ‘oil crunch’)
• Setting aggressive targets on energy efficiency
• Accelerating massive and immediate investment in renewables, including transport fuel
• Addressing the “dangerous shortfall” in skills and manpower across the energy sector
Although the plan’s goal would be to head off the economic disruption caused by peak oil, the taskforce insists it would also deliver substantial cuts in carbon emissions, which would drop by 47% by 2020. Oil use would fall by 5% per year during this period, and gas by 2% per year.
“The renewables industry is confident that 100% renewable energy supply is possible in 20-40 years,” says the report, adding: “They should be given the opportunity to prove it.” – Martin Wright