The Oil Drum, peak oil and why some good blogs don’t last

At the end of this month, The Oil Drum will be archived after eight years.

A flurry of commentary when this was first announced concluded that it’s shutting down because of the demise of peak oil. Noah Smith, Forbes and Reuters’ John Kemp, among others, have concluded that extraction from new sources, particularly shale gas and oil in the US, have killed the idea of peak oil and, in turn, The Oil Drum. As an explanation for TOD’s impending closure, it sounds neat — but it’s not correct.

Firstly, it’s a bit of a stretch to call TOD a purely peak oil blog. A survey in 2009 showed more than a quarter of its readers didn’t believe resources would constrain economic growth. They even had nicknames for the extremes at either end – the ‘doomers’ and the ‘cornucopians’. A post published on the site yesterday titled “What The Oil Drum Meant” talks more about this. John Kingston wrote at Platts that much of the division was between the geologists and the environmentalists; but we’d argue that the key evolution in TOD has been from a strictly geological focus more on the implications of expensive oil, and away from discussions about oil suddenly “running out”, with the attendant survivalist themes.

Secondly, the state of the peak oil debate plays only a small part in its closure. As ‘Heading Out’, one of the founders of TOD, wrote in a polite response to the Forbes column:

No, gentle readers, the closing of TOD is, in my opinion, based on a deliberate but IMHO faulty management decision made in that group a couple of years ago. It was predictable at that time, but it has nothing to do with the coming of Peak Oil, and is not even symptomatic of much of a delay in that arrival.

We’ll get onto that decision he’s referring to a bit further down, as there’s a lot to unpick in TOD’s rise and shuttering.

But it should be noted just how good the site was, especially by those of us in the “MSM” who have read, quoted from and linked to TOD over the years (the latter includes at least half of current and former FT Alphaville staff). You could assume that any topic raised there would be examined in some detail, and thoroughly and knowledgably interrogated in the comments. TOD editors have written FT opeds and in academic journals. The site was, by any measure involving quality of information and discussion, a huge success.

It’s a rare example of how the internet can facilitate a grassroots place for people to explore, learn and debate together — and actually change their minds.

Despite the divisive aspects of peak oil, and energy more generally, everyone at TOD interacted in a largely civil way — not without a lot of hard work, as you’d expect – but the readers loved it. A few quotes:

“I know its been a labor of love for the editors and staff. I check in every couple of days and have for years. I’ll miss you all.”

“I would have say that this site has the best quality of commentators AND the best moderation because the signal/noise ratio often approaches 100%” [Link]

“The beauty of TOD was that 95% of the comments were well though out and insightful even if you didn’t particularly agree with their conclusions.”

“The Oil Drum was a primary source of information that started me back to complete a PhD..”

“Often I have a very hard time following the articles, and instead skip to the conclusions and/or comments to help myself make sense of it all, but it is worth it. I am so very sad that TOD is closing.”

It’s all quite touching, and you’d wonder why anyone would shut down a website with such a smart and good-natured readership.

What made The Oil Drum work, and how did it come to this?

Understanding TOD’s trajectory is important because it’s a rare online entity that actually lived up to the internet’s early promise of building both community and informed discussion, when so much of the online world is made up of diversions and commerce.

This post won’t do TOD justice because the site could probably serve as the subject for a thesis on internet communities, but we’ll highlight what seem to be a few of the key themes, based on reading TOD over the years and no doubt filtered through our own subjective lens:

1. The level of discussion was both extremely serious and of a very high quality… and demanding. It’s also large and busy. To maintain such a community is a lot of work. Gail the Actuary, a key TOD editor between 2008 and 2010, described the work she did like this:

Readers and staff members would send in proposed posts. I would decide whether or not to run them, and if I did run them, would fix the posts for them. If they didn’t speak English well, I would fix it as well. I would check to see that the numbers looked right. If authors wrote posts that were too mathematical to understand, I would write a “plain English” simpler version, and get agreement from the author to run it. I very often would write to someone on another web site, and ask if The Oil Drum could rerun something I had seen there. In some cases, I would find an academic paper of interest, and write and simple English summary of it. Or I would write to someone who had written an interesting comment, and ask them to write a longer article that we might run. If it turned out that they really couldn’t organize their thoughts well, I rewrote the article for them, and fixed it up.

Just reading it is tiring.

2. The site was not commercialised. A non-profit corporation was formed to “conduct[s] research and educates the public about energy issues and their impact on society”, including publishing The Oil Drum. Advertising was featured early in TOD’s history but was abandoned. To really know the reasons for this would probably take dozens of interviews with TOD participants to unpick, but one thing worth noting is that most of the key people who founded and ran TOD were either professionally employed or retired. They were in it to share knowledge and intelligent discussion; setting up an online media business wasn’t their goal, nor was making money. Here are some comments from Leanan, a longtime editor, last week:

Money really isn’t the main issue, and we aren’t in this for the money.

And no, we are not going to transfer the site to anyone.

