Wednesday, 14 July 2010

Lloyd's insurance warns on Peak Oil

And so the chorus grows:

Lloyd's adds its voice to 'peak oil' warnings

"One of the City's most respected institutions has warned of "catastrophic consequences" for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy."

That's from the Guardian (UK).

The actual report released by Lloyd's of London in co-operation with Chatham house has more interesting snippets inside it.
  • Businesses which prepare for Peak Oil transition will prosper - the rest will go down
  • Low cost [liquid] fuels are gone
  • Asia is now part of the global energy security mix
  • Global oil supply crunch and price spike coming
  • Energy infrastructure is vulnerable
  • Just-in-time production/warehousing will have to adjust
  • Big business opportunities in transition
This is the "easy oil is gone, but we will transition through a rough patch" type Sunday matinee scenario for the whole family. All the really disruptive parts are left out or between the lines.

Yet, some of the graphs are quite telling:

So much for that Middle East spare capacity...

$200USD barrel of oil by 2016, anyone?

Peak Oil risks + Financial risks + Climate Change risks = ?##%&&!!

So, finally the insurance market is ready to start taking into account the consequences of peak oil, even if the scenarios are quite cautious - almost optimistic.