Peak oil warning

“Catastrophic consequences” await companies that maintain business as usual when our world is certainly moving towards increased scarcity in oil and carbon output restrictions, says a recent report from Lloyds’ of London, a highly regarded insurance institution in the United Kingdom. 

India and China both will increase their demand for oil in the future.  Even if we haven’t seen the peak of oil production, demand, and thus prices, for fossil fuels will be much higher in the immediate future so businesses must change to “take advantage of this new energy reality.”  If companies fail to adapt, their collapse is guaranteed.   

This announcement from Lloyd’s of London is an interesting development in the climate change and alternative energy debate.  The stance held by many businesses in the insurance industry coincides with those of environmental advocates.  Insurance companies need their clients to be prepared for the changing energy and environmental situation because they fear increased losses in the form of rising claims related to property damage and business disruption. 

Lloyd’s of London, and the highly regarded Chatham House together criticized the International Energy Agency for consistently over-estimating crude output and under-estimating threats. 

Global demand for oil will only increase as we recover from the recession.  Professor Paul Stevens, a former economist from Dundee University, claims the price of crude could skyrocket to above $200 a barrel in 2013.  Brace yourselves for increased demand and decreased production.  On top of that, the insurance industry issued warnings as rare earth metals, vital to the development and implementation of clean energy, face increased shortages. 

The Lloyd’s report calls on governments to address the impending situation and further support the global carbon market.  This will provide companies with better options to adapt. 

More information can be found at Solve Climate.