Peak oil alarm revealed by secret official talks

22.8.2010 (Observer)

Behind government dismissals of ‘alarmist’ fears there is growing concern over
critical future energy supplies

 by Terry Macalister and Lionel Badel

Speculation that government ministers are far more concerned about a future supply
crunch than they have admitted has been fuelled by the revelation that they are
canvassing views from industry and the scientific community about “peak

The Department of Energy and Climate Change (DECC) is also refusing to hand over policy documents about “peak oil” – the
point at which oil production reaches its maximum and then declines – under the
Freedom of Information (FoI) Act, despite releasing others in which it admits
“secrecy around the topic is probably not good”.

Experts say they have received a letter from David Mackay, chief scientific adviser
to the DECC, asking for information and advice on peak oil amid a growing campaign
from industrialists such as Sir Richard Branson for the government to put contingency
plans in place to deal with any future crisis.

A spokeswoman for the department insisted the request from Mackay was “routine”
and said there was no change of policy other than to keep the issue under review.
The peak oil argument was effectively dismissed as alarmist by former energy minister
Malcolm Wicks in a report to government last summer, while oil companies such
as BP, which have major influence in Whitehall, take a similar line.

But documents obtained under the FoI Act seen by the Observer show that a “peak oil workshop” brought together staff from the DECC, the Bank
of England and Ministry of Defence among others to discuss the issue.

A ministry note of that summit warned that “[Government] public lines on peak
oil are ‘not quite right’. They need to take account of climate change and put
more emphasis on reducing demand and also the fact that peak oil may increase volatility in the market.”

Those comments were written 12  months ago, but a letter in response to the FoI
request written by DECC officials and dated 31 July 2010 says it can only release
some information on what is currently under policy discussion because they are
“ongoing” and “high profile” in nature.

The letter adds: “We recognise the public interest arguments in favour of disclosing
this information. In particular we recognise that greater transparency makes government
more open and accountable and could help provide an insight into peak oil.

“However any public interest in the disclosure of such information must be balanced
with the need to ensure that ministers and advisers can discuss policy in a manner
which allows for frank exchanges of views and opinions about important and sensitive

Yet the note of the workshop distributed last year talks about secrecy around
the topic being “probably not good”, although it also suggests officials stick to the line that the “International Energy Agency is an authoritative
source in this field” and stresses how the IEA believes there is sufficient reserves
to meet demand till 2030 as long as investment in new reserves is maintained.

But the Paris-based organisation has come under increasing scrutiny from a growing group of critics who believe the IEA’s optimism is misplaced.     Last year the Guardian revealed that the IEA was also riven with dissent over the issue with senior
staff members privately telling newspaper they thought the official numbers on
future global oil supply were over-optimistic.

The IEA predicted in the 2009 World Energy Outlook   published last November that oil demand would grow from 85m barrels a day today
to 88m in 2015 and reach 105m in 2030.   The organisation presumes the challenge
of meeting that demand can equally be met by a mixture of higher Opec production
and considerably more output from unconventional sources.

But an internal IEA source 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.”

The IEA has denied the claims of internal dissent and sticks by its figures.
But Kjell Aleklett, a professor of physics at Uppsala University in Sweden and
author of a report The Peak of the Oil Age, (see   below) claims crude production is more likely to be 75m barrels a day
by 2030 than the “unrealistic” 105m projected by the IEA.


see also

23.4.2010     Peak oil predictions | John Sauven 




11.8.2010       Graham Wayne: Using the threat of a high oil prices is a sell the public will buy into – unlike
intangible arguments over climate change
see also
Energy   Bulletin

The Peak of the Oil Age – The Uppsala World Energy Outlook

by Kjell Aleklett, Mikael Höök, Kristofer Jakobsson, Michael Lardelli, Simon
Snowden, Bengt Söderbergh

A new study has been accepted for publication in the journal of Energy Policy.
The article performs an analysis of the oil production forecast done by the International
Energy Agency in 2008 and highlights several shortcomings as well as confirms
other parts.


The assessment of future global oil production presented in the IEA’s World Energy
Outlook 2008 (WEO 2008) is divided into 6 fractions; four relate to crude oil,
one to non-conventional oil and the final fraction is natural-gas-liquids (NGL).
Using the production parameter, depletion-rate-of-recoverable-resources, we have
analyzed the four crude oil fractions and found that the 75 Mb/d of crude oil
production forecast for the year 2030 appears significantly overstated, and is
more likely to be in the region of 55 Mb/d. Moreover, analysis of the other fractions
strongly suggests lower than expected production levels. In total, our analysis
points to a world oil supply in 2030 of 75 Mb/d, some 26 Mb/d lower than the IEA

The connection between economic growth and energy use is fundamental in the IEA’s
present modelling approach. Since our forecast sees little chance of a significant
increase in global oil production, our findings suggest that the “policy makers,
investors and end users” to whom WEO 2008 is addressed should rethink their future
plans for economic growth. The fact that global oil production has very probably
passed its maximum implies that we have reached the Peak of the Oil Age.

The study is available online as PDF: