The British economy is unprepared for the consequences of peak oil, a group of British businesses warns today. While the recession has delayed it by around two years, an oil crunch should still be expected before 2015.
That’s the message from the Industry Taskforce on Peak Oil and Energy Security (ITPOES) who released their second report today. The Oil Crunch: A wake up call for the UK economy forecasts rising demand for oil, and falling supplies as more accessible sources of oil begin to run dry. The result would be a price squeeze on consumers that could tip the economy back into recession.
In response, the report calls for urgent action to prepare for the crisis.”Let’s not let an oil crisis take us by surprise” said Richard Branson, founder of the Virgin Group. Jeremy Leggett of Solarcentury spoke of a “cultural failing”, drawing parallels to the credit crunch, where industry insiders and journalists blowing the whistle on derivatives were dismissed as ‘alarmists’.
Specifically, ITPOES recommends greater investment in public transport, incentives for renewable energy, and measures to protect poorer households from energy poverty. Surprisingly for a group that includes an airline, the report also calls for an end to the £9 billion a year tax break on domestic aviation. Most importantly, the government needs to acknowledge the problem and begin to work with business to find solutions.
MP Chris Barton of the Department for Energy and Climate Change, has defended the government’s record. “We are taking action to mitigate these risks,” he told the business leaders in a short statement this morning, pointing to the recent Low Carbon Transition Plan. Make Wealth History readers may remember that the Low Carbon plan makes almost no mention of peak oil. The government’s stand on peak oil is best summed up in the recent Wick’s Report on energy security, which boldly claimed that “there is no crisis” in the very first paragraph.
The Industry Taskforce on Peak Oil and Energy Security is comprised of several key businesses, including Scottish and Southern Energy, Virgin Group, the Stagecoach group, and renewable pioneers SolarCentury. Their 2008 report, The Oil Crunch, was the first business-led study of peak oil.