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Oil: Future World Shortages are Being Drastically Underplayed

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Uppsala University has published a scathing assessment of the International Energy Agency's annual world Energy Outlook, just a few days after two insiders revealed that the agency was downplaying the potential for future oil scarcity. The study warns of the IEA's increased politicization, describing the report as a "political document" developed for consumer countries with a vested interest in low prices. In order to meet the agency's predictions, oil would have to be extracted at a pace never seen before.


By Terry Macalister

November 12, 2009


A leading academic institute has urged European governments to review global oil supplies for themselves because of the "politicisation" of the International Energy Agency's figures.

Uppsala University in Sweden today published a scathing assessment of the IEA's annual World Energy Outlook, saying some assumptions drastically underplayed the scale of future oil shortages.

Kjell Aleklett, professor of physics at Uppsala and co-author of a new report "The Peak of the Oil Age", claims oil production is more likely to be 75m barrels a day by 2030 than the "unrealistic" 105m used by the IEA in its recently published World Energy Outlook 2009. The academic, who runs a Global Energy unit at Uppsala, described the IEA's report as a "political document" developed for consuming countries with a vested interest in low prices.

The report from Aleklett and others, including Simon Snowden from the University of Liverpool, says: "We find the production outlook made by the IEA to be problematic in the light of historical experience and production patterns. The IEA is expecting the oil to be extracted at a pace never previously seen without any justification for this assumption."

There is particular concern about high future production rates from "unconventional" sources such as tar sands, with the Uppsala report saying there is a lack of information about the figures in the 2008 Outlook and largely repeated in the latest one. "We must therefore regard the IEA production figure as somewhat dubious until it is explained more fully," added the Swedish report, which is to be published in the journal Energy Policy.

The Uppsala findings come days after the Guardian reported that IEA whistleblowers had expressed deep misgivings about the way energy statistics were being collected and interpreted at the Paris-based organisation. Insiders questioned whether US influence and fears of stock market "panic" were encouraging the IEA to downplay the potential for future oil scarcity.

Aleklett, whose latest work was funded by the state-owned Swedish Energy Agency, said he had experience of similar internal worries about the IEA.

"The Organisation of Economic Cooperation and Development (OECD) gave me the task of writing the report, Peak Oil and the Evolving Strategies of Oil Importing and Exporting Countries. This report was one of those discussed at a round-table meeting that was held in the IEA's conference room in Paris. At that opportunity, in November 2007, I had a number of private conversations with officers of the IEA. The revelations now reported in the Guardian were revealed to me then under the promise that I not name the source. I had earlier heard the same thing from another officer from Norway who, at the time he spoke of the pressure being applied by the USA, was working for the IEA."

The energy agency dismissed the suggestions of political influence on its analysis as "groundless". It said the annual document was reviewed by 200 different and independent experts.

The IEA was always trying to find ways to make its estimates even stronger, a spokeswoman said: "We would be happy to see any initiative to improve the data quality on reserves and decline rates. We believe our World Energy Outlook 2008 opened an important door to have more field data and transparency and would very much welcome similar efforts to help improve transparency in the oil sector."

Meanwhile, Steve Sorrell, author of a recent oil supply report for the UK Energy Research Centre, which also warned of British government complacency on the issue, said the Uppsala paper was a "useful contribution" to the debate on "peak oil" - the period at which maximum levels of crude output is reached after which there will be terminal decline.

"The IEA has taken some useful steps in recent years to give more information about how it is arriving at certain conclusions and that is to be welcomed. But its [oil supply/demand] scenarios have also changed radically and that deserves greater explanation. We still need greater access to the data that provides these assumptions," he said.

Aleklett added: "I am a scientist, not an economist or a politician. I believe in the facts and if someone can prove me wrong I will happily change my mind."


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