One of the more interesting occasions each year is learning just how far the International Energy Agency has come in the last 12 months towards publicly admitting that days of boundless cheap oil are over, just how high global oil production will ever get, and when the inevitable decline in production will set in. The IEA, of course, is not a completely free agent in formulating its discussion of peak oil, for it must take into account the collective positions of the 28 member countries that pay for its services. For the most part, these nations are not yet willing to admit to their peoples that two centuries of rapid economic growth based on easily available cheap fossil fuels are drawing to a close.
This year’s IEA World Oil Outlook, while another step towards reality, is still projecting production levels during the next 25 years that are impossible to achieve. While acknowledging that production of conventional oil from existing fields will fall from 70 million b/d to less than 16 million by 2035, the agency projects that increases in heavy oil production from Venezuela and Alberta, more natural gas liquids and the discovery and development of another 50 million b/d of new oil production will delay the peak in oil production until circa 2035.
Peak demand is now projected to be around 99 million b/d in 2035 (down from the prediction of 106 million by 2030 last year). But then, this is all unrealistic window dressing for it says nothing about the ability to fulfill the demand.
Because of the realities of the IEA’s political environment, an increasing share of information and insights in the report comes from between the lines where it must be ferreted out by careful reading, analysis, and reflection. Given that it is politically impossible to project major setbacks in the course of industrial civilization, the agency must write around some major issues while still maintaining its credibility.
When the agency says that the oil price needed to balance markets is set to rise, reflecting the growing insensitivity of both demand and supply to price, it is making an important pronouncement that has ominous implications for all our futures, but readers are left to figure this out by themselves.
Besides restating the obvious, that China and India are slated to grow rapidly and that the OECD nations are going to stagnate in coming decades, this year’s report takes on the issue of global disarray over climate change and the implications this has for energy consumption. New scenarios have been developed outlining where we might be if the major countries do try to increase energy efficiency and make cuts in emissions.
While, as usual, there is much detailed information that will provide fodder for analysis over the next year, meaningful conclusions as to where we are really going are sadly lacking.
Tom Whipple originally published this article in the ASPO-USA Peak Oil Review of November 15, 2010.