Leading energy analyst Colin Campbell has just published a response to the Peak Oil debate now raging
Colin Campbell’s Response to the Guardian IEA Reporting
Last week saw the release of the IEAs 2009 World Economic Outlook on which we will be providing some analysis in the coming weeks. The night before its release, the Guardian ran an interview with a ‘whistleblower’ claiming that key oil figures were distorted by US pressure so as to avoid ‘panic buying’, claims the IEA subsequently denied. Today, we see the fourth Guardian article in a week on the urgency of Peak Oil…………………
…………………….It is more difficult to evaluate the Non-Conventional oils, comprising tarsands and heavy oils, deepwater oil, Polar oil and Natural Gas Liquids, but the above graph suggests that the peak of all categories was passed in 2008. A debate rages as to the precise date of overall peak but rather misses the point when what matters is the vision of long decline on the other side of it.
Given the central role of oil in the modern economy, the peak of production promises to be a turning point of historical magnitude. It seems that banks have been lending more than they had on deposit, confident that Tomorrow’s Economic Growth was collateral for Today’s Debt, without recognising that the expansion was fuelled by cheap oil-based energy. The Governments are now printing yet more money under Keynesian principles in the hope of restoring past prosperity, which may meet with a brief success. But if it does, it would stimulate the demand for oil that would again soon breach the supply limits, leading to another price shock and an even worse consequent economic depression. In fact, today 28 billion barrels a year support a world population on 6.7 billion people, but by 2050 the supply will have fallen to a level able to support less than half that number in their present way of life.
There is a great deal that can be done to reduce waste and bring in renewable energies. Coal and nuclear power can also ease the transition although they are themselves also subject to depletion. The challenges are however great, and it is clear that governments must move urgently to prepare for what unfolds. In parallel come the challenges of climate change that are to a degree related to oil supply.
There may well now be a certain awakening, and the OECD governments may begin to seek an umbrella under which to introduce new national policies. This may in turn allow the IEA to come forward with more realistic assessments of the true situation. The media too has an important role to alert people at large of what unfolds. It underlines the value of the article you have published for which you deserve every credit.
Complete letter at http://www.theoildrum.com/node/5970