The Oil Drum

Who is the International Energy Agency? According to its website:

The International Energy Agency (IEA) acts as energy policy advisor to 28 member countries in their effort to ensure reliable, affordable and clean energy for their citizens. Founded during the oil crisis of 1973-74, the IEA’s initial role was to co-ordinate measures in times of oil supply emergencies. As energy markets have changed, so has the IEA. Its mandate has broadened to incorporate the “Three E’s” of balanced energy policy making: energy security, economic development and environmental protection. Current work focuses on climate change policies, market reform, energy technology collaboration and outreach to the rest of the world, especially major consumers and producers of energy like China, India, Russia and the OPEC countries.

With a staff of around 190, mainly energy experts and statisticians from its 28 member countries, the IEA conducts a broad programme of energy research, data compilation, publications and public dissemination of the latest energy policy analysis and recommendations on good practices.

If the IEA acts as policy advisor, it is clearly involved in many matters of political importance. One question a person might ask is whether the IEA is able to separate its political role from its data analysis role. Is there an energy policy Chinese Wall? Also, there are many other tugs on anyone who provides forecasts to others (consistency with past forecasts, explainable changes due to outside causes, forecasts in line with what the clients want).

Given these issues, one might ask whether the IEA can really be expected to be objective. Is there any auditor looking over the IEA's shoulder? Is there any other outside independent agency looking out for the accuracy of the forecasts?

Dingell loses early bid to retain chairmanship of energy committee

WASHINGTON -- In a stunning setback for Rep. John Dingell of Michigan, the Democratic Steering and Policy Committee voted Wednesday for his rival to be the next chairman of the House Energy and Commerce Committee.

Dingell got 22 votes while rival Henry Waxman got 25 votes.

The final decision will be made in a vote by all House Democrats Thursday. The Steering group's nomination carries great weight historically.

In just the last year and a half, Transportation Commissioner Janette Sadik-Khan has begun a dramatic transformation of New York City's streets from mere utilitarian corridors into livable public spaces.

This is no happy accident. It took advocates (and bloggers!) years and years of hard work to make this possible. Only three years ago Mayor Bloomberg proudly stated that traffic was a side effect of the city's growing vitality. Now he's leading the charge on putting into place practical ideas that make the city less dependent on automobiles, more livable, more desirable and inviting to new families that would otherwise choose to live in exurban developments.

This may seem like just a feel good story about something that just increases quality of life for some people in NYC that doesn't have much implication for the rest of the country, but consider this: As the Commissioner states, NYC is planning on a million new residents over the next 20 years. Think about how many square miles of suburban/exurban development that will save for farming. Think about how many fewer cars will be produced if those million people come to NYC. What if every city across the country were a more desirable place to live, work, play, shop than its surrounding suburbs?

As we think about our future, we will need to be very conscious of how we can make low energy consumption urban areas more desirable than high energy consumption suburban areas.

Given the central role Saudi Arabia will play in the world's energy future, the continued fuzziness regarding its oil prospects is cause for concern. According to the IEA 2008 World Energy Outlook, Saudi Arabia will remain the world’s largest producer through at least 2030 as its output climbs from 10.2 mb/d (million barrels per day) in 2007 to 14.4 mb/d in 2015 and 15.6 mb/d in 2030. The future totals include Natural Gas Liquids (NGL) production as well as additions from enhanced oil recovery efforts (EOR).

The 2008 WEO represents a step forward in that projections are purportedly based on a bottoms-up querying of a database containing reserves and past-production information for 800 of the world's largest oilfields, rather than just being extrapolated to what future demand will require. However, the results obtained from such a data mining effort are limited not only by the quality of the data therein, but also by the assumptions made when querying the database. A close look at the data and projections for Saudi Arabia in the WEO reveals a rather spotty effort, providing neither a clear picture of what is happening in this important region nor much confidence that the overall report for the world is accurate.

