November 8, 2007
The IEA warns: “the wheels might come off”
The IEA could not have stage-managed a more dramatic backdrop for the launch of its 2007 World Energy Outlook. $100 oil says more about Chinese demand than a thousand forecast charts ever could. When the IEA’s Fatih Birol warns that "the wheels could come off" the world’s oil supplies, you have to believe him.
There are many good points well made in the IEA’s analysis. But there is something of a contradiction in its position: it wants oil producers, including Opec, to invest in capacity to produce more oil, while trying to persuade the world to use less of it. It is no wonder Opec is suspicious.
As Mr Birol says, however, the threat of oil shortages is fundamentally less of an issue than climate change. The world can eventually adjust to oil running out. Our chances of adjusting to a world that is six degrees C hotter do not look so good. And that, unfortunately, is about the size of the temperature increase implied by climate models given the IEA’s projections of what will happen under "business as usual" scenarios, with China doubling its coal-fired power generation capacity between now and 2030.
We should probably be grateful if the world never does get beyond 100m barrels a day of oil production, as Total’s Christophe de Margerie thinks it won’t. That would at least help keep climate change within manageable bounds. The IEA’s "alternative scenario", including more energy efficiency and renewables, needs a mere 100m barrels of oil a day in 2030, and keeps the temperature increase down to a - just about - bearable 3 degrees C. Unless we make up the shortfall from coal to liquids, of course.
Can’t blame anyone but our own USA and EU politicians for this “Oil Freak-Show of the 100 dollar bill for one barrel of the stuff” …..specially when you read an article today in http://www.eetimes.com/ about top USA scientists visiting Iran and getting the best treatment and support,in contrast with the “Paranoia-Evil-Terror Show” that the politicians and the media give us every day and that pushes oil up and that country’s sales of oil
down,because after all, if we didn’t have this daily confrontation with Iran and instead we had Trade and Commerce, they could sell us millions of barrels a day more ,keep the price down and buy our own products, which would do wonders for the economy in EU and USA, where real job growth is so low is insulting…but hey! we have been talking about new energy sources for 20 years and the “Politicos” ? nothing ! so here we are, stuck with oil and yet with tensions or at war with almost every main producer, so the question for the EU and USA leaders can be : how much more dumb and fake can it get ?
Why not a massive Trade deal with Iran? Trains and Bridges and nice homes with air condition and color TV and fast internet computers with nice all wheel drive cars in the driveway and ultra cool schools for the kids and adults in exchange for a steady supply of oil, what’s wrong with that? ….that’s basically what China is trying to do in Venezuela by investing billions in the heavy-tar fields , instead of the bully-sable rattling of the USA that only shoots the price of oil up,but hey! that would require adult educated policies,will the EU and USA ever get there?
right now the leaders in EU and USA refuse to launch a massive Solar Home Plan, refuse to launch fuel-cells for homes and cars in volume and at the same time is at war with many oil producers while keeping our Economy addicted to oil more than ever to please the Oil Lobby and its Hedge-Funds stockholders and profiteers,from oil wars and high oil prices, so where is the patriotism or intelligence there?
Posted by: bloger | November 9th, 2007 at 6:54 pm | Report this comment“the threat of oil shortages is fundamentally less of an issue than climate change”
On the other hand, the United States and the Shanghai Cooperation Organisation fear shortages, and seem ready to square up for the planet’s reserves of energy. Resource war - big time.
Which side will the EU countries, including Britain, join?
Posted by: Slightly Optimistic | November 12th, 2007 at 8:28 pm | Report this commentCould this announcement change politics in Europe and help ameliorate energy prices since those prices are set on the margin?
Posted by: Andy Varga | November 16th, 2007 at 4:03 pm | Report this commentThe announcement:
http://oilandglory.com/2007/11/meanwhile-on-field-of-pipeline-battle.html
and pricing on the margin:
http://oilandglory.com/2007/09/greenspan-and-caspian.html
With plummeting production and lagging investment, Birol is forced to urge greater spending. That doesn’t really seem to contradict the goal of reducing the explosive growth in demand. Opec still ends up with current or probably greater demand, but perhaps, as you suggest, the world gets a less catastrophic greenhouse gas situation.
