Liquid fuel shortages, massive unemployment, high interest rates and severe recession.

Those are just some of the bleak prospects ahead for the global economy as our energy supplies dry up, according to a keynote speaker at the Smart 2007 supply chain conference to be held in Sydney next week.

The predictions come from Dr Roger Bezdek, a keynote speaker at the conference, described as an “internationally recognised expert” in energy market analysis and energy forecasting and President, Management Information Services, USA. He has co-authored two reports for the US Department of Energy on the economic impacts and risk management of declining oil supplies and liquid fuel mitigation options.

Bezdek says the fuel shortage, high unemployment and recession will be just some of the challenges impacting on Australian businesses and the broader community if governments and companies do not prepare now for the peaking and subsequent decline of world oil production.

According to Bezdek, future oil shortages are expected to impact on virtually all aspects of the supply chain, especially transportation. With such an unfamiliar global situation so close, preparation and planning are crucial.

“In a micro sense, supply chain managers have to recognise what is likely to happen in the future and change their plans and methods of doing business accordingly. For example, shifting to more efficient and secure models of transportation and inventory management,” said Bezdek.

“In a macro sense, all participants in the supply chain should pressure their national and regional governments to recognise the impending liquid fuels crisis and take appropriate remedial actions.”

Whilst the world is only now waking up to the problems inherent in climate change, and with many scientists believing remedial actions are long overdue, experts are now calling for early action to avoid the same scenario with peak oil.

Bezdek asserts that one of the major challenges preventing the issue from being taken seriously by many decision makers and industry leaders is a history of repeated and erroneous predictions of oil peaking. Data discrepancies in the past – owing to political biases or low quality of reserves data – may have given the world false assurance and prevented policy makers from taking recent, more robust forecasts seriously.

“The problem of the peaking of world conventional oil production is unlike any faced by modern industrial society. Previous energy transitions, from wood to coal and from coal to oil, were gradual and evolutionary. The world is facing an imminent energy discontinuity that will be abrupt and painful,” said Dr Bezdek.

Exactly when the ‘crisis’ will occur is still a hotly debated topic. However there is some consensus that the time needed to plan and implement mitigation options that would have a substantial impact is more than a decade before peaking occurs.

“Mitigation options on both the demand side and supply side are available today. But unless these are implemented – beginning soon – a severe liquid fuels crisis is inevitable,” said Bezdek.

Smart 2007 Conference is a leading Asia-Pacific event for supply chain and logistics management and is expected to attract more than 1000 delegates next week.

Bezdek will be the keynote speaker at breakfast on Thursday June 21.



Source: FOODweek online team with information from Smart 2007 organisers, June 14 2007.

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