The IEA Sets a Date
In the IEA’s annual report, “The World Energy Outlook 2008″, the agency says that “although global oil production in total is not expected to peak before 2030, production of conventional oil…is projected to level off towards the end of the projection period.” This rather cryptic formulation, which sounds a lot like a compromise between factions in the IEA, says that at some date between now and 2030 world oil production will peak, but not to worry because the difference will be made up by increasing production of natural gas liquids, ethanol, and heavy oil.
When Fatih Birol, the IEA’s chief economist, was interviewed by the Guardian newspaper last week he was pressed to explain just what “level off towards the end of the projection period” actually means. To the astonishment of the interviewer, the answer came back as 2020 - only 11 years from now. For an Agency that has steadfastly maintained that there was plenty of oil to keep on increasing production for the foreseeable future, this admission caps the turnaround that came with the publication of this year’s Energy Outlook. In that publication, the agency says new research shows that oil production from the world’s existing oil fields may be declining at 6.7 percent a year rather than the 3.7 percent rate previously estimated.
The impact of this admission on government policy has yet to been seen. Many believe that a 2020 date for the plateauing of world oil production is far too optimistic and that a more realistic time frame is between 2010 and 2013 if it has not come already due to the economic slowdown. The next shoe to fall in the general recognition of imminent peak oil may be at the US’s EIA which will be changing leadership in about a month.
Comments
By Peter Weggeman on December 26th, 2008 at 3:20 pm
Re IEA setting a date: They set a date when their recent study predictad an annual decline of 6.7% for producing fields. About a year ago CERA predicted 4.5%. Lets be conservative and use 5%. In 13 years (in the early 2020s) production will be half of todays 86 mb/d. Natural gas follows a similar path, perhaps a decade behind oil. Demand and price increases will rush back by 2010. Shortages will appear about the same time and looming depletion will will become the basis for energy planning. Including new drilling and streamlining of the nuclear construction and licensing pocess (with fuel reprocessing). The Obama stimulus package, carbon cap&trade, nuclear foot dragging will be seen for the misguided waste of time and resources they are. We should be educating the public about depletion, drilling, building new nukes, and a modern national electricity grid now, at once.
By Clifford J. Wirth, Ph.D. on January 1st, 2009 at 9:58 am
The top story of the year is that global crude oil production peaked in 2008.
The media, governments, world leaders, and public should focus on this issue.
Global crude oil production had been rising briskly until 2004, then plateaued for four years. Because oil producers were extracting at maximum effort to profit from high oil prices, this plateau is a clear indication of Peak Oil.
Then in July and August of 2008 while oil prices were still very high, global crude oil production fell nearly one million barrels per day, clear evidence of Peak Oil (See Rembrandt Koppelaar, Editor of “Oil Watch Monthly,” page 1). Peak Oil is now.
Credit for accurate Peak Oil predictions (within a few years) goes to the following (projected year for peak given in parentheses):
* Association for the Study of Peak Oil (2007)
* Rembrandt Koppelaar, Editor of “Oil Watch Monthly” (2008)
* Tony Eriksen, Oil stock analyst and Samuel Foucher, oil analyst (2008)
* Matthew Simmons, Energy investment banker, (2007)
* T. Boone Pickens, Oil and gas investor (2007)
* U.S. Army Corps of Engineers (2005)
* Kenneth S. Deffeyes, Princeton professor and retired shell geologist (2005)
* Sam Sam Bakhtiari, Retired Iranian National Oil Company geologist (2005)
* Chris Skrebowski, Editor of “Petroleum Review” (2010)
* Sadad Al Husseini, former head of production and exploration, Saudi Aramco (2008)
* Energy Watch Group in Germany (2006)
Oil production will now begin to decline terminally.
Within a year or two, it is likely that oil prices will skyrocket as supply falls below demand. OPEC cuts could exacerbate the gap between supply and demand and drive prices even higher.
Independent studies indicate that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.
Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”
“By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame.”
With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.
It is time to focus on Peak Oil preparation and surviving Peak Oil.