The New York Times on Peak Oil - Don't Worry, Be Happy
For those who follow the debate over Peak Oil - the idea that world oil production is peaking or is about to peak, and will then decline with disastrous results for the global economy - this has been a banner year for the Peak Oil side.
First, oil prices spiked to record levels - just when many Peak Oilers predicted they would - and helped stagger the economy. Then prices declined dramatically, as Peak Oilers also predicted, but began skyrocketing again even though demand for oil was off sharply - as they also predicted. Based purely on foresight, the Peak Oil side has been scoring touchdowns left and right.
On top of that, a steady drumbeat of scientists, analysts and industry executives who once pooh-poohed the idea of Peak Oil have been jumping on the bandwagon.
For example, a recent survey of American oil and gas company CEOs showed that 48% now believe we are at peak oil today, or will reach it in a few years. Top analysts at places like ConocoPhillips and Royal Dutch/Shell have been writing memos warning that "after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."
And just weeks ago Fatih Birol, the Chief Economist of the International Energy Agency (hardly a scare monger when it comes to Peak Oil), made global headlines when he issued a dire warning that world oil production would peak within the next ten years and that governments were woefully unprepared.
On the other side, the Peak Oil denialists had little to show this year but failed predictions.
So what is one to make of the New York Times this week, which reacted to this drumbeat of pro-Peak Oil news by publishing an Op-Ed piece by one of the chief Peak Oil deniers, Michael Lynch?
Lynch, for those who don't know him, is not exactly recommended by his own predictive powers, to say the least. In 1996, when oil was at $17 a barrel ($25 adjusted for inflation), Lynch testified before Congress that ...
... the ongoing technological revolution in the industry, combined with managerial improvements and a more friendly fiscal environment in oil exporting countries, will keep real oil prices flat for the next two decades.
Right. Over the next ten years oil prices more than doubled, then rose to a disastrous 2008 spike at six times the 1996 price. They are currently almost triple the 1996 price - in the midst of a global meltdown and flat demand.
Clearly, Lynch is a man who knows how to get it wrong. Which is entirely his right. He has an agenda and he is not shy about it, as when he wrote in his Op-Ed that
...we can't let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures...
Heaven forefend.
The question is not about Lynch's fervent cornucopian beliefs and free-market faith - it's about the New York Times and other American media outlets that have consistently missed what's actually happening within the Peak Oil debate.
What's actually happening reminds me of what happened years ago with the global warming debate. Then, a climactic theory largely pioneered by scientists (as Peak Oil was largely pioneered by geologists) was initially either ignored or denied in the media, and only began to gain traction as the evidence solidified and the things they predicted began coming true.
We seem to be entering such a tipping point now with Peak Oil. But you would never know it reading the American media.
In a fascinating piece on The Oil Drum, Debbie Cook analyzed how rarely Peak Oil has even been mentioned in American newspapers, especially as compared to papers abroad.
Here's the number of total mentions she found for a few selected papers.
- The Washington Post - 0
- The LA Times - 0
- The Chicago Tribune - 0
- The Baltimore Sun - 0
- The Wall St Journal - 32
- The New York Times - 38
(The New York Times, by the way, didn't even report the Fatih Birol bombshell, though they allowed Lynch to attack Birol's warning in his Op-Ed.)
And here's how that compares to some papers abroad.
- The Hindu - 48
- The Times of London - 74
- The Financial Times - 127
- The Globe and Mail - 196
- The Guardian - 235
What we have, people, is yet another example of the American media messing up big time. Weapons of mass destruction, anyone?
The fact is that if the Peak Oil proponents are correct, it amounts to one of the biggest stories of our time, right up there with global warming. I am not a scientist so I cannot tell you with absolute, iron certainty that they are right, but I do know this:
When you read the literature and compare the arguments as laid out by the two sides, the Peak Oil argument is characterized by logic, rigor, data and hard science - just like the global warming argument a few years back - and the opposing side is characterized by, well, by unbounded faith that markets always work and technology always saves us, by paranoid suspicions that the Peak Oil concept is a plot (by radical tree-huggers or venal oil speculators, take your pick) and by assorted Hail Mary passes.
For example, Lynch bases part of his optimism on the idea that there is five times as much oil in the ground as most geologists believe, or as the data support. Raymond J. Learsy, who frequently posts here, suggests we should be skeptical of Peak Oil because perhaps oil is not a fossil fuel at all, but rather comes from the geological forces deep within earth's interior and is almost limitless, as certain Stalin-era scientists suggested.
