29 July 2008

You Don't Have to Be Nuts to Believe in Peak Oil Doom, But It Helps!

If all the citizens of Planet Earth were polled, it is likely that most citizens believe in one doomsday cult or another. Peak oil doom is a highly addictive, though irrational, doomsday cult. Like the climate catastrophe doomsday cult, it is a quasi-scientific religion, with just enough factual bits included to snare the unwary.

The first problem one confronts when trying to come to grips with the cult of peak oil, is finding a definition of the phenomena which is both widely held among adherents, and clear enough to be falsifiable. Here is a short explanation from Matt Savinar of Life After the Oil Crash (as quoted by Fabius Maximus)
In practical and considerably oversimplified terms, this means that if 2005 was the year of global Peak Oil, worldwide oil production in the year 2030 will be the same as it was in 1980. However, the world’s population in 2030 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil dependant economies will crumble, and resource wars will explode.

The issue is not one of “running out” so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. … A loss of as little as 10-15 pounds of water may be enough to kill him. In a similar sense, an oil based economy such as ours doesn’t need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty. … _FabiusMaximus
Fabius Maximus analyses Savinar's claims line by line at the link above, and explains in several ways why the peak oil cult is massively overblown, and suitable only for people with nothing important to do or think about. Take one of Savinar's points: oil production follows a bell curve. Does that actually hold up in reality? Not really. Think rather of a curve with a long plateau at the top (yet to be reached) and a gradual skew to the right over decades.

JD at Peak Oil Debunked blog has an interesting recent post explaining how a drop in demand for oil such as we are seeing now, can completely change the equation. Here is more on the demand slump in the US.

New supplies--even new wells that will not produce for 5 or 10 years--will also have a downward effect on oil prices and a re-shifting in markets. Producers who are holding back production will be inclined to sell more at current higher prices before later new supplies kick in. See this non-OPEC outlook (PDF), and consider the coming oil rush to the offshore and the arctic.

In China, India, Indonesia, Malaysia, Mexico, and many other emerging economies, governments are subsidising petroleum costs for residents. This is incredibly expensive for those governments. Some of them are already tapering their supports, and others are making definite plans to do so. The loss of those subsidies will trigger a demand destruction in those countries similar to what we are seeing in North America and Europe. It is like a dimmer switch: high cost of a commodity affects how that commodity is used, and promotes substitution of all kinds. This is one of the many things that peak oil cultists fail to comprehend.

It is very likely that high oil prices (above $90 a barrel) will continue to stimulate massive investment in oil exploration, production, and improved refinement--particularly of heavy, sour, and unconventional oils. It is also virtually inevitable that the headlong rush to develop bio-energy solutions will not only continue but will accelerate--as long as oil stays above $90 a barrel.

The US Democratic Party controlled congress will try to continue to cut off energy supplies to the US by banning offshore drilling, arctic drilling, shale oil exploration and development, coal to liquids and coal to gas technologies, nuclear fission power plants, etc. That is political peak oil which we have plenty of. If Barak Obama is elected, he has suggested that he may even ban Canadian oil sands from being used anywhere in the US--political peak oil in spades!

But the US Democratic Party functionaries such as Nancy Pelosi and Barbara Boxer are playing with fire, considering the mood that US consumers, taxpayers, and voters are in. There will be a reckoning, and the Pelosis, Boxers, and Obamas may not enjoy the final tally. Political peak oil is a useful scam for temporarily wrecking an economy only as long as you can blame the carnage on your political opponents. Once the voters begin to see who is really responsible, an intelligent political crook should know when to back off. It is not clear that the cronies leading the political peak oil charge in the US are intelligent.

Even the election of John McCain will not help the energy equation very much, since McCain is actually a believer in climate catastrophe--and probably peak oil doom--at heart. Much of his current posturing is merely a savvy reading of the electorate's mood.

What we are seeing now is a race between the political peak oilers who are trying to shut the US energy supply down via prohibitions, regulations, and bans, and the energy entrepreneurs, engineers, wildcatters, inventors, and innovators--who want to see continued economic growth based upon ever cleaner and more abundant energy. Who are you cheering for?

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Blogger Snake Oil Baron said...

Does McCain really believe of is he just looking for votes from planet Gore?

And how did you get my high school grad picture?

Tuesday, 29 July, 2008  
Blogger al fin said...

Who knows what a politician really believes, Baron? Not I.

A lot of people truly believe the peak oil pablum, which has been affecting the oil futures market. Several hedge funds and pension funds lost a lot of money from their managers' belief in progressive peak oil.

To think rationally about the topic, it is best to substitute the term "extended oil supply disruptions" for "peak oil", which is a very ambiguous term based upon a false premise.

