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Peak oil - Nov 18

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ASPO-USA: IEA acknowledges 'patently unsustainable' trends in global energy supply and consumption

Press release, ASPO-USA via PRNewswire via COMTEX

World Energy Outlook 2008 report details significant challenges in petroleum production, agreeing with ASPO-USA's long-held position
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National and international energy agencies have long downplayed the statistics and significance of oil depletion. Finally, in Wednesday's World Energy Outlook (WEO) 2008 report, the Paris-based International Energy Agency (IEA) conclusively recognized the reality of "Peak Oil" and the magnitude and implications of large annual decline rates on the world's annual oil production.

While the IEA's report is groundbreaking in acknowledging the problem, the Association for the Study of Peak Oil and Gas USA (ASPO-USA) finds unwarranted optimism in the report's projections of oil production that are inconsistent with known decline rates -- acknowledged in the report at more than six percent per year.

"Years of data from the majority of oilfields around the world show steady or declining production," says Steve Andrews, co-founder of ASPO-USA. "Most major oilfields were found decades ago, and those reserves were easy and inexpensive to extract. Since then, few new fields have been discovered to replace those reservoirs. Now, oil is technically more difficult and financially more expensive to produce, and the demand trend should continue to rise, despite the recent slowdown. We anticipate supply shortages and price increases within a few years."

Yet the WEO optimistically cites steadily growing oil production, which proposes that global supply will expand from today's 85 million barrels per day (mbd) to 106 mbd in 2030. That equals the addition of six times the current capacity of Saudi Arabia, the world's largest producer -- an extremely unlikely scenario according to Andrews.

Currently, a modest margin of spare production capacity cushions the US against traumatic political or natural events. Until the recent economic downturn, demand has increased at a steady two percent per year. Numerous industry analysts, including some major oil company CEOs, are skeptical that world production can ever reach the 106 mbd suggested by the WEO report. Given current low prices and widespread financial uncertainty, oil companies will likely find it difficult to invest trillions of dollars in the necessary infrastructure to maintain current production in the face of depletion -- or to be able to afford the costs of a substantial production increase, Andrews says.

"Current trends in energy supply and consumption are patently unsustainable -- environmentally, economically and socially -- and they can and must be altered," said Nobuo Tanaka, head of the IEA. "One thing is certain. While market imbalances will feed volatility, the era of cheap oil is over."

ASPO-USA Executive Director Dave Bowden confirms that "the logical place to start is with energy efficiency -- to cut our demand for oil by up to 50 percent by 2030 -- which is an enormous challenge. That goal will become more and more critical as world oil production is set to plateau and decline within a few years."

SOURCE Association for the Study of Peak Oil and Gas USA
(17 November 2008)
Another response just posted at ASPO-USA: A Peak-Oiler, but still in the closet? IEA’s 2008 Report by Aage Figenschou, with Matt Simmons

UPDATE (Nov 18): Changed the main link for this press release to its posting on the ASPO-USA website.

The former link was to MarketWatch



TOD:Europe on the IEA report

Euan Mearns, Samuel Foucher and Rembrandt Koppelaar; The Oil Drum:Europe
The 2008 IEA WEO - Production Decline Rates
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... Conclusion

The IEA are to be applauded for conducting and reporting a detailed analysis of global oil field decline rates. This is truly vital data for understanding and predicting the future course of global energy supplies upon which the future of Mankind is based. No doubt the mainstream media, international policy makers and politicians will be suitably impressed by the rigor and detail contained in this report, that they do not understand.

As far as we can establish, the IEA analysis shows that global decline rates are actually lower or the same as those reported by CERA last year. We have sent two emails to Dr Birol requesting clarification on the points raised in this report and are awaiting his reply.

The key information required is this:

What % of current production comes from fields in production build up phase and what decline rate (presumably negative decline) is applicable to that production increment?

What % of current production comes from fields in the post peak / plateau / decline phase and what is the weighted average decline rate applicable to that production increment?

How have these variables evolved in the past, and how are they set to evolve in future?
(17 November 2008)



Sticking to the Diet

Spencer Swartz, Wall Street Journal
Companies and consumers have cut their demand for oil in thousands of ways. Now comes the test.
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Oil demand in the world's biggest consuming nations, excluding China, has shrunk by a total 4% over the past three years -- the equivalent of discovering nearly 660 million barrels in new oil supplies.

A good deal of the credit goes to thousands of small and large decisions by companies and consumers looking for ways to pare soaring energy bills. The big question now: What happens to these gains with oil prices down more than 50% since summer?

Some of the changes will no doubt disappear if lower prices remain. Others may go away when economic growth returns. But many other changes are likely to remain, whatever happens to oil prices, because they make sense at any price.

"I think this conservation ethos has staying power, both because there's a higher floor for oil prices even with a weaker economy and because of the growing weight of climate-change policies," says Daniel Yergin, chairman of Cambridge Energy Research Associates.
Gas Guzzlers

Many efforts to curtail long-term oil consumption, for instance, are focused on transportation, which has accounted for most of the growth in world oil demand in recent years.
(17 November 2008)

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