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Report Blasts "Peak Oil" Theory
Posted by
ScuttleMonkey
on Wed Nov 15, 2006 03:01 PM
from the a-peek-at-the-future dept.
from the a-peek-at-the-future dept.
Rei writes "Today, the Cambridge Energy Research Associates released a report dismissing the Peak Oil theory, suggesting that world oil production will continue to increase for the next 24 years, and then only level into a plateau. The report, which suggests that world reserves are enough to last 122 years at our current rate of consumption, also blasts Peak Oil theorists for repeatedly making unscientific predictions and then shifting them whenever their predictions fail to materialize."
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Who pays their bills? (Score:5, Insightful)
Re:Who pays their bills? (Score:5, Interesting)
Make of that what you will..
Parent
Re:Who pays their bills? (Score:5, Insightful)
I can't imagine why an energy research organization would actually seek out and listen to national energy secretaries in developing energy analysis - can't they just publish some near-term doom-and-gloom conclusions with only selective data like everyone else?
Parent
Re:Who pays their bills? (Score:5, Insightful)
>energy analysis - can't they just publish some near-term doom-and-gloom conclusions with only selective data like everyone else?
So when a single company with stated links to oil-producing countries comes up with the conclusion that we should continue to rely on oil, that's "seeking out and listening... in developing energy analysis", but when "everyone else" (and that does include pretty much everyone) comes to opposite conclusion, that's "doom-and-gloom... with only selective data"? That's some good, objective critical thinking skills you got there...
Parent
Well, let's take a look at the speakers (Score:5, Informative)
H.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007), David Crane, President & CEO, NRG Energy, Incorporated, David J. O'Reilly, Chairman & CEO, Chevron Corporation
John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructure, John W. Rowe, Chairman, President & CEO, Exelon Corporation, Charles W. Shivery, Chairman, President & CEO, Northeast Utilities
Neil H. Smith, CEO, InterGen, Jeff Sterba, Chairman, President & CEO, PNM Resources, Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation
Jake S. Ulrich, Executive Director, Centrica plc, Don Voelte, Managing Director & CEO, Woodside Energy Ltd, Theo H. Walthie, Business Group President, Dow Chemical Company
Daniel Yergin, CERA Chairman
H.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007), David Crane, President & CEO, NRG Energy, Incorporated
David J. O'Reilly, Chairman & CEO, Chevron Corporation, John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructure
John W. Rowe, Chairman, President & CEO, Exelon Corporation, Charles W. Shivery, Chairman, President & CEO, Northeast Utilities
Neil H. Smith, CEO, InterGen, Jeff Sterba, Chairman, President & CEO, PNM Resources, Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation, Jake S. Ulrich, Executive Director, Centrica plc, Don Voelte, Managing Director & CEO, Woodside Energy Ltd, Theo H. Walthie, Business Group President, Dow Chemical Company, Daniel Yergin, CERA ChairmanH.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007)
David Crane, President & CEO, NRG Energy, Incorporated David J. O'Reilly, Chairman & CEO, Chevron Corporation John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructur John W. Rowe, Chairman, President & CEO, Exelon Corporation
Charles W. Shivery, Chairman, President & CEO, Northeast Utilities Neil H. Smith, CEO, InterGen Jeff Sterba, Chairman, President & CEO, PNM Resources Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation
Jake S. Ulrich, Executive Director, Centrica plc Don Voelte, Managing Director & CEO, Woodside Energy Ltd. Theo H. Walthie, Business Group President, Dow Chemical Company
Daniel Yergin, CERA Chairman
I'm detecting an air of possible bias there. Not just is there no-one on the speaker list with an environmentalist bent, but most of the speakers apart from those employed by CERA are heads/employees of major oil/chemical companies.
Parent
Re:Well, let's take a look at the speakers (Score:5, Funny)
John Denver, American folk singer-songwriter, Poet Laureat of Colorado, author of "Take Me Home, Country Roads" and "Leaving on a Jet Plane"
Don Pearson, management consultant and executive of Folsom, CA's "eRepublic"; trainer of Allstate Insurance Company managers and salesmen in the tenets of L. Ron Hubbard's "management by statistics" approach.
