Peak Oil is You
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Page added on April 10, 2014
The Greens’ Peak-Oil Limits-to-Growth Apocalypse That Wasn’t
A few years ago, some experts predicted the world was about to reach a peak in global oil and gas production to be followed soon by marked decline. It would cause “war, famine, pestilence and death” – the biblical Four Horsemen of the Apocalypse.
Another version: “war, starvation, economic recession, possibly even the extinction of homo sapiens.”
Or, peak oil and gas “represents a mortal threat to the U.S. economy” and we “could plunge into a new Dark Age … in an overheated world.” This one lamented that it might well exacerbate “global warming” and thus it called for higher energy taxes and increased limits on coal alternatives.
Besides the extravagant rhetoric typical of environmentalists, the Politically Correct and other statist liberals, even when these advocates admitted that things might not turn out as badly as they foresaw, it was important that their Draconian prescriptions be followed anyway. Those were increased taxes, public spending, regulation and control of people’s lives, especially by big governments and international means — meaning reduced liberty and economic freedom. As usual with such folks, the diagnosis is asserted quickly as certain, and the real point is the absolute necessity, stringency and urgency of the remedy.
In 2006, a young professionals group in Reno asked me, as an economic, policy and technical analyst and energy expert, to debate these matters with a peakist. He gave a saner version of the litany than the foregoing quotes, but still inferred that the results of using typical assumptions in the peak model made oil/gas production declines, the resulting economic and social dislocations, and the need for statist action nearly certain.
I explained that, as a young university energy research engineer at an institute affiliated with the limits-to-growth folks in the 1970s, I drank the same kool-aid, which was first made then. In fact, I had remained pretty much a statist San Francisco PC lib whose deepest convictions were as an enviro and alternative energy booster – until, ironically, going to graduate school at Stanford (about as PC as any place) in 1987 helped open my eyes and make me a limited-government conservative.
A key problem for peakist claims – as with dire warnings of the population bomb, nuclear winter and global warming – is that they are based on simplistic extrapolation of temporary trends via formal computer models and input assumptions unsuited to support such predictions, much less the policy prescriptions advocated to fix them. More than that, I explained, those analyses assume away the most important countervailing facts: human creativity resulting in continuing technological progress, productivity gains and business innovation; and the normal adjustments made by people in economically free societies to the incentives and constraints they face.
So, the Energy Crisis of the 1970s was not only not a first, but was wrongly conceived as a crisis and a reason to turn the world upside down by collectivist efforts toward “energy independence,” etc. England faced an intractable energy crisis – the cutting of forests mostly for fuel – in the 17th Century before technological progress produced coal as a better alternative. In the 18th Century, whale oil became dear before petroleum was discovered in Pennsylvania in 1859. Etc.
I explained that, while I could not precisely predict future developments, they would include – even without government action – more efficient ways to use oil and gas, alternative fuels to greatly displace them, alternative technologies to deliver existing goods and services with less energy use, changes in the mix of goods and services consumed by folks that substitute less energy-intensive options for more energy-intensive ones, etc. They might even include new oil and gas resources and cheaper ways to produce them. The important thing is that we have always benefitted from such developments and it’s predictable that we will continue to do so.
Not only have the alternative and substitution trends continued, but spectacularly in the half-dozen years after that event, slant drilling and fracking and other ways of exploiting tight oil and gas formations exploded. They not only made previously recognized low-grade resources economically recoverable, but also led to huge increases in recognized reserves and resources. Contra the energy-crisis foolishness of yesterday, America is now within seeing distance of becoming a net exporter of at least natural gas!
America leads this revolution because we protect private property rights and assure most economic incentives that are key to the oil/gas revolution and development of other alternatives. Some other countries also have fracable resources in the ground – but they lack the development incentives and gathering and processing infrastructure we have developed under our superior property-rights and economic-freedom regime.
The ultimate lesson in all this is that the limits-to-growthers, enviros and other PC liberal statists are fundamentally wrong at the deepest philosophical, intellectual and analytic levels. Their dogma fails to square with the facts of history, especially the fact that people enjoying liberty and economic freedom buttressed by the rule of law and private property rights do remarkable things that government planning, command and control can’t match.
