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David Strahan on the IEA report
David Strahan, Guardian
Despite forecasting an oil supply crunch and soaring prices, industry watchdogs are sticking to the line that production can go on rising
You can imagine the internal contortions when an old friend was once memorably described as a 60s liberal with Catholic guilt. I got the same impression of grinding gears while reading the International Energy Agency’s latest long-term forecast, the World Energy Outlook 2008, published last month. In many respects, the IEA’s analysis of threats to the oil supply is bloodcurdling, and yet the agency maintains that global production can keep rising for at least two decades. The rich nations’ energy watchdog is clearly alarmed, but seems afraid of its own bark.
The IEA’s annual forecast has become steadily darker in recent years, but this time the deterioration in its outlook is dramatic. Only a year ago, the agency was predicting that global oil production in 2030 would reach 116m barrels per day, up from around 84mb/d, but now it has slashed that to 106mb/d.
At the same time, the agency has also doubled its oil price forecast. Last year, it said the cost of crude would fall in the long term,
but now it predicts an average of $100 per barrel until 2015, despite the deepening recession, and rising to $120 in real terms by 2030.
It concludes that the era of cheap oil is over and that the recent extreme price volatility will continue.
… The question remains as to why the IEA persists in its view. Perhaps it is just the innate conservatism of an international bureaucracy funded by western governments, or maybe the agency fears a diplomatic rift with Opec, or possibly it wants to avoid panic. Or maybe it hopes policymakers will read between the lines.
• David Strahan is the author of The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man. Details at lastoilshock.com
(3 December 2008)
Also on David’s blog.
The 2008 IEA WEO – Renewable Energy
Robert Rapier, The Oil Drum
As I read through the 2008 International Energy Agency (IEA) World Energy Outlook, I had the distinct impression that I was reading
contributions from people with completely opposite points of view. The pessimist warned that we are facing a supply crunch and much
higher prices. The optimist in the report said that oil production won’t peak before 2030.
This trend held in the section on renewable energy. The optimist noted that renewable energy is expected to “expand rapidly.” The
pessimist noted that biofuels are predicted to only supply 5% of our road transport fuel in 2030. And so the report goes, part rampant
optimism and part rampant pessimism.
I guess the good news then is that there is something in there that will appeal to everyone, regardless of your outlook. The bad news?
The claims that are directly opposed to your views will have you questioning the credibility of the report. And if you are like me–and note that between last year’s report and this year’s report they dropped their 2030 oil demand forecast by 10 million bpd–you are left wondering whether there is any credibility at all in forecasts that far out.
But for what’s worth, here’s what the IEA had to say about renewable energy.
The renewable energy portion was a tale of two technologies: Renewable electricity and renewable biofuels. Renewable electricity is
forecast to grow rapidly, and make up an increasing portion of electricity supplies. The share of nuclear power falls, but coal usage is projected to rise 60% by 2030 (with 90% of that increase in non-OECD countries). The expected increase in coal usage helps explain why greenhouse gas emissions are forecast to continue rising.
Renewable biofuels, by contrast, are forecast to still make a very small contribution to overall road transport fuel by 2030. Cellulosic ethanol will be slow to be commercialized, and the contribution to fuel supplies by 2030 is expected to be small. Concerns about negative externalities will grow, and the impact of biofuel production on water supplies will be hotly debated.
(3 December 2008)
Cheap oil: short-term good, long-term dangerous
Christopher Johnson, Reuters
… while low energy costs come as welcome short-term relief to consumers and companies struggling with the financial and economic crisis, longer term they can be bad for everyone.
Low energy prices squeeze investment in the oil industry, reducing future supplies. They discourage energy saving and they destabilize
countries dependent on oil exports, making oil in the future more likely to be expensive and even more volatile. Perhaps most important of all, low energy prices stifle investment in alternative energy, deepening dependence on oil and other hydrocarbons and increasing greenhouse gas emissions.
(3 December 2008)
Rocky Top (Albert Bates interview) (audio)
KMO, C-Realm Podcast
M. King Hubbert’s peak is a perfect mathematical abstraction, and gliding over the top at speed might leave one with a giddy feeling of
momentary weightlessness, but according to Albert K. Bates, the reality described by the mathematical object is more of a rocky mountaintop than a glassy smooth parabola, and moving over it’s jagged topology won’t (doesn’t) feel much like gliding.
(3 December 2008)