IMF releases new research paper concerning oil and the global economyMay 9, 2012
Research paper is meant to incite debate and encourage new perspective
The International Monetary Fund (IMF) has issued a paper dubbed “The Future of Oil: Geology versus Technology.” The research paper is meant to provoke debate concerning the issue of oil and sustainability. Because of its two-fold approach to the issue, the IMF notes that the paper does not necessarily represent the views of the organization. The paper takes into consideration two points of view: The economic and technological approach used by the Energy Information Administration, and the geological approach, which concerns peak oil forecasts.
Paper seeks to establish new model for oil forecasts
Both approaches have been shrouded in controversy for some time. The research paper notes that while both approaches are subject to problems, geological forecasts have recently proven to be more accurate than forecasts made through the economic/technological approach. The economic/technological approach, however, accounts for the financial factors that are inseparable from the world of oil. Both approaches are marred by inaccuracies. As such, the research paper aims to introduce a new forecast model than combines the two methods.
IMF model predicts a troubling future for oil and the economy
The composite model forecasts the future of oil by taking into account geological depletion and economic trends. According to the model, the future of oil may be cause for concern. First, the model predicts that the supply of oil will not increase as rapidly as it had done in the years before 2005. Oil prices are also expected to grow at a faster pace than average inflation and could reach new heights in 2020. If the latter prediction proves true, the world will be entering uncharted economic territory.
Alternative energy continues to grab attention as people begin to break away from fossil-fuels
The paper is meant to draw attention to the issue and make people talk. This discussion may help people change the way they look at oil and other fossil-fuels and their place in the world. With alternative energy attracting more attention around the world, the issue of oil, and its financial implications, is no longer something that can be ignored.
The IMF research paper is available for free and can be found here.