EEM 1-11: The Energy Assumption


Welcome, dear Reader,

in this first issue of Energy Evaluation Monthly, you will be able to read about the why and how of EEM, giving an indication to what the aims and intentions of this monthly publication will be, after which this month’s subject, ‘The Energy Assumption’, will be addressed in depth, giving you the opportunity to maybe appreciate a different view on the energy-data and the expected energy developments as presented by the ‘Official Institutes’.

Energy Evaluation Monthly will appear monthly and will address each month a different issue at play in or around the energy industry. The views expressed in EEM are the views of Alexander, Author of EEM and founder and owner of Alexanders Gas & Oil Connections at, and are the result of his training and experience over the last decades.

The views will often be very different from ‘the Official View’, or the assumed way of thinking, and it is hoped to give the reader food for thought and (self-)reflection and different ways of thinking in approaching the challenges facing Mankind in general and the industry in particular.

Alexander takes full responsibility for his thoughts and these writings and is always open for reflection or correction should this be needed.

The aim of this publication is to try different views and ways of thinking on our way into an unknown future, give a throughout and integrated picture of developments, possibly lay bare some flaws in the global system, present ideas for improvement or change, debunk some myths on the way and generally present you with a refreshing view on global developments that will be an inspiration for change and hopefully will help you to prepare for a future that will turn out very different than what we currently might think or generally is assumed.

These writings and ways of thinking are amongst other based upon the paradigm:


“The future is NOT an extrapolation of the past

it is the release of new Creation permission.”


And so the thinking, viewing and perceiving as displayed in EEM, is based in the future and in what the future will allow or not allow, will support or not support, and will be taking into consideration the many influences at play in the world, on our planet and on our planet coming from outside of our planet.

In ‘Long Term Energy Security: Quo Vadis? (Where do you go?)’ some of the issues around the expected long-term energy-developments are opened up, and it is advisable to read this issue as well, for a greater understanding of the expected developments and their consequences.

The Author believes that great and deep changes lie in waiting and that many developments as they are currently assumed by the ‘Official Institutes’ will turn out very different, as we have entered a new time, in which new forces are at play, giving rise to new developments and permissions and (r)evolution-possibilities, needing new ways of thinking and dealing, as well as a different value-system.

To the Author, and an increasing amount of people, it is clear that the current economic and political system has run its mile and that new ways are needed to deal with the challenges of the future.

These new ways need to be worked out over the coming years and decades, to completely change the ways of thinking and working of our society as well as its inherent value-system, and so to change the way of living and being for all humans, in search for a more balanced society that will be an asset on this planet and be in line with human- and planetary development ‘as is meant to be’, instead of the parasitic and cancerous  growth on its way to self-destruction, heavily damaging our basis for living (Mother Earth) on the way, as is the case now.

It will be attempted to keep it light and interesting to read, although challenging it sometimes may be.

We hope you enjoy the ride.



The Energy Assumption

The idea for this theme came up whilst being at the UNCTAD Global Commodities Forum 2011 in Geneva, at the occasion of which Alexander was invited to present a paper (‘Long Term Energy Security: Quo Vadis?') and a speech.

Whilst attending the speeches and discussions, it became clear that many, (probably almost all) future projections are based upon the ‘official data’ as they are presented by a.o., the International Energy Agency in Paris for expected future energy supply and -demand, as well as by the UN, for the expected amount of people on this planet in the future.

During the presentations it became clear that almost everyone just takes these dates and copies them without questioning and uses them for their own projections of demand or supply or for the need for new oil & gas finds, new power plants, refineries and the like, as well as expected economic developments, demand for food, water, land and other commodities and so much more.

As showed in ‘Long Term Energy Security: Quo Vadis?' the Author puts significant question marks with these assumptions that are based upon continuous, extrapolated growth.

In this issue of EEM it will be shown that these ‘assumed energy data’ are flawed and that the reality already looks very different than what is being displayed.

During this writing also the question of ‘Why?’ will be addressed, as behind the reasons for the ‘energy assumptions’ lies a whole world of Interests of many kinds that want to make sure that the status quo is being maintained as it serves these Interests best in this way, and other ways and data would rattle the cage of the current controllers.


