Peak Oil is You
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Page added on May 2, 2014
‘Peak oil’ theory runs out of gas
The problem is, it’s just so hard to be an alarmist these days. Temperatures aren’t rising, U.S. emissions are down, and now it turns out that peak oil won’t peak.
What’s a scare-monger to do?
“Peak oil proponents — the guys and gals who believe overconsumption combined with scarce resources will lead to stratospheric energy prices — are now clinging to the hope that the shale oil and gas boom will fizzle out as the cost of drilling climbs,” reports Business Insider. “For the most part, the boom has held up, though no one believes it will last forever. But there is a fifth-column phenomenon this group has completely overlooked that will once-and-for-all obliterate their arguments: energy consumption efficiency.”
Put simply, we won’t run out of oil and gas (and other fuels) because we’re using less and less of them.
Not because demand is down, but because efficiency is up.
“Contained in Exxon’s new Outlook for Energy report is the following damning statistic: Electricity generation will grow by 90 percent by 2040, but the amount of fuel needed to generate that electricity will only have to grow by 50 percent,” the magazine reports. “And the projected increase in energy demand is 20 percent less than the demand increase seen from 1980 to 2010. The IEA has previously projected that electricity will become more affordable over time in most regions as income levels increase faster than household electricity bills.”
In one sense, this is a victory for the conservationists. It’s difficult to quantify, but the EPA’s Energy Star program no doubt played a part. Consumers were encouraged — but not forced — to spend their money on more energy-efficient appliances. Consumers were rewarded for their purchases with tax credits — and lower electricity bills.
Although the General Accounting Office has criticized the Energy Star program’s implementation, it was at least a free market approach to saving energy.
The free market deserves a lot of the credit for the failure of peak oil claims, as well. Companies, as well as consumers, seek to trim their expenses, and energy is always a big expense. There’s a built-in motivation for efficiency that everyone responds to.
Writing in the Dallas Business Journal, Nicholas Sakelaris says that efficiency can be seen as our greatest “green” energy source. He quoted Ted Pirog, an energy analyst with Exxon.
“Our greatest source of energy in the future is our ability to use it more efficiently,” Pirog said.
Don’t tell that to Daryl Hannah, the Hollywood star who has been arrested in East Texas protesting the Keystone XL pipeline.
“We should be starting to build some resilience and some self-sufficiency by developing renewable energy infrastructure,” she says.
And she’s right, to a degree. There’s nothing wrong with a true “all-of-the-above” energy policy.
But we can’t let the alarmists continue touting the peak oil theory, which was first expounded in 1956 by Shell scientist M. King Hubbert. He said U.S. oil production would peak between 1965 and 1971, and after that, costs would steadily rise until we’re out of oil completely.
It didn’t — and it won’t.
32 Comments on "‘Peak oil’ theory runs out of gas"
Davy, Hermann, MO on Fri, 2nd May 2014 6:50 am
Denial and lack of critical thinking. Reminds me of the Mak show with the need for political propagandist ideologue over cold hard reality.
J-Gav on Fri, 2nd May 2014 6:56 am
Idiocy knows no bounds.
Nony on Fri, 2nd May 2014 7:16 am
TOD is dead, Ruppert is dead, Savinar is an astrologer. Picollo was wrong, Rune was wrong, and Gail = the boy who cried wolf.
Drill, baby, drill.
rockman on Fri, 2nd May 2014 7:50 am
Pesky facts keep messing up his message: “…because we’re using less and less of them.” Fact: the world is currently consuming more hydrocarbons then ever before in history.
“…we won’t run out of oil and gas (and other fuels)”. Repeating the same childish straw man argument only weakens his effort IMHO.
“He said U.S. oil production would peak between 1965 and 1971, and after that, costs would steadily rise until we’re out of oil completely. It didn’t — and it won’t.” A truly bizarre statement given US oil production did peak in 1971. And oil prices (even adjusted for inflation) have risen 500% since that time. And Hubbert never predicted oil would “run out”. One has to wonder why be would make a statement that he must know can be readily shown to be untrue. Perhaps that’s just the way of a true propagandist: going after just the ignorant masses that can’t independently analyze the situation.
eugene on Fri, 2nd May 2014 7:56 am
It’s always nice to be reminded ignorance, in some areas, prevails.
