A guy who has been wrong on oil prices longer than most has managed to convince the New York Times to give him some of its precious Op-ed space to issue yet another sure-to-be-wrong prediction. That would be energy consultant Michael Lynch, with his remarkably content-free piece, "'Peak Oil' Is a Waste of Energy," asserting:
Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward....
That should be a no-brainer since I am giving him 2-to-1 and spotting him $10 a barrel off of what he says the right price is. I am happy to offer the same bet to Raymond Learsy, who endorsed Lynch's nonsensical prediction here on HuffPost yesterday. I assume he'll jump all over it, so eagerly does he diss the McPeaksters.
I wasn't going to post on this since I have blogged endlessly on the painfully obvious reality that we are at or near the peak (see "Peak Oil? Bring it on!"). It is so obvious that the International Energy Agency, which until recently had been a bastion of relatively staid and conservative and hence useless energy prognostication, has begun desperately trying to warn people of what is happening -- see World's top energy economist warns peak oil threatens recovery, urges immediate action: "We have to leave oil before oil leaves us." Heck, half of the most cautious "show me the money" people in the entire energy business agree (see "Half of oil & gas CFOs say we are peaking").
But a congressional staffers sent me something I didn't know existed -- an online transcript of a 1996 Congressional hearing "U.S. energy outlook and implications for energy R&D: hearing before the Subcommittee on Energy and Environment of the Committee on Science, U.S. House of Representatives, One Hundred Fourth Congress, second session, March 14, 1996" (hard to read HTML here, massive PDF here). I was Acting Principal Deputy Assistant Secretary, at DOE's Office of Energy Efficiency and Renewable Energy, and the House GOP were basically putting me on trial for:
And who did the Republicans drag in as their witness to rebut me -- one "Michael C. Lynch, Research Affiliate, Center for International Studies, Massachusetts Institute of Technology." Even back then, in the good old days of $17 oil (1995 average nominal price or $24 in 2008 inflation-adjusted dollars), Lynch was predicting flat oil prices for decades:
In previous work, I have shown that past oil market forecasts were biased towards rising prices and declining non-OPEC production. Correcting for the supply pessimism leaves a forecast in which oil markets remain in surplus over the long-term, suggesting that oil prices will remain weak for the indefinite future....Conclusions: Prices are much more likely to be weak than strong....
... 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.
... a flat oil price forecast appears to be much more consistent with historical behavior than the rising price forecasts of DOE and the lEA. A declining price, or flat at a lower level, would hardly be unrealistic.
For the record, here is in fact what happened in the decade after Lynch's prediction of flat real prices:
Real prices more than double in the subsequent decade.
Lynch's analytical worldview is that "a flat oil price forecast appears to be much more consistent with historical behavior." Well, the future is just like the past, until, of course, it isn't. We aren't making more oil, we are, however, consuming more and more.
For completeness sake, and with apologies to my regular readers, as Dr. Fatih Birol, the chief economist at the International Energy Agency (IEA) recently explained:
Dr. Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends 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.
Steep falls in oil production means the world now needed to replace an amount of oil output equivalent to Saudi Arabia's production every two years, Merrill Lynch said in a research report.
One final note: The conservatives in Congress thwarted efforts to ramp up clean energy R&D in the 1990s, and the situation has become so dire now, that increased R&D, while useful, is quite secondary to the urgent need to massively deploy clean energy technology, as Obama and Congress have done in the stimulus and the major fuel economy deal earlier this year, and as they hope to do in the climate and clean energy bill.
At last, one of the great misnomers of public disinformation bordering closer to brainwashing has been brought to heel.
When it comes to matters oil and energy, the globby hand of oil influence seems to smear all in the industry, even the otherwise-esteemed International Energy Agency (IEA).
Make it a bet based on a basket of world currencies or correlated to gold. More honest.
Also, since the argument always becomes one about the reality of peak oil, isn't your approach rather disingenuous? Especially given that the prices didn't begin to spike until Bush invaded two ME countries?
Nice try.
According to our own government experts and most of the world's financial institutions, our economy was in stellar shape right up to and including the elections last fall. Apparently their data (controlled, massaged and available only to them) was--to be kind--in error.
Now, you as a former government expert relying on the same sorts of institutions and government agencies to supply similarly controlled and unverifiable data, expect us to believe you.
