What’s That Sucking Sound?

Don’t take my word for it, or that of Brace for Impact: one of the foremost energy economists in the world says  “the world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production. “[T]he public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.”

That’s the bad news; there’s worse. But first the bona fides: the speaker, Dr Fatih Birol is the chief economist at the  International Energy Agency (IEA) in Paris, which assesses energy markets for the 30 countries of the Organization for Economic Cooperation and Development (OECD). His views appeared in the British newspaper The Independent [Warning: Oil Supplies are Running Out Fast] on August 3.

His observations made headlines in Europe, Asia, even Canada. But US newspapers did not mention them until the New York Times ran a mocking op-ed piece by big-oil apologist Michael Lynch [Peak Oil is a Waste of Energy] ridiculing Dr. Firol and all of the world’s scientists who have come to the conclusion that there is not enough oil to satisfy perennially increasing demand, forever. Lynch and his ilk cannot, of course, claim that oil will never run out; the standards of public discourse will have to deteriorate a little more before that becomes acceptable. They rely on arguing that it won’t for a while yet.

But like their brethren the climate-change deniers, the peak-oil deniers have to ignore the avalanche of evidence from saner scientists. Such as those who, for the IEA, have just completed the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, and have  found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago.

Demand, meanwhile, continues to accelerate, especially as China emerges from recession.  According to Dr. Birol, even if demand remained steady, the world would have to find the oil equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030.

But if you are not inclined to have confidence in a guy with a foreign-sounding name — he might be a Muslim! — speaking from France, of all places, then let me offer you this conclusion reached by the United States Joint Forces Command in its strategic report titled  “Joint Operating Environment 2008,” published last November:

“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD… The implications for future conflict are ominous..”

In other words the Department of Defense is telling its commanders, with respect to peak oil, to brace for impact.