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.