Lessons From The Peak Oil Hysteria (2005-2013)

  • Date: 12/02/16
  • Fabius Maximus

The peak oil hysteria provides rich lessons for us today about learning from activists and the value of listening to our major professional institutions.

Easy cynicism led people to believe outlandish forecasts, wasting valuable time and resources. Worse, we have had many such barrages by doomsters — aided by their clickbait-seeking enablers in the media — which have us almost immune to warnings, no matter how well-founded. We can do better.

It’s an Oil World

Where were you during the peak oil hysteria? It began in 2005 and died in 2013, marked by the opening and closing of The Oil Drum website. Despite their analysis and forecasts proving to be mostly wrong, most of their authors are still “experts” publishing elsewhere (see this bizarre example). That follows the pattern of modern American doomsters, as with those in the 1970s predicting global pollution and famine catastrophes and the military “experts” who cheered our disastrous occupations of Iraq and Afghanistan. Perhaps the activists predicting a climate catastrophe will add their names to this list in the next decade.

It’s not just historical trivia. We must learn from these bouts of irrationality if we have any hope of regaining the ability to govern ourselves.

Maximum World Oil Production Forecasts

Memories have faded, but a decade ago the predictions of end of oil were hot news. Comment threads overflowed with people terrified of the future. Conferences were held and books sold trumpeting certain disaster as the lifeblood of our industrial civilization dried up. Many of the following names were highlighted in journalists’ Rolodexes as the go-to people for hot quotes. Then as now, the names least often consulted proved to have the more accurate forecasts.

•2005 – Pickens, T. Boone (Oil & gas investor).
•2007 – Bakhitari, A.M.S. Oil Executive ((Iranian National Oil Co. planner).
•2007+ – Groppe, H. (Oil / gas expert & businessman).
•2007 – Herrera, R. (Retired BP geologist).
•2008+ – Westervelt, E.T. et al (US Army Corps of Engineers).
•2009 – Deffeyes, K. (retired Princeton professor & retired Shell geologist).
•2009 – Simmons, M.R. (Investment banker; see the posts about his work).
•2010 – Goodstein, D. (Vice Provost, Cal Tech).
•2010 – Wrobel, S. (Investment fund manager).
•2010 – Bentley, R. (University energy analyst).
•2010 – Campbell, C. (Retired oil company geologist; see the posts about his work).
•2010 – Skrebowski, C. (Editor of Petroleum Review).
•2011 – Meling, L.M. (Statoil oil company geologist).
•2012 – Koppelaar, R.H.E.M. (Dutch oil analyst).
•2012 – Pang Xiongqi (Petroleum Executive, China).
•2015 – Husseini, S. (retired Saudi Aramco).
•2020 – Laherrere, J. (Oil geologist , France).
•2020+ – CERA Energy (consultants).
•2020+ – Wood Mackenzie (consultants).
•2025+ – Shell.
•2030+ – EIA and IEA.
•No visible peak – Lynch, M.C. (Energy economist).

These predictions were made during 2003 – 2008 (collected by Robert Hirsh; most sources are listed here). Most were given with qualifying language expressing uncertainty about the dates. Some of these people, especially those associated with the Peak Oil movement, had given different dates — moving them out as time passed. Most of these are documented, but details of some have been lost over time.

Conclusions

As many of us predicted during the peak oil hysteria, high oil prices had three great effects — all predictable…

• Increased efficiency of energy use — as consumers and businesses invested to increase the efficiency of the more expensive energy (and R&D produced more ways to do this).
• Increased production of oil (boosted by R&D making more “resources” into usable “reserves”. Today’s $30 oil shows that production growth has exceeded demand.
• New sources of liquid fuels — including both new hydrocarbon-based supplies (bitumen in Canada and Venezuela), new carbon-based fuels (e.g., coal to oil, although oil prices never rose to make this viable), and new carbohydrate-based supplies (e.g., ethanol from corn).

Only time will tell about the IEA’s forecast for 2030 of $122 oil (in 2007 dollars). But today’s oil glut gives us an opportunity to prepare alternative supplies in an inexpensive and orderly manner, not only reducing the risk of energy price shocks but also reducing pollution and the risk of unpleasant anthropogenic climate change. Let’s make use of the gift.

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