Key oil figures were distorted by US pressure, says whistleblower

[Francois Cellier]

From the Guardian

Key oil figures were distorted by US pressure, says whistleblower

Watchdog's estimates of reserves inflated says top official

Terry Macalister
guardian.co.uk
Monday 9 November 2009 21.30 GMT




The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

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.

The IEA acknowledges the importance of its own figures, boasting on its website: "The IEA governments and industry from all across the globe have come to rely on the World Energy Outlook to provide a consistent basis on which they can formulate policies and design business plans."

The British government, among others, always uses the IEA statistics rather than any of its own to argue that there is little threat to long-term oil supplies.

The IEA said tonight that peak oil critics had often wrongly questioned the accuracy of its figures. A spokesman said it was unable to comment ahead of the 2009 report being released tomorrow.

John Hemming, the MP who chairs the all-party parliamentary group on peak oil and gas, said the revelations confirmed his suspicions that the IEA underplayed how quickly the world was running out and this had profound implications for British government energy policy.

He said he had also been contacted by some IEA officials unhappy with its lack of independent scepticism over predictions. "Reliance on IEA reports has been used to justify claims that oil and gas supplies will not peak before 2030. It is clear now that this will not be the case and the IEA figures cannot be relied on," said Hemming.

"This all gives an importance to the Copenhagen [climate change] talks and an urgent need for the UK to move faster towards a more sustainable [lower carbon] economy if it is to avoid severe economic dislocation," he added.

The IEA was established in 1974 after the oil crisis in an attempt to try to safeguard energy supplies to the west. The World Energy Outlook is produced annually under the control of the IEA's chief economist, Fatih Birol, who has defended the projections from earlier outside attack. Peak oil critics have often questioned the IEA figures.

But now IEA sources who have contacted the Guardian say that Birol has increasingly been facing questions about the figures inside the organisation.

Matt Simmons, a respected oil industry expert, has long questioned the decline rates and oil statistics provided by Saudi Arabia on its own fields. He has raised questions about whether peak oil is much closer than many have accepted.

A report by the UK Energy Research Centre (UKERC) last month said worldwide production of conventionally extracted oil could "peak" and go into terminal decline before 2020 – but that the government was not facing up to the risk. Steve Sorrell, chief author of the report, said forecasts suggesting oil production will not peak before 2030 were "at best optimistic and at worst implausible".

But as far back as 2004 there have been people making similar warnings. Colin Campbell, a former executive with Total of France told a conference: "If the real [oil reserve] figures were to come out there would be panic on the stock markets … in the end that would suit no one."

[Francois Cellier]

From Aleklett's Energy Mix

Comments on “Key oil figures were distorted by US pressure, says whistleblower”

Kjell Aleklett
November 10, 2009


I am not surprised that some within the IEA have leaked this news. Rather, it is astonishing that this has not become known earlier. (See the article in the Guardian: Key oil figures were distorted by US pressure, says whistleblower.)

The article ”The Peak and Decline of World Oil and Gas Production” was published as long ago as 2003 in the scientific journal Minerals and Energy – Raw Materials Report by Kjell Aleklett and Colin C. Campbell (Volume 18, Number 1, 2003 , pp. 5-20[16].) It was the first “peer reviewed” article to discuss Peak Oil.

That article was read in 2007 by representatives of the “Global Transport Forum” of the OECD and they gave me the task of writing the report, ”Peak Oil and the Evolving Strategies of Oil Importing and Exporting Countries”. This report was one of those discussed at a round table meeting that was held in the IEA’s conference room in Paris. At that opportunity, in November 2007, I had a number of private conversations with officers of the IEA. The revelations now reported in the Guardian were revealed to me then under the promise that I not name the source. I had earlier heard the same thing from another officer from Norway who, at the time he spoke of the pressure being applied by the USA, was working for the IEA. Since these anecdotes were not scientific evidence I never made use of the information other than as inspiration to continue our own research.

Earlier, following a suggestion by Colin Campbell, 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. I had previously posted an analysis of World Outlook 2004 on ASPO’s homepage. In the discussion that followed it was revealed that the USA was applying pressure. The pressure was that the IEA should consider the prognoses that USA’s Energy Information Agency releases half a year earlier as guidelines for the IEA report. In connection with this I can mention that, in 2003, we received financial support from [Sweden’s] Energy Authority to begin the research that has now resulted in our publication “Peak of the Oil Age” and that Sweden’s Energy Authority also financed the first Peak Oil conference (ASPO) that we held in Uppsala in 2002.

After meeting with the Swedish delegate I have, at various times, communicated my view that Guy Caruso (who was then responsible for the EIA and its prognoses) was one of the world’s most dangerous people. Today a great deal of the responsibility for this situation rests with him. I have also asserted that I did not think that the level of competence within the IEA could be so low that all of its officers believed in what they have been presenting. What these faulty analyses will cost the world in the future is difficult to estimate but all the crisis packages that are currently in place are presumably a smaller part of that cost. In our publication ”How reasonable are oil production scenarios from public agencies?” we have shown that the IEA’s future prognoses are erroneous.

One consequence of that which has now been revealed is that the emissions scenarios that the IPCC has advanced for calculating future carbon dioxide production from oil can never reflect reality. Before the round table conference in Paris I was also given the task by the OECD of writing another report, ”Reserve driven forecasts for oil, gas and coal and limits in carbon dioxide emissions”. In connection with the Global Transport Forum in Leipzig in 2008 I met the chairperson for the IPCC, Rajendra Kumar Pachauri, and gave him a copy of this report. The subsequent interest from the IPCC’s side can be described as absolutely zero.

I would also like to highlight the fact that, in 2005, I was invited to the House of Representatives to give testimony about Peak Oil. (The testimony)

It is time for President Obama to establish a commission to undertake a detailed investigation of the EIA’s activities and establish the truth. It is extremely important that the members of this commission have no associations with the oil industry.

[Francois Cellier]

This is fairly big news!

[potter]

However it's not very surprising.

[clownboy]

hmmm, while I'm sure there IS pressure from the US to put a rosy spin on the numbers, I'm not convinced we have yet hit the peak output.

The List: The World’s Largest Untapped Oil Fields

Iraq has put 10 untapped fields up for auction recently and alone has significant untapped resources.

Then there's this that adds to the suspicious factor:

At that opportunity, in November 2007, I had a number of private conversations with officers of the IEA. The revelations now reported in the Guardian were revealed to me then under the promise that I not name the source. I had earlier heard the same thing from another officer from Norway who, at the time he spoke of the pressure being applied by the USA, was working for the IEA. Since these anecdotes were not scientific evidence I never made use of the information other than as inspiration to continue our own research.

Yet later in the article he uses reports generated in 2003 and 2005 to rebut what he couldn't find evidence of in 2007? Am I mis-reading that?

I believe we've reached peak refining capacity but peak output is still years away.