Saturday, 5 July 2008

Proven Reserves and a Possible Crisis in November

There are many similarities between the climate change issue and peak oil. Today there is a wide spread agreement that climate change is real and that we need to reduce our CO2 emissions. The interesting thing is that for climate change the scientific agreement existed for about 10-20 years before it became politically correct to accept it.

The mechanisms behind this lag have been discussed elsewhere and this post is just to signal that we might see an “IPCC 4AR” (when climate change became a mainstream issue) happening this November with regards to peak oil.

In November IEA (can be seen as the same credible/media accepted body for oil as IPCC is for climate change) will release WEO 2008 (could become a similar report for peak oil that the fourth Assessment Report, 4AR, was for climate change). The similarity is that both can say something that everyone working with the issue already knows, but for the world it is not until these bodies say something that it becomes "real".

The World Energy Outlook 2008 (WEO 2008) will look into the sensitive issue of proven reserves. IEA is basically the last major institution that still produces reports that are based on assumptions that there are huge oil reserves that will allow us to continue to burn oil for another 200 years (IEA do not really look into the climate aspect even if they lately have begun to add new scenarios for low carbon development.)

Now the world is changing and the technical discussion is no longer the interesting (how much oil does exist), but more the economic (how will supply and demand develop).

A great interview with Biril from WEO is available here.

About the three pictures.

The one above is from the last WEO, where I have added the actual price development. The two below should be seen from this perspective. If we for the first time have seen proved reserves shrink, 2008 might be the year when politicians start getting really serious about the issue (I will come back to the danger with this as right now the increase in oil prices is mainly resulting in actual or planned investments in really destructive areas such as CCS, Coal to Liquid, Arctic Oilfields, etc)

Global proved reserves 1993-2007 (From BP)

Proved reserves in the Middle East 1993-2007 (from BP)

For those who want to be inspired there is a CNN short movie called “we were warned”.