IMF Taking Peakoil Seriously
Well, at least Michael Kumhof, deputy chief of the modeling division at the research department of the International Monetary Fund (IMF). Last month we already reported that the IMF had acknowledged that she at least understood what the word meant, now one of their employees takes the concept seriously, without wholeheartedly embracing it, yet. Kumhof is looking into the matter for ten years now and still has difficulty deciding whether the world has arrived on a liquid fuel production plateau or not and if, but it is certain that crude oil production is stable since 2005, without being certain whether this is due to geological or financial constraints. Kumhof nevertheless takes the idea of peakoil very serious as he is convinced of the very grave consequences. His models reveal that a continuous decline in production of 2% per year would lead to a price increase of oil of 800% after 20 years. Kumhof is not that convinced of the impact of shale oil. Further he refers to the ‘best peakoil study to date’ [pdf] investigating when the beginning of the production decline is to be expected. After 228 pages the study concludes that we don’t know, but almost certain before 2030 and ‘with a significant probability that it might happen quite a few years before 2030.’ Kumhof admits that his work has not yet arrived at the chef etage of the IMF and no official position has been taken. To sum it up: ignoring the possibility of peakoil would be irresponsible. Well, that’s a start, albeit a bit late.