Peak oil

Where Have All the Peak Oilers Gone?

Dancing on the grave of "peak oil" - will it stay buried?



In my November 2007 column, Peak Oil Again?, when oil prices had reached $100 per barrel, I concluded, "Some day peak oil production will be reached, but most oil reserve estimates suggest that there are good reasons to doubt that that day is now at hand." And that was before fracking and horizontal drilling had unleashed the shale oil revolution.

A quick Google check of the news finds that the more prominent peak oilers—Colin Campbell, Jean Laherrère, Kenneth Deffeyes, Daniel Goodstein—are maintaining a decorous silence as the price of crude sinks below $28 per barrel. After all, the International Energy Agency just warned that the world is "drowning" in oil. So no Jeremiads about the impending end of an oil-starved industrial civilization are appearing in the media. Nor, sadly, do many journalists seem interested in probing why the peakists' widely touted dire forecasts have, once again, proven wrong.

Well, one peak oiler, Richard Heinberg from the Post Carbon Institute, has actually spoken up recently on RT (Russia Today) during a program that discussed the current "oil crisis." The crisis is low prices, not peaking production. The RT interviewer asked Heinberg: 

In your view will we ever see the oil prices return to their peak or are we here with this new reality for good?

R[ichard] H[einberg]: It's impossible to say what oil prices will do in the future.

Well, yes. But Heinberg was not always so sagaciously reticent. For eample, in the 2010 foreword to his 2007 Neo-Malthusian classic Peak Everything: Waking Up to a Century of Declines, Heinberg declared:

I argued that the industrial expansion of the past century or two was mainly due to our accelerating use of the concentrated energies of cheap fossil fuels; and that as oil, coal, and natural gas cease to be cheap and abundant, economic growth will phase into contraction. I further pointed out that world oil production was at, or very nearly at its peak, and that the imminent decline in extraction rates will be decisive, because global transport is nearly all oil-dependent, and there is currently no adequate substitute for petroleum. Finally, I noted that the shift from growth to contraction will impact every aspect of human existence—financial systems, food systems, global trade—at both the macro and micro levels, threatening even our personal psychological coping mechanisms.

Nothing has happened in the past three years to change that outlook—but much has transpired to confirm it. …

Thus Peak Oil likely represents the first of the limits to growth that will turn a century of economic expansion into decades of contraction.

In 2007, global crude oil production averaged around 84 million barrels daily; it is now about 94 million barrels per day. Peak what? With regard to the availability of natural resources, much has happened in the last five years; and nearly all of it has refuted the doom-laden predictions made in Peak Everything

Did I mention that I have a chapter,—"Is the World Running on Empty?"—in my book, The End of Doom: Environmental Renewal in the Twenty-first Century, that analyzes how resource doomsters like Heinberg always get it wrong?

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  1. The crisis is low prices, not peaking production.

    The important thing to remember is there’s a crisis.

    1. The crisis isn’t low prices. Since when has spending less on an essential commodity been a bad thing, in the big picture.

      If there is a crisis from the current oil market, it is at least one step removed, and has to do with how much debt has been taken on relating to oil that will vaporize, and cause knock-on effects through other markets – currency, derivatives, etc.

      1. This is the near term problem/opportunity, which I desperately hope will not be met with government assistance

  2. The crisis is low prices

    There has always been too much oil.

    1. Where have the Houston Oilers gone?

      1. They went to Nashville and changed their name to the Titans.

  3. Nor, sadly, do many journalists seem interested in probing why the peakists’ widely touted dire forecasts have, once again, proven wrong.

    Replace “peakist” with “warmist” and it reads exactly the same. One of these days, you will realize that one is just a stupid as the other.

    1. *as stupid*

  4. When can I get plane tickets for $20?

    I’d like to beat traffic by flying from LAX to Burbank a few times next month.

    1. They had 40-dollar helicopter fares from LAX to Burbank during Carmageddon.

  5. the more prominent peak oilers – Colin Campbell, Jean Laherr?re, Kenneth Deffeyes, Daniel Goodstein

    I applaud the naming of names.

