Peak Oil Denial: More Almost-Truths

In his presentation to Montana Energy 2012, Michael Economides told Montanans, ‘You are already a superpower in oil production. You have already defied the trends and once again showed the can-do attitude of this industry, smashing the myth of the ‘peak oil’.
‘You have redefined and defied the trends suggesting strongly the future of energy is oil and gas and not solar and wind.’ [1]

Yeah! We’re Number One!

Kinda gives you the chills, doesn’t it?

In an article noteworthy mostly because of its introduction of the word (?) “bizerk” (sic) and the phrase (?) “cut the mustered” (also sic), this cute tug at red, white, and blue American hearts was otherwise free of factual reasoning for “making the whole myth of peak oil a shambles,” according to Mr. Economides.

Why one might ask? Well, according to this article, “The reason places like Montana and Canada stand at the leading edge of the industry is because of conditions that exist in other countries, which are mostly hostile to the US.” That certainly clears things up! And of course “supplies have always increased and continue to meet a demand that only grows” because finite resources uh … uh … are secretly infinite, I guess.

As if that rationale alone wasn’t enough: “Many of these countries are ‘a shambles,’ ‘corrupt,’ and unstable. ‘It is hard to produce oil when people are shooting at you,’ said Economides.” That settles that! (Although I’ll agree completely that doing most anything is likely harder when one is being shot at it … pretty sure it’s not limited to just oil production.)

Just one tiny little problem to pass along before we order our Montana is a Superpower T-shirts. According to the U.S. Energy Information Administration earlier this year:

Montana Crude Oil Production is at a current level of 1.823M, down from 1.963M last month and down from 1.867M one year ago. This is a change of -2.64% from last month and -8.79% from one year ago.

So how does a nearly 9% decline make Montana a “superpower in oil production”? According to this chart, in 2011 Montana was producing about 66,000 barrels of crude oil per day. The United States is using somewhere in the neighborhood of 18 – 19 million barrels of oil per day. So Reality Math tells us that supplying .00356% doesn’t exactly make one a “superpower,” or even a power, or even a pow….Pretty safe bet that whatever unconventionals Montana managed to scrape up didn’t make much of a dent in that percentage contribution. Just more damned facts getting in the way of perfectly good sound bites! (Of course, in Fact-Free Math-Isn’t-Useful World, those numbers tell us instead that Montana supplied exactly 63.826% of our oil needs.)

Raising a point argued by many others disinclined to consider what’s really happening with crude oil production and what’s not happening with unconventional oil production such as shale oil and tar sands, the article adds: “Economides expressed disappointment with the US Geological Survey and the degree to which they fail to take increasing prices into account in making their projections regarding supply. Increased prices increase the amount that producers can afford to invest, which puts into production resources that they previously considered uneconomical to recover.”

I find it a source of never-ending amusement that these “increased prices” are never viewed from the perspective of the end users: you and me. Higher prices allowing for investments in the exploration of previously untapped (and inferior, more expensive, more costly, etc., etc.) unconventional reserves is one end of a stick. Higher prices paid by you and me is the other end, and we don’t actually think that’s such a good thing….Imagine that!

“Economides predicted that $100 a barrel oil is the new norm.” Well isn’t that such good news!

And there’s more!

Economides pointed out that going back decades in the US, oil, gas and coal – the fossil fuels – have consistently contributed 87 percent of the fuel used in the country. He said that the day will come when his great, great grandchild ‘will stand here and tell you that 87 percent of the US fuels come from hydrocarbons,’ said Economides, ‘There are no alternatives to oil and gas.
And, that comes even with the increased demand for fossil fuels. In 1973, ‘the world energy demand was 60 percent of what it is today,’ and in 2030 it will be 50 percent more than what it is today,’ but still 87 percent will come from oil, gas and coal. ‘Production from other energies may grow, but they will not be where the 87 percent is going to come from.’

That is some kind of math … nothing to substantiate it and clearly unlike anything I ever learned, but definitely some kind of math!

So how does that work? We have depleting conventional oil fields; production of unconventional and inferior (and more costly, etc., etc.) substitutes not even matching depletion rates (see this, for example); increasing demand; decades more demand and use, and yet we’re to believe that supply will still magically meet demand for another … hundred and fifty years or so? Seriously?

A few months back, Mason Inman had an interesting observation (duly noted by others, including Robert Hirsch/The Hirsch Report – see Category sidebar) about the same kind of math (apparently from the same Fact-Free Talking Points handbook), with a concluding sentence that puts a nice bow on the discussion:

OPEC members in the Middle East have reserve numbers that are—to put it politely—magical. These countries’ figures for ‘proved reserves’ only go up or stay flat—and never go down. Kuwait’s ‘proved reserves’ stayed at 96.5 billion barrels from 1991 to 2002, and then have crept upward from there. From 1989 to today, Saudi Arabia’s ‘proved reserves’ have barely budged, creeping up slightly from 260.1 to 264.6 billion barrels. Meanwhile, these countries have produced tens of billions of barrels of oil. It’s as if a huge corporation told auditors that their bank account always held exactly $572 million dollars, for decades. It’s not believable [my emphasis]. [2]

But if you still aren’t convinced, we have this: “‘How can you have too much of a good thing?’ he asked, pointing out the importance of Canada, as a friendly country, and a dependable source of oil for the US.” Doesn’t it just warm your heart when the deniers mention Canada the Friendly Country as our primary supplier? It’s exactly how I felt as a child when I heard about Casper the Friendly Ghost … just all warm and fuzzy! Who needs reality and facts when you can just smile about friendly things….

Lest you’re thinking I believe the entire article was pure nonsense, I did agree with this, although with a caveat as to the first point:

Economides questioned every alternative energy option as being an ineffective alternative to fossil fuels.
He called ethanol a scam, because it takes 1.6 gallons of gasoline to produce one gallon of ethanol – not to mention the negative impact on food prices.

Every alternative energy option IS an ineffective alternative, and will continue to be as long as we make certain that we conduct no research and make no investments in discovering what the potential might be (and no guarantees, to be sure). Nope, let’s just make sure the profitable oil companies remain profitable, while we explain no truths about a finite resource, downplaying the fact that if every day you have less of Product X than the day before and more demand every day for the same Product X, the rules of math (and geology) will nonetheless be set aside and all will be well forever.

A fine story indeed, warm-hearted and all good things … except that it’s all bullshit. Other than that, no objections.

So what’s it going to take for more people to “get it” and fewer people to keep passing out nonsense as fossil fuel gospel. A couple of clues to assist: Who benefits? Who loses?

Not that difficult to figure it out … and a damn good reason to start thinking and planning.

More to come….

Peak Oil Matters