IEA Projections and Peak Oil Politics

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IEA Projections and Peak Oil Politics

Postby jingofever » Mon Nov 09, 2009 9:08 pm

says whistleblower:

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves...


"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," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "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," he added...
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Postby MacCruiskeen » Mon Nov 09, 2009 9:21 pm

Bloody hell.

It's worth noting that the link leads not to some obscure fringe website but to The Guardian.

This is weird and worrying, coming hard on the heels of suddenly-respectful interviews and articles with and about Michael Ruppert in both the NYT and the WSJ.
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Postby wintler2 » Tue Nov 10, 2009 5:35 am

This will vanish into deafening silence, the Growth Cult gives no reward for pointing out its impossibility. Oil production peak is being edged into public conciousness, will still be a 'theory' to most politicians & CEO's for a few more years yet, despite being past peak. Who wants to leave the last party early?
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Postby smoking since 1879 » Tue Nov 10, 2009 8:47 am

This year's report here:

http://www.worldenergyoutlook.org/
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Postby JackRiddler » Tue Nov 10, 2009 10:31 am

wintler2 wrote:This will vanish into deafening silence, the Growth Cult gives no reward for pointing out its impossibility. Oil production peak is being edged into public conciousness, will still be a 'theory' to most politicians & CEO's for a few more years yet, despite being past peak. Who wants to leave the last party early?


If what this fellow is saying is true, how will this cover-up be accomplished? Will they add 10 million barrels of pretend-oil a day to pretend to meet demand?
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Postby slow_dazzle » Tue Nov 10, 2009 11:14 am

MacCruiskeen wrote:Bloody hell.

It's worth noting that the link leads not to some obscure fringe website but to The Guardian.

This is weird and worrying, coming hard on the heels of suddenly-respectful interviews and articles with and about Michael Ruppert in both the NYT and the WSJ.


Aye, it seems weird to me too McC. Difficult to say if this is a drip feed approach, or whether it is becoming impossible to keep the dirty little secret much longer. My hunch is there is just too much information on the subject for it to be kept under wraps.

I rarely post anywhere these days, largely because the evidence is there for everyone to see. In fact, I think the IEA has previously admitted PO: AFAIK there was an article on Energy Bulletin about the admission.

Western economies are up the creek, especially those of the UK & US, both of which grew massively on the back of a credit boom. The credit generated can only be paid back by additional economic activity. Additional economic activity can only take place through sucking in more energy: without energy our economic system, which is growth-based, cannot generate additional money. An increase in ‘real’ money supply can only come about through increased lending. Money is lent into existence. (The quantitative easing trick is inconsistent with how real economies work. It is a one-off holding measure that allowed governments to temporarily stave off the inevitable by trying to inject additional liquidity into their respective economies. In any case, the additional ‘new’ money has not found its way into the real economy, at least not in the UK. The standard measures of money within the UK economy, do not show an increase commensurate with the volume of new money created by the Bank of England AFAIK.

Given the crucial nature of energy, and other scarce resources, it is inevitable that nations will do whatever they can to secure those resources. China has just secured the rights to the largest undeveloped copper mine in the world. It is in Afghanistan and China beat off bids by western and Russian companies. China is supplying the Sri Lankan government with military aid, and more, in return for being allowed to build a big naval base there. The base is needed to allow Chinese warships to patrol the Indian Ocean to safeguard the oil supplies that are coming from...Saudi Arabia. This has not pleased India and might create further tensions.

China is quietly dumping the US$ and Chinese citizens have been advised to put at least 5% of their savings into precious metals. Given that the yuan is likely to remain a strong currency, it is less likely that this is a hedge against inflation. Currency inflation is likely to wreck the US$, not the yuan. I suspect this might be an attempt to prompt an increase in gold prices, as a means of hastening investor flight from the US$. So the US$ will possibly tank, in which case we all catch cold and all that. Think of the amount of US$ held world wide, for example.

In short, the balance of global power is moving towards China, Russia and other SCO nations.

And here’s the rub: any nascent economic recovery is going to push prices up again. At the same time as oilfields become economically viable again (prices need to be at least $80/barrel to make exploration/development viable) the price at the consumer end rises. Difficult to see how an already fragile economy can sustain even small increases in overheads, brought about by an increased oil price. In fact, I think the demand destruction has caused economic damage that is structural and which would be difficult to repair quickly, even if there was enough energy to fuel a recovery. Manufacturing plant will have been sold off and some premises too.

Sadly, we are so close to the events of the economic collapse it's impossible to step back and see it for what it is: collapse. In any case, 'collapse' implies a single event. It's better to think of it as a process, a series of increasingly worse economic performances, that only become recognisable as 'collapse' once the process is complete. By 'complete' I mean shortages of goods, failure to maintain infrastructure etc. Even then, there will be variations as wealthier people can insulate themselves from the collapse longer than those of us who aren't as well off. We are already seeing this process at a macro level, as poorer nations go to the wall first. The same phenomenon is likely to play out within individual nations, but with specific demographic groups faring better than other. Until no-one is able to protect themselves.