The ‘Official Data’

Coming into Geneva for the Global Commodities Forum, there was this huge banner covering the side of a 10-storey building, proclaiming that the Earth will have 9 billion people in 2050.

This is the official expectation/assumption as proclaimed by the UN. These figures form the basis for a vast amount of calculations, such as the expectations for economic development, demand for food, demand for energy, demand for water as well as demand for many other resources or goods.

However, is this a realistic assumption?

Currently humanity consists of 6.5 billion people, going on for 7.

Is it realistic to assume that in the coming 40 years another 2 – 2.5 billion people (in numbers almost the complete population of China and India combined) will be added?

How can we know and how can we start to approach the subject to get a realistic inroad in assessing the value of these assumptions?

Why is it so important?

The reason such an assumption needs to be approached with great care is because it has vast implications on the expected energy-demand, food-demand, water-demand, need for transportation, health-care, need for jobs, need for goods, need for housing, infra-structure, city-planning, country-planning and so much more.

And most of these have a direct impact on energy demand.

An expected growth of 30 % of the global population is therefore a huge challenge that indicates a strong and continued growth in demand at all levels and especially in energy.

Without energy almost everything comes to a stand-still and so the population growth assumption has a big influence on the energy assumption.

However: Where will all these people come from?

Looking at the developments of the world-at-large (at greater length written about in Long term energy security: Quo Vadis?) we see that:

- At planetary level (partly coming from above planetary), we can expect more earthquakes, more volcanic eruption, tsunamis as well as substantial changes in major water- and wind-jetstreams that will have massive influence on the environment and the climate and will in most cases certainly NOT be conducive for human multiplication.

- At planetary level, coming from the level of climate-change (human-induced or not), we see the oceans being emptied out, as well as turning acid, making life for the micro-life (plankton, krill etc.) ever more difficult or impossible, resulting in reduction of reproduction and presence. Being at the bottom of the food-chain, this will have major repercussions for the remaining fish-stocks, as they will be confronted with food-shortage and this will result in less fish and less recovery of already depleted fish-stocks.

As the process of acidification will only continue and speed up (in line with but with a delay of about 30 years to the rise of CO2, SO2, NOx and other acidifying agents the human has put in the atmosphere as a result of economic development), this picture will only exacerbate.
As is attempted to compensate the lack of naturally grown fish by ever more fish-farms, which cause huge pollution and poisoning of the seas or the waters, the picture actually gets worse.

So the seas will ‘give’ ever less over time, and ‘produce’ ever less fish, and therefore, an important part of human ‘feed-stock’ is slowly disappearing.

- Looking at the effects of climate-change on land, (as a result of human activity or as a result of other influences), vast changes are expected in the water-systems of the planet.

Looking at the developments of some of the massive rivers on the planet, the Amazon, the Mississippi, the Nile, we see that there is a clear trend towards drying up. Increasingly the Amazon Forests are drying out, and ever more of the agricultural lands around the great rivers (which have been extensively and expansively used for irrigation), and that play an important role in food-security, are becoming arid and useless, as without water nothing grows.

- The picture is slightly different with the rivers that source their water from glaciers and snow. Due to rising temperatures these rivers overflow with melting water and destroy large swaths of fertile lands used for agriculture. This will probably become worse over the coming years.
Once the snow and ice has melted away, these rivers will dry up and will not be able to provide irrigation-water for the agricultural lands.

Billions of people are dependent on our major rivers, for water, for food, for work, for transport and so much more.

The drying up of the rivers, a development that already is clearly visible, will therefore negatively affect the ‘carrying-capacity’ of vast stretches of land and negatively affect food-security and the amount of food that will be able to be produced.

These are not the kind of developments that support a growth of 30 % of the global population. The recent food-riots, although rooted in speculative rising of the prices and not yet in physical shortage, give a clear indication of what may be coming.

The fact that evermore rich countries ‘secure’ vast stretches in potentially agricultural lands outside of their borders (in esp. Africa and South America) is a clear sign that food-security is already low and not expected to improve over time.

