Jerome a Paris has a diary up over at Daily Kos, Top official: without Iraqi oil, we hit the wall in 2015, that provides an English translation of some snippets from an interview with Fatih Birol, the chief economist of the International Energy Agency, that appeared in Le Monde. The diary also contains JaP’s own assessment of the rest of the interview.
The four parts in English that JaP provides:
If Iraqi production does not rise exponentially by 2015, we have a very big problem, even if Saudi Arabia fulfills all its promises. The numbers are very simple, there’s no need to be an expert.
Within 5 to 10 years, non-OPEP [OPEC?] production will reach a peak and begin to decline, as reserves run out. There are new proofs of that fact every day. At the same we’ll see the peak of China’s economic growth. The two events will coincide: the explosion of Chinese growth, and the fall in non-OPEP [OPEC?] oil production. Will the oil world manage to face that twin shock is an open question.
Unfortunately, there’s a lot of talk, but very little action. I really hope that consuming nations will understand the gravity of the situation and put in place radical and extremely tough policies to curb oil demand growth.
I understand the Saudi government claims 230 billion barrels of reserves, and I have no official reason not to believe these numbers. Nevertheless, Saudi Arabia - as well as other producing countries and oil companies - should be more transparent in their numbers. Oil is a crucial good for all of us and we have the right to know how much oil, as per international standards, is left.
As JaP correctly points out in his diary, this is unusually blunt talk from someone in Birol’s position. I think it should be considered one of the (if not the) most prominent “the peak is now or very soon” statements we’ve heard to date. (Others have come from Colin Campbell, Ken Deffeyes, David Goodstein, T. Boone Pickens, Matt Simmons, and Chris Skrebowski.)
I honestly don’t know how much louder and clearer the alarm bells have to ring before enough of us pay attention. It could well be too late: With all signs pointing to the OPEC showdown materializing later this year, our first hint from the market’s invisible hand that things have changed radically might be a right jab that loosens a few teeth, and not a gentle tap on the shoulder.
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June 28th, 2007 at 10:29 am
“Unfortunately, there’s a lot of talk, but very little action. I really hope that consuming nations will understand the gravity of the situation and put in place radical and extremely tough policies to curb oil demand growth.”
That’s what I’m talking about. We can make the Prius a top-10 selling car, and it will still be “very little action.”
I was thinking about this in the shower this morning, about that old “exponential growth” lecture and video that was popular in Peak Oil groups a year or two ago. That lecture struck me as a nice survey of basic math, and certainly a step beyond linear extrapolation. That said, it left a lot of unanswered questions. In particular, it stepped from linear math to a particular form of predictable non-linear behavior. The key science of the 80’s (popularized as ‘chaos’) is that most non-linear systems are inherently unpredictable.
Societal response is non-linear and inherently unpredictable (just find me a post predicting widespread hybrid use in the Peak Oil world 5 years ago).
So who says “little action?” Either someone lobbying for more action (which I can support) or someone who fundamentally does not understand the mechanisms of history (which I will deplore).
June 29th, 2007 at 9:12 pm
I think that Mr. Birol is bing wildly optomistic. Iraqi oil cannot grow exponentially much before 2015, even if we get out and the masters of the petroleum universe, the Russians, step in and actually straighten out the mess, there is not enough infrastructure remaining to get the supply to the purchasers. If we have an Iran style ban on trade, only Halliburton will be able to supply US style engineering to the problem, and the oil will sit there, if the needed wells are drilled. IF 2015 is a true estimate of the needed date for acceleration, then this is tantamount to calling Houston about a little problem.
The prestige of having PO essentially endorsed at such a level is an amazing event. He should be commended for being so forthright in his acknowledgement. Since some sources, pointing to Cantarell, Burgan and much of the rest of the producing super-giants being in decline for several years now, indicating that non-OPEC production is already in decline, the warnings are even more ominous. Get your ray-guns everybody, and convert those plastic jugs into diesel. Can anyone imagine the refining cost with that heavy of a feedstock? (e equals m c squared)
Production is far too expensive to obtain at this time to hope for any improvements, so let’s all just sit and wait on this one as well as GW/CC.
June 29th, 2007 at 9:24 pm
Woodchuck: I think it’s fascinating, to say the least, that Birol made these comments when he obviously knew he was on the record for a major publication. My guess is that he knows there’s no realistic hope of a miraculous recovery of Iraqi oil production, but he phrased it that was as a “dog whistle” (to use an obscure political term), meaning he was sending a signal that only those very familiar with the details would understand at a deep level. To everyone else it sounds like, “Gee, if things don’t go exactly right then gasoline will get expensive in 8 years.”
Frankly, this is the kind of thing that really worries me. If this was an investor or just some guy with a web site flapping his gums I could shrug it off. But when Birol says it this plainly to Le Monde it should be in every newspaper in the US. And I’d bet my keyboard that very few US newspapers or news broadcasts (TV or radio) carried it. We’re all too busy watching video’s of Paris Hilton’s jail release while waiting in line for our iPhone, I guess.
June 30th, 2007 at 4:16 pm
One Russian political cartoonist said that a pessimist is just an INFORMED optimist.