How reasonable are oil production scenarios from public agencies?

Posted on July 25, 2009

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When, in their future scenarios, politicians and economists discuss energy they most often refer to the scenarios presented by the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA). Kristofer Jakobsson, Bengt Söderbergh, Mikael Höök and Kjell Aleklett have analysed how reliable these prognoses are in an article that is now accepted for publication by the journal Energy Policy. A summary of the article is given below:

Abstract: According to the long term scenarios of the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), conventional oil production is expected to grow until at least 2030. EIA has published results from a resource constrained production model which ostensibly supports such a scenario. The model is here described and analyzed in detail. However, it is shown that the model, although sound in principle, has been misapplied due to a confusion of resource categories. A correction of this methodological error reveals that EIA’s scenario requires rather extreme and implausible assumptions regarding future global decline rates. This result puts into question the basis for the conclusion that global “peak oil” would not occur before 2030.

The article can be read in its entirety at the homepage of our research group Global Energy Systems at Uppsala University. In the article we attempt to show that the prognoses that, above all, the EIA discusses can result in large problems in the future. An unrealistic description of the future will mean that adaptation to a new, realistic one will be beset by conversion problems of enormous magnitude. I would like to quote the following text from the conclusion of our article:

“In the peak oil debate, analysts who downplay the possibility of an early peak are usually labeled “optimists”. This title we would like to claim for ourselves. In our view, optimism means to always have a constructive attitude after a sober look at the facts at hand, not merely hope for the best scenario to come about. An early production peak followed by a gentle decline should provide good opportunities for an orderly transition from today’s oil dependent economy to a more sustainable one. It should definitely not be interpreted as a doomsday scenario, but rather as a cause for cautious optimism. EIA’s high-peak-steep-decline scenarios, on the other hand, would make an orderly transition extremely difficult and likely have catastrophic consequences for the economy.”

(Swedish)

Då politiker och ekonomer i sina framtidsscenarier diskuterar energi hänvisar man oftast till de scenarier som International Energy Agency (IEA) och U.S. Energy Information Administration (EIA) presenterar. Vi, Kristofer Jakobsson, Bengt Söderbergh, Mikael Höök, Kjell Aleklett, har analyserat hur tillförlitliga dessa prognoser är. Vår artikel är nu godkänd av Energy Policy och här nedan finns en sammanfattning av artikeln.

Abstract
According to the long term scenarios of the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), conventional oil production is expected to grow until at least 2030. EIA has published results from a resource constrained production model which ostensibly supports such a scenario. The model is here described and analyzed in detail. However, it is shown that the model, although sound in principle, has been misapplied due to a confusion of resource categories. A correction of this methodological error reveals that EIA’s scenario requires rather extreme and implausible assumptions regarding future global decline rates. This result puts into question the basis for the conclusion that global “peak oil” would not occur before 2030.

Artikeln i son helhet kan läsas från vår grupps hemsidan, Globala energisystem vid Uppsala universitet. I artikeln försöker vi visa att de prognoser som framförallt EIA diskuterar kan leda till stora problem i framtiden. En orealistisk betraktelse av framtiden medför att en anpassning till en ny realistisk framtid kommer att möta omställnings problem av gigantisk magnitud. Från vår slutsats i artikeln vill jag citera:

“In the peak oil debate, analysts who downplay the possibility of an early peak are usually labeled “optimists”. This title we would like to claim for ourselves. In our view, optimism means to always have a constructive attitude after a sober look at the facts at hand, not merely hope for the best scenario to come about. An early production peak followed by a gentle decline should provide good opportunities for an orderly transition from today’s oil dependent economy to a more sustainable one. It should definitely not be interpreted as a doomsday scenario, but rather as a cause for cautious optimism. EIA’s high-peak-steep-decline scenarios, on the other hand, would make an orderly transition extremely difficult and likely have catastrophic consequences for the economy.”

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