Boat on Fri, 2nd May 2014 8:31 am
As the high price of oil led to the affordability of fracking, don’t you think continued higher prices will make solar, wind and building efficiency more competitive? This seems to be the trend. Where it ends up and at what rate can be argued but the higher the price of fossil fuels will hasten innovation.
At some point an inefficient building won’t be allowed to be built, regulations still have a long way to go.
Electric cars may rule the day. In Houston there are still plenty of gas guzzlers driven for little reason because they can afford it. So plenty of waste to be squeezed out with higher prices.
mo on Fri, 2nd May 2014 8:54 am
True rockman, people like that like to capitalize on the (ignorent masses) but don’t come down too hard on them. Most people are just struggling day to day to survive and don’t have time or the energy to research such fringe ideas like peak oil. They will start paying attention when the price goes higher and higher, like in 2008, when everyone was paying attention
Davey on Fri, 2nd May 2014 8:57 am
Boat AltE’s are financial system and FF driven their economics will move in tandem similiar to what gas and oil do The AltE renaissance is nearly over. As noonster says (modified) build baby build before the $ runs out!
Boat on Fri, 2nd May 2014 9:15 am
Davey
Unlike you I think AltE’s are just in their infancy. Just like methane gas is in it’s infancy. Higher prices unlock other energy sources one at a time. Efficiency is still the lowest hanging fruit and is developing rapidly.
http://thinkprogress.org/climate/2014/04/10/3425406/japan-energy-efficiency-replacement/
Japan is an example of what a people can do if forced to.
Jimmy on Fri, 2nd May 2014 9:27 am
This Tyler person obviously never took a physics class.
Brandon on Fri, 2nd May 2014 9:28 am
It amazes me that people like TYLER who wrote this article think that we will never run out of oil and that we can keep sucking it out of the earth at alarming rates such as 75+ million bbls a day and it will always be there. You need to go back and review all the FACTS since 1956, before you write an article like this. Because this is so ridiculous I will not waste my time reading another one of your articles. Facts speak for them self, and you need to get the Facts Sir. We all will see as the steady decline in oil production per day continues to fall and prices will keep rising that the “PEAK OIL” people were right and we should of paid attention a long time ago.
Davy, Hermann, MO on Fri, 2nd May 2014 9:31 am
Boat efficiency is reaching diminishing returns with industry, governments, and individuals at limits of growth already loaded up with debt. AltE’s are facing the same. Subsidies are disappearing as governments go broke. China’s contribution with overcapacity will end with their debt spiral hard landing. As fossil fuels become pricier and or in short supply the complex AltE industry will be ground down from higher costs for everything FF related including AltE material. The financial system cost of money repression is ending and this will be a significant hindrance for AltE growth. Capex will diminish causing AltE’s with their long payback periods significant headwinds. I wish and hope you are right Boat but I honestly don’t see it.
tahoe1780 on Fri, 2nd May 2014 9:59 am
Boat, Build a home (using fossil fuels) that saves 40% over conventional. Yippee! You’ve just added more demand. 🙁 Build two and you’ve added 120% of a conventional (not to mention the FF used in construction) As long as population grows and demands incrementally more units, we’re pushing that rock up a steeper and steeper hill.
Pops on Fri, 2nd May 2014 10:34 am
“Not because demand is down, but because efficiency is up.”
Demonstrably wrong.
http://www.advisorperspectives.com/dshort/updates/DOT-Miles-Driven.php
Norm on Fri, 2nd May 2014 10:43 am
pass the author some more legalized pot.
meld on Fri, 2nd May 2014 10:54 am
Are you guys even really bothering to refute this bullshit.
The guy clearly hasn’t even heard of Jevons law and seems to think peak oil is about running out of oil. And who exactly are these people talking about peak oil theory anyway? it’s never on the news or in newspapers, the majority of the public has never heard about it.
meld on Fri, 2nd May 2014 10:57 am
Boat said – “As the high price of oil led to the affordability of fracking, don’t you think continued higher prices will make solar, wind and building efficiency more competitive? This seems to be the trend”
Are you a genuine clown shoe or just a troll? This is one of the stupidest statements I have EVER seen on this site, and boy have I seen some stupid ones. Perhaps you might like to meditate on this utterly moronic statement for a few decades to figure out why your logic is crap.
