Business leaders today welcomed a commitment by the Government to work with the private sector on contingency plans to protect the UK and its economy from the growing risk of rising oil prices.
It follows a meeting between Chris Huhne, Secretary of State for Energy and Climate Change, and representatives from the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES).
During the meeting, the Secretary of State agreed that the Department for Energy and Climate Change and ITPOES should work more closely together on peak-oil threat assessment and contingency planning. The collaboration should begin with a joint examination of concerns that global oil supply will begin to fall behind global demand within as little as five years – far earlier than previous widely-held assumptions.
While full details are to be agreed, Mr Huhne has indicated this would be the first step in the development of a national Peak Oil contingency plan. DECC has already begun to explore the likely damaging economic impact of rising oil prices, as reported in The Times.
Following the discussions with Mr Huhne, business leaders are also to seek engagement with the Treasury to raise their concerns over the economic consequences for UK businesses which are likely to result from the threat of energy security.
ITPOES Chairman John Miles said: “We had a very constructive meeting with Chris Huhne, and this is a positive step forward in the dialogue between business and Government. It is important that we work together to assess the short-term threat which confronts the national economy and the business climate in which we have to operate.”
“We must define the risks and develop sensible contingency plans. This means thinking critically about what we should be doing now if we knew that the oil price would soar over the next five years. Many of the possible courses of action could also help to accelerate our response to the parallel threat of climate change. We look forward to building on this commitment from Government to work together on developing practical plans to mitigate these risks.”
ITPOES member companies are Arup, Buro Happold, Solarcentury, SSE, Stagecoach Group and Virgin Group.
For the past three years, ITPOES has argued for proactive and rapid mobilisation against both the oil and climate-change threats through a coalition of government, business and consumers.
ITPOES released reports in 2008 and 2010 on the impact of peak oil on the UK economy, highlighting the complex factors above and below ground which will increasingly tighten the flexibility in the oil market over the next few years, and as early as 2015. ITPOES also produced a briefing note in November 2010 highlighting the risks to global oil supply from increasing exposure to deepwater oil production.
The UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) welcomed the Government’s new Carbon Plan as a “positive first step”.
However, the group said political instability in the Middle East, rising fuel prices and increasing uncertainty over oil reserves had heightened the urgency for action.
ITPOES said the private sector was crucial to ensuring the practical delivery of any strategy. It urged Ministers to adopt a closer and more collaborative working partnership with industry and use the forthcoming Budget to give a clear commitment to accelerate a range of low carbon initiatives, including the “Green Deal”, Green Investment Bank and protection of feed-in tariffs for renewable energy.
In a joint statement, ITPOES members Arup, Buro Happold, Kingfisher, Solarcentury, SSE, Stagecoach Group and Virgin Group said:
“For the past three years, we have been warning of the very energy security risks that have been brought into sharp focus by events in the Middle East. We have stressed the need for co-operative contingency planning and proactive risk-abatement and we remain extremely keen to work with the UK government.
“Recognition by the Coalition administration that we have a serious problem and moves to ensure a more joined up approach across government are a positive first step.
“However, the negative impact of our dependency on oil threatens to be far worse than the oil shocks of previous decades and the actions needed to tackle it are wider than just government.
“Business has a crucial role to play if we are to wean the UK off oil. We must work together to deliver a radical solution to the challenge of peak oil, and we hope this will be reflected in the forthcoming Budget with accelerated support for domestic and commercial low-carbon initiatives, including a low-carbon transportation strategy to reduce our oil dependency.”
ITPOES released reports in 2008 and 2010 on the impact of peak oil on the UK economy, highlighting the complex factors above and below ground which will increasingly tighten the flexibility in the oil market over the next few years, and as early as 2015. ITPOES also produced a briefing note in November 2010 highlighting the risks to global oil supply from increasing exposure to deepwater oil production. These reports are all available on this website.
For further information, contact Ben Richardson, Arup: email@example.com
A BBC news online article looks at oil prices and a rise in the price of goods.