Where would they come from?

On top of the fact that the current planetary developments give clear indication that we may be close to ‘peak-planet’ as well as ‘peak-human’, there is another question that needs to be asked to have a critical but well-founded look at the amount of humans that are expected to be on this planet in the coming decades: Where are all these (expected) people going to come from?

In most of the currently still relatively rich ‘Western’ or OECD countries, the population is stable or shrinking. In ever more countries the situation is so desperate that the governments are paying and rewarding people to produce children. This is not so much out of love for children but is mainly instigated by the fear of either social or cultural disintegration (with subsequent ‘take-over’ of other cultures within the country), as well as that the children of the future will need to earn the pensions of the future.

As most countries have indebted themselves for many generations to come, the situation is quite desperate. Ever less children being born means that there will be less ‘working masses’, less students, less people to fill jobs (if any on offer) and especially less people paying taxes and pensions.

As debts have been steadily increasing but the amount of paying workers is steadily decreasing, in just a few years there might be a host of countries that will find themselves on the road to economic disaster.

Collapsing economies are not a good ‘breeding-ground’ for families and so the expectation can well be expressed that the amount of children born in most of the OECD-countries will keep reducing, causing further shrinking of the original population. (This is called ‘negative growth’ in the economic new-speak.)

Taking a look at the emerging countries, we can say that in some the fertility-rate is still high enough for sustaining a growing population. However, the net population growth will be by far not as great as expected, especially as many of these emerging economies are very lob-sided, giving off beautiful economic data but in reality seeing a very large part of the population being kept in abject poverty. With the economic pressures and the increase of violence and diseases, not too much population-growth can be expected in quite a few of these countries.

In discussing the subject of population-growth (and economic growth) many fingers point to India and China.

But both these countries, although seeing some population-growth, also see the ‘limits of growth’, both in what their country and economy can bear, as well as due to general or specific discouragement to produce more children.

China is more or less keeping to its one-child policy, which, although the source of social distortion due to uneven man/woman balance, is highly successful in containing the population growth. When the policies were implemented, China was vilified in and by the Western world for it, but proved itself right over time, as the policy was implemented with a long-term view and the knowledge that it would not be able to cater for the needs of its population if unbridled growth was allowed.
This long-term thinking is one of the reasons why China may be able to lift up large parts of the population out of poverty in the coming decades, without completely ruining its land on the way.

Also India is seeing a clear slowing down of growth of the population, as it is clear that it already has too many people to properly feed, educate and take care of.

Many African countries see many children being born, but also see a growing dying curve of young people due to lethal diseases and armed struggle.

Southern Africa is said to be devastated by HIV (with exceptions), Middle-Sub-Saharan Africa sees cases  of a positive outlook, albeit also much armed struggle and abject poverty, and North Africa is in economic and political turmoil.

..and of course there are the increase in incurable diseases, the increase in wealth-related diseases, the increase in diseases and disabilities as a result of wars, the increasing debilitation of large parts of humanity due to lowering of standards in media and education with subsequent increase in violence and crime, the decrease of fertility due to life-style circumstances and so many more factors influencing current and future human multiplication.

So whilst this is only a very partial picture, one does get the impression that the assumption of a 30 % population growth in the coming 40 years may be slightly, or completely, out of whack.

Taking the planetary developments, the climate & environmental changes, the disastrous economic situation or policies, we may well ask:

What is the assumption based upon?

Is it by any means even in scope?

Could it be that over the coming decades the population on the planet is not going to grow? Or that it will even shrink?

This would have major repercussions on the stability of many countries, as well as on the long-term demand for energy, food, resources and infrastructure.

The Energy Assumptions

The next question then is: the energy assumptions, as for example stated by the IEA and EIA, also are projecting continued growth. Is this correct? And why is it so important?

The IEA states that in the coming decades oil-demand will continue to rise and sets expected oil-demand in 2035 at currently 99 mm bpd (down from 105 before and 120 before that), as well that demand for coal and gas will continue to rise very substantially.

