Peak Oil: One-Sentence Problem-Solving

As is still the case—unfortunately, for all of us—there remains a sizeable number of individuals, organizations, and other associations determined at all costs [literally] to preserve the primacy of fossil fuels to power us into the future. Facts: good when they can be massaged to fit the partial-truth narrative required to breathe life into an industry unwilling to bend to the realities of geology, economics, and … well, reality. Facts: not good when they address the broad range of issues and concerns best left neglected to further that Abundance-No Worries narrative.

One-sentence talking points seem to be the ideal. No concerns about having to delve into the complexities of ideologically-troublesome issues, for one thing. Summary statements suggest there are no worries, for another.

As for the harm caused by failing to properly inform those relying upon the assessments of those others presumed to know? Who has the time to explain all those facts and details and what-nots?

According to the U.S. Energy Information Administration, in 1998, when the article was written, global oil production was 75.7 million bbl/day.  In 2014 it was 93.2, and our problem is too much oil.
It’s useful to remember such things when the ‘experts’ grandly tell us what’s going to happen. [1]

With the world awash in oil and prices falling toward $26 a barrel, Iran is set to add to the oversupply now that international sanctions have been eased.
It’s as if the whole world were conspiring to bury the tattered remains of the ‘peak oil’ thesis, so popular a few years ago. [2]

Economics and I have a gentlemen’s agreement: the less I discuss, the better. Notwithstanding, I do understand that when prices are as other-worldly low as they are now, few in the oil industry are eager to venture out and invest in production efforts they can ill-afford. Those production efforts are now more costly, more time-consuming, and fraught with a host of other challenges rarely encountered in the good-‘ol days of conventional crude oil production. [If you don’t have to explain any of the important facts regarding those highly-touted current production totals, it’s so much easier to let a simplistic statement serve as the sum total of one’s contention.]

So when the industry cannot afford to explore and extract because investors and lenders cannot justify the funding risks [and assuming the Happy Talkers have not discovered the Right magic words to magically extract unconventional fossil fuel supplies from deep below the planet’s surface], then there will be inadequate production going forward.

And when there is inadequate production going forward, those vast abundances of worry-free fossil fuel resources will stay tucked away deep below the planet’s surface. Rising prices will certainly revive efforts, but those are not overnight undertakings, nor will they be free. And meanwhile, the finite fossil fuel supply totals in conventional crude oil fields will continue to do what finite resources do when they are extracted and used: they will decline.

When you have less of something today because you used some yesterday, and you cannot replace what you used, well … economic theory isn’t even necessary. Just garden-variety second grade math.

So why is it so difficult for industry cheerleaders to acknowledge basic realities and provide an actual beneficial service to those relying on their presumed knowledge? If there is some Consequence-Free pill they are holding in abeyance, now might be a good time to start flooding the market with it.

Otherwise, those annoying facts are going to continue to mess with the Happy Talk. Offering the public the full range of issues for consideration and planning may violate some ideological Code of Honor, but countless millions might benefit even just a wee bit by having the full story about the challenges ahead.

Being “awash in oil” [points scored for using a favorite buzzword!] in the midst of falling prices isn’t exactly ideal, once you move on to a second and third sentence.

Companies that grew quickly thanks to the shale boom are trying to weather the dramatic slide in oil prices with measures like scaling back production and laying off workers. But for many, sunk costs and high debt levels mean cutbacks are not enough.
As a result, defaults and bankruptcies are mounting in the U.S. energy industry as the price of crude bounces along under $30 a barrel amid a worldwide oil glut. And with some forecasts pointing to oil — already down more than 70% since mid-2014 — possibly falling below $20 a barrel, failures are expected to continue. What’s more, plummeting energy prices have been a large contributor to the huge slide in global stock markets now underway. [3]

Facts do suck, but better we deal with them than rely on nonsense having a very short shelf-life and a long trail of unnecessary harm to follow.

Peak Oil Matters