We Peaked

The International Energy Agency says they expect production will boost in 2009/2010, giving some temporary relief, but said prices will then continue to rise until 2013 (from India Reuters):

FRANKFURT, July 5 (Reuters) - The situation on the oil market is likely to ease in 2009/2010 as more production comes onstream, then tighten again through 2013 as output falls and demand rises, the head of the International Energy Agency said.

“The market situation will certainly remain tight until 2013,” Nobuo Tanaka told German business daily Handelsblatt in an interview released ahead of publication on Monday.

In a summary of the interview distributed on Saturday, Tanaka urged oil producers to increase investment and consumers to save energy.

Developing countries must end the practice of keeping petrol prices artificially low and industrial countries must not reduce taxes on petrol at the pump, which would send the wrong signal to consumers, the paper quoted Tanaka as saying.

Earlier this week, Tanaka told Reuters in an interview that the world oil market was very tight, leaving it vulnerable to several factors that could boost crude prices further.

This is good news. It sounds like the world will get a very noticeable warning over the next year or so, encouraging people to make drastic changes while making the cost of changing a bit more affordable.

I also think “until 2013″ should be read “until at least 2013″. I’m assuming they can predict until 2013 because if new sources were discovered today it could take 5+ years to reach production.

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I found this article which puts together statistics from the 2006 CIA World Factbook to speculate on the potential of a few dozen countries:

Which countries are best equipped to survive peak oil?

It concludes that Russia will be at the top and Bangladesh at the bottom. And until a few days ago, Bangladesh had gas prices fixed from when oil was $60 a barrel (from Google News):

Poverty-hit Bangladesh forced into huge fuel price hike

The government last increased fuel prices in April 2007. World crude oil prices have since more than doubled, costing the impoverished country more than one billion dollars in subsidies in the fiscal year that ends on Monday.

Economist Apiur Rahman, the head of Development Coordination — a Bangladeshi think-thank — said the global surge and the resulting domestic hike could be catastrophic for millions in the country.

“It’s very bad news for the country’s farmers, for rural poor, and even middle income people,” he said.

“It will drive millions of people into poverty. Inflation will jump immediately. But the government had no choice, its hands were tied. It had to raise prices.”

And most foreboding:

Economist Apiur Rahman, the head of Development Coordination — a Bangladeshi think-thank — said the global surge and the resulting domestic hike could be catastrophic for millions in the country.

“It’s very bad news for the country’s farmers, for rural poor, and even middle income people,” he said.

“It will drive millions of people into poverty. Inflation will jump immediately. But the government had no choice, its hands were tied. It had to raise prices.”

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The Globe and Mail reported yesterday that Ontario’s economy (which is almost 40% of Canada’s economy) is shrinking and may be heading in to a recession. The cause?

Just three months ago, economists were projecting that Ontario’s economy would grow 1.2 per cent this year - a consensus forecast that has since been slashed in half in the wake of an unexpected rise in oil prices and plummeting motor vehicles exports to the United States.

“We are in some challenging times,” Finance Minister Dwight Duncan told reporters yesterday. “I think those challenges continue.”

Unexpected rise in oil prices? This is just the beginning.

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