Frederik "Fred" Deburghgraeve, shoe salesman; former Belgian olympic swimmer and olympic gold medalist in the 100 meter breaststroke in the 1996 Olympic Games
Gerald Mosse, principle horse rider to the Aga Khan IV; former apprentice of Patrick-Loiuse Biancone and rider for Francois Boutin. Rode Arazi to five straight wins in France.
Arazi: A thoroughbred chestnut colt who won the 1991 Breeders' Cup Juvenile. Has crooked white blaze on forehead.
Ficus carica: the Common Fig; small tree native to the eastern Mediterranean and southwest Asia; deciduous, with 3-5 cm fruit.
Vanadium: A chemical element of the periodic table, with atomic number 23. A rare, soft, ductile element used in alloying; good resistance to sulfuric acid.
Three: A number, numeral, and glyph; the natural number following 2, but preceeding 4; the first unique prime; the second triangular number; integral divisor of natural numbers whose digits add up to a multiple of three.
Parent
Re:Peak oil has nothng to do with the environment (Score:5, Informative)
The way I see it, whether we suck the world's oil reserves dry quickly or we suck them dry slowly, we're still going to suck them dry. There's more profit associated with large demand than small demand, however. Indeed, for a fixed supply, the price vs. demand curve is anything but linear. Furthermore, the time value of money indicates that a given sum of money is more valuable the sooner you have it. If we proactively shift energy demand away from oil, this lengthens the timespan across which we'll deplete the world's oil reserves. This will reduce demand, reduce average prices, and the money will arrive later (and therefore not be as valuable).
Thus, oil companies have strong economic reasons for wanting to keep demand high. They want to maximize their total profit.
Peak oil and alternative energy proponents seek to move energy demand away from oil, either by increasing efficiency or by drawing energy from other sources. Either approach reduces the demand for oil, which is what the petroleum industry wants to avoid.
Parent
In other words (Score:5, Insightful)
"I don't like what they're saying. Is there a way we can slur them with a phony conflict-of-interest implication or some other kind of ad hominem? Dealing with arguments on their merits is too hard."
Parent
Re:Who pays their bills? (Score:5, Insightful)
These guys are legitimate. I'm quite sure their client list includes big oil, coal, etc, but their business is selling information to these companies, not shilling for them. The energy companies have plenty of alternatives for that.
That's not to say that CERA is right, but they certainly are worth paying attention to.
Parent
Re:Who pays their bills? (Score:5, Insightful)
The past has proven time and time again that reports provided by people backed by certain corporations, such as Cigarrette Manufacturers, Oil Firms and both the RIAA and MPAA are filled with half-truths, straight lies, clear misrepresentations of data (once the data is brought out into the public space), as well as a number of other "Dirty Pool" tactics.
Simply because of who is backing this report, the publishers of the report have a tremendous amount of work that they must perform in order to be taken as anything other than what any "corporate shill" will say.
If they are not 100% open with the methods they used, the data they collected as well as with the stastical analysis they performed, their work is going to be suspect. Perhaps their first line would be to see if they can get their report published in a peer reviewed scientific journal.
Personally, I would be far less skeptical of a piece that could make it into a peer-reviewed medical journal.
Parent
I got news for these people (Score:5, Insightful)
Alternate energy sources and fuel conservation are a good idea under any conditions.
I wonder... (Score:5, Insightful)
I say there's been so much doom-and-gloom about oil, every prediction I can remember about oil running out has been proven wrong time and time again. As our technology increases, we will find ways to get more oil out of existing locations and find new ones. Hmm. Go figure.
Hell, in 1879 Edison invented the light bulb. Who would have thought after 100+ years, the only thing a house from 1890 and 2006 would have in common is a lightbulb? And now the idustry is changing with LED bulbs for just about everything these days. I bet the next advancement doesn't take 100 years.
In oil, there's money. And a ton of it. So, advancement will happen much faster. We will use it more efficiently and get it from places we never thought possible.
Re:I wonder... (Score:5, Insightful)
b) People are tricksy things - some of them will find ways to clear the oil of the wells more efficiently.