However: how realistic is this? Why is this assumed and what are the consequences of these assumptions?

Oil: to Peak or not to Peak? That is the question.
And will supply peak, reserve peak or demand peak?

For many years the discussion of Peak Oil has been  running through the industry and has developed a whole theatre of itself.

Originally brought into the open by a few brave individuals and a growing chorus of followers and ‘believers’, Peak Oil has by now gone mainstream, especially after the run-up to the price-peak of 2008, which was partially rationalised by an amazing amount of ‘experts’ that suddenly seemed to have discovered peak oil as a coming reality and therefore saw reason to talk up the price.

The original Peak-Oilers ‘came out’ with the bad news because they saw that humanity had used up more than half (or more) of the easily accessible oil and wanted to warn the world of this fact.

Their figures were based on good data and their credibility, in the fact that they had no financial gain from it and that, although being ridiculed, they did not stop their mission of making this highly significant issue known to the world.

In the beginning there was much confusion over what actually was meant by peak oil: was it Peak-Reserve or Peak-Supply, but originally the story started with the warning of having used up over half of the easily accessible reserves in regular-conventional oil.

Over time the issue of supply peak appeared: the fact that ever more fields needed to be explored and exploited, and ever more infrastructure needed to be built for ever smaller or more difficult fields to guarantee supply and compensate for the depletion of the giant and super-giant fields that were found in earlier times and have begun to show signs of aging and depletion.

For some time the discussion has been that with the 86.5 mm bpd the maximum possible supply had been reached. Currently the market is said to be well supplied with about 86.5 mm bpd and that there is a reserve supply-capacity of 4 – 6 mm bpd and it is quiet at this front for the moment.

What appeared next, was peak-demand. The story suddenly changed with the economic crisis that started in 2008/9 which saw energy-demand going down. The talk of the town became now that peak-demand was reached before peak-supply had arrived.


Demand is rising, or is it?

Currently the situation has become very opaque, as ‘officially’ demand is rising again, but the substantia for that seem questionable.

Whilst the rise in demand in especially China and India is blown up in the press, the reduction in demand that has taken place and is taking place in Western Europe and especially the US, is hardly spoken about. Especially the reliability of the US-data can well be questioned. Although for example officially unemployment keeps being under 10 %, (unofficially at 20+%) well over 50 million people (one in 6 US-Citizens) currently live on foodstamps, with millions thrown out of their houses, and many falling off the social security radar, having no income at all.

How a country can see its energy-demand figures going down only slightly (from 21 mm bpd to now officially just under 19 mm bpd in 2009) whilst in a short time millions of people have become jobless, income-less and house-less, is a miracle (and raises questions). (In this light it is interesting to see that there is currently no ‘Country Analysis Brief for the US’ at the US’ Energy Information Administration-website

The situation is only slightly better in Europe. Although we may hear from the economic recovery of Germany or up to a certain point The Netherlands, most countries in the EU are in trouble or will come into deep trouble in the coming years, with increasingly defunct budgets, increasing unemployment, eroding social security as well as impossible pension-plans. All these countries will see spending going down, travelling going down as well as driving going down, especially with the current speculative and criminal increase in fuel-costs. Energy demand will not go up under such dire circumstances.

How a substantial long term growth in demand, as officially expected, would be able to materialise in circumstances as written above, is a question that needs further investigation.

Another question is what the influence on the demand figures is of the high-speed trading and the multiple circle-trading schemes that create artificial demand? How much is this influencing the official demand-figures? Does anyone know?
At what level is current demand for real?

The current and future global demand-figures as displayed by the ‘official institutes’ therefore need to be taken with some heavy question-marks on their reliability.

The Supply Delusion

During the presentation at the GCF, the International Energy Agency brought a graph that depicted their expectation for supply in the future.

The main line, related to regular conventional, was correctly depicting more or less the depleting reserves curve. Added to this was an ever greater amount of oil from yet-to-be-found and yet-to-be-explored fields, towards 2040 covering almost 60 % of current supply.

