Peak oil has slowly been gaining acceptance in the mainstream. But there are still a lot of people out there who think it’s utter nonsense, that there’s nothing to worry about. Right about now those people should be coming to the realization that their position is untenable.
Increased demand for oil is outpacing new discoveries, and it’s proving to be very expensive to extract oil from the few fresh finds.
But that’s old news to readers of Energy and Capital. What’s new is this: Two anonymous senior officials at the International Energy Agency are blowing the whistle on data manipulation. According to a major article in the UK newspaper the Guardian, pressure from the U.S. and others has influenced the IEA to overstate oil reserves and discoveries. Apparently the goal was to prevent panic buying.
But intentional distortion of this kind could have even more dire implications as systematic deception comes to light.
Cooking the books on production data could have lulled the public, and even oil companies, into a false sense of well-being. Calls for new oil exploration are easier to ignore if production figures look rosy. Conservation efforts might have sat on the back-burner for too long, as we looked at artifically inflated reserves.
We think this bad news for oil-data distorters is fantastic news for oil bulls. Prices should indeed go higher! Whether the real raw output numbers will unwind in an orderly fashion into the market is a question that remains to be answered.
Check out the Guardian chart below for the full picture of future oil production according to the IEA. The pink and light blue sections are now seriously in doubt: