The International Energy Agency headquartered in Paris is an organization that looks at all aspects of world energy use. On November 12th they will release their widely anticipated World Energy Outlook report. It seems that the Financial Times in London yesterday leaked a portion of that report and the numbers if true are stunning.
What the report allegedly says is that world petroleum production will be declining 9.1 %/year unless investments of at least $360 Billion /year
in exploration and infrastructure are made……………………………………for the next 22 years!!!. That is almost $8 Trillion.
Now get this next figure. If this level of investment occurs, the decline in world petroleum output will only be 6.4%!
The world has just entered a severe recession and these figures may be subject to revision I would assume but this is stunning data which directly contradicts projections from many world government agencies including CERA(Cambridge Energy Research Associates) and the USGS in the US and projections from the UK which assume sufficient petroleum supplies out to 2030. In light of daily reports of financing difficulties being experienced by oil and gas producers world wide I think we can conclude that the annual decline rate will be from 6.4 to 9% per year for the foreseeable future. There are a number of oil fields coming on line within the next3 to 5 years which will offset these figures but there is little on the drawing board after that.
I have included a graph posted above from yesterdays Financial Times with a graph of world oil production going forward. I believe the data is from Chris Skrebowski who is a consulting editor for The Petroleum Review.
The consequences of this magnitude of a drop in world production to the large industrialized economies could be severe. If ever there was a wake up call for a national energy plan to wean the US off imported oil, this is it.