Open Thread for "Peak Oil is 'A Waste of Energy'" NYTimes Article
Posted by nate hagens on August 25, 2009 - 10:55am
Today the NYTimes ran an Op-ed by Michael Lynch once again pointing out the "fallacious thinking behind the concept of Peak Oil."
TheOilDrum staff is considering a rebuttal to this article, though if we go point by point to Mr. Lynch it will be a bit like Monty Python skit, "The Argument Clinic", given he didn't posit many facts. Below the fold are some brief points followed by an open thread for you to deposit your own.
Here are some points to rebut Lynch:
1)Peak Oil has never been about the amount of hydrocarbon molecules that exist, but flow rates, timing and costs.
This post from 2007 gives a general overview of the differences between those concerned about a near term oil peak, and the unconcerned.
2)Reserves additions are backdated to date of discovery - even with that global discoveries peaked in 1960s and have declined every decade -we need to find oil before we produce it. Onshore oil production peaked in 1980 -all growth since then has come from offshore. 30 of the worlds 54 oil producing countries are past peak, with 10 flat or declining and only 12 increasing. etc.
Graphic by Gail Tverberg, Data from Exxon, Source: Tsoskounoglou, M.; Ayerides, G.; Tritopoulou, E. The End of Cheap Oil: Current Status and
Prospects. Energy Policy 2008, 36, 10, 3797-3806
3)New, better technology generally allows us to maintain current oil flow rate at cost of higher future decline, (which then requires more discoveries, etc.). Look at the example of Cantarell - stagnant production until 1999 when they introduced nitrogen injection - then horizontal drilling in 2002 -production increased for a few years but is now crashing - (yesterday Mexico announced they are buying oil from Brazil, which means USA is buying oil from Brazil indirectly)
4)Lynch and most other natural resource optimists completely ignore net energy analysis - the fact that energy and other natural resource inputs are requirements of oil extraction. Dollars are only an abstract marker for real biophysical costs. The energy return on energy invested on oil in USA has gone from 100:1 (1930s) to 30 to 1 (1970s) to 11:1 (2000) and anecdotally (we don't have the data) is lower now - additionally how much energy and natural resources will it take to rebuild the massive oil/gas infrastructure around the world with 40+ year average life? That isn't even included in those energy profit figures quoted above.
5)Nobody I know is blaming politics for declining discoveries -more expensive exploration and production, or increasing depletion rates. Mr Lynch tries to tie the current debate to the oil embargoes from 40 years ago - but tellingly doesn't mention one person today.
6) His final argument about total resources available being enormous mentions "some geologists". Again, he tellingly doesn't mention one name or organization to substantiate his claims.
7) If the mountain of credit/debt relative to physical resource continues to unwind, the market price signal will cause new investments to stagnate, and the observed decline rate will approach natural decline rate.
8)There was no mention of oil as the lynchpin of economic growth and that we need growth to pay back debt. We import 2/3 of our oil, yet are paying for it with fiat markers. Just today the Obama administration revised the 10 year deficit to $9 trillion. US Oil production and debt creation, are going in opposite directions. Lynch and others don't seem to understand that energy and natural resources are what we have to spend - dollars are just who controls these resources in the current system (or maybe they do understand?)
US lower 48 remaining recoverable oil (based on HL) vs. US Treasury Debt
Please add additional points with relevant charts, data, links, below.
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Lets not say "anecdotally" when refering to supporting information. if it is anecdotal - leave it out. we dont want to fuel his fire - after all he did say all our supporting data is anecdotal.
To add to point #5 you made. It doesnt matter if there are 10 trillion barrels of oil left - it if takes 9.9 trillion barrels of oil to recover it. Lets add some data about the increasing marginal costs associated with recovering the kind of oil that is left.
Is it possible that Mr Mike Lynch (pic below) is a shill for the oil industry and is paid to keep the horses calm and not panicked into changing to other forms of energy?
About 4 years ago, Michael Lynch was quite active on the PeakOil.com message board and posted under the moniker Spike. The mammoth "Michael Lynch - Disputing Peak Oil" thread has been inactive for awhile though.
http://peakoil.com/peak-oil-discussion/michael-lynch-disputing-peak-oil-...
In a way its good to know he is still active, as his arguments are slick yet very straightforward to cut apart. His primary approach has always been an attack on "conclusions on poor analyses of data and misinterpretations of technical material" as he states in the OpEd. What has changed since a few years ago is the wealth of novel analysis techniques that have appeared on TOD and elsewhere. Lynch simply has no counterarguments to these analysis techniques, and will likely try to ignore them for as long as he can.
Lynch:
The reserve growth argument in particular has always been an analysis Lynch spins to good effect for the cornucopian side. With a good model for reserve growth based on dispersive search, we can easily accommodate upward projections and gain a better understanding of what is actually happening. That is the key to how Lynch operates: he looks for weaknesses in a peak oil analyst's heuristics and attacks any holes that he finds. Admittedly, the reserve growth heuristics have been an obvious weakness on the PO side as no one has created a sufficiently strong first-principles derivation to describe its temporal dynamics. Lynch has sensed this and decided to attack this soft spot, and has held his ground because no one has adequately countered his assertions.
But Lynch's own weakness is that he is not a high-caliber mathematician or statistician and would retreat if faced with some reallly solid analysis. ... That is, IF he has any scientific integrity, which is debatable. As I said, he does seem to point out the weak spots, but where he would go beyond this is not clear. If he was indeed an industry shill, he would likely start making stuff up. We have to get him to that point, as he still owns the upper hand on some of these arguments.
IIRC on that thread he argued that data pointing towards "peak now" wasn't what it was presented as by the "peakoilers"
he was asked what sorts of effects and data he would expect to see if oil was peaking..
when he failed to produce examples of such markers he answered that such information was a commercial secret he charged for...
glorified argument from authority.. "only i have the arcane formula"
no wonder he never stepped up and guest posted here.
Joseph Romm has the history on Lynch's bogus price predictions back in 1996 and he lowers the boom with a public challenge. Good stuff:
http://climateprogress.org/2009/08/26/michael-lynch-peak-oil-bet/
Is that true? In the chart of oil discoveries that Nate posted, didn't he say that the discovery sizes were back-adjusted for reserve growth? The declining discoveries for the '70s, '80s, and '90s are all pretty old by now. How much more reserve growth could be expected for them?
Not only that. Someone who says that oil from deep sea off Africa and South-America will bring back oil to 30 dollar cannot be taken serious. Oil can only go to $30/barrel because of a deepening recession.
It is a waste of energy and time to think much about his article.
From the facts above is most telling that onshore oil production peaked in 1980.
After that the fact that more than 40 years elapsed since peak discovery.
The Cornucopians know better. They are mere tools of delusional or desparate expansionists. They declined our $100K wager in 2007 on production estimates and have repeatedly rebuffed our invitations to debate at ASPO conferences. Dan Yergin called for a "civil dialog" at the same time his crony Peter Jackson called peak oil theory "garbage". And now Lynch calls peak oil watchers "Chicken Littles". They are university-trained, highly-experienced and well-paid dissemblers. But maybe, just maybe, if we keep reaching out to them in a bi-partisan manner they will come to our upcoming Town Hall Meeting (ASPO Conference, Oct.11-13)so we can have an honest conversation and learn from each other. I just hope they don't come with their weapons. HAWR!
I'm certain that Lynch is useful for what I call the "fiduciary conumdrum" facing the big boys in the oil industry. I've discussed this privately with a couple of heavy hitters, and they agree. If you are in senior management of a large publicly-traded oil company, admitting peak oil exists harms your shareholders and makes you subject to huge lawsuits for breach of fiduciary duty. In other words, if you make the stock go down, the lawyers can take all your money away.
If you admit peak oil is here, you immediately signal that you are willing to pay a scarcity premium for things like acquisitions of reserves or other companies, key employees, and specialized service providers. In short, all you do is increase your company's costs, while doing nothing to increase revenues. I seem to remember from school that declining earnings make a stock go down.
Some lawyers and pension fund consultants would have a field day picking apart the management teams that admit this. If you were in their position, and faced possible financial ruin, or at least a severe financial and legal cost for just saying you're not sure, then you bet you'd welcome the help that Michael Lynch and CERA provide in confusing this issue.
Sorry, I don't see that. If the admission of peak oil raises costs for the operating companies, then it should also raise prices for what they produce.
I'm not about to suggest that the oil business operates on anything like a "cost plus" basis, where increases in production costs are passed through directly in the form of increased prices. Costs to operating companies and prices to oil consumers are both determined by market dynamics. They're only coupled indirectly. So the situation you describe is possible in principle. But I don't see any reason it would work out that way in practice.
In saying that admitting peak oil will raise costs for the operating companies, you're implying that an expectation of scarcity will change the psychology of those that hold reserves in a manner that will increase costs to the operators -- which I think is quite true. But in saying that it won't increase revenues, you're implying that the same does not apply to the prices that the operators can get for the oil they produce. There you lose me.
The question of who gains from denial of peak oil seems to me rather complex. To the extent that it succeeds in influencing market opinions, it obviously serves to lower both costs and prices over what they'd otherwise be. That's short term. It also forestalls and undercuts market flight to alternatives, which could benefit producers in the longer term. But it puzzles me, because I don't see how it can be effective for any significant length of time. We're rather late in the game, in my opinion, and reality is already knocking at the door.
Perhaps what we're seeing is a last-ditch effort for those in acquisition mode to hold prices as low as possible while they're locking up everything they can get their hands on. It's hard to see it as an honest opinion, given the weight of recent evidence.
People like him deny the issue through stupidity; deny it due to emotional hindrance; deny it due to conflict of interests. They are essentially the bane of our efforts to spread the word about Peak Oil. Therefore, it is essential that we rebuke them as efficiently as is possible. And is it just my psychology, or do all deniers actually look as ugly as he does? (Assuming that is his likeness!)
Lynch is right. negative people who ignore economic history, only see gloom.
are historically and hysterically wrong.
In 1858- Titusville PA, oil was 20$. that 20$ incited production technology and brought on SUPPLY!! Oil has been going down in price ever since.
20$ is $400 in today’s prices.
FACT All commodities Go down in price in REAL terms,, since caveman days!!
By 1863 when the FUNK well came on at 3k barrels / day,
Oil went to 10 cents a barrel.
N-gas is 2.60, 160 in the Rockies- because there is TOOOOO much,, industry can help itself,, it barfed and over produced.
Over time rewards go to those who “see”,, not to it’s a disaster gloom-doom types.
Titusvilleman
To infinity, and beyond!
I'm glad you have started a seperate thread for this -I was just gonna post a comment in Drumbeat that said "remember this guy (Michael Lynch) and make sure he is the first to get crucified when the SHTF..."
-I'm sure your rebuttal will be much more diplomatic/informed.
Nick.
A minor nit: how about including the word "global" in point #1. Sure, we all know this refers to global discoveries, etc. But, someone who isn't familiar with the issues might think it refers to the US.
Todd
Bud, bubble spec nutcase cdue was 150..
it went to 30$ in 6 months//
TSHTF ,,,it was a joke.
75$ is a joke.
there is plentitude//
70$ makes THINGS hapoen, the industry acts!!
we will see 40 by Nov.
place you bets//
Bud, bubble spec nutcase cdue was 150..
it went to 30$ in 6 months//
TSHTF ,,,it was a joke.
75$ is a joke.
there is plentitude//
70$ makes THINGS hapoen, the industry acts!!
we will see 40 by Nov.
place you bets//
Is this titusville-man some out-of-control C++ automatic source code generator?
// This is a gratuitous comment
No, it is a complete idiot who doesn't know that drilling wells past peak only slows the decline.
What, no abiotic oil? No mining the asteroids? No endless supply of goose oil?
//This comment intentionally left blank
Nice shot web.
Almost all of my shallow knowledge about peak oil has either come directly from reading The Oil Drum or something on TOD sparking enough interest to cause me to look more deeply into a topic via other sources. At any rate, I'm far,far from an expert in geology, petroleum engineering, refinery practices, and energy marketing. I'm a natural born Malthusian though and can imagine very few if any at all things that will not eventually run out. So when I saw the gentleman's article in the NY Times I thought, it must be a sarcastic piece by a peak oil believer, but damned if the guy wasn't serious. I then decided to read it again and see just exactly what it was the man said and came to the conclusion that it amounted to little more than, “Is not”. He's not even particularly clever. Take this snippet:
“When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time. But as years pass, the estimate is almost always revised upward, either because more pockets of oil are found in the field or because new technology makes it possible to extract oil that was previously unreachable.”
Now that's somewhat true. But what he does not emphasize is that some of the increased estimates may be based on the potential ( but not yet demonstrated ) of a new approach to extracting oil, and he does not bother to mention that the pressure to up the estimates is often and, perhaps mostly as time goes on, marketing positioning and I believe that has been thrashed out rather thoroughly here on TOD.
Another bit reads “A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum.”
I think that the bit about based on anecdotal information may be sometimes true, but I'll bet that any number of TOD experts would love to be relieved of using anecdotal information by having access to actual data. I've seen enough on TOD to assure me that the statement “ignorance of how the oil industry goes about finding fields and extracting petroleum.” is not a credible assertion.
So I was left wondering why he'd write such a facile piece. It must be just to provoke.
If pressed, both Peter Huber and Michael Lynch will admit that discrete regions like the Texas and the North Sea peak and decline, but both of them are basically making the argument that the sum of the output of a group of producing regions that peak and decline will show increasing production for the indefinite future, practically forever apparently.
As I noted on the DB thread, this led me to define a "Huber/Lynch" type oil field as one whose individual wells ultimately decline, but the total field production--the sum of the output of discrete wells that peak and decline--increases forever.
Although most people probably don't think about it that much, the "Huber/Lynch" model is the operating premise that most people have in regard to natural resources.
Mathematically speaking, Lynch appears to be saying that even though the first derivative of production at individual wells is negative, the sum of all those negatives is a positive. (In other words, the whole is the opposite of the sum of its parts.)
We have to be careful as we might give Lynch some ideas. If Lynch doesn't know this already, there is the somewhat famous "Simpson's Paradox", where the sums are not always what they seem.
http://en.wikipedia.org/wiki/Simpson%27s_paradox
I would agree that if they were all negative, then we can make the obvious inference and trust that the aggregate would decline, but the trick is that they are not all negative.
Good insight though.
I think that Lynch's argument is simply an updated version of Zeno, and so he can argue that his math has thousands of years of support behind it. IIRC, Achilles never caught the tortoise, and thus we will never run out of oil from any well (but wait, there's more!).
More exactly, the theory is that there will be more (and/or bigger) wells that are still ramping up their production to counteract for the older declining wells. The underlying assumption in this theory is that as the industry develops, there will be more and more (or bigger) discoveries, and newer/better production methods that increase available flow rates. Obviously both assumptions can be tested by observing the facts about oil discoveries over time and about production technology wrt production rates.
I don't think that's right. If the number of individual wells is increasing (which it is)then total production could be increasing, even if production at each individual well were declining from the moment it came on line (which it pretty much does). It depends on which is bigger -- the total decline rate for existing wells, or the rate at which new production is brought on line.
From what I've seen here and elsewhere, the data seem conclusive that the total decline rate is already nearly equal to if not greater than production additions. There's every reason to believe that the decline rate will increase, and the rate of additions will fall as we move forward. But it's a matter of data collection and interpretation, not any funny math (as far as I can see).
Re: "Dollars are only an abstract marker for real biophysical costs."
Let me get this straight: Dollars are abstractions and energy is real.
In my world energy is abstract since its characteristics are undefined. Energy could be any of its various forms: solar, wind, geothermal, electricity, oil, coal, etc.. Each form has its own individual characteristics that are unique. Energy does not exist outside of its various forms. When EROEI/Net Energy is calculated without defining the form of input and output, it is invalid unless the forms happen to be the same.
Dollars are concrete at least for a moment in time. Energy is an abstraction like grain and metal. Until this is admitted and the wide variability in energy characteristics are taken into account, there can be no progress in dealing with the Peak Oil dilemma IMO. All alternatives will be deemed unacceptable because they fail the fallaciously measured EROEI when compared to oil.
Oil is non renewable and should be given a big minus for that characteristic somewhere in the calculations. Also imported oil is diffinitely a big energy return negative from the point of view of the oil importer. It has to be since no oil exporter would sell it for less than its energy value. When imported oil is refined and consumed no energy is produced. It is consumed. Since most of American oil is now imported, it should be obvious that the energy return on oil in the current American experience is very negative, not positive as implied.
That is part of the reason we are now experiencing the Great Recession as the economy struggles to make enough economic profit from imported oil to pay for importing more of the stuff. It is a vicious circle especially with the other drains on th economic profits of imported oil like fiscal and trade deficits, wars for oil security and bailouts of banks, auto companies and such.
I think you misunderstand by what I meant by 'abstract'.
Money can by created by penstroke, rule changes, etc. Energy cannot.
I think you squarely hit that one on the head. Money is imaginary, Energy is real. Money requires faith ("in God we trust")and more can ALWAYS be conjured up whereas easily accessed, transported and processed liquid petroleum is finite.
"Dollars are concrete at least for a moment in time.", yet "Energy is an abstraction like grain and metal." ?! WTF?
That is why I flagged this as inappropriate.
That, and the fact that your post has nothing to do with the topic at hand.
If you want to post this kind of reasoning (and I use the term loosely) in the Drumbeat, go for it.
That stupid inappropriate flag function was never intended to censor discussion based on ideas-it was set up to keep out cursing, insults, shoutfests, etc. So now you have this small band of morons flagging everything they disagree with.
Priceless!
It is funny, and he should not have used the word "moron" in his reply post, but his point still stands, in the post flagged as inappropriate there was no cursing, insults, etc. The flag unappropriate was for a post simply because the replier disagreed with it.
RC
The flag is not just for cursing and insults. It can also be used if a comment is inappropriate for the thread. Off-topic, etc.
FWIW, I have seen no evidence that anyone is "flagging everything they disagree with." If anything, people aren't using the flags enough.
The setup of this forum has always been a problem I find. Remember the red and green flags? and now this system is being abused.
