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World will struggle to meet oil demand
Posted: 29 Oct 2008, 00:52
by energy-village
The headline must be the understatement of the year!
World will struggle to meet oil demand
By Carola Hoyos and Javier Blas in London
Financial Times, 29 Oct 2008
Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows.
Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times. The projections could yet be revised lower because the draft report was written a month ago, before the global financial crisis deepened after the collapse of Lehman Brothers.
All the increase in oil demand until 2030 comes from emerging countries, while consumption in developed countries declines. As a result, the share of rich countries in global demand will drop from last year’s 59 per cent to less than half of the total in 2030.
This is the clearest indication yet that the focus of the industry on the demand – not just the supply – side is moving away from the US, Europe and Japan, towards emerging nations.
The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed.
The IEA, the oil watchdog, forecasts that China, India and other developing countries’ demand will require investments of $360bn each year until 2030.
The agency says even with investment, the annual rate of output decline is 6.4 per cent. The decline will not necessarily be felt in the next few years because demand is slowing down, but with the expected slowdown in investment the eventual effect will be magnified, oil executives say.
“The future rate of decline in output from producing oilfields as they mature is the single most important determinant of the amount of new capacity that will need to be built globally to meet demand,” the IEA says.
The watchdog warned that the world needed to make a “significant increase in future investments just to maintain the current level of production”. The battle to replace mature oilfields’ output could even offset the decline in demand growth, which has given the industry – already struggling to find enough supply to meet needs, especially from China – a reprieve in the past few months.
The IEA predicted in its draft report, due to be published next month, that demand would be damped, “reflecting the impact of much higher oil prices and slightly slower economic growth”. It expects oil consumption in 2030 to reach 106.4m barrels a day, down from last year’s forecast of 116.3m b/d.
http://www.ft.com/cms/s/0/e5e78778-a53f ... 07658.html
Posted: 29 Oct 2008, 09:25
by Andy Hunt
The agency says even with investment, the annual rate of output decline is 6.4 per cent. The decline will not necessarily be felt in the next few years because demand is slowing down, but with the expected slowdown in investment the eventual effect will be magnified, oil executives say.
Well well well - who'd have thought it.
Re: World will struggle to meet oil demand
Posted: 29 Oct 2008, 09:34
by Erik
energycity wrote:The headline must be the understatement of the year!
Not really. Considering the way demand is reported to be going, I'm sure the headline itself will actually come as a bit of a surprise to most FT readers.
It refers of course to more long-term forecasts and the long-awaited IEA report which, for the first time, focuses on the supply-side as much as on demand projections. It's a pity that the report was written a month ago when the financial world was so different, but the article seems to suggest that the report's projections could be revised accordingly.
Seems to me that the biggest short to medium term question is how a fall in demand due to economic slowdown will compare against the combination of production decline rates and mothballed oil and gas projects.
The longer term situation which this IEA study addresses is bleak, however you look at it. I wonder if this IEA report, when it is published, will be quite a wake-up call for all those who have always based their optimism on the IEA's previous less gloomy forecasts.
Posted: 29 Oct 2008, 09:46
by MacG
A bit interesting, but I guess it will be ignored. No reason to belive that people will start to listen NOW, when they have more or less managed to ignore the issue for over 150 years.
Posted: 29 Oct 2008, 10:23
by Ludwig
MacG wrote:A bit interesting, but I guess it will be ignored. No reason to belive that people will start to listen NOW, when they have more or less managed to ignore the issue for over 150 years.
They'll have to listen, now that the time for listening is over.
Posted: 29 Oct 2008, 10:30
by Aurora
Ludwig wrote:MacG wrote:A bit interesting, but I guess it will be ignored. No reason to belive that people will start to listen NOW, when they have more or less managed to ignore the issue for over 150 years.
They'll have to listen, now that the time for listening is over.
IMHO the sheeple will only start to listen when they can't use their Nintendo or Wii.
Posted: 29 Oct 2008, 10:54
by snow hope
Aurora wrote:Ludwig wrote:MacG wrote:A bit interesting, but I guess it will be ignored. No reason to belive that people will start to listen NOW, when they have more or less managed to ignore the issue for over 150 years.
They'll have to listen, now that the time for listening is over.
IMHO the sheeple will only start to listen when they can't use their Nintendo or Wii.
Agreed. But there are still plenty of thinking people about. When I talk to people, I am usually pleasantly surprised how much people are aware of what is going on, whilst maybe not aware of PO in all its aspects and implications.
So for the thinking people this can be nothing but a wake-up call. A decline rate of 6.5% a year is very significant. That headline in the FT is really quite dramatic. It this doesn't change thinking people's world view then I hesitate to imagine what it will take.
