5 Years From Now Peak Oil Pinch Could Devastate the UK Economy, New Report Warns

oil supply versus demand graph image

Here's today's addition to the growing list of groups and people warning that the problems that financial recession may bring will pale in comparison to the coming nexus environmental and energy problems. (I won't say describe them as crises, as we throw around that word that it's become lessened in impact.)

Peak Oil Greater Threat Than Terrorism
A report titled The Oil Crunch says that the risk to the UK from peak oil, is greater than that from terrorism, and has potentially devastating consequences for the UK economy. Published by the Peak Oil group (which counts Virgin, Stagecoach and Scottish and Southern as members), here are the report's key findings and recomendations:

new oil supply graph image

Demand Outpaces Supply by 2013, New Discoveries Can't Keep Up
As you can see from the graph at the head of this post, past 2013 demand will begin outpacing supply by a large margin. The reason for this can be summarized as follows:
All is not well with the discovery and production of conventional oil -easy-flowing crude [...] The production figures of all the five major international oil companies have been falling for five consecutive quarters. The steepest fall was in the last quarter, despite a collective $44bn profits in that three month period. Where the international oil companies now sit, the national oil companies — the largest oil companies in the world, controlling some 80% of global production - can easily follow. Old oilfields and provinces are showing today that local and regional oil production can descend very fast beyond peak-production, even where the best enhanced-oil-recovery techniques are applied. We conclude that global oil production may well descend fast too, once we reach the peak.

To counter this, the report makes the following recommendations:

Admit There is a Problem
1) The UK government must face up to the reality of peak oil and plan accordingly.

Use What Fossil Fuels We Have, Increase Renewables, Maximize Energy Efficiency
2) Any energy plan designed to deflect the worst of peak oil must: expand exploration and production of conventional oil and natural gas; maximize energy conservation and energy efficiency; accelerate adoption of renewable energy technologies; and, develop a national skills program to address shortfalls in the manpower needed in the energy industry.

Sustainable Transportation
3) Furthermore the follow things need to be done: Develop a sustainable transportation policy based on reduced use of fossil fuels and increased use of sustainable biofuels and electric vehicles; support efforts to make the industry prediction of 100% renewable energy within 20-40 years a reality; and, the "government should ensure that uncertainties over the nuclear renaissance should not act as barriers to the mobilization of energy efficiency and renewables."

International Efforts
On the international level the report 1) calls on all oil companies and governments to be more transparent in their reporting of oil reserves; 2) urges all governments to act together in dealing with oil depletion and climate change, post-Kyoto; 3) advises that unconventional oil sources (oil shale, tar sands) should not be exploited if their net carbon footprint is higher than that of conventional oil (which by all accounts is true); 4) calls on all governments to create their own national peak oil action plans, at the heart of which should aim to "accelerate the green industrial revolution already underway".

As you might imagine, there is far more in this report that I can summarize in a typical TreeHugger post. Please download the full Oil Crunch report and examine it.

It is truly impossible to overstate the havoc—financial, social, cultural—that could be brought about by peak oil if sufficient renewable energy is not in place to make up for declines in fossil fuels.

Peak Oil
Matt Simmons: Peak Oil Will Dwarf Financial Crunch Soon
The Ultimate Race: Peak Oil versus Global Warming
Shell CEO Admits Peak Oil Could Be Here in 7 Years

Related Content on Treehugger.com