Doom and Gloom

For some reason people are attracted more to a doom-and-gloom view of the future than one of a bright-and-promising-new-day vision of the future. The former makes you want to hunker down and distrust others, to want to say "I've got mine Jack, you bug off". Whereas the second makes people optimistic and hopeful and willing to share. I favour the latter. But so many people want to be pessimistic. That disheartens me.

Here are some key bits from an article by Peter Foster in the Financial Post:

The great petroleum geologist Wallace Pratt famously said that “Oil is found in the minds of men.” Discoveries depend on visionary theory, technical innovation and commitment to risky drilling. Plus luck. Peak Oil theory, by contrast – which asserts that global oil production has, or soon will, peak, and that this has powerful policy implications — is found in the limitations of the minds of men. It is less geological theory than unevolved intellectual shortcoming, although it certainly has its political uses.

The fruits of the “greatest resource,” as economist Julian Simon dubbed the human mind, appeared yet again this week with the announcement by BP that it had found a “giant” field at unprecedented depth in the Gulf of Mexico, an area that twenty years ago was regarded as played out. By contrast, the limitations and conceits that characterize Peak Oil were nicely summed up by a report on BP’s find in the leftist British newspaper, The Guardian.

According to that report, BP’s Tiber well, and another recent huge find in Iran, “have encouraged skeptics of theories which say that peak production has been reached, or soon will be, to hail a new golden age of exploration and supply.”

Note how the use of the term “skeptics” suggests that Peak Oil is the mainstream view, which it is not. The word also links unbelievers to beyond-the-pale climate change “skeptics.” Finally, the report suggests that these people are suggesting a “golden age of exploration and supply” although in fact the only relevant quote is from Peter Odell, professor emeritus of international energy studies at Erasmus University in Rotterdam, who merely says, “It’s an amazing turnaround from the gloom of the last 10 years. All these finds will take a long time to bring on stream, but it shows the industry is capable of finding more oil than it uses and shows we have not come to any peak.”

...

Debate between economists and Peak Oilsters tends to be a dialogue of the deaf. Economists often seem to imagine that they are explaining a technical issue. They note that the alleged failure to “replace” production is in fact due to the way reserves are reported. They stress that startling new technologies -- such as the ability to drill in thousands of metres of water to depths of more than 10,000 metres (as at Tiber), or 3-D computer seismic imaging, or horizontal drilling -- are constantly finding new oil and gas, and producing more from old reservoirs.

Again, citing how often alarms over “the end of oil” have been sounded since 1880 holds no sway with Peaksters. Since they see oil supply as essentially “fixed” and economists as deluded and morally deficient, delays in the projected “crunch” will only make it all the more painful when it — inevitably — comes.

Peak Oilsters do not so much refute economics and history as simply ignore them. They are victims of the “psychology of taboo,” which prevents them from assessing markets objectively.

For example, leading Peakster Matt Simmons has described the market as a “500-pound wrecking ball” and Adam Smith’s invisible hand as an instrument of strangulation!

...

The oil industry, by contrast, is constantly producing new wonders. In a piece in the latest Foreign Policy magazine, oil historian and consultant Daniel Yergin notes that, “Again and again, in researching oil’s history, I was struck by how seemingly insurmountable barriers and obstacles were overcome by technological progress, often unanticipated.”

With regard to Peak Oil, Mr. Yergin points out that his own firm’s analysis of 800 of the world’s largest oil fields “indicates that the resource endowment of the planet is sufficient to keep up with demand for decades to come.”

Only governments can stand in the way. Supported by our misconceptions.

If you want to revel in your gloom-and-doom, then go read the Wikipedia's list of gloomy "peak oil" forecasts. Squirrel those predictions away and look at them in ten years time. You will laugh yourself silly.

I had a similar experience with IPCC over global warming. When I bought my house in 1983 I pulled out the IPCC forecasts and discovered that according to their predictions by 2000 I could expect the sea to rise by a meter and top the dykes and I would own swampland and not a house. Well... it is nearly 30 years later and the sea has risen maybe 3 centimeters. So I'm not sweating "global warming". I've learned by watching their ever-receding doom-and-gloom forecasts that they are more religious believers than scientists. They cling to their "coming" of global warming as tightly as any Christian clings to what Paul said was Christ's return "within our lifetime". Well, that was 2000 years ago and as far as I know the oldest human lifetime is about 130 years. So that "prediction" didn't stand up to the test of time, just like "global warming" won't, and "peak oil" won't.

Don't get me wrong. I know the earth is finite. The oil will end one day. But it won't disappear overnight. It will simply get more and more expensive and human ingenuity will move us to other energy sources. So I don't lose any sleep over "peak oil".