Oil economist denies peak oil 14

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1. 

   GreenEngineer Posted 3:48 am
   02 Oct 2008

   BizarreHow is it that someone who is a leader in the industry still does not understand what peak oil actually means.
   All together now:  Peak oil IS NOT ABOUT RUNNING OUT OF OIL!!!
   It is about the possible rate of oil extraction.  That is partly a function of price, but not exclusively.  Geology and geopolitics play at least as big a role.
   Peak oil is the point of maximum worldwide production.  "Peak lite", which is a much more immediate concern, is the point at which the worldwide demand consistently exceeds supply, even if supply is still growing.
   The distinction, I'll grant you, is not totally obvious, but neither is it fundamentally hard to understand.  How is it that people who's entire (very well paid) job is to understand these things, fail to do so?  I really don't get it.
   
   

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2. 

   Russ Posted 4:16 am
   02 Oct 2008

   Price and energy descentWhat a silly circular quote.
   "You'll always be able to pay the financial price if you're willing, and you'll always be willing to pay the price the market is able to provide."
   (I have no doubt he's willing to pay any environmental price.)
   ..there will never be a moment when the world runs out of oil because there will always be a price at which the last drop of oil can clear the market...
   Unless they're thinking of using slave labor (which I don't put past them), there certainly will come a level of cost where the exploration to find that next patch of ever-heavier crude; extraction and refinement of those ever-more fleeting "last drops" of it; not to mention whatever military resources will be needed to secure whatever far-flung logistics are necessary, will dictate a price no one can pay.

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3. 

   KenG Posted 4:21 am
   02 Oct 2008

   Who is confused?Given that we only have a quote pulled out of thin air, I can't figure out whether Mr. Ruhl or Mr. Roberts doesn't understand peak oil. I see no indication that Ruhl is even talking about peak oil.

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4. 

   GreenEngineer Posted 4:38 am
   02 Oct 2008

   Good pointYeah, that's a good point.  Ruhl does say he's talking about "running out of oil"; I assumed that DR found that quote in the context of a discussion on peak oil, but that may not have been a good assumption.  (DR, can you give us some context to work with?)
   At any rate, Ruhl should understand that the meaningful issue is not running out of oil.  As he says, that will never happen in any literal, physical sense.  The fact that he's focusing on that non-issue, rather than the actual issue of supply rate vs. demand rate, suggests to me that he is more interested in obscuring than clarifying the subject.  But as you say, the quote is out of context.

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5. 

   Earl Killian Posted 7:41 am
   02 Oct 2008

   there will be a moment we stop pumping petroleumA different way to look at it is appropriate, IMO.  At some point we will stop pumping crude from the ground because either (1) there is no use for the crude anymore, or (2) pumping it from the ground is more expensive than synthesizing it from CO2 and wind/sunlight. There will still be crude in the ground when either #1 or #2 happens; we will simply leave it there.
   For example, wind/sunlight can make gasoline for about $8/gallon. When gasoline reaches $12/gallon, demand will already be down a lot, but some company will still decide to build the wind/sunlight to gasoline plants to sell it at $10/gallon instead, and thereby start shutting down uncompetitive crude oil production.

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6. 

   GreenEngineer Posted 7:52 am
   02 Oct 2008

   how's that?For example, wind/sunlight can make gasoline for about $8/gallon
   Details please?
   
   

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7. 

   Bart Anderson Posted 7:54 am
   02 Oct 2008

   Here's the source of the quoteThe article from which this quote comes is at Euractiv: Interview with Christof Rühl, chief economist at oil giant BP.  
   He does deny peak oil, saying: Physical peak oil, which I have no reason to accept as a valid statement either on theoretical, scientific or ideological grounds, would be insensitive to prices. In fact the whole hypothesis of peak oil - which is that there is a certain amount of oil in the ground, consumed at a certain rate, and then it's finished - does not react to anything.
   Whereas we believe that whatever can be turned into oil strongly depends on technology and technology depends on prices as well.
   
   This is a familiar talking point from oil companies.
   The oil companies have a sophisticated PR strategy for dealing with peak oil. On the one hand, they agree that "the era of cheap oil is over."  However, they add that the apparent peak is due to "above ground factors" which means that oil-producing nations are asserting control over their oil resources.
   What the oil companies do not do is engage with the technical discussions about oil depletion, for example with ASPO or The Oil Drum. I assume this is because they know that they would lose the argument.
   
