Fatih Birol, Chief Economist, IEA: Catastrophic Energy Crisis Threatens Economic Recovery

"A catastrophic energy crisis" could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, according to Dr. Fatih Birol, Chief Economist of the International Energy Agency (IEA).

If such energy crisis emerges in the next 5 years, it could compromise the end of the recession. "Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course," Dr. Birol told The Independent.

According to the IEA chief-economist, many governments appear to be oblivious to the fact that oil is running out far faster than previously predicted and that global production is likely to peak in about 10 years - at least a decade earlier than most governments had estimated. "One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money," he added.

The first detailed assessment of more than 800 oil fields in the world, covering 75% of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just 2 years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, Dr. Birol added.

The IEA estimates that the decline in oil production in existing fields is now running at 6.7% a year compared to the 3.7% decline it had estimated in 2007.