International Energy Agency Acknowledges Shortfalls in Petroleum Prodcution, Worldwide

The following is from the web site of the International Energy Agency (IEA), which is a sub-division of the Organization for Economic Cooperation and Development (OECD). The OECD is the coordinating body that collects information and suggests policy and standards for the 30 or so wealthiest nations in the world. The IEA was formed by the OECD in the wake of the energy crisis of the 1970s. What follows are snippets, collected by the IEA, from the world press on the current global energy situation. It makes for an interesting read.

This information comes from . . .

http://www.iea.org/journalists/headlines.asp

Below each snippet topic is a brief comment from me. Happy reading!

Blaine

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China Business Weekly, 01 December 2008 Era of Cheap Oil is Over

During a visit to Beijing to present the results of the World Energy Outlook 2008, IEA Executive Director Nobuo Tanaka noted that the financial crisis is an appropriate time for China to develop clean energy and said that despite diving oil prices, “it is certain that while market imbalances will feed volatility, the era of cheap oil is over.”
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COMMENT BY BLAINE: As usual, we must not get lost in the "Forest of Numbers," as displayed in daily market reports (e.g., as usually depicted on TV). We are dealing with a long-term trend, which is best measured in years and decades. Therefore, we must keep our eyes on the long-term trends in both pricing (after we factor in inflation) and availability (measured in either "barrels" or "tons" of oil). In spite of recent (downward) price fluctuations these past few weeks, energy "prices" are still trending upwards (since the turn of the century), in inverse relation to "availability," which is trending downwards.


The Australian, 26 November 2008 Call to Not Delay Greenhouse Measures

Attending the Clean Energy Council conference IEA Executive Director Nobuo Tanaka urged countries such as Australia not to delay greenhouse measures due to the global financial crisis. "The global financial crisis should not delay measures to mitigate climate change because the cost will only get higher in the future," he said and warned oil prices could soar after the financial crisis and urged governments to spend some of their fiscal stimulus on renewable energy and energy efficiency projects.
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COMMENT BY BLAINE: Although the immediate topic here was "Australia," the basis for the discussion was rooted in "global" trends. We ignore such trends at our peril. What are the implications here for a "new economy?" How would we need to (re)tool our industrial base and (re)train our workforce, in the months/years to come? What are the economic and social justice implications here, if any? Who gains, who loses?


Wall Street Journal (Re: Africa), 22 October 2008

Asked about oil prospects in Africa, which are starting to look dimmer because of the credit crunch, geopolitical problems and price hikes, IEA Chief Economist Fatih Birol sustained the idea that Africa’s days as a supplier of additional oil may be numbered. “We have benefited from additional oil volumes from Africa, but given the production profile of off-shore fields, we need to see significant new discoveries to sustain that trend”, he said and added, “it’s not clear that will happen.”
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COMMENT BY BLAINE: As I've been saying for some time, Africa--long viewed as the last great refuge of concentrated energy supplies outside the Mid-East--may well have been over-hyped. The US foreign policy implications (as well as energy policy implications) are huge. Where will the US (or China or Japan or the UK) turn next? Please note that the situation with US domestic energy supplies is like Africa--only more so. We can still drill for (and still extract) more oil in the US, but only at tremendous cost now (i.e., economic, social, and environmental costs). And then? We could also lean more heavily on foreign sources. But what happens after the global spigot begins to run dry, when we can no longer economically extract oil from the ground, in many more parts of the world? [Hint: Part of the answer lies in the previous paragraph on Nobuo Tanaka’s comments to the Clean Energy Council.]


Arab Oil and Gas, 30 September 2008

On the occasion of the publication of the new IEA Natural Gas Market Review 2008, the Agency’s Head of the Energy Diversification Division Ian Cronshaw voiced his concerns about long-term world gas supplies. In an interview with Arab Oil and Gas he said that there was a “risk” that gas supply may not meet demand and added that, next to more investment, the main solutions were to “increase energy efficiency in the power sector (…), ensure a healthy degree of energy diversification and develop new gas projects, especially liquefied natural gas projects, which offer far greater flexibility.”
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COMMENT BY BLAINE: Reading between the lines—“We have a serious problem here,” and “We’re not really sure of what to do about it, except to do a lot more of the same!” I’ve been following the energy policy statements of the IEA for a few years now, and that’s how I am interpreting these comments. Bear in mind that oil and natural gas are typically co-located in the same pockets, underneath the Earth’s surface. They are both non-renewable energy resources. They are both subject to depletion. Most peak oil advocates will tell you that natural gas depletion is only about a decade (two decades at most) behind oil. Then what? Much of our home heating (esp. in the northeast section of the US) comes from natural gas. That market cannot hold up much longer, after oil. We need a "Plan B," soon.

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