How something like that is realizable or realistic is the question. In an environment in which the majority of “main producers” is showing signs of maturing or depletion, and most of the main fields have been found (not withstanding some recent substantial discoveries), where do we find the sources and the supply-infrastructure for 20, 30 or more million barrels a day (!) in supply/production from yet to be discovered fields?

The main reason for the excessive amount of oil that is expected to come from still to be found fields seems to be to keep the line of total supply of regular conventional a horizontal line and not a sagging one.

This way, with the addition of deepwater, heavy oil and NGLs, the line could be nicely made to go up and to the inexperienced eye it looks like future supply will nicely grow to the expected demand. It all seems perfect.

However, this picture deceives, because it is fully unrealistic to assume that such a substantial and ever-growing amount of oil will come from until now unknown places. (Even whilst sub-salt, deepwater and very deep drilling may give some more surprises.)

Why is this all happening?

The reason for the “incongruities” seems to lie in the need to maintain the myth of eternal growth. Without growth our economic system collapses and the financial industry would implode, probably to only a fraction of their current presence, as money would be used again for what it is: A useful medium to do business.
It would mean no speculation, no derivatives and no creative banking anymore.

In our case, at this moment in time in human and planetary development, the end of the “growth era” is an intrinsically unavoidable situation. It is intrinsically unavoidable because our society is based on the maximum exploitation of non-renewable, and therefore depleting (and very polluting) energy- and other re-sources, and therefore the ‘growth era’ will automatically end when the resources become depleted.

This ‘end of growth’ apparently cannot be allowed to happen, as it would mean that those now in control, would, and will, lose their power and status.

For this reason, the reason for maintaining the myth of growth, the media talk up the growth-threat of China but do not balance it with realistic pictures from other places.

This is the reason why we are presented with an ever growing demand and supply, and with a world population that keeps growing to create the demand that is now envisaged.

However, most of this seems to be based upon very questionable assumptions.

The End of the Growth Era

Looking with an open eye to the development on the planet, it becomes ever more clear that we most likely are entering an age of negative growth or shrinking, and that nor humanity will rise up to 9 billion people, nor that we will see eternal growth in either supply or demand.

We can see everywhere that the times are changing and that the current developments are putting the assumptions based on the extrapolations of the past to the question.

But whilst a growing amount of people is starting to see the runes of change, we need to remember that the projected increase in need for power means that more power plants need to be built, more pipelines need to be laid, ever more fields need to be explored, more refineries need to be built and that many billions of dollars and other currency are involved.

Would we start to realize that much of the expected or projected growth is fake, then quite a few industries and “services” would also start to see the “limits of growth”, and no business means no shareholders’ return.

As long as we all believe in the myth of eternal growth, at least for the moment, all is well. Otherwise growth needs to be “helped” by bending stats, hyping up growth, or by the creation of conflicts or wars, which have always proved to be very useful in pulling failed economies out of the sinkholes they have created for themselves.

Of course, only a partial picture can be created here and partial reasoning provided, otherwise this assay would become a book (for which we do not have the time yet).

But let it be clear: The Author does not believe that the world will see a population of 9 billion people in 2050, nor does he believe in the official projection, as presented by the IEA, as he sees demand coming to a plateau soon – if not already on it – to slowly or rapidly come down afterwards.
The Author does not see a grave problem in supply yet for the reason of the current spare capacity and huge volumes in storage on the one hand, and the reduction of demand on the other.

And although many of the big giant and supergiant fields that have been found early are depleting and are giving signs of maturing, the imminent danger of physical supply shortage due to limited reserve, seems suspended  for the moment, because new reserves are being found, (although not enough to compensate the write-down of certain countries) and new provinces and frontiers are being found and opened up in which especially sub-salt, deepwater and very deep drilling may still give some nice surprises.

Next to the fact that the above points at the possibility that the future may bring changes very differently than officially envisaged or projected, all this also points to the great need for broad information and reliable data that are not influenced by politics, stock markets or shareholders, but give a neutral and unbiased picture of the reality of the situation, as good as it can be revealed.

We are working on that.

Keep an open mind,


February, 2011

Alexander is founder and owner of Alexander's Gas & Oil Connections at

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