Peak Energy: A Reply to Kevin Drum, Part 3
This is part three in the series of posts that points out some of the problems with the current fad Peak Oil (parts 1 and 2 are here and here). Kevin’s third post deals with the issue of how much oil is left and can we get it to the surface as fast as we need it.
There isn’t much here that I quibble with. I accept that basic premise that someday oil will not be a major source of energy. I think Hubbert’s idea is fundamentally correct, but that there are problems in determining exactly how much oil is left and thus, exactly when the peak will be. If the predictions for the total number barrels that recoverable are too low, then the peak shifts back. If they are too low then the peak shifts forward. Toss into this mix the fact that as prices rise people will respond by curtailing usage you get a real iffy forecast for the peak of oil production, IMO.
With regards to that last point some argue that the peak oil analysis using the Hubbert curve takes this into consideration. This is incorrect. The Hubbert curve is determined by the following function,
Notice that price is not in there anywhere. Further, neither are the prices of the goods that are derived from oil. For the most part we don’t like oil because it is oil, but what we can use it for. One obvious product derived from oil is gasoline, and gasoline prices here in the U.S. are…unstable to say the least. This instability of gasoline prices is not solely a function of oil, but of our own making. There are a small number of gasoline refineries in the U.S. and various regions of the U.S. have their own requirements for the blends of gasoline. These two factors make the price of gasoline highly volatile. One refinery shuts down and the next thing you know gasoline prices have jumped $0.25/gallon. I think it is fair to say that without these kinds of things we might have already passed the peak in oil production. After all cheaper means that we use more.
Another statement by Kevin that is made out of thin air with nothing to support it is this.
However, there are no miracle breakthroughs on the horizon, and we have a pretty good idea of what existing advanced technology can do: it can reduce the decline of old fields, but it can’t prevent them from peaking in the first place. There’s no magic bullet here.
At first it looks pretty impressive…but how often are technological breakthroughs visible on the horizon before they are needed? At least some historical context would be nice. Maybe Kevin is right, but we have no way of knowing it since he can’t bother himself to look at various instances of technological breakthroughs. My usual example is the kerosene lamp which helped bring about the end of the whale oil trade. Did anybody foresee that replacing whale oil lamps prior to the Titusville well? Did anybody forsee the internet becoming what it is today back when it was first being suggested/discussed? What about cell phones, were those on the horizon? Did anybody see that coming? I’m sure there are other instances of miraculous breakthroughs and I’m curious…did anybody see them on the horizon 4,5 or even 10 years before they actually “broke through”? How about the polio vaccines? Did anybody see those 4 years before it happened?
Kevin also presents some impressive data on new discoveries of oil. At one point Kevin makes the following comment,
Will market forces and technology save us in the future? Maybe. But prices skyrocketed during the 70s and the rate of new discoveries fell anyway. Likewise, new technology has been put to ever increasing use during the past two decades, and that didn’t stop the decline in new discoveries either. Nothing has stopped the decline, probably because there’s just not that much new oil left to be found.
Okay, fine. However, we have a similar result for Hubbert cycles. We have not gone through a complete Hubbert cycle for a non-renewable resource, ever. But peak oil is “serious”, why because what Kevin accepts as the truth in one instance (declining oil discoveries) is not even really acknowledged in the second (that we have yet to go through a complete Hubbert cycle).