The IEA on peak oil and climate policy

2009-12-16

in Economics, Politics, Science, The environment

The International Energy Agency (IEA) has recently charged its public position on peak oil. It now claims that output of conventional oil will peak in 2020, if demand continues to grow in a business-as-usual way:

After analysing the historical production trends of 800 individual oilfields in 2008, the IEA came to the conclusion that the decline in annual output from fields that are past their prime could average 8.6% in 2030. “Even if oil demand were to remain flat, the world would need to find more than 40m barrels per day of gross new capacity—equal to four new Saudi Arabias—just to offset this decline,” says Mr Birol.

A daunting task. Peak-oil proponents point out that the average size of new discoveries has been declining since the mid-1960s. Between 1960 and 1989 the world discovered more than twice the oil it produced. But between 1990 and 2006 cumulative oil discoveries have been about half of production. Their opponents argue that long periods of relatively low oil prices blunted the incentives for exploration. A sustained period of higher prices, they argue, should increase discoveries. They point out that the first half of 2009 saw 10 billion barrels of new discoveries, an annual rate higher than any year since 2000. The pessimists retort that recent discoveries are still not enough.

Insofar as climate change mitigation policies could help control demand growth, they could thus extend the timeframe during which humanity will address fossil fuel depletion.

The IEA argues that coordinated action to prevent more than 2°C of climate change would reduce global demand for oil in 2030 from 105 million barrels per day to 89 million.

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{ 6 comments… read them below or add one }

fossilfreak December 17, 2009 at 1:14 am

The Fifteenth Conference of the Parties will likely end as all the previous conferences have, little accomplished and let’s do this again soon – the foie gras was marvelous. The top down government control dictated by focusing on CO2 doesn’t work. We’ve got seventeen years of proof that they can’t even get started.

Policy should not be based on CO2 and climate, but on what actually deploys alternative energy solutions. Think about how further along we’d be if the billions of dollars and millions of man hours spent on just talking about doing something about climate had been devoted to deployment.

Climate change is a symptom, one of a number of environmental, economic and geopolitical symptoms, of the disease of burning carbon. Treat the disease, not the symptom.

Climate is a poor measurement of progress. Temperature does not always follow the CO2 curve. The trend is not linear.

Bunc December 17, 2009 at 10:21 am

It seems to me that the arguments for taking action on climate change and the type of action we need to take are significantly bolstered by the need to also protect dwindling non-reneable resources such as oil. That’s why action to improve use of renewables makes so much sense because it potentially addresses both AGW and resource depletion.

Milan December 17, 2009 at 10:23 am

Not to mention the geopolitical vulnerability that accompanies dependence on imported fuels.

R.K. December 17, 2009 at 11:36 am

The most important connection between climate change and peak oil may be the danger that people will start making liquid fuels from coal, as oil becomes ever more expensive and hard to get.

That cannot be allowed to happen, given what a disastrously huge amount of carbon there is in the world’s coal.

Milan January 22, 2010 at 4:58 pm
. July 30, 2017 at 1:51 pm

The IEA thinks the most likely scenario is for oil demand to peak after 2040, but if the Paris agreement is strictly adhered to, it said, oil demand would peak in 2020 and fall off quickly after that.

“We know that Canada’s tarsands have a few special features that would lead one to expect that they’ll be the first to go when oil consumption declines,” said Kathryn Harrison, a political scientist at the University of British Columbia.

“It’s more expensive [to produce], so when consumption declines, the price of oil will also decline, so Canada’s oil will not be competitive when other countries start getting serious about reducing their emissions.”

Harrison said she expects carbon pricing and other regulators to further hamper the oilsands to the point where they are no longer economically viable, what she describes as a case of market forces responding to government regulation.

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