This combined with having to search through an entire thread to answer replies to your own posts means the oildrum forum is the worst I have come across in 15 years of internet use.
Its about time we had a major overhaul of this forum and made it more user friendly.
Well, I like it. The format is easy for me to use -- if you want to find your own posts just use CtrlF.
And inappropriate content is way down compared to any other forum I read
One of the sweet features of the Chrome browser, is cntrl+f search results are also indexed as colored lines on the vertical scroll bar. It's easy to find things even in a long forum.
The comment system is a real pain in the backside. When there are 100+ comments it takes forever to get to the ones you wish to view and reply to. I have resorted to using the 'find' function with either my screen name or '[new]' to quickly locate posts.
I did email the editors a few days ago recommending a general forum is set up so we can start our own thread outside of conversations directly relating to a main article. This would be a plus for TOD.
You can also click on My Account.
Then click on Comments.
That will link you to all the comments you recently made and to responses that other TOD'ders may have posted.
This used to work better as you could easily tell if there were "replyed-to" comments. I think this was implemented when TOD used a pre-Scoop blogger configuration.
I've read this little diatribe so many times, it's starting to feel like those emails you get to purchase English bulldog puppies from Zimbabwe...
Energy is not abstract. It is totally definable and quantifiable. That it has various forms does not mean we can not quantify it. Does the fact that there are right, obtuse and acute triangles make "triangles" as a whole "abstract"? Yes there are different forms like coal, oil, gas, but they each have different eroei. THere are also different oil fields... but they each have their own quanitfiable eroei (that declines over time) and any group (or total) of fields will have an averageable eroei.
Your last parapgraphs seem to be constradicting your first few. eroei is abstract and fake... and yet it is what is causing us to go broke? Huh?
Grain and metal are abstracts? Wtf does that mean? Last time I checked, I could touch my box of cereal and weight it. Ditto on a pound of steel.
No one said that alternatives are unnacceotable JUST because of having ereoi lower than oil. (Indeed, I think they are quite acceptable.)
Why should oil get a lower eroei for being nonrenewable? Yes this is a disadvantage, but it has nothing to do with how much energy it takes to produce it right now. Me thinks you don't understand what eroei really means...
Hello Andrew in Texas,
Your quote: "Energy is not abstract."
Yep, this is a true statement! If there are any doubters seeking scientific self-proof: Please come to my Blazing Asphaltistan.
I will gladly provide you with comfortable A/C-cooled transport far & deep into my incredibly lethal, scorching Sonoran desert. Then you can pursue on-foot mirages into the ever receding horizon. You will have just a few hours of life left in the 115f heat, but to energy-doubters and energy-deniers: that is just 'too abstract' a concept to be concerned about. The buzzards, fly-maggots, and other desert biota will NOT consider the energy embedded in your corpse to be ABSTRACT at all.
YMMV based upon rate of dehydration and onset of heatstroke!
EDIT: those on a tight budget [you can't afford the plane fare] can find self-proof by tightly tying a cellophane bag over their heads.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
The Sonoran desert is beautiful and awful. I moved out of Tucson recently. Loved my two years of grad school there, awesome culture, but I don't really think we should be building cities in the desert, though not so much because of energy issues (the desert would be a great place to use local solar to pump heat/air condition) as water issues, which are quite harder to work around.
I think I might take Kunstler to bat on his "Suburbia is the biggest misallocation or resources in history" by challenging him with Phoenix. Of course, there's always Scottsdale... that we could both agree on.. :)
Thxs for your reply. I am doing all I can to dissuade people from moving anywhere [that already has plentiful water] to the naturally parched Southwest [CA,AZ,NV,NM..]. IMO, it will be a nightmare beyond belief when most of Mexico + SW US goes into water shortages.
I have invented a way to dehydrate water so that it can be shipped economically from Western Oregon, where we have plenty of it, to places like the Sonoran desert, where it can easily be re-hydrated with some abstract water that you can just find lying around on the sand.
The process is proprietary, of course, but I will gladly share it with a well-heeled investor of sufficient mental deficiency.
Hey! Not so fast you're it sounds like you're infringing on my "Instant Solar Water" patent pending circa 1999.
I had invented a solar destillation process to do exactly what you propose.
I had succeeded in producing 99.9999% pure instant water through my unique process. It came in a package with very precise measuring devices and instructions so that the end user, could, by very carefully following the instructions and adding a precise predetermined volume of highly purified distilled H20, measured in cubic centimeters then converted to mililiters, to the contents of the packaged Instant Solar Water, thereby instantly reconstituting the purest of waters, rivaling even the most exquisite of designer bottled waters.
I think you will be hearing from my attorneys shortly.
BTW my process doesn't depend on any fancy schmancy virtual water. My Instant water is the "REAL DEAL"!
Energy and grain and most commodities ARE abstract. Well it's all quantifiable right, so much as the energy in a super solar flare hitting our planet and burning off all of it's atmosphere within the next 10 million years would be quantifiable. Yes, that would be quantifiable and a pound of grain would be a pound of grain and 20 million barrels of oil a day would be just that. BUT when you get right down to it, that's all very abstract to any individual seeing only one small part of reality.
There's no need to brow beat individuals that sympathize with your world view. Maybe only two percent of people in the United States are directly involved in farming and I'm beginning to believe that hardly more than that have even a layman's understanding of what the peak oil argument is all about. To most people the dwindling forms of energy that sustain our civilization are very abstract.
I wish more people would take the time to make energy consumption less of an abstract, but hell, I wish more people knew what a space elevator was and understood the costs of war on a personal level. Our goal here is to find the best way to communicate our world view to the masses to which have an abstract idea of what energy is and to help TOD counter Michael Lynch twisted Op-ed.
Let's all save the brow beating for the Mr. Lynches and offer our rationale explanations to the rest of the folk.
This issue or "relationship" is one that interests me most.
** So has anyone found any discussions by economists or better yet...economists and those in the energy field about this subject? **
The amount the US spends on oil and the wars in the ME speak volumes? And we borrow and print $ to do these things.
"That is part of the reason we are now experiencing the Great Recession as the economy struggles to make enough economic profit from imported oil to pay for importing more of the stuff. It is a vicious circle especially with the other drains on th economic profits of imported oil like fiscal and trade deficits, wars for oil security and bailouts of banks, auto companies and such."
Check out The Automatic Earth at http://theautomaticearth.blogspot.com/
There is a primary on renewable energy at http://theautomaticearth.blogspot.com/2009/07/july-1-2009-renewable-powe...
Careful- it is as addicting at TOD.
Oil is not capital, but rent, if you believe Ricardo or Marx.
Of course, this is still economics, a Alice in Wonderland place that everyone believes is real.
Light bulb moment, oil is peaking because were are not printing enough money.
That's clearly silly. Oil is peaking because we are not paying bankers big enough bonuses.
Well, youre both wrong. Oil is peaking because of those crazy environmentalists keeping us from drilling!
You really ought to read your own stuff before you post it.
An interesting exercise would be to examine that issue of the NY Times fully and attempt to estimate what % of the articles written would be considered total BS (to the average reasonably aware reader). I would be surprised if this silly article stands out when that exercise is completed. Newspapers are meant to entertain, not inform.
This article is typical a New York Times opinion/op- ed piece. The Times de- coupled from reality a long time ago:
- Economics is 'examined' by Paul Krugman twice a week. Paul has the recession technically over but needing endless stimulus. Ilargi points out that Krugman cannot know what he doesn't know, and he cannot predict the unpredictable.
- The Times' Tom Friedman (along with the editorial staff and that of the Washington Post) was a front- runner/cheerleader for the Iraq invasion.
- The Times itself is a relentless spammer for the auto industry as well as for various luxury consumables; luxury clothing, luxury real estate, luxury vacations. These advertisements are constantly cloaked as 'news' content rather than what it really is. It is hard to craft an editorial policy of restraint and limits ... when big business advertising is picking up the check.
By the way, Steve, I've noticed and enjoyed a few of your comments on various NYTimes columns. Completely agree with your assessment of the nation's so-called "paper of record." The fact that they continue to give hacks like Lynch a forum speaks volumes.
I agree that the NY Times publishes a lot of this crap. But a big newspaper is a mosaic of different things and it is not all black and white. Some NY Times editors, unlike the majority who must be out of touch with reality to give such a prominent voice to mental midgets like Lynch and Friedman, may have different views. I base this on the fact that The NY Times also publishes articles by Micheal Pollan--a tireless advocate for local, unprocessed food and sane agriculture. Do you really think the NY Times editors/publishers are conscious propaganda tools for big business, or could it be they are just out of touch with reality? By publishing Michael Pollan they are kicking poison producers of high fructose corn syrup and hydrogenated oils, Archer Daniels Midland, Cargil, and all fast food big business right in the balls. At least they are not concerned about that advertising revenue.
Producers of foods with fructose corn syrup and hydrogenated oils don't advertise much in the NYT. The demographic, for the consumers of these products, would more likely find Rupert Murdoch's New York Post more to their liking.
They claim to be "the newspaper of record". That is reason enough to try and set the record straight.
I agree, and sometimes (unfortunately) bad press is better than no press. Lynch's cornucopian blather raises the issue one more time and allows people in the know the opportunity to rationally set the record straight one more time. I love when one of the big networks does an optimistic expose on peak oil related events because it get's people thinking, "why are they talking about this if it's not an issue." I know I'm pretty cynical and jaded to think like this, but you can see this reveals that I'm also pretty hopeful and optimistic too.
Telegraphing the real message
It may be helpful to highlight the real message behind Mr. Lynch's OpEd piece. He clearly states it: "We can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures".
It is impossible to ignore the parallel with Prince Turki al-Faisal recent Foreign Affairs article where the Prince declares: "U.S. politicians must muster the courage to scrap the fable of energy independence once and for all."
The more effectively the real purpose is highlighted the more effective the rebuttal will be. Mr. Lynch and Prince al-Faisal are concerned about the economic impact of decreasing our dependence on fossil fuels, particularly imported oil. And the real cost of imported oil is much dearer than we generally acknowledge given the sizeable commitments in blood and treasure we've made to protect "our" supply.
razrmon,
you said, "Mr. Lynch and Prince al-Faisal are concerned about the economic impact of decreasing our dependence on fossil fuels, particularly imported oil."
I think you have called it exactly right. They are concerned about the economic impact ON THE PRODUCERS.
For them, it doesn't matter whether the decrease in oil usage occurs because of decreased supply or decreased demand, it is still a catastrope for the producers! The need to extract the billions spent in the infrastructure to get, refine and move oil.
Frankly, we have it in our power to break the back of the producers in the next decade if that is the goal. I do not see it as the goal. The idea would be that the oil producers will begin to transition themselves away from dependence on oil just as the consumers do. But they must be willing to take that path.
RC
Actually it matters very much to them. If the decrease is because of a demand reduction the price collapses, and the producers are screwed. If the decrease is due to supply constraints, then the price goes very high, and the producers can make a killing, even though they are selling less. The whole motivation for misdirecting people about the prospects of future supply problems, is to make sure that that is the way it goes down. Anti-peakers whether witting or unwitting are tools of the producers.
I think this is the core of the argument - and one that needs to be put back into the NYT by someone able to write that op-ed.
Hi e.o.s.
re: "If the decrease is due to supply constraints, then the price goes very high, and the producers can make a killing, even though they are selling less."
This doesn't last for long, though, does it? If it's the case that price volatility increases with "peak."
It would also matter how the periods of high price compare to the periods of low price and the cost of the ups and downs (to the producers).
Anyway, the illusion is that anyone's boat can float in this environment, as the situation worsens. We'll see, I suppose.
I had a journalist propose to me today that pek oilers were in the pocket of oil companies as this would allow oil companies to jack up prices when everyone was convinced that peak oil was real. I fear that is going to be the general belief which will hold up any meaningful mitigation until it is too late.
I've see a variant of that theme over on counterpunch.org. Elsewhere in the article I mention, the author writes:
Very well said. This has always struck me as the geopolitical nut that underlies all of the machinations we have seen thus far...
I have to say, I think its worthwhile reconsidering the general approach here, and what might be the best direction to take.
This little op-ed is basically just the same as all the rest, designed to push a particular policy direction by rubbishing the threat. We've seen its twins many times before. The bigger question is what is driving it?
Now I'd love it to be Opt2, but given the woeful backbone demonstrated over the past six months, Opt1 is quite a possibility. You must also take into consideration that if commercial property doesn't tank, people are being to stare down the possibility of another oil price spike as recovery sets in.
In either case, the field of play is politics and policy. These are set by emotions and emotions derived from faux facts. You want to answer that call with graphs and point by point rebuttals? You're bringing the wrong weapons to the fight.
I'd suggest that in answering it you give short shrift to the words, dismissing them quickly as tired repeats of distortions and lies that were trumpeted in 2006 - saying oil was going down to $12 a barrel. A link to a factual statement of the position on oil on this site can be given as an aside.
Instead move on to the policy battleground described above. Outline the failure of action that has dogged policy since OPEC first demonstrated the weakness of the US situation in 1973, 36 years ago. Paint a picture of the year 2012 if policy failure continues; the never ending recession as any green shoots of recovery are stomped on by oil price spike, the continued growth of China as its currency reserves allow it to buy up oil contracts around the world, Mexico falling apart as oil revenues disappear, the collapse of the dollar in the face of reality. Reference the words of Fatih Birol about failure to invest currently and need for much more government attention.
Then say the hour is getting late, action needs to be strong, swift and certain if that picture is not to be made real. Snivelling vested interests (like Mr Lynch) need to be 'strung up high' if the US is not to slouch towards its personal and international apocalypse.
I'd guess that some would catch the Yeats imagery, but the important thing is NOT to fight with numbers, but to fight with ideas. The facts are there to back up assertions, not to lead with. You are interested in decisive actions, not in if the peak was 2005 or will be 2011. Above all, its not really the readers you are interested in, its the government policy and it going down the Opt2 rather than Opt1 path.
garyp:
I fear your Option 1 is what is really behind this. My suspicions are that the Obama administration was so backed into a corner that they had to cut a backroom deal with some oil state Blue Dogs in order to get their support for the health plan. The deal is that the green energy initiatives get "postponed indefinitely" (i.e., for the remainder of Obama's term of office), with the public explanation being that the brakes need to be applied to the spending. The real back room explanation is that that is the price paid for the votes. Part of the deal was probably to delay the announcement of this for a while, in order to start in to play the machinations with the media that would lay the groundwork and condition public opinion to accept this policy change without too much opposition. Thus the appearance of Lynch's piece at this time. Look for others like it, in other venues (e.g., Samuelson's hit piece on passenger rail in yesterday's WaPo).
This is a testable hypothesis. If this initial salvo becomes a flood tide in the media of things like this, followed by a public announcement that "we just can't afford to move forward with green energy right now", then that will be confirmation.
Following that logic - that oil is plentiful - there is no reason for the government to throw away money on subsidising oil producers, either.
Interesting you see those two statements as synonymous because I see them very differently -- Lynch's is absurd, while the Saudi guy's observation is absolutely true. Nearly everything done in the US in the name of "energy independence" has been a disaster --- biofuels, oil shale, synfuels, you name it. A country with 1-2% of reserves and 5% global population that consumes 25% of the world's resources MUST get over the fantasy of energy independence and start trying to figure out how to live and play well with others.
Reducing consumption (or population) is the only long term solution. Similar to being unable to solve the credit crisis by increasing debt/credit, we can't solve an energy dependency problem by becoming more dependent on energy.
Only if you actually believe energy dependancy is a problem.
Seriously; Global human energy use is some 16 terawatts today. Its going to go up to hundreds of terawatts over the next century as global civilization continues industrialization. That this is 'bad' is a matter of perspective.
Have you thought about the non-energy inputs (in particular water, and metals for infrastructure) that accompany that fantastical prediction? How about externalities and social equity? Will we appropriate more or less than the 30-50% of net primary productivity we already pull into human systems? All other inputs and outputs magically stand still while we harness nuclear hmm? You are off by an order of magnitude, and quite likely two (meaning we are down to 1.6 from 16 by then). There is a non-zero possibility you're off by 3 orders of magnitude (.16 terawatts in 2109).
But lets say youre right. Nuclear is the only logical move up the energy density scale, and there is lots of it. How does that answer the fiat/liquid fuel/social equity crises of the next decade? Where is it addressing the real time problem?
Sometimes I think I'm on another planet. The only thing I agree with you on is that 'bad' is a matter of perspective.
It doesn't; I never claimed it does. Over the next decade price signals will bring forward the usual suspects of coal liquefaction, tar sands, ultra deep water, and so on.
Coal use will continue to go up, especially in India and China. But over the next 30-40 years there will be a transition to nuclear, wind, etcetera, and energy demand will continue to rise to feed ever larger industrial demands.
That statement is so outrageous it is difficult to know how to reply. Energy consumption is going up, not to one hundred terawatts but to hundreds of terawatts from the present sixteen terawatts.
After thinking about it for a couple of minutes, such a statement could only be made by someone who is totally delusional, totally out of touch with reality. Such people are best ignored.
Ron P.
To be fair, I think he's counting the watts from all the bombs we'll be dropping.
(Bred in his benign fleet of reactionary reactors)
Seriously; Global human energy use is going down to zero over the next century. That this is 'bad' is a matter of perspective.
Both wrong. Thanks for playing "See the extremes!"
LoveSalem:
Then the amount of exports available from producing countries drops to zero, then consuming countries like the US WILL be energy independent. It will happen, absolutely. And if the ELM hypothesis is true, then it may happen far sooner than most people realize.
razrmon:
Here, here! Thanks for saying this, otherwise I would have had to say the same thing. You are absolutely right, the real point and the real purpose of Lynch's article comes right at the end. I suggest that what we really need to do is think in terms of starting at the end and working our way backwards. Point out right at the beginning that Lynch works for the oilcos, and that both he and they have an obvious interest in derailing both renewables and energy efficiency. THEN make the case for why that is a terribly bad idea, and catastrophic for the US, by showing what the real state of affairs is wrt energy in general and oil in particular.
