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Page added on March 1, 2015
Why Peak Oil Predictions Haven’t Come True
I’ve written about the myth of “peak oil” for at least eight years — every year brings new evidence against the prophecies of the doomsayers and yet every year their faulty premises require debunking.
As I said in 2006 (“Oil is Well: The Shortage is a Myth, and Not a New One“): “The left consistently underestimates the power of human ingenuity — given sufficient price incentives — to devise new technologies which expand supply.” The principal resource underestimated in every single dire prediction is people — their intellect, creativity, and resilience.
But of course, that other resource underestimated by so many of our friends on the left is the market: the legitimate desire of people to get ahead by solving other people’s problems. That desire incentivizes a level of creativity not often witnessed at, say, the Post Office.
So here we are in 2015. What’s happening today?
Just read Russell Gold’s “Why Peak-Oil Predictions Haven’t Come True” in The Wall Street Journal. Not only does he trace the protracted history of this fear (over a hundred years now) but he also relates this:
Then the data took a detour from the bell curve. In 2008, the U.S. produced five million barrels a day. In 2009, U.S. oil production began to rise—at first slowly, then quickly. It is still rising today. Through the first half of 2014, it averaged 8.3 million barrels a day.
What changed? An innovation in oil-field technology, which peak-oil theory didn’t anticipate. Energy companies combined hydraulic fracturing and horizontal drilling to wring oil out of super-tight rock formations in North America. The industry figured out that pumping chemically slickened water and sand into shales could create thousands of fractures, each one a tiny path for energy molecules to travel into a well.
At first, drillers targeted natural gas because they thought oil molecules were too big to be extracted. But fracking worked to make oil wells, also. Innovations allowed the industry to locate its frack jobs better and increase density. Now other countries are starting to apply the same techniques and may see the same kinds of gains.
Gold continues by pointing out that this is not a new story, just as I have for all these years.
A century ago, the energy industry found giant new oil fields in Texas and California just as fears spread that oil output had peaked. As production in the U.S. began to decline, other regions picked up the slack: the North Sea, Nigeria and Saudi Arabia. Technical innovations such as using sound waves to locate oil fields through thousands of feet of water and rock spurred a boom in deep-water drilling.
More broadly, peak-oil naysayers argue, the theory looks at the problem in the wrong way—focusing on the physical supply instead of our ingenuity in being able to reach it. “There has to be a finite limit” of oil and gas in buried reserves, says George King, a global technology consultant for Apache Corp. But the constraint on how much oil can be produced isn’t geological, he believes: “We face technical and economic limits more than anything else.”
And Mr. King is an optimist about our ability to overcome technical limits. “This is an inventive industry,” he says.
Indeed. Wealth has never been about what’s in the ground. It has always been about what’s in the mind. Ironically, the “limits to growth” crowd implicitly recognizes this with every call for developing “alternative energies,” a necessarily inventive process. That irony belies an agenda that has little to do with energy, of any sort.
So what’s next? We are already hearing of the “limits to fracking,” but such as those may be, they are no limit on ingenuity.
One of his responsibilities at Apache, a Houston-based oil and gas company, is to stay abreast of new technologies that could boost output in years ahead. For example, he is paying attention to new ways of squeezing more oil out of tight reservoirs. When rocks are fracked, a large amount of oil remains left behind. Fracking tends to free the lighter, smaller gas and oil molecules but leaves behind heavier and stickier molecules.
One idea calls for using carbon dioxide to flood into the tight rocks and push oil out ahead of it. Another is to use nanochemistry to reduce surface tension and lift oil molecules off rock, much like a detergent lifts stains. “Some companies have really neat ideas” along these lines, he says.
Indeed they do. Moore’s Law is about far more than silicon wafers. We are blessed to live in a time and place — so very rare in all of history — where people are free to give full effect to their thoughts. Some people are opposed to that, and others place little faith in it. But the economic and technological revolution of the past two and a half centuries is ample proof of its merit.
