Past peak oil, no emission reductions in sight
The International Energy Agency released its World Energy Outlook the other day, and made some headlines by calling 2006 the year of peak oil production. People have different perspectives on the topic of peak oil â€“ many see it as the point upon which civilization as we know it will collapse; with my climate change hat on, I’ve generally thought of peak oil as a good thing that will finally drive us towards major investments in renewables.
But there is a catch: the peak refers to conventional oil sources, the proverbial gushers of old. As the Figure from the IEA shows in dark blue, this looks to be the case. And yet the good news I was looking for appears to have been disappeared. First, new supplies will come on tap, that we know about already (in grey) and the more speculative “we hope they are out there somewhere” kind (in light blue). Those fields will keep us level in terms of conventional supplies.
What is worse are the top two parts of the graph: unconventional supplies of oil (like the tar sands) and natural gas liquids, both of which are due to grow. The bottom line is that total output continues to grow, by close to 20% over current levels by 2035. This is really bad news on the climate change front, in total volume of emissions and because those unconventional sources are dirtier in emissions to get to market.
Supply is just one side of the coin, of course. Growing demand from China and elsewhere will undoubtedly drive up prices, and that may spur some transition to renewables. And perversely, global demand is being stoked by a number of oil-producing countries that subsidize fossil fuels for domestic use â€“ a carbon tax in reverse. The IEA put these consumption subsidies at $312 billion in 2009.