The big challenge: Someone like Lynch can throw out lies by the sentence, but refuting them requires facts by the paragraph. It is going to take a lot of good writing and editing to distill our arguments down to something concise enough to fit within the constraints of what the NYT will be willing to print. I would gently suggest to those putting this together that you not be too concerned about refuting each and every little thing that Lynch wrote. Focus on the most important things, and be more concerned about making our own case than about cutting down his. Focus the heavy artillery on the most strategic points - that's how you win a battle.
That's the theory? Who doesn't believe that? The only debate I've seen or heard of is about when. The peakers say it is imminent or here. The extreme optimists say it's decades off. This is the first time I've heard someone suggest the oil age won't end. There's massive confusion (or something) right there at the door.
More confusion. So most "previous predictions" were for peak in 20 years? Most who? Peakers? No. Those are the optimists. So again, the issue for anyone is when, not whether, with the optimists putting peak 20 years or more ahead. Well, if oil were known to be peaking in 20 years, that would be a serious problem deserving of attention NOW. But this guy is very, very relaxed about even that. What WOULD make him nervous?
I think #2 is a very important point. When I heard him say that reserve additions were not counted as discoveries, I worried that Ace's chart (my personal favorite) of discoveries vs. production was not telling the whole story.
The other major graph to include would be WT's favorite of Texas & North Sea. Between those two charts, you can make a pretty convincing argument.
Jin Baldauf invites Michael C. Lynch to an ASPO meeting.
http://tech.groups.yahoo.com/group/energyresources/message/105081
What? No Cornucopian apologists for Mr. Lynch? How can you have a debate with no voice representing the mainstream view ('mainstream' in the U.S. anyway). Ok, this isn't my specialty, but since there's no one else around to do it, I'll give it a whack.
Mr Lynch is 100% correct --more power to him for sticking it to those eco-weenie Doomers! There is no shortage of oil in the world, and not likely to be any shortages in the foreseaable future. Cheap oil, just like so called "endangered" plants, fish, mammals, etc. are replenished abiotically by Corporate Jeebus. Corporate Jeebus *wants* us Chosen Ones to be rich (and by 'Chosen Ones' I mean "belonging to an evangelical/pentacostal branch of Protestantism that supports laissez-faire unfettered capitalism, environmental deregulation, and an agenda of globalist pro-growth labor arbitrage", of course). To be rich all we need to do is "drill, baby, drill!" and grow ourselves into permanent prosperity. It's the Growth, stupid!
If you're *not* personally benefitting from His Unlimited Bounty, here's some practical advice: pray harder. And donate to the Republican Party, 700 Club, AEI and Heritage Foundation. Oh, and for you Ehrlich/Kunstler die-hard L-I-B-E-R-A-L-S, stop hating America!
/end rant
Ok, how'd I do?
+10
You did pretty good, but I could almost hear the sarcasm in the typing! lol
(1) The net energy analysis (#4) is strong. Has anyone done any economic analysis of the economic impact to the global economy of going from 100:1 EROI to 11:1 EROI or how much this will cost the economy to re-engineer its systems to accommodate (continue to create new economic wealth) lower EROI's? I just keep wondering how much of the current financial system meltdown (and destruction of ~$50,000 billion in asset prices) is a harbinger of future corrections left to occur as we slide down the EROI curve.
(2) Would Michael Lynch agree that oil today comes in at 11:1 EROI or would he claim that this number is also a figment of someone’s imagination?
(3) But, whether there are trillions of more barrels of oil left in the ground salvageable at today's 11:1 EROI is beside the point, if CO2 needs to be kept below 350 ppm to avoid runaway abrupt climate change. If conservation is driven primarily by the cost of energy inputs, there should be a cogent economic argument that higher energy input prices (at least for fossil fuel sources) are desirable. Again, there is an economic argument to be made if the cost of avoiding the triggering of runaway abrupt climate change (my estimate to achieve 350 ppm is $20,000 billion in current dollars; slightly more than 'fixing' the present financial system crisis) is less than the cost of an outcome without managing CO2 concentrations (e.g. the wholesale destruction of the global economy, loss of ecosystems, morbidity of large portions of the human population and loss of biologic life, etc.).
(4) I am intrigued by the NYT Op-Ed editorial policies. Would they publish an op-ed by an MIT professor who claimed that the earth was flat or that quantum physics was all ‘smoke and mirrors’? Is there really that much controversy over the ‘peak oil’ theory today? How does the NYT publish something w/ so little vetting? Is this an opportune time for the Oil Drum to publish a NYT op-ed to set the record straight, to provide an alternative view?
As to (1)
So long as EROEI is >1, the amount of net energy available for consumption is what matters. Let's say in 1950 (theoretical numbers follow) a country consumed 10 gigajoules (net) and all of this energy comes from oil with an EROEI of 100:1 said country would have produced (pumped) 10.1 gigajoules of primary energy out of the ground. Now let's say in 2050, the same country consumes 10 gigajoules of energy (net) and all of this energy comes from oil with an EROEI of 10:1 said country would have produced (pumped) 11 gigajoules of primary energy out of the ground. In both cases, the same amount of energy is available for planting, fertilizing, harvesting, and transporting crops as well as other goods thus the welfare of society is the same. The only real hole in my argument is that the country in 2050 would have more wells, drilling rigs, and associated environmental destruction.
Some insight into the NYT policies which gave rise to the Op-Ed on peak oil by Michael Lynch is provided on the front page of the print version of the paper (today):
(three inch ad across entire bottom of front page with a graphic of a car made from brown and green dots)
"- fuel for thought -
Energy from Algae.
The energy from algae holds potential as an economically viable, low emission transportation fuel. ExxonMobil is partnering with Synthetic Genomics Inc., as part of a major long-term research and development program aimed at developing algae as a viable fuel source. And because they consume CO2, algae could help reduce greenhouse gases.
To learn more, go to www.exxonmobil.com.
ExxonMobil
Taking on the world's toughest energy challenges."
I like the New York Times for many reasons. However, on the subject of peak oil it is blinded by loyalty to one of its principal advertisers.
4)I am intrigued by the NYT Op-Ed editorial policies. Would they publish an op-ed by an MIT professor who claimed that the earth was flat or that quantum physics was all ‘smoke and mirrors’? Is there really that much controversy over the ‘peak oil’ theory today? How does the NYT publish something w/ so little vetting? Is this an opportune time for the Oil Drum to publish a NYT op-ed to set the record straight, to provide an alternative view?
They would not publish a flat earth article, but they would also not be able to explain WHY they believe the earth is round. Editing a newspaper is not a job for people with a science education.
A few points for Nate from a non-expert:
1. Classic: Majority of nations have peaked
2. Classic: Hubbert predicted U.S. peak
3. Classic: Hubbert predicted world peak
4. Classic: exponential extraction cannot be sustained
5. Classic: We are going offshore and to Alberta because we have used up all the good stuff.
6. Political: Wars in Iraq and Afghanistan are about securing the last major oil reserves
7. Fallacy: Cherry picking one arguably irrelevant term by Matt Simmons proves nothing about Peak Oil
8. Fallacy: Cherry picking one so-called failed prediction of Peak Oil by founder of ASPO does not disprove Peak Oil.
9. Fallacy: Claiming that there are 10 trillion barrels of oil in the ground is completely inconsistent with publicly available production data applied to the integrated logistic equation.
10. Poor research: Lynch has obviously not been looking at the data as well as Matt Simmons has: "The Last Nail in the Coffin of Peak Oil."
Another point you could add is the low-hanging fruit premise. Countries/companies produced their best fields first and bring lesser fields on line as time goes on (e.g. Saudi Aramco producing Ghawar first and recently bringing on Khurias). I'm surprised no one has mentioned the fact that ALL fields peak on an individual basis which means that oil production in the aggregate will also peak.
Seems to be boost the "Recovery" Tuesday.
I emailed this through to ASPO ~ 15 hours ago.
The message seems to be you don't have to worry until 2030...
Demand without supply i.e. look no Peak at the BBC.
Thought this might be of passing interest given its potential audience size.
There is a Energy data graphic derived from World Energy Outlook © OECD/IEA, 2008, figure 2.2, p. 81 and modified by BBC News.
http://news.bbc.co.uk/1/hi/sci/tech/8213884.stm
Lynch writes:
Ask him to put his money where his mouth is. Here's my proposal: Make a public bet with him, spotting him $10 on his prediction of oil "closer" to $30 a barrel. At the end of each week between now and the end of 2015, TOD will pay Lynch the difference between $40 and the price of WTI if WTI is less than $40/barrel. In turn, Lynch will pay TOD the difference between $40 and the price of WTI if WTI is more than $40/barrel.
the problem with that is he might be right (for wrong reasons). We have built an enormous amount of slack into a system that decoupled from real assets for too long. Combine that with a market that prices at the marginal unit and we could very easily see $30 oil again, even with (and helping to cause) eventual near double digit decline rates. I wouldn't take that bet - depends how much central banks add - so far what theyve added is huge, but still small compared to the obligations/claims.
The argument (and the bet) would not be that oil absolutely won't get down to $30 (or rather, $40) at some point, but rather that it will average over $40 between now and 2015. If you are reluctant to make any kind of argument along those lines, then I think that in your response you really need to argue more or less what said -- that he might be right about oil prices, but for the wrong reason. That reason would obviously be that the economy has collapsed to the point that a significant recovery in petroleum demand might not occur for several years.
If his prediction of $30 a barrel comes true and you don't address why its coming true would not invalidate the broader argument for peak oil "soon," then he will have earned major prophecy points that will enhance his future credibility.
Starting to sound more and more like an economist, Nate. Haha. Just don't forget that what the central bank giveth defaults taketh away. One has to ask "What is happening faster: private de-leveraging or public leveraging?" I suppose only the Fed and money center banks truly know the answer...
At this point, public leveraging. TPTB are doing everything in their power (cash for trash, creative accounting) to avoid financial asset prices reflecting reality, and while consumers are paying down debt, they're only back to mid-2007 debt levels.
Nate, you are completely right that we don't know how the system may play out, but I would definitely take that bet. 5 year oil futures are currently trading at $85, if needs be I could just sell a bunch of futures and lock in the profit.
A better bet would be "The market reckons oil prices will be $85 in five years time, will it be more or less?"
I'm still a buyer at $85 though.
With a bet like that, you better have a lot of syrup to go with all the waffles you'll be receiving.
If I recall, Bakken is primarily dolomite. No? I know I'm preaching to the choir but Lynch overlooks the primary tenant of peak oil theory, flow rates, and the two physical attributes that dictate flow rates: porosity and permeability. There might very well be 60+ billion barrels in Bakken but getting it to flow out at more than 500,000bpd would take a miracle. Shame we can't have some one like Deffeyes to step in and give us a porosity comparison between Bakken and Ghawar.
Cornucopians such as Lynch never delve into actual science.
To be fair, one could make that same claim about doomers (many of them in any case)
A stock analyst friend of mine says there are some incredibly cheap reserves in Bakken - like $10 a barrel cost but all in with total acreage the play might produce 300-350 mil barrels URR, which is nice but chickens feet in scheme of things..
Continental Petroleum of Enid Oklahoma is the oil company developing the largest blocks of Bakken play. The President and CEO, a Mr H. Hamm, was interviewed by an Oklahoma newspaper about five or six months ago. He said that most companies developing the Bakken are losing money at the current price (then around $40/bbl) and to make money on that oil the price had to exceed $50/bbl. The fact that oil rig count in MT and ND has dropped from last year shows that even at current price of $70 per barrel the Bakken is not as attractive for oil production as when price was $100/bbl. Sorry I can't find the link.
Nate has a good point. In many of his articles, Lynch attacks the heuristics of PO advocates. He finds holes in the empirical arguments, and sits back confident that he won't get a counter-argument, since heuristics have no basis in any kind of model.
That is why I am so intent on coming up with solid models for oil depletion. A good model is Kryptonite to someone like Lynch, who knows enough math to know where the weaknesses are, but he would be clearly outmatched if he ran into a top-notch first-principles derivation for oil depletion.
I still think Lynch is a worthy Devil's Advocate as he seems to find the soft white underbelly of PO. The case of reserve growth he brings up in the OpEd is a good example.
Hi WebHubbleTelescope,
Could you please possibly explain this further? I don't see what you're getting at, though I'm sure I've missed previous discussions. (Thank you in advance for your patience.)
re: http://en.wikipedia.org/wiki/Heuristic
When you say, Lynch "attacks the heuristics of PO advocates", can you possibly give me an example?
When you say, "heuristics have no basis in any kind of model" - what model are you talking about? Do you mean models in general? Or, models WRT to some aspect of the production and consumption of oil?
re: oil depletion.
When you talk about "first principles," what do you mean?
My (admittedly naive) impression is that we've got a practical problem, namely, how to get the oil out of the ground; i.e., I guess we'd call it an engineering problem. And the engineering is brought to us by first principles, that, in a sense, no longer count (once we're in the engineering phase).
Next, my impression is that there are (must be) a finite number of ways to get the oil out, and the factors that make up these ways are well-known.
Then, there exist limitations regarding the factors that determine the amount that can be extracted. And these are well-known, as well, and there appear to be no big breakthroughs (in extraction techniques) on the horizon. (And the limitations exist WRT the characteristics of the fields and oil as well).
Then, backing up a bit (in order of things), the number of places from which one can extract oil are also finite and fairly well-known, and the combined production history (take the "giant oil fields" argument, for example) is also well-known.
Then, in the bigger picture, we have the different approaches to determining "peak of production", (please correct me: Hubbert/HL; megaprojects; and WRT KSA "Satellite O'er the desert" which goes with the "when Ghawar peaks the world has peaked" argument; I know I'm missing something - what?) and the even bigger picture of the idea that it's the "remorseless decline" on the other side of peak (as Campbell says) that's really "the issue."
So, I don't quite see the problem.
Just as a short example, there are really no accepted models that use a probability framework to understand peak oil. This would emerge as a first-principles formulation since it would consider physical quantities and stochastic processes to arrive at an outcome. Instead, the heuristics we use are mainly curve-fitting based on algebraic forms that we pull out of thin air. The way that most people use the Logistic is as a heuristic since no one has provided an acceptable derivation based on fundamental considerations. The classical derivation of the Logistic in terms of biological populations leads to a steady-state carrying capacity, and we know that oil doesn't reach a carrying capacity -- it just depletes.
So the techniques you describe are simply heuristics. Let me give a related example. Although its not quite so bad as this, but it would be like if we trusted global warming advocates who predicted temperature changes solely by tracking yearly temperature. Although predicting temperature tomprrow by using the temperature today is a fairly good heuristic, it doesn't explain anything in terms of why the trend occurs. This is compounded by the fact that the anti-AGW crowd uses this same heuristic any day that is cooler than normal to support their own argument. That would be Lynch's approach, attack the heuristics.
Bayes, Bayes, Bayes... (to be sung in the tone of the Swedish Chef)
A gentle reminder:
This isn't being written for Lynch. He's done, and couldn't care less. It is really being written for the general public. The point is to inform and convince the general public. Brush Lynch to one side and write for the general public.
Well, here's one of Mike's papers kneecapping Campbell and Co in the heuristic: CRYING WOLF : Warnings about oil supply. Amusingly enough Mike's own call for future production of C+C looks to have seriously overshot reality; here is his final graph of forecasts:
I've added bars for delineations of 10 mb/d and 2008/09, to see things better. Actual for 2008 was 73791.24 mb/d. Colin wins, despite being a bit under; next best is the World Bank, which looks to be ca. 79 mb/d. According to another diehard cornucopian, Freddy Hutter, Jean Laherrère made the best call for 2008 liquids, back around the time of Lynch's paper. For 2010 FH has also added the team denoted most accurate forecaster for 2008 by this site, Duncan & Youngquist's 1999 paper.
So that's 3 spot on calls 10 years out from peak oilers, leaving the big agencies and cornucopians thoroughly in the shade. You were saying, Mr Lynch?
uprated.
You misspelled "misinform".
"Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward in the deep waters off West Africa and Latin America, in East Africa, and perhaps in the Bakken oil shale fields of Montana and North Dakota."
Utterly contradictory. If oil were really so abundant, then no one would be giving much attention to such exotic sources of fossil fuels. Moreover, a price of $30 is insufficient to support production in such regions. We know that such a prices is far too low to maintain, let alone expand, production from the oil sands of Alberta.
In a rebuttal to Lynch, it's worth emphasizing indisputable empirical facts: irreversible peaking of production has occurred already in some of the most important oil producing regions of the world.
IMO, it's also worth emphasizing the empirical observation that peaking occurs when about half of the oil reserves of a region are extracted. We are consuming oil at such a rapid rate (30 billion barrels / year) that if we could add an enormous 600 billion barrels to existing world reserves, representing more than two new Saudi Arabias, peaking would be postponed by a mere ten years. It's hardly a reassuring situation.
"In a rebuttal to Lynch, it's worth emphasizing indisputable empiricalfacts: irreversible peaking of production has occurred already in some of the most important oil producing regions of the world."
Just use Westexas' argument, and look at the examples of Texas and the North Sea. This is still the most compelling argument that all the money and the talent in the world cannot bring more oil out of the ground past a certain point of no return. The North Sea and Texas are still the most compelling arguments for REAL geological peak, not peak based on logistical issues. Go To Westexas string of posts over the years for ammo. :-)
RC
Joe Romm did it:
http://climateprogress.org/2009/08/26/michael-lynch-peak-oil-bet/
I imediatelly wrote a letter to the NYT on this POS op ed piece. The fact that he calls himself an "energy expert" and calls shale oil "synthetic" is laughable. Its not "synthesized". Its naturally occuring but requires additional steps in retrieving and purifying to crude.
How in God's name can this guy be an "energy consultant" when he ignores what are basic facts. I mean, let's forget "Peak Oil". How about the future price of oil being "$30"???? Its at $74 right now and we are experiencing a global recession! How about the decline in production in Mexico, UK, Russia??
MIT has lost a lot of credibility with me if that idiot works there. As a previous poster has suggested, we should next have an MIT moron discuss that the sun revolved around the earth, because "I said so."
Oy Vey!
What else would you come to expect, from a school that invented the SMOOT unit of measurement.
