IEA Agenţia Internţională pentru

International Energy Agency forecasts, regularly published in "World Energy
Outlook", do merit closer scrutiny in this respect. After all, the IEA is
the authoritative OECD-branch that advises OECD governments and makes
long-term recommendations to political players. Statements by this
government-funded institution in Paris are taken as the "truth" in the
energy ministries of many industrialized nations. IEA-"Reference Scenarios"
in fact assume that oil production will increase steadily by 1.6% per annum
until 2030, without massive increase in prices: "Resources of conventional
crude oil and NGLs are adequate to meet the projected increase in demand to
2030, although new discoveries will be needed to renew reserves. The
importance of non-conventional sources of oil, such as oil sands and
gas-to-liquids, is nonetheless expected to grow, especially after 2020"

For many years now IEA puts forward the assumption that oil prices will stay
low: "Crude oil prices are assumed to remain flat until 2010 at around $21
per barrel (in year 2000 dollars) - their average level for the past 15
years. They will then rise steadily to $29 in 2030."

This forecast is extremely unrealistic, for the current oil price is already
above $30/b.

Simple oil industry statistics (e.g. from the BP Statistical Review of World
Energy) readily reveal that a large number of oil-producing countries have
suffered declining outputs for years, even decades. These dismal results
occurred even though new oil discoveries came along from time to time.

According to the IEA forecast to 2020, production will rise from 76 million
b/d in 2000 to 100 million b/d in 2020 (and to even higher levels
thereafter).

However, take into account the trends in the countries with already
declining output (black) or with outputs starting to decline by 2005 (white)
and you will get a measure of what the Persian Gulf producers (grey) have to
accomplish to meet the IEA forecast for 2020:

1. They must produce at least at the yearly rate attained in 2000, that is,
at roughly 23 million b/d.

2. They must compensate for the production shortfalls of post-peak
countries, for example the UK, USA, Mexico, China or Norway. This calls for
an output of an additional 19 million b/d.

3. Lastly, they must produce the oil needed to satisfy the predicted growth
in consumption --- a staggering 30 million b/d by 2020.

Summarizing then, daily output by Persian Gulf producers must roughly triple
from 23 million to 73 million b/d in order to maintain consumption patterns
and price levels predicted by the IEA.

According to the IEA's forecast of 2020 oil consumption oil production would
have to rise by 50 million b/d. This represents a six-fold increase in Saudi
Arabia's present-day production, and this offers a sort of yardstick for
asking: Is this at all reasonable? Even comparing this increase with the
present-day production levels of the entire Middle East we
wind up with the question: Can this geographic area really triple its output
within the span of 15 years especially when considering the unavoidable
delays encountered in adding new oil production facilities? From this
follows naturally the question: Are the IEA's prospects grounded in reality
or do they reflect an agenda for influencing the future? Indeed, the IEA is
government-financed, suggesting impartiality, but this organization seems to
be strongly influenced by the oil and gas industries and, in earlier days,
by the nuclear industry. This can be recognized easily by anyone who comes
into direct contact with IEA representatives or with their many
publications.

For decades now the IEA's coded message has been: "continue as usual,
nothing can happen, build your airports and highways, ignore renewables and
the Kyoto Agreement, for there will be enough oil, gas, coal, nuclear." The
IEA's real mandate however is precisely to protect consumer countries from
over-dependence on petroleum and to guarantee secure energy supplies at
modest prices. The IEA has always interpreted this mandate as though it were
only about tapping new countries with oil deposits and mobilizing the
required capital. Yet even if the world still were blessed with bountiful
oil reserves, the IEA's tone and statements deserve to be questioned on
three critical levels:

. The IEA avoids identifying the origin of the future oil supplies. Enormous
estimates are based on "unidentified reserves" - reserves that it is hoped
will still be found as prices rise modestly, but whose existence can be
identified neither technically nor geographically.

. The IEA advocates the exploitation of so called unconventional oil
reserves (tar sand oil, shale oil), yet overlooks considerations regarding
the ratio of energy investment to energy return from these new sources. In
the case of oil sands and oil shale deposits in Canada and Venezuela, the
energy in/ energy out is rather poor and cost overruns are common.23 Large
quantities of natural gas are needed to extract unsatisfactory quantities of
oil. Moreover, this extraction process destroys landscapes and leads to
enormous emissions of CO2, and this is similarly unattractive as burning
more coal.

. The IEA seems to ignore the influence of suppliers on the price of oil.
Better quota control and the inevitable exhaustion of their finite reserves
will encourage exporting countries to drag out production over time in the
hope of getting better prices and of prolonging the flow of revenue from
their diminishing resource.

(Note: As a member of Swiss Parlament we met with Mr. William Ramsey, deputy
director of the IEA. Ramsey is a 100 % US oil man. He and his staff do
openly advocate to reduce funding of renewables and research on
Photovoltaics. I had a discussion with him and they are fully ignorant of
wind energy and recent cost reductions done in this field. They call it a
subsidized resource without any future value or progress. This is the more
horrible as the whole staff in Paris is paid by governments.

Another excerpt of my article:

If we press ahead with the serious development of renewables we can in time
cover Switzerland's needs, as well as those of any other industrialized
nation, and given a longer time horizon, the needs of all energy consumers
worldwide. The first step involves freeing ourselves from the analyses and
recommendations of the International Energy Agency (IEA). This organization
and its related international and national organizations (e.g. IAEA, the US
DOE EIA) are the unquestioned record holders in peddling defective forecasts
and recommendations.

In the 1970s and 80s they were champions of nuclear power propaganda. And
their perspective turned out to be entirely wrong. Today they ignore all
signs of resource exhaustion, climate change and of the substantial progress
toward use of renewable energy. They repeat the same errors they made for
decades:

. Misestimating reserves.

. Misestimating the production costs of conventional techniques.

. Ignoring cost reductions for renewable forms of energy.

. Benign neglect of environmental impacts.

In the eyes of the IEA the share of renewable energy will barely increase
over the next 30 years. The quality of the IEA's forecast is downright
disastrous with respect to the role of wind energy. The steadily dropping
costs of wind power installations and the resulting rise in the return on
investment in them is consistently ignored. In its World Energy Outlook 1998
the IEA predicted that by 2020 a total of 45 GW of wind power capacity would
be installed. The reality is that by 2003 the installed capacity already
reached 39 GW, and the 2020 goal of 45 GW will be attained in 2004.