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Page added on February 4, 2014
Peak Oil Denial: Nonsense Keeps Rolling Along # 7
At the risk of starting a cat fight where truth may too quickly become a casualty, why don’t we more forcefully challenge those who deny peak oil (and global warming) and who do so for reasons that generally ignore reality in favor of narrowly-defined interests? Those motivations will ultimately do nothing but promote more eventual harm by denying the truths to those who clearly need them the most….
Of course, we run the risk of getting bogged down in he said/she-said arguments that quickly devolve into the lowest forms of ‘debate’, but why let those types of offerings go unchallenged? They feed on themselves, and it is tiresome and time-consuming to have to rebut all the nonsense. But if we don’t, uninformed readers and listeners have no reason to at least consider the possibility that there may indeed be other facts out there that should at least be examined in order to make informed assessments, rather than accepting the words of the few. More information is rarely a bad thing, and giving everyone the opportunity to examine the facts and engage in rational discourse as a means of seeking common ground makes for a healthier and more productive society.
That’s from a post I wrote three years ago, and my attitude hasn’t wavered. The constant flow of articles and opinions give me yet more opportunities to bat down the nonsense passing as advice and learned observations about the world of energy supply.
In a recent post, I offered a sampler of some of the more common phrases and notions offered by those who prefer skirting the realities and facts about peak oil. I’ll begin dissembling some of them in this and the next few posts.
If only this were the beginning and the end of the nonsense….
‘[T]here may be no other nation on the planet where greed and denial are more deeply rooted.’ [1]
WORD PLAY
As I noted in an earlier series entitled “Peak Oil Denier Test Criteria” [see this December 2013 post for links] and as has been demonstrated in any number of other denial posts found in the Category section here, the message-discipline of those who deny the realities of fossil fuel supply is to be admired. Truthfulness … not so much.
The red-meat terminology is never far from view, and the last post of this series offered a few of those same examples:
Oil production in Canada as well as the U.S. – long written off as a virtual resource wasteland – began to creep up, then roar.[2]
In hindsight, you drive oil to $147 barrel and lo and behold, five years hence the world is swimming in oil. It really is that simple. [3]
The Arctic’s potential for oil and gas production is huge, massive, colossal even….[4]
MISSING THE MESSAGE
The implication is clear: we are awash—swimming no less—in a roaring uptick of production from huge, vast, massive, “even colossal” amounts of potential supply which might come to fruition at some point in some way if certain expectations can be met under other conditions which might possibly make all of this potential a reasonable expectation … some day. If only we “mongers” (a late entry into the name-calling portion of the show) could appreciate that message!
But we crazed doomers, delighting as we apparently do in issuing pronouncements about imminent collapse and the end of life on this planet and elsewhere, are just too feeble-minded (I didn’t get the memo, but … okay, sure, I’ll get started soon). We continue to—again, apparently, even though no one informed us—“completely disregard the very probable chance for energy companies to find new plays.”
Perhaps we should consider more carefully the message: “even colossal” amounts of potential supply might come to fruition at some point in some way if certain expectations can be met under other conditions which might possibly make all of this potential a reasonable expectation … some day. We’ll give that all the consideration it merits. Fair enough?
RUNNING OUT – NOT
The fact is, governments have almost always thought their countries were about to run out of oil….[5]
Christoph Frei, Secretary General of the WEC said that the chances of the world running out of oil were slim, citing the fact that global reserves of the engineering resource were 25 percent higher than in 1993 while production has increased by 20 percent. [6]
[T]here is little reason to fear that the oil will run out before an alternative can be found. [7]
“Running out of oil” is a popular allegation the non-mongers make against we mongers. It is absolutely true we say that all the time except that it’s not true at all. What it is is a nice straw man set up like bowling pins in an alley. Running out of oil pins at one end, bowling ball cheerleaders at the other, and the outcome is clear.
Produce just a little bit of evidence to show that we are not running out of oil, and there goes the “geological gibberish” of the peak oil claim.
