Venerable financial institutions Lloyds of London and Chatham House issued a dire warning to UK businesses. Energy shortages and peak oil are going to be major issues for insurance markets in coming years.
The groups issued a joint report, Sustainable Energy Security: Strategic Risks and Opportunities for Business, which explained, "Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences."
The UK Guardian adds:
The insurance market has a major interest in preparedness to counter climate change because of the fear of rising insurance claims related to property damage and business disruption. . . . The report [claims] the world is heading for a global oil supply crunch and high prices owing to insufficient investment in oil production plus a rebound in global demand following recession. It repeats warning from Professor Paul Stevens, a former economist from Dundee University, at an earlier Chatham House conference that lack of oil by 2013 could force the price of crude above $200 (£130) a barrel . . .
Richard Ward, chief executive of Lloyd's, said the failure of the Copenhagen climate change talks last December has helped lull many business leaders into a false sense of security about the challenges ahead. "We are in a period akin to a phony war. We keep hearing of difficulties to come, but with oil, gas and coal still broadly accessible – and largely capable of being distributed where they are needed – the bad times have not yet hit ... all businesses ... will be affected by energy supplies which are less reliable and more expensive."
This report indicates how widely the belief has spread that oil is no longer a viable energy source in the long term (or even the medium term). With businesses and market analysts warning companies to prepare for peak oil, the alternative energy future is starting to seem more like a present-day reality.