‘Peak Oil’ Is a Myth & Waste of Energy

Discussion in 'Economics' started by ByLoSellHi, Aug 25, 2009.

  1. http://www.nytimes.com/2009/08/25/opinion/25lynch.html

    ‘Peak Oil’ Is a Waste of Energy

    Published: August 24, 2009

    Amherst, Mass.

    Michael Lynch, the former director for Asian energy and security at the Center for International Studies at the Massachusetts Institute of Technology, is an energy consultant.

    REMEMBER “peak oil”? It’s the theory that geological scarcity will at some point make it impossible for global petroleum production to avoid falling, heralding the end of the oil age and, potentially, economic catastrophe. Well, just when we thought that the collapse in oil prices since last summer had put an end to such talk, along comes Fatih Birol, the top economist at the International Energy Agency, to insist that we’ll reach the peak moment in 10 years, a decade sooner than most previous predictions (although a few ardent pessimists believe the moment of no return has already come and gone).

    Like many Malthusian beliefs, peak oil theory has been promoted by a motivated group of scientists and laymen who base their conclusions on poor analyses of data and misinterpretations of technical material. But because the news media and prominent figures like James Schlesinger, a former secretary of energy, and the oilman T. Boone Pickens have taken peak oil seriously, the public is understandably alarmed.


    A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again: the founder of the Association for the Study of Peak Oil first claimed in 1989 that the peak had already been reached, and Mr. Schlesinger argued a decade earlier that production was unlikely to ever go much higher.

    Mr. Birol isn’t the only one still worrying. One leading proponent of peak oil, the writer Paul Roberts, recently expressed shock to discover that the liquid coming out of the Ghawar Field in Saudi Arabia, the world’s largest known deposit, is around 35 percent water and rising. But this is hardly a concern — the buildup is caused by the Saudis pumping seawater into the field to keep pressure up and make extraction easier. The global average for water in oil field yields is estimated to be as high as 75 percent.

    Another critic, a prominent consultant and investor named Matthew Simmons, has raised concerns over oil engineers using “fuzzy logic” to estimate reservoir holdings. But fuzzy logic is a programming method that has been used since I was in graduate school in situations where the factors are hazy and variable — everything from physical science to international relations — and its track record in oil geology has been quite good.

    But those are just the latest arguments — for the most part the peak-oil crowd rests its case on three major claims: that the world is discovering only one barrel for every three or four produced; that political instability in oil-producing countries puts us at an unprecedented risk of having the spigots turned off; and that we have already used half of the two trillion barrels of oil that the earth contained.

    Let’s take the rate-of-discovery argument first: it is a statement that reflects ignorance of industry terminology. When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time. But as years pass, the estimate is almost always revised upward, either because more pockets of oil are found in the field or because new technology makes it possible to extract oil that was previously unreachable. Yet because petroleum geologists don’t report that additional recoverable oil as “newly discovered,” the peak oil advocates tend to ignore it. In truth, the combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years.

    A related argument — that the “easy oil” is gone and that extraction can only become more difficult and cost-ineffective — should be recognized as vague and irrelevant. Drillers in Persia a century ago certainly didn’t consider their work easy, and the mechanized, computerized industry of today is a far sight from 19th-century mule-drawn rigs. Hundreds of fields that produce “easy oil” today were once thought technologically unreachable.

    The latest acorn in the discovery debate is a recent increase in the overall estimated rate at which production is declining in large oil fields. This is assumed to be the result of the “superstraw” technologies that have become dominant over the past decade, which can drain fields faster than ever. True, because quicker extraction causes the fluid pressure in the field to drop rapidly, the wells become less and less productive over time. But this declining return on individual wells doesn’t necessarily mean that whole fields are being cleaned out. As the Saudis have proved in recent years at Ghawar, additional investment — to find new deposits and drill new wells — can keep a field’s overall production from falling.

    When their shaky claims on geology are exposed, the peak-oil advocates tend to argue that today’s geopolitical instability needs to be taken into consideration. But political risk is hardly new: a leading Communist labor organizer in the Baku oil industry in the early 1900s would later be known to the world as Josef Stalin.

