-Do not discount the threat of peak oil
-Has the IEA dramatically changed its oil production forecasts?

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Peak oil, prices, and supplies - Aug 11

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Peak Oil Warning
Interview with Bruce Robinson of ASPO-Australia
2SER's Razors Edge, Radio 2SER-FM 107.3
The International Energy Agency has issued a warning this week that global oil production will peak in about 10 years time.

The chief economist at the IEA, Faith Birol, says that without an adequate government response - oil shortages could precipitate a worldwide economic and industrial collapse.

Most of the world’s biggest oil fields have already peaked and the rate of decline in oil production is now running at nearly twice the pace as calculated two years ago.

Domestically, figures show that Australia's crude production has fallen by about 25% per cent in the past five years.

Some analysts are saying that the state and federal governments are completely unprepared for peak oil.

Bruce Robinson from the Australian Association for the Study of Peak Oil and Gas spoke with 2SER’s Alex Angel.
(8 August 2009)
Sent in by EB contributor Stuart McCarthy

Do not discount the threat of peak oil

Will Whitehorn and Jeremy Leggett, Financial Times
Last week, the government published a review of the UK’s energy security situation. In a report commissioned by the prime minister, Malcolm Wicks, the former energy minister, pronounced that “there is no crisis”.

His findings were in marked contrast to those of the UK Industry Taskforce on Peak Oil and Energy Security, which concluded last year that the economy faces a clear and present energy-security threat. The taskforce, a group that includes Virgin, Scottish and Southern Energy, Arup, Stagecoach and Solarcentury, was set up in 2007 on the basis of our shared opinion that peak oil merited serious study as a business risk. Some began with the assumption that the issue was low-risk but high-consequence. Sadly, we are now of the collective view that peak oil is a high-risk, high-consequence issue.

How can government be so out of tune with such a wide spectrum of companies? The core of the disagreement is the point at which the world pumps as much oil in a day as it is ever going to pump. Beyond the peak, or plateau perhaps, lies a descent that would pose huge challenges for oil-dependent economies. There is a grave danger, in the view of the taskforce, that this will happen earlier than widely expected. In the words of its report: “The risks to UK society from peak oil are far greater than those that tend to occupy the government’s risk-thinking, including terrorism.”

We fear this is because of over-estimation of reserves by the global oil industry, underinvestment in exploration and production, or a combination of the two. Once the descent begins, the realisation would sweep the world that another leading industry has its asset assessment systemically wrong. The danger is that producing nations then start cutting exports. At that point, for some oil-consuming nations, energy crisis becomes energy famine.

The taskforce will produce a second report this November, studying among other topics the impact of the recession on oil production, which we concluded (www.peakoiltaskforce.net) last November was most likely to peak in 2013. Early indications are that the recession has moved the peak a little further into the next decade, but steepened the descent in production thereafter. Most leaders in the oil industry put the peak well beyond the next decade, a view that we know senior civil servants share...
(9 August 2009)
You can download copies of the Wicks report here.

Has the IEA dramatically changed its oil production forecasts?

Kate Mackenzie, Financial Times
‘Warning: Oil supplies are running out fast‘ ran The Independent’s front page today. The story cites an interview with IEA chief economist Fatih Birol about a looming ‘catastrophic energy crunch’.

Much of the interview covers fairly familiar ground. Birol has warned about the fall in investment in future supply since the IEA’s 2008 World Energy Outlook in November, although the agency toned down its concerns down in June’s medium-term outlook. The estimates for the rate of production decline were also discussed last November.

The main new line is:

"…Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated."

So, is the IEA now saying global production will peak well before 2030? This would be quite a turnround. Last year’s WEO revised total oil production estimate for 2030, including unconventional oil, down by 10m barrels a day. But the 2008 report forecast that total crude oil production will increase through 2030 to 75.2m barrels a day, from 70.2m in 2007. It doesn’t clarify whether production peaks after 2030, but it does say that production of conventional, onshore crude oil by non-Opec countries would fall from 39.1m in 2007 to 36.3m in 2030....
(11 August 2009)

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