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DOE Still Disavows Peak Oil Forecast, Despite New Studies

Gulf oil spill adds pressure for release of "proprietary database" behind DOE's optimism.

By Julia Harte

May 10, 2010

The U.S. Department of Energy has long disavowed peak oil theory: the notion that annual world oil production will peak, plateau, and then enter a decline. But the agency’s stance appears increasingly at odds with the future predicted by many world energy analysts, including the US military.

In February, the United Kingdom Industry Taskforce on Peak Oil and Energy Security—a group comprised in part by renewable energy companies—published a warning that global peak oil would probably occur within the next decade.

And in March, the U.S. Joint Forces Command released its report, a forecast of likely national security challenges. Drawing on several energy information sources, the report concluded that "world surplus oil production could disappear by 2012, and shortages of 10 million barrels per day could be seen as soon as 2015."

With the BP Gulf oil disaster continuing with no resolution in sight and mounting public concern over the wisdom of offshore drilling, more pressure is mounting on DOE to justify its optimistic forecasts and its belief that the nation will be producing millions of more barrels of oil a day within two decades.

Change in DOE stance?

A few weeks after the joint force report came out, there was speculation that the DOE had endorsed peak oil theory after Glen Sweetnam, former director of the International, Economic and Greenhouse Gas division of the DOE’s Energy Information Administration (EIA), French paper Le Monde that, "if the investment is not there," world oil production could enter a "decline" by 2011.

Sweetnam has since left the EIA on a yearlong reassignment: a development unrelated to the interview he gave Le Monde, according to Lauren Mayne, a liquid fuels analyst at the agency.

Mayne clarifies that the EIA does not expect oil production to peak in 2011. When asked if the EIA expects to see oil production ever peak and diminish, Mayne replied that the agency does not anticipate a peak oil scenario resulting from supply shortages: “We do not see a peak, if a peak means a sharp retraction in oil production.”

In fact, Mayne argued, the world’s total projected oil consumption in 2030 "could be met, given current resource estimates."

That claim is backed up, according to Mayne, by the EIA’s country-by-country estimate of future oil production. "Actual production, of course, will likely differ somewhat, but we do feel from an analytical basis that these production estimates are likely to progress in a way that’s shown" by EIA models, she said.

Those models predict significant production increases in several countries over the next two decades. In a from a round-table of oil economists that Sweetnam presided over in April 2009, several graphs showed estimates of the world’s liquid fuels supply through 2030, and how production would change in the current top 15 oil-producing countries.

But all the estimates of project production were based on a "proprietary database," according to Linda Doman, another forecaster at the EIA, and the exact numbers behind the charts cannot be released.

So it’s difficult to figure out how the agency derived, for example, the predictions that the United States will produce approximately 1,750,000 more barrels of oil per day in 2015 than it did in 2007, and approximately 2,700,000 more barrels per day in 2030 than in 2015.

Localized peak oil

It’s especially confusing to James Hamilton, an economics professor at the University of California, San Diego, who has published extensive research on the macroeconomics of oil prices. Most energy analysts, according to Hamilton, agree that the U.S. is "well into a period of declining oil production," along with Mexico, the North Sea region, and Indonesia.

Peak Oil

Life requires energy, more expensive energy and the quality of life diminishes, less energy and life diminishes.

Economic stability requires stable price of energy. Our economy was founded on:
- Assumption: Oil costs of less than $30 a barrel. Reality: $75
- Assumption: Net energy of 20:1 (usable : energy to get energy). Reality: >10:1.
- Assumption: Constantly growing oil supply to support economic growth. Reality: Oil supply stopped growing at 74 mbd in 2005.
- Assumption: Debt could increase forever to borrow to consume oil. Reality: Personal defaults and foreclosures collapsed the banking system.

Peak Oil is not about running out of oil, it is about the rate at which oil can be extracted and the net energy available to power economies. It does not matter how much oil is buried, it matters what is at the gas pump, at what price.

ASPO documentation of how bad EIA forecasts volume of oil production.

