Energy Commissioner Andris Piebalgs has drawn attention to the ‘overlooked’ issue of dwindling oil reserves coupled with rapidly growing and unprecedented global demand. His comments were made in the run-up to the publication of a widely-anticipated package of Commission legislative proposals on energy and climate change.
Speaking to the Swiss Energy Congress on 14 January, Piebalgs warned that global energy demand is expected to more than double by 2030, and questioned whether the provision of oil can “keep up” with demand in this period.
With the Commission set to release on 23 January a series of proposals designed to help the EU realise its commitment of reducing CO2 emissions by 20% by 2020, Piebalgs argued that while tackling climate change is crucial, policymakers should not lose sight of the issue of security of fossil fuel supply.
The combined challenge of climate change and supply security leads to the conclusion that the EU cannot “hang on” to its “old, fossil energy system’, he said.
Piebalgs referred to varying predictions about when the oil production peak will be reached, with some experts saying it will be in 20 years and others arguing that the world is already at peak production.
Highlighting the potential gravity of the problem, Piebalgs noted that the oil crisis of the 1970s presented a discrepancy between oil supply and demand of only 5%, but that in a post-peak oil scenario, the gap between supply capacity and demand could widen by 4% annually, leading to a 20% gap within five years.
While the Commissioner did not mention the names of the experts or organisations he was referring to, a number of studies have appeared on the issue, including one by the International Energy Agency, or IEA (See EURACTIV’s LinksDossier on peak oil).
To date, the Commission has not dealt extensively with peak oil, at least not in public fora. It is unclear if Piebalgs’ speech is a sign that the EU executive intends to devote more attention to the issue.
The oil industry appears to be divided on the question of oil reserves, with some companies, like Chevron, launching publicity campaigns to raise awareness about potential shortages. But other firms, such as BP, argue that concerns about oil scarcity are ‘misguided’ (EURACTIV 21/07/07).