What if we don't run out of oil?

The debate over "Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil" has begun to take familiar lines. "Peak oil" adherents continue to insist that oil resources worldwide are depleting. This mantra is repeated almost like an article of faith.

Ever since M. King Hubbert drew his first "peak-production" curve, statements of this tenet are easy to find. Typically, the "Peak-Production" theory is articulated as so well established that further proof is not needed. "Peak production" statements abound in publication. Consider this example written by an energy consultant in the Bulletin of the Atomic Scientists:

Petroleum reserves are limited. Petroleum is not a renewable resource and production cannot continue to increase indefinitely. A day of reckoning will come sometime in the future. The point at which production can no longer keep up with increasing demand will mean a radical and painful readjustment globally to everyday life.

To counter this argument, Craig Smith and I have argued that proven worldwide reserves of oil are currently estimated by the Energy Information Administration at 1.28 trillion barrels, the largest amount every recorded in human history, despite worldwide consumption of oil doubling since the 1970s. Oil prices are currently declining suggesting ample worldwide supplies are available – oil prices are not increasing as would be expected if chronic oil shortages were imminent.

In response to an article we published here about Brazil's offshore oil discoveries, one bulletin-board poster commented: "Corsi is pushing his abiotic oil agenda. He keeps repeating the canard that oil comes from dinosaurs. NOBODY BELIEVES THAT!" This prompted a response with a correction and an objection: "I suppose you meant to say 'the canard that oil does NOT come from dinosaurs and ancient flora debris'? That's the reason why we call oil a fossil fuel." Even better yet was this: "Who says that oil came from 'dinosaurs and ancient forests'? What a moron."

Interestingly, many critics seem ready to give up the "Fossil-Fuel" theory of oil's origin, as long as they can continue to advance the "Peak-Production" theory. Regardless where the oil comes from, this particular type of critic argues, we are still running out. This line of analysis misses a key point of the abiotic, deep-Earth theory of oil's origin. If oil is naturally produced within the Earth's mantle, oil may well be a renewable resource.

Then, there were some abusive ad hominem attacks, as expected in this heavily charged political environment in which differences have become polarized. Some posters argue that as a "discredited" co-author of "Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry," nothing I write is credible, regardless of how well documented or argued. Here are a couple of examples. "This guy was also co-author of a smear book against John Kerry by the Swift Boat liars ... highly credible!" Or, again: "This man is an architect of the Kerry swift boat smear, so I am unconvinced of his ability or desire to maintain a dispassionate and analytic stance with respect to this topic." Evidently, there are still many who do not accept that John Kerry lost the presidential election of 2004, as there remain many who refuse to accept that Al Gore lost in 2000.

In the final analysis, many on the political Left appear to have gravitated to embrace "Peak-Oil" theories because the argument that we are running out of oil fits in with their overall pattern of leftist political beliefs. Spend any time on the peak-oil bulletin boards and you will find many comments from posters who appear happy at the prospect we may be running out of oil.

Underlying their enthusiasm for "peak oil" is an anti-oil, anti-business attitude that feels our advanced capitalist society is "bad" or "wrong," wasteful of the Earth's valuable natural resources in the pursuit of a materialistic, lazy lifestyle. Posters of this disposition simply want to dismiss any other theory without serious consideration. Here's how one poster summed up that attitude, "Ugh, more abiotic oil crap ..." The ellipsis typically was not followed up by rational argument. Evidently, the poster felt the "Peak-Oil" thesis was just too obvious or well-established to be in need of defense.

The FTC did not impose Nixon's wage and price controls, that was all Tricky Dicky.

Sure Nixon "imposed" the controls but some Alphabet soup agency had to have implemented and enforced them - or so it would seem to me - maybe there was some "office of wage and price controls" at that time - I'll try to find out.

Thanks for your kind words.

We spend more money on bottled water than gas.

I'd like to see the bottled water barons hauled before Congress to justify their outrageous price gouging.

Actually, it does. The oil company can make gazillions in profits that enrage the morons who don't comprehend the workings of a free market economy

Yes. I guess you mean price supports, which are the reverse of price controls. They are usually in effect at the wholesale level. Sugar, milk, corn have price supports.

Just as bad. If any industry were to do something like this on their own, they would go to jail.

I thought the Earth's core was made up of iron and maybe nickel as well. When did the thinking on the core's composition change?

There are meteorites that contain some percentage of carbon and hydrogen and so it would be surprising if the earth's core had none. It wouldn't take very much at all to account for the oil deposits since the crust is a tiny fraction of the earth's mass.

Federal Trade Commission, surprisingly enough, was a better run organization than it is today. Had they known beforehand that artificial price controls had been implemented by another government agency (such as the WH or Congress), they wouldn't have wasted the manpower to conduct an investigation.

I really think it is a stretch to make that assumption. I would not be at all surprised that these people would be completely bewildered that price controls would cause a shortage.

If they can't honestly come out and say they are going to jack prices up because they can, I don't have a lot of respect for them.

You don't understand. They don't "jack up" prices because they can, they do it because they have to. There is only one correct price. If the price is too high, they can't sell all of their product. If it is too low, they there is a shortage -- gas lines.

What oil companies can do, and what all companies do, is adjust the production to maximize profit. Produce too little or too much and profit falls. It's tricky because competitors are doing the same, demand changes, customer habits change, oil supplies vary, etc. And they have to do this while a hostile government is looking over their shoulder ready to jump on them if they perceive any "gouging".

As I noted previously, if the "shortage" were due solely to price controls, selling ANY amount of gas at a loss is still selling the product at a loss;

No. They could make a profit by selling some gasoline at the controlled price but not a lot. The more gas they produce, the more it costs them per gallon to make it. Why? Because:
1) Some crude costs more than others. Long term contracts may cost less than the spot market price.
2) Refining costs more if you have to pay people overtime.
3) Some crude costs more to refine than other types. If you limit production you can save costs.
4) Some refineries are more efficient. If they can shut down the inefficient ones they save costs.

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