Dáil Éireann Debate, Thursday - 21 October 2004
3 Mr. Eamon Ryan asked the Minister for Communications, Marine and Natural Resources the analysis the Government has undertaken to investigate when global oil production is likely to peak; and the implications of such a peak for future energy prices. [25915/04]
Amharc ar fhreagraI have been asked when global oil production may peak against the background of the conventional notion of what is meant by "peak oil". The determination of the date and impact of the peak and decline of the world's oil production is a matter of worldwide concern. It is the focus of many, often conflicting, research studies, views and opinions. While I have not undertaken specific analysis of world oil production, I support and have access to such research because Ireland is a member of the European Union and the International Energy Agency. I understand that the agency will publish the 2004 edition of its World Energy Outlook on 26 October next. The implications of global "peak oil", whenever it occurs, on prevailing energy costs will be determined to a significant extent by the energy mix on the global demand side at the time.
In Ireland, as in other economies, the magnitude of the direct effect of a given oil price increase will depend on the degree of dependence of the various sectors of the economy on imported oil, the ability of end users to reduce consumption, the ability to switch away from oil and the impact of world oil prices on the cost to businesses and consumers of imported goods and raw materials. Reliance on oil must be eliminated over time, however, if global economic development and living standards are to be sustained. While there may be new oil finds and improvements in extraction technologies, the environmental impact and the finite nature of fossil fuels such as oil are key drivers of research into sustainable and renewable energy sources.
I wish the Minister well in his new and challenging position. He said in his response that the Government follows the advice of the International Energy Agency and that there are many conflicting views in this regard. Is he familiar with the views of an expert on this matter, Dr. Colin Campbell, a former geologist with some of the major companies, who is based in west Cork? He believes that the International Energy Agency has not done its job properly because it has failed to conduct detailed field-by-field analysis of the remaining oil stocks. He argues that the markets reflect the increasing international concern that we may have reached peak oil production and may be moving towards a position of decline. Does the Minister believe that recent price increases were caused by the occurrence of such a peak in oil production or the prevailing geopolitical environment?
There is no obvious alternative to the significant use of oil in sectors such as agriculture and transport because cars will not run on biodiesel or hydrogen for the next two to three decades at least. How high will oil prices have to rise before the Government starts to review public policy in such areas? Will the price have to reach $70 or $100 per barrel? If the price of oil continues to increase, at what point will a change in Government policy be triggered?
The Deputy and I agree that there is a great deal of conflicting evidence in this regard. When I read the information in my notes and scanned the Internet quickly to learn more about this subject, it struck me that there are as many opinions as there are experts. I am familiar with the work of Dr. Campbell who is not regarded as the only expert in this area. He has a particular point of view which may be valid. I do not think it is generally accepted that we have reached a peak in oil production.
The Government's overall energy policy obviously involves trying to ensure that we have security and diversity of energy sources. We depend largely on oil and gas at present, obviously. We obviously have gas. Our current target is for 13% of energy to come from alternative sources and that will be constantly reviewed. In the event of arriving at a situation where there is consensus that we are at peak oil use, that would obviously galvanise everyone into examining alternatives. At present, we are reviewing it continually and part of my job over the next three years will be to ensure that we continue to support alternative energy sources to make sure that we are not dependent on any single source of energy.
It is only after the fact that we will know when the peak has occurred and that may be too late. We know for certain that it will be in the next five or ten years. It is a small point whether it is now or in ten years time. Is the Minister concerned at the comment of the OPEC president this summer when reacting to the price crisis when he said the problem was that there was no more supply? If OPEC is saying there is no more supply and the demand will continue to increase next year——
The Deputy has made his point.
——does that not raise concerns in the Minister's mind?
I would be concerned were that borne out, but we are awaiting the world energy outlook report, which will be published on 26 October. However, the conventional wisdom at this stage is that resources of conventional crude oil are adequate to meet demands until 2030. There is obviously a different view on that point.
Is that the Government's view?
