2010 The Oil Crunch: A wake-up call for the UK economy - Second report of the UK Industry Taskforce on Peak Oil & Energy Security (ITPOES)
Organisation: UK Industry Taskforce on Peak Oil & Energy Security (ITPOES)
Publish Date: February 2010
Country: United Kingdom
Tags: Oil peak, General policies, Transportation, Power generation, Alternative technologies
The second report of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity potentially by 2015. Peak Oil refers to the point where the highest practicable rate of global oil production has been achieved and from which future levels of production will either plateau, or begin to diminish. This means an end to the era of cheap oil. The report, “The Oil Crunch - a wake-up call for the UK economy”, urges the formation of a coalition of government, business and consumers to address the issue. The Taskforce states the impact of Peak Oil will include sharp increases in the cost of travel, food, heating and retail goods. It finds that the transport sector will be particularly hard hit, with more vulnerable members of society the first to feel the impact. The Taskforce warns that the UK must not be caught out by the oil crunch in the same way it was with the credit crunch and states that policies to address Peak Oil must be a priority for the new government formed after the election. Having assessed the systemic changes caused by the global economic recession, coupled with the projected growth from non-OECD countries, ITPOES predicts Peak Oil will occur within the next decade, potentially by 2015 at less than 95 million barrels per day. (In 2008, production levels were 85 million barrels per day.) The study finds that the recession has delayed the oil crunch by two years. This provides invaluable time to plan for a future which will see structural increases in oil prices coupled with shortages and increased market volatility. The UK will be particularly badly hit by these factors with a tightening of supply leading to greater oil import dependency, rising and volatile prices, inflationary pressures and the risk of disruption to the transport system.