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In the IEA’s annual report, “The World Energy Outlook 2008”, the agency says that “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.” This rather cryptic formulation, which sounds a lot like a compromise between factions in the IEA, says that at some date between now and 2030 world oil production will peak, but not to worry because the difference will be made up by increasing production of natural gas liquids, ethanol, and heavy oil.
When Fatih Birol, the IEA’s chief economist, was interviewed by the Guardian newspaper last week he was pressed to explain just what “level off towards the end of the projection period” actually means. To the astonishment of the interviewer, the answer came back as 2020 – only 11 years from now. For an Agency that has steadfastly maintained that there was plenty of oil to keep on increasing production for the foreseeable future, this admission caps the turnaround that came with the publication of this year’s Energy Outlook. In that publication, the agency says new research shows that oil production from the world’s existing oil fields may be declining at 6.7 percent a year rather than the 3.7 percent rate previously estimated.
The impact of this admission on government policy has yet to been seen. Many believe that a 2020 date for the plateauing of world oil production is far too optimistic and that a more realistic time frame is between 2010 and 2013 if it has not come already due to the economic slowdown. The next shoe to fall in the general recognition of imminent peak oil may be at the US’s EIA which will be changing leadership in about a month.