The Peak Oil Crisis: Edging Towards Reality

Last week the International Energy Agency (IEA) in Paris released their annual report on the state of the world’s energy resources — World Energy Review 2008.

As the world’s energy situation becomes more and more confused, with prices gyrating wildly, and with more voices warning of unprecedented problems just ahead, this 569-page report stands as the most authoritative description of what will happen to the world’s energy supply. The energy policies of the 28 countries that are members of the IEA in theory hinge on the report’s findings – and that is where the trouble comes in.


Until recently, the IEA’s forecasts have been based on the premise that there was plenty of oil or equivalent hydrocarbons left to extract. Forecasting future production was simply a function of extrapolating demand. However much oil the world needed and was ready to pay for, the oil industry would provide. This premise of course undercuts the notion of world oil production peaking anytime soon. As long as there is plenty of oil to extract in the foreseeable future, world production should not peak. It was this premise and associated judgments that serve as the basis for most of the world’s governments denying or at least avoiding discussing very loudly the idea that world oil production will soon be going into decline.

In recent years however, as world oil production stagnated, and as more attention was focused on rates of oil depletion vs. the likelihood of offsetting new production, the IEA’s basic premise became more and more untenable. This year the Agency succumbed to reality and addressed the issue of stagnating oil production head-on with detailed discussions of oil depletion around the world.

Falls Church News-Press