Interesting that Birol does not seem to pose the possibility of a paradigm shift should the vigorous technological inquiries currently under way bear fruit in the next quarter-century, and start to edge out fossil fuels use.
Steve LeVine, author
Posted by: Steve LeVine | November 18th, 2007 at 3:10 am | Report this commentThe Oil and the Glory
http://www.oilandglory.com
Wow, that’s an incredibly complacent comment: The world can eventually adjust to oil running out.
Although it’s a truism, it masks incredible upheavals. This world is totally dependent on oil, and other fossil fuels, not to mention the also finite resource of nuclear fuel. Do you really think that the depletion of this huge store of energy can be replaced by renewables? Of course, some of it can but the sheer scale and utility of fossil fuels dwarfs anything else imaginable. And when you add in the fact that our economic systems and societies require more energy each year, there is no way the situation can be dismissed with the simple remark you used.
Yes, climate change is very serious for the world but oil and fossil fuel depletion is no less serious and to ignore that is “head in the sand” stuff.
Posted by: Tony Weddle | November 22nd, 2007 at 6:15 pm | Report this commentIt is amazing for rational people to observe that global warming is an unquestioned article of faith in many parts of the world, even though the “science” behind it is still very much in question. Global Warming has become the new world religion.
In August 2000, the New York Times ran an apocalyptic story that said the pole was free of ice for the first time in 50 million years.
“It was retracted three weeks later as a barrage of scientists protested that open water is common at or near the pole at the end of summer,”writes environmental scientist Pat Michaels.
“Further, it’s common knowledge in the scientific community that there has been no net change in Arctic temperatures in the last 70 years.”
Apparently unwilling to learn its lesson, the Times published a fretful story Oct. 2 about Arctic ice loss. Good for shipping across the pole, and fishing and oil exploration in the region. But not so good, the article said, for polar bears that could be in for a “particularly harsh jolt.”
The alarmists like to scare the public with harrowing stories of bears drowning when they get trapped on melting ice and can’t swim the long distances needed to reach safety. The specter of their extinction has been raised.
So how to explain the increase in the polar bear population from 5,000 in 1950 to 25,000 today, as documented by the U.S. Fish & Wildlife Service? The alarmists are noticeably quiet. Could it be that the facts don’t fit with their campaign of exaggerations, half-truths and outright lies?
Posted by: Peter Grynch | January 8th, 2008 at 4:13 am | Report this commentLast year the IEA’s ‘World Energy Outlook’ warned of an energy crunch for the world in 2012 - $trillions of investment in exploration and infrastructure would be needed in the short term. $Trillions more would be needed for renewables.
The crunch was suspected back in 2005 so the G8 then asked the IEA to report in 2008 on enhancing international cooperation. I wonder how this is going.
Posted by: Slightly Optimistic | February 22nd, 2008 at 1:58 pm | Report this commentDitto Weddle supra. The off hand comment about being “grateful if the world never does get beyond 100m barrels a day” carries huge implications. Still, $100+ oil does not seem to be lighting a fuel-transition fire under us while it may be telling us that oil-based economies are already becoming problematical.
The world’s most successful effort, to date, has been ethanol, and the limitations, in that direction, are rapidly becoming clear. The most effective ethanol crop presently imaginable could be grown on every arable acre in the world and not be enough to supply the entire present, much less projected, demand. Thus blending which might buy us valuable time but at the cost of considerably higher food prices.
Coal, again, buys us time but carries high environmental “charges” and/or plant costs. Of course, liquified coal can not yet, and will probably never, serve as fuel for vehicles. The amount of available nuclear fuel is limited, in quantity and application, and comes with the well known waste disposal problems.
…and so on. A diversified plan will almost certainly need to be phased in with separate delivery systems required for each type of fuel. As the hour grows late, even an orderly plan could result in decades of daunting personal and public challenges. If one survives the attendant political and economic upheavals, one’s fuel of choice for car or house (or plant) could become as obsolete as Betamax or vinyl record albums, as one tries to project what product lines have staying power.
Posted by: Gilbert Wesley Purdy | February 29th, 2008 at 1:23 am | Report this comment