Can we put this one to rest, people? Investor’s Business Daily weighs in with a blindly optimistic article about peak oil, and why you shouldn’t be worried. I will spend a few minutes dissecting it:
Most fear-mongers are careful not to say we’re running out of oil. They know they can’t get away with it. Instead, they use words such as “crisis” and “peak oil” to insist that in about 30 years, little will remain.
The opening paragraph immediately reveals that the author doesn’t get it. The problem is not the reserves; the problem is the production capability, vs rising demand.
Doomsayers who claim the world is running out of oil are not unique to our time. They’ve been around as long as oil has been used as an energy source.
No shit. Oil is a finite resource. New discoveries have happened regularly in the past; discovery rates have tapered off over the past 10 years, and most of the fields that people are excited about are much harder to reach. That all aside, the argument that “things have always turned up to prove the doomsayers wrong” is facetious; eventually, the doomsayers have to be correct, given, again, that we are talking about a finite resource.
From that peak, Hubbert, whose theory unfortunately gave every doomsayer leave to shriek alarms about the end of oil, believed production would be in perpetual decline. Instead, production actually increased after a short fall-off.
Um, actually, bzzt. American oil production peaked in 1971 (p6), and never recovered. Hubbert was *only* talking about America’s imminent peak, and he was bang on the money; he made a long range forecast for a worldwide peak of 2000 (which, obviously, he was off on). It is true (of course) that there have been short term increases in production, but the overall trend has been a depletion. IBD’s claim here is outright spin.
The fast pace of technological progress, meanwhile, will let the industry find oil it could not see before and to easily extract oil that’s hard to get. Consider the rich reserves held in oil shale.
OK, let’s consider them.
Though it’s expensive to extract, the amount of oil found in mineral deposits in Colorado, Wyoming and Utah is staggering. With possibly as much as 1 trillion recoverable barrels embedded in rock, this field dwarfs the known conventional reserves in Saudi Arabia, where 261 billion barrels burble beneath the sands.
As a point of reference, the U.S. uses about 20 million barrels a day.
Well that’s OK then. Goodie!
It will be a while, though, before much shale oil reaches pumps in the form of gasoline. Rand research indicates it could be at least 12 years “before oil shale development will reach the production growth phase.”
Rand adds that it might take more than 20 years to get a million barrels a day from oil shale. Given the pace of technological advancement, we’d say that’s a bit pessimistic.
WTF??!!!! Again this clearly illustrates that these people don’t know their asses from their elbows. A million barrels per day is *nothing*. As the article itself said, 5 paragraphs above this little bombshell, the US uses 20 million barrels a day, and growth in consumption is all but guaranteed (assuming that production continues to meet demand.) But, no, technology will save us.
Either way, the inescapable fact is we’re not in danger of running out of oil.
In addition to the oil that can be tapped from the shale in those small patches in the American West, several trillion barrels of oil are tucked away in the tar sands of Canada, South America and the Middle East.
Tar sands are just as problematic as shale, as this blog has covered before (search for tar sands). Of course we are not “running out of oil”; that is not the issue. We are close, however, to peaking in our oil production, while our (worldwide) oil consumption grows at a record pace. The problem is not that we are running out of oil, but that we cannot produce enough to go around.
[Link -> http://www.investors.com/editorial/IBDArticles.asp?artsec=20&artnum=2&issue=20050920]
I don’t know much about IBD, but based on this article with its high level of misinformation, I’m not very impressed.