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Predictions of Energy Price Spike Emerge
Friday, 30 July 2010 08:02
Although we've seen a steady fall over the last fortnight from recent (admittedly not-that-high), high energy prices some business experts have predicted that there could very well be a price spike with oil prices potentially reaching $200 per barrel (currently sitting at $75 per barrel) as early as 2013. These claims were made after not merely studying current and historic price trends, but also considering other factors such as the energy usage of emerging countries, the remaining extractable fossil fuels and the planet's reliance on them, and the infrastructures in place to deliver the power to where it is needed. Despite Liquefied Natural Gas proving very successful, the slow uptake and modest output of renewable energy and the cost and waste implications associated with nuclear power, it seems that the dependence on gas and oil is not going to change much in the near future.

Another fossil fuel, shale oil, is touted as the next big thing but, despite plentiful reserves (it is predicted there is up to 3.3 trillion barrels available) extraction of this fuel peaks much quicker than traditional fuels and most of the associated recoverable gas is extracted in the first few years. This makes the economics less attractive that conventional extraction methods.

The predictions are contained in the report - Sustainable Energy Security: Strategic Risks and Opportunities for Business (by Lloyds and published by Chatham House) - which also reflects on the September 2000 fuel tax protests in Britain and the ensuing chaos as truckers and farmers created blockades at oil depots around the country - not something we look back on with much fondness. As petrol stations began to run dry and supermarket deliveries were halted, the general public resorted to panic buying and subsequent 'rationing' was enforced. While these predictions are merely that, predictions, we must expect an eventual increase in gas and oil prices, and the best possible advice is to be prepared.

As experts in Energy Procurement our Utility Consultants continually monitor utility prices and research the market in order to better predict future prices. This can be incorporated into budgets which we compile for clients - allowing them to be prepared and not have any nasty surprises should the markets shoot up.