“The prices of goods leaving UK factories rose at their fastest rate for 13 months in January, fuelled by a jump in the cost of oil, figures show.”
The FT Energy Source blog reviews comments by BP chief executive Tony Hayward.
Watchdog’s estimates of reserves inflated says top official
By Terry Macalister Guardian.co.uk, Monday 9 November 2009 21.30 GMT
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
The allegations raise serious questions about the accuracy of the organisation’s latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.
In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.
Now the “peak oil” theory is gaining support at the heart of the global energy establishment. “The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.
By Will Whitehorn, Virgin, and Jeremy Leggett, Solarcentury.
Last week, the government published a review of the UK’s energy security situation. In a report commissioned by the prime minister, Malcolm Wicks, the former energy minister, pronounced that “there is no crisis”.
His findings were in marked contrast to those of the UK Industry Taskforce on Peak Oil and Energy Security, which concluded last year that the economy faces a clear and present energy-security threat. The taskforce, a group that includes Virgin, Scottish and Southern Energy, Arup, Stagecoach and Solarcentury, was set up in 2007 on the basis of our shared opinion that peak oil merited serious study as a business risk. Some began with the assumption that the issue was low-risk but high-consequence. Sadly, we are now of the collective view that peak oil is a high-risk, high-consequence issue.
Companies across a broad spectrum of UK industry today aired their
concerns about a premature peak in global oil production, and the impact
that would have on the global economy, to a special session of the
UNCTAD Trade and Development Commission in Geneva. The companies,
members of the UK Industry Taskforce on Peak Oil and Energy Security
(ITPOES) are concerned that the oil industry collectively has its asset
assessment wrong in a systemic way, just as the investment banking
industry did in the run up to the global financial crisis. They fear
that the oil industry will be unable to meet the demands of an
oil-dependent global economy, even in the midst of recession, some time
in the early years of the next decade, with 2013 as a likely year for
the crisis to emerge. The International Energy Agency, which has warned
of an oil crunch within five years, shares such fears. ITPOES and the
IEA produced reports warning about this in the same week during October
Speaking to the UNCTAD delegates (presentation by videoconference
Tuesday 9am GMT), Dr Jeremy Leggett of Solarcentury said: “many people
in and around the oil industry are now warning of a premature peak in
global oil production. Investment in oil exploration and development is
being cut back in many oil companies, as a result of the credit-driven
recession, and this makes an oil shock all the more likely down the
track, even in the face of reducing oil demand during the current
recession. The scenario we fear is that just as the world begins to haul
its way out of a recession driven by financial crisis, so it will be
knocked back into another recession by an oil crisis. We are urging
governments to mobilise proactively by fast-tracking alternative energy.
This is needed anyway, to abate climate-change risk, and enact the green
new deals that so many governments talk about as a solution to the
financial crash. But peak oil is a whole new reason for action.”
Companies in the ITPOES taskforce include Virgin, Arup, Foster and
Partners, Scottish and Southern Energy, Solarcentury, and Stagecoach.
Taskforce chairman Will Whitehorn of Virgin added: “We have been trying
to get the message out to government, fellow corporates, and the public
ever since completing our report. Imagine if five years ago companies
worth billions, across a range of industries, had been warning of a
financial crash in five years time, and a major international agency
held the same view. In taking their advice, governments might have been
a chance to soften the landing come the credit crunch. Now we know whole
industries can have their asset assessment systemically wrong. Lets not
make the same mistake twice.”
MPs Back Solar Power for the UK and call for your support.
London, Friday 23rd January 2009: The UK Solar PV Manufacturers Association is today launching a new campaign to promote the use of solar power in the UK. The campaign We Support Solar has already attracted the support of MPs on all sides of the House of Commons, and is endorsed by campaign groups Friends of the Earth, the World Future Council, Greenpeace and the Green Alliance, as well as the European Photovoltaic Industry Association and Renewable Energy Association.