    When the large supply disruptions of 1973 and 1979 led to skyrocketing prices, nearly all oil experts said the underlying cause was resource scarcity and that prices would go ever higher in the future. The oil companies diversified their investments — Mobil even started buying up department stores! — and President Jimmy Carter pushed for the development of synthetic fuels like shale oil, arguing that markets were too myopic to realize the imminent need for substitutes. All sorts of policy wonks, energy consultants and Nobel-prize-winning economists jumped on the bandwagon to explain that prices would only go up — even though they had never done so historically. Prices instead proceeded to slide for two decades, rather as the tide ignored King Canute.

    Just as, in the 1970s, it was the Arab oil embargo and the Iranian Revolution, today it is the invasion of Iraq and instability in Venezuela and Nigeria. But the solution, as ever, is for the industry to shift investment into new regions, and that’s what it is doing. Yet peak-oil advocates take advantage of the inevitable delay in bringing this new production on line to claim that global production is on an irreversible decline.

    In the end, perhaps the most misleading claim of the peak-oil advocates is that the earth was endowed with only 2 trillion barrels of “recoverable” oil. Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent — another 2.5 trillion barrels — in an economically viable way. And this doesn’t even include such potential sources as tar sands, which in time we may be able to efficiently tap.

    Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward in the deep waters off West Africa and Latin America, in East Africa, and perhaps in the Bakken oil shale fields of Montana and North Dakota. But that may not keep the Chicken Littles from convincing policymakers in Washington and elsewhere that oil, being finite, must increase in price. (That’s the logic that led the Carter administration to create the Synthetic Fuels Corporation, a $3 billion boondoggle that never produced a gallon of useable fuel.)

    This is not to say that we shouldn’t keep looking for other cost-effective, low-pollution energy sources — why not broaden our options? But we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.
  2. fhl


    ..and not only those reasons, but if you really want to get into it, do some research on just how certain we are about whether it's a "fossil" fuel.

    If it's fossil, people can say it will run out. If it's not a fossil fuel, there goes their argument.

    Just sayin...
  3. xenix


    Great article. That's what my gut has always told me, but, being a gut, it's not too articulate.

    Need smart head . . . make words . . . (rumble)

    What I like is the fact that the argument gets shot down before you even mention LNG or coal gassification The latter probably isn't a great choice given the current tech, but necessity is a mother, or something.

    We've got NG out the bung hole. Imagine how much is left to be discovered if we're ever really motivated.
    Good point. There was one scientist who, about 25 years ago, swore that it was created by subterraean archaea bacteria (aka extremophiles). Everybody laughed at him. But even under a couple miles of Antarctic ice there are living bacteria that manage to eke out a living. I haven't read anything in years, but I guessing not too many people are laughing now.
  4. I'm not surprised you said this. You must be one of the abiotic school of thought quacks. Or maybe Jesus continually makes the stuff.

    The article above is a farce.
  5. Be careful following this guy.

    He did his anti-peak oil song and dance in Forbes on Oct. 2, 2006.

    "Don't sell that SUV just yet. Oil, at a recent $66.50 a barrel, will fall to $45 by mid-2007 and could dip briefly into the 20s in 2008."

    Crude was around $61/bbl. on 10/02/06.

    Three months later, it traded down to around $58/bbl.

    Three months later, $65/bbl.

    Three months later (July 2, 2007 - i.e., "mid 2007") $71/bbl. ... Juuuust a bit outside of $45/bbl. ....

    A year after his song and dance, $80/bbl.

    Three months after that, $99/bbl.

    You get the picture.

    I don't care whether or not you believe in peak oil or not.

    But if you want to go hardcore "anti-peak oil" - Michael Lynch is not the cheerleader you want to give your "poms poms" to ... I'm just sayin' ...
  6. logikos


    This is absolutely plausible. I have read some arguments that oil, is in fact, a renewable resource and that it is produced deep in the earth. The article cited an old oil field off the coast of Louisiana that was pumped dry, but since had replenished itself.

    "Scarcity" is a scary word and can be used as a control mechanism. So far, most people have bought it.
  7. achilles28


    Peak oil is fiction designed to scare-up energy prices and usher-in scarcity via CO2 legislation.

    Hydrocarbons are abiotic - created under a planets mantle = pressure + heat + carbon + other elements = oil. That's scientific fact.

    Jupiter, Saturn, and notably, Titan, Saturns Moon, hold vast quantities of Natural Gas (Methane).

    Apparently, dinosaurs somehow mastered space-travel and managed to populate Titan, then die-off before humans came on the scene. "Fossil Fuel"....

