British energy policy is founded on dangerously optimistic assumptions that need to be urgently reassessed, according to a paper from the Oil Depletion Analysis Centre (ODAC) published today.
As the upheavals in the Middle East drive the oil price ever higher, the report identifies a litany of questionable assumptions that underpin the forecasts of the International Energy Agency (IEA), on which UK policy is based.
Energy Secretary Chris Huhne has recently acknowledged the potential economic impact of the recent surge in oil prices, but not yet the much greater risks the government is running by relying on IEA forecasts of the oil supply.
The paper, Future oil supply: The changing stance of the International Energy Agency, published in the Energy Policy Journal, shows how IEA forecasts in recent years have shifted from optimistic to pessimistic and back again, as assumptions changed, and how its methodology is flawed.
The report’s author, ODAC trustee Dr Richard Miller said, “Events in the Middle East have grabbed attention, but the flaws in the IEA’s analysis are potentially more serious in the longer term. We are flying blind into an even more dangerous crisis.”