WIKI --- "One smoot is equal to Oliver Smoot's height at the time of the prank (five feet and seven inches ~1.70 m).[1] The bridge's length was measured to be 364.4 smoots (620.1 m) plus or minus one ear, with the "plus or minus" intended to express uncertainty of measurement.[2] Over the years the "or minus" portion has gone astray in many citations, including the commemorative plaque and markings at the site itself."
Ahem.
Michael Lynch was in the management wing of MIT (the business, economics and poli sci departments).
They're in a ghetto on the east side of campus and their antics should not be taken to reflect on the whole school.
Q: Could the 'no peak oil' argument be a smokescreen, a feint, to gain traction for abundant 'clean' coal and 'non-carbon' nuclear energy as the peak-oil and climate enthusiasts convince Congress and the public beyond a shadow of a doubt that 'peak oil' is near or has arrived?
I suggest that arguments that refute Lynch's propositions and assertions should not lead one to imagine that either 'clean' coal or 'non-carbon' nuclear are reasonable alternatives or 'solutions' to the peak-oil 'problem' or that Congress must ride to the rescue of 'bailing out' a beleaguered oil industry. My guess is that this is where this conversation is meant to lead. The oil industry makes more profits as prices rise. From the industry's perspective, they want higher prices and less government interference that leads to greater profits. The op-ed is not an intellectual exercise. It is to influence policy, either something on the table today such as climate legislation, or something that is still in Committee.
you are probably right -but all we can do here is show facts - the politics are beyond our reach. And no one in politics is going to win popularity by saying we need to use less energy and cannot be energy dependent.
I disagree. The argument is highly political. Lynch's op-ed was wholly political. The response should be factual, but, ultimately will carry the day by its political undertones and strategy. That said, my experience is that telling the truth carries further than framing arguments from the perspective of imagining what you think someone else wants to hear or what is PC at the moment. Understanding who Lynch is talking to (not us or the public) is important so that we can craft a response that is also heard by Lynch's audience.
BTW: sometimes NY Times Op-eds are designed to reach just a couple of key decision makers. These folks need to be our audience.
Actually it is a rather common political refrain, one I have been hearing since 1975 or so.
ur darn tootin they understand. Lynch has been putting out the same crap for what seems like years now. The guy is as big a hack as they come. He ignores every time he is exposed as a fraud and simply continues parroting the same nonsense. His articles read like a talking point memo. Each paragraph contains multiple logical fallacies and precious little hard evidence of any kind. And the best part is that he actually has the audacity to respond to idiotic strawman comments on his articles, usually with even more fallacious garbage if not outright lies. All the while ignoring the comments that actually disprove his garbage. Seriously, he literally will ignore a post that proves him wrong, then respond to the very next post written by some idiot. I think he does this just to rub in the fact that he's a hack.
The people who pay Lynch's paycheck do so out of a need to deceive humanity while they herd us like bison off a cliff. They are as cold blooded as can be. I look forward to the day when Lynch realizes he will not rest easy when he tries to retire on the paltry profits he has made by willfully participating in a mass extermination event.
I've actually met many people like that - and if so he is just guilty of Self-deception. Believes his own story to point of blindness. Either that or its as some have suggested - there is some greater political prize for the content/timing of this piece.
Top salespeople have the ability to allow themselves to believe anything that will further their agenda. When a guy can sell ice to Eskimos, it is not because he has determined that on a reasoned and intellectual basis Eskimos need ice-the top salesperson starts from a point where he determines what belief or set of beliefs will further his agenda and then allows himself to internalize those beliefs-you have to sell yourself the BS first before attempting to sell it to others.
Some other stories posted on the subject of boosting oil today ;¬):
http://www.dailymail.co.uk/money/article-1208774/G4S-benefits-guarding-I...
http://www.timesonline.co.uk/tol/news/uk/scotland/article6808436.ece
http://online.wsj.com/article/BT-CO-20090825-702966.html
http://www.google.com/hostednews/afp/article/ALeqM5geWULDXXrwfpI5mB-PPqB...
http://news.bbc.co.uk/1/hi/business/8219861.stm
http://www.forbes.com/feeds/afx/2009/08/25/afx6811606.html
http://news.bbc.co.uk/1/hi/england/nottinghamshire/8219753.stm
http://in.reuters.com/article/oilRpt/idINLP51028920090825
Also, look at the text book small rise in oil market caused by news created sentiment to buy.
If it was orchestrated anyone in the know could have banked on a rise for the first few hours of trading - a quid pro quo perhaps.
What makes most sense to me (just your average observer) is that Lynch was paid to play down the need for climate change/sustainable energy legislation that will give big business a hard time (in the short term). There was another article on DB about how worried big business is about climate change legislation and its deleterious effect on the ability to turn a profit.
Also, I think the thrust of most of what I have been hearing (on NPR) and reading lately (Yahoo News) is that we are coming out of the recession. Even the fourth or fifth derivative of the unemployment rate is improving, you know?
If I am convinced of something, it is that it is in way too many people's interest to inspire Americans to get back to spending and being optimistic. We have read several articles recently on DB that detail the ways in which we are still completely dependent on the consumer economy and there is absolutely no interest in changing that mode (perhaps smarter folks than I have determined steady-state economics can NEVER work).
Hell, my friends all believe they cannot retire unless their money grows as it sits in retirement accounts, and NO ONE is willing to work until they drop dead. So we are all in agreement - the economy MUST grow, so consumer spending MUST resume, so Americans MUST be optimistic about the future, so we MUST stop planning for a low-oil, climate-changed future. Unfortunately we can't do that unless we discredit Peak Oil and undermine Transition Towns.
On the other hand, the result of publishing the Lynch piece is a couple of hundred doomer comments, with nary a one supporting Lynch. Might that have been the intent? DId someone at NYT want to show that might be too late for the Cornucopian Economic Recovery?
Well hell, all we need to do is let Lynch stop deceiving himself with Cornucopian delusions. I suggest a very brief summer vacation to the very middle of this:
http://www.flickr.com/photos/97946617@N00/391103181
-------------------
Got Sand?
-----------------
Since Lynch is so confident about finding very deep crude, I am sure that he is a 100 more times confident about finding very shallow aquifer water. He most positively thinks it would be a easy & simple task for him to hand-dig through a hundred feet of sand, then another hundred feet of rock-hard caliche, to then take a thirst-quenching, very satisfying sip....
EDIT: I am sure that we could get enough TOD donations to totally soak the sand in his chosen digging area with 1,000 gallons of gasoline. He can then extract this very close-at-hand fuel any way he desires to ease his hand-digging task, but he will have to work much faster in the few hours remaining.
Toto: Are you writing for Bill Maher now? http://www.youtube.com/watch?v=VDSXUevzsF0
LOL! I wish, as I sure could use the income. IMO, if he ever has Tiger Woods or Justin Timberlake on his show, Bill out to reuse those golf jokes and facts. It would be fun to watch their reactions.
So I just want to get this perfectly clear. The graph above under point 2 includes backdated reserves growth? And ace's graph does the same?
I think these graphics are among the best, starkest illustrations that peak is coming in the near future, which is why I want to be sure I understand them. And to do so, I think it should also be clear how much reserves growth gets added through backdating per decade. (E.g., what is the difference between cumulative discoveries through, say, 1990, as of 1990, and cumulative discoveries through 1990 as of 2009?)
Fact: Oil discovery peaked in the USA in the 1930s and production peaked in the 1970s. I call it the 40 year factor that Hubbert discovered back in the 1950s.
Fact: Global oil discovery peaked in the 1960s or roughly 40 years ago.
Conclusion: World oil production peaked sometime between 2000 and 2010.
Fact: 85% of US offshore is banned from oil production.
Fact: Federal lands (ANWR etc.) are also off limits.
Conclusion: If the US doesn't have the political will to produce oil, it will be left behind by economic growth nations.
Is the CNPC in decline?
Fact: US production peaked in 1970 and NOTHING, not the North Slope, not technological improvements, not ANYTHING has changed that fact - so your point is that there are a few areas without proven reserves that are not open to drilling means what - we are fine? Oil will never run out?
The US has had the political will to produce oil for longer than any nation on earth (except Canada I suppose) - and we still peaked in 1970 and we still import far more than we produce.
So what is your point?
btw, I suppose your screename is ironic? "Drill baby drill" is not most people's idea of "conservation"
Do a little reading.
Deffeys recalls a time in the 60s when Exxon drilled a couple of exploratory wells off the coast of Washington and Oregon and then proceeded to promptly pack up their gear and go home. This was prior to said areas being off limits to exploration/production.
Our own DOE (who should be cheerleading) tells us that North Slope oil production would not add more than 400,000bpd.
Watch a little TV:
http://www.youtube.com/watch?v=o3I-PVVowFY&feature=related
If there's no oil there, then why do the majors want the ban lifted?
The ANWR debate is not about oil. It is about eliminating all environmental protections enacted over the last 40 years. ANWR is just a talking point invented by big business to continue BAU. If you checked a Google map you would see a large area west of ANWR that was specifically set aside for oil production yet this is left out the debate by right wingers. The question is why isn't the Petroleum Reserve being drilled today considering the economic impact oil imports have on our economy???
Because they need to say something, anything, to deflect the blame for high gas prices.
Here's another clip that lays out the reality of the situation. The oil is there, it's just that the liberals have been successful (so far) in denying access to it.
http://www.youtube.com/watch?v=QUjG3HRUYVo
Yes - its the powerful liberals who changed the laws of physics
And its the powerful liberals who had George W Bush say America is addicted to oil
The way things are going now (downhill fast), many "powerful liberals" are likely to be thrown out in 2010.
What the idiot Dem Socialists have done in only a few months would make for a good comedy (if it weren't such a tragedy).
Are you pulling our legs?
Even if ANWR and OCS had ~70B bbls of extractable oil, we would buy what, about one extra year of oil consumption at today's burn rate?
And how much would it cost to extract this oil? How would this vast investment be financed?
Arguments such as this make me repeat my supplication to TPTB: USG should Mandate, right now, that oil companies drill in ANWR and OCS...give them tax breaks and low-interest loans...double-dog dare them to go try and produce all this oil...call their darn bluff already and let's move on to reality after that debacle is played out. Give them a five-year deadline to start production...a crash Manhattan Project push for this vaunted 'oil independence'...when no one steps up to the plate, call them the liars and cons that they are.
70 billion barrels would be 10 years supply. I suspect there's a lot more than that which could be produced.
As far as cost goes, it's costing us $140 million/day to not drill.
Because that's what we're paying for 2 million barrels/day of imported oil (at $70/barrel).
I predict we will be drilling everywhere. All that's needed is for the price of oil to keep going up. The public will start pressuring lawmakers as they did last year when gas was $5/gallon.
70 billion barrels is only about 2 years of global supply. If the number really is that high, then it only postpones the peak by a matter of months.
My first child will be 9 years old in 10 years.
This oil will still be there because he will have better uses for it than you do.
I sincerely hope he's better at math than you!
And uh, it's probably not a good idea to give him the car keys at that age. lol
He will certainly be better than you.
Sadly I think you're right. Because the rhetoric of those like Newt Gingrich et al who are advised by non-ecologists types that we just need to throw money at problem and it will magically produce oil at sufficient flow rates is something that will sell to those not understanding receding horizons, non-energy inputs, and the fact that america already has more oil wells drilled than the entire 100+ countries in the world that have tried drilling for oil.
On your other point - world uses 30 billion barrels of oil a year, and that is with China and India just coming online with liquid fuel intensive transport - the fact we might have 30-40 years of 30 billion per year is not enough because a)its the perception of scarcity that sets in motion reactionary human nature and b)we need 10-20 years lag to build alternative infrastructure and c)any move to renewables INCREASES energy use in the interrim or borrows from what were previously parts of general economy.
The oil that's there is not enough to get us producing oil at the same rate we produced in 1970.
And, our children will have far more justification for using that oil than we do. So we're going to save the oil for our actual children and not let overgrown children like you piss it away.
So ANWR and the OCS are off limits because we're saving the oil for our children? Yeah that makes sense.
Not "we" as in you and me. "We" as in the Everyone But Conservationist@TheOilDrum Club.
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I read the op-ed again. It is brilliant rhetorically. My guess is that it was also written (or at least edited) by a professional PR firm. Facts alone will not counter Lynch's argument. Any refutation must be rhetorically as powerful as his or it won't carry.
Opening: “Remember ‘peak oil’ - as if the entire topic is outdated, old hat, not worth careful consideration other than some named individuals (named!) who are mistaken and are misleading folks.
Support for opening claim: “Like many Malthusian beliefs”
Disputation:
-peak oil theory
-a careful examination of facts
-But those are just the latest arguments
-a related argument
-the latest acorn
-when their shaky claims
-In the end, perhaps the most misleading claim
Refutation summary: oil remains abundant
Closer (argument is over once and for all time): we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.
This is a very persuasive argument from a decision maker's perspective! What is important is not just what Lynch says, but what he does not say outright, but alludes to. He has build an argument that compels the decision maker to trust him, to discount what anyone claiming an alternate view might say, or that discordant 'facts' may suggest. A lot of work went into this piece. I wonder who paid for this work?
Lynch's piece nicely syncs with the recent whining by the Oil Arabs (Prince Turkey). My guess is that he is paid by them to promulgate their interests in the press. There is a co-ordinated effort to influence opinion. There must be some legislation or summat up for grabs right about now.
How to Improve Michael Lynch's Approach to Peak Oil (aka Evil Genius Plan #1)
Whomever may be among The Powers That Be, whether you're in the CIA or the oil industry or whatever, listen up. You've done a fairly good job so far at spreading mis- and dis-information to bolster your profits, your infrastructures, your ways of life. Unfortunately, it's soon not going to be enough and you're going to have to change tactics.
Misinformation is content only, and you have to realize that content is the last stop in a chain of how the general public, or sheep, process any information that you want to give them. First they process social cues, then they process emotional cues, then they process content.
The work you're all doing through people like Michael Lynch, mini-nukes at 9/11, is creating confusion and chaos, which has been good so far. Unfortunately while means that virtually no-one can get a handle on the hard facts to pierce the chaos, you as TPTB must actively spend more and more money and energy in order to maintain everyone else's lack of control.
So you need to attack the problem at a level that uses less money energy over the long run. Like this.
1. It is not necessary to spread disinformation everywhere.
2. You only need to use principles of social and emotional influence, coupled with disinformation, directed at the small audience of motivators to which large sections of society are attached. Making general blog postings directs at the entire audience. You need to be more focused on the small areas that actually make a difference.
3. Identifying this audience of motivators can be best understood by reading Malcolm Gladwell's "The Tipping Point". He calls them connectors, mavens, and salesmen.
4. The principles of social influence are reciprocation, authority, similarity, consensus, consistency, and emotional liking. As TPTB, you usually excel at authority, but after that you're one-trick ponies. You may be able to fake the rest from time to time, but you don't do it well, and this is why it's always a source of friction between you and the general public. They have no sense that you have done anything for them, they don't feel similar to you, they are all in consensus (based largely on social motivators mentioned above) about their negative feelings toward you, they are consistent in their opinions as you are consistent in the behaviors they find unpleasant. And they don't like you.
It's not necessary that you as TPTB actually change, you just need to fake it better. That comes with practice and training.
More about how to accomplish this can be found in Robert Cialdini's "Influence: Science and Practice".
5. The emotional cues to be passed before content get through are about 80% body language and 20% tone of voice, and they must be appropriate for the content. George Bush's main failing as a figurehead was that his content was not appropriate for his tone of voice, and sometimes his voice was also out of sync with his body language. Again, practice and training overcomes this.
6. Using these principles to finding how to get through to this small audience is easy, as they make their thought patterns freely and regularly known through their written language patterns on the Internet. It can be done with off-the-shelf screen-scrapers, databases, and a small amount of programming.
7. Michael Lynch is wasting energy in his current approach, by using authority only, and by using omnidirectional attacks. By using social and emotional influence on a smaller audience of motivators, will accomplish far more change while using less money and resources. It is a far more efficient approach.
8. It should be noted that the existing approach is still working. Lynch still comes off as enough of an authority that scores of people are now scurrying around trying to attack him on the facts -- Lynch managed to pass the social and emotional cues. If you had written an article about how the sky is green, they'd be doing the same thing. But this tactic won't work forever.
Having read carefully many of Lynch's papers over the years, he actually does a fair job of pointing out weaknesses in the heuristic PO arguments. He essentially employs Judo/Jujitsu tactics in using his opponent's strength against themselves. By that I mean that for all the heuristic arguments that PO pessimists seem to advocate and rely on, Lynch will basically launch broadsides at our lack of understanding and derivation of of these heuristics. And of course, he is right, as a heuristic can not be derived! That's the definition of a heuristic. Our supposed strengths at relying on heuristics of curve fitting via HL are laid to waste if we can't fundamentally derive how they come about. And that is the way that Lynch works.
The classic case is his trotting out the reserve growth argument in the OpEd. This is one angle that I have seen him use before. His implicit argument is that no one really understands how reserve growth comes about and that we have no real model for it based on first principles. And no, backdating is not a model as it is simply data collection. So he shows how PO people will continually update their empirical observations of reserve growth, via creaming curves, etc, and then point out that they have no exit criteria for an asymptotic leveling of the reserve growth. He is correct in the fact that indeed no one has a credible model for this effect and therefore no one has a justified argument for an asymptote. So to answer him is pretty easy: let's standardize on a reserve growth model, doh!
This is actually pretty obvious stuff; as an engineer I would not try to defend the behavior of an electric circuit without having knowledge of Kirchoff's law. I might be qualitatively right but I would look like an idiot if I were to invoke "ethers" as an explanation. That is the basic state we are in when trying to argue with Lynch.
Honestly, this feels like a disaster in the making.
Unless this response is uncharacteristically well done, it's only going to serve to convince those who aren't or don't want to be convinced that the "peak oil crowd" is a bunch of Internet wackjobs, in the same league with the alien abduction, JFK or Elvis or whoever is still alive, etc. loons.
I apologize how harsh this sounds, but I've seen this countless times, particularly when reality-enhanced people try to "debate" the climate change denier loons. I've also done a few "peak oil 101" presentations to newbies.
