Last Updated Feb 11, 2010 4:27 PM EST
The UK Peak Oil Task Force, a group of six companies headed by Branson, warned the world will face an oil crunch as early as 2015, in a report released Wednesday, . Meaning, global production will reach its peak and supply will no longer be able to meet demand -- even if developing countries like China somehow cut back. This oil crunch will cause oil prices to rise and become more volatile and ultimately impact on everything from fertilizer to computers to clothes.
And the group isn't alone. The CEO of Brazil's state-owned oil company Petrobras warned last December that world oil production would peak this year. And Total's CEO has said the world will need to produce more than 100 million barrels a day within a few years and without more investment there won't be enough supply to meet demand.
The task force stops short of predicting an all-out Armageddon. But they do believe it will destabilize the economy and call for governments and businesses to invest in alternative energy sources that will lessen our dependency on oil. A video featuring two of the group's members, Will Whitehorn, president of Virgin Galactic and John Miles, chairman of Arup, a design and business consultant firm.
The task force, which includes transportation, solar, construction and utility businesses, will likely be called fear mongers hoping to cash in. After all, does a guy like Branson, whose in the business of selling space travel, have the right to wave the peak oil flag? Absolutely.
For one, I hate the argument that companies -- fossil fuel-based or clean energy -- are only talking about peak oil and reducing oil dependency because they are going to make a buck on it. The bottom line of virtually every industry in the world is linked to energy and its cost. Airlines may be more exposed to oil prices in the short-term, but ultimately it hits every business. A restaurant owner who relies on trucks to transport food and supplies are just as exposed to the trucking company.
Finally, the task force takes a common sense approach to the whole matter with some recommendations that are based in reality. It's not about stockpiling and planting root vegetables -- an image peak oilers have had a problem shedding. Instead they talk about energy efficiency and investment in public transportation and government support for alternative solutions like electric vehicles.
There is one item -- as The Oil Drum notes -- absent in the report's recommendations. Nothing in its 60 pages mentions putting a price on carbon as a way to reduce dependency on oil. Although the report's aim isn't so much about reducing greenhouse gas emissions as it's about oil supply.
Photo of Richard Branson from Virgin.com