IEA Chief Economist Projects Global Oil Peak In 2020 - Birol Worries About Lack Of Investment Today

[hatrack]

Global oil production will peak much earlier than expected amid a collapse in petroleum investment due to the credit crunch, one of the world's foremost experts has revealed.

Fatih Birol, chief economist to the International Energy Agency, told the Guardian that conventional crude output could plateau in 2020, a development that was "not good news" for a world still heavily dependent on petroleum. The prediction came as oil companies from Saudi Arabia to Canada cut their capital expenditure on new projects in response to a fall in oil prices, moves that will further reduce supply in future.

Birol's comments will give more ammunition to those who warn that the British government is dangerously complacent in not trying to wean the country off oil as quickly as possible. Some observers believe that, because the global economy is underpinned by oil, the peaking of supply will cause severe economic, social and political disruption unless prepared for over many years.

John Hemming, chairman of the All Party Parliamentary Group on Peak Oil and Gas, said Birol's "conversion" was significant. "The penny has finally dropped - geological issues matter as well as political and economic. The IEA - unlike our government - appears to be leaving cloud cuckoo land finally," he added.

EDIT

http://www.guardian.co.uk/business/2008/dec/15/global-oil-supply-peak-2020-prediction

[Idealism]

1. Birol said a few years ago that the Saudi's ARAMCO had peaked, too

Not so good of a track record, imo...

[GliderGuider]

3. He did?

Odd, I've been following Peak Oil fairly closely for the last four years, and I don't remember him saying anything like that. Matt Simmons has said Ghawar might have peaked, and the good folks at The Oil Drum did dome very interesting cooperative research a couple of years back that concluded the Saudis are close to peaking, but Birol has never said anything remotely close to that AFAIK.

Birol's error has consistently been in the other direction (i.e. "Go back to sleep, everything's fine") which is what makes the IEA's recent change of tone such a dramatic development.

[Nihil]

4. Deleted by poster

(Edit: Was thinking about Ghawar rather than ARAMCO ... oops.)

[jwirr]

2. Using less should not accelerate the peak timing. However, many believe

that we have already reached peak. So?

[hunter]

5. Past peak, demand decreases one way or another. Price hardly matters at all.

I'm guessing we've rolled past the peak and a lot of difficult pie-in-the-sky oil projects are never going to be developed. Our oil fueled civilization won't have the economic stregnth to further increase extraction rates.

If the price of oil is $50 then new oil will cost $75. If the price of oil is $100, then new oil will cost $150.

The oil orgy is winding down.