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The Energy Spectator
Is the Theory of ‘Peak Oil’ Dead?
The power of market adaptation illustrated.
(Page 2 of 2)
Nothing is forever, including oil and gas reserves, and gasoline prices are near $4 dollars per gallon in many parts of the country. There may be a point when supplies become limited and prices escalate, driving businesses and consumers to even greater efficiencies, electric vehicles, and other sources of energy such as renewables or modular nuclear plants. Yergin notes that the growth in world energy demand will be “greater than all the energy that the world consumed in 1970.” And 75 to 80 percent will still be carbon-based two decades from now.
“The globalization of demand may be shaping tomorrow’s needs,” writes Daniel Yergin. “But it is accompanied by a globalization of innovation.” The generation of knowledge and the application of science is now “a worldwide endeavor.”
This global resource base of knowledge and creativity is expanding, fueling insight and ingenuity that will lead to new solutions for the benefit of humanity. Peak oil or no peak oil, the future is neither bleak nor foreboding as long as markets, prices, and human creativity are allowed to function so as to cope with the challenges of the future.
About the Author
G. Tracy Mehan, III served at the U.S. Environmental Protection Agency in the administrations of both Presidents Bush. He is a consultant in Arlington, Virginia, and an adjunct professor at George Mason University School of Law.
Letter to the Editor View all comments (27) | Leave a comment
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Frank Drackman| 3.5.13 @ 7:03AM
I love how the Evil-lutionists turn into strict Creationists on the subject of "Fossil" fuels.
There's only a certain amount, created thousands of years ago, on whatever day Jehovah decided, and every tank of gas is one step closer to escaping the Wooly Mammoths on nothing but your 2 feet...
First of all, even if Jehovah quit creating 10W-40 5,000 years ago, there's so much, we won't have to worry for another 50,000 years. The Saudi's are still drilling the same fields they did 50 years ago, and not because they're lazy, they just haven't had any cause to move.
In 8th grade our Hippy "Earth Science" teacher took us on a field trip to Pismo Beach, warning us to wear cheap sneakers(all I had) because the oil on the beach would ruin them.
Oil? I thought? wasn't that Oil Spill years earlier?
Turns out the oil naturally seeps up through the sand, from its home deep to the south, sort of like Mexicans.
"Umm Yeah Man, but its still a disaster" mumbled Tommy Chong before vanishing behind a dune and reappearing with the Chinese Eyes...
Frank
Mnestheus| 3.6.13 @ 3:21AM
Fortunately, new fossil fuel is on the way thanks to the noble efforts of Newscorp:
http://vvattsupwiththat.blogsp.....arbon.html
chuck| 3.5.13 @ 7:58AM
Gee, the "experts" were wrong again. Imagine that.
But we are still suppose to believe in Global Warming......er.......I mean Global Cooling........no, that was in the 1970's...........Climate Change!
Mike G| 3.5.13 @ 8:38AM
Oh, but Climate Change is real. After all, the climate has been changing for millions of years. It's awfully arrogant of us to think we can stop it.
cicero| 3.5.13 @ 8:28AM
Hey guys, get real. Without a "sky is falling" theory floating around, how would the liberal ruling class convince you to part with your hard earned wealth? If we working stiffs told them to go pound sand, they would have to find something useful, and maybe hard, to do in order to earn a living. Then we would have to deal with all those fake invalids sitting on their legs, with a begging cup in their outstretched hands, reciting the poetry of Maya Angelou.
This way, they make up a crisis - peak oil, global whatever - and they get us to give them our money to solve the problem for us. Nice job if you can get it. The really clever ones never even have to leave the house. They mail out pictures of cute baby animals, and trick the hoi poloi into sending them money to save those little guys. This is great, because for every cute little baby polar bear you pay to save, that bear will make a living killing and eating all those cute little baby seals you sent money to save last week. Something about "a fool and his money" comes to mind.
Maybe if we started teaching real science starting in the 1st grade, the next generation would be better prepared to fend off the charlatans. But, given our current educational system, there is not much chance of that.
Kwan| 3.5.13 @ 9:56AM
Leftist propagandists continue to manufacture the lie that the planet's oil reserves will soon be depleted and therefore we must turn to "Hippie Commune" energy sources like wind, solar, and cockroach guano. Yet more and more scientists are starting to believe that oil is actually manufactured at the earth's core and not the result of decomposed plant and animal life. This would make oil a resource that would never be exhausted. Read Gary Kent Boyd's article "Oil Is Being Produced At The Earth's Core" for a fuller explanation. http://ezinearticles.com/?Oil-.....id=6256804
sickofit5| 3.5.13 @ 10:00AM
It's about changing the power structure. Demonize and diminish big oil's role in the economy and you take them and their money out of the political process. Create a new player who is indebted to you, i.e. Big Green and you can rule in perpetuity. Goodbye to the 10 million jobs big oil provides.
sickofit5| 3.5.13 @ 10:00AM
It's about changing the power structure. Demonize and diminish big oil's role in the economy and you take them and their money out of the political process. Create a new player who is indebted to you, i.e. Big Green and you can rule in perpetuity. Goodbye to the 10 million jobs big oil provides.
