U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn't predict: It started rising again in 2009, and hasn't stopped, thanks to a leap forward in oil-field technology.Why Peak-Oil Predictions Haven't Come True (WSJ) More Experts Now Believe Technology Will Continue to Unlock New Sources
A century ago, the energy industry found giant new oil fields in Texas and California just as fears spread that oil output had peaked. As production in the U.S. began to decline, other regions picked up the slack: the North Sea, Nigeria and Saudi Arabia. Technical innovations such as using sound waves to locate oil fields through thousands of feet of water and rock spurred a boom in deep-water drilling.
More broadly, peak-oil naysayers argue, the theory looks at the problem in the wrong way—focusing on the physical supply instead of our ingenuity in being able to reach it. "There has to be a finite limit" of oil and gas in buried reserves, says George King, a global technology consultant for Apache Corp. But the constraint on how much oil can be produced isn't geological, he believes: "We face technical and economic limits more than anything else."
[N]aysayers agree that while they don't believe supply limits loom, economic limits remain. When the oil industry overcomes an obstacle and boosts oil production, costs typically increase. That opens the door for a better and cheaper energy source that will eventually displace crude oil. So at some point, the cost of getting more and more oil likely will get so high that buyers can't—or won't—pay.
This is an issue the late petroleum economist Morris Adelman wrestled with. "No mineral, including oil, will ever be exhausted. If and when the cost of finding and extraction goes above the price consumers are willing to pay, the industry will begin to disappear," he wrote in "The Genie out of the Bottle: World Oil Since 1970," a book published in 1995.
Already, economics is bringing about some changes. Despite the abundance of oil that fracking has delivered, global oil prices remain high. This has kept the door wide open for alternative sources of energy and spending on energy efficiency. Natural gas has been grabbing market share from oil for years. A few decades ago, heating oil kept American homes snug; now it's natural gas. And gas is making inroads in transportation—trucks and trains—as are electric cars.
"There will be peak oil, but it will be [because of] peak consumption," says Michael Shellenberger, president of the Breakthrough Institute, an energy and climate think tank in Oakland, Calif. "What we all want is to move to better, cheaper and cleaner sources of energy."
Mr. Shellenberger suspects that oil's long dominance in transportation is weaker than most people suspect. When something better comes along, he says, oil's days are numbered. "We will be leaving a lot of oil in the ground, in the same way we are leaving coal in the ground," he says.
Will high oil costs (which, despite what the article says, is a key component of Peak Oil and always has been) and falling solar costs lead to a gradual transition to solar (and maybe nuclear)? Note even the WSJ is not advocating only oil forever. See the following:
The End of Fracking Is Closer Than You Think (Vice)
How Solar Power Could Become the World's Dominant Energy Source in 35 Years (Vice)
By 2050, the Sun could be the dominant source of electricity for human civilization. Thanks to falling costs, solar power could feasibly overtake fossil fuels as the top energy source in under 35 years. So says the world's top energy agency, the Paris-based IEA, which details the encouraging and fairly radical prospect in an ambitious new report.The WSJ article concludes on a sober note:
The International Energy Agency lays out a roadmap for how photovoltaic panels—the kind on your neighbor's roof—could provide 16 percent of the world's electricity by 2050. Meanwhile, concentrated solar power plants, larger projects designed to reflect large amounts of sunlight onto a single point to drive a heat engine, may generate up to 11 percent.
Combined, that's 27 percent of the planet's power coming from solar—which would be more than coal, wind, hydro, or nuclear. Here's how that world could come to pass, according to the IEA.
"The rapid cost decrease of photovoltaic modules and systems in the last few years has opened new perspectives for using solar energy as a major source of electricity in the coming years and decades," IEA Executive Director Maria van der Hoeven said in Paris at the report's release.
If M. King Hubbert were alive today—he died in 1989—would he admit defeat? Probably not, says Mason Inman, who has written a biography of Mr. Hubbert that will be released next year. He argues that the recent shale boom is just a temporary respite in a long march downward. U.S. oil production could be about to hit a second peak, and then return to its terminal decline. The production boom "makes things better for a while, but it doesn't change the long-term picture," Mr. Inman says.See also:
As for the power of innovation to reach new oil reserves, Mr. Hubbert believed that technology would help extend the limits of oil production, but thought its impact was exaggerated, Mr. Inman says. He felt people would invoke technology as a kind of panacea—which it isn't.
There will eventually be diminishing returns, Mr. Inman says, since oil is a finite resource, even though we don't really know its limits. "He would probably say, 'You guys are crazy to be drilling this so fast and using it up and pretending it's a solution,' " says Mr. Inman.
As Levi explained when I interviewed him last year, his book is actually about two different energy revolutions going on in the United States — each with its own set of supporters. On the one hand, US oil and gas production has been surging since 2005, thanks to hydraulic fracturing and other drilling techniques. But at the same time, alternative energy sources like wind power and electric vehicles had been making surprising advances. Different camps often claim that one or the other technology is the best solution to America's energy and climate woes. Levi's book, meanwhile, focused on how these trends could potentially work together.How the oil and gas boom is changing America (Vox)
Here's Nelder talking about how most articles about Peak Oil completely miss the point and they "comment on the debate about peak oil -- the poor predictions and demagoguing and pollyannish posturing and name-calling, which have, truth be told, tainted both sides of the issue -- but none of them discussed peak oil."In Search of Oil Realism (Resilience)
Nelder continues: "I really didn't think I'd have to say this again, but peak oil is about data, and specifically data about the production rate of oil. If you want to claim that peak oil is dead (or alive), you have to talk about data on production rates. There is no other way to discuss it."
This is the place where Gold's article, and most optimistic articles, falls down. The correct metric for this discussion is rate of oil production, it's not "number of times people were wrong in the past."
Being an optimist in the Peak Oil Debate means that the person believes global oil production will at worst plateau and at best continue to increase steeply.
So that means there are three arguments an optimist can choose from, but they MUST make at least one:
1. Conventional oil production globally, which has been in strong decline for years, will stop declining, level off or begin to increase again.
2. The US tight oil boom will continue to grow at a strong rate and will not peak in the near term (2-3 years).
3. Globally the tight oil boom will follow the US template as other countries begin to mimic US oil growth.