Monday, July 12, 2010

Peak oil continues into the mainstream

Insurance giant Lloyd's of London has released a new report called Sustainable Energy Security: Strategic Risks and Opportunities for Business in which they have added their voice to growing recognition of an imminent energy crisis. Here are some of the headlines from the executive summary.

  • Market dynamics and environmental factors mean business can no longer rely on low cost traditional energy sources
  • We are heading towards a global oil supply crunch and price spike
  • Energy infrastructure will become increasingly vulnerable as a result of climate change and operations in harsher environments
  • Lack of global regulation on climate change is creating an environment of uncertainty for business, which is damaging investment plans
  • To manage increasing energy costs and carbon exposure businesses must reduce fossil fuel consumption
  • Business must address energy-related risks to supply chains and the increasing vulnerability of 'just-in-time' models
The third last one is ironic. One of the reasons for the failure of global regulation on climate change has been uncertainty about the effects on business of taking action. This report points out that taking no action is actually making the problem worse - not just the actual climate problem, but the economic problem!

When an insurance group decides it needs to tell businesses to cut their energy use, you know that this is no longer just the concern of nutters and conspiracy theorists.
H/T Graham.