Oil Change International

Exposing the true costs of fossil fuels

It’s Official: Oil Will Peak by 2020

These are turbulent times, no doubt. The unexpected seems to happen on an almost daily basis and what was deemed impossible just months ago now seems highly probable or even normal, whether we are talking financial crisis, falling currencies, or the price of oil.

But what about when we will reach peak oil? Another hotly debated topic, for years some have been arguing that peak oil is already upon is, with others saying we are years away from such a date. The conventional “bible” for many governments are the forecasts issued by the International Energy Agency (IEA).

For years, the IEA has ignored warnings from credible NGO’s and analysts that peak oil is fast approaching. Just three years ago, its executive director, Claude Mandil, labelled those who warned of peak oil as “doomsayers”. “The IEA has long maintained that none of this is a cause for concern,” wrote Mandil.

In its World Energy Outlook for last year, the IEA predicted a rate of decline in output from the world’s existing oilfields of 3.7% a year. But as we know a week can be a long time in politics and a year can be a lifetime in the oil industry. Who, for example, would have forecast the price volatility this year that has seen oil go from $147 to around $40 in six months?

Even so, in a quite amazing turnaround, the IEA now predicts that rate of decline as 6.7 per cent, meaning that oil will peak as early as 2020. In an interview with George Monbiot from the Guardian,  Fatih Birol, chief economist to the IEA admitted that decline rates “were significantly higher” than before. Amazingly he admitted that this year they had done detailed research on a field by field basis and hence come up with the new figure. Before they had only ever done estimates. But that begs the question – why hadn’t they done this work before?

More importantly, it is significant in many ways. The IEA has never before forecast the exact date when peak oil might occur.  And even 2020 is now likely to be over optimistic. Also the IEA is expecting that Canada’s dirty tar sands will take up the slack.  So to keep the world economy turning we will fry the climate in the process. That is why the IEA is now admitting that we are on an “unsustainable energy path”.

And when the world’s energy watch-dog finally admits we are in trouble, you know that we are in trouble. There will be more turbulent times ahead.

Comments (3)

  1. Independent studies (reviewed in the Peak Oil Report by Clifford J. Wirth) conclude that Peak Oil production will occur (or has occurred) between 2005 to 2010 (projected year for peak in parentheses), as follows:

    * Association for the Study of Peak Oil (2007)

    * Rembrandt Koppelaar, Editor of “Oil Watch Monthly” (2008 to 2010)

    * Tony Eriksen, Oil stock 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)

    Independent studies conclude 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. 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.”

    http://www.energywatchgroup.org/fileadmin/global/pdf/EWG_Press_Oilreport_22-10-2007.pdf

    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.

    This is documented in a free 48 page report that can be downloaded, website posted, distributed, and emailed: http://www.peakoilassociates.com/POAnalysis.html

    I used to live in NH-USA, but moved to a sustainable place. Anyone interested in relocating to a nice, pretty, sustainable area with a good climate and good soil? Email: clifford dot wirth at yahoo dot com or give me a phone call which operates here as my old USA-NH number 603-668-4207. http://survivingpeakoil.blogspot.com/

  2. Well, i don’t think so. My opinion is not directly based on research but i guess that Oil peaked in 2008.

    From now on the world nees less oil. First as a spin-off from the financial and economic crisis that will contiinue in 2009 and first half of 2010, i expect.

    At the same time everywhere in the world renewable energy is rising fastly with nice result: we need less oil even when economic crisis is gone.

  3. james moon says:

    I agree that oil prices are going to go up because the economy cycles through this era for example the great depression (Hard Time for the economy) What is happening now “a hard time in the economy” History and time will repeat itself just like you wake up every morning at the same time because it keeps repeating over and over again.

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