Peak Oil is a Myth

no theory required

"The U.S. Department of Energy has long disavowed peak oil theory: the notion that annual world oil production will peak, plateau, and then enter a decline."

Peak oil is not a theory. Unless you believe the Earth is filled with magic oil creation factories staffed by elves in Exxon uniforms and producing brand new supplies, peak production is a fact. In short, you would literally have to be a psychotic not to acknowledge peak oil as a reality.

Peak Everything

I think I will agree with General Mattis and not Mayne on this one. It was a little funny in the UK Guardian to say that they don't know what source Mattis is going off of. Hmmmmmmm, lets see the head commander of all allied forces might be getting his info from I don't know the CIA or even the FBI. Where do you think he got it from? Come on. I think there is actually two peaks here. The real peak oil and the peak of truth about peak oil. When it is accpeted in main stream media and then Wallstreet, the collapse begins. Good luck to you all and cherish the end of the King like lifestyle we all live.

About the Le Monde interview

About the Le Monde interview and just to be precise, the interview was not with Le Monde but with a free lance journalist Mathieu Auzanneau, sometimes working with Le Monde, and published on his blog which is hosted by Le Monde :

Had a few exchange with him, and Le Monde wasn't any more "eager" to officialy publish something about this exchange with Sweetnam than any other media/paper.

Somehow "funny" that after that, it has then also been reported by the Guardian (and FT I think), and described as "published in Le Monde." (the blog link was posted on Le Monde Web front page I think, but it for sure didn't appear in the paper version, and it is not a "Le Monde article" on the site)

And about Sweetnam's reassignment, anyway to know whether it isn't related at all to this interview story ? Is he still willing to talk about it ?

Good post by the way

Reassignment?

I find it interesting that Sweetnam was sent on a one year reassignment after his interview with the French newspaper. Generally you have to be way up on top of the heap in your agency to even be speaking to the media, but that said, in the land of Federal employment, we call these "reassignments" rotations, which are typical and normal. However, while many believe they are intended to enhance your career, often they are used to get rid of people in the office that you can't fire (federal civil servants are tenured employees and getting rid of them is difficult.) I should know, my boss at DHS hated me and used a rotation to NCTC (National Counterterrorism Center) to get rid of me until she retired. The down side of rotations is that you are a traitor to the home office by taking the rotation, you have tied up a billet and you should do the only honorable thing and that is to find a new job! It will be interesting to see if Sweetnam ever comes back to EIA after his one year rotation, or if he will extend for a year or find a new position, with a promotion perhaps, and then move on. Given DOE's unwillingness to acknowledge the implications of Sweetnam's chart of "unidentified projects" and then talking to the press, I can't imagine that his masters at DOE are happy with him at this point in time. (At least that is my view as a retired Federal civil servant).

This is the golden age of self-delusion

The only question is who is going to fess up to the truth first.

Don't expect your TV to warn you to prepare

They don't see Peak Oil,

just like they didn't see Wall St. crashing and burning in 2008.

They don't want to see it while the profits are still rolling in - once the crisis hits, then "nobody could have seen this coming".

They Live.
We Sleep.

Peak Oil

The problem is that the lines between idiot, liar and politician are so blurred that most cannot see the difference.

Peak oil

The author states: “The U.S. Department of Energy has long disavowed peak oil theory: the notion that annual world oil production will peak, plateau, and then enter a decline.”

But, according to this article:” Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.”

Whose correct?

peak oil

I believe I found the answer: "In 2005, the United States Department of Energy published a report titled Peaking of World Oil Production: Impacts, Mitigation, & Risk Management.[139] Known as the Hirsch report, it stated, "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."

Ever?

"... Mayne replied that the agency does not anticipate a peak oil scenario resulting from supply shortages: “We do not see a peak, if a peak means a sharp retraction in oil production...”

Mayne doesn't see a peak? Ever? No sharp retraction in oil production? Ever? No supply shortages? Ever?

What does Mayne see? Santa Clause?

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