Tag Archives: energy

Peak Oil? Maybe Not

The hardest thing about living in the reality-based community is that you have to change your mind when new facts emerge. Lately, after a several-year flat period, global oil production has started growing again. The trend has reached the point where people who backed the Peak Oil Theory a few years ago are publicly changing their minds.

Here’s what George Monbiot wrote a few weeks ago in The Guardian:

Some of us made vague predictions, others were more specific. In all cases we were wrong. … Peak oil has not happened and it is unlikely to happen for a very long time. A report by the oil executive, Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun.

In Foreign Policy, Steve Levine is proclaiming “new age of fossil fuel abundance” and assessing the global winners (the U.S. and a variety of “new petrostates”) and losers (Russia, Venezuela, and OPEC).

My cynical first reaction was to check the sources for phony Exxon-funded think tanks, but that’s not what I’m finding. This looks legit to me.

Economists vs. ecologists. I view peak oil as one more chapter in the decades-long debate between ecologists (who know that in the natural world exponential growth always ends, and so worry that unlimited economic growth makes unsustainable claims on the planet’s resources) and economists (who have two unshakeable beliefs: handling scarcity is exactly what markets are designed to do, and human ingenuity is the one resource we will never run out of).

It’s an asymmetric debate: The economists are almost always right and we muddle along without catastrophe. But catastrophes being what they are, the ecologists only need to be right once. If civilization does go off a cliff someday, it won’t be much comfort to remember all the previous cliffs we avoided.

So a typical ecologist/economist debate goes like this: The ecologist says, “We only have X amount of commodity Y, and we’re using up Z of it every year. So unless we change our ways, it will all be gone in X/Z years, give or take. And if consumption keeps growing exponentially, it will all be gone even faster.” And the economist says, “Chill. In X/Z years we’ll have so many new discoveries, new technologies, and new ways of doing things that it won’t matter.”

Bad bets. The debate starting getting mass-media attention when the Club of Rome published The Limits to Growth in 1972. The report didn’t actually predict the world’s oil would run out by 1992, but that was the easiest headline to write. Those headlines generated a lot of panic, and (needless to say) 1992 came and went a long time ago. Every resource-depletion debate since has included an economist crowing about The Limits to Growth.

The classic economist-beats-ecologist story is the Simon/Ehrlich bet. In 1980, economist Julian Simon made the kind of put-your-money-where-your-mouth-is challenge that probably ought to happen more often: Pick any five commodities you want, Simon offered, and I’ll bet you that in 10 years they’ll be cheaper than they are now. Paul Ehrlich took the bet, picked chromium, copper, nickel, tin, and tungsten — and lost. All five were more plentiful and cost less in 1990, and Ehrlich paid up.

Peak oil. So why did anybody think oil production would peak?

Production from individual oil fields follows a well-established pattern: It starts slow, ramps up as more wells are sunk, then eventually peaks and declines. The production peak usually happens when about half the oil is still in the ground.

In the 1950s, geologist M. King Hubbard asked the question: What if we think of the United States as one big oil field? He used the single-oil-field model to predict U.S. oil production would peak between 1965 and 1970, which it did.

Hubbard extended his model to predict a world peak in 1995, and his protege Kenneth Deffeyes later updated it to get a peak sometime around 2005-2010, which for a while seemed to be accurate. The prediction graphs looked like this:

But recent production has moved above the Hubbard curve. At least for now, the price spike of 2008 seems to have done what the economists say price spikes are supposed to do: encourage conservation and stimulate production.

So now we’re seeing world oil production graphs like this:

(Notice production flattening out from 2005 to 2009.) Meanwhile, the supply of natural gas in the U.S. is booming (thanks mainly to fracking), and the price has collapsed.

Why didn’t the prediction hold? All along, the speculative part of the Peak Oil theory was that you could extrapolate from the well-supported model of oil field depletion to the depletion of oil on the whole planet. The fact that Hubbard did so well with his U.S. peak prediction made that problem seem smaller than it was.

The economists’ argument was always that as the price went up, new fields and production techniques that hadn’t been tried (because they were too expensive) would come into play. The ecologists responded, “Why didn’t that happen in when U.S. production peaked?”

In retrospect, the answer to that question is obvious: It didn’t happen because there was somewhere else to go. When production peaks in one oil field or even one country, the easiest thing to do isn’t to invent new techniques, it’s to take your old techniques somewhere where they still work. But when there’s nowhere to go, you get creative.

