03/23/10 Stockholm, Sweden – The UK’s former chief scientist, Sir David King, working with Oxford University scientists, has come forward to warn of oil “shortages and price spikes within years.” He states the delay in awareness has been caused by OPEC overstating oil reserves for decades, perhaps by about a third.
According to the Telegraph:
“Their new research argues that estimates of conventional reserves should be downgraded from 1,150bn to 1,350bn barrels to between 850bn and 900bn barrels and claims that demand may outstrip supply as early as 2014.
“The researchers claim it is an open secret that OPEC is likely to have inflated its reserves, but that the International Energy Agency (IEA), BP, the Energy Information Administration and World Oil do not take this into account in their statistics.
“‘It is necessary to investigate ambiguities and sources of error that are broadly acknowledged but not taken into account in public data due to political sensitivities,’ the researchers said. The paper also raises concerns that public statistics have started to incorporate non-conventional reserves such as the Canadian tar sands, where oil and gas are much more difficult to extract and may never be economically attractive to develop.”
Almost like how the financial crisis resulted in part from the likely biased credit rating agencies, the article indicates that the IEA is also supported by its same 28 member states… which leaves plenty of room to doubt its optimism and credibility.
You can read more about why King is sounding an alarm over peak oil in the Telegraph’s coverage of oil reserves “exaggerated by one third.”
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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Thanks Rocky for warning us to be on the look out for a huge rise in oil prices. Good for a few, bad for many. Same old rat race.
Like .99 cents is so much lower than $1.00. Pitiful
“Canadian tar sands, where oil and gas are much more difficult to extract and may never be economically attractive to develop.”
Um, never? I don’t think so. As we finish running out of cheap oil, this more expensive source will become feasible. It won’t be fun paying for expensive oil, but it will be available.