Oil Supplies - Someone Is Lying

If a senior official from the International Energy Agency (IEA) is telling the truth, we are much closer to running out of oil than previously expected. The anonymous so-called “whistleblower” told the U.K. based Guardian that crude oil shortages have been purposely downplayed in World Energy Outlook reports to avoid triggering a buying panic.

In addition to allegations of this cover up, the insider also claimed that the United States (government I assume) has been inflluential in making sure the IEA underplayed the oil shortage while overplaying the odds of discovering new, untapped oil reserves. What’s more, another former IEA source (who also was unwilling to devulge his name) said the situation is “really bad”. He added that we have already reached peak oil and that there is not as much oil as the IEA previously reported.

The IEA released its 2009 World Energy Outlook this week and in a nutshell admitted that current energy plans are unsustainable. Demand for primary energy is expected to increase by 40% over the next 20 years, and the demand for oil will increase by nearly 25% during that same period. But the real shock was the anticipated increase in need for electricity - up more than 75% by 2030.

Crude oil prices are near their 12 month high right now, around $80 per barrel. The price has roughly doubled since February and we’ve been on a steady climb upwards for most of the year (in part due to the value of the U.S. dollar). Even though the sting of $140 barrels and $5 per gallon gas in 2008 has subsided, it seems like only a matter of time before new highs could be tested. What impact this will have on hybrid electric and all electric vehicles remains to be seen, but I think it is safe to say that the IEA would be betting on increased demand.