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Category — Yergin, Daniel (CERA)

The Great Energy Resource Debate (Part I: Peak Oil was … is here!)

[Editor note: The posts in this series are The Great Energy Resource Debate (Part II: Neo-Malthusian Alarmism) and The Great Energy Resource Debate (Part III: Pessimists Turn Optimistic!). Part IV will look at the theoretical case for resource expansionism in light of the preceding posts.]

“It is clear that domestic [U.S.] oil, gas, coal, and nuclear cannot deliver vastly increased supplies, although it is equally clear that these sources cannot be ignored.”

- Robert Stobaugh and Daniel Yergin, “Conclusion: Toward a Balanced Energy Program,” in Stobaugh and Yergin, eds., Energy Future (New York: Random House, 1979), p. 216.

“The gas lines and rapid increases in oil prices during the first half of 1979 are but symptoms of the underlying oil supply problem—that is, the world can no longer count on increases in oil production to meet its energy needs.”

- U.S. Central Intelligence Agency, The World Oil Market in the Years Ahead (August 1979) p. iii.

From the beginning of the U.S. oil industry in the mid-nineteenth century, warnings have  heard from intellectuals, industry experts, politicians, industry practitioners, pundits, and novices alike that that oil (and natural gas) were physically in decline.

How many times have we heard ‘the easy oil is gone’ … ‘the low-cost oil has been found’ …. ‘the big fields are discovered’ … ‘costs and therefor prices must go up’ ….?

But the reality has been quite the opposite, particularly under free market conditions where resourceship (entrepreneurship applied to mineral resources) could reign.

This series on the great energy resource debate begins with a series of quotations from the beginning of the industry in the 1850s through the 1970s. Readers are invited to add other quotations as comments to further add to this collection.

I. Pre-1900 Pronouncements

“Hurry, before this wonderful product is depleted from Nature’s laboratory!”

- Advertisement for “Kier’s Rock Oil”, 1855, quoted in Edward Porter, Are We Running Out of Oil? American Petroleum Institute Discussion Paper #081, December 1995, p. 1.

“I take this opportunity to express my opinion in the strongest terms, that the amazing exhibition of oil which has characterized the last twenty years, and will probably characterize the next ten or twenty years, is nevertheless, not only geologically but historically, a temporary and vanishing phenomenon—one which young men will live to see come to its natural end.”

- Professor J.P. Lesley, State Geologist of Pennsylvania, 1886, quoted in Paul Giddens, Standard Oil Company (Indiana): Oil Pioneer of the Middle West (New York: Appleton-Century-Crofts, 1955), p. 2.

II: Pre-1970 Pronouncements

“We have anthracite coal for but 50 years, and bituminous coal for less than 2000. Our supplies of iron ore, mineral oil, and natural gas are being rapidly depleted, and many of the great fields are already exhausted.”

- Gifford Pinchot, “The Fight for Conservation,” 1906, quoted in Edward Porter, Are We Running Out of Oil? American Petroleum Institute Discussion Paper #081, December. 1995, p. 7.

“I’m sorry for you—coming to Texas [in 1915] to look for oil. Don’t you know there is no oil in Texas?!”

- Wallace Pratt, Consultant, “Oil Finding—the Way it Was,” Petroleum 2000 Issue, Oil & Gas Journal, August 1977, p. 144.

“The peak of [U.S.] production will soon be passed—possibly within three years.”

- David White, Chief Geologist, United States Geological Service, 1919, quoted in Edward Porter, Are We Running Out of Oil? American Petroleum Institute Discussion Paper #081, December 1995, p. 1. [Read more →]

May 12, 2011   8 Comments

Obama’s Offshore Drilling Misdirection (Say What, Daniel Yergin?)

“[The plan] is a sign to the industry that the Obama administration is serious about exploration.”

- Daniel Yergin, chairman, IHS-CERA, quoted in Jennifer Dlouhy, “Offshore Plan Wins Few Raves,” Houston Chronicle, April 1, 2010.

The subtitle to Ms. Dlouhy’s piece was “Environmental groups and GOP are critical, while oil patch is wary.” Pouring over the 300 comments on this article, Chronicle readers know a bait-and-switch and Trojan Horse when they see it (energy-savvy Houston, after all). Maybe some of these same readers fear what I do: a wishy-washy editorial from the Chronicle on how Obama’s drilling plan is a ‘good beginning’ and ‘reasonable compromise’.

Now to Dr. Yergin, the industry expert and author who seemed to have come a long way from Energy Future (1979)  to The Commanding Heights (1998). And to his credit, Yergin has been very good on the “peak oil” issue, bringing into play a lot more knowledge and facts than possessed by the peak-oil community (including Matthew Simmons). (Our Michael Lynch has blogged regularly on this issue at MasterResource and is still waiting for acceptance of a related bet with the slippery Joe Romm of ClimateProgress.)

Yergin and Political Correctness

Yergin, however, has always been very politically correct when it comes to the company in power (Enron) or the government in power (Obama). He is an influence- and profit-maximizer, in the final analysis, and sometimes that can interfere with the intellectual side of things.

I remember from my Enron days how CERA was making money off of its climate consulting services where alarmism and policy activism were not to be questioned. (I participated in their conference calls.) The annual CERA conference–easily the most important event of the year for the energy industry–would feature alarmists and influence peddlers (such as Eileen Claussen of the Pew Center on Global Climate Change) but nary a skeptic.

CERA, in fact, has never hosted a debate on climate science in front of an energy audience eager to know. I cannot recall a representative from a free-market think tank (Cato, CEI, IER, etc.) ever addressing the CERA throngs. This does not speak well for Yergin intellectually or as a trusted consultant. Truth bats last in public policy.

Returning to the opening quotation of this post and Obama’s drilling plan: It is possible that Dr. Yergin was quoted out of context. That can happen in interviews where a lot is said and the reporter grabs a sentence to complete the spectrum of views.

But if this is what Yergin meant, then I have another data point of the esteemed energy analyst and author being way too middling and politically correct for my taste.

 Obama’s Step Back–The Facts

The real story of Obama’s new offshore drilling has come out from the “Facts & Maps on Obama Administration’s Plan to Lock Up the OCS” released by the House Natural Resources Committee Republican Press Office. Compared to the status quo, Obama’s plan is a clear step back from a pro-resource strategy for oil and gas.

Here are the facts–and illustrative maps in that release. [Read more →]

April 2, 2010   6 Comments