Drivers need to start treating oil as a scarce commodity and switch to green transport to avoid shortages by 2020, according to the chief executive of Scottish & Southern.
Ian Marchant, who heads the £10bn FTSE-100 company, is among a group of corporate leaders warning that the world's demand for oil is on the brink of outstripping industry's ability to produce.
"The West has been far too profligate in its use of oil and the price is going to say: stop it now and start using your oil as a scarce commodity," Mr Marchant said.
The energy boss is a member of the Industry Taskforce on Peak Oil and Energy Security, along with Sir Richard Branson, the aviation and media billionaire, Brian Sout, the chief executive of Stagecoach, and Philip Dilley, chairman of engineering group Arup.
They believe that it will be very difficult for the world to produce more than 100m barrels per day of oil.
Current output is around 87m barrels per day, but demand for petrol products is likely to surge as the standard of living increases in China and India.
"It's GCSE economics that if production is constrained and demand increases from emerging countries, the price will go up and up and up," Mr Marchant said.
He urged the Government to start dealing with the problem of limited oil supply by encouraging consumers to limit their energy usage.
"We can have a debate about which year this problem will hit us, but I would rather have a debate about how we avoid it becoming a problem," he added.
The electrification of the UK's transport system is likely to prove both a huge challenge and expansion opportunity for electricity companies and network operators in the UK.
Mr Marchant believes that most consumers will probably be driving hybrid or electric cars by the middle of the next decade.
"Driving two miles is a pretty low value use of oil," he said. "One car in China adds far more value than a second car sitting in the driveway of some house in the UK."
The industry group wants the government to explore electrification of the railways and overhaul the transmission and distribution network.
Chris Barton, a member of the Department for Energy and Climate Change's energy security team, insisted that the Government is already doing enough to encourage efficiency and green transportation under plans published last year.
However, Mr Souter, the transport boss, has proposed more radical solutions than incentives to buy green vehicles. He called for the abolition of the lowest bands of tax that hit those with problems paying their energy bills and the establishment of a tax on carbon emissions.
"This would help redistribute wealth and the people using carbon would be paying for it," he added.
Last week, Ofgem, the energy watchdog, warned that lack of power plants, insecure supplies of gas and underinvestment in the grid would all contribute to "unaffordable" energy bills without more government intervention.
"The West has been far too profligate in its use of oil and the price is going to say: stop it now and start using your oil as a scarce commodity," Mr Marchant said.
The energy boss is a member of the Industry Taskforce on Peak Oil and Energy Security, along with Sir Richard Branson, the aviation and media billionaire, Brian Sout, the chief executive of Stagecoach, and Philip Dilley, chairman of engineering group Arup.
They believe that it will be very difficult for the world to produce more than 100m barrels per day of oil.
Current output is around 87m barrels per day, but demand for petrol products is likely to surge as the standard of living increases in China and India.
"It's GCSE economics that if production is constrained and demand increases from emerging countries, the price will go up and up and up," Mr Marchant said.
He urged the Government to start dealing with the problem of limited oil supply by encouraging consumers to limit their energy usage.
"We can have a debate about which year this problem will hit us, but I would rather have a debate about how we avoid it becoming a problem," he added.
The electrification of the UK's transport system is likely to prove both a huge challenge and expansion opportunity for electricity companies and network operators in the UK.
Mr Marchant believes that most consumers will probably be driving hybrid or electric cars by the middle of the next decade.
"Driving two miles is a pretty low value use of oil," he said. "One car in China adds far more value than a second car sitting in the driveway of some house in the UK."
The industry group wants the government to explore electrification of the railways and overhaul the transmission and distribution network.
Chris Barton, a member of the Department for Energy and Climate Change's energy security team, insisted that the Government is already doing enough to encourage efficiency and green transportation under plans published last year.
However, Mr Souter, the transport boss, has proposed more radical solutions than incentives to buy green vehicles. He called for the abolition of the lowest bands of tax that hit those with problems paying their energy bills and the establishment of a tax on carbon emissions.
"This would help redistribute wealth and the people using carbon would be paying for it," he added.
Last week, Ofgem, the energy watchdog, warned that lack of power plants, insecure supplies of gas and underinvestment in the grid would all contribute to "unaffordable" energy bills without more government intervention.
Source: The Daily Telegraph
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