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Peak oil, prices, and supplies - Dec 9, updated Dec 11

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Approaching peak oil
Frances Bell, Stateline, Western Australia
As oil approaches its maximum rate of production globally, Western Australians are considering ways to prepare for the inevitable rise in prices.
(4 Dec 2009)

Copenhagen talks could leave oil industry with a sinking feeling

Robin Pagnamenta, Times online
Vast amounts of oil lie in the bitumen-rich sands of Northern Canada, but whether oil companies choose to spend billions extracting them will hinge on decisions made 6,000 miles away in Denmark next month.

Even at the best of times, squeezing crude from Alberta’s tar sands is an environmentally fraught process that is economic only with very high oil prices. The cost of oil production can be $70 (£43) per barrel compared with only $5 for the onshore oilfields of Saudi Arabia or Kuwait.

The prospect of a successful climate deal in Copenhagen threatens to hit the industry with a cost that could drive it out of business: international carbon regulation. Like all big economies, Canada will be expected to agree to make cuts in its CO2 emissions of at least 20 per cent by 2020 and up to 80 per cent by 2050.

A key goal of the UN meeting is to create an effective global trading scheme for carbon emissions — a tool that would place a firm price on greenhouse gases produced by industry. A weak trading system of this kind already exists in Europe but governments want to create a bigger and bolder scheme that would penalise the use of high carbon fuels and drive global investment into cleaner energy...
(4 Nov 2009)

IEA forecasts stir debate

Saadallah Al Fath,
The International Energy Agency (IEA) recently released its World Energy Outlook (WEO), an annual long term forecast for energy and the oil market.
This research is usually sought after for the wealth of information it contains and for the forecasts of energy demand and supply as seen by an organisation representing the rich industrial countries as major consumers of all forms of energy.

This year's WEO raises questions as much as it gives answers due to the alarmist views that were pronounced this year.

The IEA prepared this outlook against a background of the worst economic slump in a long time but with some signs of recovery already emerging.

...But the most important question regarding the oil forecast is the alarming view of the IEA that the majority of oil production in 2030 will be coming from "fields yet to be developed or found".

The IEA goes on to say "sustained investment is needed mainly to combat the decline in output at existing fields, which will drop by almost two-thirds by 2030".

A few years ago and even when forecasts were very much higher, the IEA was always assured of the availability of resources without such lost and found statements.

This has led some commentators to call this "capitulation to peak oil" and the Guardian on November 9 quoted an unidentified employee of the IEA as saying the world is "closer to running out of oil"...
(8 Dec 2009)

The peak oil debate: 2020 vision

The Economist
The IEA puts a date on peak oil production

FATIH BIROL, the chief economist of the International Energy Agency (IEA), believes that if no big new discoveries are made, “the output of conventional oil will peak in 2020 if oil demand grows on a business-as-usual basis.” Coming from the band of geologists and former oil-industry hands who believe that the world is facing an imminent shortage of oil, this would be unremarkable. But coming from the IEA, the source of closely watched annual predictions about world energy markets, it is a new and striking claim.

Despite repeated downward revisions in recent years in its forecasts of global oil supply in 2030, the IEA has not until now committed itself to a firm prediction for when oil supplies might cease to grow. Its latest energy outlook, released last month, says only that conventional oil (as opposed to hard-to-extract sources like Canada’s tar sands) is “projected to reach a plateau sometime before” 2030.

Mr Birol’s willingness to acknowledge that conventional supplies may peak in a decade’s time points to a subtle shift in policymakers’ attitude towards the “peak oil” debate. This debate is not about whether the supply of oil, a finite resource, could some day stop growing. Rather, it hinges on the timing of an end to increases in global oil production, and on what happens next. The most pessimistic peak-oil proponents think that global oil supply has peaked or is about to do so. Given projections of demand increasing well into the future, they fear economic disaster...
(10 Dec 2009)
Sent in by EB reader Thomas Christiansen, who writes:
Does this article offer the chance to fundamentally change the quality of debate on peak oil? ... Fatih Birol of the IEA acknowledges a peak in 2020 (in a BAU scenario) and The Economist carries the story.

What do you think? Leave a comment below.

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