Re: Energy Policy / Junk Science Environmentalism

From: Al Koop <>
Date: Mon Dec 26 2005 - 00:01:06 EST

DW: Recent news reports say Saudi Arabia is willing and able (if necessary) to raise its production significantly, by from one to 3 million barrels a day, as I recall. Glenn and others question whether they can do it. Probably no one knows for sure, but it's clear that someone at a fairly high level in the business over there believes they can. Can other major producers also raise output? Glenn believes Kuwait and (I think) also Mexico won't be able to, but there are several others. I suspect Iraq will be able to if and when the country stabilizes. Maybe also Iran and Russia. Chevron's CEO expects his company to raise output by half a million barrels a day by 2008; and from what I've heard, Exxon is also optimistic in this respect. Much of this adds up to a possibility, at least, that the supply crunch will come later rather than sooner. A lot, of course, depends on how rapidly production declines among those who are unable to raise it.
AK: It would be great if it were all the petroleum engineers and geologists that were predicting more oil production as opposed to the top executives. I haven't found any evidence and data that can be used to justify their predictions. ASPO puts out fairly detailed estimates of oil production for each of 40 countries or so. I would like to see Chevron or Exxon put out a similar report with their version of oil production for comparison. All I can find are sweeping statements that tell us not to worry and that oil reserves are increasing. If I remember correctly, 33 of the top 48 oil producing countries are now in declining production. Most optimistic reports indicate places where new fields have been found and new fields are being brought online, but they devote almost no space to specific estimates of the rate of decline. We need not only to find new fields to meet the increasing demands of a growing population and of growing development in places like China and Ind!
ia, we need to replace the loss of oil production in these 33 countries on top of that. Show me more than 3 sentences from some top executives describing a rosy scenario.

DW: Only time will tell whether these countries/companies can do what they claim. But what does this say about prophecies of imminent doom? While it's fairly urgent for people to start working on alternatives to hydrocarbons, it might be best to soft pedal the prophecies of doom lest they lose credibility if and when the Saudis (and others) come to the rescue and the world continues to sail on with higher prices and therefore somewhat curtailed demand but otherwise pretty much unaffected. On the other hand, if the countries/companies come up short, the doomsayers will gain credibility.

AK: What do you mean by imminent doom? Granted some people argue the peak has already hit, but I think most of those who are concerned think that it will happen sometime within the next 10 years--is that imminent enough? Since you agree that it is urgent that we begin working on alternatives, how are we going to make it clear that working hard on alternative energy sources now is the only prudent thing we can do, and it may already be too late to avoid a severe economic downturn from dropping oil reserves. How do we convince the general public that we have to start ramping up the supply of alternative energy resources immediately if we have top executives telling us not to worry for decades?
DW: Price of oil from unconventional sources depends strongly on what source you're talking about. In some cases production costs are insensitive to the price of oil. The very fact that companies seriously ramp up production in many plays (e.g., tar sands, heavy oil) when prices rise is proof that high product prices increase both profits and production. Throughout the oil industry there are examples of additional production resulting from higher product prices. On the other hand, some alternatives--e.g., hydrogen and ethanol--may never be truly cost-effective. (I'm skeptical that they'll ever be able to make a profit on oil from shale with prices at $30 per barrel, as your Web reference says; but at least this time they aren't talking about freezing the rock around heated wells!)
AK: Sure the tar sands are a source, but I think the production is now about 1 million barrels a day and they hope to increase that to 2 million barrels a day by 2010. The question is how fast this oil product can be produced even if there are 1 trillion barrels there. A second question relates to the amount of environmental damage this method causes. A third question is whether all the natural resources needed will be available to increase production. I think there are serious questions whether the currently known methods of obtaining energy will be sufficient to meet the world's needs in the near future. The uncertainties are such that no one can honestly claim that we are in good shape.

I do not think that anybody out there can assure the world that our energy needs will be covered over the next 20 years. It isn't a sure thing that we have the technology and resources to increase supplies if only we have the will. I won't rule out some breakthroughs and some new discoveries that possibly could bail us out for a generation or so, but I don't think anyone knows now what these breakthroughs might be, and I don't think we have enough good reasons to expect that they have more than a minor chance of happening.

Finally, I think we pretty much agree that there is a problem. What bothers me is that it seems that if someone can establish that a tiny bit of doubt exists for a situation, many among the general public then take the view that any contrary position is equally valid. I therefore see almost no possibility that we will take up any long term planning to alleviate future energy problems. Only when there is a crisis will any significant action be taken, and then it will be too late for a soft landing. Unless somebody makes a great breakthrough using the meager resources now devoted to alternative energy, we will experience some pretty severe consequences.
Received on Mon Dec 26 00:06:41 2005

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