Peak Oil is now says IEA

addicted to oilTHE world will have to find four Saudi Arabias by 2030 if it wants to maintain its oil consumption habit, says the International Energy Agency’s chief economist, Dr Fatih Birol.

“The reality of peak oil is fast approaching,” said Dr Birol (whose figures are used by governments everywhere to forecast their own future oil budgets. He said that to an Australian newspaper last week.  And he had told the same thing to the Guardian in an article last year.

True, he had to have it dragged out of him by eco-writer George Monbiot, but Birol  eventually confessed that the rate of decline in oil production, which was stated by the IEA in 2007 as being 3.7%, was in fact  6.7% and would lead to a “temporary supply crunch,”as he put it.

So it is strange that the Guardian today has announced two IEA whistleblowers “claim it has been deliberately underplaying a looming shortage for fear of triggering panic buying.”
Now the agency’s chief economist is taking the matter more seriously, the Gaurdian claim. ”: “Mid to long term, we will be experiencing high prices,” he said last month.

The Guardian’s whistleblowers say there are fears that panic could spread on the financial markets if the true, predicted oil production figres were released by the IEA. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.

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,”

Crude prices have risen swiftly this month, moving in the opposite direction to the US dollar.

When the dollar loses value, crude becomes attractive as an investment. Crude is traded in US dollars, so it essentially gets cheaper when the US currency is weak.

Saudi Arabia, the globe’s largest oil producer, pumped out more than nine million barrels of crude oil per day in 2008, the US Energy Information Agency reported.

Dr Birol believes one major change needed is a move to electricity by transport.

“There is a need for the transportation sector to make more use of electricity,” he said from the IEA’s headquarters in Paris.

Both nuclear and solar electricity were acceptable alternatives.

Dr Birol said the success or otherwise of efforts to tackle climate change would hinge largely on the upcoming UN climate summit in Copenhagen.

“Agreement in Copenhagen is very, very important,” he said.  But the oprgainsers have made it clear that no agreement is likely.

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