World energy shortage has the capacity to destabalise our societies, destroy our faith in our governments to ‘provide for us’ and to radicalise the ‘silent majority’. As we watch the relentless marketization of China and the growth of the Indian economy few of us can fail to see a time when we will be competing with these economies for the earth’s scarce resources. Add to this the predicted growth of world populations to eight billion in just over twenty years, how will we clothe, feed, shelter and provide energy and water to these extra two billion people?
I rarely talk about these matters, but believe that it is time that business takes a stance on these issues, not for environmental or sociological reasons but for self preservation and strategic business planning. We won’t run out of economically viable oil reserves when the last drop is pumped from the ground. Some of us run out when our country has been unable to secure oil options which have been snapped-up by our developing competitors.
Two years ago China used only 7.7% of the oil used on Earth but 31% of the coal the world consumed, 33% of the fish the world ate and even 19% of the world’s ice-cream. When their lagging need for oil catches up with their other appetites we will be in direct competition with them for this oil. We could see their demand for oil and gas double in a very few years.
Whatever business you’re in this will matter to you. Have you developed a scenario where you and your customers can see an end in sight for the availability of oil and gas for their use?
As these resources become scarce the authorities may feel it appropriate to ration them. We might see a relatively early arrival of carbon quotas for people or Carbon tax for users of fossil fuels. This may dampen demand or raise the urgency for people to find fuels and therefore develop a healthy ‘black market’. At the same time pressure may emerge for a socially responsible attitude to fossil fuel consumption, generating a downward pressure on the frivolous and non-essential use of fuels. We might see it becoming less acceptable to make unnecessary journeys in our cars, our boats and on airplanes. Could there be an early end to the low-cost airline phenomena?
Much of this issue is in the public domain and under discussion already but I’d like to encourage you to develop a strategy to cope with an early pressure on your business to detach itself from association with the profligate use of fossil fuels? From products which may use fuels in high quantities in their creation and from suppliers who are high energy users who lay themselves open to becoming outcasts, much as the Vivisectionists and fur traders became in past decades?
Remember the problem of scarcity doesn’t arise when the resource runs dry; it arrives when you can’t get access to supplies of it.
Joint Chief executive
Global Futures and Foresight