The launch of “We Support Solar” comes at a critically important time for the development of solar power in the UK with Feed-in tariffs for solar PV and other renewable electricity technologies due to be launched in a little over a year’s time. MPs endorsing the campaign include former Labour Ministers, Liberal Democrat leader Nick Clegg MP and Shadow Conservative Ministers Greg Barker MP and Bill Wiggin MP. The full list of Parliamentary messages of support for today’s launch can be viewed at: http://wesupportsolar.net/supporters/mps-support-solar/
Michael Meacher MP (Lab - Oldham West and Royton and former Environment Minister) said:
“Solar PV is a well established, proven and robust technology that has potential to make a significant contribution in the UK. Ed Miliband’s decision to introduce a feed-in tariff for solar PV and other small-scale renewable electricity technologies is potentially a real turning point for the UK solar PV sector. It gives the UK a vital new policy tool that should help to maximise the contribution from solar PV to our demanding renewable energy target.”
Steve Webb MP (Lib Dem Northavon and Shadow Work and Pensions Secretary) said: “Solar PV is a proven technology in the UK and one that can play a big role in making our towns and cities greener. That’s why we’re urging the Government to set appropriate feed-in tariff levels for solar PV, to encourage investment in the UK industry, to boost green jobs in British solar PV manufacturing, and to maximise the contribution that this technology can make to the 2020 target.”
Colin Challen MP (Lab Morley & Rothwell and Chairman of the All Party Climate Change Group) said: “As the UK gears up to delivering our 2020 target of 15 % renewable energy, we will need big contributions from all renewable energy technologies. Solar PV has immense potential in the UK. The Government’s welcome decision to introduce a feed-in tariff for solar PV and other renewable electricity technologies now needs to be followed with tariff levels that can actually drive forward these technologies quickly in the UK market.”
Peter Luff MP (Con Mid Worcestershire and Chairman Business and Enterprise Committee) said: “Both solar photovoltaics and solar hot water technologies have great potential in the UK. Solar energy can play a significant part in helping to deliver our 2020 renewables target. That’s why I’m very pleased to support this new campaign.”
Peter Hain MP (Lab Neath and former Energy Minister) said: “The vast potential of solar PV in the UK is undeniable. But what the sector needs above all else is a coherent, long-term policy framework that plays to the UKs strengths in building integrated PV and our solar design and engineering expertise. The UK can still be a global leader in solar PV with enormous benefits in terms of exports, jobs and investment for the UK economy.”
Welcoming the Parliamentary support for solar power, Andrew Lee of Sharp UK and the UK PV Manufacturers Association said: “We Support Solar” has been launched to raise the profile of solar power in the UK. Solar power is a proven, reliable, effective and easy to install technology. The Government’s own modelling suggests that it can make a significant contribution to the UKs 2020 renewable energy targets and at domestic level solar power is a highly cost-effective solution for delivering low carbon homes.”
Bruce Cross Chairman of the REA PV group said: “The Renewable Energy Association PV Group strongly supports the objectives of the ‘We support Solar’ campaign. Photovoltaics have a significant contribution to make to meeting the UK Renewable Energy Targets with the added benefit of creating employment opportunities. The government can encourage the growth of a strong UK PV industry by setting a suitable and sustained level of feed-in-tariff. This will establish market continuity and therefore create the climate for investment which UK PV companies need.”
‘We Support Solar’ is calling for those in support of solar, from individuals and businesses, to sign up on the website www.wesupportsolar.net. The group will shortly be announcing their recommendations for an effective Feed-in tariff (FIT) in the UK. Visit the website to learn more about solar and the benefits of a FIT.
George Monbiot meets Fatih Birol of the IEA
In the latest in the groundbreaking interview series, Britain’s leading green commentator tackles the International Energy Authority’s chief economist, who reveals for the first time a startling and worrying prediction for the date of peak oil.
Watch the video
Read the peak oil feature