The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency (IEA) who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying. The senior official claims the US has played an influential role in encouraging the IEA to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
The allegations raise serious questions about the accuracy of the organization’s latest World Energy Outlook on oil demand and supply. In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.
Now the “peak oil” theory is gaining support at the heart of the global energy establishment. “The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organization was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted.
The senior IEA official who blew the whistle on the organization’s tendency to overstate supply says the group is manipulating data in order to placate financial markets.”Many inside the organization (IEA) believe that maintaining oil supplies at even 90 million to 95 million barrels a day would be impossible, but there are fears that panic could spread on the financial markets if the figures were brought down further,” a senior IEA said.
Title: Key oil figures were distorted by US pressure, says whistleblower
Source: guardian.co.uk, Monday 9 November 2009
Author: Terry Macalister
Title: Oil: A Market of Psychology of Fear
Source: IPSnews: Dec 8 2009
Author: Chris Arsenault
Faculty Evaluator: Peter Phillips
Sonoma State University