IEA Predicts End of Cheap Oil

More confirmation of Peak Oil (see bold highlights) from the IEA (formerly in the denial camp).

Mar 09, 2010 (Dow Jones Commodities News Select via Comtex) — By Tom Barkley

from DOW JONES NEWSWIRE

WASHINGTON (Dow Jones)–The chief economist of the International Energy Agency said predicted Tuesday that the “era of cheap energy is over,” with oil supply unlikely to keep up with demand.

Fatih Birol told the National Association for Business Economics that China will be the main driver of global oil demand, which he sees increasing by about 1.5 million barrels a day this year.

China will account for a third of that gain, with the rest split by Middle Eastern oil producers and other developing countries.

However, he predicted that demand from the major industrialized countries comprising the Organization for Economic Cooperation and Development has peaked.

“They are not anymore the drivers of oil demand, unlike in the past,” he said.

Birol said he has “serious worries” about whether future supply can meet demand.

With investment down and production declining, even if global demand remains around 85 million barrels a day by 2030, about 45 million barrels a day worth of new oil would have to be found to compensate for falling output at existing fields, he said.

The Paris-based IEA is the energy watchdog for the major industrialized nations.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

(END) Dow Jones Newswires

03-09-10 1457ET

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