At last we know…sort of. An article in the UK newspaper The Guardian for November 9, titled “Key Oil Figures Were Distorted by US Pressure, Says Whistleblower,” reveals what hundreds of analysts have been trying to convey to world leaders for years: The global oil supply situation is critical and getting worse, and vested interests are playing key roles in covering up this devastatingly inconvenient truth.

Over a decade ago, when I began following the Peak Oil story, the main sources were a few highly-placed petroleum geologists with experience in oilfields around the globe. At that time, these brave scientists were saying that world oil production would peak sometime around 2010, and that the global economy would be hammered as a result. Since it will take decades to develop alternative energy sources to replace petroleum (if adequate replacements are even available), the consequences for transport, trade, and agriculture will be almost too awful to contemplate.

In the past few years these lone voices of warning have garnered the backing of a million-voice chorus: investment banks, oil analytics firms, and investigative journalists have joined the geologists in pointing out that oil production limits are within sight, and in calling for more transparency in official data reporting and forecasting.

But the International Energy Agency has stubbornly refused to come clean. And this is important: while financial analysts and investors are free to draw their own conclusions about Peak Oil (and a great many of them have seen the writing on the wall—hence recent run-ups in oil futures prices), national and local governments must rely on officially sanctioned fuel supply and price projections for all their planning. Energy policy, transport planning, agriculture policy, economic forecasting, and much more depend upon the august pronouncements of the Paris-based IEA.

There are always folks who are glad to tell us what we want to hear. Indeed, the presentation of plausible excuses for the denial of serious problems offers an attractive career track. Prominent oil optimists like Daniel Yergin and Michael C. Lynch find open doors at the New York Times and other major media outlets, and wealthy clients for their consulting services, because they reassure markets that all will be well.

Nevertheless, denial leads to complacency, not problem-solving. And the end of cheap, abundant oil is a problem that could cripple the global economy not just for another year or two, but more or less permanently.

This is not to say that the recently released IEA “World Energy Outlook 2009” is worthless: the current iteration of the agency’s annual report makes many excellent points (for example, that “Falling energy investment [resulting from the worldwide financial crisis] will have far-reaching consequences”). But, as the whistleblower quoted in the recent Guardian article notes, agency forecasts for future world oil production are still profoundly unrealistic:

Many inside the organisation believe that maintaining oil supplies at even 90 [million] to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources.

Sooner or later, we must face reality. If we do it sooner, our chances of adapting successfully are far better than if we wait and deny just a little longer.

On one hand, careers are at stake if IEA officials step forward and tell us the truth. On the other hand, the global economy is as risk if they don’t.

There is evidently a quiet battle raging within the agency, and within the consciences of many of its officials. So far, we are all the losers in that battle.

Richard Heinberg is Senior Fellow of the Post Carbon Institute and author of The Party’s Over: Oil, War and the Fate of Industrial Societies.