myopia writ large

One month does not a civilization make. What part of the word 'finite' do the pundits not understand? Here's more cornucopia from Newsweek. Mr. Maugeri writes:

Suddenly the alarmists who foresaw an imminent era of oil scarcity are silent

Not me.

As this bleak scenario gained acceptance, it became easy to assume that the price of oil would defy the laws of gravity and break the barrier of $100 per barrel.

Appealing to the laws of physics, now that's a first.

But a bit farther out, between roughly 2010 and 2012, there is a good chance that supply trends will overtake demand, raising spare production capacity to a range between 7 to 10 percent of demand.

Methinks we've heard that before. Higher prices lead to more investment lead to more oil, nevermind geology. Mr. Maugeri concludes with more gobbledygook:

..., contrary to all the scare scenarios, ... China's oil-consumption growth has the potential to ease substantially, while in most industrial countries consumption growth is approaching zero and may start to drop.

and

One thing is certain: if prices should drop significantly before the investments now underway reach the point of no return, they could come to a screeching halt, precipitating another price spike.

Newsweek also presents an article on Big Oil's malaise, two factors being:

the maturing of old reserves and more and more risky exploration projects

Left unspecified are which reserves have matured and how significant a role they play in the global oil picture. Could those include the venerable Saudi fields?

Running Out, a Myth?

from John Stossel's web page:

MYTH: We are running out of oil
TRUTH: Not so fast!
"It's going to be a catastrophe!"
When they're not complaining about the price of gas, doomsayers would have us believe that we are burning oil at an "unsustainable" rate.

How can anyone honestly argue otherwise? In this video interview with Peter Huber, co-author of The Bottomless Well, Mr. Stossel asks the right questions such as: Isn't oil finite? Somehow, the answers are unconvincing.

Mr. Stossel goes on to argue:

If the price of a barrel of oil stays high, lots of entrepreneurs will scramble for ways to supply cheaper energy. They'll come up with alternative energy sources or better ways to suck oil out of the ground. At fifty dollars a barrel, it's even profitable to recover oil that's stuck in the tar sands in Alberta, Canada. Peter Huber and Mark Mills point out in their book The Bottomless Well that those tar sands alone contain enough oil to meet our needs for a hundred years.

But the media don't pay much attention to that. Not running out of oil is not a very interesting story.

As usual, everyone gets sidetracked by the present (cheap fuel) dollar cost to extract oil, but doesn't figure the actual energy cost to capture further energy, whether tar sands, ethanol or solar.

In another 20/20 piece, Mr. Stossel counts down to two more of his myths related to oil:
MYTH #2-- Urban Sprawl Is Ruining America and
MYTH #1-- Sharing Would Make the World a Better Place.
In that last, he alludes to The Tragedy of the Commons. See my blog entry on this.

Here's how one reviewer characterizes Mr. Stossel's Myths book:

From Publishers Weekly
ABC News correspondent Stossel mines his 20/20 segments for often engaging, frequently tendentious challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, ...The author's complacent glosses on overpopulation and global warming ("we can build dykes and move back from the coasts") are especially glib and one-sided.

More Newspeak

In an MSNBC piece, John Schoen has all the answers, including the following:

an oil company is no different than, say, a gold mining company. The price of gold has little to do with how much it costs to find and produce it — it's set by supply and demand.

it takes years from the time you invest in looking for oil to the time you can pump it out of the ground. So even in places where there are still plenty of reserves (oil underground) like the Middle East, oil production (how much you get out of the ground per day) didn't grow fast enough to cover the growth in demand.

most domestic U.S. oil costs more, not less, to produce than Saudi oil. Our oilfields are much more “mature” — which is another way of saying the easy (i.e. cheap) oil has all been pumped

I'd say there is an inconsistency here: why remark about oil costs, if costs don't have much to do with price. There is a lot of evidence that the Saudi oil fields are mature. Mr. Schoen posits that growth will, in time, keep up with demand, given enough monetary incentive. Where, oh where, is the recognition that the earth is round and that oil is a finite expendable resource?

and again, remarkably,

By the early 2000s, just as investment in new oil production had slowed, demand for oil began taking off — especially in developing countries like China and India that have presided over booming economies. (Which is a good thing, by the way. If the Chinese weren't able to afford to buy billions of dollars of U.S. Treasury debt to make up for our budget deficit, we'd likely be looking at much higher U.S. interest rates — or worse. But that’s another answer for another day.)

Sounds Orwellian to me.

If that's not enough, try following Mr. Schoen's glib answers to the following serious question:

If, in fact, world oil production has peaked and there are (at best) twenty years worth of oil and gas reserves remaining we are facing cataclysmic change. We're not talking about the "inconvenience" of higher gasoline prices or the need to curtail emissions to arrest global climate change. We're talking about the end of life as we know it. There is no single aspect of our economy, our very lives that is not dependent on products and processes derived from oil and gas …
While "alternative" energy sources are available, they, too, are dependent on fossil fuels: photovoltaic cells and hydrogen fuel cell membranes are derived from petroleum based plastics. The sooner we acknowledge that our fossil fuel sources are finite and the day of reckoning is not that far away, the better our chances that some semblance of what we call human civilization will exist fifty years from now.
-- Ray S., Los Angeles

I don't fully agree with Ray's assumptions. For example, one might conclude from Ray's question that we have twenty years before the 'guage hits empty' (to use Mr. Schoen's words). The evidence shows that there will be reduced production each year after the peak. And there is plenty of evidence that the peak is upon us. Our society worships growth. Can we possibly handle contraction? The cataclysm could come sooner rather than later.

To counter gloom-and-doom, Mr. Schoen offers pie-in-the-sky:

Many, like Ray in Los Angeles, fear that coming oil shortages could bring “the end of life as we know it.” We agree. But that doesn’t have to be a bad thing.
post-oil life could end up being a much better one.

and

If the era of “cheap oil” is indeed over, we all have a lot of work to do. But here at the Answer Desk, we don’t believe that the game is over. There are a lot of very smart people out there working on solutions. As oil consumers, we all created this problem. The good news is that that means we all have the power to solve it.

It's not a game, Mr. Schoen, and aren't you the one with the answers? Why does our creating the problem imply that we have the power to solve it? Isn't there anyone at MSNBC who can see through such drivel?


Here's a Newsweek piece that purports to show how market forces are kicking in to advance alternate fuels. In it, the author states:

Add to that the fierce ongoing debate about "peak oil" and the declining viability of the Earth's oil supply.