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The “Peak Oil” Pig Returns With A New Shade Of Lipstick

The “Peak Oil” Pig Returns With A New Shade Of Lipstick thumbnail

Heritage pigs stand in a pen at the Stone Barns farm in Pocantico Hills, New York, U.S., on Friday, April 21, 2017. Photographer: Cole Wilson/Bloomberg

Proponents of a new strain of the always-tiresome, never-correct “Peak Oil” theory have returned to the public discourse , this time with a new theory coming from the other side of the crude oil supply/demand equation.

Prior iterations of “Peak Oil” theory – which noted author Daniel Yergin traces all the way back to the 1880s, when alarmists claimed that oil would never be discovered anywhere west of the Mississippi River (Texas, Oklahoma, North Dakota, Louisiana, Wyoming, Colorado, Utah, New Mexico, Montana, Kansas, California and Alaska beg to differ) – have always focused on supply.  According to “Peak Oil” theorists down through the decades, oil production has constantly been at or near its “peak”, and the end of the age of oil is always just around the corner.

Prior to about 2012, the people promoting “Peak Oil” theory tended to be either in or associated with the oil and gas industry itself.  M. King Hubbert, a then-geologist with Shell, is generally recognized as the modern inventor of “Peak Oil” theory.  Matt Simmons, CEO of Simmons & Co., promoted his own brand of “Peak Oil” theory from around 2004 through his death in 2010, based on his belief that the Saudi Arabian oil fields had already peaked, and the Kingdom’s reserves were being vastly over-reported.  Both Mr. Hubbert and Mr. Simmons were brilliant individuals who honestly believed they had firm factual bases for promoting their theories.  Both were completely and consistently wrong on this subject.

At some point around 2012, anti-fossil fuel activist groups began to co-opt “Peak Oil” theory in the belief that they could discourage investment in oil and gas projects via the promotion of the theory.  This co-option resulted in the issuance of a long series of comically-incorrect “Peak Oil” studies and pieces from groups like the Post-Carbon Institute (gee, wonder what their agenda might be?), or this knee-slapper from a fellow named Robert Ayres, a professor at INSEAD.  Like Hubbard and Simmons, these and other anti-fossil fuel activists focused in on the pretense that global oil supply either had or was about to “peak”, and begin an inevitable decline, thus, in their views, creating urgency for governments to more heavily-subsidize the development and deployment of alternative fuels.

Of course, the reality was and still is that, thanks in large part to the development of technologies necessary to produce oil from shale formations that were previously thought to be permanently inaccessible, the world is awash in untapped oil resources.  That, plus the 2014 revelation that Saudi oil production had not only not “peaked”, but that the Saudis had in fact been holding back on a vast amount of excess production capacity, turned anyone still trying to promote “Peak Oil” theories from the supply side of the equation into immediate laughingstocks.

But that inconvenient development did not mean an end to activists promoting “Peak Oil” theory.  Instead, they merely re-trenched and have now come back with a new angle, this time focused on the demand side of the supply/demand equation.  This theory is based on the pretense demand for crude oil is nearing its “peak”, and will soon begin an inevitable decline, regardless of how much supply remains in the world.  Thus, say the proponents of this new theory, investors should quit investing in oil company stocks because those dumb ol’ oil companies are going to waste trillions of dollars on finding and drilling for oil that will never be produced, because there will soon be no market for it.

This of course flies in the face of the fact that, as Robert Rapier points out, demand for crude oil has grown by about a million barrels per day each year for the last 30 years, and in fact grew more rapidly in 2016 (1.6 million bopd) than it had in prior years.  It also flies in the face of the reality that, per the BP Statistical Review of World Energy for 2016, global oil consumption vs. economic growth rose more rapidly from 2010 through 2016 than it had over the previous decade.


Undeterred by reality,  an anti-fossil fuel investment activist group that calls itself the Carbon Tracker Initiative released a report touting this demand-side brand of “Peak Oil” theory, with the predictable alarmist talking points designed to frighten investors away from oil and gas companies.  If CTI is to be believed, the 69 global oil and gas companies they supposedly studied are about to waste $2.3 trillion in capital investments between now and 2025 on finding oil reserves that they are going to have to leave in the ground.

