Stakeholder position: Institute of Directors

Institute of Directors

 

 

A recent survey of members of the Institute of Directors found that:

 

• 49% were either concerned (20%) or very concerned (29%) about the possibility of a disruption in future energy supply to their organisation.
  
• 93% thought that over the next 5-10 years energy prices would rise significantly (68%) or slightly (25%).

 

It is estimated that, by 2020, the UK could be dependent for 75% of its primary energy requirements on imported sources.

To tackle this, the Government reckons that the way ahead is greater energy diversity: of suppliers and supply routes.

Additionally, the UK's energy infrastructure needs updating. Recent large-scale power failures in London, Italy and North America have helped focus thinking here, although the general issue of security of supply in relation to potential terrorist attacks must also come to mind.

OUR ENERGY FUTURE 2

Despite intermittent (or perhaps permanent these days) United States concerns about the political and other threats to oil in the Middle East, the citizens of the USA do not in general face the same more immediate diminution of a major source of energy supply in their back yard as do the people of the countries of Europe.

For Europe it is not the back yard, it is offshore. North Sea oil and gas will run out, both in physical capacity, and as far as economically extractable reserves are concerned.

In the next 20 years the UK, for instance, will become a net energy importer, rather than exporter. For gas this may happen from about 2006, and for oil by 2010.

It was only in the 1960s that oil began to flow to power European business and society, and it will only have been decades before it ceases to play a major role for the economies of Norway and the UK. (This is probably on a much lesser timeframe than that which concerns those who are worried at the prospects and effects of climate change).

 

In fact, one reason for the apparent rise in concern about the natural environment in Europe, as compared with the USA, for instance, may have something to do with responses to decline in reserves of oil and natural gas in the European arena.

 

There is greater pressure in Europe from environmental organisations, and seemingly more awareness about environmental issues than in the USA. Businesses must take account of their stakeholders in the normal course of events.

 

Apart from leading to big changes ahead in energy sourcing for the UK, the North Sea factor must also be a driver as far as firms having operations in Britain are concerned. Businesses involved in fossil fuel extraction have made moves in diversifying, funding work on alternative and renewable energy sources in some cases.