It is a terrific tactic if honesty and integrity don’t matter at all, and the truth only a little.
As I and others have noted repeatedly, no legitimate peak oil proponent ever makes that claim. See … we prefer facts and reality, even when it’s not working in our favor. (In my very first post, I made it abundantly clear that I am not the poster child for this topic. I enjoy a very nice lifestyle as evidenced by the many travel and summer home photos I share, and have no desire whatsoever to see the problems associated with peak oil show up in my or my children’s lifetimes.)
Given that, we know that running out of oil is not an issue, nor is it at all what peak oil is all about. Getting all of the vastly massive swimming awashed reserves from there to here is more to the point, along with annoying incidentals such as rate of production, cost, quality, etc., etc.
So the Happy Talkers who continue to make that claim against us either have no clue what the hell they are talking about—in which case they should stick with subjects about which they do have knowledge—or they realize it’s an effective tactic to promoting their self-serving needs, and who the hell cares about honesty, integrity, or the well-being of countless millions who don’t know much at all about fossil fuel supply issues.
Is one explanation worse than the other?
27 Comments on "Peak Oil Denial: Nonsense Keeps Rolling Along # 7"
Nony on Tue, 4th Feb 2014 12:19 pm
We’re not living in long term cheap oil. And the development of tight oil is a sign of running out of cheap oil (see, I agree with all that). That said, if we didn’t have the tight oil (and sands), we would be at even more of a high price.
4-5 year out futures are at 75ish. So the betting money is on (some) easing of POD.
Davy, Hermann, MO on Tue, 4th Feb 2014 12:34 pm
The number are just not standing the test of time for these deniers. We are seeing this with both fossil fuels and climate change. The biggest issue as most of you know here is that cost are going up for coal, gas, and oil. That is plain and simple to see. Capex from the majors is not producing returns. The gold rush in shale oil and gas is not so alluring anymore. The sweet spots are located and any new exploration is finding a marginal resource. Coal cost are shutting in coal more than Obama will ever do. The remaining new cheap oil like in Iraq one has to price in risk which makes it much more expensive. Time is on the side of truth in all the markets. Truth is coming home to roost in the financial markets this month. Oil and gas price remains stubbornly high for all the talk of plenty. I am just curious how this whole drama plays out when shortages have developed and the markets has misallocated resources from the “there’s plenty propaganda”. I foresee shortages which will result in relative “high prices” because what is the difference if you have little money and prices are cheap or lots of money and prices are high.
rockman on Tue, 4th Feb 2014 12:59 pm
Nony – “…we would be at even more of a high price.” And thus we began the chicken/egg discussion. If we weren’t producing the more expensive to produce oil it would be because we have oil prices too low to develop those reservoirs. We knew the oil was in the Bakken and Eagle Ford for decades. We’re essentially using the same technology (with some tweaking) we used to horizontally drill and frac the Austin Chalk unconventional reservoir 20 years ago in Texas. At that time the AC was the hottest oil play on the planet and covered and area much larger than the EFS.
We had a surge in US oil production because of high oil prices. High oil prices that justified drilling the Bakken/EFS. If we weren’t vigorously developing those trends today it would be because we had much lower oil prices IMHO. But one can pose a theoretical question: what if there were no US unconventional reservoirs that could be justified at today’s higher prices? Not so theoretical: most countries don’t have such trends. At least none being developed currently. Those countries are paying the market price for their oil. But so are US consumers. Perhaps a more pertinent question: how much would oil prices be in the US if we weren’t importing record volumes of Canadian oil? But that brings us back to the same place: if oil prices were significantly lower how much production would they be pulling from the oil sands? Again they knew the oil was there decades ago. And the tech to dig out those deposits and extract them has been known for 20 years. So if the oil sands didn’t exist what would the price of oil be? But now jump globally: even if you subtract Bakken, EFS and the oil sands production out of the number we are still producing as much oil as we were when prices were 1/3 of current levels. So why isn’t oil selling for $35/bbl?