This “finding” should come as no surprise to anyone who takes the time to browse the CTI website, and read how the group describes itself:  

We are a team of financial, energy and legal experts with a ground breaking approach to limiting future greenhouse gas emissions and the scale of their impact. Our aim is to raise awareness among key decision makers about the risks that fossil fuel investments pose to financial stability. In this way we are challenging the status quo allocation of capital and shifting the financial markets system towards supporting a low carbon future.

Well, yes, of course.

As has been the case since 2012, this newly-clothed version of “Peak Oil” theory has little to do with the realities of global supply and/or demand, and everything to do with promotion of divestment in the oil and gas industry, and increased subsidization of renewable energy and alternative fuel sources.  The advocacy for ever-rising subsidies itself ignores the realities of the massive budget deficits and mushrooming national debts sported by pretty much every major industrialized nation.

Everyone wants a cleaner-energy future, and everyone is free to invest their money as they see fit.  But everyone should also understand that “Peak Oil” theories have been continuously wrong since the 1880s, and they very likely remain wrong today.  The shifting of focus from supply to demand simply amounts to putting a different shade of lipstick on the same old pig.


32 Comments on "The “Peak Oil” Pig Returns With A New Shade Of Lipstick"

  1. twocats on Tue, 27th Jun 2017 8:45 am 

    so they invent a theory of peak demand which the POD community mocks and then they attribute phony analysis to POD community. classic propaganda.

  2. Jef on Tue, 27th Jun 2017 8:49 am 

    I haven’t died yet therefor I probably never will.

    So this guy doesn’t see and connection between the converging constraints and all of the major problems popping up around the world. Whatever!

  3. sam on Tue, 27th Jun 2017 9:20 am 

    There’s a level of ridicule which deters comments or rebutal. You’re way above that line with this article.
    Forbes shows no grasp of how to make a logical argument, pom-pom girls of consumerism and vaporware

  4. rockman on Tue, 27th Jun 2017 9:23 am 

    “Prior iterations of “Peak Oil” theory”. And again an early hint why there’s no need to read any further. Yes, lots of incorrect projections of when global PO will happen. None of which negates the real statistical FACT (and not a theory) that GPO will eventually occur.

  5. Sissyfuss on Tue, 27th Jun 2017 9:29 am 

    It is very difficult, nay impossible to see the coming changes to both the economy and the climate when your vision is continuously being blocked by dollars signs. Forbes is only observing the profit portion of life as if nothing else matters. Very 21st century, at least the early portion of it.

  6. Dude on Tue, 27th Jun 2017 10:02 am 

    Just means Wile E. Coyote is still running in mid-air. Gives me more time to prep.

  7. Bob on Tue, 27th Jun 2017 1:08 pm 

    It isn’t often that I see an article with so few facts so poorly written but we do have one here. It kind of reminds me of the people that hate windmills because they kill a few birds. They neglect the hundreds of millions of birds killed by other means: tall buildings, cats, cars, etc. You get the idea. Soon all we will have will be wind and solar. We need to do our best to make it work.

  8. Jerry McManus on Tue, 27th Jun 2017 2:57 pm 

    It looks to me like the folks at Forbes have hit on a brilliant strategy.

    Blame it on the sanctimonious greens, who everyone generally loves to hate anyway, and their stupid “divestment” movement.

    Certainly nothing to do with the plummeting economic value of upstream E&P investments, which last time I looked are falling off a cliff.

    Oh no, it was those pernicious greens and their dumb-ass solar panels!

  9. peakyeast on Tue, 27th Jun 2017 4:16 pm

    Says about 2 million in spare capacity for OPEC – so about 2% of world consumption. But then how accurate is it?×439.jpg

    Indirectly says Saudi Arabia claims to have all the 2 million in spare capacity.

    Where is that vast Saudi overcapacity for production coming from, forbes?

  10. Harquebus on Tue, 27th Jun 2017 5:59 pm 

    Peak oil is not a theory. It is an observation.

