Crucial Differences Between "Peak Oil" & "Peak Oil Debate"  

Posted by Big Gav in ,

D Ray Long of ASPO USA has a post on one of the reactions to the impending demise of The Oil Drum - A Buzzfeed Attack On Peak Oil Deserves A Buzzfeed Response. He also has some follow up pieces - Crucial Differences Between "Peak Oil" & "Peak Oil Debate" - Part 1 and Crucial Differences Between "Peak Oil" & "Peak Oil Debate" - Part 2.

"Mentions of “peak oil” in news publications peaked between July 2007 and July 2008, according to Nexis" and "Web search interest in “peak oil” peaked in August 2005 and spiked again in May 2008."

I spoke on this a little before, but I continue to be amazed by how many very smart people just don't understand how silly they look when they use THIS as evidence of Peak Oil's demise.

If "internet popularity" was the true measure of importance, we'd have given the keys of the world to Justin Bieber a long time ago. And if you looked at how many people were talking and writing about terrorism in August of 2001, those guys would probably conclude that topic peaked forever in the early '90s.

I'm shocked I have to keep repeating this, but "We judge Peak Oil by oil production rates, if you're looking at anything else, you're doing it wrong."

"Oil prices also peaked around then, hitting $145 per barrel in July 2008."

It's like Zeitlin forgets to include the second half of that sentence. His own chart shows that oil hit $145, retreated, and then resumed its march back up. RIGHT NOW as people are falling over themselves proclaiming the death of Peak Oil, oil is back in the triple digits and at 15-month highs. Over the past decade-plus, the price of oil has more than tripled.

Peak Oil can never really die, because oil is a finite resource and any finite resource peaks in production. But you can kill it in the court of public opinion, and for that to happen you'd need two things:

1) You need daily production rates to continue to skyrocket, leaving far behind any peaks of the past. But you also need something more difficult.

2) You need what AEI's James Pethokoukis called the "wonder-working power of technological innovation" to actually reduce oil prices, much like Moore's Law for computers has made memory cheaper year after year. If you're in a production boom, but you then have to turn around and tell the people of the economy that they'll have to keep paying a larger share of their income for gasoline... is that really a net win?

In oil production, you access the easy and cheap oil first, then move on to the more difficult and more expensive oil later when prices allow. That's why conventional crude oil production has already peaked, and the only thing keeping total oil production from declining are gains from much more expensive unconventional sources.

Anyone seriously telling people that Peak Oil is dead, really needs to have a strong answer when regular people ask why prices are still so high.

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