Energy Security Supply Threat

As the New York Times reports on the lack of consensus surrounding how much oil is spilling from the Deepwater Horizon well in the Gulf of Mexico, a timely new study from across the pond says that green energy systems are essential in securing our energy supply and protecting the environment.

According to the report from Lloyd’s 360 Risk Insight and UK think tank Chatham House, the Deepwater Horizon oil spill is an example of how reliance on fossil fuels is pushing the search for reserves into more difficult and risky territories as declining production from easy to access oil reserves combines with growing global energy demand.

However, Lloyd’s reports that these trends could spur the transition to more cost-efficient clean and renewable energy systems. A press release quotes Lloyd’s CEO Richard Ward saying:

The current generation of business leaders need to rethink their approach to energy risks or be left behind as energy becomes less reliable and more expensive. The environmental and economic cost of our reliance on fossil fuels is too high. We need a long-term plan to reduce consumption and diversify our energy sources.†

As a result Lloyd’s says that all businesses, not just the energy sector, need to consider how they, their suppliers and their customers will be affected by energy supplies which are less reliable and more expensive.

With markets for low-carbon energy products likely to be worth at least $500 billion per year by 2050, Lloyd’s says this sector holds tremendous opportunities for business, though the lack of global agreement on carbon reduction is inhibiting commitment and investments.

The report calls on governments to set clear policies and create certainty in the transition to a low carbon economy. It also urges businesses to prepare for a new set of risks as our energy system changes. Check out I.I.I. energy facts and stats.

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