Whistleblowers Say Oil Reserve Numbers Deliberately Inflated to Avoid Panic, Appease the US

World oil reserves are far lower than officially reported, the situation far more serious than publicly admitted, and we're already past peak oil. That's the word from two anonymous IEA whistleblowers, The Guardian reports. To add insult to industry, the figures were deliberately massaged, at least in part, to appease the United States:

Apparently the IEA was concerned that reporting the true reserve numbers -- and keep in mind that determining oil reserves is as much art as science -- it would trigger a buying panic.

The US enters the picture encouraging the IEA to underplay the rate at which oil fields are being depleted -- something which the IEA has admitted in recent months is occurring more quickly than previously acknowledged -- while at the same time overplaying the possibility of new large discoveries.

Indeed, when one does the math on how much recent new oil finds, touted as 'huge', actually add to world reserves, the result is usually in days or weeks of additional world supply, not months, still less years.

Little Room to Expand Global Production

Drilling into the numbers, the first whistleblower -- who is still at the IEA and wished to remain anonymous out of fear of reprisal -- says that while the IEA has maintained that world oil production can be increased to 105 million barrels per day, from the current 83 million barrels, "Many inside the organization believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible."

The second whistleblower, who is no longer with the IEA, said that it was agency policy to not "anger the Americans" and added that we are already past peak oil and that "the situation is really bad."

Check out the original Guardian piece for their analysis and background, but here are some things that immediately pop to mind....

Slow Change of Position to Avoid Panic?

First of all, it seems that the IEA is coming around a bit on the idea of peak oil and has been increasingly willing to talk about the economic impact of this. If I was a more conspiracy-minded person, I might think that this change in messaging was some sort of deliberate pacing to defuse the perceived possibility of financial panic. But then again, that's pure speculation.

The Same Head In The Sand Thinking...

Second, to entirely avoid some significant economic disruption because of peak oil, we would have had to gone on an oil crash diet starting a decade ago. Right now it's not a question of whether there's going to be a crash, but whether we try to slow down and avoid the worst of it.

So, more than anything, this illustrates the same head in the sand thinking that dogs climate change negotiations. Out of fear of disrupting current activity, profit, lifestyles, what have you, you put off action for the future, even though it's inevitable that those have to change.

Rather than take difficult proactive steps while there is time to reduce damage, we obfuscate, delay, debate uncertainty rather than solutions. We'd rather deal with symptoms than causes, continue engaging in compartmentalized rather than holistic action. Addressing environment, healthcare, terrorism... the same myopic thinking.

Third, it all seems painfully, even boringly, expected.