Resources are finite, but only in a trivial sense. The actual limits of energy and material resources are way beyond the levels needed when they are employed with the full creativity and infinite variation in getting utility from them that people can devise. If any resource is meaningfully limited, it is human creativity, and that only because our statist collectivist strictures suppress it.
Life need not be the grim retreat to primitivism in a state of nature that their false religion worships. It can be an exciting endless adventure of creativity, productivity, growth, possibility and human flourishing if we embrace liberty, opportunity and economic freedom.
26 Comments on "The Greens’ Peak-Oil Limits-to-Growth Apocalypse That Wasn’t"
Davy, Hermann, MO on Thu, 10th Apr 2014 1:58 am
Article said – Resources are finite, but only in a trivial sense. The actual limits of energy and material resources are way beyond the levels needed when they are employed with the full creativity and infinite variation in getting utility from them that people can devise
The above is a good definition of a cornucopian with allusions of human exceptionalism. He has a religious belief in Human knowledge and technology allowing humans to transcend their carrying capacity. His arrogance is a classic example of cognitive dissonance. He is realizing we are facing a predicament with no solutions and his reaction is a religious sermon on the greatness of the human spirit but his spiel is empty with little substance.
Dave Thompson on Thu, 10th Apr 2014 2:33 am
Davey, you said it. Sadly those that read this type of view, often times will look no further for more information and enlightenment.
GregT on Thu, 10th Apr 2014 3:13 am
“It can be an exciting endless adventure of creativity, productivity, growth, possibility and human flourishing if we embrace liberty, opportunity and economic freedom.”
Only if the planet Earth can somehow find a way to endlessly expand, produce, and grow more finite natural ‘resources’, while at the same time miraculously healing itself of all of the destruction that we have, and are still, causing it.
But of course, liberty, opportunity, and economic freedom, always trump biology, physics, and basic mathematics.
There really is no point trying to get through to people like this, they have already made up their minds that human beings are above the laws of nature. All the more reason for rational people to get their plan Bs in effect ASAP.
The inmates truly are, running the asylum.
Nony on Thu, 10th Apr 2014 3:14 am
There was (is for the die hards) a big element of wish fulfillment in the peak oil predictions of the last few years. The people predicting it want it.
That’s why it is sort of confounded with climate change (although really the two fight each other…lack of fuel to warm the planet versus restrictions on demand). But ideologically can see them together (and hear it a lot from commenters here).
GregT on Thu, 10th Apr 2014 3:37 am
Nony,
We are already living post-peak conventional oil. The world’s economies are stagnating, and debt continues to grow exponentially. At some point there will be a reckoning here in NA, just like what is already occurring around the globe.
If we are fortunate as a species, our economies will not continue to be kept on life support for much longer, if we are unfortunate, and our economies continue to be papered over, the consequences for all of us, will be dire. Actually, IMHO, the consequences will be dire either way, it is only a matter of time.
Nony on Thu, 10th Apr 2014 5:00 am
I missed the part where Saniford, Campbell and Gail all made little charts showing 3 MM bpd of tight oil being added in 3 years in the US. Since the Rockman says that it was obvious (technology, geology, etc. just waiting for price), why didn’t these guys show the new oil coming on? They believed in high price, so that’s no excuse. But of course the idea that price allows higher cost supplies to come on line and maintain production is not a peaker staple.
If you were going to predict “conventional oil”, why? Bakken oil is a perfect substitute for WTI (same API and sulfur).
Whole thing is a joke. You all screwed up and don’t want to man up and admit it since you’re typical Internet debaters (never wrong on the Net, argue for ever.)
TOD is dead.
http://2.bp.blogspot.com/-hC819n9EoFM/UfkIFielYMI/AAAAAAAAAlw/wgwD7GDqfqQ/s1600/screenshot_12.jpg
GregT on Thu, 10th Apr 2014 5:32 am
US national debt has doubled in the past 7 years. Not including personal, municipal, county, or state debt, never mind CDSs, the stock market, unfunded liabilities, 401Ks, and failing infrastructure.