Some advice:
0. NEVER EVER FORGET WHO YOUR AUDIENCE IS.
1. Stick to the facts. No anecdotes, nothing debatable.
2. Don't use any concepts that need to be explained. EROEI is the perfect example; turn this response into a lecture and you will lose 90% of your audience.
3. Don't even mention Hubbert. It buys you nothing and wastes valuable word count, and therefore reader time.
4. Stick to the stock vs. flow point, but find a good, intuitive way to present it. A farmer has access to an immense water tower for irrigating his crop, but there's only one, tiny hose attached to it, so no matter how much he needs more water per day, he can't get it, even though the tower has a bazillion gallons. Result: Most of the crops wither and die.
5. Don't go near the credit/debt thing. It's off-message, and it's just begging to be cast as a loon who sees monsters in every shadow, or minimally, someone who's padding the argument. Same goes for the economic growth is needed to pay back the debt issue.
6. NEVER EVER FORGET WHO YOUR AUDIENCE IS.
a)In my opinion the audience is very smart, civically minded people who have already been exposed to these concepts. Peak Oil/Overshoot will never be a topic for the masses.
b)the credit situation is very much on-message. The credit explosion was a social response that directly caused/allowed accelerated extraction due to higher prices and when the pendulum swings back there will be higher decline rates.
The above was my own quick response. I've written over 100 articles on various aspects of this situation - they cannot be parsed into one concise post (though I tried with Advice to Obama. There are many others crafting less nuanced responses- but this is how I write/see things.
Is the audience like TOD? TOD is mostly nerds. An article you wrote that I think had some real teeth was your Net Energy Parable, and I think the form penetrates a non-nerd audience well (opinion). Every time I read or hear something about Deep Water, Bitumen or the Bakkan, I think about Mongo Nuts.
I am with Nate on this one, we have to treat our audience with respect, as the ones that count are the ones that will listen to a careful logical argument, not anecdotal trickery. Funny that Lynch himself said that PO advocates rely on anecdotal arguments too often, of which the following is a good example:
This argument won't work with the "Drill, Baby, Drill" crowd. They simply say drill more.
The most salient point?
"5. Don't go near the credit/debt thing. It's off-message, and it's just begging to be cast as a loon who sees monsters in every shadow, or minimally, someone who's padding the argument. Same goes for the economic growth is needed to pay back the debt issue."
So...point me to a serious discussion of this issue....
I think that this is the ELEPHANT in the room that no one wants to see.
This got picked up by Business Insider.
Why do anything? Peak Oil is a phenomenon, not a policy.
Peak Oil is a problem that solves itself. It is premature to count on specific policies; the fruit is unripe.
Let oil spike upward in price again, and there will be a more receptive audience for Peak Oil.
because any switch to renewables will require major energy and resource investments ON TOP OF everything else needed in society - the longer we wait the less possible that is without severe hardship.
The Pacific Northwesterners are not waiting :-) While The Ballard News-Tribune is not the New York Times, I nearly spilled my latte this morning when I read the blunt reporting about our Saturday produce run:
I have, I guess, a pessimistic view of arguments about peak oil. Oil is finite and if we continue to use it we'll get to some form of peak if we haven't done so already. About all that can be said for sure is that we'll continue to use it. I think Mr. Lynch is wrong, but I don't see the benefit in engaging him in public discourse. If he's right then we (Oil Drum types) are wrong, which would on balance be a good thing. If we're right it will be obvious soon enough. It isn't like much can be done; all our eggs are in the fossil fuels basket and the idea that we as a species will suddenly become altruistic and sacrifice current comfort for future generations is silly.
David Bacon
Aspen, CO
Logic or dialectic debates are at the heart of scientific understanding. I will engage Lynch in public discourse at any time.
me, too.
Perhaps we should just link all of the videos and all the articles with his infamous predictions (like we've done to Yergin) and then ask the NY Times why they give space to him?
Peak Oil??? What Peak Oil.
Google: Peak Oil
Find: lifeatertheoilcrash.net, theoildrum.com, en.wikipedia.org/wiki/Peak_oil
Michael Lynch may have a significant amount of experience in the politics of oil but I question his technical ability. It is easy to discuss PO with an engineer or scientist who can understand the basic physics. It may be more difficult to discuss PO with an economist but one can frame the debate mathematically.
But Mr. Lynch has not one but two degrees in Political Science from MIT. I'm sure that he has a quick mind but the technical background just isn't there.
"Prior to joining SEER Mr. Lynch was Vice President of WEFA's Global Oil service. He has been Director, Asian Energy and Security, Center for International Studies, Massachusetts Institute of Technology, and held a number of research positions there. Both his B.S. and M.S. degrees in Political Science are from the Massachusetts Institute of Technology."
http://www.energyseer.com/SEER%20Brochure.pdf
Not quite fair, especially when one considers that many of the people here on TOD are not oil industry professionals either. What business do we have in commenting on peak oil w/o a geology or petroleum engineering degree? We need to attack the arguments and not the credentials, which prevents us from succumbing to the ad hominen.
IMO, Lynch's skills at math are good enough that he effectively points out the inadequacies of the PO advocates heuristics. He doesn't really need to do anything more mathematical than this, it is enough for him to just raise the issues. Yet, that said, I am still with you that he hasn't yet shown the mathematical flair to come up with his own model that isn't just some extrapolation based on unknown assumptions.
I accept your criticism. However, when one reads through Lynch's piece in the NYT it is apparent that he views the situation in a framework that is based upon his training in Political Science. In the op-ed, the primary criticisms of the concepts of PO are based upon a study of history combined with the use of economic trend analysis.
For example there is this quote from the article...
"Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent -- another 2.5 trillion barrels -- in an economically viable way."
The reference to technology 100-years ago is not germane to the argument unless he can show that their is similarity between the analysis conducted 100-years ago and the analysis that is being conducted today. I'd be more willing to accept his argument about the potential for a 35 percent recovery rate if he provided the physical mechanism for how that rate would be achieved. Without providing any mechanisms, he is basing his arguments on faith alone.
Review of Lynch's piece in the NYT makes it apparent that he is a crafty writer who knows how to pull out all the stops in spin meistery and mind manipulation.
Start with the Title of his Punditry: "Waste of Energy".
This is a resonating cliche that keeps ringing in the human brain long after the rational part of the mind has dismissed it as merely an attention grabber.
It's much more than that. But if you do not understand the dark art of mixed messages, the spin meisters will get you every time.
Contemplate ever so slowly, his Opening Sentence: "REMEMBER “peak oil”?".
It is NOT an opening sentence.
It is a shouted question.
Every time your brain receives a question, it is wired to automatically start looking for answers.
And lucky for you, Lynch comes with the answers.
Lynch's opening line is a time reversing verse.
But you should have known that in the first place. And you did. Remember?
Lynch's opening line belittles peak oil through decapitalization.
Oh, you didn't notice that?
Think again. The subconscious parts of your brain did. Those parts are not that stupid. Only the forefront of your consciousness is stupid.
All that happened in the first split second that you began to read: "and YOU didn't even notice it all, did YOU?".
So did you notice the us versus them split? Hint: "Well, just when we thought that the collapse in oil prices since last summer had put an end to such talk, ..."
There you have it. There are the "thinking" us and then there are those "Malthusian belief" theorists. Which group would you like to be a part of?
Remember, there are losers like the "motivated ... scientists and [sucker] laymen who base their conclusions on poor analyses of data" and then there are those of us who engage in "A careful examination of the facts .." Which one are you?
Oh come on. You know the answer even before you start thinking about it.
What more did your clever mind observe when critically analyzing Lynch's Lines?
Lynch was chair of a panel on Asian energy that I spoke at in June at the International Association of Energy Economists in San Francisco (I am not a member). He spoke first, and in true form, informed the audience that the 2008 oil price spike was solely the result of "two stupid presidents" (then showing a slide with Bush and Chavez), then asserted that there was plenty of oil and prices should be 20-30 a barrel, then concluded that Asia's growth would require a lot of oil, but that was no problem since they would get all they needed from the Middle East. The overall tone was definitely one of insouciance mixed with a lot of flippancy.
Lynch to me falls in that category of "energy experts" who are better (loosely) termed "market experts", since to them, energy is just a commodity like pork bellies but with more interesting politics around it. He showed then, as he does in this article, no fundamental understanding of physics or thermodynamics that define why energy is not just another commodity. Sadly, nearly every "energy expert" I have dealt with over the years falls into this category to some degree.
I have opened a thread on Peakoil.com that shows the EIA's latest IPM reducing 08 world crude production below 2005. 2009 EIA reports are showing an almost 2 m/b/d decline over 08. Surely all can agree 2009 world crude production will not exceed 2005. Thus it can be said with certainty that based on EIA"s most recent data that world crude oil has a current peak year of 2005 that has not been exceeded in 2006,2007, 2008, 2009. Even in a time, 2008, when oil was over $100, production for the year did not exceed 2005. This is a fact Mr. Lynch cannot escape for at least 18 months and who knows how much longer.
Hi Sparaxis,
re: "Lynch to me falls in that category of "energy experts" who are better (loosely) termed "market experts", since to them, energy is just a commodity like pork bellies but with more interesting politics around it."
Exactly.
This mirrors my experience of the views of college grads with degrees in economics, and/or politics - and math, too, now that I think about it. And, even with people who have had a couple of years of physics (at least) and understand thermodynamics.
It's disheartening to see this view held by people so (relatively) young and supposedly well-educated.
It's almost as though even the "studies" don't really mean anything outside the textbook and the problems.
The world is run by a narrative that they inherit and one which, presumably, will allow them to find success and a place in it.
The most convincing arguments you can make are quantitative not qualitative. Qualitative is what the Op-Ed mostly seems to be doing. The figures need to represent actual production data not what may or may not be done to reserves in the future. E.g. the WEO 2008 - simple facts: 800 of the largest fields surveyed, for the first time actual production data instead of "guesses" aka estimations, 6.7% decline per year, four Saudi Arabias needed to sustain level production (by 2030), some more if emerging economies are to be accomodated. Shock! Fatih Birol is a "doomer" now! Additionally, one could point to the trend of formerly "optimistic" organizations such as the IEA to downgrade future production estimations. For another example (EIA) read the newest from Michael T. Klare.
Also, it can not be stressed enough that reserve numbers say little to nothing about actual production numbers for a given point in time (example from Robelius: Alpine and Beryl fields, same reserves (200Mb) but completely different rates -- 120kb/d vs 25kb/d). How much is going to be pumped out on a given day in the future and will it be enough to satisfy demand? That's the question that Lynch and cohorts like to bypass by playing around with reserve numbers.
A respone should emphasize three points:
1) The production decline in existing, large fields (giants which make up ~60% of total production, see Robelius).
2) The difficulties in developing new (smaller) fields (size, capital, equipment, staffing, access, EROI) to offset the decline and meet
3) the increase in demand from emerging countries, China (10 mb/d more by 2030), India etc.
As a bonus to point 2, one could straighten out the myth that unconventionals are gonna save the status quo. They are solids (non-liquids) which makes them an order of magnitude slower to extract. Tar sands: max production in Alberta 6 mb/d by 2040 with crash program (notice how Lynch says "perhaps"). 2.4 mb/d in Orinoco by 2025 if things go as planned. And so forth with oil shale.
Hello norm,
Excellent point about using actual production data.
Wrong.
Wrong.
Wrong.
Why?
Because the human brain does not live by logic alone.
Admit it.
The real reason we are upset is not because Lynch hath spoken again, but because the mother #$^@#ing of all newspapers, the venerable New York Times, has given him front page credibility.
The real question is why the NYTimes has sunk so low in its ability to discern as between science and spoofery?
Lynchnism: The Earth is flat, hot and crowded with fools willing to believe my narrative falsehoods. The Earth has a creamy nogut energy center that will almost forever produce more and more energy for us in the form of yet-to-be discovered oil.
Lynchnism: Money is a magical elixir that will unleash the powers of the Invisible Hand and bring forth onto us everlasting prosperity.
Lynchnism: _____________________________________________ (fill in the nonsense).
Dear Step,
Point well taken.
I forget that the rational is not what it's about. (Or, is, perhaps, rarely.)
re: "Why?"
Good question. Maybe they - (the particular editors who chose to run this) - don't know the difference. Or, someone is pressuring them not to know. Or, they know and don't care. For some reason.
Remember that nice person who sat next to you in physics class on day one?
The conversation probably went like this:
"What is this s**t? They want me to memorize that accelartion is 9.8 meters per second per second? And then to calculate the time it takes for object X to land at point Z?"
You probably said, Relax it's not all that bad.
Then they said:
"Heck, I don't even know what a meter is. And then there is this per second per second stuff that makes my head spin. I'm out of here. I'm going to be an English and Poli Sci major instead. See ya."
That was the last time you saw them.
Today they make the editorial op piece decisions at the venerable NY Times.
This guy is a professional Peak Oil Denier. The one time that the "Democracy Now!" show covered Peak Oil -- after years of complaints that they ignored the topic -- they invited Julian Darley of Post Carbon Institute to debate Mr. Lynch. It seems obvious that the media is going to continue to ignore the implications that the Earth is not infinite in an economic system based on endless exponential growth.
April 28, 2006
TODAY'S DEMOCRACY NOW!:
* Has Global Oil Production Reached Maximum Capacity? A Debate on Peak Oil *
With the price of oil soaring to record highs and oil companies reporting record profits, many are asking whether the world has reached peak oil production. Peak oil occurs when half of all existing oil has been pulled from the ground. Some experts believe we are at peak now while others disagree. We host a debate on the issue with Julian Darley of the Post Carbon Institute and Michael Lynch of the Strategic Energy & Economic Research.
Listen/Watch/Read
http://www.democracynow.org/article.pl?sid=06/04/28/1439240
--------
http://www.oilempire.us/democracy-now.html
Note that DN! couldn't simply invite the Post Carbon Institute onto the show to profile their good work. One of the DN! staff asked this website to comment on the show, and this was the response:
The flat earth and round earth perspectives.
I'm glad that Julian Darley was invited, but it's interesting you couldn't just profile the good work that the Post Carbon Institute is doing without inviting someone who claims it's bunk.
I've said for years it would be a race to see whether the "progressives" would focus on Peak Oil as a core reason for current events (Iraq, 9/11, vote fraud, civil liberties) before gasoline rationing or much higher prices.
And this was the reply from DN!
re: The flat earth and round earth perspectives.
In almost all subjects, opposing parties such as the DOD, state office, NYPD etc. are invited in to state their case. Most decline.
I'd like to profile Julian's work but, in my opinion, if you are portraying yourself as unbiased news, your guests need to fairly match the perspective of society's or your going down the same road as Fox news. I think all intelligent listeners/viewers heard Julian clearly.
There has been at least one other show in the last month that I remember where some discussion on peak oil was done. and it has certainly started it's way on mainstream news with CNN and more.
In our community here in No California we are bringing people together weekly to plan for "the end of the suburbs". We plan to have Richard Heinberg up to speak in a month or so.
If DN! invited a civil rights leader onto the show, they probably would not ask a member of the KKK to debate them -- that is the equivalent of asking an anti-environmentalist to debate whether Peak Oil is real or not when trying to profile the Post Carbon Institute.
It should not surprise anyone that Richard Heinberg has not been invited onto Democracy Now! Now that DN! has interviewed (sort of) one leading spokesperson of the Peak Oil "movement," they can claim they've covered the issue and do not need to have a follow up.
Rather than a point-by-point rebuttal, I would suggest a very brief piece.
I would state that the essence of the peak oil argument is about return on investment. (Leave out EROEI; that'll just make people's eyes glaze over.)
Oil production is in a "Red Queen" situation, running as hard as it can to stay in the same place. Production has been essentially flat since late 2004.
There is one difference between Alice's situation in "Through The Looking-Glass" and the situation of oil production. For oil, the racetrack is not flat but uphill, and its slope is always increasing:
Source: Daniel Yergin, "It's Still the One", Foreign Policy (linked to in yesterday's Drumbeat).
Ten times as much capital investment is required to produce oil as was the case ten years ago. There is every reason to think this trend will continue - ever-increasing amounts of capital will be needed to produce oil.
But, says Mr Lynch, this is merely enough to "keep pace" with depletion of oil wells:
At base, peak oil "theory" is simply the assertion that at some point in time, it will no longer be possible to continue the race, let alone get ahead. Nothing Mr Lynch has said disproves that.
You all are missing the point!
Analysis of NYT's article
Conclusion:
"This is not to say that we shouldn’t keep looking for other cost-effective, low-pollution energy sources — why not broaden our options? But we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times."
My understanding of the conclusion:
we dont need to spend money on alternative energy during tough economic times.
Premise:
"A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information"
My understanding of the premise:
peak oil is not real
Assumptions in the article:
1. energy cost of oil is less that energy cost of alternatives
2. lets assume that there is plentiful oil. the author assumes plentiful oil yields low prices.
If you are going to counter an argument, do yourself a favor and attack the assumptions. It is a lot less work.
Last year, summer of 2008, crude prices skyrocketed to ~$150. For the most part, this wasnt caused by a spike in demand or supply contraction. It was mostly caused by the USD losing value and speculators. Supply and demand increase and decrease gradually. Assuming the USD's value is constant and peak oil is happening, energy cost should increase slowly and alternatives slowly become financially attractive. the transition should be relatively slow and very undramatic. The USD is what we need to worry about. It is the most volatile component determining our energy cost.
some references:
http://www.petrostrategies.org/Graphs/World_Oil_Supply_and_Demand.htm
http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=3&mn=0&dy=0&id=p69447787507
http://stockcharts.com/h-sc/ui?s=$XOI&p=D&yr=3&mn=0&dy=0&id=p69447787507
"The USD is what we need to worry about. It is the most volatile component determining our energy cost."
And the dollar is or will be weak because of extreme debt and borrowed/printed money?
The US has abused the dollar to buy oil and growth...and now the piper will have to be paid as the world sees the connection and tries to delink?
Thoughts from the thread:
DRAFT
In Michael Lynch’s op-ed in Tuesday, August 25 New York Times, ‘Peak Oil’ Is a Waste of Energy (http://www.nytimes.com/2009/08/25/opinion/25lynch.html?pagewanted=1&_r=1... he claims that oil remains abundant. Thus the government shouldn’t throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.
