IEA 'whistleblower' says peak oil nearing

Oil traded as low as US$32.40 a barrel last December as a recession in major economies including Germany and the U.S. eroded demand. The IEA cut its five-year forecasts for global crude consumption in June, citing the economic slowdown. Demand won't return to levels seen last year, when prices soared to US$147.27, until 2012, the agency said at the time.

All the growth in oil demand through 2030 will come from developing economies, according to the IEA report. Consumption in the developed countries of the Organization for Economic Cooperation and Development will shrink during the period.

The IEA also reduced its forecast for global energy demand in 2030 to 16,800 million tons of oil equivalent from a previous estimate of 17,010 million tons. The agency sees consumption rising 40 percent from 2007 to 2030, or 1.5 percent a year. Last year, it had estimated that demand would rise 45 percent from 2006 to 2030, or 1.6 percent a year.

450 Scenario

The IEA's forecasts are based on its “reference scenario” which assumes that governments make no changes to their existing energy policies and measures. The advisor also has a “450 scenario” whereby world governments take collective action to reduce the concentration of carbon dioxide and other greenhouse gases in the atmosphere to 450 parts per million.

Global oil consumption is likely to average 86.1 million barrels a day in 2010, the IEA said in an Oct. 9 monthly report, raising next year's forecast for a third consecutive month. The agency expects demand of 84.6 million barrels a day this year. The IEA's next monthly report will be issued on Nov. 12.

It will be up to members of the Organization of Petroleum Exporting Countries to satisfy the bulk of the world's increasing need for oil as conventional production in countries outside the group peaks next year, the IEA said.

“Most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources,” the agency said in the report.

As well as sapping consumption, the global recession has crimped investment in new energy projects, potentially leading to a supply crunch and surging prices, “a few years down the line,” the IEA said.

Reduced Spending

“In the oil and gas sector, most companies have announced cutbacks in capital spending, as well as project delays and cancellations, mainly as a result of lower cash flow,” according to the report. “Oil sands projects in Canada account for the bulk of the suspended oil capacity.”

Global investment in oil and gas production has slumped 19 percent this year compared with 2008, a reduction of more than 90 billion, according to the IEA's estimates.

Total SA said in September it may delay decisions on investment depending on terms offered by oil-service companies, which are hired to help with field development. Royal Dutch Shell Plc said last month that higher costs were limiting progress in oil sands projects in Canada.

1|2

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email