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The problem of the middle way

(Note: Commentaries do not necessarily represent the ASPO-USA position.)
To everyone’s collective enormous relief, the IEA’s 2010 World Outlook reassured the world that while oil prices may rise and conventional crude oil production may have peaked in 2006, we don’t have to worry about dramatic, longer-term energy-price increases. IEA predicts a gradual creep towards $113 per barrel by 2035. By 2015, we do have to worry that we might get up to $90 per barrel, with the high costs that imposes on ordinary people and the burdensome effects on the economy, but we’ve got five years, we are assured.

The oil price needed to balance oil markets is set to rise, reflecting the growing insensitivity of both demand and supply to price. The growing concentration of oil use in transport and a shift of demand towards subsidized markets are limiting the scope for higher prices to choke off demand through switching to alternative fuels. And constraints on investment mean that higher prices lead to only modest increases in production. In the New Policies Scenario, the average IEA crude oil price reaches $113 per barrel (in year‐2009 dollars) in 2035 — up from just over $60 in 2009. In practice, short-term price volatility is likely to remain high.

Of course, as of the day that I wrote this, oil futures were, in fact, trading at $88 barrel – thankfully, we have the certainty of that $2 breathing room – phew! This must be that ―volatility‖ they spoke of – I wonder how long oil has to trade above $80 before it becomes a price increase?

We are also assured that we definitely don’t have to worry about the peak of conventional crude oil being a significant problem, because the IEA emphasizes that unconventional oil sources will absolutely make up the difference. They spend little time, however, discussing the high economic and environmental costs of these unconventional sources, merely reassuring us that if governments act, peak oil won’t matter.

The IEA is also confident that Saudi Arabia will be able to maintain and increase production significantly, to compensate for declining rates in other nations farther down the depletion curve. Worries about Saudi production that have been floated for years are either dismissed or ignored in the Executive Summary.

The IEA focuses its optimism, however, on unconventional oil sources: heavy crude, tar sands and a mix of other lesser resources, all of which they predict will replace light crude proportionally, and without any deep effect on projected price. The summaries indicate both optimism about the prices at which these unconventional oil and other sources can be developed and also optimism about rates of development and extraction that the IEA suggests are possible if governments just put their minds to it.

In many ways the latest IEA report, which is, at least in terms of oil prices, clearly obsolete already, has a lot in common with the 2007 IPCC Climate report. The IPCC, afraid of sounding alarmist, chose to use optimistic and mid-range scenarios that turned out to be wild understatements. Within six months of its release, for example, the IPCC’s predictions about Arctic sea ice, which predicted summer disappearance of ice sometime around the beginning of the 22nd century, turned out to be 80 years out: New results showed that Arctic sea ice might be gone in summer before 2020. Within the year of the report’s release, Climate Equity’s ―Climate Code Red‖ report documented that climate sensitivity was actually much greater than the IPCC had credited, and we began to talk about 350ppm, rather than the 450 or 550ppm that were used for much of the recommendations portion of the IPCC report. Meanwhile, the IPCC, as we all know, was accused of alarmism anyway.

Both the IPCC and the IEA have suffered losses of credibility by attempting to steer a middle path, to write a narrative of ―oh, there’s a problem, but we don’t want to appear alarmist.‖ In the case of the IEA, there’s some reason to believe this may not be purely a problem of scientific reticence. In 2009, an IEA whistleblower reported that the agency had bowed to pressure from the US to distort figures on world oil reserves. In the case of the IPCC, the result of their perhaps more honest commitment to moderation is that climate-change deniers slackened their attacks not at all. But the approach meant that most people missed the real story: that in fact, climate change was occurring more rapidly in most places than even the IPCC predicted.

Whatever the choices made by both agencies, the critical point is that both offer up clear evidence that you cannot simultaneously raise an alarm and not appear alarmist. The ambiguous middle path in which you acknowledge what is happening and then minimize the danger of the situation does not save you from attack by those who wish to undermine your basic message. Instead, it muddies the waters. The IEA report’s acknowledgment that the peak of world-crude-oil supplies has indeed occurred ought to be big news, particularly given the recent warnings by international military and strategic agencies about the implications of peak oil. Instead, buried in between caveats, it was missed by many news sources entirely.

It turns out that walking a middle course isn’t as easy as it looks — reassuring and alarming simultaneously tend to create only muddles — and doesn’t result in much sparing of criticism. In the end, the takeaway message may be that there are worse things than being accused of alarmism, when there’s actually something to sound an alarm about.

Sharon Astyk is a writer, farmer and member of the ASPO-USA board of directors.

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