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Rosy Forecast of Cheap Oil Abundance, Economic Boom a Myth

For related articles and more information, please visit OCA's Environment and Climate Resource Center page and our Organic Transitions page.

Headlines about this year's "World Energy Outlook" (WEO) from the International Energy Agency (IEA), released mid-November, would lead you to think we are literally swimming in oil.

The report forecasts that the United States will outstrip Saudi Arabia as the world's largest oil producer by 2017, becoming "all but self-sufficient in net terms" in energy production - a notion reported almost verbatim by media agencies worldwide, from BBC News to Bloomberg. Going even further, Damien Carrington, head of environment at The Guardian, titled his blog: "IEA report reminds us peak oil idea has gone up in flames."

The IEA report's general conclusions have been backed up by several other reports this year. Exxon Mobil's 2013 Energy Outlook projects that demand for gas will grow by 65 percent through 2040, with 20 percent of worldwide production from North America, mostly from unconventional sources. The shale gas revolution will make the US a net exporter by 2025, it concludes. The US National Intelligence Council also predicts US energy independence by 2030.

This last summer saw a similar chorus of headlines around the release of a Harvard University report by Leonardo Maugeri, a former executive with the Italian oil major Eni SpA. "We were wrong on peak oil," read environmentalist George Monbiot's Guardian headline. "There's enough to fry us all." Monbiot's piece echoed a spate of earlier stories. In the preceding month, the BBC had asked "Shortages: Is 'Peak Oil' Idea Dead?" The Wall Street Journal pondered, "Has Peak Oil Peaked?" while the New York Time's leading environmental columnist Andrew Revkin took "A Fresh Look At Oil's Long Goodbye." 

The gist of all this is that "peak oil" is now nothing but an irrelevant meme, out of touch with the data and soundly disproven by the now self-evident abundance of cheap unconventional oil and gas.


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