Quote Originally Posted by Rick M View Post
IEA chief economist Fatih Birol continues to sound the alarm on oil supply, most recently in an interview published this morning in The Independent (UK).

Mr. Birol’s key points include [these are quotes from the article]:
- the public and many governments appear to be oblivious to the fact that the oil on which modern civilization depends is running out far faster than previously predicted [emphasis added].
- Global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.
- We will have the risk that the [economic] recovery will be strangled with higher oil prices.
- The UK Government, along with many other governments, has believed that peak oil will not occur until well into the 21st Century, at least not until after 2030. The IEA believes peak oil will come perhaps by 2020. But it also believes that we are heading for an even earlier “oil crunch” because demand after 2010 is likely to exceed dwindling supplies.

Mr. Birol also mentioned the fact that oil is essential for our global food system and that it “is a strategic asset for the military.”

This morning’s Independent article is here:
http://www.independent.co.uk/news/sc...t-1766585.html

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Saw this on another thread, figured best to keep it here.

If you read this quickly, it seems to openly contradict the projections in the IEA report referred to in the post above. Read it more slowly, and you catch the critical distinction between oil fields and oil reserves. Existing oil fields are seeing rapid depletion, but existing fields do not cover even close to all of the known reserves. Very few new fields have been developed since the start of the oil glut in the late 80s - it was cheaper to just keep pumping the easy oil from the existing fields. When demand spiked in the last 5 years, producers responded by running existing fields to their maximum capacity, hence rapid depletion.

The problem is not that the oil is running out, the problem is thast the existing developed oil fields are running out. To respond to that, as IEA report stresses, is that massive investment is needed to develop new fields, and many countries with large oil reserves are under-investing on their own account and are not presenting conducive environments for foreign investment. The vast majority of current investment in new production is in the GCC... a bit more in the Caspian, and some, mainly Chinese-financed, in Africa. In the West investment and exploration are constrained by environmental and NIMBY concerns. In Venezuela, Iraq, Iran, Nigeria, Russia, and many others it is constrained by the political and security environment.

I agree with the IEA report's conclusion that the quantity of oil available is not going to be the problem that causes the next crunch (and there will almost certainly be one). When that crunch comes there will be plenty of oil in the ground and plenty of demand above ground, but decades of underinvestment will leave us incapable of moving the oil from underground to where it's needed.