A group of business leaders will warn the UK Government today that more urgent action is needed from it to address energy issues following the Gulf of Mexico oil spill.
In a briefing into the impact of the oil spill, the UK industry taskforce on peak oil and energy security highlights that the regulatory ramifications are likely to result in the reduction of spare capacity and rising oil prices having an impact on the UK within five years.
The taskforce will call on the government to work with industry to develop a contingency plan that addresses the risk of peak oil and helps to reduce the UK’s dependency on oil by speeding up the switch to alternative energy sources.
Richard Branson, founder of Virgin Group, said: “The energy issues facing the UK are complex and there are so many potential risks to the global outlook for oil production that our government must take the problems very seriously.
“This year’s Gulf of Mexico disaster has increased the chances of an ‘oil crunch’ in the coming decade.
“This will lead to much higher sustained prices which will in many ways rival the impact of the credit crunch of 2007 on UK growth, jobs and stability.”
The briefing highlights the increasing importance of deepwater drilling to global oil supply. It is expected to constitute 29% of capacity by 2015, up from only 5% today.
Ian Marchant, chief executive of Scottish and Southern Energy, said: “The energy sector faces major challenges over the next decade with the need to ‘green’ the energy mix and maintain security of supply.”
Brian Souter, chief executive of bus and train operator Stagecoach Group, said: “Huge amounts of UK infrastructure, including almost our entire transport system, are dependent on oil.
“The Gulf of Mexico spill makes addressing this threat to our economy and society ever more urgent.
“The country cannot afford to delay action to support alternative technologies and incentivise behavioural change to protect business, consumers and our environment.”
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