The FT: "Highlights of the IEA report"
Posted by Big Gav in iea, peak oil
The FT seems to have been leaked a copy of the forthcoming "World Energy Outlook" report from the IEA. Highlights are summarised here - Highlights of the IEA report. Other pieces on the same topic - Opec’s economic clout set to grow and IEA predicts oil price to rebound to $100. The IEA still seems to be far too optimistic on future production (predicting 100 mbpd + in 2030) but at least their changes are trending towards reality.
In a flagship report due to be published next week by the International Energy Agency, the developed world’s energy watchdog doubles its forecast the price for oil will reach by 2030 and predicts the era of cheap oil is over. Below are the report’s highlights.
The Challenge:
“It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply.”
The Oil Price:
“While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over.”
Supply and Investment:
“Globally, oil resources might be plentiful, but there can be no guarantee that they will be exploited quickly enough to meet the level of demand projected.”
“Production continues to outstrip discoveries (despite some big recent finds, such as in deepwater offshore Brazil).”
“Observed decline rates vary markedly by region; they are lowest in the Middle East and highest in the North Sea.”
“Investment in 1m b/d of additional capacity – equal to the entire capacity of Algeria today – is needed each year by the end of the projection period just to offset the projected acceleration in the natural decline rate.”
International versus National Oil Companies:
“The opportunities for international companies to invest in non-Opec regions will diminish as the resource base contracts, eventually leaving the countries holding the bulk of the world’s remaining oil and gas reserves to take on a larger burden of investment.”
“The increasing dominance of national companies may make it less certain that the investment projected in this Outlook will actually be made.”
Emissions and Renewable Energy:
“The projected rise in emissions of greenhouse gases in the Reference Scenario puts us on a course of doubling the concentration of those gases in the atmosphere by the end of this century.”
“Modern renewable technologies grow most rapidly, overtaking gas to become the second-largest source of electricity, behind coal, soon after 2010.”
The Oil Drum will have some in-depth coverage next week after the report is released.
TOD also has a report quoting Jeff Rubin blaiming oil prices for the recession - Jeff Rubin: Oil Prices Caused the Current Recession.
Jeff Rubin, Chief Economist at CIBC World Markets, in a recent report, is now saying that the current recession is caused by high oil prices. Defaulting mortgages are only a symptom of the high oil prices. We should be blaming the underlying cause--higher oil prices--rather than the symptom. These higher oil prices caused Japan and the Eurozone to enter into a recession even before the most recent financial problems hit. Higher oil prices started four of the last five world recessions; we shouldn't be too surprised if they started this one also.
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