Lynch obviously agrees with Prince Turki al-Faisal’s recent Foreign Affairs article where the Prince declares: "U.S. politicians must muster the courage to scrap the fable of energy independence once and for all." Lynch claims that he is an energy expert, so why is he making such assertions? Is it because he and his oil company clients are concerned about the economic impact of decreasing the U.S.’s dependence on fossil fuels, particularly imported oil.
Peak Oil has never been about the amount of hydrocarbon that exists, but flow rates, timing and costs. Lynch’s assumption that contrary to physical laws, the earth contains an infinite supply of readily available oil is beside the point. Even if the U.S. possessed all the money in the world, enough to find, refine, and distribute this infinite supply of oil that Lynch claims exists does not mean that it makes economic sense for the U.S. to do so, or to continue to rely on importing increasing amounts of Mid-East oil. For example, in today's tight credit market, oil companies find it more difficult to finance exploration to find new sources of oil and difficult to finance the additional technologies required to keep old fields producing at higher rates.
Whether there are trillions of barrels of oil left in the ground recoverable at today's cost of extraction is immaterial if CO2 needs to be kept below a critical level to avoid runaway abrupt climate change. If investing in conservation and renewable energy is less than the cost of triggering runaway abrupt climate change, this is sound policy. It also makes sense for national security reasons.
However, Lynch’s assertion that the earth contains an infinite supply of recoverable oil is absurd. To accept this fallacy, he must also believe in Technological Fairy Dust (TFD). Despite what some of the advocates of "Drill, baby, drill" believe, there isn't enough oil in Alaska and the American coastal areas to offset the coming decline in global production, much less to render the U.S. energy independent or even less dependent on imported oil. Tellingly, Lynch fails to mention one geologist to support his claims on total reserves or that the supply of oil is essentially inexhaustible due to technological progress.
The International Energy Agency (publishes the World Energy Outlook) and the U.S. Department of Energy’s Energy Information Administration and virtually every real energy expert knowledgeable about the physics, chemistry, and geology of oil recovery (Lynch is a political scientist) agree on three things: the collective production from developed, large oil fields has been declining over the past decade; newly discovered fields are generally smaller and more expensive to develop than the older fields; and the world continues to consume ever more oil as it industrializes.
Denying ‘Peak Oil’ is what is a waste of energy, akin to claiming the world is flat or that global warming is a figment of our collective, scientific imaginations. With declining new discoveries and depletion of currently producing fields, the supply of oil available on the market will inevitably decline. Exactly when this will occur is up to some debate, but close observers of the oil market believe that it will be sooner rather than later.
"In Michael Lynch’s op-ed in Tuesday, August 25 New York Times, ‘Peak Oil’ Is a Waste of Energy, he claims that oil remains abundant. Thus the government shouldn’t throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times. "
The moment any sign of economic recovery emerges, oil will rise right up in price.
And it's already at $70. If we want an economy that doesn't hit the canvas with every price spike, we have to get off oil. These economic times are MORE reason to do it, not less.
DRAFT
For I doubt not, but if it had been a thing contrary to any man's right of dominion, or to the interest of men that have dominion, that the three angles of a triangle should be equal to two angles of a square, that doctrine should have been, if not disputed, yet by the burning of all books of geometry suppressed, as far as he whom it concerned was able. -- Thomas Hobbes, The Leviathan
In Michael Lynch’s op-ed in Tuesday, August 25 New York Times, ‘Peak Oil’ Is a Waste of Energy (http://www.nytimes.com/2009/08/25/opinion/25lynch.html?pagewanted=1&_r=1... he claims that oil remains abundant. Thus the government shouldn’t throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.
Lynch obviously agrees with Prince Turki al-Faisal’s recent Foreign Policy op-ed, “Don’t Be Crude: Why Barack Obama’s energy-dependence talk is just demagoguery” where the Prince declares: "U.S. politicians must muster the courage to scrap the fable of energy independence once and for all" (See: http://www.foreignpolicy.com/articles/2009/08/17/dont_be_crude?page=0,1).
Lynch claims that he is an energy expert, so why is he making such assertions? Is it because he and his oil company clients are concerned about the economic impact of decreasing the U.S.’s dependence on fossil fuels, particularly imported oil. Apparently, some executives in the oil industry must believe that admitting peak oil exists harms shareholders and makes one subject to huge lawsuits for breach of fiduciary duty.
Peak Oil has never been about the amount of hydrocarbon that exists, but flow rates, timing and costs. Lynch’s assumption that contrary to physical laws, the earth contains an infinite supply of readily available oil is beside the point.
Even if the U.S. possessed all the money in the world, enough to find, refine, and distribute this infinite supply of oil that Lynch claims exists does not mean that it makes economic sense for the U.S. to do so, or to continue to rely on importing increasing amounts of Mid-East oil. For example, in today's tight credit market, oil companies find it more difficult to finance exploration to find new sources of oil and difficult to finance the additional technologies required to keep old fields producing at higher rates. All the money, technology, and the talent in the world cannot bring more oil out of the ground in west Texas or the North Sea.
Whether there are trillions of barrels of oil left in the ground recoverable at today's cost of extraction is immaterial if CO2 needs to be kept below a critical level to avoid runaway abrupt climate change. If investing in conservation and renewable energy is less than the economic cost of climate change, this is sound policy. It also makes sense for national security reasons.
However, Lynch’s assertion that the earth contains an infinite supply of recoverable oil is absurd. To accept this fallacy, he must also believe in Technological Fairy Dust (TFD). Despite what some of the advocates of "Drill, baby, drill" believe, there isn't enough oil in Alaska and the American coastal areas to offset the coming decline in global production, much less to render the U.S. energy independent or even less dependent on imported oil.(1) Tellingly, Lynch fails to mention one geologist to support his claims on total reserves or that the supply of oil is essentially inexhaustible due to technological progress.
The International Energy Agency(2) (publishes the World Energy Outlook)(3) and the U.S. Department of Energy’s Energy Information Administration, the McKinsey Global Institute,(4) half the CFO’s in the oil industry,(5) and the majority of real energy experts knowledgeable about the physics, chemistry, and geology of oil recovery (Lynch is a political scientist) agree on three things: the collective production from developed, large oil fields has been declining over the past decade; newly discovered fields are generally smaller and more expensive to develop than the older fields; and the world continues to consume ever more oil as it industrializes.
Most telling is Lynch’s apparent lack of any economic training or use of any understanding of economics in his assertion that despite rising demand and falling supply, the future price of oil will likely come down closer to the historical level of $30 a barrel as new supplies come forward. The moment any sign of economic recovery emerges, oil will rise in price. It's already at $70/bbl. If the U.S. wants an economy that doesn't hit the canvas with every price spike, there is no choice other than to invest in conservation and renewables to reduce our economy’s dependence on oil. In today’s economic times, there are greater reasons to make these investments, not less.
Remember peak oil? Why should anyone forget when just in the past few years the UK, Indonesia and Mexico's oil fields have gone past peak and into sharp decline? Add those to the previous countries that have gone into decline, including the U.S., and a pattern emerges which tells anyone with eyes to see and ears to listen there is a period of discovery, followed later by a peak and then depletion. Why? Because oil is after all a finite resource.
Mr. Lynch and his cornucopian followers might phone the leaders of the numerous countries that have gone into oil production decline and let them know they have nothing to worry about because of the non-data backed assertions in his op-ed piece in the NY Times. He might also call members of Congress and the Executive branch and explain what to do when oil hits $100-$125 a barrel as it slows the economy to a crawl. Where are these other equivalent Saudi Arabian gigantic new fields going to come from? If things do not pan out the way Lynch and his oil industry denizens suggest, then what compensation will they offer the world for such misguided, non-geologic based wishful thinking?
Denying ‘Peak Oil’ is what is a waste of energy, akin to claiming the world is flat or that global warming is a figment of our collective, scientific imaginations. With declining new discoveries and depletion of currently producing fields, the supply of oil available on the market will inevitably decline. Exactly when this will occur is up to some debate, but close observers of the oil market believe that it will be sooner rather than later.
(1) “The amount of oil in proven U.S. reserves—reserves that the United States is fairly certain it can extract oil from in the future—has steadily deceased since the late 1970s from 31.8 billion barrels in 1977 to 21 billion barrels in 2007. This means even if we drilled and produced all the U.S. oil reserves it would be exhausted in only about four years if consumption remains constant. See: Christopher Beddor, Winny Chen, Rudy deLeon, Shiyong Park, and Daniel J. Weiss, “Securing America’s Future: Enhancing Our National Security by Reducing Oil Dependence
and Environmental Damage,” Center for American Progress (August 2009), 3.
(2) Dr. Fatih Birol, the chief economist at the International Energy Agency (IEA) said
that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilization depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated (http://www.independent.co.uk/news/science/warning-oil-supplies-are-runni...).
(3) The most recent World Energy Outlook incorporates data from the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago.
On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an “oil crunch” within the next five years which will jeopardize any hope of a recovery from the present global economic recession, Dr. Faith Birol said….
The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong….
In its first-ever assessment of the world’s major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was “patently unsustainable”, with expected demand far outstripping supply….
Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.
See: http://www.independent.co.uk/news/science/warning-oil-supplies-are-runni....
(4) The McKinsey Global Institute (MGI) research “suggests that the economics of investing in energy productivity—the level of output we achieve from the energy we consume—are very attractive. With an average internal rate of return of 17 percent, such investments would generate energy savings ramping up to $900 billion annually by 2020. Energy productivity is also the most cost-effective way to reduce global emissions of greenhouse gases (GHG).” See http://www.mckinsey.com/mgi/publications/Investing_Energy_Productivity/i....
(5) “According to a new survey by BDO Seidman, LLP, one of the nation’s leading accounting and consulting organizations, 48 percent of chief financial officers (CFOs) at U.S. oil and gas exploration and production companies agree that the world has reached its peak petroleum (liquid hydrocarbon) production rate or will reach it within the next few years, while another 52 percent disagree with that statement.” See: http://climateprogress.org/2009/01/13/half-oil-cfos-peak-oil-bdo-seidman/.
While I'm myself convinced about peak oil theory but not really a specialist, maybe the guy has a valid point though ?
Do you have any counterargument for this statement ?
Hello Effco,
Welcome to the TOD Meatgrinder, thxs for joining the discussion. Peakniks do not ignore any newly found or newly developed recoverable oil:
http://www.google.com/search?q=peak+oil+megaprojects&ie=utf-8&oe=utf-8&a...
---------------
11,300 hits for Peak Oil Megaprojects
---------------
The Megaprojects, and others like it, has been going on for a long time.
Hi Totoneila,
Thanks for your answer but in fact Lynch is talking about fields found ages ago but "constantly reestimated" so that their initial size is in fact growing.
Hre is the full quote:
Is that true ?
Nope, otherwise the oilfield where Edwin Drake first got started back in 1859 would now be the world's largest oilfield. An older link, to be sure, but things have only got worse since 2000.
http://www.hubbertpeak.com/us/pa/
Extrapolate Lynch's "the combination of new discoveries and revisions to size estimates of older fields" to every oilfield ever discovered: the entire planet would be black crude goo by now.
Yes I agree. But I guess Lynch was stating that initial size estimates of those old fields were low enough to allow slow but constant upward reestimates over time, in a way that world peak oil is not in sight before 20 years instead of maybe 10.
This leads us back to the fact that peak oil theory is NOT a theory is just applying gaussian distribution to "estimated" oil not yet discovered/recovered.
Therefore the debate is all about your information primary sources so that this "estimated" oil is huge or not.
I would advise you to not get hung up on Lynch's insane focus on 'ever-growing estimates'; it is a 'red herring' to throw people off.
Focus on real flowrates. Do PA's oilfields wildly out-produce Ghawar's output? NOPE! Estimate any size you wish to describe the reserves for either reservoir--it doesn't matter [make them one gallon each if you wish]-- it is the actual producing flowrate:
"It is not the size of the beerkeg, but the size of the tap."
For example: If you work very, very hard, I estimate than you will eventually have a $100,000 in cash, then $1 million, then $1 billion, and so on until you have a 100% chance of becoming far, far richer than either Bill Gates or Warren Buffett.
So what flowrate of cash are you going to send me NOW for this estimate of your ever-growing cash reserves? It won't be any different than if I said I estimated you will be 100% dead broke from here on out.
A reverse example: I could phone you that I am dying of thirst. You could be fishing on Lake Superior [obviously huge reserve], but you have no way of phoning back to me a single molecule of H2O [zero flowrate] of Superior's water to help save my life.
It's the Flowrate. No ifs, ands, or buts allowed.
Effco has a good point. He is asking specifically about reserve growth and I assume that means a quantitative analysis of what is going on.
I would refer to a model that Sam posted for me last year on TOD:
"Solving the 'Enigma' of Reserve Growth" http://www.theoildrum.com/node/4311
A lot of assumptions go into reserve growth estimates, and Lynch generally goes after stuff that we don't understand too well. Some of this may indeed be a red herring, but unless you go through and do the math, it reduces to conjecture, and that is what Lynch seems to feed on.
I would really like to see Lynch go after and try to criticize the dispersive discovery model for reserve growth. It is definitely not based on the heuristics he usually attacks.
And that lack of theory is one of the things that Lynch has a bug up his butt about.
Very interesting, thanks for the link. Obviously I was playing the Devil's_advocate here, but it's necessary to do so that be able to answer questions from people thinking like Lynch
There are a lot of people here more qualified to answer that than me but since no one has I'll give it a try:
Most analyses that you find linked from this site will say that the reserves growth in existing fields are backdated to show when they were originally discovered. That reduces the additions in later years. The oil companies add the reserves in a year when they feel comfortable saying that they are now economically viable. That is good for the investor image.
New discoveries are a different kind of problem, partly because national oil companies, like Saudi Aramco keep the details of their reserves a secret and have political and market reasons to deny that they are burconsuming their reserves. Oil companies state a reserve addition and there may be more or less actual oil available than they state, depending on the economics, the EROI or the accuracy of their estimate.
So is the statement true? No one really knows. The important point is not the amount of oil in the ground but the potential flow rate and the net energy return of that flow.
I'm going to channel Westexas here:
Yeah right, all those "additional recoverables" and yet total production in the lower 48 keeps declining and declining.
I scanned the Lynch article and waded through the comments.
The comments were hysterical! There must have been twenty people hassling him for being an oil company shill, lobbiest or know-nothing for every complimentary one. A rebuttal is hardly needed. He must be feeling humiliated if he has read them.
Excuse me. He's on page one of the NY Times and we're like on page ... none.
Yet those comments are truly one-sided. I await the inevitable backlash via a late flurry of counter-comments.
True that the cornucopians will not pay attention to the comments.
"1)Peak Oil has never been about the amount of hydrocarbon molecules that exist, but flow rates, timing and costs."
that idea has been repeated hundreds, possibly thousands of times on tod. who invented it ?
imo, a simplistic view.
i dont see where your statement rebutts anything lynch says.
a more accurate statement would be:peak oil is defined as a peak production rate(period)
Good point. Lynch seems to rip apart qualitative spin fairly effectively. I would think the first thing he would go after is to point out that no one actually has a model that consists of "flow rates, timing and costs".
I don't know if anyone else on this thread has actually debated Michael Lynch. If anyone else has, I would like to know what your impressions were. In any case, I took the "Yes we have peaked" position on a PBS program in 2006. Lynch called in from Tokyo. Following is a copy of a 11/06 Oil Drum post I made regarding the debate. Unfortunately, the video link has passed away; the archives only go back to 2007. The panelists were yours truly, a local oil operator, a senior ExxonMobil engineer, a consultant (Chris Ross) recommended by Saudi Aramco, and Lynch, via phone.
From November, 2006:
I have only debated him on the Michael Lynch thread at peakoil.com. This was several years ago and this wasn't exactly one-on-one since he had some cornucopians on the thread to assist him. My impression is that he is a pretty elusive character in that he responds to exactly what he wants to.
http://peakoil.com/peak-oil-discussion/michael-lynch-disputing-peak-oil-...
I was on that thread and came to the conclusion the guy was a f**k-knuckle.. wasn't just a case of circular internet argument wankerdom ..he does this for a living....
At first I thought he was debating in good faith but after a while it really was the argument sketch..
basically for him to know we have not peaked is that he must know when we will... be it for above ground stuff or geology.
he admitted oil "will" peak but not soon... which means he must have a peak oil model of his own..which he failed to produce
I don't what he means by anecdotal?
the lower 48 is a pretty compelling case study
Anecdotal is a euphemism for using heuristics or weakly empirical methods. Any predictions based purely on observations is an anecdotal approach according to his way of thinking (IMO, of course).
Of course, a truly scientific approach would be to postulate a theory and use the data along with statistical techniques to test the viability of the theory. Unfortunately, that is not what most PO advocates do, and we see that most of the authoritative PO figures rely on extrapolations and gut feel. Hubbert himself was guilty of this approach himself -- he had a remarkably good gut feel but nothing he did derived from first principles as it was all heuristics.
WHT - Technically you are correct. But mitigation (as per Hirsch and other) will require 10-20 year head start. Data/science need time to percolate, hypothesize, test, retest, percolate some more etc. Ultimately decisions are going to be driven by a combination of heuristics, available data and politics- we didn't evolve to be scientists -when faced with stressful situations/unknown we (as a general rule) will fall back on fast and frugal heuristics, and will choose for the moment over some concerted scientific plan.
Here is a plausible (draft) hypothesis. Help me test it or devise a way to test it.
-In animal kingdom, organisms with access to excess energy vs. energy expenditures have had advantages. Human societies with surplus energy gain were able to expand, and vice versa assertion based on Optimal Foraging Theory, and work by historians
-Oil use is 95%+ correlated with Gross Domestic Product fact, depending on what data source, time frame, etc.
-US Oil peaked in 1970 fact, not argued
-Oil and other commodities are priced at the marginal unit, meaning they do not accurately signal long term scarcity suppostion based on historical observation - we've used 850,000,000,000 barrels of oil since 1974 but real prices are the same
-US dollar went off natural resource backing in 1971 (Bretton Woods) fact, though little discussed
-Humans, and particularly those in economic based cultures, compete to raise their perceived social status. In capitalist societies this results in positional goods consumption races theory, backed by biology (relative fitness), evolutionary psychology, anthropology, marketing, etc.
