Tag: Fossil Fuels

The Best of Lee: Peak Oil

You remember peak oil? Um, yeah:

Oil depletion studies commonly focus on the supply of conventional petroleum without as much attention to the other side of the equation, which is petroleum demand. In this study, we examine the trends affecting demand for conventional oil in the future to see under what conditions “peak demand” for oil might arise. We find that historical trends in oil use lead to a peak in demand for oil by well before mid-century. If concerted effort is made to shift to oil alternatives and promote efficiency, a demand decline may arise even sooner.

Note that this study isn’t talking about windmills and solar panels in particular. It is accounting for the explosion (no pun intended) of “unconventional liquids”, natural gas and biofuels. And they basically believe that conventional oil demand will peak by the 2030’s and then begin to fall off.

In short, our demand for oil is going to peak long before the supply does.

I had a whole post ready for this and then I remembered that the late great Lee wrote it for me five years ago, when he crushed the scares about Peak Oil. I’ll quote at length. Enjoy the brilliance.

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.

You would not believe the number of times I had this conversation with liberal coworkers in California, all of whom believed the peak oil nonsense. It’s a means by which left-leaning people scare other people into supporting environmentalist causes. We heard exactly the same thing in the 1970s about population explosion, how by the turn of the century there would be global starvation due to overpopulation. Oddly enough, not only did this never come to pass, but the exact opposite is true—in the aggregate, people the world over are better fed and living longer lives than at any time in their past.

People just think that one day there’s going to be a huge empty sucking sound coming out of the ground, like what happens when you get to the bottom of a milkshake. People who think this have no grasp of economics or a fundamental grasp of how oil markets work. This isn’t really anyone’s fault, these are specific areas of expertise, and it only makes sense that most people wouldn’t understand them. That being said, the fact that there’s a global consensus about something which most of the globe doesn’t understand thus makes the consensus argument completely worthless.

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.

In case you’re wondering, the current score is something like Lee 525, hysterical ignorant liberals 0.