Fatih Birol (IEA) Interview - "We Have Warned Them" - Energy Bulletin

[hatrack]

Astrid SchneiderInternationale Politik (Journal of the German Council on Foreign Relations)
Original in German. 12-page article.

Fatih Birol: Prices will not immediately rise x-fold but gradually, so some time remains to adapt but longterm it is clear. If oil is finished in 2030, 2040 or 2050 doesn't change a thing.

S: You say that?

F.B: Yes, one day it will definitely come to an end and I think we should leave oil before it leaves us. This should be our motto.

.... F.B. We sounded the alarm bells in Nov. 2007 and this Nov. with WEO 2008 the bells may well shrill much louder. ... It is up to the governments, we have warned them. "

EDIT/END

http://www.energybulletin.net/43083.html

[GliderGuider]

1. To people who try to tell the truth

:toast:

[kristopher]

2. There is considerable difference in what you say and the claims in the OP.

I don't know of anyone who says petroleum is forever; and most people admit we need to transition now. Most people do not, however, claim civilization is going to end in 5 years. There is a huge difference.

[GliderGuider]

3. I don't claim civilization is going to end in 5 years either.

I claim that the problems some countries will face because of fossil fuel shortages will become severe in 5 years. Civilization in one form or another is going to continue on much longer than that, though with growing disruptions and failures.

[pscot]

6. What could go wrong in the next 5 years?

Three hundred dollar oil; Oil dependant enterprises fail (see airlines, long haul truckers, plastics manufactures; increasing food scarcity; big losses in the stock markets; world financial depression; fifteen% to 20% unemployment in the developed nations, maybe more; civic unrest (food and fuel riots); possibly violent international competition for resources; increasingly apparent environmental degradation. I could go on, but to what end.

It may not be the end of western civ, but it won't be the start of a new golden age, either.

[robertpaulsen]

4. Supply/Demand gap of 12.5 MBD by 2015?!

There is a discussion of this at LATOC:


Goodness, this is a long article ...

I did the first three pages so far, I don't know if I have the patience to actually translate all of it. I think the idea becomes clear from the first part anyway. Birol is an economist who still thinks that money can solve everything (including peak oil), but at least he is one of the few who acknoledges the problem up to a point. He is also born in Turkey which may or may not have anything to do with him being so obsessed about the idea that the Middle East can save the world.

Quote
"The Sirens Shrill"

The International Energy Agency (IEA) gives alarm: The world could run out of oil faster than expected - the danger of a supply shortage is rising

Hunger for energy vs. energy shortage: While the demand for oil is on the rise, the production is decreasing - shortages, escalating prices and inflation are looming. When talking to energy politician Astrid Schneider, Faith Biro, chief economist of the IEA demands a change in policy from the member countries. His motto: leave oil before it leaves us.

Astrid Schneider:
Mr. Birol, in your "World Energy Outlook" which was published in November 2007 the IEA has warned for the first time that there could be a slump in oil production and escalting prices in the time from now to 2015. The reason you give is that there has been to little investment in oil production.

Faith Birol:
Indeed. There are three reasons why that is so. The first one is the increasing demand, mostly from China, India and the Middle Eastern countries themselves. These countries are the main reason for the increasing oil consumption. Even if there should be a recession in the USA, this would not slow those countries down much, because India and China have a strong internal economic growth, while high oil prices will help the economy in the Middle East. The demand for oil will therefore remain high.

Schneider:
The second reason ...?
Birol: ... is, that we see a sharp decline in production from the existing oil fields, especially in the North Sea, the USA and many non-OPEC countries. Even here money should be invested, to slow down that decline. The third reason why we expect a risk for overall production is, that we looked at all oil exploration projects around the world: 230 alltogether, in Saudi-Arabia, Venezuela, the North-Sea, everywhere. Even if all those projects which are already funded will be implemented, the overall capacity they can bring for new oil production is too little.

Schneider:
How much is missing?
Birol:
Exactly 12.5 million barrel a day are still missing, about 15 % of the global oil demand (the current global oil consumption is 84 million barrel a day, note from the editor). This gap means that we could face a supply shortage and very high prices during the next years.

Schneider:
Is there still a way to avoid this?
Birol:
There are only three ways out of this dilemma: First of all we have to increase enery-efficiency drastically, we have to build more economical cars, trucks and airplanes, to slow down the incline in oil consumption. Secondly we have to use more alterative fuels in the traffic sector. If you take a look at how little governments are doing to help higher efficiency, though, I have little hope that there will be such a change of policy. The third thing is that we need many more oil production projects, especially in the key countries in the OPEC.

