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Lloyd’s adds its voice to dire ‘peak oil’ warnings
Terry Macalister, Guardian
Business underestimating catastrophic consequences of declining oil, says Lloyd’s of London/ISS report
One of the City’s most respected institutions has warned of “catastrophic consequences” for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy.
The Lloyd’s insurance market and the highly regarded Institute of Strategic Studies (ISS, known as Chatham House) says Britain needs to be ready for “peak oil” and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming.
“Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences,” says the Lloyd’s and ISS report “Sustainable energy security: strategic risks and opportunities for business”.
The insurance market has a major interest in preparedness to counter climate change because of the fear of rising insurance claims related to property damage and business disruption. The review is groundbreaking because it comes from the heart of the City and contains the kind of dire warnings that are more associated with environmental groups or others accused by critics of resorting to hype. It takes a pot shot at the International Energy Agency which has been under fire for apparently under-estimating the threats,
(11 July 2010)
Will oil be coal?
Uday Gupt, Emirates Business (Dubai)
On the face of it, a bumper two decades lie ahead for oil exporting countries.
Led by relentless appetite from China and India, world demand is growing by a steady 1 to 2 % annually; even the Great Recession hasn’t been able to peg back the oil- hunger.
Peak Oil, a point where the world’s oil production tops off, may be around the corner, somewhere between now and 2025.
Add political uncertainty and speculative frenzy to the mix. The no-brainer result: bumper prices for the world’s primary energy source.
There is growing consensus that a barrel of oil at $100 (and plus plus at times), at constant 2008 prices, might be the norm for a large part of the next 20 years.
For a foretaste of possible hubris, look no further than the world’s last primary energy source: coal.
… With Governments, big business, big money and concentrated international brainpower now searching for answers insistently, how long before the alternatives match, or better, the oil-based originals? How long, after that, for the coal-ing of oil? Food for thought indeed, for the GCC.
The author is a senior executive with the National Bank of Abu Dhabi. The views expressed are his own and not those of his bank.
(11 July 2010)
With Governments, big business, big money and concentrated international brainpower now searching for answers insistently, how long before the alternatives match, or better, the oil-based originals? How long, after that, for the coal-ing of oil? Food for thought indeed, for the GCC.
The author is a senior executive with the National Bank of Abu Dhabi. The views expressed are his own and not those of his bank
India cuts gas subsidy in favor of greener investments?
Warren Karlenzig, Post Carbon Institute
Is India trying to turn a corner toward more sustainable economic development with its recent reduction in fossil fuel subsidies?
India’s decision to completely cut gasoline subsidies last month has created national protests, as new unsubsidized gas prices rose to about $4.60 a gallon. The country has also reduced subsidies to natural gas, diesel and kerosene, all to balance a budget and reportedly redistribute money for economic development, including the planning of cities with more sustainable energy and transportation.
Gasoline will no longer be sold below cost by producers and retailers in India, as it had been until the late June announcement was made to end the subsidies, which have been cut $5.2 billion. That leaves the remaining government and state owned fuel companies subsidy spending at about $11.5 billion this fiscal year.
India has embarked on a program to develop new and greener cities, and to redesign existing cities for greater sustainability as its urban population swells in the wake of a national population that is forecast by the United Nations to surpass China’s population by 2030.
The nation is moving from its agrarian roots to a service-based economy that has been boosted by the rise of the companies in information technology, health care and other professional services.
(9 July 2010)
Peak oil postponed again
Ambrose Evans-Pritchard, Telegraph blogs
So there is plenty of oil and gas after all. Prices will bumble along gently until well into the next decade. We are becoming more efficient in our use of energy, with 3pc extra savings annually. That is a faster pace than the rising real cost of fuel. Mankind will not run out of fuel for a very long time.
That at least is the story today from the International Energy Agency. Their medium-term outlook for fossil fuel markets is a dazzling contrast with last year’s warnings that a combination of break-neck industrialisation in China and lack of investment in new oil fields (thanks to the credit freeze) would exhaust global spare capacity by 2013.
The IEA said then that we would need “four new Saudi Arabias” within a generation to cope with the rise of China, and there were no such Saudi Arabias in sight. Such are the perils of forecasting the volatile variables of supply and demand for oil…
…I reserve my judgement on this. The energy market is infuriatingly opaque. But on balance, I think IEA was closer to the truth last year.