After Gulf spill, peak oil risk grows

Despite the progress we’ve made in expanding renewable energy supplies, we’re simply not moving fast enough right now to make a difference when it will matter. And we’re not just talking about bringing down carbon emissions to avoid dangerous climate change. We’re talking about having a Plan B ready should Plan A — fossil fuels — suddenly begin to fail.

Some large corporations — among them, Virgin Group, Solarcentury, ARUP, Scottish and Southern Energy and Stagecoach Group — have been warning for some time about the potentially dramatic impacts peak oil could have on the UK in particular. And they’ve long expressed concern that the British government hasn’t taken that risk seriously enough.

“This is a group of industries that think this is a huge systemic threat to markets,” says Jeremy Leggett, executive chairman of Solarcentury, a London-based solar energy firm and a member of the UK’s Industry Task Force on Peak Oil & Energy Security (ITPOES).

Now, the top people at ITPOES have even greater cause for concern. In their latest briefing, released today, they’ve analysed the implications of last summer’s BP Macondo deep-sea well disaster in the Gulf of Mexico for potential future oil supplies, and the answers aren’t reassuring.

It’s not the leak itself that has the task force worried. The oil supplies lost by the long-awaited capping of the leaking Macondo well would have amounted to just 0.2 per cent of the globe’s expected new petroleum capacity by 2015. Instead, it’s the new legislation, tightening of regulations and stricter inspections expected to come into play in the aftermath that could very well cause a slowdown in the rate at which new oil production from deepwater wells might come online.

And with our growing dependence on deepwater drilling, even a six-month delay in bringing new wells online could make a significant dent in spare capacity. That’s because, in just five short years, 29 per cent of our new supplies will come from wells deep under the oceans … as opposed to 5 per cent today.

ITPOES isn’t taking a position on whether or not post-Macondo laws and inspections should change. But it is urging the government to start drafting plans for how to respond to an oil crunch, whether it’s caused by regulations or anything else.

The previous government, after long years of dismissing the possibility of peak oil, did eventually hold a summit to discuss the issue. And officials with the new coalition are in contact with ITPOES members regularly. Whether that means they’re ready to take action of any kind yet, though, is another matter.

“It’s too early to say,” says Leggett. “At the minimum, we want them to draft a contingency plan,” he adds, explaining that the government should have an idea what to do on day one, week one, month one of a possible oil crunch.

“We know of no such plans,” he says.

ITPOES, joined most recently by new members Kingfisher and Buro Happold, is also urging a more rapid push toward clean energy and away from fossil fuels.

“Our primary purpose is to blow a whistle,” Leggett says. “This is a risk issue.”