I know that many of you out there are young, and you probably find the prospect of the mundane existence that we all share to be terrifyingly bland. Many of you are hoping, in your secret hearts, that *something* changes and the world becomes a much different place, where a 9 to 5 existence in a cube farm is no longer a possibility. So you latch on to disaster scenarios, like Catastrophic Global Warming and Peak Oil, because they offer the kind of dramatic "world-changing" catastrophe you hope to bear witness to - to be one of the survivors, one of the pioneers of the new, simpler Earth.
(and for those of you who read this and say "That's not me", that's fine. I'm not talking to you)
But Peak Oil is not the catastrophe you might hope it will be. It will result, at worst, in a gradual increase in oil prices, causing people and countries to shift slowly away from oil-consuming technologies. It might be messy, and there might be shortages (although virtually all shortages will be caused by government price caps), but the fundamentals of the market have not changed just because Peak Oil is capitalized.
Many people criticize CERA, and claim they are industry shills. Fair enough, I make no claim as to their veracity and ethical fiber. However, don't forget that the Peak Oil advocates are also receiving money and attention for their claims, and the more catastrophic a picture they paint, the more money and attention they receive. For a professor or a scholar, notoriety is as valuable as cash in terms of book deals, speaking engagements, etc.
Let's review:
- Demand for a good causes the price to rise.
- The rising price gives businesses the incentives to supply that good to the market.
- As the supply increases to meet the demand, the price levels off, reducing the incentives for new entrants.
- Changes in supply may cause existing suppliers to fall short.
- This causes other businesses to enter the market, and provide supply, possibly in a variety of new ways. Many of the world's paradigm shifts happen because a businessman discovers a novel and unusual way to solve a problem.
- This causes the supply to increase, or causes the demand to fall.
There is nothing about the oil industry that does not fit this model. We know that we don't capture all the oil from the existing wells. We know there are lots of alternatives, both in terms of oil-like solutions and solutions that are completely unrelated to oil (solar, nuclear, telecommuting). We know that as the price rises, people will drive their cars less (we saw that after Katrina, for example) *You* know that if the price of gas was $10 a gallon, you would find ways to reduce the number of trips you took, take public transportation, carpool or walk, or find other ways to reduce your personal gas costs.Well, everyone else can take those options as well.
There is no catastrophe here. It is not going to happen. If you want to fret about a catastrophe, contemplate supervolcanos and asteroid strikes, and how much the survival of every living thing on earth depends on humanity's ability to advance technologically as rapidly as possible.
Parent
Great... (Score:5, Funny)
Wonder who's putting out this report? (Score:5, Informative)
"CERA was acquired by IHS Energy in 2004. . . . Some of the company's largest clients include international energy companies, governments, utilities, and financial institutions."
http://www.answers.com/topic/cambridge-energy-rese arch-associates [answers.com]
"IHS is one of the leading global providers of critical technical information, decision-support tools, and related services to customers in the energy, defense, aerospace, construction, electronics, and automotive industries. We have developed a comprehensive collection of technical information that is highly relevant to the industries we serve ."
http://www.ihs.com/About-IHS/ [ihs.com]
I will believe this .... (Score:5, Insightful)
Re:No increase in oil demand? (Score:5, Interesting)
It's pretty hard to predict future consumption and production patterns. The best evidence we have is historic, which has naturally formed the basis for their argument.
Parent
Re:No increase in oil demand? (Score:5, Insightful)
Parent
Re:No increase in oil demand? (Score:5, Insightful)
"world oil production will continue to increase for the next 24 years, and then only level into a plateau."
Yeah, a plateau is NOTHING like a "peak". Oh, they expect it to ever again INCREASE after 24 years? It sounds like the wonks that pegged the peak as far off as 24 years, [which seems unlikely due to their constant demand criteria which we know is wrong] can't even twist the numbers into something that means my kids will live to the age I am now before their world is shattered by transportation and energy crisis.
Parent
Re:OK... (Score:5, Informative)
They predict that the demand will outstrip the supply of cheap oil, forcing us to shift to more expensive supplies and creating shortages that drive the price beyond a reasonable means. They draw a standard set of supply and demand curves, and show where they cross. What's most interesting to me is that it's not the supply curve that's the issue -- it's the demand curve.