Posted: 29 Oct 2008, 19:30
by Erik
snow hope wrote:That headline in the FT is really quite dramatic.
Indeed it is. There it is, the peak oil problem, staring at us all in the face. From the FT no less. I sometimes wonder why people aren't heading for the hills or running around screaming the "end is nigh". (Note to myself: Why am
I not heading for the hills or running around screaming?)
Posted: 29 Oct 2008, 20:23
by Aurora
Erik wrote:snow hope wrote:That headline in the FT is really quite dramatic.
Indeed it is. There it is, the peak oil problem, staring at us all in the face. From the FT no less. I sometimes wonder why people aren't heading for the hills or running around screaming the "end is nigh". (Note to myself: Why am
I not heading for the hills or running around screaming?)
The headline might have had more impact if it had been featured on the cover of the Daily Mirror, The Sun, The Daily Mail or the Daily Express.
It's time for the sheeple to WAKE UP to our forthcoming energy crisis and until Peak Oil is featured on the cover of Hello magazine or is discussed at length in an episode of Corrie or Dead Enders, I fail to see how we can get the message across.
Information about oil and gas depletion has been in the public domain for the last eight years or so and yet it would seem that most people haven't even heard of Peak Oil.
It's all well and good for our 1000 strong membership to feel smug and well informed but at the end of the day PO will remain a subject of academic interest (until it's too late) unless we can convince a much wider audience.
Posted: 29 Oct 2008, 21:52
by Vortex
Mardy bums.
IEA Statement on Unauthorised Press Coverage of World Energy Outlook 2008
The Financial Times carried a cover page article this morning and a second article on page 4 allegedly reporting on the findings of the forthcoming WEO 2008. This article was drafted without any consultation with the IEA. It appears to be based on an early version of a draft from several months ago that was subsequently revised and updated. The numbers in the article can be misleading and should not be quoted or considered to be official IEA results. We are dismayed that such a comprehensive and important IEA report was made public without our input and verification.
The IEA will present the final and accurate results of the World Energy Outlook 2008 officially as planned at a press conference in London on 12 November. At that time, we will be happy to discuss the results and their implications for the global energy and climate in full detail.
Translation:
"Someone leaked the real version before we could fiddle the results."
Posted: 29 Oct 2008, 22:17
by EmptyBee
Vortex wrote:Mardy bums.
IEA Statement on Unauthorised Press Coverage of World Energy Outlook 2008
The Financial Times carried a cover page article this morning and a second article on page 4 allegedly reporting on the findings of the forthcoming WEO 2008. This article was drafted without any consultation with the IEA. It appears to be based on an early version of a draft from several months ago that was subsequently revised and updated. The numbers in the article can be misleading and should not be quoted or considered to be official IEA results. We are dismayed that such a comprehensive and important IEA report was made public without our input and verification.
The IEA will present the final and accurate results of the World Energy Outlook 2008 officially as planned at a press conference in London on 12 November. At that time, we will be happy to discuss the results and their implications for the global energy and climate in full detail.
Translation:
"Someone leaked the real version before we could fiddle the results."
Quite. To quote Fatih Birol:
"You are from the press? This is not for you. This is not for the press." source
Posted: 30 Oct 2008, 09:31
by Erik
Vortex wrote:Translation: "Someone leaked the real version before we could fiddle the results."
You're not claiming that this is some sort of CONSPIRACY are you Vortex?
Posted: 30 Oct 2008, 09:54
by Vortex
Erik wrote:Vortex wrote:Translation: "Someone leaked the real version before we could fiddle the results."
You're not claiming that this is some sort of CONSPIRACY are you Vortex?
I think that I/we need a new word for 'conspiracy'.
The world is full of 'conspiracies' ... mainly cover ups or sneaky price-fixing or similar activities.
By 'conspiracy' I mean 'mega conspiracy' with a cast of thousands.
You know the sort of thing:
- reptile aliens running the White House
- 100s of engineers wiring up buildings with explosives ... and then crashing huge fuel filled aeroplanes into the very same buildings, just to make sure that the fire takes hold.
- alien spacecraft being held at a US airbase
Any IEA 'fiddling' will primarily be 'redaction' ... changing 'serious' to 'concerning', '2012' to 'sometime in the next few decades', 'urgent' to 'worthy of review' ...
Posted: 30 Oct 2008, 10:29
by Erik
Vortex wrote:I think that I/we need a new word for 'conspiracy'.
Yeah, just kidding! (But you know, if those lizards are running the White House, the chances are they control the IEA too)
Posted: 30 Oct 2008, 18:23
by PaulS
The most freightening aspect of the article is the rate of decline - 9%. That would imply halving oil supplies every 8 years.
Or every 10 years if you factor in a rate of new oil of 1-2%/year, which seems likely from Chris Skrebowski's figures.