GregT on Fri, 2nd May 2014 11:11 am
The sad thing is, people actually believe this crap. Most don’t have the time, interest, or intelligence to do a little investigating on their own.
All the more reason to get those plans in order ASAP people. The masses are going to be very angry when the truth finally hits them like a 2×4, squarely in the face.
Boat on Fri, 2nd May 2014 11:34 am
meld
Don’t put words into my mouth. Peak oil may or may not have passed. At this point, who cares as replacement energy sources come online.
Do I believe there has been demand destruction because of the high price of oil? Yes
Will this push us in the direction of electric cars? Yes
Have many businesses and homes started switching from oil heating to Nat Gas heating? Yes
If N America had allowed exporting for Nat Gas to the entire world for decades would the price be less than Japans? No
there would be a lot more fracking going on and the replacement for oil would just happen faster.
As rockman has pointed out many times, the tech for fracking has been around a long time. It took a high price of oil for drillers to go after it and make a profit. How is any other energy any different.
And tahoe,
I have commented many times how populations from educated societies naturally decline during economic stress. Why can’t you build efficient structures without increasing population.
Pops,
So the improvement in MPH from 5.5-6.6 to 10.5 to 13 mph for semis happened because of what. I will tell you why. Because they will sell. And we will all benefit because if it. But higher prices spawned the effort because of the idea of profit. Just like future advances in everything will.
dolanbaker on Fri, 2nd May 2014 11:44 am
“Put simply, we won’t run out of oil and gas (and other fuels) because we’re using less and less of them.
Not because demand is down, but because efficiency is up.”
Much of those efficiency improvements are to reduce the costs rather than for saving fuel. High costs are hurting the bottom line and that won’t do.
Makati1 on Fri, 2nd May 2014 12:12 pm
Subject well covered in the above comments, both sides. There is no way to go but down on this ladder. The only difference between countries is the speed of decent, which is increasing.
shortonoil on Fri, 2nd May 2014 12:24 pm
“Contained in Exxon’s new Outlook for Energy report is the following damning statistic:”
Also contained in an EXXON report is that EXXON, Shell, and Chevron spent $130 billion during 2013 to boost their waning production; it continued to fall regardless. This article is an idiotic attempt to convince someone that the industry is not on its way out. The arguement is that EXXON “thinks” that the cost of producing electricity is going to decline. How that is relative to the article title is of course ignored because it isn’t. With all production now dependent on declining legacy fields, the industry is getting desperate to maintain the appearance that the status quo is doing fine. We will most assuredly get a plethora of obscenely stupid commentary like this one to support that position. We will also get an avalanche of stupid people who want to prove that the oil industry is not in trouble because EXXON wants to think that electricity prices might decline. With almost no new fields of any merit coming on line, and older fields being pushed beyond reasonable limits just to slow their decline, only industry cheerleaders could image that the days of the age of oil aren’t numbered.
http://www.thehillsgroup.org
Davey on Fri, 2nd May 2014 12:55 pm
Damn short that is some bad ass BOil doom in a “Nut” IOW basically a financial retirement story. I see large utilities in the same boat.
bob on Fri, 2nd May 2014 1:05 pm
I sent Steve Kopits talk to a lot of my business friends…so far nothing; I think they think that this kind of thought just ruins their life “here and now” and that there is not much they can do at this point…just wait and see.
Northwest Resident on Fri, 2nd May 2014 1:30 pm
The only question I have when reading articles like this is, what is the intended purpose?
To me, this article is of the “Baghdad Bob” variety where the real situation is a disaster, everybody knows it, but yet we have this joker in front of the camera smiling and confidently proclaiming that everything is going according to plan. We all know that he’s a liar and that the exact opposite is the truth — same with this article. So the question is, “WHY!?”
