Peaky

Some things in this interesting interview with IEA chief economist Fatih Birol are unhelpful. For example:

* the IEA is taken to task for changing its estimate of the oil price in 2030 (in today's prices) from about $60 to $120. But it should surely be evident that any estimate for so far ahead will in large part be arm waving. Remember that oil prices have plunged over recent months, for a variety of factors, from over $140 to under $50. Few people saw this coming. How can one expect them to forecast more accurately more than 20 years hence, given the much greater number of factors involved?

* the precise year that oil production is likely to plateau: again, this should be treated with real caution: it's quite possible the new IEA report is wrong.

* sounding a warning on social dislocation in the U.S. as a result of 'peak oil'. But serious social disruption is likely already given the current economic crisis, and 'peak oil' has not been a factor in the genesis of that crisis (high oil prices in 2008 occurred for other reasons). Beware one dimensional explanations. [1]

* the conclusion that "either the world economy comes to rely on tar sands for transport oils or economy screeches to a halt." No: there is scope to anticipate the problem and act -- as, for example, is reported to be happening in Denmark and Israel or China.

There is more, but I think the problems boil down to a search for greater certainty than is possible. This is illustrated by the description of the IEA report as "gospel" for the petroleum industry, a term that implies that, right or wrong, it is a text accepted with almost uncritical faith. But that's not the case: the report is an important and in this year's case evidence-based contribution to the debate, but one hedged with caveats.

Ashdenizen recently noted Andy Revkin's observation that "climate change is [just] a subset of the story of our time, which is that we are coming of age on a finite planet and only just now recognizing that it is finite." That's true enough, but it's also the case that our knowledge is necessarily finite and inadequate the challenges ahead.

This does not mean, of course, that we do not have enough information and understanding to see that the challenges are very large and very serious, and to recognize that governments, and others, need to wake up and get moving.

Footnote

[1] In a Jan 2006 article, Jeremy Leggett cites Roger Booth, "who spent his professional life at Shell, and who now believes that, when the peak does hit: 'A crash of 1929 proportions is not improbable.' ". Well, we are experiencing a crash of 1929 proportions. Was this a result of peak oil, or was it, rather, the result of a financial system rotten to the core?