PARIS (ResourceInvestor.com) -- It is rare in this column that we take a look back at our previous work. But the client response to last week’s column ‘Zombie Attack’ was so brilliant we cannot help ourselves. For any new readers, we talked about the fact - and we use the word ‘fact’ as such - that many people who believe in ‘peak oil’ are a bit weird.
In fact, many of the people who believe in ‘peak oil’ are so weird they put off anyone else who looks at the subject. Because the subject, at first glance, seems so amazingly simple, it attracts simple views. That is we are about to embark, or already have embarked upon a precipitous decline in the production of oil. When you consider how important oil is to the global economy, notably transport, the effects are unknown and worrisome.
What may have escaped a few people’s notice, notably some of those who replied to the column last week, is that this column also deals with the notions around ‘peak oil’. The title may be somewhat of a giveaway. What we do not deal in is certainty, because what both the ‘free market’ technology-will-save-us brigade and the ‘peak oil whacko’ brigade deal in is just that, unbridled, self-assured certainties. This was superbly illustrated by some of the responses to last week’s column.
Both sides it seems have some amazing properties. They are able to see below the ground for a start. They are all able to see exactly how many barrels of reserves are subsoil. It is an amazing feat. Sad to say that the free marketeers see vast quantities of oil, especially in places like Saudi Arabia, that will be extractable for hardly any cost. The ‘peak oil whackos’ see hardly any oil; instead, they see a series of IOU notes from previous Saudi emirs.
When you possess these incredible superhuman abilities why waste your time lobbying for data transparency, annoying and time consuming activity that it is, when via your X-ray vision you are already in possession of the facts?
They are also all masters of technological progress via their other super-human trait, the ability to see into the future. Long ago came predictions of snake wells, ultra deepwater finds and so on, all from the free market brigadiers. Fine, they never mentioned it before, but they thought it. The ‘peak oil whackos’ have gazed into their crystal balls, and they can also see that technological progress is about to halt.
Economically, too, both sides are possessed with soothsaying abilities. They are able to predict future demand through to 2030 and beyond. The idea that both sides have been consistently wrong in their forecasts over the recent history of the energy business is of course neither here nor there. Why deal with the complexities and the ever-shifting nature of economic activity and its effect on energy when you are able to see forward with such religious clarity?
The sad facts are that we could see ‘peak oil’ one hour from now - or one century from now. We could see an economic recession next year, next decade or the one after that. We could find that economies are able to withstand far higher energy prices than previously thought, or we could find that the current rises have just taken longer to knock through than was generally accepted.
But that means that you have to do away with the ideology. You can no longer be a ‘believer’ either in the failed political ideology of neo-liberal markets – such a big hit in the developing world – or a ‘believer’ in the idea that ‘peak oil’ is happening now, and we are all about to run to the hills clutching shotguns.
So much of this debate is a macho chest-beating exercise. Who is going to be the smartest boy in the debating society? It is why the whole subject drips with such cleverer-than-thou-ness. That is why, as the IEA pointed out recently, it stirs such emotions. Because idiots cannot debate.
Instead of chest beating and screaming at anyone who does not believe, you have to sit day by day sifting through mounds and mounds of data. Economic data, political data, regional, commodity, demographic and other data. You have to try and gauge international relations, the price of personnel, the price of rigs, the price of credit and so much more. Tiresome and boring when you are already so enlightened.
Because ‘peak oil’, like death, will arrive one day. Undoubtedly. It has been arriving since Standard Oil first siphoned off a few pools of American oil back in the 1860s. Oil has been running out ever since then, but unlike the people who know, who believe, who understand, it is not a simple business.