    “These countries at one time were all Oil Exporters, although not on the scale of Saudi Arabia or Kuwait. As their own supplies of oil have depleted they have become oil importers, except they neither have a sufficient mercantilist model running to bring in enough FOREX to buy oil, and they can’t get credit from the international banking cartel to keep buying. 3rd World countries are being cut off from the Credit Lifeline, unlike the core countries at the center of credit creation like Britain, Germany and the FSoA. All these 1st World countries are in just as bad fiscal deficit as the MENA countries, the only difference is they still can get credit and run the deficits even higher. This works until it doesn’t anymore.”
    “So all the corporations involved in Extraction & Production these days are surviving on further extensions of credit from the TBTF banks. This also is a paradigm that can’t last.
    The other major problem now surfacing is the Food Distribution problem, and again this is hitting the African countries first and hardest.”
    “The dependency on fossil fuels to keep this supposedly endless cycle of growth going became ever greater each year, all while this resource was being depleted more each year. Eventually, an inflexion point had to be hit, and we have hit it.”

  11. Anonymous on Tue, 27th Jun 2017 10:02 pm 

    Peak oil is not about some sort of careful analysis. It is about anti-FF leftists wishcasting.

    And it is soooo funny watching them get slammed by events. The Oil Drum is dead. HAHAHAHA!

  12. dave thompson on Tue, 27th Jun 2017 11:10 pm 

    Hey Anonymous, fuck you.

  13. makati1 on Tue, 27th Jun 2017 11:31 pm 

    5 billion barrels today. 2 billion tomorrow. 15 next week. $40 oil. $50 oil. $30 oil. The “predictors” don’t have a clue. Roll the dice and write an article. Must be cousins of the economists.

    ALL of the articles are geared to sucker the ‘investors’ to not jump ship while the SS Petroleum is taking on water and listing to the side. After all, what can the oily industry leeches do after oil? Sell pencils on the street corner? LOL

  14. Cloggie on Wed, 28th Jun 2017 1:54 am 

    Peak oil is not a theory. It is an observation.

    Peak conventional oil maybe an observation, but peak oil?

    Peak oil is the date of maximum oil production, after which said production will inevitably decline due to geological constraints.

    Signs are that this date will never occur, for the simple reason that new energy forms will take over. Renewable energy already constitutes that largest share of new installed energy generation capacity and there is no reason this will change in the future.

    If this is true this will mean that we will experience peak oil demand rather than the geological defined peak oil.

    Peak oil is a theory, not an observation. You need new glasses, Harquebus.

  15. Anonymouse on Wed, 28th Jun 2017 4:56 am 

    You are in no position to lecture anyone about what constitutes a ‘theory’ or ‘observation’ clog-fraud. Since your own ‘theories and observations are little more than a grab-bag of whimsical fantasy, opinions dressed up as fact(in your own mind anyhow), goal-post shifting, random assorted nonsense, and little else.

    I suggest sticking to what you do best clog-fraud, shilling for Yahweh.

  16. Anonymous on Wed, 28th Jun 2017 5:41 am 

    The Downfall of Peak Gas Theory

    ““Shale Gas Revolution” is still a teenager. However, the volume of operational and financial evidence demonstrating that natural gas shales “work” is overwhelming at this point. This evidence leaves no doubt, in my view, that North America is well supplied with low-cost natural gas (NYSEARCA:UNG) for at least a decade, and possibly much longer.”

    “During the new technology’s early years, shale skepticism was understandable. However, at this point, “peak gas” and “gas shales do not work” claims have largely moved into the category of conspiracy theories.”

    “As they say, the proof of the pudding is in the eating. Two macro metrics – volumetric growth and market price – speak loudly in support of shale gas having a low cost of supply. Geologic assessments of resources in the ground indicate that this low cost of supply is likely to be sustained over a long period of time.”

    “This remarkable volumetric growth has been accomplished despite a continuous decline in natural gas prices. In fact, since the beginning of 2012, Henry Hub spot price has averaged just $3.18 per MMBtu.”

    “A case can be made that an even lower price will be sufficient going forward to meet demand, as local differentials will contract once adequate takeaway and processing capacity comes in service. In fact, the market appears to agree. The futures curve indicates that natural gas is a “sub-$3/MMBtu commodity” for the next five years.

  17. Cloggie on Wed, 28th Jun 2017 7:06 am 

    You are in no position to lecture anyone about what constitutes a ‘theory’ or ‘observation’ clog-fraud. Since your own ‘theories and observations are little more than a grab-bag of whimsical fantasy, opinions dressed up as fact(in your own mind anyhow), goal-post shifting, random assorted nonsense, and little else.
    I suggest sticking to what you do best clog-fraud, shilling for Yahweh.

