85 mpg cars needed by 2030 to survive?

by frog

I have been looking for some down to earth way to talk about the International Energy Agency’s (IEA) World Energy Outlook 2009 (WEO) since it was released.

The OECD International Energy Agency (IEA) is the taxpayer-funded energy advisor to the 28 most developed countries. The agency was created in 1974 by large oil consuming nations in response to an oil supply embargo which began in late 1973.

Many frogblog readers will have heard about the IEA whistleblowers, who claimed that there was serious political interference in playing down the bad numbers so as not to spook the markets.

Morgan Downey, author of Oil 101 and the Scarce Whales blog, has written an excellent, relatively non-technical post on the Oil Drum, which illustrates the fallacies in the WEO 2009 report. Here are some of the key statements, but I urge you to go over and have a read of the article:

One of the conclusions which can be drawn from deconstructing the 2009 WEO, the IEA’s forecast of energy supply and demand out 20 years to 2030, is that the IEA estimates that the average new vehicle sold in Japan in 2030 will have to attain on average 85 miles per gallon. Even small motorcycles cannot get close to that level of efficiency in everyday use today.

Oil supplied to the global market in 2009 is just over 84 million barrels per day (Mbpd). Although the IEA’s 105 Mbpd 2030 supply forecast is down significantly from previous WEOs, it will still require the discovery and development of at least four Saudi Arabian sized oil producing areas before 2030. This huge challenge is the IEA’s basic “reference scenario”.

The IEA WEO report forecasts oil prices rising to an average of US$100 by 2020 and US$115 by 2030 (in year-2008 dollars).

What to do? It cannot be stressed any more how the winners in the IEA reference scenario to 2030, which many outside the IEA see as too optimistic, will be those that get ahead in terms of efficiency. Reacting to oil prices is by definition too late. We have to create an economic incentive to become more efficient independent and ahead of oil prices.

So why has our government scrapped plans for vehicle fuel efficiency standards? Why are we building ever more motorways, when the IEA’s watered down scenario says that prices are only headed up?

This government is planning to fail, and fail big.

frog says

Published in Environment & Resource Management by frog on Sat, December 5th, 2009   

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