-US real wages peaked in 1974 fact, though there are some demographic explanations
-US household and government debt was just $2 trillion in 1974 and is now over $70 trillion. Worldwide currency, financial derivatives, wide money definitions, stocks, bonds are well over $1,000 trillion and possibly $2,000 trillion, based on GDP of $55 trillion unproven, but in the ballpark - money can be 'created' via the Fed or fractional reserve banking system via monetization, printing, coupon passes, dropping in margin requirements, increased availability of leverage etc.
-US repealed Glass steagel in 1999, allowing banks to significantly increase leverage in financial assets fact, specific details findable
-40% of corporate profits since 2000 are in financial industry through 2007 fact, though it could be revised in future - source David Brooks
-Real interest rates have been negative for much of this decade, essentially free money fact based on Fed target rate minus inflation, plus opinion
-For 6 months following July of 2008, currency cross rates vs low yielding currencies easy to borrow (particularly euro/yen and euro/dollar), most commodities, SP500 have been 80%+ correlated (I havent done a new R^2 since Feb) - from 2000-2008 they ranged from -.25 to plus .28, basically around zero fact- in effect - the system is beginning to treat all risky assets in one class - confidence in financial system is the liquidity of fiat system opinion
Hypothesis: The 'gain' from the natural resources USED (particularly energy) to the natural resources RETURNED, has powered human civilization, consumption, and population. The flattening out of energy gain (EROI from all source times scale) in 1970s was replaced by a)importing of cheap oil from less developed areas and b)the increasing of 'fake' energy (debt, leverage, credit) in order to maintain social cohesion within an acceptable range. The 'belief' in this system continued to a level where the perceived cultural signals were inverted for a time - that money was actually the goal and was worth more than hard resources. As such, the relationship between the vanilla derivatives (currency, stocks, bonds) to what they originally were designed to represent far overshot their true relationship, perhaps by an order of magnitude. High prices brought about not by 'speculators' but by credit/leverage etc. finding a home, finally met up with flattening world supply of oil, modern cultures hemoglobin and caused oil to get to a price high enough to impact growth, setting up a domino chain of claims built up over a generation, and exponentially built up since 1999, that had no physical foundation. Future energy production based on market signals will now fail, as the monetary system will signal too low of prices to develop future energy resources - said differently, the 'real energy gain' has become too low to maintain the level of consumption that belief in money engendered over last decade - much of the energy infrastructure will need to be rebuilt due to age, obsolescence rust, etc. The amount of 'fake energy gain' created by the system can NEVER be turned into real energy gain, so the system will need to be reset in order to get accurate accounting of what true costs are in natural resource terms.
Possible test I would like to look at total energy gain (estimate) from all sources in say 1970 and add on top of it the global M3 at the time -call this 'real + fake energy gain'
Then do same thing for 2008 - I would hypothesize that 2008 would have 10x the total gain, but the 'real' component would be flat to down from 1970 and the 'fake' component up by factor of 10+.
Summary: We don't have data in energy terms to effectively test this hypothesis. But we do know that we've used a great deal of low cost resources during a 30 year period of increasing reliance on paper assets -one starting point would be to look at our remaining cheap energy assets BEFORE the exponential rise in paper markers (roughly coincident with end of Bretton Woods). But how can we use science to address this problem? How can this problem be answered by anything other than systems analysis combined with heuristics? Verhulst, logistic, dispersive discovery, etc. all assume they are measuring whole system but whole system is so much larger due to human rules. And there are no scientific methodologies extant that can translate real energy and abstractions (dollars representing claims on future flows) in a commensurate language.
If you know any way to model all this using first principles I would appreciate some advice. I've left out many aspects of human nature that are also relevant: addiction, habituation, control, belief systems, cognitive load, cognitive dissonance, denial, optimism bias, placebo effect, self-deception, etc. Im working on some of the details but its a bit much for one person... Thanks.
I approach modeling from a building-block perspective. Specific behaviors exist under specific constraints and what I try to do is to identify these "laws of nature", or whatever one would prefer to call them w/o getting to pretentious. Dispersion is one of these universal behaviors that seems to pop up everywhere, and I am taking advantage of the fact that no one has thought to apply it to the oil depletion domain.
I can say that I intend to look into the broader societal behaviors once I get past my current interests, but in my experience people can waste years on some other thorny problem that you need as a prerequisite. That is the problem with using building blocks as a foundation. If one of the blocks fails, the whole infrastructure could crumble. That's why you have to get those parts right.
Well this would be first blush way to test it:
1) estimate a timeline EROI for the major fuels (coal, nuke, hydro, nat gas, oil) from 1970 to 2008 (weakest link in analysis)
2) multiply each fuel times its EROI and subtract out the energy investment to get energy gain.
3) multiply the energy gain times dollar price for each fuel to get 'societal energy gain' in dollars (if there were no leverage, derivatives, etc. and we just had this amount of dollars plus some additional for other resource gain, there would be little problem with finance at this point
4)compare this amount to global M3 to get a ratio of 'marker to real'
5)repeat in each year. I expect the 'marker to real' ratio, including derivatives went up by factor of 10-20 over this period.
It would seem one could just use 'cost of energy as % of GDP' like Euans recent graph - but this MIXES fake and real energy gain, and doesn't account for EROI. It would account for declining EROI if M3/Derivatives had held constant at level of GDP growth since 1970s, but since they didn't (they have exploded) it doesn't.
I think the bottom line is a)we have much less cheap energy left than 30 years ago and b)we have far more fiat (belief) claims on underlying assets. Not good. And not easy to model ANYTHING natural resource related unless we understand this relationship.
(per our email chat over the past hour, 27 AUG 2009 20:48 EDT)
Yes we absolutely replace energy decline, in both real and nominal terms, with paper.
But my insight (I really should toss off email responses more often) is that when the compensatory phase of paper creation gets underway, it sends a signal through the system that the underlying (energy) is actually undergoing a supply increase.
As humans if we have always understood the financial capital coming towards as being tied to real energy capital--then if the financial capital increases in quantity we will behave as though the energy capital must be increasing. Accordingly, we ourselves will take on lots and lots of new obligations: ownership, parenthood, future plans.
Now add your sugar insights at the margin, here, and one gets a very acute but massive false signal coursing through the system. So, what you will want to consider is not a linear but an over-reactive compensatory response, once the paper-creation phase triggers. As a result of the initial reaction to the roll-over of energy supply (real not nominal), we may not have merely opened up a conventional spread to (real) energy supply. We may have opened a much larger, faster divergence.
G
Yup - we are basing energy (and other) decisions on false signals - the 75 million barrel question is how false?. Supply came from EVERYWHERE last 3-4 years based on artificially high prices (not that oil isn't getting scarce, but that human demand system only accelerated that fast due to fiat leverage/credit/derivative products swinging for fences) - we won't know until well in the future that abstract/neural energy gain does not/can not equal the real energy gain. Said another way, if in 1999 we had NOT repealed Glass Steagal, NOT had 5-6 years of negative real federal funds, not allowed consumers to use homes and other assets as ATMs, NOT flooded system with easy money for banks, etc. we would have peaked in oil production many years earlier (AND had more moderated decline rates ahead). Bottom line for society is we are in serious pickle and consumption needs to drop precipitously - bottom line for oil industry is decline rates are going to approach 8-10% in next decade unless some new miracle of EOR comes to light.
thanks Gregor
Copy of a DB post:
What's interesting about the energy side (some major oil companies, some major oil exporters and some energy analysts) of the "Iron Triangle" is that they apparently believe in Technological Fairy Dust (TFD), i.e., if we sprinkle enough TFD on old oil fields and on oil producing regions, they will virtually never decline. They make this assertion despite the examples like Texas & the North Sea--developed by private companies, using the best available technology, with virtually no restrictions on drilling. BTW, note that the MSM side of the Iron Triangle is breathlessly reporting that TFD will save us, and of course the MSM are supported by advertisers, especially in the auto/housing/finance sectors, which is the third side of the Iron Triangle.
In any case, people like Kenneth Deffeyes made a specific prediction about a world peak in the 2004-2008 time frame, most likely in 2005, and he showed his work, basing his prediction on the logistic (HL) method. As we all know, world crude oil production stopped growing in 2005, despite much higher oil prices, at about the same stage of depletion (based on HL) that the US Lower 48 and the North Sea peaked, also in response to higher oil prices. Deffeyes did erroneously observe that the world probably peaked in 2000, but he never backed away from what his model showed. But in contrast to the vague hand waving assertions that TFD will save us, Deffeyes explained specifically what his prediction was based on, and so far it appears that he was correct. To some extent we may be seeing a CPSR--Cornucopian Primal Scream Response.
However, relatively speaking, Peak Oil is the "Good News." The bad new is Peak Exports. Based on 2006-2008 data and based on Sam's modeling, it appears likely that the top five net oil exporters probably shipped about one-fifth of their post-2005 cumulative net oil exports in just the past three years. The energy side of the Iron Triangle continues to (at least implicitly) offer consumers the worst possible advice at the worst possible time, to-wit, Party On Dude.
ELM is a good example of a solid non-heuristic model. The equations can be derived because the concept is pretty simple -- oil used by a country reduces the net exports, can't argue with that.
Deffeyes work with HL is kind of weak because he just made an assertion. Nowhere does he derive why the Logistic should work. The equations for HL are correct but that becomes a tautology in the absence of a strong premise for the Logistic. That is definitely a working definition for a heuristic.
The logistic is a good approximation because of receding horizons, decreasing returns etc. Depletion is battling technology but as we go deeper, farther, different quality etc we expend more energy, and technology gradually loses. Same thing with animal populations - finite area produces equivalent net primary productivity each year which can accomodate a certain number of a population before they begin to starve, fight, disease etc. As to above conversation regarding oil, I would argue that finance/leverage extended the first half of sigmoid in duration, at risk of higher future depletion, just like injecting nitrogen in Cantarell or water in Ghawar....
Doesn't the Central Limit Theorem roughly apply when you aggregate oil field discoveries? (I say "roughly" because the requirement of independence does not hold, but ...) If even approximately, then that leads to a normal distribution. The integration of a normal distribution will give something that looks like a logistic curve.
Saw this article on the front page of the nytimes.com and then checked the paper version and was amazed it had the space it did.
Obviously Lynch is a cornucopian and the space attacking peak oil could be better used explaining it. It's slightly infuriating to me, for instance, that after I explained the basics of peak oil to a Poli Sci professor here at college, Lynch's expose tears the idea apart without citing any facts.
But after thinking about the op-ed it occurred to me that maybe this isn't all bad. My biggest complaint about peak oil is that no one has heard of it. At least now anyone who turned to back of The Times has heard of it. Maybe 10% of those people will be curious and do some real research. That's 10% more people then before this article was published who at least have thought for themselves about our oil problems.
Exactly.
He is in our conversation.
One way that we can understand corporations, their activities, and the individuals who run them, is through the analysis of corporate interlocks. There is a pretty good collection of literature that details the effects of corporate interlocks (individual directors of a company sitting on two or more boards, which links corporations) on those items mentioned above. Most of the literature indicates that first, second, and third level director interlocks are all important--their importance diminish with distance (i.e. first level interlocks are more important than third level), but several studies indicates that all three are significant (the best example of this can be found in Burris (2005)).
Example: Company 1
First level interlocks: Company 1 is linked to Company 2 by one or more shared directors
Second level interlocks: Links that are established to Company 1 through Company 2's links with other companies
Third level interlocks: Links that are established to Company 1 through the links created by second level interlocks
The Beef
CERA was bought out by IHS, a publicly traded corporation, in 2004. I started a project analyzing the director interlocks of IHS in late 2007 and lost interest in it, but what I ended up with was pretty interesting. I am attaching two pictures that detail the first and second level interlocks of IHS, which are downloadable (you need to zoom in on the second to see the company names). The follow-up research was supposed to analyze the links produced by IHS and corporations to the energy policy-planning network (see Domhoff 2005 for the "policy-planning network"; my first two master's degrees fleshed out the existence of the energy PPN). Feel free to contact me if this is of any interest; I'm more than happy to provide more information or answer questions.
This is definitely worth pursuing.
I tried this with oil company mergers a few years ago, and the web it wove was complex beyond belief.
http://mobjectivist.blogspot.com/2006/04/tangled-web-of-oil.html
Do you have a higher quality version of that image? I downloaded the file posted on your blog, but it's all blury--I'd like to check out the names. Here is what I uncovered in 2003 regarding Energy Policy-Planning Networks (EPPN) and energy firm interlocks (sorry, the names are small!):
Download the one embedded in the paragraph, not the thumbnail. The pic is about 1 Meg and it was tough to generate. That is the best I can do for now.
Got it--thanks for covering my silly error with polished kindness :).
In case it hasn't been covered (I haven't had time to go through every comment and a search didn't produce a hit) Raymond Learsy is another guy whose motives and story just don't add up. But given that he is a regular poster on HuffingtonPost.com it probably bears noting:
http://www.huffingtonpost.com/raymond-j-learsy/peak-oil-agonistes-the-ny...
I have tried to engage this guy in debate previously and he simply doesn't respond. What can be the motives behind guys like this? On the one hand he deplores burning more fossil fuels (global warming). On the other he keeps promoting that oil is abundant and we should not be worried. He blames the Saudis, the oil companies, any fall guy he can conjure as to why oil prices are high. And he gets a following of angry sycophants.
What a world!
Learsy probably understands less than Lynch, and I assume that his whole approach is to take a populist attitude and reach out for the support from that crowd. "Big oil is bad, and they are keeping oil away from us" is essentially his schtick.
Here's my suggestion for a letter to Mr. Lynch. Whether or not this is used in any way, remember the power of asking questions back.
Remember peak oil? Why should we forget when just in the past few years the UK, Indonesia and Mexico's oil fields have gone past peak and into sharp decline? Add those to the previous countries that have gone into decline, including the U.S., and you see a pattern which tells us there is a period of discovery, followed later by a peak and then depletion. Why? Because oil is a finite resource.
Mr. Lynch, why don't you phone the leaders of the numerous countries that have gone into oil production decline and let them know they have nothing to worry about because of the non-data backed assertions in your op-ed piece in the NY Times.
Maybe you can also call Obama and explain to him what to do when oil hits $100-125 a barrel as it slows the economy to a crawl.
Also explain to us how the flow of oil will always continually increase to support an ever expanding economy. Where are these other equivalent Saudia Arabia's going to come from? If things do not pan out the way you suggest, then what sacrifice will you offer the world for your mis-guided, non-geologic based 'advice'?
Hi Cslater8
I like this, especially the first paragraph.
Your last two sentences are also quite nice.
The impacts of "peak" are more than serious, they're overwhelming.
There is no sacrifice large enough to encompass the consequences of misdirection and the diversion of attention. It's going to be bad enough as it is.
From point 4:
As such, I think the figure in point 8 should plot debt relative to GDP. This ratio is more meaningful than just straight dollars. (Even better than U.S. Treasury Debt would be total U.S. debt -- both public and private.)
Reading an article by Michael Lynch is a waste of energy.
I had just got through the comments on the NYTimes site, poised to post, when they closed it to further entries.
This was just after a friend emailed me that the piece raised good points. (Sigh.)
I was going to offer the suggestion that Congress direct the National Academy of Sciences to do an immediate "peak oil" study, to include impacts and policy advice. (www.oildepletion.wordpress.com)
The details of the Mr. Lynch's spin are interesting.
re: Mr. Lynch says:
"Like many Malthusian beliefs, peak oil theory has been promoted by a motivated group of scientists and laymen who base their conclusions on poor analyses of data and misinterpretations of technical material."
Let us examine the word choices:
1) "beliefs" - as opposed to findings, conclusions, results.
2) "theory" - as opposed to descriptive label of a phenomenon.
3) "motivated group" - motivated by what?
As opposed to...a collection of (disinterested, educated, objective, perhaps one might go so far as to say "rational") individuals one might characterize as a "group" because they happen to reach the same conclusion?
4) "scientists and laymen"
I may be overly sensitive, but it seems to me the term "laymen" serves to denigrate the otherwise assumed credibility of the "scientists."
5) "poor analyses"
It's almost as though Lynch's use of the phrase "Malthusian beliefs" establishes his credentials for the use of the word "poor." Since he must know what "Malthusian" means - (how many "Malthusian beliefs" are there?) - then he must be in a position to grade the unnamed analyses.
6) "misinterpretations of technical material"
This is where the spin reaches new heights (of low). "Laymen," of course, would be inclined to misinterpret technical material. After all, they are laymen, and the "material" is "technical."
And those scientists in that "group" - since it's a small "group", there must not be very many of them. Thus, they are not in the majority of scientists.
Assumptions: There is no argument, as opposed to technical material. There is only the "analyses" (not defined) and the "technical material."
re: "...the public is understandably alarmed."
Implied:
It is not your fault, dear public.
You are alarmed, but you have been misled by the small group.
My experience:
Actually, most people I encounter are not only completely unaware of "peak oil," they have never thought about where oil comes from, what it does, or how the food gets in the wrapper.
Aniya,
I started a similar analysis of the spin doctoring elsewhere in this thread.
What you see is real.
It's all the print that's fit to fool lay persons into believing it's news.
Aniya, you should remember my position on a NAS Peak Oil study from the discussion we had about the petition some time ago. Here again I see an opportunity to call a Peak Oil deniers bluff.
Lynch claims that peakists have called peak before and were wrong so why should we believe them now.
My response, Lynch has called $30 a barrel oil before and has been wrong so why should we believe him now.
On the evidence, I think the forecasts made by the peakists for the last five years have been much closer to reality than the forecasts of the optimists. Lynch needs to explain why this is so. If two groups are using subsets of the same data to come up with forecasts but, one forecast is hopelessly off the mark then, either the group that missed the mark is using incomplete/incorrect data or their analysis is faulty. In the case of Lynch, CERA et al, what's their excuse.
What would be very instructive to the public would be for someone to compile a list of Lynch's price/production forecasts over the years and compare his predictions with the actual data. That should be interesting.