26 Comments on "Why Peak Oil Predictions Haven’t Come True"
gdubya on Sun, 1st Mar 2015 10:06 pm
Well, that’s a relief. Nothing to worry about then, eh?
dave thompson on Sun, 1st Mar 2015 11:33 pm
No mention of true net energy growth. I wonder why?
Plantagenet on Sun, 1st Mar 2015 11:58 pm
The folks who don’t believe in peak oil are bound to gloat a little bit now that we are in the middle of an oil glut. But one way or another—sooner or later—–eventually we’ll hit peak oil.
Cheers!
dave thompson on Mon, 2nd Mar 2015 12:20 am
Here in the US in 1971 when we hit “peak” oil extraction, many did not believe it and still do not to this day. The number of barrels extracted and counted have increased to 91+ million per day now world wide, but, the net end user products and available energy is in a death spiral of decline. Welcome to the age of limits, AKA “peak oil”.
pat on Mon, 2nd Mar 2015 1:10 am
“the economic and technological revolution of the past two and a half centuries is ample proof of its merit” the both have reached a limit and cannot go on ever. the unending desire for growth, BAU economy have reached a limit, the 2008 was just a glimpse of the coming global collapse. the signals of the limits of bau already seen on the global oil prices which have collapsed more than 60 per cent. the technological revolution had enabled to know the hugely declining reserves of conventional oil, which had already seen peak in 2005 and their ability to pump the world is decelerating fast.
Northwest Resident on Mon, 2nd Mar 2015 1:35 am
We hit peak oil already. Then we launched on a plan to boost “oil” production by incurring hundreds of billions of unpayable debt to produce unconventional sourced oil at too great expense and too great a burden on society. That was just a short term plan to buy time and extend the age of oil a little further into the future. Now we’ve got a GLUT of that unconventional oil that nobody can afford and that just keeps piling up because it is too expensive for what it is. We are AT PEAK OIL in every way except barrel count. And if predictions and analysis that I read end up being correct, we’ll be at peak barrel count later this year as well.
Perk Earl on Mon, 2nd Mar 2015 4:14 am
Instead of whistling past the graveyard like the Author of this article, people should enjoy this ‘extend and pretend’ period of the oil age, because it will be followed by the privation of harsh descent marked by violent chaos.
Newfie on Mon, 2nd Mar 2015 4:32 am
There’s “plenty” of oil left if you can afford to pay for it. The higher the price of oil, the more recoverable oil there is. Unfortunately the economy won’t run on expensive oil.
yoananda on Mon, 2nd Mar 2015 4:48 am
In 1971 it was peak US oil.
In 1979 it was peak onshore world oil.
For the cornucopians, nothing to worry, peak oil will never occur because we will ever find new ways to extract oil.
BUT, since 1979, growth is depending on exponential debt. It was not before.
From 1979, oil is not sufficient. Growth is not self sustainable, we have rely more and more on debts.
They would like us to believe it’s just coïncidence ?
In 2005 conventional oil, as predicted, peaked. 3 years later, we have a gigantic financial crisis.
But don’t worry, there is still plenty of oil. Debts have nothing to do with lack of oil.
Now, shale oil is on the verge to peak. But we will have artic oil, and maybe Venusian oil … still nothing to worry !
lol
peterev on Mon, 2nd Mar 2015 6:41 am
I case you missed the discussion, there is a graph posted here:
http://peakoil.com/forums/viewtopic.php?f=1&t=71061 where Exxon shows that Conventional C+C peaked in 2005. There was a good discussion on where the new Conventional C+C will be coming from since we did not make much progress in increasing production when oil was over $100/barrel which puts the totals in question.
Please inform us of where the new Conventional C+C will be coming from and how it will be extracted.