It seems the increase in demand (and the ability of those buyers to pay a higher price) has more impact on the price then the effect of all the unconventional reservoirs. If that demand weren’t there we wouldn’t have the high price. No high price…no surge in production. How would oil price respond if that demand were suddenly removed? Look back to 1986 when the global recession killed demand and drive oil prices down about 90% from current levels. Not that increases in supply don’t moderate prices to a degree. But today the world is producing more oil than ever before while we’re experiencing the longest sustained high oil price in history. So in effect the driving force behind oil prices isn’t so much what we are or aren’t producing from the unconventionals but the well-funded demand IMHO. Decreased demand = decreased price = decreased oil production from all reservoirs.
Nony on Tue, 4th Feb 2014 1:16 pm
I agree that the tight oil development is a natural, expected, response to sustained higher price. And helping to moderate it. Those guys are heroes. 🙂
meld on Tue, 4th Feb 2014 1:44 pm
They are certainly heroes to some people Nony. To others the most evil people in existence. Both sides could be argued quite coherently. The truth is they are not heroes or villains, they are creatures who want to eat and live in comfort and so they will unwittingly sacrifice future generations comfort for their own.
Nony on Tue, 4th Feb 2014 1:50 pm
If everything was so, so, so expected though (no new geology, no new technology), I wonder why the leases were not bought up earlier (say 2005). And also, if so predictable, wonder why TOD articles were not talking about the expected increase in US and Texas production. It’s an interesting feature, no?
And I agree that tight oil development is a sign of high price, more than something new. Still, development response seems more like a corny meme than a doomster one.
I sure didn’t see anyone from TOD drawing this chart as a prediction, and putting it in their articles in 2005:
http://www.aei-ideas.org/2013/04/the-meteoric-rise-in-texas-oil-output-continues-and-is-one-of-the-most-remarkable-energy-success-stories-in-us-history/
Actually there was a lot of talk about how an oil field has a Hubbert peak and then discussion of how the same shape had been seen in Texas, in the US, etc. And then we would see that in the World.
I actually think maybe we will see that in the World (and still maybe not the end of everything good…maybe we shift to coal, nuclear, gas, etc.) But even if one believes in World Hubbert peaking, one can construct scenarios (perhaps even what we are living in), where certain kinds of resources (e.g. the tight oil shales) make local areas boom, even as the World overall declines (and the World declining causes high price which enables the tight boom). but the interesting aspect of this is it implies the simple graphs of “how Texas peaked, how the US peaked” are not really realistic.
Nony on Tue, 4th Feb 2014 1:51 pm
Meld: it’s an NPV situation. comfort for today’s generation is worth more than for our children’s. 🙂
rockman on Tue, 4th Feb 2014 2:35 pm
Nony – No…meld is correct: we are evil lying bastards. LOL. But we’ve been cast in that role so long it’s become such a cliché that it has really lost all impact on us. We make the same money whether the public likes us or not.
Why not go on a lease buying frenzy in the EFS et al in 2005? Easy: $45/bbl oil. Predicting the surge in unconventional as well as all other oil plays was easily predictable…if one had predicted $100/bbl oil. Likewise the surge in shale gas drilling was predictable had one expected $12+/mcf. Every geologist since the oil age began has folders in the back of his file cabinet with projects that were uneconomic to drill when first thought of. I’m currently drilling horizontal wells in “depleted” oil fields based upon an idea I generated more than 15 years ago. And it’s working out just fine: first well came in at 150 bopd…not bad sitting in between 4 wells that have gone to zero bopd long ago. So why didn’t I drill it 15 years ago? Easy: $35/bbl didn’t make my very expensive horizontal well worth drilling. All I had to do was wait for oil prices to get high enough. And did I foresee prices getting that high when they did? Heck no. But I was ready once they got high enough.
