Should we prepare for Huge Increases in Oil and Gas Prices?

I wrote my blog the other day without knowledge of this article being published in the Independent on Sunday. Seems I am not the only one thinking upon these lines.

Oil industry 'sleepwalking into crisis'
Former Shell chairman says that diminishing resources could push price of crude to $150 a barrel

Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."

In an interview with The Independent on Sunday ahead of his address to the Association for the Study of Peak Oil in Ireland this week, Lord Oxburgh, one of the most respected names in the energy industry, said a rapid increase in the price of oil was inevitable as demand continued to outstrip supply. He said: "We can probably go on extracting oil from the ground for a very long time, but it is going to get very expensive indeed.

"And once you see oil prices in excess of $100 or $150 a barrel, the alternatives simply become more attractive on price grounds if on no others."

Lord Oxburgh added that oil majors must invest more heavily in developing viable alternatives to oil and gas. "If you look at it from oil companies' point of view, effectively what they're doing at the moment is continuing business as usual, and sticking their toes in the water in a number of areas which might become important in future.

"But at present there is a relatively poor business case for making significantly greater investment in these new areas."

Commenting on whether "peak oil" – the point when global oil production goes into terminal decline – was likely to be reached in the near future, he said: "In a way it scarcely matters; what really matters is the gap between production and demand. I don't know whether there is going to be a peak in world oil production, whether it's going to plateau and then slowly come down.

"It could well plateau within the next 20 years, and I guess I would be surprised if it hadn't."

By David Strahan and Andrew Murray-Watson
Independent Newspaper - 17th September 2007


A gradual change in the way we live will help ease our path to these inescapable facts. What can we do now?

1. Insulate the house and lower the central heating thermostat 1 degree.

2. Buy a smaller, ideally diesel engine car, drive slower, accelerate more gradually.

3. Car share to work. 71% of UK employees go to work by car. (RAC survey)

4. Make a habit to walk and cycle short journeys.

5. Replace light bulbs with low wattage types - they are now getting much cheaper.

They also last much longer!

These suggestions not only make financial sense, but will help reduce co2 emissions and global warming rates, thereby impacting upon climate change.

Small changes that will make a long term difference. Most habits are sub-conscious, so perhaps the answer is to try to adopt some good ones?

Denny