Since the Energy Information Agency releases its International Energy Outlook 2009 mostly as statistics, you will have to follow through some math below to understand what is up. I became aware of the new report being radically different from a story by jsmyers that linked in It's Official--The Era of Cheap Oil Is Over.
For years now, assorted petroleum geologists and other energy types have been warning that world oil output is approaching a maximum sustainable daily level--a peak--and will subsequently go into decline, possibly producing global economic chaos. Whatever the timing of the arrival of peak oil's actual peak, there is growing agreement that we have, at last, made it into peak-oil territory, if not yet to the moment of irreversible decline.
But although very alarming the Michael Klare article still understates just how radical the new prediction from the US government is...
The new outlook includes a High Price Case where oil in 2030 is $200 a barrel, a Reference Case where oil is $130 in 2030 and a Low Price Case where oil is $50 in 2030. I'm going to assume that even the most optimistic of Daily Kos readers do not, in the absence of massive government intervention, take seriously oil at $50 in 2015 much less 2030. I realize some believe oil speculators are responsible for the current price of $70 but a speculator is, after all, betting on the future price of oil and they are betting it is higher.
So that leaves the reference case which predicts a 3% increase in US oil consumption by 2015 and the high price case which predicts a 2% increase by 2015. The normal the United States lifestyle and population growth dictates a 10% increase in US oil consumption by 2015; which you can see in this picture
So the United States government is saying that America must reduce normal 2015 consumption or normal US population trends by seven or eight percent. But wait you say, "7 or 8%, that's not much is it?" Actually its a lot. Let's compare it to losing weight so we can get a relative sense. I'm 185 pounds and my minimum weight, at an abnormally low 9% body fat, is 155 pounds. For me to lose 7 or 8% is about 14 pounds which doesn't seem major. But since I can at most lose 30 pounds 14 pounds is almost 50% of my maximum weight loss. That is I would have to lose almost half of all of my fat, a major difference. So before we decide whether 7 or 8% is major let's look at the picture above again to figure how much oil "fat" America has.
What we see above is a high correlation between US oil consumption and US population. There does not seem to be any correlation between US oil consumption and the inflation adjusted price of oil. And, although there have been many recessions between 1980 and 2007, the US oil consumption data does not show any of them. Consumption sticks right to the linear trend line through thick and thin.
The IEA has spun the demand part of the report as a green shoot
"These revisions do not necessarily imply the beginnings of a global economic recovery, and may only signal the bottoming out of the recession," the IEA said in its monthly Oil Market Report.
But a more likely explanation is that oil demand in developed countries is not correlated much with the wages and earnings part of the economy. That is their is not much "fat" in people's usage of oil. They can cut out some vacations but they still have to drive to work, the grocery store, etc. Food still has to be grown and transported and buses and trains still run.
There is no proof that America will find a diet that reduces oil consumption by the EIA predicted 7-8% by 2015 and plenty of indication otherwise. To achieve that kind of reduction, America would need to keep its population stable, majorly change our lifestyle (as a depression might) or change our transportation technology. Under President Obama the EIA has finally taken a step toward admitting the magnitude of the problem we face; now we need that admission to come out of the fine print of an obscure report and into the state of the union address of a credible (non-Bush) president.
And this time around the change promoted by the government will need to be as radical as the 7-8% we need by 2015. Drive 55 will not be enough -
However, net fuel savings were calculated by the United States Department of Transportation at 1%, and independent studies found savings as low as half of one percent.
Its true that gas mileage improves but as a policy its just not very effective. I believe our policies must be rooted in converting vehicles to use electric - the kind of massive overhaul that only a country that owns GM and claws back trillions from corrupt banks and failing wars can under take.