[JPL]

... here is the translation of third and last part of the Le Monde - IEA interview.

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Is there a short-term risk?

I'm resting on the assumption that the average rate of depletion of existing oilfields is 8 percent per year. This is already a lot: for each dollar invested in extraction, we have to invest three dollars to compensate for this decline. But what would happen, on all fronts, if this decline rate was 9 percent? The additional quantity of oil that would need to be found to compensate for this difference is equal to the entire projected increase in demand of the OECD out till 2020.

Saudi Arabia admits to a rapid decline in several of its main fields...

I can confirm that Saudi Arabia is capable of attaining a production capacity of 15 million barrrels per day by 2015, as against 12 today - this comes from the Saudi Oil Minister, Ali Al-Nouaimi. However these additional 3 million barrels is all we can look forward to to meet the envisiged rise in world oil demand (this demand is 83 MBPD today).

And Iraq?

If Iraqi production does not increase exponentially between now and 2015, we have a massive problem, even if Saudi Arabia fully meets it commitments. The figures are very simple, there is no need to be an expert. All you have to do is one subtraction. China is going to grow very fast, and India also, and the Saudi increase, the 3 MBPD extra, is not enough to even cover the additional Chinese demand.

But, given the actual situation in Iraq, it is very umprobable that this country is going to reach its optimum capacity just like that!

If this situation improved dramatically, how long would it take the Iraqi petrolium industry to reach its full capacity?

The Iraqi officials talk of 3 to 5 years. They know better than me. Even if they are correct, and all goes well in Iraq, it will in any event be a long process.

So I repeat, the oil industry faces a serious test between now and 2015. With the decline of production outside of OPEC and the peak in growth of China, the gap between supply and demand will widen to a significant degree.

What happens to the oil majors in this new game, which, according to you, will be increasingly dominated by the producers cartel?

These "majors" (Exxon, Chevron-Texaco, Shell, BP and Total) will be in trouble. They will not have access to new sources of production. They need to re-define their strategies, if they remain focussed on oil, they will have to be content with niche markets.

You are saying that they won't be "majors" much longer?

This is what I am telling you. In spite of the big increase in the price per barrel, which has enabled them to invest, they have not been able to increase their reserves! (Translators note - there is a reference here to a graph which is not included so I have dropped it).

So if things don not improve in Iraq...

... There is a wall, a great test in front of us, if the Western powers and also China and India do not make substantial changes to their energy policies, increase taxes on oil, and research more into energy conservation.

We are really not going to take this road. Global oil consumption is growing more and more quickly.

Unfortunately, there is a lot of talking, but very little action. I really hope that the consumer nations will understand the gravity of the situation, and put in place strong and radical policies to slow down the growth in oil demand.

[Zardoz]

$this->bbcode_second_pass_quote('pstarr', 'W')hy don't you go over to the 'Mother of All Biofuels' thread where this belongs.

[JPL]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', 'A')re they any nasty surprises waiting around the corner?

I believe the Saudi government talks about 230 billion barrels of reserves. I have no official reason to disbelieve those numbers.

[Starvid]

Fatih Birol has been peak oil aware for several years, at least. He has said all kinds of outrageous things off the record.

I could tell you what and to whom, but then I'd have to kill you.

[Jack]

$this->bbcode_second_pass_quote('JPL', 'O')n a personal note, I find it astounding that some guy in rural France has to translate this article line by line and then shove it up on some marginal web site (sorry Aaron!) to get the news out. For God's sake, this is the IEA talking - it should be everywhere!

JP

[Roccland]

$this->bbcode_second_pass_quote('Jack', '
')
You have, no doubt, heard the cliche wherein a person asks for the truth, and the other party responds "You can't handle the truth!"

I suspect our political and economic elite are peak aware, and regard the masses as unable to handle the truth. I think they're right.

A slow crash may well be more destructive than a hard fast crash. Prune 70% of the global population, then pick up the pieces might be a decent plan.

[Tanada]

$this->bbcode_second_pass_quote('MonteQuest', 'T')he annual World Energy Outlook is the leading source for medium to long-term energy market projections and analysis and has achieved widespread international recognition. It is the flagship publication of the International Energy Agency.

http://www.worldenergyoutlook.org/

[KevO]

$this->bbcode_second_pass_quote('', '[')/b]World oil demand will rise faster than expected, while supplies will remain tight, the latest International Energy Agency (IEA) report has warned.[b]

The IEA predicted demand would rise by an average 2.2% a year between 2007 and 2012, up from previous estimates of 2%.