Schneider:
You write that 5.4 trillion dollar have to be invested to meet the global oil demand. In which countries should this money be invested?
Birol:
In the Middle Eastern countries with a large oil supply - but I am not sure
that those countries and their oil corporations will invest as much as would be necessary. They might think that it is not in their own interest to raise the production that much, to keep the oil prices up. A further part of the investments has to go to the OPEC countries, to the USA and to the North-Sea, to prevent the decline of the oil production there.

Schneider:
In the WEO 2007 it is mentioned that the rapid decline of oil production will be between 3.7 and 4.2 percent per year. Is that right?
Birol:
Exactly-

Schneider:
This decline is even steeper than the one predicted by the Energy Watch Group!
Birol:
I can already tell you that in our "World Energy Outlook 2008" which will be published in November we will deal in depth with the prospects of the oil and gas production. We will take a look at the 350 most important oil and gas fields and explore how much production rates are sinking and what that means.

Schneider:
What do you mean by that?
Birol:
As far as I know this will be the first profound public study in which we verify and revise our knowledge about how much oil and gas is going to the markets. Many people will come to new conclusions about this.

Schneider:
One of the statements of the WEO 2007 is that the complete additional oil production has to come from the OPEC countries and especially the Middle East. Salem el-Badri, the general secretary of the OPEC has announced on a conference regarding energy security in London last February, that the OPEC wants to invest 200 billion dollar until 2012 to create new production capacities of 5 million barrel (mb) a day. This is a sharp contrast to the WEO 2007 where you state that to the year 2020 we need 24 mb per day in new production capacity to satisfy the rising demand for oil. So de facto Salem el-Badri says that the OPEC will not be able to meet the expectations. Doesn't that mean that we will run into serious problems?
Birol:
Indeed. this is the reason that this year for the first time we announce a "supply crunch" situation. There is a gap between the global demand for oil and the amount which is or can be brought to the market from that region. We think that the oil producers have to increase their production output significantly, but we are not sure that they will do it or even can do it.

http://www.peakoilstore.com/forum/index.php/topic,15712.15.html

[GliderGuider]

5. Ouch! And Birol is an economist, even

That's one frightening interview, coming as it does from the Chief Economist and Head of the Economic Analysis Division of the International Energy Agency.

He must be a pretty poor economist though, not to understand that marketing plans and cost-driven substitutions are going to save the day.

[pscot]

7. Isn't there a line from Shakespeare somewhere

"First kill all the marketing people."

[robertpaulsen]

8. Doesn't "we have warned them" remind you of Bush's 8/6/01 PDB reaction?

After being read a PDB titled "Bin Laden Determined to Strike Inside US" on August 6, 2001, Bush responded:

“All right, you’ve covered your ass now.”

This is exactly what the IEA is doing. It gives me chills.

:scared:

[kristopher]

9. Nothing like creating a strawman is there?

"He must be a pretty poor economist though, not to understand that marketing plans and cost-driven substitutions are going to save the day."

The only discussion about marketing plans was in regards to the claims by Energy Watch Group. They stated without qualification that the decline in production observed through the 90s was a result of geologic constraints, a point that was CENTRAL to the unconventional accounting method they employed. In spite of the FACT that the recognized reason for the decline reflects marketing plans aimed at increasing efficiencies through industry consolidation, they offer no proof of their assertion nor do they deal with the understood reason for the decline.

As for substitutions, that isn't what the translated portion of this interview addresses. Since the principle function of the International Energy Agency is to serve the energy needs of the OECD, primarily through fossil fuels, I'm not sure of his level of familiarity with the present capabilities of alternatives. What I am sure of though, is that he recognizes the validity of the economic model. There is massive evidence that the theory is an accurate predictor of human behavior, there is no evidence to support your contention that it isn't. Zero. Zip. Ziltch. Na - da. All you offer is the equivalent of a christian fundie pointing to genesis and denying evolution.

[NM Independent]

10. Nah, I'm not mad about obscene big oil profits

"Schneider:
So the things I see in the WEO are more - if I may say so - a wishlist?
Birol:
You could put it that way. I think we are entering a new world oil order. The new players, which decide how much oil is going to the markets, are mostly public oil companies. For many reasons things will not be as easy as they have been before."

Wait, yeah I am :grr:

After reading the entire interview now, I have a question - Who thinks we'll still have a growing population in 5 years? Anybody?

[DCKit]

11. Oh Oil, I wish I could quit you. n/t