The Myth of Peak Oil Showing its Age

The Peak Oil myth goes back at least to the early 1900s. Peak Oil experienced strong resurgences in popularity throughout the 1900s, and has grown a particularly loud and insistent following over the past 10 years. Below, I extract from two recent articles from OilPrice.com, a website devoted to the economics of energy.

Debunking the Myth of Peak Oil I (Dennis Eidson)

Over the past 33 years mankind has consumed more than three times the world’s known oil reserves in 1976 – and today proven oil reserves are nearly double what they were before we started. The story with natural gas is even better – here and around the world enormous amounts of natural gas have been found. More will be found. But if you had asked in 1976 what the supply of oil would be like given the demand of 2010, you would have come up with the “Peak Oil” theory then, and we would have supposedly run out of oil decades ago; an ongoing impending crisis.

I think the key to the argument of Peak Oil, is that it not only ignores the huge amounts of oil yet to be found, but other hydrocarbon fuels as well. Even if the “theory” holds water, which I argue on its face (or in your face, as some so delightedly pointed out), we will not be out of hydrocarbons and our cars stranded on the side of the road during this century. This is the perceived “crisis” of Peak Oil that tells us that declining production and increasing demand will cause a disruption in supply.

...Now that oil is $80/bbl, it opens the door to production of different grades of oil and different kinds of oil, and new places that oil was never thought to exist.

America has developed new technologies to develop oil production from the many known shale oil fields containing a trillion barrels of oil, that has never been tapped until two years ago, because it was too expensive to extract, and the technology has not yet been improved enough to tackle it before then. But money solves a lot of problems, and $100/bbl oil would certainly do it. _OilPrice.com

Debunking the Myth of Peak Oil II (Dennis Eidson)

As of 2009, the Potential Gas Committee estimated that the United States has total future recoverable natural gas resources approximately 100 times greater than current annual consumption. These huge reserves are available now, yet largely untapped and unused, and would largely flatten the Peak Oil curve.

Natural gas is converted to barrels of oil equivalent using a ratio of 5,487 cubic feet of natural gas per one barrel of crude oil.

The new technologies in the oil and gas industry, proven just in the past two years, including horizontal drilling, new fracturing methods, and shale production, particularly the new Marcellus Shale play in the Appalachian Basin will greatly revise the above estimates by this one source and this new technology alone, and there are many other known fields waiting to be tapped that are not included in proven reserves. These technologies and methods, and producing from shale formations on a large scale, were unheard of just two or three years ago.

...We have yet to uncover the full potential of the continental shelf regions of shallow offshore production of oil and gas, let alone deepwater regions. And again, new technologies, methods and even sources like natural gas crystals on the sea floor (we are still trying to grapple/comprehend the potential of these crystals), are constantly being found/developed/utilized. New discoveries are made almost every month, yet it often takes years to develop and produce and analyze to compute proven reserves from conventional wells.

EIA estimates the Arctic could hold over 20% of the world’s undiscovered conventional oil and natural gas resources. http://www.eia.doe.gov/oiaf/analysispaper/arctic/index.html.
Also, our own federal park lands and offshore prohibited drill zones contain huge amounts of reserves, and oil companies are constantly lobbying to unlock the bureaucratic access to the bigger finds in Alaska than already exist, but are known to exist; not necessarily to laymen.

...Gasification of coal and ethanol production and liquefaction and other refining methods can also supply over a century of hydrocarbon needs. British Petroleum, in its 2007 report, estimated at 2006 end, there were 909,064 million tons of proven coal reserves worldwide, or 147 years reserves-to-production ratio. This figure only includes reserves classified as "proven". The largest proven reserves are found in the USA. The 930 billion short tons of recoverable coal reserves estimated by the Energy Information Administration are equal to about 4,116 BBOE (billion barrels of oil equivalent.

Electrification of our cars holds potential to spur the decline of Peak Oil, but some other hydrocarbon must be burned to produce the electricity. There is plenty of coal and gas available, but if the gov’t would pull their head out and build more nuclear power plants this would be a cleaner alternative. _OilPrice.com

The author did not really discuss the huge potential of microbial and biomass energies -- which will begin to hit world fuel markets within ten years. Within twenty years -- unless the world is completely immersed within the Obama Dark Ages -- between 30% and 40% of liquid fuels in the developed world will come from biomass and microbial fuels.

Persons who dwell upon resource doom should probably read Julian Simon's The Ultimate Resource. Better late than never.