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We are saved! 

  • "Leonardo Maugeri, a fellow in the Geopolitics of Energy Project at the Kennedy School’s Belfer Center for Science and International Affairs—and a long-time critic of Peak Oil analysis—has just published a new report, "Oil: The Next Revolution," in which he forecasts a sharp increase in world oil production capacity and the risk of an oil price collapse." 

Though ‘conventional’ oil may be running out, there’s plenty of ‘unconventional’ oil to take its place, i.e. deep-sea oil fields, tar sands, shale oil, etc. Production of all of these things is on the up – much of it in friendly countries like Canada and the US.

So can we add ‘Peak Oil’ theory to all those other predictions of doom that haven’t quite come to pass, e.g. the Millennium Bug, the avian ’flu epidemic and that new ice age they used to talk about in the 1970s?

The trouble is that for every dodgy prediction of doom, there’s an equally dodgy prediction of boom. For instance, whatever happened to those Space Age lifestyles we were supposed to be living by now? The new iPad is very nice and everything, but it’s not exactly a personal jetpack, is it? And what about all that lovely nuclear power? It’ll soon be too cheap to meter, they said – but, in fact, it got more, not less, expensive. One might also mention the vast sums of money that were staked, until recently, on the idea of a never-ending boom in property values, share prices and the magical ability of the Greek government to defy economic reality.

Thus when it comes to any notion of a boom in unconventional oil production, a reality check is surely in order – supplied here by Richard Heinberg – a noted pessimist on these matters: 

  • "…there are a few observations that no serious energy analyst can dispute. Oil exploration and production costs are skyrocketing (Bernstein Research estimates that this year the industry needs prices in the range of $100 a barrel to justify new projects)." 

So, yes, we can have as much unconventional oil as we like, as long as we pay a recession-inducing price for it.

Also, when the boom-sayers quote figures at you, check to see whether they’re talking about actual energy content or mere volume: 

  • "…some of the fuels (ethanol, natural gas liquids) counted… in the ‘all liquids’ category have significantly lower energy content per unit of volume than regular crude oil; thus an increase in barrels-per-day of "all liquids" does not necessarily mean an increase in the amount of energy delivered to society." 

The same goes for the difference between gross and net energy production: 

  • "…all the unconventional liquid fuels (including biofuels, tar sands, and "tight" oil) offer a low energy return on the energy invested in producing them. Therefore, even if the number of barrels of liquid fuels delivered to market is still gradually increasing, the amount of useful net energy being made available by the petroleum and biofuels industries, when energy costs are accounted for, is probably already declining." 

Finally, if you have to import your energy, remember that energy production isn’t the same thing as energy availability: 

  • "…available global crude exports are declining rapidly as producing nations use more of their oil domestically—leaving less each year for importing nations like the US, Europe, and China…" 

In the end, the best guide to these matters is not Mr Heinberg, nor Mr Maugeri, but the Danish physicist Neils Bohr, who once said: "Prediction is very difficult, especially about the future."

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