You are ignoring reality Nony. It is the price that matters, not volume. It is the price that has allowed volume to increase, at a deficit to the overall economy. The economy is on life support, the economy cannot afford a 300% increase in energy costs.
$17,000,000,000,000 in national debt is not a joke. It is very real, and you should be very concerned. That is YOUR future Nony.
Nony on Thu, 10th Apr 2014 6:00 am
I don’t like the debt. But try cutting some government program and hear people whine. I didn’t like the bailouts either. A few Goldman shmucks diving out of windows would have been a good thing. Why should someone who was not betting on derivatives be responsible for them?
Jimmy on Thu, 10th Apr 2014 6:19 am
The article states the following- Another version: “war, starvation, economic recession, possibly even the extinction of homo sapiens.”
So the writer hasn’t heard about Yemen Syria Egypt Libya Central African Republic, Global Economic Crisis etc ….
What an unbelievably piss poor article. Dip shit needs to learn how to Google lol
Meld on Thu, 10th Apr 2014 9:27 am
Jesus christ, these articles are getting funnier and funnier. Do these people live in a little bubble? do they not watch the news or talk to anyone outside their bourgeois friend circle.
Got to love that ending, a collection of hopeful emotion filled buzz words written to make the reader feel snuggly warm. It’s sad to say but these are the kinds of people who get strung up in revolutions and have no idea what they did to deserve it .
As Davy says, this chap is a preacher of the religion of progress, a religion that has as much evidence for it as every other religion. none.
Cloud9 on Thu, 10th Apr 2014 11:23 am
If peak oil is a joke, then why are we retailing a third of the gasoline we were retailing a decade ago? Gasoline is the life blood of our economy. Its use is a good metric of our economic growth. Money created with a mouse click is not growth.
meld on Thu, 10th Apr 2014 11:38 am
If peak oil is a joke then why are people going to such great pains to deny it?
If peak oil is a joke then why are large proportions of the worlds countries having revolutions and or civil unrest due to high food and living prices
They don’t have answers to these questions so they use arguments from emotion. There was a time when they used to argue their case with facts and figures and charts, anyone remember those times, when deniers at least had some semblance of credibility, now they just make shit up, dress it up with highly emotionally charged words and say if you don’t believe me then you’re and idiot. I think folks, we have finally won!
meld on Thu, 10th Apr 2014 11:45 am
Just to clarify this guys background
Economist & Policy, Technical & Financial Analyst
Consultant (Self-employed)
Self-Employed; Myself Only; Internet industry
March 2012 – Present (2 years 2 months)
Consultant and Expert Witness
Regent
Nevada System of Higher Education
Educational Institution; 201-500 employees; Human Resources industry
January 2007 – Present (7 years 4 months)
Member of state’s governing board for all public higher education; member of budget, investment, audit and Health Sciences System commitees
Economist; Senior Economist
Nevada PUC
August 2001 – March 2012 (10 years 8 months)
Wide range of economic, policy, technical and financial analyses, especially cost of capital; expert witness.
President
Economic & Technical Analysis Group
June 1990 – August 2001 (11 years 3 months) San Francisco & Los Altos
Consultant & expert witness — wide range of economic, policy, technical & financial areas; wide client base
Thus going to prove that economists are the modern day soothsayers. In other words, full of shit.
Nony on Thu, 10th Apr 2014 12:36 pm
TOD is dead. I know how people like to hang and chat with similar folks and I don’t resent anyone their TOD-refugee sites. I even feel bad (occasionally) for pissing in the punch bowl.
But you all need to realize you’re not mainstream and you’re not high caliber analysts. After that, we can still have fun conversation, just like debating football.
Davy, Hermann, MO on Thu, 10th Apr 2014 12:48 pm
Hell, NOOO, if you didn’t have cognitive dissonance you would not even bring up the subject. You are giving away your worry about the truth we lay bare here. You are struggling with the truth with your corn pone cornucopian ideas of a non-future of cheap fossil fuels. You turn a blind eye to anything that does not conform to your vision of a bright new world of growth through unconventionals. Wake Up NOOOO.
