Pricking the Peak Oil Theory

Last week I heard another media report about how we have reached our “peak oil” production for the world.  That is the theory that maintains that we have found all the oil that is going to be found and that we have reached our peak of production of oil and that from now on production of oil and gas will go into a steady and inevitable decline.    Per that theory we will not achieve greater production than we have now and the supply of oil and gas will decline on a steady or precipitous rate.   I would agree as a matter of scientific fact that there is a finite amount of oil and gas and that there is only so much that can be extracted from old Mother Earth.  Just as there are only  a limited number of diamonds or gold that exist and can be extracted, so the supply of oil and gas will be limited.  But this latest prediction does make me remember past predictions of a peak oil terminus.

Predictions of running out of extractable oil are not new.   Some of those predictions go back to the ’20’s when some believed we had found all the oil that there was in Texas, Oklahoma and Pennsylvania and that we would soon run out.  Well, the Depression came along and soon oil and gas was very cheap and plentiful and guess what, the methods for extracting oil improved and so did the science for locating the oil.   Then we had the panic of the ’70’s when there were many predictions of running out of oil.  Many predicted that there were very few oil fields left to be discovered and that even with them there would be an inevitable decline in production.   They did not see the North Sea Production or Brazil, or Prudoe.   These predictions came along at a time when concern over oil supplies was even more pronounced than it is today.  It wasn’t only one such prediction, it was a pretty constant drum beat of repetition.  We faced two Arab embargoes on the supply of oil in less than 10 years and consumers were dealing with long, long lines merely to obtain a tank of gas.    Don’t take my word for it, look it up in the news articles and magazine articles of that time.   This attitude of having no more production increase lasted into the early ’80’s.   There were dire predictions that oil would hit $100 per barrel in the early ’80’s but that did not happen, in fact just the opposite occurred; we found more oil and the production went up substantially and the price came down.   Science prevailed and entreprenuership lead the way.   We learned how to find more oil and how to extract more of it from each well.   About 25 years ago we used around 7 million barrels of oil daily and now it is about 18 million or so.  In the early days they would produce mostly the oil that would flow naturally from the underground pressure and then abandon the well.  It wasn’t long of course before they learned to economically pump additionally oil from each well.    Then they added fracturing  techniques and horizontal drilling to reach even more production areas that had been unobtainable before.

I am not a petroleum engineer or a geologist but I have lived a while and learned to take sweeping predictions with a grain of salt.   Like the ones of the ’50’s that predicted by the ’90’s we would all be driving cars that could also fly.   I haven’t seen too many flying cars in my neighborhood lately.    I have no idea how much oil is under the surface of old Mother Earth and I would agree that there is surely a finite amount of it.   I would suspect that there is still more to be discovered and extracted with the improvements that will come in petroleum engineering.   Things don’t remain static.   We don’t use the technology we used 40 years ago and we won’t be using the same technology 20 years from now.   I would believe that there is sufficient oil and gas to last us until we develop a new method of powering our electrical needs and transportation needs.  We will come up with new ways to do that without question.  Just as 100 years ago the means of power was purely coal so we will have new methods down the road.  It might even be working with coal in dramatically new methods, I don’t know, but I do know it will happen.    I doubt we have reached “peak oil” yet.   I think it is just as likely that we won’t so much reach a peak oil plateau that will make us change our habits as it is that brand new technology will make that proposition irrelevant.    Do your own research and do your own thinking.   I would advise that you not let others do it for you on such an important issue.   Especially when many of those advocating a peak oil scenario do so for an ideological reason and to promote a particlar agenda.

What happened to Joe Biden?  Remember him, he ran and was elected as Vice President.    His specialty was foreign affairs.  With Hilary as Sec. of State you can rest assured he won’t have a role there.   He won’t have a say in the health care and insurance debate with Tom Daishle heading up that department.   He doesn’t have a “slot” anymore and will end up being our funeral attender in chief like so many other Vice Presidents.

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Filed under Economics, history, Mother Nature

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