[R-G] [BillTottenWeblog] At Last, A Date

[Bill Totten]

For the first time, the International Energy Agency has produced a date
for peak oil. And it's not reassuring.

by George Monbiot

The Guardian (December 15 2008)

Can you think of a major threat for which the British government does
not prepare? It employs an army of civil servants, spooks and
consultants to assess the chances of terrorist attacks, financial
collapse, floods, epidemics, even asteroid strikes, and to work out what
it should do if they happen. But there is one hazard about which it
appears intensely relaxed. It has never conducted its own assessment of
the state of global oil supplies and the possibility that one day they
might peak and then go into decline.

If you ask, it always produces the same response: "global oil resources
are adequate for the foreseeable future". {1} It knows this, it says,
because of the assessments made by the International Energy Agency
(IEA) in its World Energy Outlook reports. In the 2007 report, the IEA
does appear to support the government's view. "World oil resources", it
states, "are judged to be sufficient to meet the projected growth in
demand to 2030″ {2}; though it says nothing about what happens at that
point, or whether they will continue to be sufficient after 2030. But
this, as far as Whitehall is concerned, is the end of the matter. Like
most of the rich world's governments, the United Kingdom treats the
IEA's projections as gospel. Earlier this year, I submitted a Freedom of
Information request to the UK's Department for Business, asking what
contingency plans the government has made for global supplies of oil
peaking by 2020. The answer was as follows: "the Government does not
feel the need to hold contingency plans specifically for the eventuality
of crude oil supplies peaking between now and 2020". {3}

So the IEA had better bloody well be right. In the report on peak oil
commissioned by the US Department of Energy, the oil analyst Robert L
Hirsch concluded that "without timely mitigation, the economic, social
and political costs" of world oil supplies peaking "will be
unprecedented". {4} He went on to explain what "timely mitigation"
meant. Even a worldwide emergency response "ten years before world oil
peaking", he wrote, would leave "a liquid fuels shortfall roughly a
decade after the time that oil would have peaked". {5} To avoid global
economic collapse, we need to begin "a mitigation crash program twenty
years before peaking". {6} If Hirsch is right and if oil supplies peak
before 2028, we're in deep doodah.

So burn this into your mind: between 2007 and 2008 the IEA radically
changed its assessment. Until this year's report, the agency mocked
people who said that oil supplies might peak. In the foreword to a book
it published in 2005, its executive director, Claude Mandil, dismissed
those who warned of this event as "doomsayers". "The IEA has long
maintained that none of this is a cause for concern", he wrote.
"Hydrocarbon resources around the world are abundant and will easily
fuel the world through its transition to a sustainable energy future".
{7} In its 2007 World Energy Outlook, the IEA predicted a rate of
decline in output from the world's existing oilfields of 3.7% a year
{8}. This, it said, presented a short-term challenge, with the
possibility of a temporary supply crunch in 2015, but with sufficient
investment any shortfall could be covered. But the new report, published
last month, carried a very different message: a projected rate of
decline of 6.7%, which means a much greater gap to fill {9}.

More importantly, in the 2008 report the IEA suggests for the first time
that world petroleum supplies might hit the buffers. "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". {10} These bland words reveal a major shift. Never
before has one of the IEA's energy outlooks forecast the peaking or
plateauing of the world's conventional oil production (which is what we
mean when we talk about peak oil).

But that is as specific as the report gets. Does it or doesn't it mean
that we have time to prepare? What does "towards the end of the
projection period" mean? The agency has never produced a more precise
forecast - until now. For the first time, in the interview I conducted
with its chief economist Fatih Birol, it has given us a date. And it
should scare the pants off anyone who understands the implications.

Fatih Birol, the lead author of the new energy outlook, is a small,
shrewd, unflustered man with thick grey hair and Alistair Darling
eyebrows. He explained to me that the agency's new projections were
based on a major study it had undertaken into decline rates in the
world's 800 largest oil fields. So what were its previous figures based
on? "It was mainly an assumption, a global assumption about the world's
oil fields. This year, we looked at it country by country, field by
field and we looked at it also onshore and offshore. It was very very
detailed. Last year it was an assumption, and this year it's a finding
of our study." I told him that it seemed extraordinary to me that the
IEA hadn't done this work before, but had based its assessment on
educated guesswork. "In fact nobody had done this research", he told me.
"This is the first publicly available data". {11}

So was it not irresponsible to publish a decline rate of 3.7% in 2007,
when there was no proper research supporting it? "No, our previous
decline assumptions have always mentioned that these are assumptions to
the best of our knowledge - and we also said that the declines [could
be] higher than what we have assumed".

Then I asked him a question for which I didn't expect a straight answer:
could he give me a precise date by which he expects conventional oil
supplies to stop growing?

"In terms of non-OPEC [countries outside the big oil producers'
cartel]", he replied, "we are expecting that in three, four years' time
the production of conventional oil will come to a plateau, and start to
decline ... In terms of the global picture, assuming that OPEC will
invest in a timely manner, global conventional oil can still continue,
but we still expect that it will come around 2020 to a plateau as well,
which is of course not good news from a global oil supply point of view".

Around 2020. That casts the issue in quite a different light. Mr Birol's
date, if correct, gives us about eleven years to prepare. If the Hirsch
report is right, we have already missed the boat. Birol says we need a
"global energy revolution" to avoid an oil crunch, including
(disastrously for the environment) a massive global drive to exploit
unconventional oils, such as the Canadian tar sands. But nothing on this
scale has yet happened, and Hirsch suggests that even if it began today,
the necessary investments and infrastructure changes could not be made
in time. Fatih Birol told me "I think time is not on our side here".

When I pressed him on the shift in the agency's position, he argued that
the IEA has been saying something like this all along. "We said in the
past that one day we will run out of oil. We never said that we will
have hundreds of years of oil ... but what we have said is that this
year, compared to past years, we have seen that the decline rates are
significantly higher than what we have seen before. But our line that we
are on an unsustainable energy path has not changed."

This of course is face-saving nonsense. There is a vast difference
between a decline rate of 3.7% and a rate of 6.7%. There is an even
bigger difference between suggesting that the world is following an
unsustainable energy path - a statement almost everyone can subscribe to
- and revealing that conventional oil supplies are likely to plateau
around 2020. If this is what the IEA meant in the past, it wasn't
expressing itself very clearly.

So what do we do? We could take to the hills, or we could hope and pray
that Hirsch is wrong about the twenty-year lead time, and begin a global
crash programme today of fuel efficiency and electrification. In either
case, the British government had better start drawing up some
contingency plans.

www.monbiot.com

References:

1. Eg DECC Press Office, 28th October 2008. Statement emailed to Duncan
Clark at the Guardian.

2. International Energy Agency, 2007. World Energy Outlook 2007, page
43. IEA, Paris.

3. BERR, 8th April 2008. Response to FoI request, Ref 08/0091.

4. Robert L Hirsch, Roger Bezdek and Robert Wendling, February 2005.
Peaking of World Oil Production: Impacts, Mitigation, & Risk Management.
US Department of Energy, page 4.
http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf

5. ibid, page 59.

6. ibid, page 65.

7. International Energy Agency, 2005. Resources to Reserves: Oil and Gas
Technologies for the Energy Markets of the Future, page 3. IEA, Paris.

8. International Energy Agency, 2007, ibid, page 84.

9. International Energy Agency, 2008. World Energy Outlook 2008, page
43. IEA, Paris.

10. ibid, page 103.

11. This interview is broadcast on the Guardian's website today.

http://www.monbiot.com/archives/2008/12/15/at-last-a-date/


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