May 25, 2008

Peak Oil Doomsayers

It’s hard to keep up with the newest craze in fear mongering but this article alerted me to the “Peak Oil” craze that has hit the Internet. If you didn’t get on the global warming bandwagon here is an issue you can surely embrace. With oil at $125 dollars a barrel and gas at four bucks surely we must be running out of oil and will soon be returning to the 19th century. From today's Cedar Rapids Gazette:

(AP) BUSKIRK, N.Y. — A few years ago, Kathleen Breault was just another suburban grandma, driving countless hours every week, stopping for lunch at McDonald's, buying clothes at the mall, watching TV in the evenings. That was before Breault heard an author talk about the bleak future of the world's oil supply. Now, she's preparing for the world as we know it to disappear...

Convinced the planet's oil supply is dwindling and the world's economies are heading for a crash, some people around the country are moving onto homesteads, learning to live off their land, conserving fuel and, in some cases, stocking up on guns they expect to use to defend themselves and their supplies from desperate crowds of people who didn't prepare.

The exact number of people taking such steps is impossible to determine, but anecdotal evidence suggests that the movement has been gaining momentum in the last few year. (This sentence should have been enough for any self respecting j-school graduate to hit the delete key on this article.)

What makes this newest end day scenario so absurd is that it is so empirically wrong. From Reason Magazine: "The Tank Is Still More Than Half Full"

So who’s right? Fortunately, it looks like humanity is at least a generation away from peak oil production. Unfortunately, there could be another “oil crisis” any day now.
The world consumes about 87 million barrels of oil per day, or nearly 30 billion barrels of oil per year. How much oil is left? It’s hard to be sure. Proven oil reserves i.e., oil that is recoverable under current economic and operating conditions—are estimated to be 1.1 trillion barrels by the industry journal World Oil, 1.2 trillion by the oil company BP, and 1.3 trillion by the Oil and Gas Journal. In March 2005 the private U.K.-based energy consultancy IHS Energy estimated that the world’s remaining recoverable reserves, excluding unconventional sources such as heavy oil or tar sands, are between 1.3 trillion and 2.4 trillion barrels.

But are proven reserves all that’s left? Several analyses put ultimate reserves at much higher levels. For example, the USGS undertook a comprehensive analysis of world oil reserves in 2000. It calculated that the total world endowment of recoverable oil is 3 trillion barrels. (Its figure is higher because it includes estimates for undiscovered resources and projected increases in already producing fields.) In addition, the total world endowment of natural gas is equivalent to 2.6 trillion barrels of oil, plus 330 billion barrels of natural gas liquids such as propane and butane. The USGS figures that the total world endowment of conventional oil resources is equivalent to about 5.9 trillion barrels of oil. Proven reserves of oil, gas, and natural gas liquids are equivalent to 2 trillion barrels of oil. The USGS calculates that humanity has already consumed about 1 trillion barrels of oil equivalent, which means 82 percent of the world’s endowment of oil and gas resources remains to be used.

In its 2005 Energy Outlook, ExxonMobil estimates “global conventional oil resources total 3.2 trillion barrels…with non-conventional ‘frontier’ resources such as heavy oil bringing that total to over 4 trillion barrels.” In November 2005, the International Energy Agency, an organization created in 1974 by 26 industrialized countries to assess global energy issues, released its annual World Energy Outlook report, which accepted the USGS numbers and concluded that “the world’s energy resources are adequate to meet projected growth in energy demand” until at least 2030. The report predicted that oil production would grow from the 2004 level of 82 million barrels a day to 115 million barrels a day and that any “peak” would occur after 2030. It suggested that world oil prices will decline to around $35 per barrel (in 2004 dollars) by 2010 and eventually rise to $39 per barrel by 2030. At the Montreal Climate Change Conference in December, Claude Mandil, head of the International Energy Agency, declared: “We don’t share the tenets of the peak oil theory. We feel that they underestimate technological developments. For many decades to come there is no geological problem.”

Probably the most respected private oil consultancy in the world is Cambridge Energy Research Associates (CERA) in Boston. On December 7, 2005, CERA senior consultant Robert W. Esser testified at a House Energy and Air Quality Subcommittee hearing on the peak oil theory. “CERA’s belief is that the world is not running out of oil imminently or in the near to medium term,” Esser said. “Indeed, CERA projects that world oil production capacity has the potential to rise from 87 million barrels per day [mbd] in 2005 to as much as 108 mbd by 2015.…We see no evidence to suggest a peak before 2020, nor do we see a transparent and technically sound analysis from another source that justifies belief in an imminent peak.” Instead of a sharp peak followed by a production decline, CERA’s analysts foresee an “undulating plateau” in which global oil production remains more or less steady. “It will be a number of decades into this century before we get to an inflection point that will herald the arrival of the undulating plateau,” said Esser.

There will always be people that are sure that we are living in the end times. Heaven knows I have met more than a few but this craze is no different than the UN takeover, black helicopter craze or the current Global Warming bologna, only this one plays on the fears of people that don't know what to make of sudden rise in oil prices and the gloom and doom predictions of the liberal media. A quick perusal of Peak Oil web sites such as “Life After the Oil Crash" finds that they all have one thing in common; they are all hawking books with titles like “Crude Awakening; The Oil Crash”, “The Coming Economic Collapse”, and "Getting Out; Your guide for escaping America” (Is there really anyplace that would be safe in the event of a total economic collapse.) These books are the product of a paranoia industry that bleeds the unwitting and pushes people like Miss Breault over the edge.

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