The International Energy Agency provides plenty of evidence that the era of cheap oil is over, forever.
Salon reports that, “the first sentence of the executive summary of the International Energy Agency’s (IEA) influential ‘Medium Term Oil Market Report,’ released (Monday), states the broad outline of the problem baldly: ‘Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012.”
Demand for oil products, especially transportation fuels, is increasing rapidly. One can place blame on all those developing nations whose populations have been approaching the crucial $3,000 per capita GDP level – that pivotal moment when, as revealed by the IEA, “a middle class emerges, eager to purchase cars, fly in airplanes, install air-conditioners and, more generally, use energy consuming products. ‘People can’t blame a lack of refinery capacity, the IEA claims in refinery upgrades is proceeding apace; and doesn’t appear likely to be a difficulty in the near future. Yet overall, supply of the raw product – gas and oil – is having a harder and harder time to keep up with demand.
According to Salon, “this would seem to be the definition of a world approaching ‘peak oil’ – that moment when supply stops growing and begins to decline, while demand continues to chug along. But it is not until Page 30 of the IEA’s very detailed 82-page report that those all important words are even mentioned. Here are some excerpts from the critical section:”
“The concept of peak oil production and its timing are emotive subjects which raise intense debate. Much rests on the definition of which segment of global oil production is deemed to be at or approaching peak. Certainly our forecast suggests that the non-OPEC, conventional crude component of global production appears, for now, to have reached an effective plateau, rather than a peak …”
