Big oil fields in shocking decline

We pause now, in what has lately been a laundry list of fiscal and monetary folly, to bring you alarming news about energy.

Oh yeah, energy.  That thing where we had a near-crisis earlier this year, but now we don’t because we’re experiencing deflation.  (Note to irony-challenged inflationists: I’m being facetious.)

I’d been aware the International Energy Agency was doing an audit of all the world’s major oil fields and its report was due soon.  Now the Financial Times has gotten its hands on an advance copy.  The numbers are freaking dire, although the FT puts its usual sober gloss on things.

Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows.

Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook…

You read that right — 9.1%.  And if we do get that “extra investment to raise production,” the decline rate will still be 6.4%.  “The watchdog warned that the world needed to make a ‘significant increase in future investments just to maintain the current level of production’.”

The IEA sees world consumption of 106.4 million barrels a day by 2030.  How exactly we get there from the present 85 million barrels a day with a decline rate of 6.4% in existing fields is left unsaid.  That’s the sort of thing that only gets discussed behind closed doors.