Credit crisis dims the lights for power industry

GREAT FALLS, Montana: As workers scramble to build an $800 million coal-fired power plant on a patch of farmland here, a crisis that began on faraway Wall Street threatens to stretch America's power supplies to the brink — driving up prices and laying the stage for future shortages.

The power industry is under extraordinary financial pressure just five years after North America suffered its worst blackout ever, when rolling outages turned out the lights on 50 million people. Even before the extent of the global credit crisis was fully known, the nation's largest power providers warned of even bigger blackouts to come with the power grid under ever growing strain.

Report authors: Euan Mearns, Samuel Foucher and Rembrandt Koppelaar

This chart is from a section of the IEA publications called key graphs and appears in Chapter 11, p250 as Figure 11.1.

Chapter 10, p 243 of IEA WEO 2008 says this:

On this basis, we estimate that the average observed decline rate worldwide is 6.7%. Were that rate applied to 2007 crude oil production the annual loss of output would be 4.7mmbpd.

So it seems reasonable to expect the decline rate on currently producing fields shown above should be 6.7%. Not so. The decline rate in the chart above seems to be much closer to 4%. So what's going on here? There's more below the fold.

As the first gentle snowflakes of winter settled on the windscreen of my car I was reminded, yet again, of the turning of the seasons and our need for power to keep us warm through the coming months. Last week I commented on how jobs might be created as the pattern of power supply begins to change, particularly with the incentives that might be a part of a new initiative. Two factors often get understated, however, in the current anticipation of the changes that a new Administration may bring. The first of these is the time that it will take to get any decision implemented at a scale that can be meaningful, and the second is the scale itself of the problem that now faces us.

EIA: OPEC 10 Month Oil Export Revenue +32% On Full-Year 2007

NEW YORK -(Dow Jones)- OPEC has earned an estimated $884 billion on oil exports in the first 10 months of 2008, or 32% more than it earned in all of 2007, the U.S. Energy Information Administration projected.

For all of 2008, EIA expects OPEC to earn a record $979 billion, a rise of 46% , or $309 billion more than in 2007, when revenues rose by 10%. Although the percentage rise in 2008 would be the biggest since a 51.5% gain in 2005, the collapse in oil prices in recent months has slashed earlier forecasts on the size of the increase.

Of those reading this website in the early days, many expected that by 2008 the world would begin to look like a different place. Perhaps they made some personal changes and hoped that information and facts about energy/environment would gain a societal tipping point and engender some tectonic shifts on global energy policy. Standing here (or sitting) today, it is apparent that in the past 3 months we have gone from the mild fire of high oil prices (hot, but pretty to watch), into the frying pan of a systemic international financial crisis. But under the surface, recent events are accelerating our energy crisis in stealth mode: supply side investments are being crimped due to low commodity prices, and investment capital is available at a premium if at all. On the demand side: people in the US are financially strapped, but gasoline at under $2 a gallon, (arguably the scarcest input into societies' future - see GasBuddy Map here), is paradoxically the most affordable item on the weekly shopping list!

Humans, governments, and Americans have a long history of putting out short term fires while simultaneously increasing the risks for long term systemic conflagrations. In the coming week we are going to continue our review of the IEA WEO report with posts on Decline Rates, Megaprojects, Saudi Arabia, Belief Systems/Economics, Reserves, Natural Gas, and more. There is no data or analysis below the fold today, just a list of questions for our readers about where we stand, what can be done, what should be done, and who should be doing it.

Global climate changes could lead to violence: Experts say it will accelerate the race for food, water

KANSAS CITY, MO. — A warmer planet could find itself more often at war.

The Earth's fast-changing climate has a range of serious thinkers — from military brass to geographers to diplomats — predicting a spate of armed conflicts driven by the weather.

Shifting temperatures lead to shifting populations, they say, and that throws together groups with long-standing rivalries and thrusts them into competition for food and water.