Davy on Mon, 2nd Mar 2015 6:46 am
PO discussions are like statistics and Mark Twain put it quite well: “Facts are stubborn, but statistics are more pliable”. We have the usual WS clowns who pander to investors and market makers down playing PO. That is easy to do depending on how you frame the subject. These economic cornucopians have rewritten the definition. Sometimes they give no definition only that all is well don’t worry. Shouldn’t the definition be with those who came up with the subject like Hubbert? Shouldn’t we keep the definition and study in the context to those in geology and those dedicated to the study of PO? Yes.
When one uses the definitions and takes it a step further with POD & ETP of oil we see the context of PO in dynamic systems. When one sees oil is a foundational commodity that cannot be substituted for we see the classic case of limits of growth and diminishing returns. Sure our econ 101 folks can use Freddy fluff charts and financial statistics to argue away the true meaning of PO. The folks that are doing this are clearly pandering and marketing. The journalist in the financial MSM are not paid for bad news. These folks are paid to keep confidence and liquidity oiled.
This pandering and marketing really is a BAUtopian dynamics. Are there any problems ever talked about except those that one side or the other can fix if and only they are given the reins of power or money? NO. We are in an age of marketing by BAUtopians who preach the exceptionalism of technology, markets, and progress. How the hell could a brick wall theory like PO be sold by these folks? It can’t. There is no way this theory could be sold in the main stream of BAUtopia.
With that said we are clearly seeing the systematic results of PO. Since oil is a foundational commodity the effects are masked by being a participant in all major predicaments and problems. Cheap and plentiful oil could solve a long laundry list of issues instead we have ever increasing problems and predicaments from expensive oil. Even AGW could be better mitigated by cheap oil because all that money savings could go into AltE and sequester technologies.
Nope folks PO is a foundational predicament. It is the brick wall for the rest of the predicaments of BAU that are potential brick walls. There are other more immediate problems like the financial system and cold wars but none are defined brick walls. We are in effect on a runaway train without a solution to our foundational commodity oil. Hence the talk about fusion and methane hydrates.
I am amazed at all the articles on PO today needed by WS clowns to try to explain away this brick wall. Here in our little PO forum world we have the corn porn Marm constantly fighting PO with Freddy fluff charts. It is funny how it is Marm who has to fight us. We have reality and facts on our side. Marm has manipulated statistics as his weapon. Notice how Marm does not veer from the numbers and statistics. He can’t because that would expose the true gravity of the situation of depletion.
I don’t use numbers much. Word salad is fine for me. Why? Because who’s numbers can you believe today. I would rather point to reality of our situation as a starting point hence the world salad. Word salad is nothing more than trying to paint a linear picture of a nonlinear reality. Pictures are needed as much as numbers to describe a foundational commodity in depletion.
rockman on Mon, 2nd Mar 2015 6:54 am
Same old rant so I’ll skip the details…I’ve bored enough of you too many times. LOL. If you don’t know what the POD is you can stop reading now. As far as: ” The folks who don’t believe in peak oil are bound to gloat a little bit now that we are in the middle of an oil glut.” Such gloating only highlights their ignorance about the dynamics: the increase in US oil production is obviously the result of high oil prices. High oil prices that resulted from the POD. Thus IMHO the increase in oil production still stands as one of the best indications of the PO dynamic that the world cannot escape.
It really is getting rather easy to feel superior to the cornies, isn’t it? LOL.
Dredd on Mon, 2nd Mar 2015 7:02 am
The NOAA ark people will be glad to know that there is enough crude to flood the jount (Will This Float Your Boat – 5).
forbin on Mon, 2nd Mar 2015 7:02 am
um,
“Indeed. Wealth has never been about what’s in the ground. It has always been about what’s in the mind.”
crikey !
So that’s what I’m doing wrong , I must “imagine ” I’m wealthy – then I will be ! what could go wrong ?
