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Peak Oil: Be prepared

www.sustainable.org.nz

Peak Oil: Be prepared

29 August 2005

We are not running out of oil yet – but we are running out of cheap oil. The Peak Oil scenario describes the point where half of any given oil supply has been used. Production rates fall rapidly after the peak –the date of which only becomes apparent after it has passed. Once the peak occurs, extraction becomes increasingly more difficult and expensive. Set against a backdrop of rising demand, this falling production means that prices will skyrocket.

The “science” of oil exploration is notorious for its uncertainty which has resulted in a range of predictions about when global oil production will reach its peak. Some of the more pessimistic scientists say that the peak has been reached already. “We now find one barrel of oil for every four we consume” says the geologist and peak-oil expert Colin Campbell. Even the more optimistic analysts such as those employed by Shell concede that the oil peak might be reached by 2025 or beyond.

But will an oil peak necessarily be bad news? The threat of climate change alone should inspire us to shift towards cleaner energy sources. Such a shift poses risks, but also opportunities for the business community.

The concept of Peak Oil and the implications it has for business is gaining more attention on the business agenda. The Sustainable Business Network is a membership based network that is proactively looking at many issues facing business today, including our reliance on fossil fuels. David Cunliffe, Minister of Communications, and Green Party Co-Leader Janette Fitzsimons were invited to discuss the topic of Peak Oil and its implications for business in New Zealand.

“To plan early is a wise thing to do,” said Cunliffe. He highlighted how sustainable businesses sometimes drive environmental policies, as was the case with CFC’s. Fitzsimons acknowledged the SBN’s role in leading businesses towards sustainability and showing that being environmentally friendly and being profitable are not mutually exclusive.

Cunliffe emphasised the need for transport sustainability, saying that if reelected, cabinet would be considering a paper that will include a range of incentives for low emission vehicles. Janette Fitzsimons proposed a “feebate” on newly registered cars, whereby people with the cleanest cars could save up to $200 a year. With regard to electricity, the Green Party Co-Leader stressed the importance to shift towards renewable energy sources rather than coal power stations. After all, climate change is an even bigger threat than the end of cheap oil. “We can live without oil, but we can’t live without climate” said Fitzsimons.

The Sustainable Business Network promotes sustainable practice in New Zealand and support businesses on the path to becoming sustainable. We link businesses and provide a forum for the exchange of ideas and experiences equipping our members for success. Further information on the SBN can be found on www.sustainable.org.nz

ENDS

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