30 August 2004, Wellington

NZ Government relies on flawed global oil production data.

Send a letter or email to Pete Hodgson, Minster of Energy, asking him what he is doing about the Peak Oil problem and you’ll get this response.

New Zealand is a member of the International Energy Agency (IEA) and that Agency, in its 'World Energy Outlook', foresees enough oil to comfortably meet demand to 2030. (reply from Pete Hodgson, 27 Aug, 2004).

People once believed the world was flat and scientific assertions to the contrary were considered blasphemy. A similar situation afflicts our politicians when it comes to the reliable reporting of energy data.

The IEA was set up by the OECD after the oil shocks of the 70’s. As concerns about global Peak Oil began surfacing in the mid to late 90’s the IEA succeed in delivering a “business as usual” message but with seriously flawed “hidden variables”.

Once such hidden variable, a completely invented parameter included in the IEA future oil production models is “as yet unidentified non-conventional oil”. This figure miraculously rises from 0 in 2010 to 19 million barrels per day in 2020. This so called “unidentified non-conventional oil” is nothing more than a euphemism for shortfall in supply. By plugging in the 19 million barrels per day the IEA can assume a “comfortable” meeting of demand until 2020.

But there are more problems for the IEA oil models.

The IEA’s data source is the US Geological Survey (USGS) and US Department of Energy. Colin Campbell in his 2002 publication, Peak Oil: An Outlook on Crude Oil Depletion summarises the flawed USGS approach as follows:

It has assessed the Undiscovered Potential of each basin with a range of subjective probabilities. It has a Low Case for the most sure and a High Case for the least sure. The High Case itself has little meaning, being little more than a wild guess. The Low Case is consistent with the discovery trend, but The Mean value, which is the one publicised is meaningless because it is influenced by the High Case. This has been confirmed by experience in the real world because the Mean estimate is already 100 Gb short, five years into the study period. Its notion of "reserve growth" is also flawed. It is depicted as a technological dynamic when it is simply an artefact of reporting practice, not to be extrapolated into the future.

Oil discovery peaked in the 1960s. We now find only one barrel of oil for every four consumed. Total oil production outside the Middle East peaked in 1997, this was accurately predicted and has been consequently verified, total oil production outside the Middle East is now in terminal decline. The Middle East must increase its production in order to meet increasing global demand, however increasingly worrying data is emerging from the Middle East in regard to it’s ability to pump more oil. It seems the Middle East is exhibiting the first stages of decline.

The warning signals have evident for a long time. The Government, the media and many other politicians are turning a blind eye to this problem. What’s worse is the Government is listening to bad advice. Given the importance of oil to our lives our lack of preparedness is astounding.

Colin Campbell and others predict a global production peak in oil between 2006 and 2007. Once “peak oil” hits we’ll quickly see shortages manifest initially as long angry queues at the petrol pump. Schools will close as students and teachers are unable to get there, hospitals will move into crisis mode as staff, doctors and nurses are unable to reach them, supermarkets will ration bread and milk, trade and industry will be seriously affected, confidence in the Government of the day will vanish overnight. An interruption in supply of oil to New Zealand lasting only a few days is likely to cause widespread havoc and confusion.

Once this happens perhaps the Government and politicians might finally take the issue seriously. By then it will be too late.

Powerless NZ 30 August 2004

PowerLess NZ is a growing group of scientists, energy analysts and concerned citizens whose principle objectives are to alert both Government and the general public to New Zealand’s looming energy crisis. Our aim is to support development of renewable energy resources at both a private and public level, as well as encourage a firm move away from dependence upon fossil fuels. More information about global peak oil and resource depletion can be found at http://www.oilcrash.com/

ENDS

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