Peak Oil is History!
The International Energy Agency’s (IEA) is a Paris based intergovernmental organization established within the framework of the (OECD) in 1974 right after the oil crisies of 1973. The IEA was initially dedicated to responding to physical disruptions in the supply of oil, but its primary function is now to act as a policy adviser to its member states, which includes Ireland.
The IEA has just released its key annual report, the World Energy Outlook 2010. And believe it or not, and without much explanation, the world’s leading compiler of everything about energy has gone from denying that conventional oil production will peak in our lifetime to saying, it happened four years ago !!. Wonders will never cease!, they then went on to justify continued world economic growth by conjouring up enough “undiscovered, undeveloped”, lousy quality, and very-expensive-to produce oil to keep the world sort of growing for another 25 years.
The WEO 2010 report states that “Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL) and unconventional oil grows quickly.”WEO 2010 – Executive Summary. The graph is taken from the WEO 2010 Executive Summery.
First, pay close attention to the legend for the chart. Starting at the bottom, note that crude oil from “currently producing fields” (dark blue) is already in sharp decline and is expected to decline from a high of 70 mbd in 2006 to ~15 million barrels per day (mbd) in 2035; a loss of 55 mbd over 25 years, or 2.2 mbd per year. The next band up (gray) is crude oil from “fields yet to be developed,” which we largely know about but have not yet really started producing significantly.
My only comment here is that these fields cannot overcome the expected rate of loss in the dark blue band below them. All of the conventional oil that we know about is now past peak. In order to keep conventional oil flat, we have to move up to the third band (light blue), which is “fields yet to be found” – which will apparently be delivering a very large 22 mbd by 2035. In other words, the IEA is projecting that in 25 years, more oil will be flowing from “fields yet to be found” than from all the fields ever found and put into production by the year 2010. Madness.
This means that over the next 25 years, the global economy will have to make do with less than half the rate of growth in oil that it enjoyed over the prior 25 years. How will the economy grow with less oil available? and so less energy available, especially when the Chinese and Indian governments have been busily buying up all the oil field futures they can lay their hands on. What will happen to the valuations of financial assets that explicitly assume that prior rates of growth stretch endlessly into the future? With a very optimistic, flat energy forecast, this inevitably means zero growth, so by definition a long recession, or as Richard Heinberg from the Post Carbon Institute calls it the “Long Emergency”.
We in Skerries, need to rethink the value of the money in our pockets, we also need to consider what is of value. Knowledge and skills. Food and water. We need to begin developing new skills, or re-learn old skills which will improve our resilience. If you haven’t already begun to grow your own food or get involved in the Community Harvest Group – Skerries , start now. Start with your own families resilience then get involved with local community groups like Sustainable Skerries or Skerries Community Association. When you or your family are able to grow just 5% of the food you consume, that is 5% more resilience you now possess. The difference between 0% and 5% resilience is huge, but getting from 5% to 50% is not such a great leap. Start to plan, then act….now.
Frank Mc Keown
Chairperson, Sustainable Skerries.