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31 Oct 2008 05:10:13

End of cheap oil 'in five years'



End of cheap oil 'in five years'
Cheap oil could run out over the next five years and the government should take action to seize the economic and environmental opportunities this situation presents, according to a group of eight important businesses.

Companies in the Peak Oil Group, which on Wednesday launched a warning report entitled The Oil Crunch: Securing the UK's energy future, warn that the global oil supply will soon fail to meet demand, after reaching its peak in 2013.

The report, backed by companies such as Scottish and Southern Energy, Yahoo and Stagecoach Group, claims that the peak is much closer than anticipated and that steps need to be taken to speed the transition away from a fossil-fuel dependent economy.

According to the report, the widespread use of oil is understandable because "the energy locked into one barrel of oil is equivalent to that expended by five labourers working 12 hour days non stop for a year".

However, as the cheap, easy to extract and produce oil becomes scarcer, the price will rise with consequences for the economy.

The report also expresses concern that the peak oil crisis will overshadow the climate change crisis and anticipates that it will lead to calls for the production of carbon-intensive energy sources.

It urges the government to ensure that responses to peak-oil are 'carbon-constrained'.

In the foreword, former Shell chairman Lord Ron Oxburgh, notes that it is not the shortage of oil but the shortage of cheap oil that will hit.

As evidence of the decline of easily accessible oil Chevron has started development in fields considered 'mediocre'.

Major oil companies such as ExxonMobil, Shell and BP have announced rising profits this year on the back of oil prices which in July soared to nearly $150 a barrel.


http://www.peakoiltaskforce.net/


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