Deffeyes Update: May 29th, 2009

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…I’m reading and enjoying Paul Ormerod’s book Butterfly Economics. The “butterfly” is a reference to atmospheric general-circulation computer models that are very sensitive to the initial conditions. Ormerod gives a clear explanation of positive feedback. When I finish reading it, I’m going to put it on my bookshelf next to Bert Malkiel’s A Random Walk Down Wall Street.

In a few years, there will be an abundance of non-geological explanations for peak oil: OPEC cut back production to support the price. Investment in new oil sources was interrupted by the drop in the oil price. The Hubbert prediction did not involve the minutiae of the oil markets. It could well be that the oil-supply tail is wagging the world economic dog.

One of the available data sources is the Baker-Hughes count of the number of drilling rigs actively digging for oil or natural gas. The Hughes rig count dates back to 1944, when salesmen from Hughes Tool Company went to the active rigs to sell drill bits. Here are some recent counts for North America:

September 12, 2008: 2031 rigs running

May 22, 2009: 900 rigs running

The rig count was cut in half in 8 months. That’s not the “drill, baby, drill” chant from the Republican National Convention.

Hubbert’s Peak, Current Events