The Oil Crunch

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Publication date: 2008-10-29
First published in: UK Industry Taskforce
Authors: UK Industry Taskforce on Peak Oil and Energy Security


The main conclusions of the Taskforce are:

1. The effects of peak oil will be felt in the next five years – during the next term of government

  • High oil prices combined with the credit crunch had a profound effect on the UK economy this year. The UK needs to plan for the impact of this scenario in the longer term.
  • In the absence of strong proactive action, the Taskforce anticipate oil prices much higher than the existing record of $147 by 2013.

2. The risks to UK society from peak oil are far greater than those that tend to occupy the Government’s risk-thinking, including terrorism

  • As easily and cheaply available oil supplies fall off, high oil prices will become a long-term trend having profound direct and indirect economic impacts:
  • Increased oil-based input costs for manufacturing and agriculture
  • Increased transport costs throughout the supply chain
  • Wider macroeconomic shocks via higher inflation, the balance of payments deficit and reduction of consumer demand.

3. The UK Government needs to re-prioritise peak oil – as the impacts are more likely to arrive first – before climate change

  • Currently the Government places climate change as the priority for policymaking, followed by energy security, with peak oil in the last place.
  • In contrast, the Taskforce analysis is that peak oil is more of an immediate threat to the economy and people’s lives than climate change, grave as that threat is too. A rapidly falling supply of oil is likely to hit us before the worst impacts of the greenhouse effect. The Government needs urgently to reflect this threat in their analysis and planning.

At this critical turning point the Taskforce now urgently calls on the Government to:

1. Prioritize the peak oil threat and develop a strategy to address it

  • Ed Miliband’s new department needs to develop a national energy plan that acknowledges the imminent threat of peak oil and addresses the entire energy sector.

2. Dramatically and rapidly increase investment in clean energy and renewables

  • Policies in the UK Renewable Energy Strategy must go well beyond the EU targets for renewable energy (currently 20% of the energy mix by 2020).

3. Develop and implement a long-term sustainable transport policy, with renewable energy sources at its heart

  • Increase transport fuelled by sustainable bio-liquids and electricity and escalate measures to reduce the amount of fossil-fuel-based road transport.

Published on: 29 October 2008
Available from: Peak Oil

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