Peak oil is less a topic of discussion now that shale oil in North America has been fracked open.
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A range of organisations are predicting increased use of oil, as well as natural gas and coal, over the coming decades. The US Energy Information Agency (part of the Department of Energy) in its latest forecast, for instance, predicts a 30% increase in the use of liquid fuels (mainly oil), and a 56% increase in global energy consumption overall by 2040. A consequence is continued carbon intensity and increasing greenhouse gas emissions.
[Btu stands for British Thermal Units, the amount of energy needed to heat one pound of water by one degree Fahrenheit (ie, 1055 joules; or 0.454 Kg water by 0.56 degrees Celsius)]
These forecasts are based on assuming the continued growth of large emerging economies, such as China, India and Brazil, as well as the continued (or increasing) availability of oil, natural gas and coal. The model doesn’t factor in significant changes to policy or regulatory settings. Consumption forecasts for OECD countries are flat or declining, while demand for fossil fuels continues to grow in non-OECD countries.
[The EIA Reference case assumes 3.6% annual economic growth and the price of Brent crude oil reaching US$163/barrel by 2040 (It's currently $109)]
Some question the validity of such forecasting. They note that they are often produced by those with an interest in continued use of fossil fuel exploration and exploitation, simply extrapolate from the here and now, and that the forecasts are usually wrong. Furthermore, forecasts suggesting cheap and plentiful fossil fuels are, in their view, dangerous, leading companies and governments to be complacent about the need to shift to other sources of energy.
EIA acknowledges the limitations of its forecasting, and has reviewed the accuracy of previous predictions [Pdf]. It admits that their model (or rather suite of models) are not great at predicting future oil prices or economic growth. They don’t take account of technological breakthroughs, economic changes, future extraction costs, or regulatory changes. EIA provide some alternative forecasts based on different oil price and macroeconomic growth assumptions.
For example, EIA looked at higher (4%) and lower (3.1%) level annual economic growth:
They also forecast that renewable sources of energy make steady progress, but predict that they will fall well below other sources of energy, except nuclear, even if oil prices increase to US$237/barrel by 2040.
However, there’s no way to judge whether these assumptions are particularly reasonable or likely.
Others note that even though the forecasts are unlikely to be right they can be useful in exploring the future and clarifying assumptions. The EIA and International Energy Agency both do this to an extent. IEA’s 2012 World Energy Outlook developed several scenarios to highlight what could happen under different policy settings, and encourage policy makers to consider the options.
None-the-less, the lure of quick easy money from fossil fuel exploitation tempts many, and impedes longer term strategic energy thinking.
The lure of clean green energy sources are also not without their problems. Poorly designed renewable energy policy can also be bad for the environment and the economy, as both the energy vs food biofuels problem several years ago highlighted, as well as current renewable energy policies in the EU.
The 2012 World Energy Outlook notes that improving energy efficiency provides plenty of scope for the west to reduce energy consumption (Their 2013 Outlook comes out in November). They also note that energy production is becoming thirstier:
… water use could become increasingly challenging for unconventional gas development and power generation in parts of China and the United States, India’s fleet of water‐intensive coal‐fired plants, Canadian oil sands production and maintaining reservoir pressures to support oil output in Iraq.
