The knock-on impact from the Gulf of Mexico disaster could be enough to tip oil production below international energy demands and spark an “oil crunch”, a cross-industry group has warned.
The industry taskforce on Peak Oil and Energy Security cut its projections for spare capacity between what is being extracted and what is being used from three million barrels a day to just two million in 2015.
John Miles, global chairman for energy, resources and industry businesses at engineer Arup, said: “What was a pretty small buffer of three million barrels a day has got eroded to two million barrels.
“Some 30% of what we thought was a buffer is going to disappear. It is too close for comfort.”
Figures from the taskforce, which is backed by companies including Perth-based Stagecoach and Scottish & Southern Energy, show that deepwater production (in depths of more than 300 metres) will account for 29% of oil supplies by 2015, up from 5% today as new fields in locations such as Brazil come on stream.
Yet at the same time these new projects are being delayed in the wake of the Macondo explosion.
Mr Miles accepted the report’s estimate of a six-month delay to new production is “arbitrary” but argued that new legislation, tighter controls and more inspections of installations could cause even longer waits.
The group now forecasts production capacity in 2015 will be 94 million barrels a day but said even this may be over-optimistic.
Its latest report, published today, noted even its latest calculation of the world oil “buffer” is vulnerable to over-optimistic calculations of capacity among the Organisation of the Petroleum Exporting Countries, higher than expected economic growth pushing up demand or higher than expected depletion rates at existing fields.
Mr Miles noted new but expensive sources such as tar sands can be tapped but will lead to price rises. At the same time, he said public spending cutbacks are leading to cuts in energy projects, notably those led by local authorities.
The taskforce’s main target is the Government, which it wants to undertake a “stress test” of the impact on the UK economy of falling oil supply and rising prices.
Mr Miles said: “We would like to see the economy stress-tested for the peak oil scenarios … Out of that would come quantification of the risk and some guidance as to where we should put some effort.” He added that any changes are likely to have to come first in transport because of its centrality to the economy and its reliance on fuel. “I think we are still concerned there is not enough awareness in Government circles,” he said.
Jeremy Leggett, executive chairman of solar energy firm Solarcentury, said that the up-dated figures mean that changes will need to be made at an “order of magnitude faster”.