Peak Oil Blowout!

The concept of peak oil has been around for decades in the imagination of those who either fear —or wish—that the days of successful E&P of the black liquid are waning.  Peak oil advocates argued that we have already reached the point where the most oil able to be produced from the easy to find sources has been reached and we can expect to see steady declines in new oil discoveries—-ergo—get thee off the black stuff and onto cleaner options.

The political correctness of peak oil helped it grow in popularity among both the ‘chattering classes’ and the ‘political classes’ because it reinforced their environmental views.

I am not opposed to renewable energy nor cleaning up the environment, but in the real world where I live and work “sustainability” means I can continue to afford to use the product and live the lifestyle I have chosen without harassment or breaking the law.

Yes, I know, I am making fun of the peak oil true believers.

But admit it, they have it coming. Most of us know enough about science and the scientific method to realize that just because Al Gore says there is ‘incontrovertible evidence’ of global warming does not make it so.  And just because The Oil Drum says we reached the stage of peak oil in 2008 and it is irreversible—does not make it so.

That is why it was SO DELIGHTFUL to read in an authoritative source none other than The Oil Drum that a new high in liquid production has been reached.  The problem for The Oil Drum was this report was written January 2011 for a period including November 2010!  And worse, the report was confirmed by both IEA and OPEC.  Oh Mon Dieu!

“Both the IEA and OPEC came out with new monthly reports recently. And both report that oil production in November 2010 exceeded the previous high month of July 2008 (back when oil was over $140). Probably the difference is within the margin of error, and in any case the third agency (the EIA) won’t weigh in for a few months.”—-The Oil Drum January 5, 2011

I’ll take that as an admission of error on the peak oil notion.

So what?

So the problem with the peak oil concept is that it relied on the old school view of oil and gas E&P where vertical drilling in search of vast pools of oil was the stuff of petro-dreams.  Today most of the new prospects for such oil come from non-OPEC countries in places of large potential and larger risks like Africa and deep water off-shore Brazil.  No doubt we will find it there, but meanwhile, the real story of the oil and gas future is in unconventional sources that use horizontal drilling and hydraulic fracturing to search for the ribbons of hydrocarbons once thought uneconomic to produce the old style conventional ways.  They were right then, but not today.

Even better news is that unconventional oil and gas apparently can be found in many places around the world from North America where it is transforming the energy business despite the best efforts of our government to prevent domestic oil and gas production from growing to China that so desperately needs new domestic sources of energy that it is now importing coal from the US that we will not allow to be used here to the EU where Russian gas always carries a risk greater than any OPEC price gouge.

It is time for the US to have an energy policy driven by a reasonable balancing of economic and environmental considerations and focused on sustainable economic growth not a failed policy of picking winners based upon the political correctness of fuels.

So Drill, Baby, Drill!

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2 responses

  1. I believe! So, what does this mean to transit? Is there a way to cause the market and consumer preference to produce a more pleasant conversion of energy into transport than today’s – each of us trying to drive a 4-7 passenger car on overcrowded roads? I love mass transit for the convenience of having it embedded into the infrastructure, I don’t like its convenience, cost or whimsical government management.

    I agree this raises the stakes on a US energy policy.
    Dan

  2. Dan:
    I actually believe the growth of unconventional oil and gas is not only good for the US economy and our energy security but it offer the “bridge” to the clean energy future for transportation as well.

    Reliable supplies or natural gas at affordable prices should encourage fleet operators of buses, trucks and other vehicles to convert them to natural gas. Combined with higher CAFE standards and expansion of PHEV and Hydrid vehicles in the fleet could mean shaving the peak off gasoline demand.

    All without any off shore drilling. I think the way to get a reasonable policy on off-shore drilling is to offer the coastal states a sizable share of the royalties and extraction fees for energy production off-shore—they are all starved for revenue.

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