The Death Of Peak Oil and Coincidence

One of the websites I try to keep up with is The Oil Drum, particularly the category called “The Drumbeat”  which every few days has links to energy news.

My job takes priority, so I got behind, and took a few weekends to catch up.

I noticed that in late April, there seemed to be a lot of articles declaring the “Peak Oil is dead” or “The End of Peak Oil”. The basic idea is that the world is nowhere near to running out of oil (or at least easily recoverable oil; does that distinction really matter?). Thanks to new technology, we are now able to access hydrocarbons that were unreachable a few years ago: tight oil and shale gas thanks to horizontal drilling and fracking, the tar sands in Canada (fracking and steam), and oil way way  farther out in the deep ocean than drillers have gone (3-D seismic imaging and faster computers).

But I think their arguments are really arguments confirming peak oil, and arguments for finding other sources of energy. A lot of this new oil is of lower quality; it has more sulpher and is harder to refine. The Canadian oil sands are not really even oil. It is more like sludge. As for the oil in the deep ocean, the new technology simply finds the oil. I do not think there is any way to actually drill it. That oil is not only farther from shore, but also under more layers of rock than oil close to shore.

Some of this technology is not very new. It is simply feasible now that oil is more than $65/barrel.

And there is higher production in the US. But global production is flat. Granted, there is some decrease in demand. But it is interesting that neither the higher prices nor the technology have been able to produce higher output.

So let’s restate the anti-peak oil thesis: Peak Oil theory is false because we are spending more money to get the same amount of oil.

That sounds like Peak Oil to me.

As I stated, all these articles seemed to pop up in mid to late April. Matthew Yglesias also noticed the trend. Is this a PR campaign by the fossil fuel industry or some fracking consortium?

One of the podcasts I have been listening to recently is The Atomic Show with Rod Adams. I downloaded all the episodes from the very beginning. I think they started in 2006. I think I am up to 2010 now. (I think everyone should read The Oil Drum and everyone should listen to The Atomic Show.)

He says there is a lot of disinformation about nuclear power. He thinks that there has been a concerted effort by the fossil fuel industry to spread lies about nuclear power, especially amongst environmentalists. In 2009 or so, he said that he knows he probably sounds like a conspiracy nutcase saying that, but he believed it.

After all the dark money in the 2012 election, he does not sound like a nut.

Part of me wonders if this sudden wave of “Don’t worry, be happy, we will always have oil” articles is some sort of stealth PR offensive by the fossil fuel industry. I do not know how the media industry works. Perhaps all these writers know each other, and talk amongst each other, and all decided to talk about this at roughly the same time. That is possible.

But I was not able to detect some catalyst to this wave. There was no new record high in the benchmark price. There was no new discovery. The oil companies released their annual energy outlooks a few months ago. There was just a bunch of “nothing to see here” articles all at the same time. It is a bit strange.

Excluding the US, rest-of-world crude production in 2H2012 was not higher than in 2005

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Page created on 2013-05-27_11:05:56, last modified on 2013-05-27_11:05:56.

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