Energy minister will hold summit to calm rising fears over peak oil

A report last month warned of complacency over the huge dislocation from a terminal decline in global oil production.

Lord Hunt, the energy minister, is to meet industrialists in London tomorrow in a bid to calm mounting fears about the disruption that could follow a sudden shortage of oil supplies.

In a significant policy shift, the government has agreed to undertake more work on whether the UK needs to take action to avoid the massive dislocation that could be caused by the early onset of "peak oil" – the point that marks the start of terminal decline in global oil production.

Jeremy Leggett, the executive chairman of the renewable power company Solar Century and a leading figure in the UK industry taskforce on peak oil and energy security, said the meeting, to be held at the Energy Institute, showed a welcome new sense of urgency.

"Government has gone from the BP position – '40 years of supply left, the price mechanism works, no need to worry' – to 'crikey'," he said. "BP and others are telling us that, but you lot, Virgin, Scottish and Southern, and others are telling us something completely different. We do not know who to believe. Let's do a proper risk assessment with industry," he said.

The meeting is expected to include executives from the taskforce members including Virgin, Arup, Stagecoach, Scottish and Southern Energy, and Solar Century as well as other industrialists.

The decision to hold the talks came after the UK industry taskforce on peak oil and energy security last month issued a provocative report, The Oil Crunch: a Wake-up Call for the UK Economy, in which it warned of the dangers of complacency.

Sir Richard Branson, founder of the Virgin Group, whose rail, airline and travel companies are sensitive to energy prices, warned then that the coming crisis could surpass the credit crunch. "The next five years will see us face another crunch: the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," he said.

The government had previously played down the risks arising from peak oil after the Wicks review in the summer in effect dismissed the idea that global demand for oil could soon outstrip supply.

A spokeswoman for the Department of Energy and Climate Change confirmed last night that Hunt and a range of energy-policy civil servants would be holding "private and behind-doors" talks at the Energy Institute. But she played down the significance of the session, saying the government had always taken supply issues seriously and met different parts of industry on a regular basis. "We do this all the time; it is just a normal stakeholder meeting," she insisted, adding that there was no "marked" change in ministerial policy.

The issue of peak oil arose last November when whistleblowers inside the International Energy Agency alleged the problem had been deliberately downplayed over a long period. BP and other oil companies insist that there is little danger of the world running out of oil because new areas such as Brazil, and more recently Uganda, are always opening up to development. BP chief executive, Tony Hayward, believes demand will fall as prices move up., pushing back any major peak-oil dislocation.

But booming demand in China, India and the Middle East has pushed up the price of crude to more than $80 a barrel and UK petrol prices are close to record levels.