[MonteQuest]

Chris,

I'm going to lock this for now and see if we can get it into the Ask the Experts forum.

MQ

[EnviroEngr]

I'll get to this in a day or two.

[EnviroEngr]

http://www.peakoil.com/post66090.html#66090

[Ayoob_Reloaded]

Please list them in this thread, they will be collated and sent to Lynch.

That is all.

[marek]

Given high oil prices, why are the companies spending money on repurchasing their stock or merging instead of exploring for more oil?

[killJOY]

How many SUVs do you own?

[seahorse]

Ayoob,

The questions are listed in the forum "Open Lynch Challenge."

Killjoy, I own 1 SUV, toyota 4 runner, what do you drive?

[killJOY]

1990 VW Fox, 1980 Honda 650 bike.

Also, to be clear: anyone who can afford to drive an SUV should be permitted to. My question is solely designed to elicit a "money where his mouth is" response.

[MonteQuest]

Moderators note:

We already have a collection area. See here.

Please repost your questions there and I will delete this thread.
MQ
http://peakoil.com/fortopic1176.html

[nero]

My criticism of Michael Lynch's article in the Globe and Mail May 28 2005:

Amherst, Mass. — Since the early Greeks speculated that the Trojan War was started by the gods to reduce overpopulation, many have feared resource scarcity. The obvious finite nature of non-renewable resources such as minerals combined with occasional shortages and an inability to be certain of future supplies has made this a recurring theme in political economy.

The most obvious modern analogy has been the work two centuries ago by Thomas Malthus, who made a simplistic (and incorrect) calculation of growth trends in population and food supply, and continued by Paul Ehrlich, who continually foresees imminent mass starvation.

I do think this is a valid critisism of some PO doomers. However many people who worry about peak oil do not fit into this mold. They may be worried about peak oil but they do not predict a catastrophe. Simmons, Campbell and Aleklett for example are not malthusian doomers. Lynch is implying here that anyone who worries about peak oil is a crazy survivalist nutcase. It's a cheap rhetorical trick to start an opinion piece devoid of facts.

His counterparts in the oil business are no less in error for mistakenly analyzing production and discovery data as representing geological processes without political or economic components, and can thus be as safely extrapolated as the orbits of the planets. This is a part of the long debate that began with Plato and Aristotle over whether numbers hold an inherent truth, independent of physical reality, or if the meaning of the numbers cannot stand alone from what they represent.

I'm impressed with the gumption Lynch shows in calling the people who actually look at the numbers unscientific. He, himself seems to ignore the numbers and does faith based forecasting. Believing fundamentally in the ability of economics and technology to come up with the oil.

As Globe and Mail reporter Barrie McKenna wrote in his cover story on oil last Saturday, M. King Hubbert looked at the numbers and correctly predicted the peak in U.S. oil production.

But Mr. Hubbert incorrectly assumed that falling natural gas demand in the 1980s reflected geological scarcity rather than a response to higher prices.

More recent work has falsely assumed that low discoveries in the Middle East mean a lack of oil in the ground, rather than a lack of drilling activity, which is primarily the result of a large glut of discovered oil fields.

There's actually a "glut of discovered oil fields"? So we don't have to worry right? The fact is that we have been whittling down the number of undeveloped identified oil fields for the past twenty years. Notice how Lynch also ignores the implausible jump in reserves in the OPEC mid-east countries in the 80s. I'm almost convinced that Lynch doesn't understand how a creaming curve works. It plots cumulative reserves versus wildcats, it is time independent and the low rate of exploratory activity in OPEC countries should not be a factor.

Some of these “scientific” analysts graph production and assume a bell curve, seeing an unending decline after any peak, when in fact, countries often peak, decline, then improve their fiscal regime to attract new investment and raise their production again.

In general I agree with Lynch on this point. Sometimes I find Campbell to be too pessimistic in his country forecasts. On the other hand Lynch here ignores the fact that the reaction of countries to local depletion is quite predictable, and when averaged over a large number of countries will again produce a bell curve.

