The Peak Oil Crisis: A Report to Remember

Last week the International Energy Agency released its annual report (600 pages) on just where energy production and consumption in the world is going over the next 25 years.

Four or five years back, producing the annual World Energy Outlook was a rather straightforward task. All the IEA had to do was to take the world's current rate of economic growth, calculate how much oil, coal and natural gas it would take to support that growth and publish the results. There was never much consideration of whether resources would start to run out or become too expensive to exploit, or what, if anything, the massive amount of carbon dioxide that was being dumped into the atmosphere was doing to the climate.

In the last few years the IEA's annual report has come to recognize that the next 25 years are unlikely to be anything like the last 25 and the report has become much more nuanced. Gone are the extreme predictions that the world will be consuming 50 percent more oil 25 years from now. In their place are forecasts that global oil production will depend heavily on what alternative policy paths are taken by major governments and how much ($38 trillion is necessary) will be spent to find and exploit fossil fuel resources in the coming years.

As global energy policies and the realities and costs of production are very much in flux these days the EIA has decided to look at the future from three differing perspectives and forecast how the future might evolve if one of these three paths is followed. The first of course, is business as usual with no major changes to the energy policies of the major countries. The second is termed "new policies" which looks at what might happen if the major energy consumers do what they say they will do with regards to carbon emissions. The third, the "450 Scenario," examines what might happen if the world takes seriously the warning that we must keep atmospheric carbon below 450 parts per million which is believed will keep global warming down to a 2oC increase in average global temperature. More