Monday, November 15, 2010

Agriculture and the IEA's World Energy Outlook 2010 Report

The rather surprising graph above from the IEA's Outlook report shows a
breakdown by selected nations of projected oil production from 2009-2035.

The annually released "World Energy Outlook" 2010 by the OECD/IEA issued the statements listed in bullet points below predicting changes in fossil fuel use and production from now through 2035. [pdf]

The report's implications for industrialized agriculture "as we know it" are immense. Policy makers need to take heed and start making appropriate long term plans for a changed future in farming which reduces the use of fossil fuel inputs. Farming methods, crop choices, government subsidization goals, farm sizes, and economics all need to be redirected appropriately. The frivolity and overproduction practices of today will by necessity, need to be removed from the system.

These next quotes from the report refer to changes which are projected to occur between now and the year 2035.

  • The 'New Policies Scenario' names the year 2006 as "peak" in global oil production, by projecting that it is most probable that conventional crude oil production "never regains its all-time peak of 70 million barrels per day reached in 2006."
  • Fossil-fuel consumption subsidies amounted to $312 billion in 2009, with oil products accounting for almost half of the total.
  • Demand for all types of energy increases in non-OECD countries, while demand for coal and oil declines in the OECD.
  • Developments in China’s energy system will have major implications for global supply and demand trends for oil, natural gas and coal, as well as prospects for limiting climate change.
  • Coal remains the backbone of global electricity generation.
  • A drop in coal-fired generation in the OECD is offset by big increases elsewhere, especially China, where 600 GW of new capacity exceeds the current coal capacity of US, EU and Japan.
  • Government support for renewables remains the key driver – rising from $57 billion in 2009 to $205 billion in 2035 – but higher fossil-fuel prices and declining investment costs also spur growth.
  • Global oil production reaches 96 mb/d in 2035 on the back of rising output of natural gas liquids and unconventional oil, as crude oil production plateaus.
  • Kazakhstan drives an increase in Caspian oil production to 5.2 mb/d by 2035, while Turkmenistan and Azerbaijan push up gas production to over 310 bcm.
  • Advanced vehicles, which represent 70% of new car sales by 2035, make a big contribution to emissions abatement, underpinned by a dramatic decarbonisation of the power sector.
  • Oil demand peaks at 88 mb/d before 2020 and falls to 81 mb/d in 2035, with a plunge in OECD demand more than offsetting continuing growth in non-OECD demand.

If you want to know more on this subject with a U.S. focus, I recommend the August Amber Waves USDA report by Patrick Canning: "Fuel for Food: Energy Use in the U.S. Food System" [PDF]


  1. you think american agriculture can wean itself off dependence on cheap fuel?
    or will it take a crisis?

  2. rjs
    US industrial agriculture will be forced to change as FF's get more expensive. Policy will have to change, too, and I hope it can allocate and prioritize intelligently. I believe this can happen barring an oil supply shock but policymakers need to start now. I foresee restoration of grasslands for grazing and small farms near cities and towns produce real food while large mega farms continue with industrialized and government subsidized methods until they can't. Of course global macro economics and the USD's value will also be vitally important in how everything plays out.