Alan from the islands
Spike - which do you think is true?
Also, you suggest that Santos Basin, Brazil can be developed profitably for $30 / bbl. Do you know if Petrobras concurs with this view?
On a yield basis, Lynch's argument about production growth is not dissimilar to the equity market triumphalist who always points to earning's growth in nominal--but never real--terms. At what has been historically the next tier higher in the financial world, however, that of the bond market analyst--no such analytical failure is allowed to pass. The bond investor learns early that real returns, after inflation, are what matter. Not nominal. Of course, Lynch is being disingenuous on both levels. He is both asserting nominal growth in supply generally, when that is such an unspecific assertion as to be either wrong or vague. And secondly, he is of course not dealing with EROEI, the real return concept. In this regard, Lynch would not even be competitive as an industry consultant or analyst, as there would be little help or value in trying to tell an extractor that cost inflation and a decline in the real barrel's value is of no concern.
It's best to take people at their word. The Op-Ed pretty much shows you the competency level that Lynch has achieved on these subjects. These are the rhetorical obfuscations that he's been practising for years. Or should I say, they appear as obfuscations to me--but they are in fact how Michael Lynch addresses these complex issues. Confronted with the x set of complexities--this is the best Lynch has to offer. This is his best shot. If you told me that he was going to be writing an Op-Ed late week, I could have told you what he'd say. It's better to accept that Lynch simply doesn't believe peak production and oil depletion in either real, or nominal terms, is a phenomenon that we will experience here on earth in any timeframe that could matter to us. I don't know why this should be a shock to people. Just about any professional from any field could write a two volume set on the number of professionals in their field who see things as Lynch does in a very limited way, and are no worse for it.
Had Lynch been a writer, opining on one of the topics that the NYT and NYT readers have a core competency--pedagogy, psychology, sociology, crime, politics--it's highly unlikely this Op-Ed would have been seen in print. The Times, as bad as they are and as bad as the rest of the US printed media has become, will not allow a quack to come in and start asserting broad unsupported fluff about the bell curve of IQ, urban crime phenomenon, or psychoanalysis. Lynch's Op-Ed was very much on that level. There really wasn't a single point he made that was either supportable or that wasn't a straw man.
As I wrote in my essay, Jevons and the Six Day Car Crash, large scale problems and phenomenon have been too difficult for the public to understand for a long time. Newspapers have always been--and let's just look at this situation free from Lynch's Op-Ed--the perfect place where society can express its typical urge: which is to dumb down all phenomenon into simplistic either/or propositions, and then solve for one of two buttons.
The task is less about Michael Lynch, and more about societal understanding. In many respects, the Op-Ed to me is a sign that Lynch's career as an oil analyst, as defined by relevency, has been over for some time. Does anyone think a young college student interested in these issues is going to wish Lynch would come and speak to their class? Unsurprisingly, students interested in the subject of oil depletion and environmental stress are already way, way up to the level of understanding expressed here at TOD. How many young psychologists would be interested in a guy who writes this: "Remember Freud and Jung? The Unconscious doesn't exist and thinking about it is a waste of time." Then the article could proceed to explain that since psychology failed to prevent two world wars, it is thus disproven as a humanistic breakthrough.
Finally, it's mildly interesting that Lynch is here in Amherst, MA, along with myself, and Michael Klare. Amherst has a rich literary tradition. Amherst as a place for resource depletion studies? Why not. In this Oil and Gas Journal article on Mexico, Brazil, and VZ, I was happily quoted in opposition to Lynch. Also, The FT Print picked up an article of mine from FT online, and retitled it America's Oil Trap just last week. Overall, I really am not impressed at all with the Op-Ed platform at the NYT. Because as far as I can tell there is a huge amount of material out there being printed each week that's very much in opposition to Lynch's limited view.
G
If one really wants to hear Lynch repeat himself going back through time you can listen for example to these:
Has Global Oil Production Reached Maximum Capacity? A Debate on Peak Oil. | Darley and Lynch.
Deep Drilling for Oil. | Simmons, Kauffman and Lynch.
The End of the Oil Age | Kunstler debating Lynch.
Gregor: Good post. Repeating myself, I don't think many realize that oil depletion isn't the only subject being wildly misrepresented in the MSM (including the "paper of record"). Years ago, there was a chasm between the credibility assigned to an opinion on the front page of the NY Times and an opinion expressed on the Net. That chasm is now far narrower, and is narrowing daily with the assistance of newspapers such as the Times and television news. As you said about Lynch, name the subject and we all know the content of almost any Times article (or pretty well any other paper).
A couple of editorial comments. I haven't read through all the comments here, so if this is redundant, my apologies. And if you didn't mean to open the floor to editorial comments, my apologies
Replace hydrocarbon molecules. It distracts the common reader.
You first chart is getting a bit dated and may contain an error. The data 'ends' at 2005 (instead of 2007 or 2008) and the text says its based on Exxon 2002 (which leaves unexplained how the data can extend to 2005)
This statement is a rebuttal or clarification of Lynch's statement. But without some introduction or summary to Lynch's position, it is a statement that doesn't carry much impact. And it isn't tied well into point 1, from a narrative pov.
Chart 2 seems redundant given Chart 1.
Flow rate is the message. I'd flip this around a bit to read:
As production begins to decline in an older field, new technologies are introduced to maintain the flow rate. These new technologies increase the cost of production.
EROEI is out of scope for a newspaper editorial rebuttal. Don't bother going there. Stick to discovery, flow rates, and cost. Heck half the general public thinks that the cost of oil is due to speculation, the discovery is down because too much land is 'off limits', and cant distinguish between reserves and flow rate. That's got to be the target audience and message.
Point 5. You guys must not get out much. Yes people are blaming politicians for low discovery. That's what the Drill, baby, drill slogan is all about. Plenty of oil in Alaska and GOM! Just drill, baby!. And you should attack this point head on something like: Despite what some of the advocates of "Drill, baby, drill" believe, there isn't enough oil in Alaska and the American coast to offset the coming decline in global production.
Point 6. This isn't so much a standalone point as a casual observation that should be thrown into the introduction of your letter. Tellingly, Lynch fails to mention one geologist to support his claims on total reserves. The problem with this kind of observation, is that Lynch can then name one crackpot geologist and you lose the point.
Point 7 is good. But you have to tie it directly to flow rate, discovery, and costs. In today's tight credit market, oil companies find it more difficult to finance exploration to find new sources of oil and difficult to finance the additional technologies required to keep old fields producing at higher rates.
Point 8 should end up in the conclusion - tying back to the three main point. With declining new discoveries and depletion of currently producing fields, the supply of oil available on the market will inevitably decline. Exactly when this will occur is up to some debate, but close observers of the oil market believe that it will be sooner rather than later.
Maybe I missed it, but I didn't see where you point out that new discoveries are generally more expensive to exploit. Deep water drilling off Brazil. Polar production. Fraccing Bakken.
Keep the message simple: Discovery, production, cost
Good luck!
Perhaps there is a problem more fundamental than Peak Oil?
I suggest a new organization, ASAS: Association for the Study of American Stupidity.
Lynch is telling people what they want to hear, which is (not coincidentally) exactly what our governing corporations want them to hear, and will be trumpeted by all the propaganda outlets in coordination across the land. And you expect to accomplish what?
If TOD exists to educate people to what is happening to our society in regard to energy, as does TAE with regard to the economy and RealClimate in regard to climate change (and others too), then that information is freely available for all who are interested. It's not hard to find, but precious few will be interested or receptive. Help those who wish to be helped, but why bash your head against an impenetrable wall?
I would say we are crackpots, but in the vast public perception we don't even exist - but so what. It is still worthwhile to try to understand what is happening (and we are still learning and revising that). At least there will be a group that does understand and is as well prepared as possible, and that may be enough to be a benefit to those around us on an individual basis. Even that would be a hell of an achievement. Forget about Lynch and the NYT - it's a waste of effort.
I don't think a New York Times rebuttal is a waste of time. Of the 180 comments I saw, I believe about 179 were somewhere near the target. Some had read Simmons, or Michael Klare. I'm sure that some of the commenters were TOD readers, but many were not. Some understood EROEI, others mentioned export declines. Many could see evidence for near-term decline. Others who weren't sure of that said it didn't matter, we need to prepare now anyhow. Others said it didn't matter how many barrels of oil were left, we ought not to exploit them anyhow due to climate change. Certainly, those who commented are a self-selected group of those concerned about oil depletion and/or climate change. I was actually heartened by the response because people from all over the country could mount substantive arguments against Lynch's position.
Evolutionists are likely to relate to exactly what Mr.Lynch is doing here. There used to be a bunch of guys who would call "Evolution" the most ridiculous thing. Instead, they explained the world to the people just the way they wanted to hear since that's the way the Church has told them about it since their childhood.
The only difference is, Evolution vs ID debate doesn't affect a thing in the practical world. Yet Evolution was "depressing enough" for the Creationists.
I wrote this up to do my little bit in informing the public (or whatever little of it that visits my blog) about Mr.Lynch's article: http://sunson.livejournal.com/208067.html
If you're a Keynesian/Reganomics sort of cornucopian, then surely you'd be in favor of the government mandating the development and purchase of efficient new machines of all descriptions, no? When we do the same thing with defense spending, we call it economic stimulus and job creation.
Not that it matters. This is his conclusion, after all, and it turns out to be emotionally loaded ("a public already struggling") and to make no sense whatsoever. As many of the factual rebuttals here make clear, he's not even trying to make a rational argument from facts; rather, he's trying to convey that impression while delivering a payload of comfort in the face of uncertainty. You don't have to make strong arguments when your audience wants to believe what you're saying.
i don't think the nyt will print your rebuttal -- at least not in op-ed form; you'll be lucky to have it published as a response letter on the lynch piece.
peak oil is, quite simply, the skunk at the garden party, and there is no 'constituency' to further its promotion. frankly, the very idea of peak oil scares the living daylights out of the nyt, as its implications are antithetical to everything the advertisers are trying to sell: expensive exurban real estate, gas guzzling cars and other conspicuously consumerist crap.
the lynch piece simply confirms what i've been saying for months in comments all over the nytimes -- there are only 2 words that scare the bejeezus out of the editors/publishers of the nytimes: peak oil.
in fact, the publication of such a desparately smarmy op-ed as lynch's in the 'newspaper of record' should be taken as confirmation that peak oil has already occurred. the lynch piece represents the icing on the cake of 'good news' and 'recovery is just around the corner' that we've been hearing nonstop from the msm for the past few months. 'good news' that, of course, flies in the face of the reality of an economy being ripped apart at the seams. and what's really the source of our economic woes? peak oil, of course. the nyt has figured out that there is no way to sell their rosy future without debunking peak oil. give them some credit, folks!
the herd MUST be prevented from panicking; the nyt is simply fulfilling its duty: the sheeple must be stroked and calmed into submission to get them to start spending again, to genuflect zombie-eyed to the needs of the 'growth' economy (which has, heaven forbid, stopped 'growing'!). but the 180 nyt comments are downright amazing and generally quite sophisticated. the educated public is catching on.
the nyt is interested in 'truth' -- but only to the extent that it doesn't interfere with 'growth'. and there will be no compromise, as their life depends upon it.
I think this whole debate gives an excellent opportunity to clarify our own thinking. Leanan, Goose, Gail, Nate, I am requesting a string sometime in the near future: The subject would be "My Peak Oil and Energy Manifesto".
This would be posts for all of us to say, as clearly as we can articulate it, EXACTLY what we believe about peak oil, EXACTLY what we believe about alternative energy (if we accept the premise at all) and EXACTLY what we believe (either by way of research or gut feeling) about the timetable for peak crude oil and renewable timetables, and of course if we are catastrophist in our worldview (i.e., it's a done deal, we're up the creek without a paddle, case closed, survival mode only) we should probably mention this.
This would be something like "The Professor's Last Lecture" exercise, in which professors write the last lecture they think they will ever give.
Because let's face it, the folks who post here at TOD over any long period and read the articles and posts here over any long period are the "higher professors" of peak oil. We know what the discussion is about, are familiar with the names and literature, and know where to go for sources. We know both the spoken and unspoken implications here in a way that no one else does, so we can argue points of EROEI, discovery curves, HL curves, The difference between "the cliff", a soft landing, and olduvia gorge, and know what we are referring to. But sometimes, it is a good thing to come back to the CORE of what we ourselves think and think we know about peak oil. Who's up for it? Let the editors know, I think it could be a fascinating string, and help find not only our points of difference but also our points of common understanding, sort of a "Nician Creed" for peak oilers of all stripes!
RC
if there's any group of people who deserve to have their rebuttal published, front page nyt, it's the geeks at the oil drum. so by all means go for it. and have your op-ed pre-approved before submission to the nyt by as many academically qualified peakers as possible.
when the lynch piece was published on line, it first appeared without any comments. when i next viewed it, about 10 hours later, it already had 150 comments, and i could not even post before "comments are no longer being accepted."
such intense and vociferous response comment 'pressure' indicates to me that peak oil is gaining momentum rapidly in the collective vernacular. that's a good thing.
imo ultimately both the very outrageousness of the lynch op-ed and the well-informed and voluminous protestations in response will make this episode remembered, overall, as a politically positive peak oil moment.
with publication of this preposterous lynch op-ed, the new york times has truly jumped the shark wrt peak oil.
Whether we, the confused peakists, like it or not, economists like Michael Lynch still have the leading edge on the abstract (or was it physical?) world of money and media.
This is why he can write an op-ed in TNYT about how false is the peak oil theory that almost nobody knows.
Besides, the poor, old, retired geologists, forecasted that oil production will decline when post peaked, between a 2 and a 12 percent per year, with a narrower most likely range of 4 to 6 percent. Even the converted IEA chief economist Fatih Birol, that has revised his figures from 3.7 to 6.7 percent decline of important deposits in just one year review, is also wrong. Not six, but ten Saudi Arabias would flow out of the ground, with a simple Lynch whistle...if sacred demands so demands it.
On the other hand, economists like Michael Lynch have the power to provoke a fall of 12 to 20 percent of the economic activity in one single fiscal year, by limiting the physical (or was it abstract?) flow of money, for instance. Some car manufacturers in Spain are producing at 40 percent throttle, implying a fall of 60 percent of this important sector activity in just one year. If the economy is moved by energy (who knows would say Lynch) then, oil consumption will have to decrease substantially as well.
So who cares now for the physical world of oil and its global peak of production?
Is not the physical world, stupids! The physical world is always an abstract thing. It’s the economy, that physical reality, that can obscure the physical and after all, abstract world, with a financial finger’s nap.
We, this singled minded group of peakoilers, did not notice that grain, this abstract physical thing, will always suffice to feed the donkey, provided that we have the financial means to prevent the donkey from eating too much. Therefore, there will always be barley to feed the donkey. In an extreme position, the Sacred Market will just kill the donkey to make this law immutable. The thermal death of the universe is the ultimate confirmation of the economists rational: in that moment supply and demand will perfectly match forever. This law is even more immutable than the Second of Thermodynamics. And the important thing in economy is not if the donkey is alive or not. Is that supply always equals demand and vice versa, in the long term. The important thing is that the physical (or was it abstract?) monetary mechanism of supply = demand works under any condition.
Economists have also taught us in the last year that they have the c3 in their hands (command, control and communications) and will not permit this silly and simplistic peak oil guys to show any peak oil production. The prosperous way down of the oil production will never be a geological issue. They will handle it as an economic issue, a Sacred Market adjustment to negative economic growth and oil, as any other vulgar commodity, will decline because the Sacred Market orders so, not because is a limited resource. The chariot of the economy will always run before of the energy horses. This is how the things work in this Ben Hur circus.
Is it clear to you or you still need some more economic whip lashes on your shoulders?
It appears to me that we have hit another inflection point in the economy and the BAU crowd is out crowing success and hellfire against any potential threats to that success. Those successes are seriously put in to jeopardy by higher commodity costs especially oil. Reported today that commodity stocks are basically net flat in the last 6 months. Cases in point
Lynch's piece in the NYT as oil hits $75
The dollar strengthens, interest rates drop and gold declines while the Treasury floats another ++$100 billion in funny montey this week.
CNBS all day crows about oil inventories taking a surprise drop while total petroleum inventories actually decline. Anyone notice the SPR has not been getting any added black juice for the last couple of months?
That we could be seeing this happen while the printing presses are totally juiced cry's fear or manipulation or both to me.
Well, just weeks after destroying T. Boone Pickens’ credibility, the good folks in the Man-Bunny Matrix have done a number on Michael Lynch.
http://manbunnymatrix.net/
These muck-raking rabbits always make me realize how little I actually know.
The rabbits are estimating 1.5 trillion barrels. That's 50 years supply, and EV's are already being mass produced this year.
I know, I know, peak oil does not mean running out, it means running short of demand. The problem with the theory is that it doesn't take into account the dynamics of price, demand, and alternatives.
RE: Lynch and The NY Times, Just posted this on Huffington Post:
http://www.huffingtonpost.com/gabriel-rotello/the-new-york-times-on-pea_...
Great article!
"lies are about things we believe, not things we know.... Lies are effective because we are insecure about many of our beliefs and are quite vulnerable to the suggestion that those beliefs might be false." See http://morris.blogs.nytimes.com/2009/08/06/seven-lies-about-lying-part-2/
Rebuttal of Lynch at Post Carbon Institute http://postcarbon.org/commentary/waste-of-energy
I posted a (hopefully) humourous discussion of the personality "types" one is likely to encounter in the peak oil "debate" on my sailing and peak oil blog:
http://sv-macha.blogspot.com/2009/08/anthropological-field-guide-to-comm...
Feedback welcome, hope you enjoy.
Michael Lynch is a well known type I describe as:
"FUD Peddlers: Snazzy professional deniers on the payroll of the PR/consulting firms in the high-stakes "denial racket". Given enough money, a good haircut and well tailored suit, these guys can wedge a crowbar of doubt between the links of even the most obvious chain of causality: cancer and cigarettes, processed food and obesity, carbon emissions and climate change, finite oil reserves and oil depletion, gravity and falling down, etc."
Cheers,
- Ari