Forbin
buddavis on Mon, 2nd Mar 2015 8:20 am
Well forbin, there is an old saying. Oil is found in the minds of men. All great discoveries begin with a great story to tell. You need a reason to drill the well.
sunweb on Mon, 2nd Mar 2015 9:33 am
Mr. Martin – is willing to do anything to the earth to keep his bank account growing. Damn those “environmentalist” anyway.
American Idiot on Mon, 2nd Mar 2015 3:16 pm
Facing REALITY is difficult for Idiots living in this Country. It much easier to live in a fantasy world.
American Idiots generally have an Emotional IQ of a Moron or an Imbecile. I blame the failed Educational System of this Idiot Society for much of this Stupidity.
Apneaman on Mon, 2nd Mar 2015 3:41 pm
American Idiot, love the handle. It’s not all that much better in Canada. It’s not as bad, but still bad enough. I use to live in Georgia so I have a good idea of your frustration.
Davy on Mon, 2nd Mar 2015 4:04 pm
Damn nice to see some humility out of a anti-American Canadian.
apneaman on Mon, 2nd Mar 2015 4:35 pm
Davy, I’m not anti-American. I’m anti-Americanism/anti-expansionist/anti-exceptionalism/anti-agression. I have mostly fond memories about my time in the US and the many wonderful Americans I got to know. If my marriage did not end, I might still be living in the great state of Georgia;).
GregT on Mon, 2nd Mar 2015 4:38 pm
From a Pro-American Canadian, who has both friends and relatives in the States, as well as a family owned property. Who loves his routine travels to Washington, Oregon, California, and Hawaii. ( although could seriously do without the HLS hysteria)
All I have to say is, the longer the truth is overshadowed by corporate interests and media propaganda, and the longer that the good citizens of the US allow the militants to continue to control public and foreign policy, the harder the fall is going to be for the once greatest nation on Earth.
The only people that have the ability to put an end to this corpocracy, is the good American people themselves. The longer the good American citizens allow their country to be hijacked by these immoral, unjust, and uncivilized people, the worse the fall will be for every single last American citizen.
Davy on Mon, 2nd Mar 2015 4:43 pm
Oh, Ap, I was just playin. I am pretty tiered of the bullshit out of the good ole USA my own damn self. Just nice to hear that Canadians are human too.
Davy on Mon, 2nd Mar 2015 4:46 pm
Well said Greg but I think the hijacking is complete until the Walmarts start closing and the gas stations are empty. Then the thieves will be lynched. Americans get pretty irate when they discover they have been lied to.
GregT on Mon, 2nd Mar 2015 5:44 pm
I hate to say it Davy, but at this point I see the rise of a fascist military/police state. Short of a violent and bloody revolution, I think that the US may be too far gone already. I see Canada as becoming a part of that fascist state as well. The corporatists have already been given control of our governments, and your military. The general public is allowing this to happen through total complacency. Some things are worth fighting for, but this time I believe that the propagandists are winning. There will be no more freedom, liberty, justice, or democracy. There will be blood in the streets, and after the dust settles, the oligarchs will rule with an iron fist while they enjoy the spoils.
“Fascism should more appropriately be called Corporatism because it is a merger of State and corporate power.”
Benito Mussolini
“Fascism will come to America in the name of anti-fascism’. I’m afraid, based on my own long experience, that fascism will come to America in the name of national security.”
Sen. Huey Long
“Fascism is capitalism in decay.”
Vladimir Lenin
Harquebus on Mon, 2nd Mar 2015 7:04 pm
It wasn’t new technology that delayed peak oil. It was a old one. Debt.
When the credit cards stop working, everything stops.
Davy on Mon, 2nd Mar 2015 7:22 pm
Good point Hark! How easy the PO naysayers discount debt as the real innovation behind the frack crack rush. It was a perfect combination of multiple variables. It probably also saved the global economy a few years of life. Imagine if the U.S. supply never cranked up. Yet, the party is over QE was shut down by the diminishing returns police and the fracking boom is a retirement party.