Peppermint Tea | 3.5.13 @ 10:22AM
"The Future ain't what it used to be." Yogi Berra.
So when will the NY Times admit Sarah Palin was right?
Don't hold your breathe. Some things never change.
SUBVET| 3.5.13 @ 10:28AM
I remember years back when the subject of drilling for oil in the US came up one of the reasons was it would take to long to get it to the consumer. We need to "find it" and then have to build refineries...it would take to long. If we had commited to drilling and building back then our gas wouldn't be $4.80 a gal.
Want to know the truth goggle.... Lindsey Williams "the energy non-crisis".
JD| 3.5.13 @ 12:12PM
That was absurd from the start, for several reasons.
First, misnamed "green energy" takes far longer to get to the consumer. How long will it take (if we continue to throw billions of tax dollars at it) to build enough wind/solar to produce a statistically significant portion of our nation's energy? A lot longer than it takes to start new oil projects.
Second, Obama and his ilk were quick to blame "speculation" for price increases. This showed their profound ignorance of basic economics, since speculators buy and sell based on understandings of underlying realities - if they thought oil was overpriced they'd be selling, not buying, and that would lower the price! But IF Obama was right and speculation was the problem, then announcing expanded drilling would be the answer. When there are rumors of a corporate buyout, does the stock price change immediately or wait for the rumors to become reality? It changes immediately. So too would rumors of expanded drilling impact speculator behavior immediately - it would cause them to sell and lower prices. Immediately.
But in the end, what saved us was none of the above. What saved us was fracking. Fracking makes use of existing, already-approved wells, so there was no need to pierce Washington's gridlock to start it. In fact, Lefties dishonestly call it "dangerously unregulated" precisely because no regulators had to give their approvals to start fracking an existing well (all other regulations still apply, but no matter).
JP| 3.5.13 @ 10:32AM
In Austrailia, geologists found one of the largest oil reserves in recent history. The reserves dwarf even Saudi Arabia's. In the UK, shale NG exists in large quantities. It seems everywhere we go we are finding new sources of energy.
JD| 3.5.13 @ 12:16PM
It's not actually so much about "finding" new oil. It's about improvements in our ability to get it.
The Homestake Gold Mine of western South Dakota closed about 10 years ago after having produced more gold than any other mine in the western hemisphere. It was not out of gold. Rather, the gold was so far underground, and so hard to get, that it cost more to retrieve it than it was worth.
So too much of the world's oil costs more to retrieve than it could sell for. When the size of "proven reserves" is printed, it counts only that oil which we believe we can obtain profitably.
But what if improvements in technology make it cheaper to retrieve oil? Suddenly that which wasn't worth retrieving could become worth retrieving! We can increase the amount of viable oil in the ground without actually finding any new oil at all.
And that's what's been happening. Shale oil - retrieved via fracking - was always known to be there, but was never counted in our "oil reserves" because we couldn't get it. Now we can. Our reserves have increased in size by an order of magnitude as a result - not because we found new oil, but because we learned to get out of the ground!
JP| 3.5.13 @ 12:54PM
So, if you are correct, there's been 3 decades of misreporting from the geologists, the energy dept, and etc... I'm not saying you're wrong. But the story I read on Austrailian find reported the findings as newly discovered. Ditto for the "newer" sources in Ohio and Pennsylvania.
JD| 3.5.13 @ 2:13PM
I'm not saying that new oil is never found. I'm just saying that a lot of oil that already existed has been honestly classified as irretrievable (with current technology).
It's the people who misuse these facts who we should be upset with.
Kingofthenet| 3.5.13 @ 12:39PM
Sure, there will NEVER be a time that we have used up more oil then is left, after all we have NEW oil forming all the time the NEXT batch is due in a mere 10 million years.
JD| 3.5.13 @ 12:41PM
Straw man arguments are the only arguments the Left ever uses.
Kingofthenet| 3.5.13 @ 12:50PM
How is the fact that every drop we use can't be replaced a straw man?
JP| 3.5.13 @ 12:57PM
Oil prices are very susceptible to supplies. If oil companies discovered that the known reserves in Saudi will last only a few more decades, and that the costs of extracting what's left would be going up every single year, oil prices would surge overnight to over $200/barrel.
