Post by JNugent Post by Byker
"Scientists are certain about some things, they're shaky on others, and
sometimes they're mistaken when discussing numbers they can quantify..."
"When should society trust scientific claims enough to act on them?"
I wonder which side of the global warming/cooling side he'll be on?
Can you remember any environmental forecast being correct?
We were confidently assured that we'd run out of oil long before the end
of the twentieth century for a start.
People like James Howard Kunstler have made a cottage industry churning out
books promoting the "peak oil" myth. I don't hear much out of him anymore:
‘Peak Oil’ Debunked, Again
The world relearns that supply responds to necessity and price.
It has been 216 years since Thomas Malthus gave birth to the idea that
mankind’s appetite for natural resources would outstrip nature’s capacity to
supply them. There have since been regular warnings that the world is
running out of soybeans, helium, chocolate, tungsten, you name it—and that
population growth has become unsustainable. The warnings create a political
or social panic for a while, only to be proved wrong.
The latest reckoning with reality is the end of the obsession with “peak
oil,” which for years had serious people proclaiming that we were entering
an era of permanent fossil fuels scarcity. It didn’t work out that way.
That’s a central lesson from this year’s dramatic fall in the price of oil,
which reached $69.49 a barrel of Brent crude on Thursday from a June high of
$112.12. As recently as early November, when oil hovered at $80, OPEC
officials warned they would intervene to hold the price at $70. But Saudi
officials conspicuously refused to support an output cut at last week’s OPEC
meeting, and Saudi oil minister Ali al-Naimi has made clear that he’d be
comfortable with lower prices.
The short-term Saudi calculation is to drive oil prices down to squeeze
their geopolitical adversaries and higher-cost producers. That goes
especially for their adversaries across the Persian Gulf in Iran, which
depends on oil exports for over 40% of its revenues, and where the regime
had designed its budget based on $100 oil.
The Saudis also hope to slow the explosive growth of U.S. production, which,
thanks to the tapping of domestic shale resources through the combination of
horizontal drilling and hydraulic fracturing, has risen to some nine million
barrels a day from five million in 2008. By some estimates, the price of oil
needs to be as high as $90 a barrel for oil extracted from “tight” deposits
such as shale, though oil market research firm IHS believes most tight oil
wells have a break-even cost of between $50 and $69 dollars a barrel.
But even if the Saudi move slows U.S. drilling, the International Energy
Agency forecasts that U.S. production will still surpass Saudi Arabia’s
output of 9.7 million barrels a day, and overtake Russia’s 10.3 million,
perhaps sometime next year. This would make America the world’s largest oil
producer, which it was from the dawn of the oil age through 1974. Thanks to
the fracking boom, the U.S. surpassed Russia as the world’s largest
natural-gas producer in 2013.
All this is a useful reminder, as IHS’s Daniel Yergin told us the other day,
that “technology responds to need and to price.” It was the same story in
the 1970s, when the world responded to OPEC’s embargoes by exploiting new
resources in Alaska and the North Sea, and again in the 1980s and 1990s,
when offshore drilling became technologically feasible and economically
profitable at ever-greater depths. And expect more from where that came, as
the frackers continue to figure out how to drive down costs, and if new
shale deposits in places such as Mexico, Ukraine and Argentina start to be
Also worth remembering is how spectacularly wrong some recent predictions of
doom turned out to be. This is shooting fish in a barrel, but here is Paul
Krugman in December 2010, declaring that “peak oil has arrived.”
“What the commodity markets are telling us,” Mr. Krugman averred, “is that
we’re living in a finite world, in which the rapid growth of emerging
economies is placing pressure on limited supplies of raw materials, pushing
up their prices. And America is, for the most part, just a bystander in this
story.” Far from being a bystander, America has been the main oil-market
Such doomsaying is that much more embarrassing because warnings of peak oil
are nearly as old as the oil industry. In his book “The Quest,” Mr. Yergin
records that in 1885 the state geologist of Pennsylvania warned that “the
amazing exhibition of oil” was “a temporary and vanishing phenomenon—one
which young men will live to see come to its natural end.”
Given this 130-year record of predictive failure, why does the end-of-oil
myth persist? Part of it is that peak oil is more wish than prediction—a
desire to see the end of fossil fuels to serve a larger political agenda. It
is also a way of scaring governments into pouring money into alternative
energy sources that can’t compete with oil and natural gas without subsidies
and mandates. Predicting disaster can also be a profitable business and a
path to speech-making celebrity.
The happy ending is that the notion that the world is running out of
resources always fails because the ingenuity of entrepreneurs, spurred by
necessity and incentive, always exceeds the imagination of doomsayers. So we
are learning again, and let’s hope memories will be longer this time.