Oil shortage 'bigger threat to UK than terrorism'
A global shortage of oil within five years poses a bigger threat to the UK than terrorism, an industry group has warned.
By David Millward, Transport Editor
It will also see prices soar to far higher levels than the $147 a barrel peak of July, which saw the country's motorists paying 119.7 pence a litre for petrol.
The warning of a looming energy crisis has been made by the UK Industry Taskforce on Peak Oil and Energy Security, an alliance of eight companies drawn from across the economy.
It has predicted that the availability of cheap oil will slump after 2013, with a devastating impact on the British economy.
In recent months the price of oil has dropped because of the downturn in demand from industrial countries.
Gordon Brown has convened a London conference of 38 oil producing countries to discuss in December.
Last week the 13-nation OPEC oil cartel tried to push prices back up by announcing a production cut of 1.5 million barrels a day.
But there are growing fears that the fall in the cost of oil over recent months has been a temporary respite.
In its report the taskforce says Britain must prepare itself for fresh price increases and the impact it will have on the economy.
More expensive oil will push up the rate of inflation because of the rising cost of manufacturing and delivering goods. Food will also become more expensive.
It has warned the Government that the impact of an energy shortage will be felt far earlier than climate change.
"The first report of the Taskforce is a balanced look at the energy risks and opportunities we face," said Will Whitehorn, chairman of the group.
"It is also a wake up call to the urgent actions required in the UK and other major global economies to overcome the consequences of the end of the era of cheap oil.
"The current financial and economic crisis provides a real opportunity for the British Government to lead the world in renewable investment whilst the oil and other commodity prices remain suppressed in the short term by weaker demand."
Another member of the taskforce, Brian Souter, the chief executive of the bus and train conglomerate, Stagecoach, said the Government should respond to the crisis by persuading people to switch to public transport.
"We need more effective partnerships, greater leadership and more bold and imaginative pro-public transport policies from local and national politicians.
"That has to be supported by more investment in the quality and capacity of country's rail and bus network infrastructure if Government is serious about making the UK a more sustainable country in which to live, work and travel."
Jeremy Leggett, another member of the group, said society had become oil dependent.
"What we are warning of is a peak in production beyond which will be a fall, potentially a rapid fall, and that will mean a global energy crisis if the analysis is correct," he said.
"When they fail to meet demand, many countries will experience this as an energy crisis. Some will experience it as an energy famine, as producers start to withhold exports."
Earlier this month Gordon Brown told MPs that Britain was trying to increase North Sea oil especially in marginal oil fields and those which had been explored but were not exhausted.
At the same time Britain is committed to producing 15 per cent of its energy from renewable sources by 2020.