Others fit a curve to discoveries by size, and extrapolate it to an asymptote, mistakenly thinking that discovery size could be gleaned from estimates by geologists, and that sequenced oil discoveries reflect geology, rather than being influenced by political decisions as to where and when drilling will be permitted.

Doesn't that sound like Lynch doesn't understand how to make a creaming curve? I'm again amazed at his disparaging the ability of geologists to estimate discovery sizes.

Though both these approaches often yield what appear to be solid “fits,” they are descriptive rather than predictive. Oil discoveries are much more human-influenced than the orbits of the planets, which can be predicted by simple observation, and efforts to forecast them are doomed to failure as was curve-fitting of the stock market.

Comparison to the stockmarket is falacious. The stock market is unpredictable because if it was predictable there would be a money making opportunity available that would in the end destroy the usefulness of the prediction. That is why stock market predictions are "doomed" to failure. There is no such mechanism in a historic chart of oil discoveries. A much better analogy would be to compare historic oil discoveries with historic fish catches. Each are politically influenced yet when you encounter a declining fishery it is probably safe to assume that it is because the sea is fished out not because the environmental regulations have become too stringent.

The world contains abundant oil resources to meet demand for decades to come, with the amount of drilling historically outside North America a fraction of what the United States and Canada have experienced, and well productivity running 30 to 500 times that seen here.

That is even more optimistic than Exxon or BP or the EIA. Why can Lynch get away with saying this sort of thing without someone calling him on it. Oh that's right because he doesn't claim to be an expert (not even an economist) he simply has Faith.

(This hardly guarantees that it will be available at any given time.) Current warnings about the inability of the market (and industry) to perceive the coming peak are no more credible or scientific than those that led so many — including Canada — astray in the 1970s, when billions were spent on synthetic fuels and frontier drilling; governments negotiated sweetheart contracts with oil-exporting countries; and a thriving industry was devoted to explaining the coming peak in oil production.

<sarcasm>Yep, Canada sure wasted our money developing those Athabasca Tar Sands. We really should have waited until it was economic to develop them. (ie. 5-10 years after the peak in conventional oil) </sarcasm>

The primary development since then in studies of “peak oil” has been the new availability of graphics software that enables unsophisticated analysts — knowledgeable of geology, perhaps, but not statistics — to make and misinterpret graphs. And, of course, the media delights in warnings of catastrophe, because stories about business continuing as usual are hardly news.

Michael C. Lynch is a U.S.-based consultant and is affiliated with MIT.

It's kind of ironic that Lynch who himself has been known to misinterpret a graph or two would say that this is the chief fault of his opponents. In the end I find Lynch only ever backs up his arguments with faith and derision. Faith that economics can handle any problem and derision of anyone who cautions otherwise.

[heyhoser]

That's a very well thought-out and put together critique, Nero. It's good to see other people seeing through the bullshit that's thrown at us.

[EddieB]

Hear, hear. Great job Nero. I had many of the same thoughts but I'm too lazy to type it all out. Great analysis. You should send that critique to the Globe and Mail. Maybe they'd publish it - or an edited version of it.

[bobbyald]

Good work nero, I agree 100%.

I expect in the long run Thomas Malthus will be proved correct, he just didn't consider overshoot.

[mididoctors]

The world contains abundant oil resources to meet demand for decades to come, with the amount of drilling historically outside North America a fraction of what the United States and Canada have experienced, and well productivity running 30 to 500 times that seen here.

what do you think of the observation that well numbers outside the US density wise are no where near as high, thus representing a far from depleted stripper well phase the US is in now?

Boris
london

[Dvanharn]

Michael Lynch seems to me to be simply a more famous and well-paid version of our own faith-based techno/econo proponents here , like the current crop that includes John Denver and BiGG.

As I have repeated many times here, these guys are like the layman who challenged the weather forecaster, and beat him for "accuracy" on forecasting the next days weather by always saying it would be the same as today's weather. However, simple logic says that while his percentage on overall forcasting could be very high, his percentage of predicting change would be zero - far below the weather forecaster's accuracy. Lynch simply says that tomorrow will be like today with respect oil - it will be found and produced when it is needed by the market demand because a higher price will provide the incentive to find and produce it. However, I don't think that there will be a sufficient supply of portable and cheap energy in the near future - at least not enough to keep our debt-ridden fiat money, profit-driven capitalist system going.