Currently the domestic oil production is running so high that our few refineries cannot keep up. Of course, that's another story.
JD| 3.5.13 @ 1:42PM
Despite the fact that Leftists exclusively use straw man arguments, when I point this out, they consistently demonstrate that they have no idea what the term "straw man argument" means.
A straw man argument is the suggestion that your opponent believes something that he does not actually believe. The straw man suggests a position which is weak and easily defeatable, in contrast to the person's actual belief, which is considerably harder to defeat.
In this case, you claim that this article and its supporters believe that the earth will forever create oil faster than we use it. This is no one's belief. It is a straw man.
As is clearly stated on the middle of the first page of the article, there is still an understanding that oil is a finite resource. However, the belief is that it will last a very long time - longer than we expect to continue to have need for it.
Kingofthenet| 3.5.13 @ 1:54PM
Well the idea of "Peak Oil' isn't that we are going to run dry, but that prices on a dwindling resource are going to get more and more expensive. We can see that happening ALREADY. You Conservatives fail to understand that 'Deep Water' drilling ONLY makes sense if prices are high, you can deep water drill gas at $1.00 a gallon, it doesn't make economic sense. Those of us Libs who are advocating for energy efficiency and TRUE costs of products(Environmental damage and pollution and damage to human health MUST be factored in) see when you do that clean energy look a lot better
JD| 3.5.13 @ 2:10PM
So... yeah, your post at 12:39PM was a straw man.
And in case you missed the last few years, there's this thing called fracking that's far more economical than deep water drilling, which was only ever on the table because Leftists banned drilling in other places. Fortunately, we can frack all the old wells without any new Leftist regulatory hindrances.
As for advocating that people pay the true cost of things, that's our game, not yours. You only claim it selectively when you think you can use it to win support for your agenda.
You certainly don't want solar and wind to pay their true costs, as evidenced by your demand for large subsidies. You don't care that nuclear is the most cost-effective low emission technology out there. And you have an army of drones making up lies about fracking that are disproved at every turn, to say nothing of the general exaggerations and lack of context surrounding "emissions."
If I had a nickel for every time one of you told me a coal-powered electric car was "zero emission"...
And please, don't try to counter with the "billions in subsidies for big oil." I oppose any selective treatment through the tax code, but the reality is that all give big oil companies pay very high global effective tax rates. A "subsidy" that reduces taxes from 43% to 41% can't be honestly compared to the subsidies for wind and solar, which supply MOST of their REVENUE.
RFisher66| 3.5.13 @ 4:44PM
It's kind of like the difference between government giving out welfare checks expecting nothing in return but your vote as compared to giving the same amount of money to me when I got out of the Marines to go to college. The guy getting the welfare check still hasn't payed back the "investment" (the Lefts word for spending my money on someone else, not mine) that the government made in him. I, on the other hand, took the "handout", got a college degree and paid it back in taxes due to a much better job over a 35 year working career. Now, you could say that the government gave me a handout, and you would be right, but it was with the idea that I would pay back in spades what they gave me. The oil companies are no different. Sure, we give them a tax break but they pay billions and billions more in taxes than we ever give them. Now, how much have your supposed "Green Energy" companies given back of the billions we have given them? Not a cent, not one red cent. Why? Because you have government trying to decide energy policy rather than actual experts in the private sector.
RFisher66| 3.5.13 @ 4:27PM
King, and just how do you come to that conclusion? Every day is a million or 10 million years from some day in the past when whatever generates oil started the process. So, a drop used today that started to be formed 10 million years ago is replaced by a drop tomorrow that was formed the next day. Get a clue.
RFisher66| 3.5.13 @ 4:31PM
This all proves one thing that seems to be lost in the debate. Private enterprise will make new sources of energy available if and when it makes economic sense. Government will throw our money at a dart board hoping that something works out. When it doesn't, they learn nothing and throw another dart. If it hits the same spot, then obviously we just didn't throw enough money at it the first time.
JR| 3.5.13 @ 6:51PM
In an issue of Popular Mechanics last year, the author stated that since 2001, gasoline consumption in this country has decreased by nearly 50%! To hear the naysayers tell it, our consumption is nothing short of gluttoness. Now, if only govt would back off, this country could really start humming well into the future!
Mnestheus| 3.6.13 @ 3:18AM
Tracy should tahe a hard look at how the quality of available oil has declined , as well as the size of reserves.
Much of the polycyclic goo American refineries subsist upon would have been unmerchantable on our shores a generation ago- he that toucheth tar sand had better have a good oncologist on call.