Spin slips off oil production numbers
World Energy Outlook 2010 is a cry for help
Kjell Aleklett, Newcastle Herald, November 11, 2010
Energy is a critical strategic issue for the OECD nations so it is naïve to think that there is no political agenda when its energy watchdog, the IEA, publishes its prognoses. Bad news on the energy front can make life difficult for politicians so the numbers given in the IEA’s World Energy Outlook (WEO) 2010 report are given a positive spin. But a closer look shows a picture that is anything but positive.
In WEO 2010 the IEA continues its tradition of predicting future oil demand without considering if supplying it is possible. Last year the IEA stressed the importance of oil for economic growth and concluded that 106 million barrels per day (mb/d) would be required by 2030, an increase of about 20 mb/d above current production. This year the IEA only predicts 99 mb/d by 2035 and avoids any discussion of economic growth. We can interpret this as meaning that the desired economic growth is not possible.
The IEA now sees OECD oil consumption falling from today’s 41.7 mb/d to
35.3 mb/d by 2035. This means that all OECD nations, including Australia, must revise down their future consumption estimates. Non-OECD nations are now expected to increase their oil consumption by 19 mb/d by 2035. Two thirds of this will come from China and India.
The IEA notes that, since 1980, we have consumed oil faster than we discover it. We now consume 30 billion barrels per year which is more than double what we find. Amazingly, the IEA asserts we will need to find an extra 900 billion barrels of oil over the next 25 years to meet demand. But at the current discovery rate of only 10 billion barrels it would take 90 years! To meet the IEA’s demand prognosis, by 2035 the non-OPEC nations will need to have produced more oil than currently in their reserves. Furthermore, in 2035 they must still be producing oil at 46 mb/d!
Just like previous years the IEA continues to assume that “demand” will determine oil production and so, as previously, their expectations for 2035 are unrealistic. However, despite several unrealistic conclusions, WEO 2010 also contains real numbers worth focussing on. The 68 mb/d of crude oil from fields producing in 2009 is now estimated to drop to only 16 mb/d by 2035. They use a decline rate of 8.3% which is in complete agreement with my team’s research. The IEA says that 60% of oil production in 2035 must come from fields not yet even found(should be the other way around, 40%) . Also, when estimating production from known fields that are not yet producing the IEA fails to heed the criticism of their methods presented in our scientific paper, The Peak of the Oil Age” published last year.
In WEO 2010 the IEA presents facts that mean only one thing – the peak of oil production is imminent. By showing this data without announcing this obvious conclusion the IEA is making a cry for help to do what, for them, is politicly impossible. WEO 2010 is a cry for help to tell the truth about peak oil.
Kjell Aleklett is Professor of Physics and head of the Global Energy Systems Group at Uppsala University, Sweden
Aleklett's Energy Mix 
Martin Saar
November 10, 2010
Hej Kjell!
Du bekräftar och förtydligar vad många inofficiella infokanaler (bloggar) skrivit idag om WEO 2010. De officiella nyhetskanalerna tiger still. Det gäller både SVT och TV4. DN hade en liten notis skriven av Lars-Ingmar Carlsson. Det är verkligen locket på och därmed ett stort svek mot medborgarna och det fria ordet. Intressant att minskningen 8,3 % sammanfaller med era beräkningar. Dessutom ett erkännande att peaken verkligen inträffade 2008,
Gustav
November 11, 2010
Välskrivet Kjell! På ett kortfattat och sakligt sätt dissekerar du WEO2010 så att vi som inte läst den förstår. Har du några planer på att försöka hjälpa svenska aktörer att nå en bättre analys av läget? Det vore trist om beslutsfattare gjorde prognoser baserat på IEAs rapport?
Bengt org
November 11, 2010
Martin Saar;
Oljetillgången har varat så länge att den är självklar för den stora massan. Inget som är av storre intresse för massmedia.
Men på måndag i “Vetenskapens värld” TV2 kommer man att ta upp ämnet “När oljan sinar, vad händer då”?
Alltid något!
aleklett
November 11, 2010
Det finns risk för att ni kommer att se mig då.
tos
November 12, 2010
Kjell,
ville du stille opp i et tilsvarende program i Norge? Det kommer en Peak Oil artikkel i en nasjonal dagsavis snart.
