Former Shell chairman forecasts $150 oil

I'm sure there are other former executives of the international oil majors who are coming around to Peak Oil theory, but this is the first one who's come to my attention — an ex-chairman of Shell interviewed in London's Independent.

Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."

He may not be an adherent of Peak Oil, but it's not stopping him from speaking to a conference in Ireland this week of the Association for the Study of Peak Oil.

Commenting on whether "peak oil" – the point when global oil production goes into terminal decline – was likely to be reached in the near future, he said: "In a way it scarcely matters; what really matters is the gap between production and demand. I don't know whether there is going to be a peak in world oil production, whether it's going to plateau and then slowly come down.

"It could well plateau within the next 20 years, and I guess I would be surprised if it hadn't."

He also tells the Independent there's a "relatively poor business case" for major investments in alternative energy sources right now, but that "once you see oil prices in excess of $100 or $150 a barrel, the alternatives simply become more attractive on price grounds."

Media-savvy readers might recall it was the Independent that caused a brief spike in awareness of Peak Oil earlier this summer with an alarmist take on the most recent BP Statistical Review.  And while the article did not generate the sustained interest that I'd predicted in a Whiskey and Gunpowder piece, there's surely more awareness of the issue now than there was, say, six months ago.  (And once again, credit Matt Drudge for giving the article a sizeable audience it wouldn't have otherwise.)

The Daily Reckoning