Again, it is their right to feel that way, as much as their arguments sound increasingly like creation science. But as for the media, you would think editors would realize the issue is a serious one, look at the track record of both sides, and perhaps decide to give a few column inches to people who have the embarrassing habit of making predictions that actually come true.
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Great article. Interesting to see the lack of reporting on the subject by American media. Some peak oil info with videos: http://www
Oil is abiotic. We're the next batch..lol
I encourage everyone to go to the ASPO website to view 10 pages of archived news stories from various news organizations regarding peak oil. The most telling stories are related to production declines in giant and super giant oil fields around the globe. Many of the stories are from major news organizations and can be read in their entirety by clicking on more in the lower left corner of each story brief.
The whole peak oil debate misses one crucial point. There is no question that US oil production peaked almost four decades ago, and has been in decline ever sense, while US consumption has continued to increase. Economically, this this is not sustainable.
Gabriel, here's the issue I take with concern over peak oil.
Geologically speaking, of course there has to be a "peak" somewhere. That's what gives credance to the concern. But practically speaking, that doesn't mean human energy consumption is going to "peak". Who knows - maybe technological development won't always exactly keep pace with our use of reachable resources. It's quite possible we'll have rough spots where prices will spike. But spiking prices is THE WHOLE point - it spurs people to innovate around the problem.
If sweet, light crude oil becomes scarce and pricey, it will make more economic sense to transition to shale oil or other alternative energies. The price spike (unpleasant for certain) will be the signal. I think it will only "feel" unpleasant because oil is so cheap today. I can get a gallon of gas today for $2.50, whereas a gallon of Starbucks might run be $35.
Geologically speaking, peak oil may make a modicum of sense. Practically speaking it makes very little. I don't pretend to have a crystal ball, only history. Mankind has been innovating, improving for adapting for 50,000 years. I like those odds.
Damn, spelling and grammatical errors abound!
Toyota announced earlier this year that they had sold 1,000,000 Prius's in ten years of production. The price of a barrel of oil rose 6X by the July 2008 highs and gasoline by 4X. There are 900.000,00
Well, I would argue that improvements in fuel ecomony EFFECTIVELY make fuel less expensive. In other words, people with hybrid cars may choose to drive a lot more than before, because it's relatively cheaper than before. For example, some people may start driving to work to instead of taking the bus.
If bus fare is $2, and the amount of gas needed to get to work costs $3, ten workers might take that bus. In this case, $3 of gas will be purchased (enough to power the bus).
If those workers all purchase hybrids, their cost of driving to work may drop to $1.50 (due to better fuel efficiency). All ten of those workers would end up purchasing $15 worth of gas that morning. That increase in demand may spur higher prices in the future.
As a side note, here's a little perspective on gas prices:
Prices in 2009 Dollars:
http://1.b
Prices with respect to CPI (and postage stamps):
http://2.b
God the American press is pathetic and its readership as well.
Faced with what many consider overwhelming scientific evidence for both global warming and peak oil, the idea that we should deny the problems, sit by and do nothing is selfish and irresponsible at best. But these days, it's not about what's good for the health of the planet or for that matter the health of Americans, it's all about what's good for Republicans or Democrats. (Ironically, the Republican stand regarding all of this is over my dead body.) In any case, for either party to remain intrangiant is ah, selfish and irresponsible at best.
The only difference between peak oil and global climate change is that climate change is here now and could easily doom our species and the planet.
If peak oil turns out as forecast it is going to be a race to see which whacks the human species first. Imagine the world's ultimate auto afflicted nation without the oil needed to keep all of their cars running. Bicycles anyone?
Important reads for anyone seriously interested in this topic:
"Twilight in the Desert" by Matt Simmons
"Beyond Oil: the View from Hubbert's Peak" by Kenneth S. Deffeyes
Mankind faces a huge dilemma, and soon.
A well crafted and convincing article by a man with even fewer credentials than those people he maligns. Rotello is not an oil expert, by any stretch, but that won't stop the peakers from trumpeting every word as gospel.
Best you can come up with?
Beats yours...
At TrendLines Research, we update monthly the top 20 estimates of URR & projections for maximum production.
The consensus for the Oil Originally in Place is 19-Tb (trillion barrels) of which 1.2-Tb has been consumed. The Ultimate Recoverable Resource (URR) or economic/technical feasible volume is 3.8-Tb as determined by the average of the practitioners.
The average of the top 20 modelers has oil production increasing from today's 84-mbd (million barrels/day) to 93-mbd in 2023.
With respect to past forecast accuracy, those made in the mid 90's are within 1-mbd of the actuals for 2008 & 2009!
