[R-G] [BillTottenWeblog] Whistleblower: There’s a Lot Less Oil ...

Mon Nov 16 01:24:58 MST 2009

... Than We Think and US Has Been Trying to Cover It Up

by Terry Macalister, The Guardian

AlterNet (November 12 2009)

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.

In particular they question the prediction in the last World Economic
Outlook, believed to be repeated again this year, that oil production can
be raised from its current level of 83 million barrels a day to 105
million barrels. External critics have frequently argued that this cannot
be substantiated by firm evidence and say the world has already passed its
peak in oil production.

Now the "peak oil" theory is gaining support at the heart of the global
energy establishment. "The IEA in 2005 was predicting oil supplies could
rise as high as 120 million barrels a day by 2030 although it was forced
to reduce this gradually to 116 million and then 105 million last year",
said the IEA source, who was unwilling to be identified for fear of
reprisals inside the industry. "The 120 million figure always was nonsense
but even today's number is much higher than can be justified and the IEA
knows this.

"Many inside the organisation believe that maintaining oil supplies at
even ninety million to 95 million barrels a day would be impossible but
there are fears that panic could spread on the financial markets if the
figures were brought down further. And the Americans fear the end of oil
supremacy because it would threaten their power over access to oil
resources", he added.

A second senior IEA source, who has now left but was also unwilling to
give his name, said 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.

The IEA acknowledges the importance of its own figures, boasting on its
website: "The IEA governments and industry from all across the globe have
come to rely on the World Energy Outlook to provide a consistent basis on
which they can formulate policies and design business plans".

The British government, among others, always uses the IEA statistics
rather than any of its own to argue that there is little threat to
long-term oil supplies.

The IEA said tonight that peak oil critics had often wrongly questioned
the accuracy of its figures. A spokesman said it was unable to comment
ahead of the 2009 report being released tomorrow.

John Hemming, the MP who chairs the all-party parliamentary group on peak
oil and gas, said the revelations confirmed his suspicions that the IEA
underplayed how quickly the world was running out and this had profound
implications for British government energy policy.

He said he had also been contacted by some IEA officials unhappy with its
lack of independent scepticism over predictions. "Reliance on IEA reports
has been used to justify claims that oil and gas supplies will not peak
before 2030. It is clear now that this will not be the case and the IEA
figures cannot be relied on", said Hemming.

"This all gives an importance to the Copenhagen [climate change] talks and
an urgent need for the UK to move faster towards a more sustainable [lower
carbon] economy if it is to avoid severe economic dislocation", he added.

The IEA was established in 1974 after the oil crisis in an attempt to try
to safeguard energy supplies to the west. The World Energy Outlook is
produced annually under the control of the IEA's chief economist, Fatih
Birol, who has defended the projections from earlier outside attack. Peak
oil critics have often questioned the IEA figures.

But now IEA sources who have contacted the Guardian say that Birol has
increasingly been facing questions about the figures inside the
organisation.

Matt Simmons, a respected oil industry expert, has long questioned the
decline rates and oil statistics provided by Saudi Arabia on its own
fields. He has raised questions about whether peak oil is much closer than
many have accepted.

A report by the UK Energy Research Centre (UKERC) last month said
worldwide production of conventionally extracted oil could "peak" and go
into terminal decline before 2020 - but that the government was not facing
up to the risk. Steve Sorrell, chief author of the report, said forecasts
suggesting oil production will not peak before 2030 were "at best
optimistic and at worst implausible".

But as far back as 2004 there have been people making similar warnings.
Colin Campbell, a former executive with Total of France told a conference:
"If the real [oil reserve] figures were to come out there would be panic
on the stock markets … in the end that would suit no one".

_____

Terry Macalister is the Guardian's energy editor.

http://www.alternet.org/story/143890/

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