    As usual 100% sneer and 0% substance from our diesel trucker, as could be expected from our forum embarrassment.

    Oops, jobs prospects for our diesel trucker ain’t so bright.

  18. Kevin Cobley on Wed, 28th Jun 2017 10:18 am 

    Peak Oil “Theory” is just that, The best explanation of events.Like the Theory of Gravitation, the Theory of Evolution or the Theory of Conversion of Mass to Energy E=MC (squared).
    It doesn’t matter how many people publish articles or post on Blogs attempting to “debunk” Peak Oil.
    The harsh reality is that the supply of Oil is finite, if this finite substance is being consumed over time then the time must come when production is at a peak and then decline sets in.
    Trying to argue otherwise is like trying to argue that 2+2=5. Peak Oil is mathematical certainty.

  19. Cloggie on Wed, 28th Jun 2017 10:30 am 

    Trying to argue otherwise is like trying to argue that 2+2=5. Peak Oil is mathematical certainty.

    Only if there is no alternative, but there is an alternative.

    The way things are going a lot of oil will be left in the ground because nobody bothers to pump it up.

  20. Jerome Purtzer on Wed, 28th Jun 2017 10:32 am 

    Daniel Yergin wrote the seminal tomb “The Prize” and used his derived reputation to become a shill for anyone who will pay him. Every projection from every oil company that I’ve ever seen have Hubbert curves. The only difference is the time of peak. As Rockman has stated many times “the peak oil dynamic at work”. Denial of reality could probably be graphed on a Hubbert curve as well.

  21. GregT on Wed, 28th Jun 2017 11:47 am 

    “Only if there is no alternative, but there is an alternative.”

    Too bad every single one of those “alternatives” requires fossil fuels in it’s resource extraction, refinement, manufacturing, distribution, and maintenance.

    Ignorance is bliss.

  22. Cloggie on Wed, 28th Jun 2017 12:40 pm 

    Too bad every single one of those “alternatives” requires fossil fuels in it’s resource extraction, refinement, manufacturing, distribution, and maintenance.
    Ignorance is bliss.

    We have been through this discussion numerous times before.

    I could of course bite again and ask for that article…

    ah well.

    Whatever floats your collapse boat, Greg.

    The rest of the world has moved on.

  23. Anonymouse on Wed, 28th Jun 2017 6:22 pm 

    The rest of the world has moved on to *where* exactly clog-fraud? While it is clear you moved on to lala-land long ago, the rest of us, have to get by in here in the real world.

    Greg does not have to provide links to articles in order to ‘prove’ to you that renewables, require FF throughout their entire production cycle. It is what is known as a ‘fact’, and it is a self-evident one at that. If anything, since you insist on insisting ‘renweables’ are produced via some other (unspecified), pathway, that means the burden of ‘proof’ is on you, not him or anyone else to show otherwise.

    Prove to us solar panels and windmills are not manufactured using FF. Either do that, or STFU already. Im sure it will be trivial for you to show us windmills being built via matter replicators, zero-point energy, or link a video showing wind turbines and solar panels reproducing themselves via osmosis, or..something.

  24. makati1 on Wed, 28th Jun 2017 8:33 pm 


    You might recognize the author.

  25. Cloggie on Thu, 29th Jun 2017 2:25 am 

    Mak, I know about the totally wrong conviction prevalent here that “renewable energy is an extension of fossil fuel”.

    It is a backward, retarded opinion. Real engineers know it is false. Energy = energy. It doesn’t give a f* if a kwh comes from wind or fossil. You are all

    The whole world is working on the renewable energy transition, but a few dyed-in-the-wool collapseniks here, keen on keeping their collapse world view alive, keep insisting that it won’t work.
    And power consumption on Sunday is not that much lower that during weekdays, contrary to popular uninformed belief. On that Sunday Germany kept producing shitload of cars and other machines, because factories don’t car where kwh’s come from.

    And this is only 2016. We have 34 years left until in 2050 we should have abolished fossil fuel almost completely. It is doable, perhaps even much earlier.

    But this forum was majestically wrong on peak oil and will be on wrong on renewable energy and climate change as well. Because the nihilistic belief in collapse is a mental a priori here. Many here belief in collapse like others believe in the return of Christ. You can’t beat faith.

