‘Peak oil’ theory runs out of gas

Published on Sunday, 21 July 2013 23:46 - Written by

Remember “peak oil”? That’s the theory, long since abandoned by all but the most devoted advocates, that we’re running out of oil quickly, and scarcity would soon force up prices. As with other panics, such as the “population bomb,” history has stubbornly refused to cooperate.

Now, one of the most relentless of reporters of the peak oil crisis, The Oil Drum blog, is shutting down, due to “a scarcity of new content caused by a dwindling number of contributors.”

It’s notable that the website has long featured a quote from Theodore Roosevelt: “It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things.”

So apparently, they’re moving on.

That’s appropriate, since the peak oil theory has run out of gas.

It was first expounded in 1956 by Shell scientist M. King Hubbert. He said U.S. oil production would peak between 1965 and 1971, and after that, costs would steadily rise until we’re out of oil completely.

“The end of the age of oil is in sight,” he said.

But as Mark Mills of the Manhattan Institute points out, we have more oil now than ever.

“Today we find the U.S. has become the world’s fastest growing oil and gas producer — on track to becoming a major energy exporter,” he says. “America is now a net exporter of refined products, gasoline and diesel, for the first time since 1949, and the world’s biggest natural gas producer. Businesses now strain against bureaucratic and political harnesses to be allowed to export natural gas.”

The peak oil theory appears so logical — of course finite resources run out. So how could the theory have been so wrong?

“The notion of imminent exhaustion of hydrocarbons has been a core tenet of alternative energy pundits and rent-seekers,” Mills contends. “But considering geophysics, this has always been, to put it politely, silly. Sure, the world consumes a lot of energy; annually some 80 billion barrels in oil-equivalent terms, wherein 80 percent comes from hydrocarbons. But the Earth’s known, never mind unknown, quantities of hydrocarbons are countable in the tens of thousands of billions of barrels. The scale of the resource itself is bottomless.”

Technological advances, such as smarter drilling and hydraulic fracturing (“fracking”), have helped immensely. So have oil sands.

The peak oil theory was the bogeyman used by environmentalists for years to justify regulations and mandates to “wean us off oil.” That’s what The Oil Drum blog advocated for its eight years of existence.

That scare tactic is not very frightening now that we know even just the oil sands in Alberta could power the whole world for 100 years, according to Shell scientists.

“The only remaining argument for ‘peakers’ is whether the world is willing to pay a premium to stop using hydrocarbons because of another theory; global warming,” Mills points out. “The yearning of billions of people for cheap power and transportation can only be met for the foreseeable future with hydrocarbons. Fortunately, both Mother Nature and human technology are up to the task.”

Unfortunately, peak oil theory wasn’t.