The official release of the IEA’s World Energy Outlook 2008, has already brought forth a flood of new stories and commentary. Most of the immediate press stories focused on the need to find 64 million b/d of new production in the next 22 years to offset depletion and provide for some modest growth. This was cast in terms of finding four new Saudi Arabias, or a new Kuwait a year. The IEA’s appraisal that depletion rates will increase in coming years as production shifts from giant on-shore fields to smaller off-shore ones received considerable attention. Finally, the IEA’s assertion that a lack of adequate investment will cause a supply crunch by 2015 was widely reported.

OPEC released a scathing attack on the report, apparently disturbed by the implication that the cartel did not have everything under control and would face a huge challenge in keeping up with projected increases in global demand. The Saudis and their friends, however, were delighted with the IEA judgment that the Kingdom’s giant Ghawar oil field was on a plateau and was not in danger of going into imminent decline — thereby “undercutting the claims of peak oil theorists.”

Beyond the immediate press reaction, numerous individuals and organizations have embarked on in-depth analyses, commentary and criticism of the report which clearly breaks new ground in examining the future of the world’s energy supply. The IEA continues to forecast that, given adequate investment, the world oil supply can increase over the next 20 years despite accelerating depletion. Many observers have already called this forecast into question.

One thought on “The IEA World Energy Outlook 2008”

  1. The International Energy Agency, whose members are the world’s industrialized nations, issued a report this month stating that the worldwide proven reserves of oil will be completely exhausted before mid-century. The report predicts that global primary demand for oil will rise by one percent per year on average and estimates that remaining proven reserves, including non-conventional oil, equals 1.2 to 1.3 trillion barrels. The report gives global primary demand in 2007 as 85 million barrels per day, which equals 31 billion barrels per year. The report states: “This is enough to supply the world with oil for over 40 years at current rates of consumption.” That is 2048.

    But this conclusion ignores the I.E.A. prediction of growth in oil consumption of one percent per year. We need to calculate the effect of this increasing consumption on the exhaustion of proven oil reserves. Luckily, R.T. Roscoe published a formula for doing this in 1973 in the American Journal of Physics, “The Effect of Growth Rate on Conservation of a Resource.” Applying the formula to a 1.3 trillion barrel supply of proven oil reserves with a starting use rate of 31 billion barrels per year which increases by one percent each year gives a result of 30 years to exhaust the resource. That is 2038.

    This stark conclusion from such a respected international energy agency serving the industrialized nations of the world should make us all take notice. The U.S. and the world needs a vision of what such a changed world will look like and the transformations that we need in all aspects of our economy, society and individual lives to adapt to it. The Executive Summary of the I.E.A. report, in addressing both energy and global warming concerns, ends with these words: “Time is running out and the time to act is now.”

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