Richard Branson, founder of the Virgin Group, is of the opinion that in 5 years time, the world will see an oil crisis more acute than the present credit crisis. Oil companies such as BP and producers such as Saudis are rubbishing the claims. But, Branson and other dissenting voices say that the world will have to cope with the peak oil issue within the next five years. According to their assessment – as the recession dies out, the demand for oil will spike, reserves and surplus will be used up by growing demand and then the peak oil issue will come to head and prices will soar resulting in crippled economies and spiralling prices.
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Branson warns that oil crunch is coming within five years
Have Branson and co. got it right, or are the oil companies & producers correct in claiming that these assessments are wrong? Time will tell. However, if a comprehesive study of the issue is not undertaken NOW and the public at large given an honest appraisal of the findings, then by the time “time will tell” comes around, it may well be too late. Panic mongering or denial? Why not study the problem now and reach a coherent consensus on the issue, rather than ignoring the issue and then later having to suddenly cope with a major crisis affecting millions of people across the globe.
LONDON, Feb 10: The world faces an oil supply crunch within the next five years, British business leaders led by Virgin tycoon Richard Branson warned on Wednesday.
The rate at which oil is produced risks hitting a peak by 2015, sparking a surge in crude prices and living costs, said a report from the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES), of which Branson is a member.
The report, entitled ‘The Oil Crunch a wake up call for the UK economy’, urged the formation of new organisation to address the issue, with members representing the British government, businesses and consumers.
“The UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity potentially by 2015,” the report said.
“Peak oil refers to the point where the highest practicable rate of global oil production has been achieved and from which future levels of production will either plateau, or begin to diminish.
“This means an end to the era of cheap oil,” added the report from the taskforce, whose members include British tycoon Branson and Ian Marchant, head of Scottish & Southern Energy.
ITPOES forecast global oil output would reach a plateau at fewer than 95 million barrels per day potentially by 2015. That compared with 2008 global production of 85 million bpd.
“The taskforce states the impact of peak oil will include sharp increases in the cost of travel, food, heating and retail goods,” the report added.
“It finds that the transport sector will be particularly hard hit, with more vulnerable members of society the first to feel the impact.”—AFP