The developing scandal around the International Energy Agency and peak oil

It is interesting that Australian media has not yet covered the developing scandal around the International Energy Agency (IEA) and its prognoses for future oil production that broke last week. The IEA was established by the OECD nations to advise them on energy and is regarded as the world’s highest authority on world energy needs and production. Last Monday week (November 9), in The Guardian, it was revealed by whistleblowers in the IEA (current and former employees) that the IEA’s future oil production estimates were inflated.

Apparently, the USA has been pressuring the IEA to use the data from its own “Energy Information Agency” (EIA), the reliability of which has been questioned in the past. According to The Guardian article:

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

Coincidentally (?) on the same day, the research group of Professor Aleklett (president of the international arm of the Association for the Study of Peak Oil and Gas) of Uppsala University, Sweden, published a peer-reviewed paper in the scientific journal Energy Bulletin that uses the IEA’s own data to show that it is comprehensively wrong in its estimates of future oil production.

The IEA’s error has been to radically overestimate the rate of future oil production from undeveloped oilfields and fields yet to be discovered. They also overestimated the amount of “natural gas liquids” associated with future natural gas production and have overestimated the rate at which oil can be produced from unconventional sources (such as the Canadian tar sands).

Even when applying extremely optimistic estimates for future oil production rates, the Uppsala research group finds that production in 2030 will be 25 per cent lower than the IEA predicts. In fact, their revision of the oil data shows that the peak of oil production was last year! For this reason, the Uppsala research group’s paper is titled, “The Peak of the Oil Age - analysing the world oil production Reference Scenario in World Energy Outlook 2008” (PDF 823KB).

One day later the IEA published the most recent update of its annual report, World Energy Outlook 2009. Its estimates of future oil production are little changed from its 2008 estimates.

Commenting on the whistleblower allegations Professor Aleklett stated that already a number of years ago:

I had communicated to Sweden’s delegate at the IEA that Sweden should leave the IEA since it was deceiving the world and this would have serious consequences globally. I also asked how they could approve of something like the World Energy Outlook that was so in error.

Now the Swedish delegate to the IEA has commented on the allegations of the IEA’s faulty prognoses in a manner that supports everything Aleklett (and his research group) have asserted:

Urban Bäckström at the Swedish Energy Authority who is Sweden’s representative at the IEA, says that the IEA’s prognoses for oil resources are probably correct. But it will be difficult to increase production as much as the IEA foresees.

This is completely in line with the “Peak of the Oil Age” paper in which Aleklett’s research group accepts the IEA’s estimates for the oil reserves that exist and that will be found but disagrees with how fast they can be extracted.