‘Warning: Oil supplies are running out fast‘ ran The Independent’s front page today. The story cites an interview with IEA chief economist Fatih Birol about a looming ‘catastrophic energy crunch’.
Much of the interview covers fairly familiar ground. Birol has warned about the fall in investment in future supply since the IEA’s 2008 World Energy Outlook in November, although the agency toned down its concerns down in June’s medium-term outlook. The estimates for the rate of production decline were also discussed last November.
The main new line is:
“…Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.
So, is the IEA now saying global production will peak well before 2030? This would be quite a turnround. Last year’s WEO revised total oil production estimate for 2030, including unconventional oil, down by 10m barrels a day. But the 2008 report forecast that total crude oil production will increase through 2030 to 75.2m barrels a day, from 70.2m in 2007. It doesn’t clarify whether production peaks after 2030, but it does say that production of conventional, onshore crude oil by non-Opec countries would fall from 39.1m in 2007 to 36.3m in 2030.
Other points made in the story are in line with the 2008 WEO:
“…the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago.”
The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.
We heard about this last year. The 2008 WEO report focused extensively on investment in oil production, based on data from 798 of the world’s biggest oil fields. Previously the IEA had looked at 550 fields in formulating its decline estimates. the IEA in November said the natural rate of decline in the world’s oil fields was 9 per cent, or 6.7 per cent with investments to boost production. But even with investments this would rise to 8.6 per cent by 2030. (Incidentally George Monbiot wrote about the wrongness of previous estimates in December.)