In Baghdad Bob’s case, the answer to “why” was clearly that Saddam Hussein desperately needed to keep his populace in line and believing that the status quo was being maintained, otherwise, they would have revolted.
In the oil industry’s case, the answer is very similar. The general population MUST be kept in the dark and believing that “all is well”, otherwise, civil unrest combined with panic and a “don’t give a rat’s ass anymore” attitude might take hold — the last thing that TPTB (or you or I) want to see.
In other words, this article is a fervent attempt to DUPE anyone and everyone stupid and/or unaware enough to believe the hype. They are casting a wide net and we can be sure that the “catch” will be very large indeed.
It is articles like this that tend to prove beyond any doubt that TPTB know just how dire the situation is, otherwise, they wouldn’t bother pumping this level of propaganda out.
gwb on Fri, 2nd May 2014 2:13 pm
Another fact-free snow job by a hack who has run out of functioning neurons – who didn’t even have a byline
PrestonSturges on Fri, 2nd May 2014 2:39 pm
“……Temperatures aren’t rising,….”
The US was pretty much the only place in the world with lower than average temperatures this past winter, and even in the US only a few record lows were set. Locally, it was the coldest weather in a decade, but still 12 or 15 degrees above the record lows of 30 years ago.
meld on Fri, 2nd May 2014 3:41 pm
@ Boat – what words was I putting into your mouth exactly. That’s an exact quote of what you said.
Nuclear power would be “economical” if oil prices were above $500 but that seems to forget that rather large issue of EROEI, you know that thing where if you are making a net energy loss you are basically screwing yourself harder than if you never tried at all.
Perk Earl on Fri, 2nd May 2014 3:46 pm
“It is articles like this that tend to prove beyond any doubt that TPTB know just how dire the situation is, otherwise, they wouldn’t bother pumping this level of propaganda out.”
Agreed. Goebbels would be proud of this kind of blatant propaganda, and as Hitler once said, “It’s a good thing for leaders men do not think.”
In this documentary we saw on Netflix streaming about Goebbels, they have footage of him making a speech in some town in Germany near the end of the war as the allies are moving in from the west and the Russians from the east. Most people have a look of defeat, glassed over just behaving themselves so they don’t get shot for saying something wrong. But there’s this one man they pan to that has a somewhat hopeful look in his eyes. So even when things are obviously hopeless some still buy the propaganda. Well, we are not to the point where defeat is in people’s eyes, so I am sure this piece will buoy them along just fine.
MrColdwaterOfRealityMan on Fri, 2nd May 2014 3:48 pm
This article is just more google-bombing. It’s a blatant propaganda effort designed to skew google search results.
There’s no listed author, and you can bet it was written by an oil company flack. Moreover, there’s no way to comment, so people will never see either facts, or the obvious arithmetic that shows that the article is nonsense.
MKohnen on Fri, 2nd May 2014 11:27 pm
Even if this article was right, all it’s ultimately saying is what “peak-oilers” have been saying all along: we have to become more efficient and less reliant on oil. Unfortunately, this article is such a load of bull crap. How come America (and yes, I do include Canada and Mexico) only started getting somewhat efficient after the 2007 financial collapse? It’s because it ain’t over, and oils still in the drivers seat on our merry trip to total collapse.
Beery on Sat, 3rd May 2014 5:56 am
This is almost certainly the single most bizarre op-ed piece I’ve ever seen on the issue of peak oil – and there have been quite a few. The amount of pure BS that’s being shoveled here is overwhelming. Everything in this article is completely wrong, because it’s based on two outright falsehoods:
1. “Put simply, we won’t run out of oil and gas (and other fuels) because we’re using less and less of them.”
Wrong! We’re using more fossil fuels now than ever before. Sure, efficiency is up, but that only makes us use more, proving the Jevons Paradox.
2. “Shell scientist M. King Hubbert… said U.S. oil production would peak between 1965 and 1971, and after that, costs would steadily rise until we’re out of oil completely. It didn’t — and it won’t.”
Wrong! Oil production DID peak in 1970, after that, costs HAVE risen steadily. Hubbert never said we’d run out completely. His argument was that nuclear power would need to take over.
Anyone here who thinks this article is right is living in a fantasy world.