Peak oil – oil prices need to double in a decade
Suggested by EB contributor Ian McPherson, who writes on his blog:
Michael Kumhof explains the International Monetary Fund (IMF) Research Department’s new, strikingly more accurate, oil supply/price/demand prediction model, and says that according to the model oil prices will need to double in a decade to grow world oil production by 0.9%, in line with published EIA predictions*.
The world economy could not cope with a doubling of oil prices, which begs the question of whether world oil production can be increased at all, at a price that anyone can afford.
Kumhof is very careful to stress the uncertainties surrounding the IMF’s predictions (see Working Paper below), but brings the world a message that any reasonable growth in world oil production will be accompanied by serious episodes of demand destruction.
* It should also be noted that the Working Paper does not represent the views of the IMF. This is normal with IMF Working Papers.A PDF of Michael Kumhof's slides is online at the IIEA website.
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