The hope that massive investment will solve this looming shortfall is whistling in the dark. Outside of the coming THAI /CAPRI revolution, only now slowly developing, there are no alternatives.
The industry is spending full out but they simply have run out of targets and options sufficient to make up the looming production decline (collapse?). After all, you drill in the seas off Kamchatka because you cannot drill one thousand new wells in much better places.
My readers know that Alberta’s tar sands are positioned to fill the demand gap. In fact I saw a newsletter quote a real reserve figure of 2.7 trillion barrels. Half or more of that will be recoverable with THAI/CAPRI. That gives us ample supplies for at least a century.
The point is though that a major industry authority has finally admitted what they knew all along, that replacing cheap oil with expensive oil is incredibly expensive and this makes expensive alternative fuel sources competitive now.
And since alternative energy sources are at least carbon neutral, they will quickly replace the entire oil industry over the next twenty years and leave most of that expensive oil in the ground.
The report continues to use weasel words but they are clearly now into covering their backsides since the supply failure is becoming visible. Their reference to forty years of supply almost lets you believe it is sitting in a tank somewhere. They fail to mention it will take eighty years to extract it all at increasingly higher cost. And it is forty years since all that oil was found and put on stream.
I think my headline makes it a little clearer.
Whenever I get access to this report in whole or in part, I will post useful data.
Energy body warns on oil prices
By Sarah Mukherjee
One of the world's leading authorities on energy supply says the era of cheap oil is over and prices could soon be back up to $100 a barrel.
The International Energy Agency (IEA), in its World Energy Outlook for 2008, says prices could soar as high as $200 a barrel by 2030.
The immediate risk to supply, it says, is not one of a lack of global resources.
Instead, it points to a lack of investment where it is needed.
The world, the report's authors conclude, is not running out of oil just yet - indeed, there is enough of it to supply the world for more than 40 years at current rates of consumption.
But, they point out, field by field, declines in oil production are accelerating and more money will be needed in research and development to extract the oil there is.
While world oil supply will rise, the report's authors predict that massive investments in energy infrastructure will be needed - an eye-watering $26 trillion dollars up to 2030.
A significant amount of this money - $8.4 trillion - will need to be spent on oil and gas exploration and development.
In one scenario considered by the IEA, China and India will account for just over half of the increase in world primary energy demand between 2006 and 2030, and much of the increase in world oil demand.
But despite the agency's assessment of oil and gas reserves, the report contains a stark warning of the consequences of continuing to rely on fossil fuels.
The consequences for the global climate of policy inaction when it comes to decarbonising the world economy are "shocking", according to the report.
"Strong, co-ordinated action is needed urgently to curb the growth in greenhouse gas emissions and the resulting rise in global temperatures," it said.