Ulmo on Thu, 10th Apr 2014 1:16 pm
Ir looks like some people just think the world is only as big as their own middle class suburb. I would recommend this writer to come to South Europe and check by himself how our living standards are becoming. Not only my parents, even my grandparents enjoyed better standards than me (35). Of course, my children will need to get used for worse living conditions than I had, as currently young people are unemployed (58%) or just work for some 200€/month.
Nony on Thu, 10th Apr 2014 2:15 pm
Move.
meld on Thu, 10th Apr 2014 2:16 pm
Oh thanks NONY, you’re so gracious.
TOD is dead because the writers had better things to do than convince people like yourself who have their heads buried so deeply in the sand they have to talk out of their arse.
We’re not mainstream? so that’s how we know something is true or not? fucking sublime reasoning skills NONY, sublime.
Boat on Thu, 10th Apr 2014 3:04 pm
There is peak oil or peak plateau but Nat Gas, solar, better cars, trucks, trains, housing and building efficiency, wind etc will prevent a crash in my view. There may be pockets of severe demand destruction and more world conflict as climate change destroys indiscriminate areas of countries. This will just balance out some the over population that exists.
The world is adjusting to our problems and will continue to do so. Not as fast as many would like including me but adjust we will.
Northwest Resident on Thu, 10th Apr 2014 3:08 pm
“I even feel bad (occasionally) for pissing in the punch bowl.”
Nony — You miss every time you attempt to piss into the punch bowl and end up soaking your feet instead. Your goofy little cheerleader routines performed in pink tights for NG and fracturing future of world energy are amusing and pitiful to watch at the same time. You are consistently wrong even when you try really hard to state facts, and the facts that you do manage to get right frequently are arranged into a nonsensical mosaic of pure B.S. Don’t compliment yourself for being any kind of serious nay-sayer. Nobody takes you seriously.
GregT on Thu, 10th Apr 2014 3:49 pm
You say “Move’ Nony?
Hmmm, sounds like very good advice. As a matter of fact, that sounds just like the advice that many here having been giving for quite some time. Sadly, for many around the globe, moving is no longer an option. For many of us here, a move is still possible, but that possibility is going to become less and less of an option, as time goes on.
drwater on Thu, 10th Apr 2014 3:55 pm
Nony,
Even though I personally think we are in for a rough transition for transportation fuels and a lot of environmental problems, I like having your counterpoint position here. With the potential energy from gas, nuclear, and solar, there is no thermodynamic reason why we can’t transition away from conventional oil. It is just going to take higher prices and a lot more capital, which means some serious pain for a while. Political mismanagement could be the greatest risk to the system.
Northwest Resident on Thu, 10th Apr 2014 4:52 pm
“I like having your counterpoint position here.”
If counterpoint was all that Nony offered, that would be great. But he all to often steps out with insults and disparaging remarks about highly qualified and respected information sources whose only fault is that Nony disagrees with them. Nony is an expert at finding errant predictions made by Oil Drum commenters from many years ago and dangling those errant predictions in up for view, as if they actually meant anything. Nony has himself stated in a comment on this site that he is surprised that he hasn’t been banned for trolling and name-calling, as he has from other sites. IF Nony would just stick to counterpoints, that would be fine — it is all the other ridiculous shit he pulls that sometimes sets me off, as in my post above. BTW, I always end up slightly regretting posts like the one I wrote above, and I wish Nony would stop posting such ridiculous crap that sometimes catches me offgaurd and elicits a sharp response from me — but, that appears to be what Nony WANTS to do, which is all the more irritating.
GregT on Thu, 10th Apr 2014 6:12 pm
“Political mismanagement could be the greatest risk to the system.”
The biggest risk to the system, was creating a system in the first place, that was reliant on finite resources. Replacing one finite resource, with another finite resource, does not solve any of our problems. It only kicks the can down the road, and makes those same problems get worse over time. The longer we try to prop up an unsustainable system, the bigger the fall will be.
J-Gav on Thu, 10th Apr 2014 9:51 pm
Back to the article here: Barf! Less than nothing there.
John Orr on Thu, 10th Apr 2014 9:56 pm
Everyone talks about costs…..if it works for QEasing u can print money for anything…only thing is we can’t go and print money!!!….in stead of giving it to the bankers I would have kept the economy going if the QEasing was distributed to us!!!!