The IEA (International Energy Agency) released their 2008 World Energy Outlook yesterday and it included a few sobering surprises.

...The needed recession has arrived - that much is clear. Demand estimates are now being slashed with abandon, helping to pull the rug out from under the price of oil which has since tumbled more than 60 percent.

You'd think that oil market prognosticators would be happy with that development (at least the ones who are hoping there's going to be enough of the stuff to go around for a while), but apparently they are not.

In fact, in the IEA's latest report, they have turned downright alarmist on the subject of the long-term balance between supply and demand, acknowledging that the current system can not endure...

In sum, recent events in the real economy have put us in the liminal space where drops in demand will temporarily exceed drops in supply. Our energy future is a battle being fought between depletion and investment/technology in a world that is not only interconnected and complex but increasingly fragile. Counterintuitively to most, the lower oil prices go and the longer they stay below $80-$100 per barrel, the steeper the fall off of the crude oil plateau will be, and the dimmer our energy future.

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