Could I have been one of those players that picked up a lot of shale acreage cheap once I saw oil prices going up? Heck yes…I was drilling and frac’ng horizontal wells in unconventional reservoirs in the mid 90’s. I drilled a straight hole and frac’d my first unconventional reservoir in 1979. But I was working overseas when the shale land rush began. By the time I got to my current company it was too late. While we would never be a shale driller (insufficient ROR for my owner) we could have picked up hundreds of $millions in acreage and then flip it like Petrohawk did…and walk away with $12 billion in our pocket. There are a variety of ways to make a lot of money in the oil patch besides drilling wells. I just checked my inventory list. I have 7 major NG drilling projects just sitting there waiting. And when NG gets north of $8/mcf I’ll pitch them to someone. Unless, of course, I’ve assumed room temperature at that time. If so those files will be cremated along with me.
Hey…I told you we were evil bastards, didn’t I. LOL.
Davy, Hermann, MO on Tue, 4th Feb 2014 4:18 pm
Evil Bastards or not a good look at the landscape minus tight oil and gas and we would have seen 3MIL less production. This coming online as the worst financial crisis since the 30’s. This supply was basically a huge stabilizer for the world economy. Yet, as ASPO said in December in an article on EIA “ Annual Energy Outlook, 2014”:
US crude oil production should peak in 2016 at a level 26% higher than that projected just one year ago. That’s an additional 2 million barrels a day (mb/d), pushing the US total to 9.6 mb/d within three years—the same total that the US produced during its first peak in 1970, as an acquaintance at the EIA pointed out last week. That’s three more break-through years like the last two. Then flat. Finito. As some wag asked last week, is that really a recipe for a continuing oil revolution or an oil retirement party?
Northwest Resident on Tue, 4th Feb 2014 5:14 pm
Davy — rockman made a great point in one of his posts a while back regarding the significance of the non-conventional oil reserves, and that point really stuck with me. That is, if it weren’t for the nonconventional oil reserves, the amount of future oil sources (reserves) that Wall Street and investors NEED TO SEE in order to feel confident enough to keep their money invested would be about 50% less than what it currently shows. The impact of a list of future reserves that barely has any future reserves would be enormous — and would kill a lot of people’s (false) hope in the future of BAU, with dire economic consequences. In addition, I think rockman mentioned that without the nonconventional oil work going on, about 50% of oil patch workers would be unemployed — how would that look in the news, I wonder, and what effect would it have on would-be investors in oil extraction? In the end, all this fracking and tar sands processing has much more to do with keeping the illusion of “BAU forever” alive in the minds of the lemming masses than it does with increasing viable oil supply. Basically, it is a way to fool a lot of the people for a little while, to buy time. From my point of view, that is all its good for. What do you think — right or wrong?
Davy, Hermann, MO on Tue, 4th Feb 2014 5:36 pm
Northwest Resident on Tue, 4th Feb 2014 5:14 pm
Basically, it is a way to fool a lot of the people for a little while, to buy time. From my point of view, that is all its good for. What do you think — right or wrong?
Yea, NR, we bought time but for what? I mean just pushing out more of the same rape and pillage!
For selfish reasons it came as a very beneficial breather for me. I am working on rehabilitating an old Dairy farm that was let go to over grow. Fences were shot and the fields full of brush. I have been clearing and putting fence up for 3 years now. (Doing this in a responsible way for the critters too)
Yet, from the reasoning of is society better I am not sure. It is possible the sooner a collapse comes the better considering how things are just going from bad to worse. The rape and pillaging is increasing at an amazing pace. It is almost like yeast in a petri dish!
Rockman made a very good point that you brought up. The importance of Big Finance and Big Energy to each other. Lets face it one does not work without the other.
Northwest Resident on Tue, 4th Feb 2014 5:51 pm
Petri dish is right. Not much goo left in that petri dish and what goo is left is hard to get at — otherwise it would have already vanished. Harsh times lie ahead. When panic gets a foothold in a large enough part of the population, it will spread like wildfire. Coming soon, I think, to a theatre near you.
rockman on Tue, 4th Feb 2014 6:17 pm
Hermann – And here’s where some folks miss the point. They focus on bopd…not $’s/day. Adjusted for inflation Americans were paying $70 billion/yr for that domestic oil in 1971 when we peaked. If prices hold around $95/bbl Americans will be paying about $330 billion/yr in 2016. I don’t personally know a single person who cares how much oil the world produces on any given day. But I do know a lot of folks who care about what it costs to fill the car.
