A group fronted by Virgin CEO Richard Branson released a report this week warning that peak oil is not only real, but closer on the horizon than many might think. The Industry Taskforce for Peak Oil and Energy Security warns that demand for oil could outstrip supply as soon as 2015, a turn of events that would send ripples through nearly every economy and industry in the world. “We must plan for a world in which oil prices are likely to be both higher and more volatile and where oil price shocks have the potential to destabilize economic, political and social activity,” wrote Branson in the forward to the report. “Don’t let the oil crunch catch us out in the way that the credit crunch did.”
The task force recommended swift action from government and business to accelerate the “green industrial revolution,” as well as the creation of actionable contingency plans should an oil crisis take place before a movement away from petroleum is complete. It warned that even if immediate steps are taken, there is a risk of serious shock to the food, transportation, heating and retail sectors. As one of the world’s leading travel providers, Branson’s Virgin Airlines would stand to be hit particularly hard in the event of such a crisis.
Branson is just the latest billionaire to warn of an impending oil crisis. Everyone with a television set, radio or Internet connection is by now familiar with legendary oilman T. Boone Pickens’ warnings on the subject. “The oil just isn’t there—no technology can change that,” Pickens told Mother Earth News in January. “And with China and India pushing up the global demand, new discoveries just can’t keep up with it.”
Both men are of course heavily invested in the transition to sustainable energy. Branson said last year that he plans to invest about $400 million in renewable energy technologies, while Pickens has invested upwards of $60 million on media promotion of his “Pickens Plan” alone. His total investment numbers in the hundreds of millions of dollars.
In a matter of few years, peak oil has grown from a marginalized theory to a serious point of debate within the mainstream energy investment and business communities. In 2007, the United States Government Accountability Office published a report recommending that “the Secretary of Energy [take] the lead, in coordination with other relevant agencies, to prioritize federal agency efforts and establish a strategy for addressing peak oil issues.” The report stated that most experts expect peak oil production “sometime between now and 2040.”
From Peak Oil to… Peak Demand?
Meanwhile, the government of Saudi Arabia is warning of the complete opposite of a peak oil crisis: so-called “peak demand.” Citing fears of reduced demand from the developing world—due to the global economic downturn—and an industrialized world that is increasingly trying to move away from petroleum, the Saudis say they’re trying to diversify their economy to be less reliant on oil. “The concern about peak oil is behind us,” said Khalid al-Falih, chief executive of the Saudi state oil firm Aramco, at the World Economic Forum in Davos last month.
Still, most energy experts see reduced demand in the developing world as a short term correction rather than a long term trend, and there is little evidence that the world is on pace to replace a significant portion of its petroleum use with alternative energies in the near future. Even at face value, the Saudi position is about as far from mainstream consensus as peak oil theory was 10 years ago.