Response to 'Peak Oil' Critics (the hydrocarbon age is still young: plan accordingly)
[Editor note: Mr. Lynch's op-ed in the New York Times last week stirred a good deal of comment and disagreement from "peak oil" proponents. His response is here]
The publication of my op-ed on peak oil in the New York Times brought forth the usual tidal wave of criticism. The Oil Drum went so far as to put up a separate page for comments, and Joseph Romm issued a ‘challenge’ to me to wager on oil prices. (For an executed bet coming due next year, see the appendix below.)
Responding to each and every comment, or even the main ones, would be a Herculean (and Sisyphean) task, so I will (here) make some hopefully useful observations.
First, I apologize to Fatih Birol for lumping him in with the peak oil advocates. He is pessimistic about supply, as are many others, without being in the ‘peak oil’ camp, and he informs me that the widely-cited Guardian interview misrepresented his views.
Second, many comments bordered on the bizarre, to the point where a number of my friends—who are not acquainted with oil—found them so. (Just as an example, I was not director of the Center for International Studies, nor am I currently employed by M.I.T.)
Third, readers should understand that an op-ed piece is intended to express opinions, it is not a research piece, thus it was not loaded with facts and citations. The Times was kind enough to give me much more space than usual (hey, it’s August), but even so it would take an entire book to address most of these issues in detail.
The intellectual tradition behind resource expansionism (versus the fixity/depletion view) is a rich one, calling to mind such names as M. A. Adelman and Julian Simon. An overview of this theory, and its rich intellectual history, is provided by Robert L. Bradley Jr. in Resourceship: An Austrian Theory of Mineral Resources (28 pages).
Fourth, the ad hominem attacks should be taken as evidence of the poverty of the arguments (in those cases), as has been pointed out repeatedly by observers of scientific debate. (See Michael Shermer, of The Skeptical Inquirer, Why People Believe Weird Things, for instance.)
Also, why I should be considered a ‘shill’ for the industry is unclear, especially given ‘the industry’ is hardly monolithic on this subject. (I think it was Susie Essman, the comedian, talking about how the Jews supposedly caused 9/11, commented that ‘she must have missed that meeting’.) One might also ask why the industry, if it ‘knew’ that oil was becoming scarce, would want to argue the opposite point of view. Wouldn’t they call for financial assistance, rationalize higher prices as being necessary, etc.? Wouldn’t the Saudis, if they really were having the supposed problems producing oil, want the world to recognize it, and thus accept higher prices?
Fifth, many of the comments support my op-ed contention that the peak oil community is full of neophytes–hobbyists who have read something about the subject and usually accepted it uncritically. In fact, many seem much less familiar with peak oil writings than I am.
For example, the first post on the thread on the Oil Drum says right up front: “Peak Oil has never been about the amount of hydrocarbon molecules that exist, but flow rates, timing and costs.” The beginning of the current round of the debate was in the 1990s, when Colin Campbell and Jean Laherrere asserted that there were only two trillion barrels, and when half had been produced (which was imminent), production would peak.
Sixth, it is discouraging that a number seem to confuse total resources with proved reserves, which demonstrates either their ignorance of the industry jargon or poor reading skills. It also indicates the degree to which bloggers and blogging is differentiated from spouting off the top of your head and making well-reasoned arguments.
Seventh, a number of bloggers (including Romm), have noted my past forecasting record, focusing only on price forecasts, and especially the well-known fact that in the past few years, during the recent oil price bubble, I have repeatedly predicted that prices would in fact return towards the mean. It took longer than I expected, partly because of the Nigerian unrest and damage from Katrina and Rita, but even ignoring that there are several problems with this argument:
The peak oil community tends to focus on price forecasting not supply forecasting, because prices are much more unpredictable, subject to both political and psychological factors (including ‘momentum trading’ the bubbles’ favorite). They are also, once again, ignoring context. The vast majority of analysts did not predict that prices would reach the $147 level, and they are largely using hindsight in their criticisms.
They also conveniently ignore their own record(s). One critic of mine, Chris Nelder, tops them all, criticizing me for having prematurely predicted a decline in oil prices. But to quote him from last July 28, just before the price collapsed, “Oil now dropping to $70? ‘Keep dreaming.’” He did predict $500 oil with a global depression.
Appendix: A 2010 Oil Wager
My colleague Rob Bradley and New York Times writer John Tierney (split with Rita Simon, the wife of the late Julian Simon) do have a wager on the future price of oil. Several years ago, they persuaded Matthew R. Simmons, author of Twilight in the Desert, to bet that the daily price of West Texas Intermediate would average more than $200 per barrel in 2010. The bet starts in just four months, so it looks like short of a hyperinflation (wait–Tierney bet in real terms; Bradley did not), Mr. Simmons will very likely owe Tierney/Simon $5,000 and treat Bradley to a nice dinner party for 100. (The loser however, gets to invite 25 guests.)
The settlement would be in early 2011, but the winner might be known to have a holiday-season party next year.