   Bart
   
   
   Energy Bulletin

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8. 

   greentiger Posted 9:26 am
   02 Oct 2008

   I don't see the real beef here...From Bart's expanded quote it's pretty clear the guy is (admittedly so) a non-believer in peak oil.  His analysis of what it represents, however, seems pretty close to the truth.
   It seems to me that he is saying that
   "Whereas we believe that whatever can be turned into oil strongly depends on technology and technology depends on prices as well."
   Is an implication that they believe they can sell petroleum to meet any market demand (this is obviously false in an absolute, infinite demand scenario, but may be true for 'reasonable' demands).  In other words he believes there's plenty of shale/tar sands/ whatever they could be processing--at some financial and environmental expense--in addition to the types of synthetic technologies Earl alluded to (I'm also interested in what that pathway is, but figure it's probably only carbon-limited in terms of starting materials).
   I see no factual errors here (and I also found Dave's quote to be really out of context), but I agree with Bart; regardless of truth, I think he's giving an academic answer to a question that deals with very real practical problems (very expensive petroleum).  The biggest 'real world result' is that petroleum will be abandoned as a fuel source specifically because of the large $/env. costs he mentions.

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9. 

   GreenEngineer Posted 9:43 am
   02 Oct 2008

   he's also misrepresenting "peak oil"He says peak oil is the idea "that there is a certain amount of oil in the ground, consumed at a certain rate, and then it's finished".  He's wrong, plain and simple.  Peak oil is about production rate, which is not a fixed value, and it's not about running out.
   Generally I try not to ascribe to malice what can adequately be explained by stupidity.  But given this guy's position in the industry, the level of stupidity required for him to say this sincerely is much greater and less plausible than the level of malice/greed required for him to intentionally muddy the waters.
   This is denialist technique #1: Misrepresent your opponent's position, then deny it.

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10. 

    Biodiversivist Posted 12:38 pm
    02 Oct 2008

    GreenE has it right
    
    In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

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11. 

    brublr Posted 1:56 pm
    02 Oct 2008

    Here's an interesting sitehttp://gas2.org/2008/04/25/could-we-grow-100000-gallons-o ...
    The vertical bio-reactor described here is a possibility this string of posts may already know about, but is worth looking into if not

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12. 

    David Roberts Posted 6:42 pm
    02 Oct 2008

    Yeargh,My bad, folks -- it's standard practice to link to the source from quotes like this. I just spaced it this time for some reason. I've added the link now (and thanks, Bart, for jumping in).
    I did have a bit of a quandary picking out which part and how much to excerpt, but I think the quote gets to the nut of his point pretty well. The point itself is fairly trivially true -- for any commodity x, there will always be more of x available at some economic and environmental price -- but as GreenE says, he's willfully misinterpreting the concerns about peak oil.
    
    grist.org

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13. 

    amazingdrx Posted 12:22 am
    03 Oct 2008

    Facts?"Because proved reserves are defined in terms of the amount of oil that you can get out of the ground with current technologies and at current prices. So if prices have increased as they have in the last few years, then reserve numbers should have increased in tandem - and they didn't because most countries were slow to adapt to new reporting."
    Scientific truth gets no respect at all when market players are in charge of the "science".  This amounts to tautological (un)reasoning.  A circular definition of the term "oil reserves".
    "There is no resource constraint at the moment for oil. There is enough oil if you're willing to accept the costs - including the environmental costs for sources like tar sands."
    More circularity, suitable for the nearest circular file.  After this point in the interview, it seems to devolve into standard economist gibberish.  Why would anyone even look to economists for any sort of reliable information at this point?  Especially corporate economists.
    Only Krugman and Reich have admitted market regulation needs to be restored.  Any economist that has not by now come out publicly and admitted this does not deserve any credibility.  
    Standard "free" marketeerian economists (the vast majority) do not even deserve the primitive superstitious level of credibility economists have come to expect, because of the total lack of any predictive efficacy of their theories.
    Tautological arguments say nothing about the real world, they only manipulate the terminology in a closed system of thought.
    
    http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

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14. 

    amazingdrx Posted 1:18 am
    03 Oct 2008

    A better explanationDuuuhbya has said, "We (the US) do not torture."
    By defining torture to skirt the practices, like water boarding, that he allows, he claims the statement is true.
    But "Mr. President", we might ask.
    "What about cases where water boarding did kill a victim?"
    "Well that was an accident, not sanctioned by this administration.  Accidents happen in war."
    So McCain or an oil company economist says, "There is plenty of oil, drill baby drill".
    We might ask, "Why then do reserve estimates and consumption increase firgures indicate we are using it up?"
    "Oh those reserve estimates don't tell the whole story, they leave out all the harder to process sources like tar sands, shale oil, and coal to oil."
    "We do not torture", and "There is plenty of oil."
    Is that clear now?  Well it is to joe and jolene 12 pack on main street.  As clear as anything the GOP faithfilled ever believe.
    Keep on guzzling that happy happy, exxonmob joy juice, and drinking your GOP koolaide. (thanks to Al Capp, "Ren and Stimpy", and Jim Jones)
    
    http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

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