World Energy Outlook: Prices will rise, dampening growth

As of  November 9th, 2010, the World Energy Outlook 2010 was released by the IEA. Some charts of the press presentation are really worrysome:

1. Conventional oil production has already peaked 2006. Conventional oil  can be pumped out of the ground cheaply and easily. Unconventional oil is extracted from oil sands or from deep water oil fields; production costs are high.
   
   To maintain todays production levels in the next decades, crude oil fields have to be developed on a big scale. Personally, I am scratching my head, wondering whrere we will find those oil fields. Remember, that the we are not talking about the hard to develop unconventional oil, its share is small.
   
   
2.  The next chart is about energy consumption. While the IEA correctly assumes that emerging economies will consume more oil and coal...
   ... it assumes that the developed countries are willing to reduce their oil and gas consumption significantly. So, please sell your Porsche or your Range Rover. China needs it all, sorry!
   
   
3. Hence, we can safely assume that belows oil increases are an understatement.
   

It seems evident, that the IEA is downplaying future oil price hikes. Follow this blog to read more about the IEA report.

Bottom line, those higher energy costs will damp future growth significantly!