Some of its officials may have talked about short-term supply problems, but the EIA is firmly focusing on above-ground issues affecting oil supply in its latest set of annual energy forecasts, the US-focused Annual Energy Outlook.
Its ‘reference case’ scenario for 2035 looks like this: oil prices reach $133; total liquid fuels consumption reaches 112m b/d. This is an extra 26m barrels per day over 2008 levels; the EIA expects about 8m would come from unconventional sources, including biofuels.
In the ‘high price’ scenario, liquids production reaches only 91m b/d while prices reach $210/barrel. In this case, the EIA expects that unconventionals supply would grow by 16m b/d — in other words, conventional supply would fall by 8m.
However lower oil consumption isn’t purely because of price. The EIA says:
Liquids demand is dampened by the high prices, but is overshadowed by the severity of limitations on access to and availability of lower cost conventional resources. OPEC’s share of production falls to 35 percent.
In otherwords, the high price would be caused almost solely by above-ground issues — ie, politics:
In the High Oil Price case, oil prices from 2015 to 2035 are on average 66 percent higher than in the Reference case. The higher prices are caused by restrictions on economic access to non-OPEC conventional resources in countries such as Russia, Kazakhstan, and Brazil, combined with reductions in OPEC production. Conventional liquids production in the High Oil Price case totals 71.8 million barrels per day in 2035, 9.8 million barrels per day lower than the 2008 total; total liquids production reaches only 91 million barrels per day in 2035.
And guess where the agency expects the oil to come from.
Are policymakers, economists and peak oilists starting to speak the same language? FT Energy Source