Business Summit: The Coming World Oil Crisis
Without enormous changes the world faces an imminent oil crisis—and there are no silver bullet solutions. People must wake up to the sobering ramifications of peak oil, which may be the defining issue of this century.
Editor's Note: This is a summary of an HBS Business Summit presentation. View a full summary and video of the event on the HBS Centennial Web site linked below.
|Date of Event:||October 13, 2008|
|Moderator:||Richard H.K. Vietor, HBS faculty|
|Speakers:||John Hess, Chairman and CEO, Hess Corporation|
Martin McAdam, Chief Executive Officer, Aquamarine Power Limited
Matthew Simmons, Chairman, Simmons & Company International
The panelists offered sobering perspectives on the world's dwindling oil resources, assessing the ramifications and offering potential solutions.
While the world's demand for oil continues its unabated growth, driven by growing Asian demand, supplies of oil have likely peaked. The coming imbalance of supply and demand is so huge that the world needs to add six Saudi Arabias by 2030 to meet demand. Without enormous changes, the world faces an imminent oil crisis.
There are no silver bullets that can solve this problem—not more drilling, greater vehicle fuel efficiency, electric cars, or renewable energy. Political and business leaders must support these measures and more; whatever can help avert a major crisis. This includes actions to dramatically decrease demand, increase supply, and develop alternatives to oil. Doing so will require policy, innovation, and leadership.
But first it requires that people wake up to the sobering ramifications of peak oil, which may be the defining issue of this century.
Key concepts include:
- The supply/demand imbalance makes the world's energy future uncertain.
- "Peak oil" may be the 21st century's defining issue.
- In addition to the economic arguments for renewable energy, there is also a strong sustainability story.
- The severity of the situation requires leadership, innovative thinking, and immediate action.