Wednesday, March 27, 2013

When "no peak oil" sounds a lot like "peak oil"

It's an interesting time for the peak oil theory.  Recent developments in unconventional fuels, such as hydrofracking and shale gas, seem to have put paid to Hubbert's concept, or at least pushed it far off into the future.

And yet those innovations might be confirmations of peak oil theory, rather than its refutation.  So argues Stephen Hren. It's an interesting argument, worth following through.  I wanted to highlight a couple of points, along with some weaknesses.

Strengths: the price of oil had to shoot up high enough to merit investing in unconventional methods.  That's classic peak oil - the easy oil has already been found, so prices rise, making it worthwhile to employ more expensive tools, like fracking.  Also the rise of consumption (worldwide), along with decrease in exports.  Plus the point about new oil being more effective in heating the atmosphere than the old.

Weakness: the role of oil prices in the 2008 crisis is controversial.  You can't talk about that without mentioning the financial sector, who not only drove the crisis on their own, but whose internal (not energy-related) logics made it happen.

In the end, it's possible to overstate peak oil as a theory.  It can become easy doom-mongering, and fail in the face of new data.  But what we're going through now certainly feels like it's in play.  "We're not running out of oil; we're finding hard to get, expensive stuff!" could be spoken by either a peak oiler or a shale booster.


Iggy O said...

I try to tell folks, "we are finding lots of oil, but it's oil that will cost us $80 to $100 to extract and refine and transport."

That puts the matter into perspective. Moreover, as you note too many Peak Oilers tend to slip into being Doommers. Even Kunstler is so biased by his hatred of the car and its effects that he can tilt that way.

Nick Baker said...

The natural gas boom has probably pushed back the peak, at least in this country, but I would be surprised if it buys us more than a decade of relief. Even a large find late in the game isn't enough to move the Hubbert curve by very much, especially at our current near-maximum rate of consumption. And even if it could, the climate crisis that is upon us calls for a different path forward.

More worrying in the near term is the stability of the international economy and fiat currencies, both of which are built on the premise of continual growth. With gas prices shooting up every time the economy starts humming (and here it comes again), it seems more and more difficult to get the growth we need to service the debt we've accumulated.

A new way of life is called for. The challenge for those of us who see the problem clearly is to articulate solutions in ways that excite and inspire, rather than breeding fear and resentment. We must lead by example as we forge a happier, healthier, and more resilient society.

Bryan Alexander said...

Good thing to say, Iggy.

Agreed, Nick. Thanks for following our experimental example here.