And they're less worried about cars than they are about what that steep rise in prices will do to all manufacturing and industry in the west.
Parent
Re:OK... (Score:5, Informative)
There used to be a lot more, but they ran out of oil. In fact, take a look around Western PA to see what devastation running out of oil can wrought on communities. Oil City [wikipedia.org] is an aptly named example.
Parent
Re:OK... (Score:5, Informative)
Technologies that exist and are already economical at current oil prices:
* Coal liquifaction (we have several hundred years of coal in the US alone)
* Thermal depolymerization (~$70/barrel from almost any organic waste).
* Bitumen (huge Canadian deposits)
* Ethanol (both corn and sugarcane)
* Biodiesel (soybeans)
Borderline technologies or technologies that exist but require higher oil prices to be cost efficient:
* Cellulose-derived ethanol
* Farmed plankton biodiesel
* Oil shale
* Methane hydrates/clathrates
* Direct Fischer-Tropsh synthesis from any CO (or even CO2, indirectly more lossy), and H2 (which can come from H2O). I.e., as long as there is power (do you see any "peak electricity" theorists out there? Not many), there can be oil (prices vary depending on component sources). As for H2:
** Electrolysis from any electricity source
** Nuclear power thermolysis
** Direct solar H2 production
** Farmed bacterial H2 production
* Direct utilization of H2 (or other fuels produced from common ingredients + "power") in vehicles.
As for those who say, "Well, sure, there are alternatives, but we don't have time to switch," this isn't true either. It takes much less time to bring a new field or plant online than it takes to drain an oilfield. About the worst time to bring an oilfield online is about 10 years, in the case of a remote field in an inhospitable location with no existing infrastructure. Expanding an existing field into less economical deposits can be as little as a year or two.
Peak Oil is a nonsense theory, and deserves to be exposed for what it is. There've been dozens of predictions since Hubbert, and not a one has been correct.
Parent
Re:From the first link (Score:5, Insightful)
In fact, the scarcer oil seems, the higher the price goes, and the more money the oil companies make.
Parent
Re:From the first link (Score:5, Interesting)
They want the current supply of oil to seem scarce so prices are high, but they want the hypothetical, future supply to seem infinite so that you never have to stop using oil.
Which is pretty much what we have now. The price of oil goes up based on fears about Middle East stability, damage to refineries on the Gulf Coast from Katrina, and so on, threatening the immediate supply. On the other hand, off-shore oil deposits and ambiogenesis promising that the oil supply will never actually run out. They make massive profits, but everyone still feels comfortable with their oil-based ICEs.
Parent
Re:Unfullfilled predictions (Score:5, Informative)
Disruption of the gulf stream - not predicted to happen just yet, so this prediction hasn't been refuted.
Deep freeze in Europe - same. That's like saying that the theory about the sun gobbling up the earth when it becomes a red giant is wrong because it hasn't happened yet.
Desertification of the US midwest - underway. I live in Alberta (Canada), and we expect to run out of glacial runoff in the next 15-20 years, leaving our river and main source of water bone dry for half the year. On top of that, the climate is getting dryer, and the water shelf is dropping. These are known to most residents here.
US crop failures - we'll see. Technology is improving all the time to offset this. Its happened before, though.
More frequent/severe Atlantic hurricanes (were there any this year?) - Nope, but again they expect a trend towards stronger storms, and last year it was certainly evident.
Inundation of coastal cities - Once again this is something that will happen down the road. No one thought we'd be under water in 2006. And we aren't. So the predictions are correct thus far.
Decline of coral reefs - underway. Most of the reefs affected by El Nino (Belize's great barrier reef in particular) are almost completely dead. Scuba diving was a lot more interesting about 15 years ago.
Disruption of Antarctic ice shelves - underway. There has been massive breakups of ice shelves in the last few years. Actually the predictions were mostly wrong; this is happening faster than we thought.
Pandemic skin cancer outbreaks (remember the ozone crisis?) - are you disputing the ozone hole now? That's a separate issue, but one that governments at least took significant steps towards solving around 15 years ago. The hole is larger this year than ever before, btw.
Parent