Posted on 11/15/2005 7:05:19 AM PST by Dan Evans
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.
It's interesting, though, to watch the posts on this site, as time goes by. I've been basically saying the same thing about this since the 90's. You can't assume that things won't change, and you'd better prepare for the possibility that they will.
When gas prices were less than $2 a gallon, the Freepers were ridiculing anyone who dared to suggest that we ought to worry about this. Then the price went up to $3 a gallon, and they were talking about throwing the GOP out because of the hardship of gas prices, and suggesting that we needed to do something about the high oil company profits, even that the oil companies must be colluding. I thought I was reading posts at the DU, it was so pathetic. Now the price goes back down, and we're right back where we started--no problem, no worry, be happy.
Why do I get the uncomfortable feeling that this is going to start all over again very shortly?
The auto companies had years to prepare for this, they did nothing. Now they are going bust. It's the same thing with the economy as a whole. People don't do anything to prepare, and then blame someone else when things go badly.
Look at Social Security. Look at Medicare. I'm not sure why we bother to discuss this stuff at all. It's not going to change anything.
Not the way I remember it. The Arab embargo was about 1973. Carter and Nixon installed price controls. Reagan removed them. Read Wikipedia:
From Wikipedia, the free encyclopedia.
"The 1979 (or second) energy crisis occurred in the wake of the Iranian Revolution. In the wake of protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979, allowing Ayatollah Khomeini to gain control. The protests shattered the Iranian oil sector.
"While the new regime resumed oil exports, it was inconsistent and at a lower volume, driving up prices. Saudi Arabia and other OPEC nations increased production to offset the decline, and the total loss in production was just about 4%. However, a widespread panic resulted, driving the price far higher than would be expected under normal circumstances.
"In the United States, the Carter administration instituted price controls. This resulted in long lines appearing at the gas stations as they had six years earlier. As the average vehicle of the time consumed between 2-3 liters of gas an hour while idling, it was estimated at the time that Americans wasted up to 150,000 barrels of oil per day idling their engines in the lines at gas stations.
"During the period, many people believed the oil shortages were artificially created by the oil companies to drive up prices, rather than created by natural factors beyond any human control or influence. Further, while in a market economy, shortages would be expected to drive up prices, causing a contraction in demand, of themselves they would be unlikely to result in lines at the gas pump but for artificial regulations and price controls. Many politicians proposed gas rationing, such as the Governor of Maryland, who proposed odd-even rationing (only people with an odd-numbered license plate could purchase gas on an odd-numbered day). This did not last long.
"President Jimmy Carter made symbolic efforts to encourage energy conservation, such as wearing a sweater and urging citizens not to turn up their thermostats, and installing solar power panels on the roof of the White House and a wood stove in the living quarters. However, his successor Ronald Reagan ordered the solar panels removed and the wood stove was dismantled. Carter made a speech arguing the oil crisis was "the moral equivalent of war." More importantly, Carter, as part of his administration's efforts at deregulation, proposed removing price controls that had been imposed in the administration of Richard Nixon during the 1973 energy crisis. Congress agreed to remove price controls in phases; they were finally dismantled in 1981 under Ronald Reagan.
I have an idea. Instead of getting the government to finance new energy production why don't you and your friends invest in alternative energy companies? That way we bypass the middleman.
I own some energy stocks. I put my money where my mouth is, and it's been very profitable. That doesn't mean, though, that I think we can dismiss the problem of declining oil reserves as a nonissue. China is now the world's number two oil consumer, whereas they were previously a blip on the monitor. And they are still growing like mad. Both China and Russia are planning to build vast numbers of automobiles over the next several years. The bicycle is out in China.
All of this is going to hurt us in the pocketbook. There is going to have to be a lot of suffering before we finally do what needs to be done to solve this problem.
I'm not going to simply wait for someone else to do something. I'm doing my share now, and I am going to encourage others to do the same. You won't find me telling people that this is no big deal. That doesn't accomplish anything. It just makes the problem worse.
No, because not all of their product costs them the same. They can have a lot of different contracts for oil. Some are long-term and some on the spot market. The costs vary wildly. Not only that, but the costs of refining different grades of oil vary. So they could make a profit selling a little bit of gas but not a lot more.
