The Best of Lee: Peak Oil

Writing about Venezuela’s oil crash reminded me of this great post from Lee in which he destroyed the very notion of Peak Oil. You should read the whole thing, but here’s an excerpt:

In the late 1970s my cousin, who was at the time in her late teens or early 20s, came to visit my family in Australia. My father, as most of you know, was in the oil business, specifically the drilling aspect. He knew all there was to know about getting oil out of the ground. My cousin, a good soul, expressed great concern that “within ten years” the world’s supply of oil would be depleted, and regaled him with the horror stories of global doom that would accompany this eventuality. My father listened to her, then patiently explained how she had no idea what she was talking about, that her head had been filled full of mush by leftist professors, and the idea that the world would ever “run out” of oil is absurd. Remember, this was thirty years ago that we were “ten years” away from running out of oil. Oddly enough, we’re still now “ten years” away from running out of oil.

The difficult argument is to explain to people, calmly and rationally, the situation with oil. The easy thing to do is terrify people into thinking that, just like sucking on a milkshake, one day we’re just going to run out. As I’ve said before, technological advances will make oil obsolete long before we ever actually run out of it. If oil were actually in any danger of running out any time soon it would be $500,000 a barrel instead of $100. (That’s freshman economics, folks. Everyone should understand that.)

We need to develop clean technologies. We need electric cars. We need to be concerned with global warming and the environment. These are all legitimate, and you will find no bigger proponent of finding solutions to these problems than me. But what I refuse to do is buy into the Chicken Little syndrome whereby I wail and screech about how the world is going to end if I don’t support a particular political proposition. Kyoto was a stupid idea when it was first proposed during the Clinton administration, and there’s a reason it was voted down 95-0 in the Senate. (That’s right, liberals, not one member of the Democrats voted in favor of it.) But opposing bad legislation does not equal a desire to ignore the problem, it’s a disagreement about the means. And, given the total, utter, abject failure of Kyoto since its ratification the United States seems eerily prescient with its rejection.

Oil will never run out. Ever. There is too much money to be made in the technology industry for the world to keep relying solely on oil. We don’t need nightmares, we don’t need screaming histrionics, we don’t need end of the world scenarios. What we need are smart people taking the problem seriously, and finding workable, reasonable solutions to transition the world from a petroleum economy into the next generation.

Unfortunately, doing things reasonably and sensibly doesn’t win elections. So we’ll continue to have global consensuses on all sorts of things that make no sense.

At the time Lee wrote those words, oil was surging to a record of $145 a barrel. Barack Obama and other Very Wise People told us that we couldn’t drill our way out of this (those were Obama’s literal words). Since then, increased production has dropped the price of oil to $45 a barrel with medium-term forecasts that it will stay in that range. In fact, many environmentalists are now worried that there is too much proven reserve and that using it all would cause very severe global warming.

Doubtless the price of oil will one day go up again as demand surges and some of the current wells run out. And doubtless we will hear panic-mongering from the Peak Oil people. And doubtless we will either find a new source of oil or an economically viable alternative (probably natural gas or nuclear) that will make the entire point moot.

Come to think of it, these moral panics never seem to pan out either, do they?

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  1. Hal_10000 *

    We will never reach peak derp either.  As a friend of mine put it, there are too many stupid fucking people fucking stupidly and having stupid fucking kids.

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  2. CM

    When do we reach Peak Donald? And if The Donald’s proposal for tax increases on hedge fund managers doesn’t dent his support amongst conservatives, does that mean we’re well past Peak Conservatism?

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