<DrumBeat: November 19, 2008 The Oil Drum DrumBeat: November 20, 2008>

87 comments on The IEA WEO 2008 - Objectivity of the International Energy Agency

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xeroid on November 19, 2008 - 4:02pm Permalink | Subthread | Parent | Comments top

The reality is WE DON'T KNOW the future - none of us! ... I think all on TOD would agree with that.

The IEA is charged to see if there is enough reserves of oil in the world to continue economic growth for at least 30 years or so ... their answer is yes ... I think all on TOD would agree with that.

The IEA further says that if the oil exporting nations (mostly OPEC) don't invest enough then the flows will be inadequate, soon ... I think all on TOD would agree with that.

It looks like the only use for the IEA is planning for short term emergencies, not peak oil - so is it value for your tax dollar, probably not?

The political reality is that we collectively vote in democratic Governments to give us growth - so that is what they will attempt, adequate oil or not, and they will never tell us that the future can't be growth. But the reality also is that the IEA sponsors HAVE NO CONTROL over the investments made in the exporting countries.

Live with the reality that we don't know what the future WILL be and that the past most definitely is no guide to the future, but we do know what it can't be (with a high degree of certainty).

The uncertainty is just the timing of inevitable things such as peak oil, peak gas, peak coal, peak phosphorous, peak fresh water, peak food, peak humans, peak investment, failing fiat currencies, climate change etc etc.

What we consider normal is actually very, very abnormal in the ~4,500,000,000 year life of the earth - it will not last!

Enjoy life and try and have a flexible personal plan that can cope with rapid change, don't rely on the efforts of others, your life is what you make of it - some of the bad things will likely happen in the next 50 years or so (and judging by recent historical data, may even be happening now).

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Will Stewart on November 19, 2008 - 4:39pm Permalink | Subthread | Parent | Comments top

enough reserves of oil in the world to continue economic growth for at least 30 years or so?

But the IEA has made it a practice to predict production rates as well, so it isn't just reserves. If by economic growth you mean continuation of BAU, then I would say "no". Counting oil shale and even some tar sands must account for EROEI, so simple reserves won't be realistic.

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Gail the Actuary on November 19, 2008 - 4:32pm Permalink | Subthread | Parent | Comments top

The IEA's method of prediction seems to bring supply up to demand, by assuming price changes and additional investments to provide the needed supply. The increased prices slightly affect demand, so the process is iterative.

These are the words of the IEA on methodology:

Matching oil supply and demand

Total oil demand is the sum of regional oil demand, world bunkers and stock changes. Equilibrium between oil supply and demand in the World Energy Model results from an iterative process. First, projections of oil supply from countries closed to international investments are run separately under a policy-driven scenario of national investments. Second, projections for the group of countries open to international investments are run under a given price scenario.

Third, the resulting total world oil supply is then compared to the results of the oil demand module under the same price scenario. The process of adjusting the price scenario and the investment policies of closed countries is repeated until an empirical convergence is found between closed countries’ capabilities and investments policies, open countries’ market-driven supply potential and the price elasticity of oil demand in the WEM regions.

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Matt on November 20, 2008 - 10:40am Permalink | Subthread | Parent | Comments top

The world has just completed a giant live experiment by trying to grow the economy against limited crude oil supplies at around 74 million barrels/day. Result: bank failures, company bankruptcies, airline closures, a car industry at its knees and many rescue packages which mean new debt. Assuming we come out of the current crisis, who would want to repeat that exercise? When will we repay debt at all?

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drillo on November 21, 2008 - 5:52pm Permalink | Subthread | Parent | Comments top

Thanks for bringing up this excerpt. I had also to do with modelling in my earlier life. However these models dealt only with natural parameters, so it had a fairly narrow and "predictable" range of results.
But the IEA model has to deal with quite a few "unpredictable" parameters, e.g. politics, so they have a big array of srews they turn manually according to their personal assumptions. So simply depending on these manual adjustments the model can produce an huge array of results.
It is a pity that they don't provide more transparency by publishing all details (source code, data etc.) on the modelling process.

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87 comments on The IEA WEO 2008 - Objectivity of the International Energy Agency

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