    Oh yea, and man-made Global warming is junk science of the same caliber. The SUN burns in cyclical intensity (read: sun spots), that vary every 14-20 years, or so. This too, is also proven by similar climatic changes (heating up) of the celestial bodies that inhabit our solar system.
  8. achilles28



    ........Please explain the existence of hydrocarbons on 3 planets devoid of life, in this solar system alone??? Dinosaurs must have built spaceships and colonized the planets!:eek: :eek: :D
  9. The abiotic process in question is fundamental to evolutionary development. No abiotic, no Darwin.

    That it happens is indisputable, as it has been observed and can be replicated. The principle question left is whether it happens on a large enough scale to be meaningful. Time will tell...

    EDIT: should clarify that "time will tell" for planet Earth - as the other poster pointed out, it is clear as day that there is a non-biological way of generating hydrocarbons as planets/moons without any evidence of life of any kind are swimming in combustible hydrocarbons.

  10. The fact remains that the abiotic theory of petroleum genesis has zero credibility for economically interesting accumulations. 99.9999% of the world's liquid hydrocarbons are produced by maturation of organic matter derived from organisms. To deny this means you have to come up with good explanations for the following observations.

    1) The almost universal association of petroleum with sedimentary rocks.

    2) The close link between petroleum reservoirs and source rocks as shown by biomarkers (the source rocks contain the same organic markers as the petroleum, essentially chemically fingerprinting the two).

    3) The consistent variation of biomarkers in petroleum in accordance with the history of life on earth (biomarkers indicative of land plants are found only in Devonian and younger rocks, that formed by marine plankton only in Neoproterozoic and younger rocks, the oldest oils containing only biomarkers of bacteria).

    3) The close link between the biomarkers in source rock and depositional environment (source rocks containing biomarkers of land plants are found only in terrestrial and shallow marine sediments, those indicating marine conditions only in marine sediments, those from hypersaline lakes containing only bacterial biomarkers).

    4) Progressive destruction of oil when heated to over 100 degrees (precluding formation and/or migration at high temperatures as implied by the abiogenic postulate).

    5) The generation of petroleum from kerogen on heating in the laboratory (complete with biomarkers), as suggested by the biogenic theory.

    6) The strong enrichment in C12 of petroleum indicative of biological fractionation (no inorganic process can cause anything like the fractionation of light carbon that is seen in petroleum).

    7) The location of petroleum reservoirs down the hydraulic gradient from the source rocks in many cases (those which are not are in areas where there is clear evidence of post migration tectonism).

    8 ) The almost complete absence of significant petroleum occurrences in igneous and metamorphic rocks (the rare exceptions discussed below).

    The evidence usually cited in favour of abiogenic petroleum can all be better explained by the biogenic hypothesis e.g.:

    9) Rare traces of cooked pyrobitumens in igneous rocks (better explained by reaction with organic rich country rocks, with which the pyrobitumens can usually be tied).

    10) Rare traces of cooked pyrobitumens in metamorphic rocks (better explained by metamorphism of residual hydrocarbons in the protolith).

    11) The very rare occurrence of small hydrocarbon accumulations in igneous or metamorphic rocks (in every case these are adjacent to organic rich sedimentary rocks to which the hydrocarbons can be tied via biomarkers).

    12) The presence of undoubted mantle derived gases (such as He and some CO2) in some natural gas (there is no reason why gas accumulations must be all from one source, given that some petroleum fields are of mixed provenance it is inevitable that some mantle gas contamination of biogenic hydrocarbons will occur under some circumstances).

    13) The presence of traces of hydrocarbons in deep wells in crystalline rock (these can be formed by a range of processes, including metamorphic synthesis by the fischer-tropsch reaction, or from residual organic matter as in 10).

    14) Traces of hydrocarbon gases in magma volatiles (in most cases magmas ascend through sedimentary succession, any organic matter present will be thermally cracked and some will be incorporated into the volatile phase, some fischer-tropsch synthesis can also occur).

    15) Traces of hydrocarbon gases at mid ocean ridges (such traces are not surprising given that the upper mantle has been contaminated with biogenic organic matter through several billion years of subduction, the answer to 14 may be applicable also).

    The geological evidence is utterly against the abiogenic postulate.
    #10     Aug 25, 2009