As far as: “This coming online as the worst financial crisis since the 30’s. This supply was basically a huge stabilizer for the world economy.” Adjusted for inflation the world was spending $900 billion/yr for the oil it consumed in 2004. Today, thanks to that surge in unconventional oil production, we are consuming 8 million bopd more and the world is paying $3.1 TRILLION/YR for the oil it’s consuming. I suppose one might classify that as a stabilizing factor but I’m not sure how paying 3X as much is very stabilizing.
So a simple question: what world would folks rather live in: one where they were paying $35/bbl for the 82 million bopd they were consuming or would they rather live in a world where they were paying $95/bbl for the 90 million bopd they were consuming? Of course they would rather live in a world where they were paying $35/bbl for the 90 million bopd they were consuming but that doesn’t appear to be an option. LOL.
GregT on Tue, 4th Feb 2014 7:00 pm
“The rape and pillaging is increasing at an amazing pace. It is almost like yeast in a petri dish!”
Sure Davy, but yeast aren’t smart enough to figure out that continued growth in the confines of the petri dish will ultimately end in their own death.
Human beings are much smarter than yeast.
Northwest Resident on Tue, 4th Feb 2014 7:20 pm
GregT wrote: “Human beings are much smarter than yeast.” Do I detect a hint of dark brooding sarcasm here? If so, please allow me to join in…
“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.” ― Albert Einstein
“Talk sense to a fool and he calls you foolish.” ― Euripides, Bacchae
“People demand freedom of speech as a compensation for the freedom of thought which they seldom use.” ― Søren Kierkegaard
“Never underestimate the power of stupid people in large groups.” ― George Carlin
“You have attributed conditions to villainy that simply result from stupidity.” ― Robert A. Heinlein, The Green Hills of Earth
“Stupidity is the same as evil if you judge by the results.” ― Margaret Atwood, Surfacing
“There is more stupidity than hydrogen in the universe, and it has a longer shelf life.” ― Frank Zappa
Primitive life is very common and intelligent life is fairly rare. Some would say it has yet to occur on Earth.” ― Stephen Hawking
“A stupid man’s report of what a clever man says can never be accurate, because he unconsciously translates what he hears into something he can understand.” ― Bertrand Russell, A History of Western Philosophy
louis wu on Tue, 4th Feb 2014 8:18 pm
“You can’t fix stupid”-Ron White
Davy, Hermann, MO on Tue, 4th Feb 2014 8:34 pm
GregT I am leaning NR’s way…. We may be self-conscious about being rational but that does not mean we act rational. We may act rational in an individual or small group fashion. Yet, the rape and pillage would be classified in my book as primitive urges en mass acting out subconscious needs and wants that manifest themselves in irrational global behavior for the survival of the species. I would go so far as to say our intelligence is an evolutionary dead end. We will go the route of most all other species but rationally…that is a lol! I think that when you get a species with a population so large and so dominant so quickly that species has not had time to adjust as a species to that position in the ecosystem. Long story short we have not evolved enough as a species to have such a large population that is so dominant. So our traditional rape and pillage of resources and the commons are suicidal now. They were once normal and of little consequence. It may be the case that we will have a bottleneck experience as a species and the resulting survivors will be awakened. Wishful thinking but it sounds warm and fuzzy
Rockman, Please tell the Chinese to quit using more and more oil because they are ruining it for all of us. That way we can get back to lower demand and price….I am naturally being stupid
Northwest Resident on Tue, 4th Feb 2014 8:58 pm
Davy — I totally agree with your sentiments. I have also posted along the lines you describe — that our raping and rampaging human behavior had evolutionary survival value through most of our history — until one day we woke up and found that instead of a wooden club to fight with and a sharp rock to dig with we instead had nuclear weapons and giant machines that rip down entire forests as if they were toothpicks. Our technological advances far exceeded our collective wisdom — essentially putting dynamite into the hands of unruly children. The end result is to be expected, and is what we are witnessing today.
rockman on Tue, 4th Feb 2014 9:35 pm
wu – “You can’t fix stupid”-Ron White. My favorite comedian…and from Texas, of course. And as George also said: Consider what the average intelligence of society may be. And half those folks aren’t that smart.
