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New IEA Forecast of Oil Supply/Demand
IEA Warns of Energy Supply Crunch
11/12/08 - 07:42 AM EST
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The Associated Press 
By Jane Wardell
LONDON (AP) — The International Energy Agency on Wednesday predicted world energy demand will rise 1.6% a year on average between 2006 and 2030 and called for massive investment in energy infrastructure to prevent a supply squeeze.
The IEA’s base scenario for energy demand has fallen because of the global economic slowdown and higher oil prices, but the agency stressed that a delay in spending on new projects because of the credit crisis could lead to a “supply crunch that could choke economic recovery.”
The IEA expects demand for oil to rise to 106 million barrels a day in 2030, 10 million barrels a day less than projected last year, from 85 million barrels a day currently.
China and India continue to be the main drivers, accounting for more than half of incremental energy demand to 2030, but the Middle East, a longtime supplier, also emerges as a major new demand center.
The agency said that these trends call for energy supply investment of $26.3 trillion to 2030, or more than $1 trillion a year, but it noted that tight credit conditions could delay spending.
“While the situation facing the world is critical, it is vital we keep our eye on the medium- to long-term target of a sustainable energy future,” Nobuo Tanaka, the Paris-based agency’s executive director, told reporters at the release of its annual World Energy Outlook report in London.
The Organization of the Petroleum Exporting Countries, which pumps about 40% of the world’s oil, cut output by 1.5 million barrels a day from Nov. 1 to counter a recent fall in the price of crude from a high of $147 in July to about $59 on Wednesday.
Tags: peak oil investments
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15 responses so far ↓
1 TommyGuy // Nov 13, 2008 at 1:35 pm
In my view, the big news in this report is that EIA data shows the worldwide average decline rate for existing production is 6.7%, increasing to 8.6% in 2030.
I’ve always said this was the elephant in the room…and that was when they were calling the decline rate at about 5%. Now, for curde oil alone, we’re looking at declines of about 5mb/d every year. That puts a lot of pressure on completing new projects right at a time when economic pressure and lower prices are likely causing reduced investment.
Remember how the megaprojects data showed that we’re relying heavily on OPEC to increase production substantially in the next 2 or 3 years? What’s the chance of that now?
2 TommyGuy // Nov 13, 2008 at 1:36 pm
Sorry…I meant IEA data (not EIA).
3 jimb // Nov 13, 2008 at 2:00 pm
I’m confused, so then is this the report to confirm what was leaked a week or so back? Did the 9.1% depletion rate average hold true?
4 TommyGuy // Nov 13, 2008 at 2:05 pm
Yes, this is the final version of the leaked report. I think the 9.1% was bogus. From what I’ve seen, the final current number is 6.7% . Check details on http://www.theoildrum.com
5 Jim // Nov 13, 2008 at 3:07 pm
So what is the best investment vehicle to take advantage of the above situation? PBR? Oil sand ie. SU ? RIG? NOV? All of the above?
Thanks
6 robert essian // Nov 13, 2008 at 4:15 pm
Tommy, I thought the % increase in depletion over time is more than 8%.
Anyways the 6.7% and lack of investments will surely be to our advantage as investors going forward.
Jim (post 5), the Professor (left hand column this site) has many suggestions in his archives that warrant a strong look. If you haven’t read them kick the wife and kids to the curb (nicely ) and get to work. He has them organized real nicely. Good stuff…Peace
7 robert essian // Nov 13, 2008 at 4:37 pm
Jim, to expand a little. All the stocks mentioned by you are solid (I think). Personally, wherever I can I try and invest close to home because I know the political situation better.
I am by no means an expert but my comfort zone is very important. I do own many of the stocks seen on this site and mentioned by you…Peace
8 TommyGuy // Nov 14, 2008 at 11:09 am
I still like the oil&gas royalty trusts (See Kurt Wolff’s oil and gas research left-column this page). Their prices are beaten down by depressed oil&gas prices…they pay a great dividend and if you believe as I do that oil prices will be back before long, they are a great buy.
9 paultaut // Nov 14, 2008 at 3:29 pm
I really don’t see, everything being stable, how current oil production can possibly decline at a rate of 6.7% annually and still be able to decline at an annual rate of 8.6%, 7 years after everything is gone.
Without compounding, 15 years at 6.7% bye ,bye our current 86 mil. or so of production.
Someone better get cracking and soon.
10 paultaut // Nov 14, 2008 at 11:57 pm
Since the projections appear to include 2006, 2007, it would explain Mexico’s steep drop, and the maybe not so irrational spike in oil this year.
11 robert essian // Nov 15, 2008 at 9:12 am
Jim (post 5), it has not been long since we watched across the whole oil patch play prices rise tremendously. So if you believe oil will go up and it certainly will (anticipating higher ups) then it would be right to anticipate those same stocks to do well. Research and is critical…Peace
12 paultaut // Nov 17, 2008 at 1:17 am
You forgot to include the Global Financial Crisis into the mix. Only the Big boys have the internal funds to finance the next round if the spike comes sooner than later.
Credit was available for big and small previously, who went up before may not go up again in the next move.
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