Saturday, January 28, 2012

Are Arguments for Peak Oil Doom Scraping the Bottom of the Barrel?

Are Arguments for Peak Oil Doom Scraping the Bottom of the Barrel? That's what CFR Fellow Michael Levi says in a recent blog post. Levi addresses a recent editorial in Nature claiming that peak oil production has already passed, and that peak oil is already upon us.

Levi demonstrates outright mistakes, mischaracterisations, and shifty reasoning on the part of the peak oilers, and says that the Nature piece is a good example of How Not to Argue that We're Running Out of Oil. One thing that makes Levi's piece interesting is that he himself is a true believer in the carbon hysteria orthodoxy, and agrees with many of the solutions proposed by the authors of the piece which he has set about contradicting. Keep in mind that it is all about the ideas that can be falsified. Everything else is opinion and speculation.

Another interesting response to the Nature editorial comes from North Dakota:
World production of oil peaked in 2008, argue James Murray of University of Washington and David King of Oxford University, in the Nature commentary. It has flattened or declined ever since, as North Dakota and Canadian crude fail to offset production drops elsewhere.

And “if oil production can’t grow, the implication is that the economy can’t grow either,” Murray and King write.

“This is such a frightening prospect that many have simply avoided considering it.”

But, for one thing, the claim that world production peaked in 2008 is arguable. “Oil company BP found in its most recent analysis that oil production was actually more than 82 million barrels per day in 2010, higher than the proposed plateau of 75 million,” a Scientific American analysis reports.

Furthermore, “adjusted for inflation, today’s $100 per barrel is roughly equivalent to prices in 1981,” the Scientific American story continues.

And “in the past 20 years, enough oil has been found to satisfy the demands of two new consumers — China and India — nations that now import more oil than is consumed by Germany and Japan.”

Given that gigantic surge, the fact that inflation-adjusted oil prices match those of 1981 is the market’s way of saying, “Don’t worry.” Because supply is keeping up perfectly well with demand.

And there’s another reason to believe Murray and King are too pessimistic. It’s clear during even a casual visit to Williston, N.D.

As North Dakotans know, Williston and the rest of western North Dakota have been utterly transformed. This transformation is almost entirely due to fracking.

And fracking, of course, is just the latest in a series of innovations that energy explorers have unleashed. These innovations have proven skeptics wrong time and again, from the whale-oil suppliers of 1869 (who mocked the “rock oil” drillers of Pennsylvania), to the 1970s claims of resource depletion and global collapse, to today.

Has that innovating stopped? Where fossil fuels are concerned, have all of the technological breakthroughs been found?

Of course not. As the Bakken boom shows, the greatest resource of all is the one that is in truly inexhaustible supply. The late economist Julian Simon identified it a generation ago: It’s the innovative power of the human mind. _Tom Dennis: There Will Be Oil
Tom Dennis is arguing from the facts on the ground. And he is also pointing out factual errors in the Nature editorial itself, just as Levi does in the CFR blog piece.

What seems clear is that a lot of academics, politicians, intellectuals, assorted opportunists, and media personalities simply hate oil -- or are willing to pretend to to make a buck. They are also willing to bend the facts, or make up entirely new facts out of the air, to support their desired narrative.

Such flimsy arguments have their parallel within the vastly larger and more powerful carbon hysteria orthodoxy, led by the IPCC and abetted by politicians throughout the developed world. But with the coming of Climate Gate, the carbon hysteria orthodoxy is now coming under attack from more legitimate thinkers and scientists.

The same situation is likely to arise if the "peak oil doom" establishment ever grows out of its clownish past and present.



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