The big news this week comes out of the UK from an article written by Terry Macalister of the Guardian. On Monday, Nov. 9, the Guardian reported that the world is much closer to running out of oil than official estimates imply. This information is attributed to “a whistleblower at the International Energy Agency (IEA),” who says the organization has deliberately underplayed a looming shortage “for fear of triggering panic buying.” Macalister reported that the senior IEA official said the US has encouraged underreporting of the decline rate from existing oil fields and overplaying projections for future discoveries. The article says these allegations raise questions about the accuracy of the IEA’s latest "World Energy Outlook" on oil demand and supply, which was published this week. The real concern about the inaccuracy of this report, according to Macalister, is that IEA numbers are used by the UK and many other governments to help guide energy and climate change policies. One specific fact that is being called into question is the organization’s 2008 prediction that oil production can be raised from the current level of output at 83 MMb/d to 105 MMb/d. That same information appears in this year’s outlook. Critics argue that this number cannot be substantiated by firm evidence. Many believe the world has already passed peak oil production. The article reports that experts inside the IEA believe maintaining oil supplies at even 90 MMb/d to 95 MMb/d would be impossible. Macalister quotes an insider at IEA, who explained the underreporting of reserves as a political necessity to the US. “The Americans fear the end of oil supremacy because it would threaten their power over access to oil resources.” A second senior IEA source was quoted as saying it was “imperative not to anger the Americans.” Interestingly, the article quotes John Hemming, the member of the British parliament who chairs the all-party group on peak oil and gas, as saying these revelations confirmed his suspicions that the organization underplayed the rate at which world reserves are being depleted and places additional significance to the UN Climate summit in Copenhagen next month. “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.” The problem with this logic is that deciding to effect change and actually making that change happen are far from the same thing. Today, 87% of the world’s energy comes from hydrocarbons, and that number has not changed by a significant amount in 30 years. Though new technologies will no doubt identify replacement energy sources, it will take decades for any such solution to make a dent in the amount of energy currently supplied by oil and gas. For a more detailed account of the IEA story, click here.
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