dont-panicEver since the dark days of the Bush Administration we have known that the US Administration, under pressure from its oil buddies, can manipulate data. But that was mainly to do with climate.

We also know that the true amount of oil in the world’s depleting oil fields is one of the most hotly guarded topics – no more so than in Saudi Arabia, where ther have long been accusations that they do not have as much oil  left as they say they do.

Whilst we have concentrated on the blog recently more on the demand side predictions, peak oil is never far away.  Today’s Guardian has a really interesting story that will get those interested in peak oil twittering like mad.

A whistleblower has apparently told the paper that the world is much closer to running out of oil than official estimates admit. A 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 US has wanted to deliberately underplay a looming shortage for fear of triggering panic buying.

Of course these allegations will raise serious questions about the accuracy of the IEA’s latest World Energy Outlook, due to be published tomorrow and which has already been heavily leaked.

A senior IEA source who had left told the paper, that a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” he added.

But we should also not forget the other side of the equation.  The IEA said that global demand may only grow by roughly 6 million barrels a day from current levels to a total of around 91 million barrels a day by 2030 if a deal is struck at Copenhagen. The projection is far below the 94 million barrels a day the IEA forecast a year ago for total demand in 2015.

“This [downward revision] is a result of the financial crisis and demand policies that developed nations are putting into place,” said IEA Chief Economist Fatih Birol.

So although supply is dipping, demand is also not rising as rapidly as once expected. But when all this means the world will reach peak oil no one really knows. It may already have happened. It all depends on how badly those figures have been manipulated.

But the main thing is not to panic!!!

One Comment

  • Well, finally something has come up with respect to the oil data being published. There was an article which mentioned about world’s largest oil field Ghawar in Sudi Arabia going under redevelopment. Check out the excerpts of the article :

    “Halliburton was awarded a five year integrated turnkey contract for Ghawar field. Work will be performed in Uthmaniyah, Haradh, Hawiyah and Shedgum. The announcement makes no mention of Ain Dar, the most mature part of Ghawar in the extreme northwestern region of the field. Ain Dar has been under pressure maintenance by peripheral water injection for over 40 years. Ain Dar (and other parts of the field) began producing salt water in the late 1970s and by 2005, the cut was 42%. All of Ain Dar was wet since 1984. Once water became a major problem, many existing vertical wells were converted to short lateral horizontals running along the top 10 feet of the Arab D zone, the main pay. New wells were drilled horizontally to the same layer. Today, the redevelopment process has gone on so long that future oil production from Ain Dar is speculative.Today, the entire field still contains a great deal of crude oil but it is much harder to get and the production rates continue to fall off. Halliburton’s mandate will be to deal with higher and higher water cuts, utilize all known new technology to hold rates as high as possible and stimulate wells as required. The total number of wells drilled in Ghawar exceeds one thousand including hundreds of vertical wells that have either been abandoned or converted to horizontals.”

    Now if we have got severe problems at the world’s largest oil field, which produces 5-5.5 million barrels a day or 7% of world oil, then why is it not being reflected in any of the publications? The oil data being over estimated, is like blindfolding the world, leading to irresponsible behavior of its citizens. Its time for a reality check, Mat Simmons has being asking for higher data transparency in world oil figures ever since he became suspicious about the amount of oil left for production.

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