During the 70's price controls on most things were in vogue I asked a friend who was smarter and wiser than I was why there were so many empty shelves at the supermarket. He very patiently explained the effect of price controls on the market and how price controls demand so that supply always meets demand. If you try to mandate a lower cost, you will have gas lines or rationing.
They know what they are doing, and they'd be the first to tell you that there is a problem.
That's what I think that "PC" is; an expression of intolerance to any deviation from dogma. The thought control of Orwell comes to mind. I have always considered being conservative as having minimum standards of behavior, like a building code, rather than any particular fashion of behavior. OTOH, the left are into fashion and lifestyle, as you mention, and not standards, which explains their hypocrisy. They are compelled to need a government that provides a "libertine" society for their psychopathologies. As do Striesand and Nader.
If oil ever reaches $10 a gallon, the Chinese economy will stall and begin retrenching rapidly. They need cheap oil to raise the standard of living for their 1bn+ people.
There is a difference between worrying about something and knowing what to do about it. Most of our problems are not caused by a lack of technology but by political forces.
For example, the problem of gasoline price volatility could be solved by simply carrying greater inventories of gasoline and selling them when there is a shortage and price starts to rise.
However, this could land you in jail if some politicians accusing you of hoarding and price gouging. The very threat from rabble-rousers like Bill O'Reilly and grandstanding politicians has a big effect on the market.
China has a lot of coal. If they do the same coal gassification it looks like America will be doing, they will have all the fuel they need for a long time. It won't do their economy any good any more than it will ours, but they will be able to keep going.
I think some oil companies (like BP) are paying lip service to the alternative energy types with their stupid, condescending ads, but I doubt if they are sincere. Anyway I hope not.
My grandfather was VP of Distribution for the East Coast for a large oil company during the 'oil crises' of the 70s. He told me on many occasions that there was never a lack of oil in those times.
The problems that he faced were with gas transportation. Namely, how to get the different formulas of gas that are mandated by different local governments to where they needed to be. For instance, there would a huge supply of Formula X gas in Texas, but it needed to be in New York City. Supply has the appearance of being short, demand goes up, price goes up and we have a 'crisis'.
The issues that he faced then, as we are facing now, are largely the making of the environment lobby, and poorly informed politicians. One of the previous posts hit it out of the park when they said that having pols set energy policy was foolish, as they are equally likely to listen to Barbara Striesand, as they are to an informed scientist.
I agree with you on O'Reilly. Besides the fact that he is clueless when it comes to this problem, he's blatantly dishonest. The increase in the price of oil is not because the oil companies are colluding. It's simple supply and demand, and he knows it. But like every politician on a power trip, he wants to be able to brag about how he got something done, and if it involves price controls, he can demogogue that.
The price will go up gradually and consumption will decrease and alternative energy sources will become more attractive. This will not be an on or off situation.
It's more than lip service. The major manufacturer of solar cells is an oil company. The oil corporations will be right there as we convert to other, more expensive energy.
I guarantee you they are sincere. However, they also realize how far down the road it is. You can't sell technology that does not yet exist.
One interesting fact is that the chemical industry is also being touched by this. It's not just energy. How do you produce all the chemicals that we need without oil?
It turns out that there is a big push in the chemical industry right now to build what they call the "biomass refinery." They are going to try to produce chemicals from biomass. DuPont is one of the leaders in this effort.
It's not as far fetched as it might seem. With genetics, etc., becoming a more doable thing, there are a lot of opportunities to advance this technology that were previously not available.
But it's still decades off, so here's hoping that the oil doesn't run out too fast. The Russians and Iranians have a lot more oil than we have. He who has the last billion barrels of oil will rule the world.
I am convinced that one of the main reasons for our recent strategic advances into Central Asia is to check any potential Chinese threat to these oil-rich countries.
"I'm worried about what happens if we do run out.
Me too. But the mass of people prefer to keep their eyes closed."
You folks need something else to worry about. Innovation in energy is not unlike innovation elsewhere. We will not run out because other energy sources will be substituted for oil as oil gets more expensive. Relax.
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