This is a guest post by Joseph Sullivan. Joseph is a management and strategy consultant in Madrid, Spain. This is a link to his blog.

Risk Management like sustainability has become one of the buzz phrases and hot topics in business and management in general. According to Wikipedia:

Risk is defined in ISO31000 as the effect of uncertainty on objectives (whether positive or negative). Risk Management can therefore be considered the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary. . .

Strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.

By definition, risk management involves the methodical identification and analysis of events that may or may not happen. The responsibility of present and future business leaders – as well as industry and government leaders of course – is to ensure the sustainability of the endeavors they oversee. So, shouldn't peak oil be considered a risk management scenario?

The “Don’t Fear the 2010s” article written by Nick Gillespie of the Wall Street Journal featured a section on Peak Oil and, after reading it, I found myself uttering the famous words of Homer Simpson: “Doh.” The article claims that "something always gets in the way" of peak oil, and since no clear peak has occured globally, Peak Oil is and will remain unimportant. Although early discussions about peak oil involved estimations of the actual date of the peak, today the discussion has transcended its past mathematical proclivities to include more complex (and more meaningful) issues. Let’s examine some of the more important insights to be gained from the discussion of peak oil.

This is a guest post by Shane Mulligan. Shane is a Postdoctoral Fellow at the University of Waterloo, and is working on a book on the security implications of peak oil. Shane writes on The Oil Drum as bioprospector.

There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem… [G]overnments and multilateral agencies have failed to recognize the imminence and scale of the global oil supply crunch, and most of them remain completely unprepared for its consequences.¹

Anyone aware of peak oil has had to wonder (at least briefly) why the world's governments seem to be ignoring the issue. The official silence is difficult to fathom in light of the fact that the IEA has decidedly come down on the side of a likely peak by 2030, while Fatih Birol (the Agency's Chief Economist) suggests it's more likely a “plateau” from 2020, or even earlier – a claim recently published in the influential magazine, The Economist.² As the UK's Energy Research Council points out, “The growing popular debate on ‘peak oil’ has had relatively little influence on conventional policy discourse. For example, the UK government rarely mentions the issue in official publications and …..'does not feel the need to hold contingency plans specifically for the eventuality of crude oil supplies peaking between now and 2020'.”³ The report notes that “the UK is one of many countries that are failing to give serious consideration to this risk.”⁴ But are governments really ignoring peak oil? Are they unaware of it? Or are they aware and taking steps to deal with it – even while they keep silent on it in public? Indeed, is their silence a policy choice itself?

This research note is an attempt to map out the range of reasons for governments' silence on peak oil. These reasons can be seen along a continuum, from ignorance (“we don't know”), to disbelief, to conspiratorial silence (“we know well, and have plans, but we're not sharing them”). This post surveys some of the more common ideas regarding governments' lack of attention to the issue, in the hope of spurring comments from readers regarding which of the scenarios is more plausible in light of available evidence.

This is a post related to a talk I am giving this week. (A PDF can be found here).

There is a huge amount of oil which theoretically can be extracted, but the question is whether the cost will be cheap enough for us to be able to afford to extract it. If the oil is too expensive to extract, the shortage of oil seems to cause a recession, similar to what we are having now. I discuss this in purely monetary terms, but it is also an issue with respect to low energy return on investment (EROI), for those of you used to thinking in EROI terms.

In many ways, the folks who say we a have lots of oil are correct. All one has to do is include the oil which is extremely expensive and slow to extract. Much of the cheap, easy-to-extract oil has already been removed.