I believe that there may be lots of petroleum (rock-oil) left, but our economic system may not be able to handle extracting and processing the nasty sour and heavy oils and tars, and the conversion of coal to oil/gas for future growth needs. And without growth, the economy will collapse (at least the economy on which our "non-negotiable" American lifestyle depends.)

Dave

[Geology_Guy]

I agree-great analysis. Another reason for the greater number of wells drilled in the USA is the early development of the oil business. In the old days before geophysics etc. the drillers just picked a spot and started to drill. Since the US was undeveloped in respect to oil wells they did find a lot of oil, but they also drilled a lot of dry holes.

Oil drilling in a lot of the rest of the world including Saudi Arabia only really picked up after WW2. By then the geophysics guys would say where to drill so there were a lot fewer dry wildcats.

The rest of the world will never reach the well density of the US because they don't need to in order to find their oil. Hence the argument that there is a lot of oil to find outside of the USA because of the relatively low number of oil wells there has little merit.

[mididoctors]

The rest of the world will never reach the well density of the US because they don't need to in order to find their oil. Hence the argument that there is a lot of oil to find outside of the USA because of the relatively low number of oil wells there has little merit.

is that true?

are stripper wells a sign of high intensity exploration or recovery?

Boris
london

[ubercynicmeister]

Yep, so Mr Lynch is of the opinion that: Peak Oil Can't Be Happening Because Even After The Peak, We'll Still Have 40 Years Worth Of Production (yada yada yada, *yawn*).

I can't add much to what Nero has said, except to point out that Malthus was incorrect, but only because he didn't take into consideration "peak energy".

But why should he have? When he was around, the overwhelming majority of "energy" was something either a horse, the wind or a human did. Or a waterfall. The topic never arose, until the 20th century some 300 (?) years later.

Thanks for your post, Nero. It was well reasoned out.

Just one question - given the UNreliability of OPEC "reserve" and "production" data, has this clown (Lynch) stumbled onto something here, in the sense that we should not be trusting the figures?

Mind you, if so, then it makes the case worse for Mr Lynch (I think it's a mister), does it not?

[khebab]

I personaly find Lynch very arrogant, in his presentations he always find a way to say that he did his PhD at MTI consequently he's smarter and more scientific than everybody else. He's an economist so he believes that market will push oil companies to invest in new technologies and stimulates exploration. He does not believe that a natural resource can be depleted because it has never been true in the past.

He does not back up his claims with any numbers or data but rather by destroying the methodology basis followed by Campbell et al. which is a lot more easier.

[JohnDenver]

I do think this is a valid critisism of some PO doomers. However many people who worry about peak oil do not fit into this mold. They may be worried about peak oil but they do not predict a catastrophe. Simmons, Campbell and Aleklett for example are not malthusian doomers. Lynch is implying here that anyone who worries about peak oil is a crazy survivalist nutcase. It's a cheap rhetorical trick to start an opinion piece devoid of facts.

To be fair, I think we should note that the same cheap rhetorical trick is also being used by the doomers -- i.e. in the recent article Neurobiology of mass delusion. The idea being pushed there is that anyone who does not buy into the radical powerdown agenda is a deluded, ignorant, pigheaded nutcase who has been brainwashed by media.

Ideally, we could get beyond these silly skirmishes, and discuss the issues in a mature fashion, acknowledging that there are intelligent, well-informed people on both sides. In fact, I think there is a subset of people here at peakoil.com (such as yourself!) who are doing just that, and it's one of the reasons I like posting/reading here.

Notice how Lynch also ignores the implausible jump in reserves in the OPEC mid-east countries in the 80s.

I think the question of OPEC reserves is still open. While the jump in Saudi reserves (for example) may appear implausible, we don't have any solid proof one way or the other. Both Campbell and Lynch are operating on faith on that point because no hard numbers are available.