Northwest Resident on Tue, 4th Feb 2014 9:57 pm
I think most of us have seen and experienced this one up close and personal:
“Talk sense to a fool and he calls you foolish.”
GregT on Tue, 4th Feb 2014 10:01 pm
Davy and NWR,
I completely agree, of course. ‘Putting dynamite into the hands of unruly children’, sounds about right.
Davy, Hermann, MO on Tue, 4th Feb 2014 10:14 pm
Here is my advise to you guys when dealing with my stupidity.
from Mark Twian:
“Never argue with stupid people, they will drag you down to their level and then beat you with experience.”
Snowing like crazy so I have cabin fever if you are getting tired of hearing from me Sorry it is the Damn weather
Northwest Resident on Tue, 4th Feb 2014 10:20 pm
Davy — Keep it coming. I’m stumped with some technical crap I have to deal with at work, and at times like this, the best thing for me to do is “drift off” to other things and let the tough technical details work themselves out in my subconscious — what I like to call “background processing”. Your post just made me laugh — I remember that quote by Mark Twain, and it is a “rule of life” that I try to live by.
GregT on Tue, 4th Feb 2014 10:29 pm
Davy,
Send some of that snow up our way, we could use it. Cabin fever also sounds pretty good right about now. Ah, the grass is always so much greener.
Davy, Hermann, MO on Tue, 4th Feb 2014 11:56 pm
GregT on Tue, 4th Feb 2014 10:29 pm
Davy,
Send some of that snow up our way, we could use it. Cabin fever also sounds pretty good right about now. Ah, the grass is always so much greener.
Northwest Resident on Tue, 4th Feb 2014 10:20 pm
Davy — Keep it coming. I’m stumped with some technical crap I have to deal with at work, and at times like this, the best thing for me to do is “drift off” to other things and let the tough technical details work themselves out in my subconscious — what I like to call “background processing”. Your post just made me laugh — I remember that quote by Mark Twain, and it is a “rule of life” that I try to live by.
GregT You know cabin fever is not that bad but I have so much to do it get discouraging. I guess in a contracted future I better get used to less with less
NR, I here you this blogging on stuff that interests me is actually relaxing
coolhand on Wed, 5th Feb 2014 2:07 pm
Rockman-
Your comments regarding the rise of oil costs in dollars relative to production levels grabbed my attention.
Have you ever looked at the price of oil in gold? It has changed very little since 1971 when the US went off the gold standard. And it has changed very little since 2004…
I once read that in 1971, some astute US minds were aware that the Arabs liked gold and that if the US dollar lost its gold backing, the Arabs would raise oil prices to compensate and that increase in price would then make economic US fields known to exist in TX & elsewhere. Whether this is true or not, it effectively went down this way & it worked.
It would appear that the same trend has happened since 2004 – USD devalued v. gold led to rising US oil prices led to known US oil plays made economic by the rise in USD prices.
More oil freed up for everyone.
Looked at this way, China’s massive gold purchases look less confusing…they are just buying future oil that is much easier to store than building more & more physical petroleum reserves…
Dragon Oil on Wed, 5th Feb 2014 7:28 pm
Bah Hummbug! Peak smeak. There are too many of us now and the future looks bleak. We all want a pleasent life for ourselves and kin and will usually do whatever it takes to accomplish the results we want, peak and price arguments aside. At the rate we are going we will reach a “peak population number” and then go into decline from there. A lot of tears will be shed along the way. Mr. 60 minutes! Tell me something I don’t know! Get responsible and accountable about the population growth and a lot of the peak arguments concerning availibility of oil and its various prices will become trivial and solveable.