Martin Saar
November 11, 2010
Bengt, det som triggar massmedia och redaktionerna är avvikelser och personliga konflikter. Denna rapport 2010 innehåller mer av detta än tidigare rapporter. Oljetillgången i sig intresserar inte massmedia där har du rätt. Peakoilbegreppet är också så uttjatat att det knappast får massmedia att bry sig. Att kommunicera konsekvenserna av bristen på olja är utmaningen, men den kommer fortfarande smygande så att den inte ens märks.
Att SVT tar upp ämnet utifrån försäkringsbolagens perspektiv är ändå en öppning att glädjas åt. De lever ändå på att bedöma framtiden!
Robert Smart
November 12, 2010
Hi, I enjoyed your talk at Sydney Uni yesterday. I asked the second last question, about the current situation. I think you agreed with me that “If the world followed Paul Krugman’s advice and used all possible means to reflate the world economy back to Business As Usual, then that would require more oil production than is currently possible”. (Hence would dissipate as stagflation). If your research confirms this point [based on the current effective ratio of oil use to global production] then I think it is very important. You could reasonably say “This is what Peak Oil means to the ordinary citizen and to politicians”, that BAU is no longer an option. Time to start building that crash mat. By the way I call the crash mat “A Gift to the Future”, and I hold the gifttothefuture.org url, but I haven’t done anything with it yet :-).
Robert Smart
November 12, 2010
There is some stuff at http:www.gifttothefuture.org that I wrote when I set it up a year or so ago. I wonder if you agree with my idea of how to build a crash mat? Note that I believe it has to be nuclear power. Wind and solar are unlikely to be very useful. However I leave that open.
Robert Smart
November 13, 2010
See the last paragraph of Krugman’s latest post for the claim that we could be out of the slump: http://krugman.blogs.nytimes.com/2010/11/13/axis-of-deflation/. Krugman is the 2009 Nobel winner in Economics, and the most academically distinguished of the New York Times columnists.
Basically the Right is happy for the poor to suffer the consequences of the slump, while the Left is in fantasy land about how to proceed. It is time for Peak Oil folk to get into the debate with some ideas on how society as a whole can share the pain (until we can emerge into a new electrified nuclear powered world).
aleklett
November 12, 2010
I have taken a second look at the report and have to correct one thing: “The IEA says that 60% of oil production in 2035 must come from fields not yet even found”, should be the other way around 40%. This does not change the conclusions.
Ed Pell
November 13, 2010
The politicians who have jobs at the IEA want to keep their high paying jobs. Many of us in the US do not have jobs. Desperate people do whatever whatever they need to do to keep their families safe.
Matt Mushalik
November 13, 2010
The WEO graph on incremental production from various countries (slide 8 in key graphs) contradicts assessments made in the IEA Medium Term Oil Market Report just a couple of months ago, for example for Iran. I had written this post:
3/7/2010
Iran needs $130 oil to balance budget
IEA: Iran’s crude oil production to decline by 700 Kb/d by 2015
http://www.crudeoilpeak.com/?p=1669
It is not just the global peak which is important but the peaking in subsystems and its socio economic impact. Read what the peaking of West Siberian oil fields meant way back in the 80s:
4/10/2010
Russia’s oil peak and the German reunification
http://www.crudeoilpeak.com/?p=1912
ehswan
November 13, 2010
The real problem is not too little oil, but too many people.
Marko Ulvila
November 15, 2010
I’d stay too many cars and aeroplanes.
Magnus
November 15, 2010
Många tycker att den globala energiförsörjningen är den viktigaste frågan i dag. Det pågår en debatt om framtidens elproduktion och en motsvarande om oljan. Men varje debatt är sin egen silo, de verkar aldrig mötas.
Jag tycker att det är beklämmande, riv dessa silon!
Benoit Dassy
November 22, 2010
“Amazingly, the IEA asserts we will need to find an extra 900 billion barrels of oil over the next 25 years to meet demand. But at the current discovery rate of only 10 billion barrels it would take 90 years!”
Could you give references in the IEA report for this, please ? Public “key graph” of WEO 2010 don’t seems to show it.
Thanks,
Roger Brewster
November 23, 2010
The WEO 2010 Executive Summary on page 6 really confuses the peak oil issue by stating that “under the New Policies Scenario, production in total does not peak before 2035, though it comes close to doing so.” As you suggest, this could be a politically motivated conclusion to obscure the facts.