Cross posted on The Daily Hurricane:
A senior official is reporting that the International Energy Agency (IEA) has been intentionally underplaying the rate of decline of existing oil fields and overstating the chances of finding new reserves. The Guardian UK broke the story yesterday, quoted its source as saying that the agency bowed to pressure from the US to overstate deliverability to avoid panic buying in the markets.
More below the jump.
Cross posted on The Daily Hurricane:
A senior official is reporting that the International Energy Agency (IEA) has been intentionally underplaying the rate of decline of existing oil fields and overstating the chances of finding new reserves. The Guardian UK broke the story yesterday, quoted its source as saying that the agency bowed to pressure from the US to overstate deliverability to avoid panic buying in the markets.
The IEA reports on worldwide energy supplies and publishes long term forecasts of production. In 2005, the agency forecast daily production of all sources of oil to grow to 120 million barrels per day (MMBOED) by 2030, but has gradually revised that figure down to it's current forecast of approximately 105 MMBOED this year. The IEA official, referring to the current IEA estimates said,
"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."
A second source, who has already left the agency, supported the whistleblower's allegation by saying,
...[it is] "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."
In a statement today, the IEA denied the allegation, and reiterated that they are more pessimistic in their forecasts than the industry would like. They stood by their production estimate of 105 MMBOED by 2030.
Peak oil (the concept of world oil production reaching it's maximum rate) has gained ground inside and outside the industry in the last 10 years, and I have written about it several times. You can read my own conclusions here and here. I personally believe that we are at or near peak, and that the IEA numbers are optimistic at best. The age and performance of Saudi Oil fields, the rapid decline of US Gulf of Mexico deepwater production, and the lack discoveries of giant or super-giant fields in recent years point me to that conclusion.
I'm doing my own research on this subject and will write about it more in the near future.