  6. As it is with the Keynesian economists, the fact that none of the Malthusians have ever been proven right in anything they predicted will not stop the mainstream media from presenting them as authorities in the future.

    Predicting doom, especially if said doom can be used as a rationalization for more government power and control over the private sector will always be popular with those who are perpetually predetermined to favor it.

    For that crowd it will always be the narrative that matters – not the facts.

    1. Lots of example of that!

      I’m old enough to remember the gas lines when I was a kid in ’73 and ’79. Back then, it wasn’t about Peak Oil. It was about OPEC. They were going to starve us of oil through collusion, doncha know We were going to be at their mercy forever.

      Before the 1970s, there was the fear that the communists were going to lock us out of the oil markets. We had to overthrow the democratically elected government of Iran and install the Shah because the new government of Iran was going to nationalize BP’s oil assets and infrastructure–starve us out and only sell to the communists.

      Our support for Saddam Hussein in his war against the Iranians was about protecting Saudi oil fields in the wake of the Iranian Revolution. Our stationing troops in Saudi Arabia prior to 9/11 was about protecting the House of Saud from the Iranians, Saddam Hussein, . . .

      1. I also recall the prediction that a Japanese economic juggernaut was going to dominate the world and that they would own everything in the United States.

  7. Where have all the peak oilers gone?
    Long time passing
    Where have all the peak oilers gone?
    Long time ago

    Where have all the peak oilers gone?
    The machinations of OPEC petro-magnates have picked them everyone
    Oh, when will they ever learn?
    Oh, when will they ever learn?

  8. I guess many of them have turned into AGW activists:

    Old: “Our civilization is DOOMED because there isn’t enough oil to burn.”

    New: “Our civilization is DOOMED because there is too much oil to burn.”

  9. I have a very serious concern about this:

    The administration is going to try and tax petroleum while it’s cheap.

    “You’re still paying less than you were 6 months ago!”

    Government being the one way vice that it is, that tax while never be repealed even if oil goes to $250 a barrel.

    1. I’m sure it will be proposed soon. IIRC, during the last oil glut, Dems were proposing a 50 cent per gallon tax on gasoline.

      I predict a similar tax will be proposed by the end of this month.

      1. Not just Dems. During one of the spikes Charles Krauthammer proposed price-fixing gasoline at $4.00 per gallon, adjusting for CPI inflation as necessary, observing that this appears to be the point in the US where demand for gas goes from inelastic to elastic. IIRC, taxes would be levied at the pump when the price for gas was low, this money would be set aside as an emergency fund, and producers would be subsidized during spikes.

        1. That would piss people off.

          Seems like it would be easier for them to just purchase shittons of oil for the Strategic Petroleum Reserve, which would drive the price up, and they could sell the excess back into the market later if prices later spiked and get some $$$ back.

      2. Timing is bad for them on this one.

        No one wants to propose something like that in the middle of a Presidential race,

    2. Michigan just did this with GoP legislature and governor.

  10. With friends and acquaintances, a lot of the peak oil hype had to do with global warming and wishful thinking.

    They were hoping that fossil fuels would eventually price themselves out of the market, and less carbon intensive substitutes would take their place.

    1. In the summer of 2008 I legitimately believed that I was seeing the end of gasoline under 4 dollars per gallon. They hype was real. I drove a shit-ton because I believed it was my last chance to do so. I still drive a lot. But with nowhere near the same level of urgency.

  11. To paraphrase Tevye, “If low prices are a crisis, then smite me forever.”

    1. Yeah, well, when I’m a buyer. When I’m a seller, low prices are indeed a crisis for me.

  12. “In 2007, global crude oil production averaged around 84 million barrels daily; it is now about 94 million barrels per day. Peak what?”

    Nowadays, the Saudis couldn’t hold back production even if they wanted to. They’re not a business that needs to maximize profit, sometimes by cutting production. They’re a country with a national budget–and they need every dollar they can get in absolute terms. In fact, there’s probably a perverse incentive, where the lower the price of oil goes, the more they need to make up for budget shortfalls with increased production.

