If it smells like peak oil, it probably is

The first sentence of the executive summary of the International Energy Agency’s (IEA) influential “Medium Term Oil Market Report,” released today, states the broad outlines of the problem baldly: “Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012.”

Demand for oil products — primarily transportation fuels — is growing fast. You can blame all those developing countries whose populations are approaching the critical $3,000 per capita GDP level — that magic moment when, according to the IEA, “a middle class usually emerges, eager to purchase cars, fly in aeroplanes, install air-conditioners and, more generally, use energy-consuming appliances.” Don’t blame a lack of refinery capacity — the IEA says investment in refinery upgrades is proceeding apace, and is not likely to be a problem in the near future. But overall, supply of the raw product — oil and gas — is having a harder and harder time keeping up with demand.



This would seem to be the definition of a world approaching “peak oil” — that moment when supply stops growing and begins to decline, while demand continues to chug along. But it is not until Page 30 of the IEA’s very detailed 82-page report that those all important words are even mentioned. Here are some excerpts from the critical section…

Salon.com