The oil spill and credit crunch were bad. An oil crunch would be worse

Small print of BP Statistical Review of World Energy is troubling

Published on The Guardian.co.uk, by Jeremy Leggett , June 9, 2010.

Big as BP’s problems are as a result of failed risk assessments, it will very probably soon become worse. Growing numbers of people doubt its annual review of oil reserves, published today. Society builds its oil dependency on key cultural statements of faith about secure supply, such as BP’s annual announcement that there is 40 years of supply or more, and no danger of supply falling short of demand, so ambushing oil-addicted economies.

You would think that BP’s risk-assessment failures in the Gulf, and in US refineries, would make the company measured, given the stakes in this particular assessment. The reverse seems true. 

After BP’s chief economist, Christoph Buhl, finished his presentation launching the annual BP Statistical Review of World Energy this afternoon, I reminded him that last year he had played a question on peak oil for laughs, pouring scorn on the issue. In the interim, I pointed out, more and more people had become worried about the prospect for a premature peak in global oil production, not least the companies in the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES). Given the heightened stakes with risk assessment in BP’s world of late, how safe did he feel he that BP is serving its shareholders well by insisting, as he had, that “reserves remain sufficient to meet demand growth” and that “the supply will never peak”. As he well knew, growing numbers of people – not least in his own industry – consider this assessment to be dangerously complacent.

“Very safe,” he said. The invitation-only audience duly laughed … (full text).

Link: Shocking allegations against BP, by Joe, May 3, 2010.

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