It added that geo-political tensions and a lack of spare capacity in Opec production would also limit supplies.

By 2012, biofuel production would hit 1.8 million barrels, more than double 2006 levels it said.

However, while supplies of the green fuel are set to surge, it is likely to remain marginal with just a 2% slice of the energy market, the IEA said.

It also echoed warnings issued in an Organisation for Economic Development report that rapidly growing biofuel market will increase the price of certain feedstocks - such as sugar and corn - over the coming year.

Demand pressure

But with forecasts predicting world economic growth to increase by 4.5% a year, the report argued that oil demand was likely to soar to 95.8m barrels a day in 2012 from 81.6m bpd this year.

At the same time it predicted production from oil cartel Opec would fall, slipping by 2m bpd in 2009, while it also cut supply forecasts for non-Opec countries by 800,000 bpd.

It added that other factors including rising refinery costs, engineer shortages and strong demand in other energy markets would also put pressure on oil supplies.

[Eli]

technically, no it would not be PO.

PO is not a function of demand, it is the maximum recoverable rate of oil production. We could have a situation where oil demand is higher than supply but the supply grows at a slower rate.

But the effects will be the same as PO.

[KevO]

more on the IEA supply crunch

$this->bbcode_second_pass_quote('', 'T')he outlook, which updates an IEA forecast last issued in February, coincides with a jump in oil prices to more than $75 a barrel, closing in on a record high near $79, on concerns of a tightening market.

"Despite four years of high oil prices, this report sees increasing market tightness beyond 2010," the IEA said.

"It is possible that the supply crunch could be deferred - but not by much."

[kjmclark]

That's as close as I would ever expect the IEA to come. They're never going to say extraction has peaked. They will end up saying that due to lack of investment, production has not met expectations. Same thing.

As the song goes, "At seven p.m. a main hatchway caved in he said "fellas it's been good to know ya".

I hope I still have time to buy that land.

[Eli]

Yeah, what I meant to say is that the IEA is calling for PO in 2009. DRTFA close enough I guess.

[dhfenton]

They have crafted their words carefully; but I would say they are admitting OPEC Peak oil in 2009. They kind of leave it open as to whether or not there is a world peak. When OPEC is dropping 2 M bpd, who is left that could make up that much of a decline. Nobody really. They're dancing around the issue; but for all intents and purposes they have admitted world peak oil. Unless someone knows a group of non-OPEC producers out there who are going to increase production by more than 2M bpd.

Is it even possible, given how small most of the rest of the producers are? Could Russia or maybe China pull off a production increase of that magnitude? What about some of the Baltic states? This is 2009, how could anyone ramp up that fast to cover the OPEC decline?

[sirrom]

maby they just prefer the words supply crunch to peak oil. the word crunch makes oil sound crispy mmmmmmm....crisps

[AirlinePilot]

To me a "supply crunch" also implies a temporary nature so it's not quite as alarming. What I found scary in that link was the OPEC production fall. I think we are being let down as easily as possible over the next year or so with regard to Saudi numbers. More and more folks are starting to align with what Simmons thinks is happening.

Can anyone find what Saudi production has done year to date? I'd be very interested in that. I keep seeing where they are supposed to have new projects come on line but nothing seems to be added to their bottom line. I think this year will be important if they dont do something to improve production.

[gampy]

They also mention something called "plateau oil".

As opposed to peak-oil. Same difference, but sounds a little better, I guess.

The hubbert curve looks like a plateau at the top if you narrow the timeline.

Curious what CERA will say about this.

[IanC]

This is frightening. The timelines for bad things happening seem to get tighter and tighter as the months go by. Time to hang-out on the "Psychology" sections and get some empathy.

-Ian

[nth]

IEA has admitted to Peak Oil production for conventional oil for non-OPEC.
$this->bbcode_second_pass_quote('', 'T')he concept of peak oil production and its timing are emotive subjects which raise intense debate. Much rests on the definition of which segment of global oil production is deemed to be at or approaching peak. Certainly our forecast suggests that the non-OPEC, conventional crude component of global production appears, for now, to have reached an effective plateau[...]

[Bas]

They indeed seem to be very close to calling peak oil for what it is. They still choose their words very careful as if they are afraid to scare or hurt someone but it's a huge difference with only two years ago when they said it's just speculators and the long term price is around 30 dollars for a barrel. And indeed it's scary.