I just took a look at the World Energy Outlook 2008 and found some alarming statements in the available summaries. The report costs over $200 and I've not yet convinced myself to buy it. This years report is supposed to be a departure from prior years with some shocking statements and conclusions. I'm shocked but then last years report also shocked me.
I just posted a podcast giving a summary: http://www.7gen.com/product/25265-world-energy-outlook-2008
A couple high level points are:-
- Crude oil production from known fields is due to begin declining this year, and that to keep oil production in pace with demand will require a huge investment in new oil infrastructure and technologies plus new discoveries in oil. I think there's a bit of fantasizing going on there, sure there will be new infrastructure built but will the amount required actually be built? The report says the amount of new infrastructure required is 6x the infrastructure currently in place in Saudi Arabia. Oofda.
- There is a huge increase projected in Coal usage with a trend that began in 2005-6. Most of the demand increase is coming in China and India. BTW a few days ago Dr. James Hansen delivered a presentation about 'Implications of “peak oil” for atmospheric CO2 and climate' pointing to increased Coal usage as the hugest problem with climate change.
Last years report said a number of alarming things such as
Oil supply is increasingly dominated by a small number of major producers, most of them in the Middle East, where oil resources are concentrated. Non-OPEC production of conventional crude oil is set to peak within a decade. OPEC’s share of global supply grows significantly, from 40% now to 48% by 2030. Iran and Iraq have significant potential to expand their production, but Saudi Arabia remains by far the largest producer. The need for more transparent and comprehensive data on oil (and gas) reserves in all regions is a pressing concern.
A critical uncertainty is whether the substantial investments needed in the oil production sector in key Middle East countries will, in fact, be forthcoming. These governments could choose deliberately to develop production capacity more slowly than we project in our Reference Scenario. Or external factors such as capital shortages could prevent producers from investing as much in expanding capacity as they would like. As demonstrated by a Deferred Investment Case, slower growth in OPEC oil production drives up the international oil price and, with it, the price of gas.
This is alarming because -- even if you assume the oil will be there to meet demand (a questionable assumption itself) -- that it's unlikely the new infrastructure will be installed to actually produce the oil to meet that demand. There are several reasons the oil producing countries would not meet actual demand. For example this years report points to a shift towards "national oil companies", which means the oil infrastructure will be owned by governments rather than shareholders. Governments have different incentives than do shareholder owned corporations and governments may decide to preserve their oil reserves as a national heritage for their children rather than an exploitable resource for maximizing short term gain.