    That’s why they’re now seeking investors to help with the costs of upgrading their production facilities even as prices continue to fall, isn’t it?…..1452254819

    1. How does this jive with their strategic decision to keep supply high to drive shale out of business? They’re playing the long game. Sure, they are operating at a deficit for the first time in forever but killing a bunch of overextended small to mid sized shale operators, gutting the North American oil field services sector for a decade all the while improving their production facilities just positions them better to control the market.

      1. I’ve heard this before and wonder if it’s pure folly on their part. Isnt the bulk of shale extraction cost the capital infrastructure piece? If so, that money’s been spent, so to speak, and it will be relatively cheaper to “fire back up” once the price justifies it. Bankruptcy of wildcatters in the interim sucks, but the expensive startup infrastructure just changes hands, no?

  13. “In my November 2007 column, Peak Oil Again?, when oil prices had reached $100 per barrel, I concluded, “Some day peak oil production will be reached, but most oil reserve estimates suggest that there are good reasons to doubt that that day is now at hand.” And that was before fracking and horizontal drilling had unleashed the shale oil revolution.”

    It’s possible peak oil will never be reached in the way Peak Oilers mean. There may be some technological advancement that allows us to produce energy in a totally new way, in which case we could just stop using oil. If that happens before oil production peaks, then there will never be an issue with declining oil production.

    1. What are you talking about? Peak oil stands for the PEAK in global OIL production. This is a physical fact of the world: that at some point in the future, the oil produced will be as high as it ever will be. That is what Peak Oilers mean, and not that we are “running out of oil” or other such nonsense.

      1. His point is that it is most likely that no one will care about Peak Oil, just as no one cared about Peak Whale Oil or Peak Horse.

  14. “do the math”s Tom Murphy has been pretty silent on the topic, after some incoherent blubbering about the matter:…..peak-what/

  15. All that the Saudis and their fellow bankrollers of Islamic terrorism care about right now is getting Hillary Clinton elected president.

    Once that happens, the price will almost instantly start going back up again, exactly like it after Obama got elected. So enjoy these prices now in 2016 while you can.


  17. The thing that “anti ? peak oilers” don’t seem to understand is that it’s about the RATIO of oil supply to economic growth, not about absolute amounts of oil, furthermore compounded by the relationship of growth to credit/debt. Given the amounts of debt in existence, we need a certain amount of real economic growth to pay it back (or default). A certain amount of oil is required to sustain that growth. The oil price spike of 2008 signalled that then current growth rates could not be sustained by then existing oil supply rates. So we were at peak oil FOR THAT RATE OF GLOBAL AGGREGATE GROWTH. Without the growth, we have a potential debt-default problem, which becomes the principal problem as we have now, with QE struggling to contain the deflationary forces caused by that excess debt. Deflation caused by excess debt and excess capacity worldwide is now causing the oil price to tank. This is compounded by an additional and completely artificial factor ? namely an oil price war waged by Saudi Arabia on US frackers AND by the US as a geopolitical entity on Vladimir Putin, the latest US bogeyman who is a true threat to the US dollar oil standard.

  18. PART 2: The other thing that anti-peak oilers are forgetting is that peak oil was always about the depletion of conventional or “cheap” or “easy” oil, not about non-conventional sources such as those now being fracked. I wouldn’t be surprised if the likes of Deffeyes (& etc) never expected US shale resources to ever be extracted given the high environmental and potential political cost of fracking. If so, they hadn’t reckoned on the ruthlessness of Dick Cheney to force through “Halliburton loophole” legislation exempting fracking from certain provisions of applicable legislation such as the Clean Water Act, rendering a whole class of landowners powerless to do anything about their groundwater supplies being polluted. Artificially cheap credit is also sustaining a lot of frackers who should be closing shop with an oil price below around $50/bl. I wouldn’t be surprised if the US govt/neocon elite are rooting for frackers to continue producing in the national price war effort against Russia.
    Bottom line: the price of a low oil price is recession/depression and an even more polluted environment than we already have from conventional oil and associated economic activity.

  19. stop;
    Most paper etc. is made from purpose-grown tree crops.

    “Recycle your breadcrumbs. Save the wheat!”

  20. The point to consider is not oil prices but oil production cost.

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