The blogger "Fabius Maximus" has an extended series of posts on "peak oil" which are worth reading.

Wednesday, 30 July, 2008  
Blogger Chrispy said...

Interesting thoughts folks.

Have you read the recent Intergovernmental panel on Climate change Report yet?
2500 Global scientistss came to concencus on this:

# 1 "Carbon dioxide, methane, and nitrous oxide have increased markedly as a result of human activities since 1750 and now far exceed pre-industrial values."

#2 The amount of carbon dioxide in the atmosphere in 2005 (379 ppm) exceeds by far the natural range of the last 650,000 years (180 to 300 ppm).

#3 The amount of methane in the atmosphere in 2005 (1774 ppb) exceeds by far the natural range of the last 650,000 years (320 to 790 ppb).

#4 The primary source of the increase in carbon dioxide is fossil fuel use, but land-use changes also make a contribution.

Even if we could keep burning fossil fool for the next 50 or 100 years, would we really want to?
Anyone seen pic's of bejing lately.

Why not insure America's future by investing heavily in clean renewable energy like solar, wind, tidal, etc?

Even T.Boone Pickens, the Texas oil tycoon feels the same way and will most probably make a ton of $$ in the process of changing course away from oil.

Wednesday, 30 July, 2008  
Blogger al fin said...

Oh really? "Global scientists" say that? How decisive! You are to be congratulated for tapping into the pure vein of global science!

In fact, carbon dioxide in the atmosphere has been much higher within the past million years, and plants would like it to be even higher! Negative climate feedbacks predominate, and anthropogenic effects shrink before the solar, ocean, and biospheric effects on climate.

The sad fact is that renewable energy is not ready for prime time. Nuclear energy has been held back by fanatical leftists both inside government and hovering around the fringes. Our energy infrastructure is built around fossil fuels, and will cost trillions of dollars to replace. So it looks like it's fossil fuels until we can come up with something to replace them.

Right now, nothing is close. It will take between 10 and 20 years of intensive effort to shift from fossil fuels. Even the fanatics who want to take us back to the stone ages had better hope fossil fuels last through the transition. Otherwise, Oynklent Green [OTC:OYNK] will seek them out.

It is always the same with these dieoff.orgists and human extinction adherents. Use CAGW to slap down fossil fuel use, then use Peak Oil Doom to cover the opposite angle. Either way, the boogeyman's going to get you! ;-)

Wednesday, 30 July, 2008  
Blogger kurt9 said...

I've been around people who have a need to believe in the "doom and gloom" stuff. It is a rather specific pathology. One example is the global warming/peak oil thing. Other examples include economic collapse (this is the most common one) and the Islamic Jihadi take over of the world (which is simply the communist peril recycled).

All of the people who believe in these things have common personality traits. They tend to be either social misfits or mal-contents. They do not fit in well with conventional society. They have a need to believe that some great catastrophe (global warming, islamic jihadism) will happen that will eliminate the existing society and replace it with somthing they think will result in them being on top of the social pyramid. This is a very common syndrome among survivalists. Although most survivalists are "right wing", global warming and peak oil cater to the "left wing" equivalents of these people.

The pathology, however, remains the same with both groups of people.

This is one area where I actually give credit to Mark Steyn. Mark Steyn, as you all know, is the leading "islam is out to get us" guy. However, he does show remarkable self-introspection in the preface to his book when he talks about the "doom and gloom" people and how he came to realize that he is one of them. However, (and this is where I give him credit) differentiates himself from all of the other doom and gloomers in that all of the others (especially the global warming people) call for more government regulation and intrusion in our lives and choices. He, on the other hand, calls for LESS government intrusion in our lives because he believes that a culture of individual free-thinking, entrepreneurship, and self-reliance is essential for the well-being of the West.

Although I think his fear of the Islmaic takeover is exaggerated, he is spot on about the above values.

Wednesday, 30 July, 2008  
Blogger al fin said...

Yes. That is where Bush has failed badly--by growing incompetent government agencies without limit, to meet a threat that incompetent government [under Clinton, Bush I, Reagan, and especially Carter] allowed to emerge in the first place.

Most muslims would indeed prefer to live in an Islam-dominated world. But only a small percentage of muslims are willing to do whatever it takes to achieve that world domination.

In western Europe, democracy can be used as a weapon against secular westerners who prefer things as they are. Democracy is the type of weapon that virtually all muslims are willing to pick up and use. Democracy, procreation, and immigration.

No massive terrorism or conspiratorial world-conquest involved. It just happens.

Saturday, 09 August, 2008  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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