by Jerome a Paris
Thu Nov 11th, 2010 at 06:26:50 AM EST
The annual World Energy Outlook has just been published by the International Energy Agency (see the Executive Summary (pdf) and the presentation slides (pdf)). And it includes some interesting notes:
Will peak oil be a guest or the spectre at the feast?
The oil price needed to balance oil markets is set to rise, reflecting the growing insensitivity of both demand and supply to price. The growing concentration of oil use in transport and a shift of demand towards subsidised markets are limiting the scope for higher prices to choke off demand through switching to alternative fuels. And constraints on investment mean that higher prices lead to only modest increases in production.
Crude oil output reaches an undulating plateau of around 68‐69 mb/d by 2020, but never regains its all‐time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGLs) and unconventional oil grows strongly.
They repeat some concepts that have been popularised by the Serious People: that of an "undulating plateau" rather than an outright peak, and that of a reduction in production caused by a reduction in demand rather than in available supply, but the message is clear: the debate on oil production peaking or not is over, and the peakers have won.
Their note that both demand and supply are becoming less sensitive to price is spot on, even if they gloss over the inevitable consequence that oil prices are going to become even more volatile.
Their scenarios finally include a noticeable presence for renewable energy in the mix, with renewables moving from one fifth (mostly hydro) to one third of power generation, and most of the increase coming from wind power. As in previous reports, they probably still understate these trends.