COVER STORY
Peak oil
WHEN THE SUN
SETS ON
Oil prices have plummeted from $147 last July to a mer
OIL
e $40
a barrel. But, write David Strahan and Gary Kendall, this has
little bearing on the future of energy prices or the drastic
steps businesses will need to take as the wells run dry
T
hese days, it is comforting to have one and mid 2008 was stagnant, at around 86 mil- Analysts divide the oil-producing world
thing not to worry about. As the world lion barrels a day. So for three years the oil into two halves: OPEC (Organization of the
teeters on the edge of a full-blown supply was a zero sum game: the East con- Petroleum Exporting Countries) and the rest.
depression, and business is crushed between sumed more, and with production static, the Non-OPEC output has underperformed
slumping sales and seized-up credit markets, price of crude had to rise to force the West to against forecasts every year this century.
at least the oil price is in retreat. From a his- consume less. Under the circumstances, the Because it depends on production from
toric high of $147 a barrel last July to around oil price was a one-way bet. But in the past, regions that are increasingly mature, non-
$40 today, the price of crude has collapsed so rising demand has always been met by OPEC output is widely expected to peak by
quickly it is tempting to believe it means the increased output, so the key question is: why around the end of this decade (most observers
end of the energy crisis; that the spike was just did global oil production fail to grow? attribute the sharp jump in proved reserves of
some speculative aberration; and that all talk
of peak oil is so 2008.
It is true that the horizon has been utterly
transformed. Last year, the big issue keeping
many company bosses awake in the small
hours was rising energy bills – this year all
manner of competing spectres haunt their
sleepless nights. But to relegate oil simply
because the price has slumped is to misunder-
stand the causes of the recent spike and col-
lapse, and therefore the future outlook for
energy prices and what it means for business
and the climate.
It is commonplace to blame $147 oil on
booming demand in China and India, but that
is only one half of the equation. The other is
that global oil production between early 2005
22 May 2009 ❘ Sustainable Business
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36