Independent oil experts have been saying for many years that the New Zealand government's almost religious reliance on forecasts of the International Energy Agency (IEA) is a big mistake because they have been consistently and grossly over optimistic. The result has been a decade of lost opportunities to prepare for the looming oil shocks and shortages.
New Zealand along with other OECD nations is a member of the IEA, and our Ministry of Economic Development relies very heavily on its forecasts for global oil prices, production, and supply.
Simon Tegg revealed with empirical data, as far back as 2007 in his paper "Oil Outlooks" that the Agency has an appallingly bad record in these matters. But successive government ministers, including Gerry Brownlee, have continued to respond to concerns about peak oil by citing the Agency's forecasts and saying we have nothing to worry about until 2035.
David Strachan, The UK Energy Research Centre and Global Witness have all written convincingly of the Agency’s flawed methodology
The Guardian reported …
“The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.”
Now a new report Future oil supply: The changing stance of the International Energy Agency, published in the Energy Policy Journal, shows how IEA forecasts in recent years have shifted from optimistic to pessimistic and back again, as assumptions changed, and how its methodology is flawed.
The report's author, Dr Richard Miller said,
"Events in the Middle East have grabbed attention, but the flaws in the IEA's analysis are potentially more serious in the longer term. We are flying blind into an even more dangerous crisis."
The conclusions of the Report is the IEA's oil supply forecast are not credible, and that global oil production is likely to peak with a few years.
Given the vital importance of oil to the NZ economy, surely our government must to reassess its reliance on the IEA's forecasts, and begin urgently to prepare for an oil crisis far more severe than the current upheavals in the Middle East and North Africa.