The Reasoned Review

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From the Summit of Peak Oil

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I would like to draw my readers’ attention to this deceitful little article in yesterday’s New York Times . The editorial, penned by “energy consultant” Michael Lynch, purports to refute fears of Peak Oil. Instead, it reveals Mr. Lynch’s own logical shortcomings and his unwillingness to deviate from a goal of endless consumption. Inadvertently, his article highlights the gravity of the resource issues before us today.

Peak Oil, for those unaware, is a model first devised by geoscientist M. King Hubbert. He predicted, in short, a specific point at which the rate of petroleum extraction would peak (hence, “Peak Oil”), and after which extraction rates would inevitably decline.

In retrospect it should not have been hard to arrive at such a conclusion. Given that only a limited amount of oil exists (the stuff takes millions of years to create), and we extract and burn it at an ever-increasing rate, there should be no controversy in the conclusion that its production will eventually peak and then decline.

The Hubbert Peak Theory suggests that oil production over a geographical area should follow a bell-curve distribution, with a clearly defined peak. Hubbert used this theory, in 1956, to predict that the peak in US oil production would occur from 1956-1970. The US peak occurred in 1970.

US Oil Production and Imports: 1920-2005

US Oil Production and Imports: 1920-2005

Much of the controversy today centers around the timing of the worldwide peak. We know that many countries (India, Iran, the US, Egypt, and others) have already peaked, and everyone is holding their breath to see when worldwide production will do the same. However there are appears to be no dearth of people willing to shill the false optimism that “we’re nowhere near running out of oil” and sell it to a public increasingly desperate for good news.

For a vivid illustration, please read the Times article in the first link. The author employs a classic “strawman” technique; instead of assessing credible fears of resource depletion, he chooses to focus on the concerns of a minority of  “ardent pessimists”, whose position Mr. Lynch caricatures then demolishes with glee.

He reduces concerns of oil depletion thus: “For the most part the peak-oil crowd rests its case on three major claims: that the world is discovering only one barrel for every three or four produced; that political instability in oil-producing countries puts us at an unprecedented risk of having the spigots turned off; and that we have already used half of the two trillion barrels of oil that the earth contained.” So clearly, if he can prove these three arguments tenuous, then free oil shall flow for all!

For the first, he claims that estimates of a decline in new field discovery are based on faulty data, because petroleum engineers tend to under-report the size of newly discovered fields. It is not worth mentioning, apparently, that the rate of new field discovery has sharply dropped – Mr. Lynch contents himself to dismiss this with the vague claim that “The combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years.” – a fact I have not the knowledge to dispute, but have the wisdom to distrust.

Mr. Lynch gives the second claim only a few lines. Fears over oil inflation in the ’70s (after the oil embargo), the’80s (after the Iranian Revolution), and today (after the Iraq War) have not come to pass – thus, he argues, political instability has a negligible effect on oil prices. Had Peak Oil activists truly taken “political instability” as an argument for their ideas, surely Mr. Lynch would have scored his point. However, Mr. Lynch gets it entirely backwards. The “political instability” to which he refers is invariably caused by the United States. He ends up making this opponents’ point.

Peak Oil protesters bewail the horrific foreign policy the US must resort to in order to secure cheap oil, not the “political instability” that threatens it. Iran in 1953, Iraq, Afghanistan, Saudi Arabia – those countries have all bent to US will, one way or another. This oil-driven foreign policy is what the Peak Oil movement points to as a symptom of resource depletion. Of course, Mr. Lynch is incapable of seeing that – his viewpoint is utterly fixated upon dollars. Since the price of oil has gone down, it must not be scarce. Mr. Lynch is fully content to ignore the fact that the US purchased low oil prices for itself in Arab blood. Europe, for instance, pays almost double what we do for oil.

Finally, Mr. Lynch’s dismissal of the Peak Oil claim that only 2 Trillion total barrels of oil exists (two-thirds of which we have already depleted), is only one line. “Actually, the consensus among geologists is that there are some 10 trillion barrels out there.” That takes care of that. He provided, of course, no source for that figure – we are to take his word for it.

At the end of his article, Mr. Lynch declares that “Oil remains abundant”, and suggests tar sand as a suitable alternative.

Apparently the man has never heard of climate change. Indeed, the whole article stinks of a pro-consumption, pro-waste philosophy. Its most insidious aspect is the blindness it imposes upon the average, newspaper-reading person, who will no doubt be content to take The Times’ word on this issue. Meanwhile, oil runs our entire society, in every aspect of the word. We literally cannot eat without oil. It is dastardly and irresponsible to shove the very real problem of depletion aside for future generations to deal with while we exult today in the “abundance” of oil.

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Written by pavanvan

August 26, 2009 at 11:48 pm

2 Responses

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  1. this article sheds light on an huge problem inherent to newspapers and television news – factual statements need not (and in many cases cannot) be backed up with citations that the average reader can check.

    blogs, to their credit, as yours has shown, are fully capable of using links to provide evidence.

    Aditya

    August 29, 2009 at 11:38 pm

  2. I do not doubt that oil reserves are much greater than what we know of now, but it does not negate the argument of peak-oil. It only delays the real effects on our economies and lifestyles. European taxes on oil work to premeditate those effects, but American (and maybe Chinese) inability to tax oil at higher rates promote more demand and lessen incentives to find alternatives.

    ibeconomics

    August 31, 2009 at 2:44 pm


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