One thing is certain: economic/commercial collapse is well under way. Currency collapse will be the next leg down.
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Postby Jeff » Tue Nov 10, 2009 11:20 am

Additional commentary from The Guardian today:



Too fearful to publicise peak oil reality


The economic establishment accepts the world soon won't be able to meet energy demands, but wants to keep quiet about it


It is very hard for the average person in the street to come to a sensible conclusion on peak oil. It's a subject that prompts a passionate polarisation of views. The peak oilists sometimes sound like those extraordinary Christians with sandwich boards proclaiming that the end of the world is nigh. In contrast, the the international economic establishment – including the International Energy Authority (IEA) – has one very clear purpose in mind at all times: don't panic. Their mission seems to be focused on keeping jittery markets calm.

Faced with these options the majority of people shrug their shoulders in confusion and ignore the trickle of whistleblowers, industry insiders and careful analysts who have been warning of the imminent decline in oil for over a decade now.

Remember the Queen's question – that uncannily accurate and strikingly obvious question she put to economists at the London School of Economics a year ago after the financial crisis: did no one see it coming? Apply that question to peak oil and the answer is that many people did see it coming but they were marginalised, bullied into silence and the evidence was buried in the small print.

Take the 2008 edition of World Energy Outlook, the annual report on which the entire energy industry and governments depend. It included the table also published by the Guardian today, and the version I saw had shorter intervals on the horizontal axis. What it made blindingly clear was that peak oil was somewhere in 2008/9 and that production from currently producing fields was about to drop off a cliff. Fields yet to be developed and yet to be found enabled a plateau of production and it was only "non-conventional oil" which enabled a small rise. Think tar sands of Canada, think some of the most climate polluting oil extraction methods available. Think catastrophe.

What made this little graph so devastating was that it estimated energy resources by 2030 that were woefully inadequate for the energy-hungry economies of India and China. Business as usual in oil production threatens massive conflict over sharing it.

Now, this all seemed pretty gigantic news to me but guess where the World Energy Outlook chose to put this graph? Was it in the front, was it prominently discussed in the foreword? Did it cause headlines around the world. No, no, no. It was buried deep into the report and no reference was made to it in the press conference a year ago.

The fear is that panicky markets can cause enormous damage – panic-buying that prompts fights over resources, which in turn could lead to power cuts in some places and other such mayhem. But so far in facing this huge challenge, our political/economic system seems unable to cope with reality. We are forced to carry on living in an illusion that we have so much time to adapt to post-oil that we don't even need to be talking or thinking much about what a world without plentiful oil would look like. Reality has become too dangerous.

So in reply to the Queen's question of a few years hence, we did see it coming but we chose to ignore it.


http://www.guardian.co.uk/commentisfree ... ablishment
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Postby jingofever » Tue Nov 10, 2009 2:05 pm

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Postby tazmic » Tue Nov 10, 2009 2:08 pm

Copenhagen
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Postby ninakat » Tue Nov 10, 2009 2:08 pm

slow_dazzle, excellent analysis -- quite sobering, in fact. Thanks for the rare posting. Always appreciated.
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Postby ninakat » Tue Nov 10, 2009 2:13 pm

The Guardian wrote:Additional commentary from The Guardian today:

The peak oilists sometimes sound like those extraordinary Christians with sandwich boards proclaiming that the end of the world is nigh.

. . .

Remember the Queen's question – that uncannily accurate and strikingly obvious question she put to economists at the London School of Economics a year ago after the financial crisis: did no one see it coming? Apply that question to peak oil and the answer is that many people did see it coming but they were marginalised, bullied into silence and the evidence was buried in the small print.


Marginalised, bullied, and RIDICULED as the author just engaged in herself. :roll:
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Postby ninakat » Tue Nov 10, 2009 2:19 pm

    Comments on Guardian article: “Key oil figures were distorted by US pressure, says whistleblower”
    by Kjell Aleklett

    I am not surprised that some within the IEA have leaked this news. Rather, it is astonishing that this has not become known earlier.

    . . .

    It is time for President Obama to establish a commission to undertake a detailed investigation of the EIA’s activities and establish the truth. It is extremely important that the members of this commission have no associations with the oil industry.
Now there's some delusional Hope: (a) a commission; (b) a commission without conflicts of interest.
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Postby justdrew » Tue Nov 10, 2009 4:16 pm

the whistleblowers didn't say we were PAST peak, but that we are in it. This would refer to the plateau, the 'economic problems' are doing a lot of demand destruction, so we may well have a lengthy peak (granted there is some point that was or will be the max and that is the true peak, but production can hang around just under that point for some time.) Once production actually starts falling more rapidly, down the far side of the graph, the theory will no longer be deniable. that could still be years away.

but anyway, it's not surprising that this would have to be whistleblown, and it sure is mildly alarming.
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Postby Hugo Farnsworth » Tue Nov 10, 2009 4:28 pm

Kunstler kicks in on this subject early this week:

http://kunstler.com/blog/2009/11/dreams-die-hard.html
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Postby xsicbastardx » Tue Nov 10, 2009 4:35 pm

Saw T. Boone Pickes on CNBC a few weeks ago on their executive hour TV show. He basically blew the lid on Peak Oil on national TV in america. Said specifically that the world can no longer produce more than 85 million barrells of oil a day and in so many words said the useable oil is running out(he used the term "Peak Oil") and Gas will be $5.00 a gallon in the US in less than 12 months and that we all are in for a big shock.

The IMMEDIATELY went to break after he spoke. The other Oil execs that were there looked as if they saw a ghost.

Somewhere Mike Ruppert is smiling.
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