IEA Whistleblower: Governments Underplaying Peak Oil

This comes from the Guardian (hat tip Lee):

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation’s latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

Conspiracy theorists will love this one. But, we don’t need a conspiracy theory to see that the end of cheap oil is upon us. To find high quality oil deposits (I am not talking about Oil Sands in Alberta here) is becoming more and more expensive. And one oil field after another is hitting peak. We have seen it in Mexico, Russia, the North Sea, the Alaskan North Slope and elsewhere. The only thing keeping us from realizing the peak is Saudi Arabia, the swing producer in OPEC.

In June of last year, I said:

There has been a lot of speculation of late regarding oil field production capacities declining. In particular, there are great worries regarding Russian and Saudi production capacities. The available data on Saudi production is especially opaque. Matthew Simmons, an expert oil investment banker, has written a book questioning the data the Saudis have provided regarding the proven reserves available for production and the production capacity of the Saudis major fields including Super Giant Ghawar, the largest oil field in the world. I recommend anyone interested in this debate read his book, “Twilight in the Desert.”

This leads us to the Armageddon Scenario. Nuclear-armed nations like China, Russia, India and the United States are desperate to keep their standard of living up. As a result, with oil supplies dwindling, competition for oil supplies will increase. The risk of armed conflict to procure necessary supply increases as peak oil becomes apparent. The U.S. has invaded Iraq, has troops stationed in Saudi Arabia and is threatening Iran, all because of oil — and in Iran’s case, the possibility of another nuclear-armed nation entering the strategic quest for oil. This is a battle of extreme importance strategically for a number of countries. They may stop at nothing to achieve their ends should peak oil become a problem.

Of course, this is exactly why China is all over South America and Africa.

As for peak oil, the lower-48 United States peak of 1970 was not recognized until years later. The same will be true again for the global peak. High oil prices are not just a reflection of speculation, there are some very real supply demand imbalances building. Recession has suppressed these, but in a more normal economic environment, oil prices are going to rise.

Comments

[chris coonan:]

OK, first of all, America is already losing the Standard of Living battle, and I don't see WW3 starting to save GM again.

The rest is true however, oil supply is decreasing, demand is not decreasing in the long term.....but if oil goes up to $150/b, we won't have to worry about demand growing, as we will be in a global depression with the current metrics running.

So, where is the Whistleblower information coming from? Source?

Nov 10 01:01 PM

[ryanclarke:]

Hubbert coined peak oil thirty plus years ago. Your whistleblower is deceased however he can be read here en.wikipedia.org/wiki/...

Hubbert hit "lower 48 state" peak oil production in 1970 ... he was off by about five months. The only flaw in Hubbert's reasoning was the assumption of a "bell curve" for oil depletion. Decline in the lower 48 has been much more linear than the right half of the bell curve curve Hubbert followers believe in. I am a "peak oil" believer, but not just because of my love for taking a walk in a forest in the summer, but because of geopolitical borders and ineffective man made policies which make extraction of oil MUCH more difficult than it has to be ... the fact mankind is spending tons of money trying to get oil out of the ground from ten thousand feet beneath the sea ... tells me mankind ... as a whole ... is about as stupid as a bunch of chimps who'll fight baboons in Africa when they think their food supply is constrained ... for a day or two. AMERICA REFUSES TO ACCEPT A DEPRESSION!


On Nov 10 01:01 PM chris coonan wrote:

> OK, first of all, America is already losing the Standard of Living
> battle, and I don't see WW3 starting to save GM again.
>
> The rest is true however, oil supply is decreasing, demand is not
> decreasing in the long term.....but if oil goes up to $150/b, we
> won't have to worry about demand growing, as we will be in a global
> depression with the current metrics running.
>
> So, where is the Whistleblower information coming from? Source?

Nov 10 02:23 PM

[perceptions...:]

Peak Oil has already passed into history, as since 2005 Oil production has not effectively kept up with inflation, Demand or Population Growth.

Whether it is the IEA, EIA, Politicians or self interest groups, the establishment is now into preservation of the status quo, at any cost!

Misinformation and smoke & mirrors are now a major part of the armory, just as it was/is in the tobacco industry campaign!

Ghawar, Burgan, Cantarell, the OLD SUPER FIELDS are now on the decline. The NEW SUPPLIES, such as Canadian Tar Sands, Shale, Deep Water & Artic Crude are mainly years away and their EROEI is much, much lower than the old super fields and their ENVIRONMENTAL IMPACT WILL BE MUCH GREATER.

There are many scenario's that may play out, regrettably most of them, may not have Hollywood endings?

Nov 11 03:50 AM

[Snitzer:]

We (the world) can do it, we must do it and our options are expiring: Oil must be relegated to the noxious substance it is, and replaced as the world's dominant energy producer by "Something Else". Oil will die an inglorious, tumultuous and destructive death, wars will be (are being) fought over the rights to spend trillions of whatever currencies are in vogue to drill down to the final few drops of the stuff. Our survival as a species pretty well depends on our developing the next source or sources of energy, not in some ill defined future but right now. Short term, oil stocks will skyrocket, and yes, there are profits awaiting for those who know their exit points. But long term it's a whole new ball game, and the shaking and sorting of winners and losers hasn't even begun.

Nov 11 10:38 AM

[Econ 1:]

There is nothing--and I mean nothing-- that has been found in nature (yet) that has the relatively safely stored and harnessed and plentiful energy that a gallon of cracked crude does--like it or not. Peak Oil is a guessing game that gets constantly hammered by advancing technologies in the use of and exploration and delivery of oil. I question the motives behind the leftist environmentalist tradition of locking down federal lands against responsible exploration and think of it as nothing more than a power grab-- I don't believe you when I hear we have such and such amount of oil left. Drill here drill now--see you in Nov. 2010.

Nov 11 01:00 PM

[jack kreg:]

the peak oil stuff, badly neglects the conversion of oil consuming industry and transportation systems to natural gas.
NG continues to become more and more abundant, not only in the USA, where its so abundant that new drilling is being postponed, but also in South Asia, where the worlds largest energy co's are building massive production and liquefaction facilities.
Peak oil neglects NG as a very attractive alternative.

Nov 11 01:24 PM

[Glen88:]

The real value of oil is not its energy content but its role as a energy storage medium. Generating energy, or capturing it is getting easier and cheaper. While storage solutions are not as well developed, there is an increasingly good pipeline of potential means.

Nov 11 03:19 PM

[Gaucho:]

Well it makes you ask why was Britain and the US and Turkey in a three way negotiation on how they were going to carve up Iraq in JUNE!! of 2001. See The American Conservative magazine www.amconmag.com/artic.../. Ya see this FBI translator Sibel Edmonds, called the most gagged woman ever by the ACLU, and stated that fact under oath. It just so happens that IRAQ currently has the largest untapped supply of oil in the world. AT LEAST 115 known billion barrels.

Ain't it convenient that 911 came along so we could try and take it for pennies on the dollar? The best plans for mice and men and neocons are soon to go awry. I can hardly wait to send my son to die for the oil that we should have not needed if we would have implemented taxes and promoted efficiency and alternatives. But that would have not been the FREE MARKET and the free market mentality.

Nov 11 03:19 PM