The “peak oil” debate: our readers write…

Our July issue featured stories on the widely divergent ways in which Cuba and North Korea have responded to critical oil shortages since the Soviet collapse (a foreshadowing of a reckoning the whole planet will have to face, sooner or later), as well as the South American Regional Infrastructure Integration project (IIRSA). The July Exit Poll was: “Will ‘peak oil’ paralyze world commerce and industry before IIRSA can complete its gridding of the South American continent?” We received three intelligent responses.

Jason Goodrow of New York City writes:

No. As is pointed out in the excellent front page article the effects will be steady and gradual. The poltical effects will be adventuring as usual and falling living standards.

Any resident of a major city should read the stuff about Cuba. Very prescient article.

Bert Golding of Houston, a veteran of the industry, writes:

It’s not Peak Oil, it’s Cheap Oil! There is plenty of hydrocarbon available, and it’s gratifyingly profitable at prices of $50 and above. Perhaps you didn’t notice that Hugo Chavez has asked OPEC to increase his proven reserves to greater than Saudi Arabia’s. It only takes about $35/barrel to make Venezuela’s enormous reserve of heavy oil profitable– if the price holds up, operators will invest a ton of money! Another source- Ten or more billion bucks have already been invested in Canadian oil sands as investors gamble that higher prices will continue. Exxon blew a billion dollars 30 years ago getting organized to produce shale oil in the US, and there is lots of it.
Unfortunately for Exxon, the price collapsed and they folded their tent.

I haven’t noticed that current oil prices have resulted in economic collapse, and I don’t believe they will. I’m amazed that prices have held up, however. My old buddies in Saudi Arabia have well over a million B/D shut in because it’s heavy oil and there is a shortage of refinery capacity able and willing to handle it, especially when the big demand is for gasoline.

The really big problem is actually carbon dioxide buildup and global warming– but that’s not considered part of the same problem! Bert

From Pound McFurious (possibly a pseudonym). We share his suspicion that “peak oil” is an industry scam to justify high prices, even if he loans credence to the loopy theory that oil is of inorganic origin and is not a finite resource:

Have you considered the possibility of the Russian wells?
40,000 feet deep, with unknown (or untold) capacities?
Have you considered the plugged up Iraq wells?
The Prudoe Bay underestimations?
Regenerating Gulf of Mexico offshore wells?
Canada’s Tar Sands?
Venezuela’s enormous fields?

Perhaps this ‘peak’s your interest.
Perhaps peak oil is a PR scam?
No one outside the oil loop will know for sure, but the prices do indicate a fraud slowly coming on the scale of the diamond business.
$100+ a barrel oil sucks for everyone, but with the wealth of information out there, it seems at this stage, that it’s artificial scarcity.
Why is refinery capacity crippled in the U.S.?
Perhaps the oil moguls are using everyone’s fears against them?
Perhaps the environmentalists are being paid off to create hysteria?

I was terrified of peak oil at first, but after deep research, there’s no reason to fear resource depletion in at least 5 generations.
There’s evidence hydrocarbons are created in the mantle of the earth due to high temperatures and prevalance of hydrogen and carbon. There’s also evidence of organic matter mixing with liquid hydrocarbons which have fooled geologists in the past to think it was forests, dinosaurs, etc.
There’s also suppressed geologic data on purported giant sources of hydrocarbons. (which aren’t the best economically, but are becoming very economical considering the price of oil now) (rocky mountain shale for example. a HUGE supply)
Do you really believe there were that many dead dinosaurs in one place, like saudi arabia?
There is reason to fear extortion.

Thanks for the consideration,

See our last post on the struggle for the world’s oil.

  1. Peak Oil
    Worrying about the supply of cheap oil and other hydrocarbons is like worrying about whether there is enough gunpowder in the cartridge in the gun you have pointed at your temple when you are squeezing the trigger.

    I believe that peak oil is real and immediate, but the numbers on the temperature projections that correlate with the concentrations of CO2 in our atmosphere makes me believe that we are committing mass suicide by continuing our massive dependence on high-entropy lifestyles, and exporting those lifestyles to China and India. The major problem is that we are doing diddly-squat to prevent either of the major calamities bearing down on us.

    And if you believe that oil is being created somehow in the “deep hot biosphere”, please share with me why production in the United States has steadily declined since the domestic peak. If it’s real, it’s irrelevant, since we apparently don’t have eons to let it build back up.

    Guess the human race isn’t smart enough to survive.

    Oh, well.


  2. Peak OIl

    (rocky mountain shale for example. a HUGE supply)

    The amount of URR matters less than the amount of oil we can produce on a day-to-day basis in order to satisfy demand. The eventual output from shale and bitumen plays will not even offset the declines in the world’s most prolific oil fields.

    Peak oil is not a PR scam by Big Oil. US oil production peaked decades ago…but I guess that’s just a ‘theory’ put out there by evil corporations and their PR minions. heh.

    Current high prices are due to many factors, none of which are Big Oil shennanigans. My feeling is that the most important factor is the peaking of light sweet crude production. Swing producers began offering heavy sour to buyers in order to ease the tight supply/demand balance. Most refineries sneer at heavy sour crude, they want the premium stuff. Hence refinery bottlenecks.

    The peaking of light sweet crude is a signpost on the way to the global peak of all liquids. But too many people, like McFurious, refuse to see it and instead bury their heads in the oil sands.

    So it goes…

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