Peak Oil Denial: Sticking To The Script

This is the second [first here] in a series of posts examining the latest entry straight from the playbook on peak oil denial—that seemingly never-ending attempt to ignore facts, mis-/under-inform readers, or create ever-rising levels of non-credible optimism.

[NOTE: Any quotes in this series are taken from the above-referenced Manhattan Institute paper unless otherwise noted. Links to sources/citations/footnotes within those quotes are located in the original report.]

This post will focus on a few of the production and research funding figures highlighted by Mr. Bryce.

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In 2012, U.S. oil production rose by 790,000 barrels per day, the biggest annual increase since U.S. oil production began in 1859. In 2013, the Energy Information Administration expects production to rise yet again, by 815,000 barrels per day, which would set another record. Domestic natural gas production is also at record levels.

Correct, although Chris Nelder pointed out (here) the fact that monthly gas production had apparently not exceeded the totals from January of 2012, at least as of a few months ago. I guess we’ll all have to wait until early next year to confirm.

Stating a primary theme of the paper, the author notes:

The dramatic increase in oil and gas resources is the result of a century of improvements to older technologies such as drill rigs and drill bits, along with better seismic tools, advances in materials science, better robots, more capable submarines, and, of course, cheaper computing power.

Shouldn’t we expect that from pretty much every industry and technology?

Advocates of solar, wind, and other renewable technologies like to claim that the innovation occurring in that sector will transform the energy landscape.

Shouldn’t we expect innovation and improvement from renewables technology as well? Aside from the fact that this would be done at the expense of the Manhattan Institute’s benefactors and audience, what’s the problem?

Environmental groups like to point out that in 2012, some $268.7 billion was spent globally on ‘clean energy.’ But many of those same advocates for renewables ignore the innovation—as well as the staggering sums of money being spent—in the oil and gas sector. In 2012 alone, global spending on oil and gas drilling totaled more than $1.2 trillion, more than four times the amount being spent on ‘clean energy.’ Of that sum, approximately $400 billion was spent in North America alone. The vast amount of money being spent in the drilling sector, combined with the ongoing innovations, has had a clear result: over the past century or so, oil and gas drilling has been transformed from an industry dominated by hunches and wildcatters to one that is more akin to the precision manufacturing that dominates aerospace and automobiles.

It sounds good, but in the big picture, so what? (Which advocates are ignoring those efforts? Might it be that their focus is simply not quite so narrow?) Should we be surprised that after a “century or so” we’re witnessing great technological advances? It would be fairly appalling if that wasn’t the case! And don’t those “vast” sums expended suggest this might not always be such a good thing?

Despite the advances in oil and gas production, government policies continue to be skewed toward renewable energy.

“Skewed”? The fossil fuel subsidy issue might offer a different notion about what’s actually “skewed.” Since Mr. Bryce makes it a point in his report of touting the International Energy Agency [IEA] estimates, perhaps he might be interested in the reported observations of the IEA’s very own Dr. Fatih Birol:

The International Energy Agency’s (IEA) chief economist has today again urged governments around the world to end the $0.5tr of annual subsidies given to oil and gas production, while also warning that policy instability has become the greatest challenge facing renewable energy markets….
Dr Fatih Birol described fossil fuel subsidies as ‘public enemy number one’ for the production of sustainable energy.
Figures from the IEA show that global fossil fuel subsidies jumped to $523bn in 2011….
‘On one hand these countries talk about renewable energy, efficiencies and climate change, and at the same time subsidises fossil fuel energy – [it] does not make sense,’ he said. ‘All the countries and governments of the world need to pay attention to this issue.
‘In the presence of these fossil fuel subsidies… we have no chance whatsoever to meet these climate change targets and provide room for renewable energies to compete with coal, oil and gas as they are artificially cheap as a result of those subsidies.’ [1]

I’ll end on that note, and continue the discussion of taxes and subsidies in my next post.

Peak Oil Matters