Slippery grounds

If one is to believe a whistleblower at the IEA, the world is much closer to running out of oil than official estimates admit. The International Energy Agency has been deliberately underplaying a looming shortage for fear of triggering panic buying as also displeasing the US, he said.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The organisation’s World Energy Outlook on oil demand and supply is soon to be published and forms the basis for many governments’ actions and policies. 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, is being questioned by many. There is no firm evidence to prove this and the world has already passed its peak in oil production, they claim.

The Americans fear the end of oil supremacy because it would threaten their power over access to oil resources, was what the source said.

The growing consensus that we are close to the peak or even crossed over makes it even more important that nations make some deal at Copenhagen. A shift in economy which is not so carbon dependent is imperative to avoid severe economic dislocation, it would seem.

Just juxtapose that with the ADB report on energy demand in the Asia-pacific. Energy demand across the region is growing at an annual rate of 2.4%, compared with the world average of 1.5%. And nearly 80% of this energy need will have to be met by fossil fuels. The region currently consumes about a third of the world’s total energy supply, says the report.

The region will have to invest from $7 trillion to $9.7 trillion between 2005 and 2030 to meet the growing energy demand. Oil makes up more than 35 percent of the global energy pie.