By Ryan McGreal
Published November 10, 2009
Who would have guessed?
The Guardian (UK) has an exclusive report that the International Energy Agency (IEA), an intergovernmental energy policy agency formed after the first OPEC oil crisis, has been overstating the world's oil reserves under pressure from the United States.
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
This revelation won't come as a surprise to anyone who has been following the IEA's reports closely over the past several years. I noted last year that the IEA's World Energy Outlook was among the most optimistic analyses, though they were already starting to revise their implausible projections downwards.
Their projection on annual oil production growth until a peak in 2030 has fallen steadily from 120 million barrels per day (mbpd) to 116 mbpd and finally 105 mbpd last year. Even so, an IEA spokesperson admitted last year in an interview with George Monbiot that their peak oil projection was actually in 2020, not 2030.
Even this, it turns out, was disingenuously upbeat. The Guardian quotes the IEA whistleblower:
Many inside the organisation believe that maintaining oil supplies at even 90 million to 95 million 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 Guardian report cites a second IEA whistleblower who confirms this assessment:
A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.
While the IEA has been stuck in its rosy outlook, the rest of the industry - particularly the oil geologists working on the ground - have accepted the theory of a near-term oil production peak. Unfortunately, the national governments of industrialized countries have relied on the IEA numbers as an excuse not to respond more forcefully to the extreme challenges that declining oil production rates will generate and move more quickly to a 'decarbonized' global economy.
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