The world’s dwindling oil and gas reserves will become the main cause of global political tension if consumers continue to “run on empty”, the head of one of Scotland’s leading energy companies warned yesterday. Ian Marchant, chief executive of Scottish and Southern Energy, told delegates at a renewable energy conference that world oil and gas production was rapidly reaching a plateau where demand would outstrip supply. He said: “If we carry on, oil and gas reserves will be the biggest source by far of global political tension and potential conflicts. “If we don’t sort this out, there will be wars fought over oil. You can argue there already have been.” His warning came in a keynote speech on the opening day of All-Energy 08, an annual showcase for Britain’s renewable energy industry in Aberdeen. It also came on a day when the price for US light crude smashed through the $130-a-barrel barrier for the first time, reaching a new high of $132.08 a barrel, while the price of the benchmark North Sea Brent, traded in London, rose to $127.34 per barrel amid growing fears of a global oil shortage. The price of oil on the futures market for delivery in 2016 also drove costs towards the $140 mark for the first time, fuelling inflationary pressures in the global economy. Mr Marchant said global oil consumption had soared by 30 per cent since 1990. He explained: “In the last 15 years, globally we have been using up more oil than we have been discovering. “Already, 20 per cent of the barrels we produce every day comes from fields over 40 years old. No field that produces more than a million barrels per day has been discovered for over 30 years. Even the United States has got to the point where it realises maybe the oil is running out.” He added: “The days of cheap, easy oil and gas are rapidly coming to an end. We will reach a plateau in the amount of oil we can produce sustainably. “Currently, oil demand is running at 86 million barrels a day. I can see us getting maybe 90 million barrels a day, but we have to fundamentally change how we think about oil and gas.” Mr Marchant stressed that dwindling supplies were also an issue for the UK, with the latest forecasts predicting a 14 per cent reduction in North Sea oil production and a 7 per cent cut in gas. “The UK’s oil is already clearly and demonstrably running out,” he said. “The debate is how we maximise the last remaining reserves. It’s a global problem and it’s a local problem.” Mr Marchant said that Britain had a long way to go in harnessing the potential of renewable energy alternatives.

And he forecast that, by 2020, the UK would only be half way to achieving the European Union’s target for 15 per cent of energy to come from renewable sources. Last week, Scottish and Southern Energy announced plans to invest £1.3 billion in the Greater Gabbard offshore wind-farm, the world’s biggest, a 500-megawatt development in the outer Thames Estuary. But Mr Marchant warned: “We are going to need around 25 gigawatts of offshore wind. We need four Greater Gabbards to go ahead every year for the next 12 years to meet that. “We need to get cracking on carbon capture and storage and marine energy, and we need to get research and development moving. We need pace, urgency and delivery. If we don’t step up our game, we will not succeed.”

How numbers add up on power

• 7 wind farms are owned by Scottish and Southern Energy (SSE).
• The Hadyard Hill wind farm in South Ayrshire is the first in the UK to generate more than 100 megawatts.
• 2,000 megawatts – SSE’s renewable generation capacity.
• 10 per cent of the electricity generated by SSE comes from renewables, 39 per cent from gas, 49 per cent from coal and 2 per cent from oil.
• £28 million of work is under way to build a deep-water wind-farm demonstrator unit in the Moray Firth.
• 100 megawatts to be generated by the massive Glendoe hydro-electric scheme near Loch Ness, which is under construction.
• £8 million invested in a hi-tech tidal underwater turbine demonstrator at the European Marine Energy Centre in Orkney.

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