Business warns of 'oil crunch'

19 November 2010
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19 November 2010 | Adam Leach

Delays extracting oil as a result of the Gulf of Mexico oil spill will pose a serious threat to the UK supplies.

The UK Industry Taskforce on Peak Oil and Energy Security, whose members include Virgin and Stagecoach, issued the warning in a briefing, Peak Oil: Implications of the Gulf of Mexico Oil Spill.

Its report says deepwater offshore production, such as the Deepwater Horizon operation, will be relied on to produce 29 per cent of new oil supplies by 2015 and that any delays could create “spare capacity falls and oil price rises”.

It believes the main threat to oil prices is increased safety and oversight as a direct result of the BP spill. The taskforce calculates that a six-month delay to future deepwater oil production would lower surplus oil supplies for 2015 from three million barrels to two million, creating increased demand and higher prices.

The briefing note was an update on the taskforce’s February report, which predicted that “the next five years will see us face another crunch - the oil crunch”.

The taskforce also stated its desire to work with the government “to develop a contingency plan that both addresses the risks of peak oil and speeds up our transition to a low-carbon economy”.

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