Branson’s Virgin Group gets into peak oil

February 12, 2010

Dire predictions tend to grab the attention – especially when an international celebrity lends a voice.

A report released in Britain this week with the unpromising title — the UK’s Industry Taskforce on Peak Oil & Energy Security – might have found only a specialised readership, but for the inclusion of Richard Branson’s Virgin Group in the six-member task force.

(The others were Arup, Foster & Partners, Scottish and Southern Energy, Solarcentury and Stagecoach Group.)

As it was the warning that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity within five years was splashed across the press.

Advocates of the peak oil supply theory have long argued world oil supply is nearing a peak from which it will decline, leading to skyrocketing prices. Some of them have reckoned the peak could be as early as this year.

They have had publicity in the past, but not quite on the Branson scale.

So far, the other side of the peak debate has yet to find celebrity backing, although it is quietly earning more adherents, who are asking whether demand rather than supply will be the first to run out as climate change policies change energy consumption habits.

The Paris-based International Energy Agency, which advises 28 governments including the UK — said on Thursday oil demand, rather than supply, looks to have peaked in the developed world. If true, that would ease any strain on supplies that may develop in future and is a more reassuring message – provided of course you don’t own or work at an oil refinery in Europe or you’re not a major oil exporting country.

So who is right? Time will tell, but future expectations for the oil price do not yet suggest extreme concern about supply.

Investors expect the price of crude to trade at $95 a barrel in December 2018. That is around $20 more than the present level, but still some way short of the record high reached in 2008 near $150

Comments

The developed world’s demand for oil has seemingly peaked because of our present economic recession. If we live in this recession for 5-10 years and we start implementing new energy technologies now, we could avoid destabilization. So where are these new energy initiatives? Why, they are waiting for the price rise in oil to make their use profitable.

Catch-22. If our economies improve we are going to be hit with Peak Oil. If our economies remain in a recession, we are going to delay using new energy systems and be hit with Peak Oil in 10 years.
Either way the future of earth is going to be very unstable for some time to come. Energy will be very expensive.

Peak Oil is here and we need to do something drastic about it now.

Posted by Workonthis | Report as abusive
 

Oil is one commodity whose supply is limited and demand is set to increase once global economy emerges out of the current slow down phase. The bounce that has witnessed from the lows in oil prices during the last few months is a clear indication towards this scenario. Its better to act now than too late, as both consumption and investment demand could result in new spikes in oil prices.

Its hight time that we concentrate more on renewable and alternate energy sources and reduce our dependency on carbon based fuels.

Richard Branson’s Virgin group has been strong advocates of efficient and cleaner energy policies. Hope other corporates around the globe will follow them soon.

Posted by Navaneeth | Report as abusive
 

To someone in the industry, the “Peak Oil” studies compares to the late arrivals of St.Clause.

The problem may be that little new oil-fields have been discovered, but contrary to all belief, the expensive development in the North Sea resulted in technology that raises the recovery rate of what is down there at least 10 times. So, while the old theories assumed that five percent (5%) of the reservoirs are recovered, the current figure is well above fifty percent (50%). I have seen fields increase recovery rate and quantity by more than fifteen times.
So: it is back to the old dry wells and unplugg them, they can produce much, much more.

Posted by knut | Report as abusive
 

Yes, more oil, but more expensive drilling. Not a change to the overall scenario. Demand is still Malthusian.

Posted by mmmggg | Report as abusive
 

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