Lloyd's adds its voice to dire 'peak oil' warnings  

Posted by Big Gav in

The Guardian has an article on concern about peak oil being voiced in the UK - Lloyd's adds its voice to dire 'peak oil' warnings.

One of the City's most respected institutions has warned of "catastrophic consequences" for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy.

The Lloyd's insurance market and the highly regarded Institute of Strategic Studies (ISS, known as Chatham House) says Britain needs to be ready for "peak oil" and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming.

"Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences," says the Lloyd's and ISS report "Sustainable energy security: strategic risks and opportunities for business".

The insurance market has a major interest in preparedness to counter climate change because of the fear of rising insurance claims related to property damage and business disruption. The review is groundbreaking because it comes from the heart of the City and contains the kind of dire warnings that are more associated with environmental groups or others accused by critics of resorting to hype. It takes a pot shot at the International Energy Agency which has been under fire for apparently under-estimating the threats, noting: "IEA expectations [on crude output] over the last decade have generally gone unmet."

The report the world is heading for a global oil supply crunch and high prices owing to insufficient investment in oil production plus a rebound in global demand following recession. It repeats warning from Professor Paul Stevens, a former economist from Dundee University, at an earlier Chatham House conference that lack of oil by 2013 could force the price of crude above $200 (£130) a barrel.

It also quotes from a US department of energy report highlighting the economic chaos that would result from declining oil production as global demand continued to rise, recommending a crash programme to overhaul the transport system. "Even before we reach peak oil," says the Lloyd's report, "we could witness an oil supply crunch because of increased Asian demand. Major new investment in energy takes 10-15 years from the initial investment to first production, and to date we have not seen the amount of new projects that would supply the projected increase in demand."

2 comments

Hmm, this is interesting to see this particular big business sound the alarm of peak oil. Maybe it will legitimize the position a bit more?

By the way, don't mean to be a pest, but you misspelled "concern".

Anonymous   says 7:00 PM

So if we look at the list, we have hubbert proved right, U.S, U.K, Mexico, Indonesia, Russia?, Saudi Arabia? Venezuela? who have all peaked, the U.S military, Richard Branson, an independent German energy watchdog and numerous independents with enormous experience in this area, Now lloyds, one of the oldest industrial institutions around. Who else needs to state the facts?

Anyway, the solution, at micro and macro level, is the Industrial hemp plant. Scale it up, and you can generate enough methanol for transport, keep it local and you can feed, clothe and heat a community. Its time to grow up and realise that we have a wonderful future ahead of us, all we have to do is drop our hang ups about plants like hemp, which are about the only practical alternative to a sharp shock to our society.

Fossil fuels have been the hall mark of an ego driven culture, no-one is truly individual, we are all a community, and have to abide with nature. The irony is, using hemp in a big way would mean almost infinite growth, as we wouldn't run out, and could become more efficient.

Peace

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