Environmental activist network argues that the oil industry might be approaching a tipping point from fall in the price, advances in technology and policies on climate change.

A long-term decline in the demand for oil could undermine the huge investments in Canadian tar sands, which have been heavily opposed by environmentalists, according to a report published today.

The report, by Greenpeace, will make uncomfortable reading for the companies that are investing tens of billions of pounds to exploit the hard-to-extract oil in the belief that demand and the price would climb inexorably as countries such as China and India industrialise.

Citing projections from the oil producers’ cartel Opec and the International Energy Agency, as well as various oil experts, the report casts doubt on the conventional assumption that consumption and prices will begin gathering pace once the world pulls itself out of recession.

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