Feel free to browse our current charts and tables based on data from geologists (not pundits) at http://www
You are abolutley right when it comes to beware of the lunatic fringe. Therefore, I suggest that you take a long, hard look in the mirror Mr. Freddy Hutter. This is, of course, after I went to your link and examined what you consider to be the lunatic fringe. There was not a single mention of Fixed News and the parasites of misinformation who reside at this vile, hateful arena of fiction.
Your trendlines are a crock as well since you paid zero attention to oil field giant and super giant decline rates along with plotting thses decline rates against giant and super giant discoveries since 1980.
"Clearly, Lynch is a man who knows how to get it wrong."
Two wars and a Depression later, none of which any of us, except for perhaps Brooksley Born and a handful of economists, could have forseen. Our meddling in the ME has had as great an impact on the price of oil as has the manipulation of the markets by the banks. Lynch's predictions were based on the political climate of the time. That changed.
Will there be and end to oil at some point? Most certainly. Every natural resource is finite--as far as we know. Is it here today? No.
"The Peak Oil argument is characterized by logic, rigor, data and hard science...
But is it, really? When any scientist presents a new theory, it is tested and restested by independent scientists around the world, using the toughest standards and critiques. Those tests rely on the free and open availability of data that will either confirm or deny the theory. With oil that is not the case. The support for peak is always derived from the same carefully controlled sources and based, oftentimes, on the same very old science that has yet to receive the level of examination or corroboration from the scientific community at large that any other theory would.
Until that happens, peak will remain just an opinion, not a theory.
Will it come some day? Yes. Just not today.
What i was trying to say.
Thanks, Durango. And I notice no peakers want to deal with the lack of independent verification of their "science."
Gabriel, thank you for posting- I hope you continue to do so on this important subject.
I post my HuffPo comments almost exclusively on Learsys blog and it would be nice for HuffPo to bring in another voice along with some new commentors from the "Green" section vis-a-vis the Business section. Maybe the business section IS the best place for this topic in terms of readership, i dont know.
Peak Oil certainly is a story worth blogging here as it already is elsewhere on the inter-tubes.
Aside from the question of what Peak Oil means, the biggest controversies swirling around this subject are:
1. When did/ will Peak (conventional crude) Oil occur: 2005, 2008, 2010 to 2015, 2020, 2030, 2040
2. The size of the URR (ultimately recoverable reserve)
3. World depletion rates
4. How much will non conventional oil (e.g. tar sands) contribute to meeting demand growth.
5. The impact of technology on the issue.
6. What, if anything, should government do.
Anyway, good luck with your blog.
I find the theory that Peak Oil is a speculators' scam to be unconvincing because it requires too many people seemingly disconnected from the oil industry to be "in on it." What do these countless geologists, for example, have to gain from promoting Peak Oil? Book sales? I don't think so. Books aren't that profitable, unless they star Harry Potter.
Science vs. Economics. I'll take Science.
Why are the oil markets secret?
How much oil is in reserve in Iraq? How much Brazil? How many oil deposits in Russia? Kazakhstan and the rest of Central Asia?
If the markets were honest and open I might have some confidence that the price of oil was honest.
But there has been far too much evidence to the contrary.
Also, let's not forget that the whole peak theory was a self fulfilling prophecy that began when American companies started capping wells here in favor of buying cheaper Arabian oil back in the early 70's. When you cap wells, production goes down--duh! That and their continuing denial of the forces of manipulation on price only weaken their arguments.
Didn't it appear just a tad bit convenient that the theory of Peak Oil came into prominence at the same time speculators were driving the price of oil into the stratosphere?
Tell me again how the price of oil is determined by the magical hand of the Market and monopoly practices had nothing to do with that spike?
Or the present price.
Show me an open honest market and then maybe I would have some evidence to evaluate Peak Oil theories..
But you can;'t. Because the oil markets are kept secret.
I have no doubt what so ever that when/if the truth comes out Peak Oil will be shown to be a very clever marketing ploy by the Boys In Houston.
Hello Durango,
It is annoying to be warned of the consequences of Business As Usual as it often requires inconvenient action.
One of the beauties of the Theory of Cornucopia is that the consequences of inaction, either personally or as a society, can be blamed on a conspiracy by others.
By all means, party on, but when your Dad (the facts) comes home, you are in big trouble!
%)
If you don't know that the price of oil is controlled by a cartel and the Boys in Houston, you are the one living in La La Land.
Please tell me why the exact same gasoline from the exact same refineries costs 5 cents a gallon more in New Mexico, where it is found and refined than it does in Colorado 50 miles away?
When NM has 5 cents a gallon less in taxes.
it is called monopoly practices, and restraint of trade.
Secret hand of the market huh?
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