Will the world soon run out of oil or are we swimming in the stuff? That debate just got a little murkier following a report in the Guardian newspaper that says figures detailing how much oil the world has on tap have been distorted in deference to the United States. The report quotes a current employee and a former staffer at the International Energy Agency, a policy adviser to 28 mostly industrialized nation that coordinates measures during oil-supply emergencies, among other tasks.Despite forecasts that call for production to steadily rise by 2030, the world will likely instead see output decline, the U.K.-based newspaper reports, quoting an anonymous whistle-blower at the IEA. The senior official claims the U.S. has been influential in encouraging the watchdog agency to play down the rate of decline from existing oil fields while over emphasizing the chances of finding new reserves, the Guardian said.
The allegations bring into question the accuracy of the IEA’s latest World Energy Outlook for oil demand and supply, published Tuesday, and raises fears that the world may run out of oil much sooner than thought.
At the controversy’s core are figures that suggest the world can raise production to 105 million barrels a day from last year’s 85 million barrels a day. Critics have charged that the level can’t be achieved, arguing that the world has long since surpassed its peak oil-producing capacity.
That hasn’t stopped those within the energy establishment to argue that oil production can be increased, with production estimates at one point reaching as high as 120 million barrels a day by 2030. The IEA has since climbed down from that estimate, the source said, having reduced them gradually to 116 barrels a day and then to 105 barrels a day last year.
“The 120 million figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this,” the source told the Guardian. The source said further that those within the organization believe 105 million barrels a day is unrealistic and that maintaining them even at levels of 90 million to 95 million barrels a day was impossible. Such pessimistic estimates have been kept under wraps for fear of spooking world financial markets.
Another anonymous source, one no longer with the IEA, is quoted by the newspaper to say that the organization viewed it as “imperative not to anger the Americans,” regardless of whether there wasn’t as much oil in the world as had been stated. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” the source said.
In its report Tuesday, the IEA warned that the recent worldwide economic crisis has led to a dangerous drop in energy investment, possibly thwarting recovery. It noted that investment in oil and natural-gas infrastructure in the U.S. slipped 19% last year to $90 million. That decline could constrain future supplies of electricity and oil and “undermine the sustainability of the economic recovery.”
When it comes to natural gas, however, the IEA warned of a far different problem. Ongoing exploration in previously untapped shale fields will likely lead to a glut that will last until 2015.
The IEA’s report comes a month ahead of next month’s United Nation’s Climate Change conference in Copenhagen, where world leaders will meet to discuss measures to reduce carbon emissions.
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