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Big Oil takes a hit

Posted: November 16, 2009 at 11:43 AM CST

Last week, the International Energy Agency released World Energy Outlook 2009, but not before The Guardian, the United Kingdom’s renowned newspaper, published comments it had received from an agency “whistleblower” who stated that the IEA has inflated its reports of oil reserves for fear that the truth would shock world markets into a reactionary panic.

According to the Guardian’s high-level IEA source, the agency’s prediction that global oil production can be raised from its current level of 83 million barrels per day to 105 million barrels per day is unrealistic. The source said many IEA officials believe even 90 million barrels per day is unreachable, but the agency will not lower its forecast because it fears panic could spread through financial markets and that U.S.’ power over access to oil resources would be threatened.

If the IEA is inflating oil production numbers, the implications could be far worse than the reaction it is allegedly trying to prevent. Worldwide, governments rely on IEA stats to formulate their energy policies. If oil has peaked and governments continue to plan for increased availability of oil, sudden shortages would have dire consequences on the global economy.

So, where is ethanol in all of this? That is a good question. I was surprised that no ethanol group has responded to these allegations. Of course, ethanol can play a major role in replacing lost oil supply. And with the U.S. EPA in the final days of consideration before its E15 waiver deadline, ethanol should be shouting from the rooftops the list of benefits it has to offer in regards to fuel supply and security. Because, let’s face it, we probably won’t see $4 per gallon gasoline any time in the near future and that seems to have been the only thing in recent years to motivate the public into really taking an interest in our fuel supplies. It’s easy to become complacent, so people need to be reminded that it can and, without a doubt, will happen again. And it will get worse. This is why there is a domestic ethanol industry and people need to be reminded.

-Kris Bevill