Interesting...
What on earth are you reading to come up with these suppositions?
Oh...., you aren't reading? Just making stuff up?
"Michael Lynch's predictions ...blablabla.. therefore whatever he says must be wrong?"
This is done all the time by Cornucopians towards Peaksters, but Lynch is supported by Big Oil and Republicans so it makes his pronouncements at least questionable.
"....prices didn't begin to spike until Bush invaded two ME countries".
Uh-hem... 1973 and 1979 ring a bell? Look at the chart above, for cryin out loud. Those little spikey thingies on the chart are called Spikes. Bush was still trying to get out of going to Vietnam.
"Now, you as a former government expert relying... blablabla... similarly controlled and unverifiable data.."
Rule, I gotta roll; times up for me- so just read up before exhibiting anymore foolishness trying to chastise a man like Joe Romm.
Here start with this- tells the story of the IEA:
http://en.wikipedia.org/wiki/International_Energy_Agency
Later, and have a good weekend.
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from the description for Michael Lynch, President and Director of Global Petroleum Service,
Strategic Energy & Economic Research Inc. (SEER)
http://www.energyseer.com/MikeLynch.html
His resume includes: PAST PROJECTS
*Developed the long-term oil market forecast for the Gas Research Institute
*Provided assistance in scenario planning for several large oil corporations
*Analyzed the economics of N. American natural gas supply for a multi-client study
oh, and you who loves the Conspiracy, check this out:
*Advised the Secretary-General of OPEC on long-term oil prices
*Analyzed world natural gas supply for a 3-volume multi-sponsor study
Nah, he doesn't have a conflict of interest- we know who he works for.
Ain't the inter-tubes great?
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Oil is a commodity priced in dollars every place in the world. As much as anything else the value of the dollar vs. other currencies will be a key determinant of oil price. If we again devalue the dollar by half vis the euro, the the oil price will be the same in Europe while it doubles in the USA. As we keep the fed rate low (meaning it is hard to attract foreign funds into treasuries), run ever more immense deficits and print money without corollary increases in productivity, then the dollar value will be very hard to defend, just as it was under W.
Want the oil price to get down/stay down? Get the dollar back to 1/1 parity with the euro and increase its value similarly vis a vis the yen, Chinese currency, etc. Or don't and then misrepresent oil prices as being due to peak oil when it is actually due to irresponsible and unrealistic US monetary and fiscal policies.
Natural encroachment of sea water and natural gas are to blame according to Pemex. They are launching a massive horizontal drilling program at $20,000,000 per well to increase production over the next several years. Most industry experts, familiar with Cantarell, believe the new drilling program will at best stablize or slow the decline. It could take several years to drill enough wells to accomplish this. Meanwhile, the rapid decline continues.
U.K. Peaked in 1999
Norway Peaked 2000
Russia Peaked 2008
Indonesia Peaks 2009
Vietnam Peaks 2009
54 of 65 major oil producing countries are in irreversible decline and we are consuming 3 a nonsustainable 3 barrels for every barrel discovered. MSM and Washington are oblivious to it.
The stone age didn't end because we ran out of stones - and the age of oil is similarly unlikely to end due to running out of oil.
1) Lack of water resources in the region necessary to extract the oil via steam.
2) Environmental concerns from air and water pollution associated with extracting the oil.
3) The energy required to liquify the oil which exceeds the energy required to extraxt oil from the Canadian oil sands.
4) Political battles required to divert water supplies destined for the front range and agricultural interests.
See: www.aesopinstitute.org for a few new possibilities.
The article: 4 Steps to Revive the Auto Industry and the Economy outlines radical new technology that can change the energy picture.
The science is new and not yet found in textbooks. Skeptics, understandably, will be many. But, independent laboratory validation, followed by mass production of these new systems, is now on the horizon.
Fractional Hydrogen, one of these breakthroughs, was recently validated by Rowan University in connection with technology developed by a competitor. Other laboratories will doubtless reproduce the experiments.
As they prove their potential, these new technologies will change much of what is presently believed about energy.
For even more information, see: www.chavaenergy.com Look under the Heading HOW?
excellent piece
unfortunately, it seems painfully obvious that few people on this site don't want to hear the truth
people know what they want to kow and see what they want to see
you are so correct!
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