  26. Davy on Thu, 29th Jun 2017 5:46 am 

    No one here is more delusional with faith than you cloggie. Your techno optimism and climate denial “lite” dismisses necessary pain and suffering. I say necessary because it is in the cards and the longer we delay real sacrifice the more difficult it will be. Your renewables are great and vital to an effort to extend life for many. Renewables will not save the planet from runaway climate change because CO2 is predicament now and more than an energy delivery system. Renewable systems are not going to scrub CO2 out of the atmosphere. Climate change has already gone abrupt and is now in the beginnings of a runaway event. We are lucky planetary events are longer term than human time frames. Many of us here may not see the worst.

    You are delusional on a KW=KW. This is true strictly on paper in the abstract. When you apply energy to human arrangements it is not. Energy systems, vectors, and types vary greatly. Human systems vary and require more or less complexity to their energy reality. As energy varies so will human systems and behaviors. We may be able to incorporate some alternative energy into the modern human system that is global. We will not be able to completely change the mix until attitudes and lifestyles change. A completely alternative energy human global system is just too expensive and complex. The requirements mean very significant behavioral changes. It means expensive ones with orderly change and a population stable and smart. The world population everywhere is going in a different direction. We are dumbing down and becoming less stable and orderly.

    The biggest obstacle is the global economy which is absolutely essential to maintain the high level of economic productivity required to change over such a large energy system at the same time it is supporting existing systems and a growing global population. Global economies of scale with healthy global finance are required to fund this. Global economy is not healthy but is treated as if it will be a stable economic force for this transition. This economy is a given attitude is going to bite your transition efforts in the ass.

    The hard part will be near the very last 30% of a switch over. If this last 30% of fossil fuel is not eliminated it will means fossil fuels will always be the weak link. Peak oil dynamics is only going to worsen. Other collapse dynamics will worsen making an expensive and the dramatic scale of a complete renewable energy transition that much more difficult. There is no completed a blue print yet for transition. Many lose ends still exist even as the transition progresses meaning you are doing trial and error in a situation of pressure. The pressure is from the uncertainty of a global economy and other collapse dynamics. You can’t just take your time to do this it must happen quickly to be a success. Storage and transport are not perfected. There is little to suggest renewables in a renewable civilization can replicate renewables without fossil fuels.

    If think you believe in your heart your small geographic and population area of Northern Europe will do it and become a Byzantium. This is part of the reason for your arrogance. This is just wishful thinking. Your northern Europe is completely reliant on a global system from finance, trade, and resources. Such a place cannot make it at the level it is at within its borders. You complain about faith. You should be looking in the mirror.

  27. makati1 on Thu, 29th Jun 2017 6:57 am 

    Cloggie, collapse is a sure thing. It has nothing to do with faith. It has to do with the decline of net energy resources, debt, and climate change. Christ is fiction. Realty isn’t.

  28. onlooker on Thu, 29th Jun 2017 7:34 am 

    Yes, Clog, it is NOT just PO. it is an array of environmental limits which we are passed and who consequences are only now beginning to fully manifest themselves. The Economy is meaningless without functioning ecosystems. It is also being rendered incapable of meeting the want and needs of 7 plus billion. That is the price we have paid for being short sighted and not realizing or mitigating the effects our ways of living and our rising population was having on the planet and its ability to withstand our impacts. So please let us not just focus on a tree and miss the entire forest.

  29. R.J. Spoley on Thu, 29th Jun 2017 10:36 am 

    Methane Hydrates will supplant the bulk of fossil fuels sooner or later and the devil take the hindmost.

  30. Apneaman on Thu, 29th Jun 2017 11:11 am 

    R.J. Spoley, keep me updated on that eh? Let me know when the first commercial production goes on line. I keep hearing it’s going to be next year, but I been hearing that for 30 years running. A close 2nd to flying cars.

  31. onlooker on Thu, 29th Jun 2017 11:21 am 

    Methane Hydrates RJ? Oh okay but tough to keep an Economy going when your planet has conditions akin to friggin Venus

  32. onlooker on Thu, 29th Jun 2017 11:24 am
    Seismic observation of destabilizing methane hydrate along the continental slope of the eastern United States, following the intrusion of warmer ocean currents, suggests that underwater landslides could release methane. The estimated amount of methane hydrate in this slope is 2.5 gigatonnes (about 0.2% of the amount required to cause the PETM),

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