IEA Confirms The End Of Cheap Oil
09 November, 2011
International Energy Agency (IEA) realeased its 2011 World Energy Outlook today in London. The report warns that if urgent action is not taken the world is headed for irreversible climate change within five years. "If we do not have an international agreement whose effect is put in place by 2017, then the door will be closed forever," IEA Chief Economist Fatih Birol warned.
The report also confirms the end of cheap oil. In its executive summary, under the sub-heading "Rising transport demand and upstream costs reconfirm
the end of cheap oil. We assume that the average IEA crude oil import price remains high, approaching $120/barrel (in year-2010 dollars) in 2035 (over $210/barrel in nominal terms) in the New Policies Scenario although, in practice, price volatility is likely to remain."
The report also confirms the arrival of peak oil when it states that by the year 2035 there will be a shortfall of 47 mb/d, about twice the current total oil production of all OPEC countries in the Middle East. The report says that it can be compensated by the production of natural gas liquids (over 18 mb/d in 2035), unconventional sources (10 mb/d), biofuels 4 mb/d. Even if we believe that such much magical numbers are reached from unconventional sources, the numbers still fall short of demand.
You can access the executive summary here
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