She later wrote in the same thread:

If we gave the site away, or sold it, we would have no control of what was done with it. The new owner could fail to pay the server bills, and it would be gone forever […]

Or simply handing it on as a non-profit:

There’s also the issue of who to give it to. One of the reasons we have not changed our focus to “future directions” is that there’s no agreement among the staff on what those would be. We were selected for our diversity of viewpoints, and while that is in many ways a strength, it’s a real barrier when moving into the speculative realm of possible futures. So, there would be no consensus on who to pick for a proper new owner. Should we pick a doomer or a cornucopian? Pro or anti nuclear power? Climate activist or skeptic? Someone who wants to influence politicians, or someone who thinks that’s a waste of time?

3. The site’s main editors and moderators made a conscious decision in late 2010 to narrow the focus to fairly technical stories about energy only (“not Chilean miner rescues or chicken farming”).

At the time, a voting system was introduced as a way of ensuring fairness in selecting which articles were published (for example, to ensure editors’ own posts were not just published regardless of quality). Another motivation appears to have been the desire to keep it “on-topic”. (Leanan, for example, wrote recently that one of the reasons for this decision was that in the previous two to three years, threads at Christmas and Thanksgiving became filled with people making sentimental comments about their families or “post what you’re thankful for!”)

The off-topic camaraderie might have represented a boon for a commercial website, which would have jumped at the chance to grow their audience and the volume of interactions through building a community. Opinions on the rise of community chitchat might have varied among the TOD editors, but that stuff takes a lot of work to maintain and it’s pretty clear no-one was in TOD for the money, and they certainly weren’t interested in running an online media business.

4. That decision in turn appeared to narrow both the subject and the type of post that appeared. As Gail Tverberg (Gail the Actuary) described it to us by email:

In theory, voting would assure high quality posts. In practice, it narrowed the range of posts published to articles almost everyone could agree with. Thus, controversial topics and new ideas tended not to get published, unless documented to the nth degree.

5. The subject matter was not terribly dynamic.

Some subjects are just less dynamic than others. If TOD was about information technology, the “newsiness” of the subject would’ve provided plenty of daily fuel. Energy, while arguably more important, simply doesn’t move quite so fast.

As Heading Out wrote, the ‘newness’ problem is similar to the challenges cited by a BBC editor of having frequent coverage of climate change. While the debate about resource supplies is a huge story, it’s a slow-moving one:

So it is with the Peak Oil story. The facts, in neither case, change, but the amount of new information while accumulating (vide the superb work that Leanan has done with Drumbeat over the years) is often repetitive or confirmatory of earlier stories and thus harder to turn into interesting and exciting new material. There are developing stories that justify continued interest in the topic, but the slow pace with which some of the stories unfold make it difficult to sustain interest.

We’d suggest — as some readers have — that a solution might have been to turn TOD into more of a forum-based site. On the other hand, however, the newsiness of the site ran deep; many readers loved the almost-daily ‘Drumbeat’ post of links and, of course, the reader discussion that followed.

Next, onto the inevitable (if somewhat dull) question…

IS PEAK OIL REALLY ‘DEAD’?

We’d argue that no, it’s not, other than in its roughest and simplest form. Sure, you would have a hard time arguing these days that no new sources of oil will be utilised, and that technology will not make previously-inaccessible reserves more economic to extract. But that hasn’t been the premise of peak oil for some time – at least not as it was discussed on The Oil Drum. There, the debate had moved towards a greater focus on “net energy”, and EROEI, or energy returned on energy invested. The idea that energy underpins the economy is one that some economists scoff at, and still more probably choose to ignore. Does that mean it is wrong?

Let’s see what Econbrowser’s James Hamilton, an economics professor at University of California San Diego with a strong interest in energy economics and markets, says. Hamilton is an expert in econometrics and monetary policy as well as energy economics, and authored a fascinating paper on the link between high oil prices that the US recession of late 2007 – mid-2008. He also wrote the excellent post “How to talk to an economist about peak oil” in 2005, a very polite and clear attempt to bridge the chasm between geologists, engineers and economists on the subject.

Hamilton in April surveyed the state of ‘peak oil’ today, comparing the contrary views expressed by T. Boone Pickens and Daniel Yergin back in 2005. He points out that while oil production indeed rose by 4m b/d between 2005 and 2012, more than half of the increase “has come in the form of natural gas liquids– which can’t be used to make gasoline for your car– and biofuels– which require a significant energy input themselves to produce”.

Meanwhile, tight/shale oil production in the US — the main cause of recent supply optimism — isn’t necessarily disproving the finite nature of oil reserves, either:

He adds:

Texas production in 2012 was still 1.4 mb/d below the state’s peak production in 1970, and I haven’t heard anyone suggest that Texas is ever going to get close again to 1970 levels. Production from any individual tight-formation well in Texas has been observed to fall very rapidly over time, as has also been the experience everywhere else.

Figure 6. Type decline curve for Eagle Ford liquids production. Source: Hughes (2013).

Hamilton looked about a year ago at an IMF paper which compared peak oil forecast models and EIA forecasts, and found that neither had fared particularly well:

Hamilton concludes:

We like to think that the reason we enjoy our high standards of living is because we have been so clever at figuring out how to use the world’s available resources. But we should not dismiss the possibility that there may also have been a nontrivial contribution of simply having been quite lucky to have found an incredibly valuable raw material that for a century and a half or so was relatively easy to obtain. Optimists may expect the next century and a half to look like the last. Benes and coauthors are suggesting that instead we should perhaps expect the next decade to look like the last.

FT