Recently many stories, though few in the U.S. media, have revealed a serious new development on the issue of peak oil. The world seems to be running out of oil, and many people say we have already reached peak oil. Allegedly, the United States government doesn’t want people to know this. According to “whistleblowers”, governments are worried about a panic situation on the world energy markets. (See the FN podcast on this here).
Two International Energy Agency whistleblowers have come forward with “startling claims” about the world’s supply of crude oil, according to a report published Tuesday in the Guardian. Colin Campbell, a former executive with Total of France recently told a conference: “If the real [oil reserve] figures were to come out there would be panic on the stock markets … in the end that would suit no one.” This is the case every year this report comes out. No one wants to report how bad the actual shortages might be, or speculate on what might happen when we run out of oil, except writers online.
IEA press conf. Nov. 10 2009
The response by the IEA was to deny the Guardian story. During the many times I have seen this story repeated, people neglect to say that the IEA has denied the claims. During a press conference announcing the WEO book, (you can see the whole video here) they were asked by a report from Africa Confidential about the Guardian report. The reponse from IEA’s Tanaka was, “I think that article is just groundless. We are a very neutral organization and we are very much proud of our analysis and independence. And this World Energy outlook is certainly publicized by my authority and we have been always saying that investment is necessary. Without huge investment we cannot really achieve the necessary balance of demand and supply.” Fossil fuel energy investments have been falling lately (and that’s good.) But he blames much of the shortages on that. Whether that is true or not remains to be seen. The bottom line is that we can’t use all of the fossil fuels we know about already and keep our temperature rise to 2C, where it has to stop.
It would also be helpful if the “whistleblowers” could come forward with their names and identities. It’s hard to take at face value people who won’t even reveal their identities. Yet this story is being repeated as truth when there is really no actual evidence, other than anonymous claims, to believe the United States government is actually pressuring the IEA. It’s not hard to believe, but there is no evidence. Yet it is likely true that we have passed peak oil already, given that the original peak year, recently, was 2010.
“We have [already] entered the ‘peak oil’ zone,” the unnamed former IEA official told British newspaper The Guardian. “I think that the situation is really bad.”
The claims came on the same day the IEA published its annual “World Energy Outlook” report for 2009. Even the UN has printed the story:
An unnamed senior official at the International Energy Agency (IEA) has told The Guardian that the agency has deliberately been underplaying a looming shortage of oil for fear of triggering panic buying.
The source claims that the United States has influenced the internationally respected watchdog to underplay the decline rate from existing oil fields while exaggerating the prospects of discovering new reserves.
“Many inside the organization believe that maintaining oil supplies at even 90 million to 95 million barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” The Guardian quotes the IEA source as saying.
The IEA was established in 1974 after the oil crisis in an attempt to try to safeguard energy supplies to the west. The World Energy Outlook is produced annually under the control of the IEA’s chief economist, Fatih Birol, who has defended the projections from earlier outside attack. Peak oil critics have often questioned the IEA figures.
But now IEA sources who have contacted the Guardian say that Birol has increasingly been facing questions about the figures inside the organisation.
This is the story in the Guardian:
Key oil figures were distorted by US pressure, says whistleblower
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
The allegations raise serious questions about the accuracy of the organisation’s latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.
In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.
Now the “peak oil” theory is gaining support at the heart of the global energy establishment. “The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.
“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.
A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” he added.
The IEA acknowledges the importance of its own figures, boasting on its website: “The IEA governments and industry from all across the globe have come to rely on the World Energy Outlook to provide a consistent basis on which they can formulate policies and design business plans.”
The British government, among others, always uses the IEA statistics rather than any of its own to argue that there is little threat to long-term oil supplies.
The IEA said tonight that peak oil critics had often wrongly questioned the accuracy of its figures. A spokesman said it was unable to comment ahead of the 2009 report being released tomorrow.
John Hemming, the MP who chairs the all-party parliamentary group on peak oil and gas, said the revelations confirmed his suspicions that the IEA underplayed how quickly the world was running out and this had profound implications for British government energy policy.
He said he had also been contacted by some IEA officials unhappy with its lack of independent scepticism over predictions. “Reliance on IEA reports has been used to justify claims that oil and gas supplies will not peak before 2030. It is clear now that this will not be the case and the IEA figures cannot be relied on,” said Hemming.
“This all gives an importance to the Copenhagen [climate change] talks and an urgent need for the UK to move faster towards a more sustainable [lower carbon] economy if it is to avoid severe economic dislocation,” he added.
. . . .
Matt Simmons, a respected oil industry expert, has long questioned the decline rates and oil statistics provided by Saudi Arabia on its own fields. He has raised questions about whether peak oil is much closer than many have accepted.
A report by the UK Energy Research Centre (UKERC) last month said worldwide production of conventionally extracted oil could “peak” and go into terminal decline before 2020 – but that the government was not facing up to the risk. Steve Sorrell, chief author of the report, said forecasts suggesting oil production will not peak before 2030 were “at best optimistic and at worst implausible”.
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