Peak oil has passed us by – it happened in 2006 according to Faith Birol, chief economist at the International Energy Agency. He made this astonishing statement in a number of interviews on television stations in the US and Australia.
Governments, said Birol, should have started thinking about all this ten years ago: “The time is running out, the oil is today our lifeline, it is everywhere in the economy, if the prices go up or if there’s a supply disruption this will be definitely very bad news.”
By 2035, three-quarters of the world’s oil production from existing fields will need to be replaced, according to the IEA’s World Energy Outlook report 2010. By then, crude oil output from fields that were in production in 2009 will have fallen from 68 million barrels per day in 2009 to 16 million per day, leaving a gap of 50 million barrels per day to be filled.
As production falls, prices increase – crude oil is currently over $100 a barrel compared to about $40 in 2009. The gap is being filled by a surge in new fossil fuels - shale gasification, extraction of oil from tar sands, and increased reliance on natural gas and coal.
The IEA’s first Clean Energy Report published in April states that surging demand for fossil fuels is “outstripping deployment of clean energy technologies”, adding:
“Coal has met 47% of the global new electricity demand over the past decade, eclipsing clean energy efforts made over the same period of time, which include improved implementation of energy efficiency measures and rapid growth in the use of renewable energy sources.”
In a hard hitting introduction to the report, the IEA states: “Less than three years after fossil fuel prices hit an all time high and the world plunged into its deepest recession since the Great Depression, geopolitical events are driving prices steadily higher.
“The short-term risks to political stability and economic activity posed by the world’s dependence on fossil fuels are again as manifest as its long-term threat to environmental sustainability. To break this dependency, the world needs a clean energy revolution.”
But no such revolution is in sight. In fact the opposite is happening. Renewable energy is being abandoned by governments, in the wake of the economic crisis.
EU Energy Chief Connie Hedegaard has spoken about ferocious lobbying by the European gas industry, representing themselves as a clean energy source. She expressed concern that when current European targets for renewable energy run out in 2020, the industry will simply stop growing.
And in any case states never could have invested, or subsidised, at levels to provide real competition to big fossil fuel interests. Only ecologically dubious bio-fuel can stand up to them to some extent, with processes that are only marginally more sustainable than fossil fuels themselves.
One estimate is that by 2030 renewables will have risen from their present 5% of the total to just 18%, and gas will be the biggest growth area. Oil and coal will fall slightly as a proportion of the whole but fossil fuels will remain the heart of the energy mix for the foreseeable future.
In 2009, the IEA set out the energy shift required to prevent dangerous climate change. By 2030, 60% of energy would need to be produced by low-carbon energy technologies – made up of renewable technologies (37%); nuclear (18%) and energy plants fitted with carbon capture and storage technology (5%).
That mix is not achievable if the current power structures – state power, corporate power and electric power – remain in place.