Global warming. In some ways, peak oil was a convenient theory for environmentalists: If we need to shift away from oil anyway, then why not deal with global warming at the same time by developing more sustainable energy sources? (Of course, the debate could have gone the other way: If we’re running out of dirty oil, then maybe we should use even dirtier coal.)

Now, environmentalists who worry about civilization’s carbon footprint are on their own; they won’t get any help from the geologists. Monbiot observes:

There is enough oil in the ground to deep-fry the lot of us and no obvious means to prevail upon governments and industry to leave it in the ground.

More and more it looks like that’s what needs to happen: Somebody who owns a king’s ransom of oil in the ground needs to be persuaded to leave it there. How exactly are we going to do that?

The resource we really do seem to be running out of is the atmosphere’s ability to absorb carbon dioxide while maintaining a biosphere productive enough to support a human population now expected to grow beyond 10 billion. That resource is not conveniently expressible as the price of a commodity, so it’s not clear exactly how markets will deal with it.

So the ecologist/economist debate will continue. And the ecologists only have to be right once.

Slinging Mud at Clean Energy and other short notes

For years, the worst thing you’d hear about wind, solar, and biofuels was that they were impractical; fun to dream about, but when you got serious about energy you’d come back to fossil fuels. Now, though, as more and more farmers plow around the windmills in their fields and businesses and homeowners see real savings from the solar panels on their roofs, the dirty-energy industries realize they’re going to have to get nastier.

The Guardian recently published an internal memo from the American Traditions Institute (a shadowy non-profit apparently funded by the fossil-fuel industry) planning (as the Checks and Balances Project put it) “a coordinated national disinformation campaign against wind energy”.

Among its main recommendations, the proposal calls for a national PR campaign aimed at causing “subversion in message of industry so that it effectively becomes so bad that no one wants to admit in public they are for it.”

ATI denies that the memo is official — no conspiracy, just an ATI senior fellow acting as a lone gunman — but adds “we would be pleased to be part of any education campaign to inform the public about the problems with expensive, unreliable wind energy”.

Put this together with the efforts to manufacture a scandal out of the Solyndra bankruptcy, the twisting of research to claim that windmills actually cause global warming, and congressional Republicans’ attempt to end the Pentagon’s bio-fuels projects. (Some Democrats on the Senate Armed Services Committee must have sided with Republicans in a closed-session 13-12 vote agreeing with the House.) It’s looking like alternative energy is about to join global warming in the culture wars: If you believe that clean energy is actually clean and provides energy, you must be one of those radical Marxists.

This Memorial Day, I’m proud of Vice President Biden. Speaking to a group of family members of fallen American troops, Biden recalled the day he heard that his wife and daughter had been killed in a car accident.

For the first time in my life I understood how someone could consciously decide to commit suicide. Not because they were deranged, not because they were nuts, but because they’d been to the top of the mountain, and they just knew in their heart that they’d never get there again. …

There really is hope. … I promise you (and you parents as well) when the thought of your son or daughter or your husband or wife brings a smile to your lips before it brings a tear to your eye — it will happen. … The only thing I have more experience than you in is this: I’m telling you, it will come.

On the surface, it looked like President Obama was doing nothing substantial for same-sex marriage: He said he favors it personally, but that it should be a state issue rather than an action item for his administration.

Sometimes, though, that bully-pulpit thing really works. It’s not obvious how much influence Obama’s statement had on the NAACP passing a resolution framing marriage equality as an “equal protection under the law” issue, but between the two of them, they seem to have dramatically shifted the opinion of the African-American community.

Middle Class Economist observes: “Romney to Replace Obamacare with…Essentially Nothing

Mitt Romney seems to think that criticizing his record as a vulture capitalist is the same as criticizing the free enterprise system.

Grist calls attention to the way the fossil-fuel industry games the academic system. A fracking-is-getting-safer report from the University of Buffalo actually came from somewhere else:

Large chunks of the report appear to be lifted verbatim from a document previously published by three of the report’s four authors for a conservative think tank called the Manhattan Institute. This matters because the university study fails to cite the think tank. In this case, it’s very relevant: The Manhattan Institute receives financial support from oil and gas companies heavily invested in fracking, like ExxonMobil. Instead, the study released this month is stamped only with the University of Buffalo’s academic imprimatur.

Kevin Connor, director of the Public Accountability Initiative, put it bluntly:

The report’s inaccurate and biased analysis and the authors’ conflicts of interest suggest that the University at Buffalo is being used as an academic front for gas industry misinformation, rather than as a venue for independent, informative analysis.

I’ve talked about this kind of thing in more detail before. There needs to be a name for it, preferably something related to money laundering: information laundering? research laundering? I’m still working on it.