Energy is a critical strategic issue for the OECD nations so it is naïve to think that there is no political agenda when its energy watchdog, the IEA, publishes its prognoses. Bad news on the energy front can make life difficult for politicians so the numbers given in the IEA’s World Energy Outlook (WEO) 2010 report are given a positive spin. But a closer look shows a picture that is anything but positive.
In WEO 2010 the IEA continues its tradition of predicting future oil demand without considering if supplying it is possible. Last year the IEA stressed the importance of oil for economic growth and concluded that 106 million barrels per day (mb/d) would be required by 2030, an increase of about 20 mb/d above current production. This year the IEA only predicts 99 mb/d by 2035 and avoids any discussion of economic growth. We can interpret this as meaning that the desired economic growth is not possible.
The IEA now sees OECD oil consumption falling from today’s 41.7 mb/d to 35.3 mb/d by 2035. This means that all OECD nations, including Australia, must revise down their future consumption estimates. Non-OECD nations are now expected to increase their oil consumption by 19 mb/d by 2035. Two thirds of this will come from China and India.
The IEA notes that, since 1980, we have consumed oil faster than we discover it. We now consume 30 billion barrels per year which is more than double what we find. Amazingly, the IEA asserts we will need to find an extra 900 billion barrels of oil over the next 25 years to meet demand. But at the current discovery rate of only 10 billion barrels it would take 90 years! To meet the IEA’s demand prognosis, by 2035 the non-OPEC nations will need to have produced more oil than currently in their reserves. Furthermore, in 2035 they must still be producing oil at 46 mb/d!
Just like previous years the IEA continues to assume that “demand” will determine oil production and so, as previously, their expectations for 2035 are unrealistic. However, despite several unrealistic conclusions, WEO 2010 also contains real numbers worth focussing on. The 68 mb/d of crude oil from fields producing in 2009 is now estimated to drop to only 16 mb/d by 2035. They use a decline rate of 8.3% which is in complete agreement with my team’s research. The IEA says that 60% of oil production in 2035 must come from fields not yet even found. Also, when estimating production from known fields that are not yet producing the IEA fails to heed the criticism of their methods presented in our scientific paper, The Peak of the Oil Age” published last year.
In WEO 2010 the IEA presents facts that mean only one thing – the peak of oil production is imminent. By showing this data without announcing this obvious conclusion the IEA is making a cry for help to do what, for them, is politicly impossible. WEO 2010 is a cry for help to tell the truth about peak oil.
Kjell Aleklett is Professor of Physics and head of the Global Energy Systems Group at Uppsala University, Sweden