Peak Oil

Examining Environmental Claims and Their Costs • January 2007

“Members of Seattle Peak Oil Awareness expect world production of oil and gasoline to peak soon, if it hasn’t already, and hard times to follow. ... ‘You can look at it like a black box,’ said Willson, a foosball-table seller who has taken up gardening. ‘The oil goes in and creates people. When the oil gets cut off, the people go away.’ ”
Andrew Garber, The Seattle Times, “Seattle ‘peak-oilers’ prepare for a world without petroleum,” January 2, 2007

Facts

Predictions of chaos due to resource depletion are not new and they are repeatedly the foundation of environmental calls for new restrictions, new government agencies and new spending on programs to avoid the predicted catastrophe.

Peak oil advocates argue that we are at or rapidly approaching the beginning of a long decline in
oil production, having reached the “peak” of oil resources. Combined with the increase in oil use,
some in the peak oil community are predicting dramatic consequences.

These predictions, however, don’t match the facts. Known world oil reserves are increasing, and
if oil becomes more scarce, and price increases, consumers and businesses will move to other
types of energy.

When Will Oil Run Out?

In The Seattle Times article that catalogues the concerns of peak oilers, the group predicts that catastrophe is in the near future. But such predictions have been made repeatedly. Bjorn Lomborg
quotes E magazine from 2000:

“Here’s the scenario: Sticker shock at the gas pumps, with prices nearly doubling overnight.
Long lines at the few stations that are open. Crude cardboard signs reading “out of gas” blocking incoming traffic at the ones that are closed. Huge sales on “full sized” vehicles. Long waiting lists for econoboxes. Ninteen seventy-three? How about 2007?”

This is not the only example. The best examples are the predictions of environmental icon Paul
Ehrlich, who said in the 1970s that oil would run out in 1992. In 1992, Ehrlich published a new
book, saying that oil will be gone in 2031.

Such predictions have routinely missed the mark. Erhlich was the doomsayer who entered into a famous bet with economist Julian Simon in 1980. Erhlich said growing resource scarcity would
increase the price of five basic metals in ten years. Simon said innovation would cause their
price to fall. Simon won the bet. Ten years later the price of all five metals were below their
1980 level. Tin, for example, fell from $8.72 a pound in 1980 to $3.88 a pound in 1990.

Claim

Seattle Peak Oilers: World To End Soon -- And This Time We Mean It
1 E Magazine quoted in Bjorn Lomborg, The Skeptical Environmentalist (Cambridge, UK: Cambridge University
Press) 2004, p 118.

None of these predictions, however, take into account the growth of technology, both in exploration and efficiency.

According to the Energy Information Administration, proved world crude oil reserves have
risen from 645 billion barrels in 1980, to 1,002 billion barrels in 1990 and to 1,317 billion barrels
today.2 At each point when environmental activists have claimed that the downturn was just
around the corner, world oil reserves defied predictions and continued to increase.

The reason is simple: as oil exploration technology improves, previously unusable or undiscovered resources are found.

Peak oilers, however, say that the “peak,” i.e. the time when reserves begin to decrease, is in the near future. Certainly they are correct that a peak will theoretically occur at some point. Given that reserves are increasing, even in the face of increased demand, the argument that declines are in our near future is no more persuasive today than it was 10, 20 or 30 years ago.

Other environmentalists, in fact, contradict the peak oilers. Groups opposed to drillng in ANWR
do so in part because they fear that increased supply will mean a continued supply of carbon
emissions that impact climate change. Some environmental groups actually argue that the worldwide supply of oil is so great that ANWR would make only a small difference in price.

Even if the peak oilers were right, however, the solution lies not in government programs, but in
the market.

Government Programs or Consumer Choice?

If the supply of oil does decline, the market will adjust. Prices will go up and consumers will
change. In fact, as one source noted, “Americans responded to spiking gas prices during the
second and third quarters of 2006, throttling back on driving as wallets were emptied by pump
prices that soared nearly $0.50 per gallon between March and August.”3 As prices declined, drivers began to drive again.

Those who warn of resource depletion have been proven wrong time and again primarily because they believe consumers and businesses will not change in the face of rising prices. They also underestimate the ability of technology to improve efficiency and change demand patterns.

This is not to say that there is an infinite supply of resources or oil. It is to say that humans have
always adjusted to the abundance and scarcity of what is around them without government attempting to second guess which technologies will emerge.

What the pessimistic view of the peak oilers lacks is an accurate sense of proportion. The oil
resources of the world are indeed finite, but, like sunlight, they are more than enough to serve human needs for a long time to come. This is especially true when technology and innovation are
taken into account. The planet’s oil reserves are ultimately finite, but human creativity is not.

Peak oilers and other environmental activists who warn of resource depletion usually call on the
government to take actions to avert the upcoming crisis. In fact, The Seattle Times goes on to say that peak oilers “start off talking about a resolution they want the Seattle City Council to approve.

It states, in part, that peak oil is likely to hit the city with little warning and ‘intervention
at all levels of government will be required to avert social and economic chaos.’”
When the government spends our money trying to solve non-existent problems, it takes resources away from real problems and increases skepticism about real environmental problems on which we should focus.

Global Cooling

Back in 1991, before Al Gore first shouted that the Earth was in the balance, the Danish Meteorological Institute released a study using data that went back centuries that showed that global temperatures closely tracked solar cycles.

To many, those data were convincing. Now, Canadian scientists are seeking additional funding for more and better "eyes" with which to observe our sun, which has a bigger impact on Earth's climate than all the tailpipes and smokestacks on our planet combined.

And they're worried about global cooling, not warming.

Kenneth Tapping, a solar researcher and project director for Canada's National Research Council, is among those looking at the sun for evidence of an increase in sunspot activity.

Solar activity fluctuates in an 11-year cycle. But so far in this cycle, the sun has been disturbingly quiet. The lack of increased activity could signal the beginning of what is known as a Maunder Minimum, an event which occurs every couple of centuries and can last as long as a century.

Such an event occurred in the 17th century. The observation of sunspots showed extraordinarily low levels of magnetism on the sun, with little or no 11-year cycle.

This solar hibernation corresponded with a period of bitter cold that began around 1650 and lasted, with intermittent spikes of warming, until 1715. Frigid winters and cold summers during that period led to massive crop failures, famine and death in Northern Europe.

Tapping reports no change in the sun's magnetic field so far this cycle and warns that if the sun remains quiet for another year or two, it may indicate a repeat of that period of drastic cooling of the Earth, bringing massive snowfall and severe weather to the Northern Hemisphere.

Tapping oversees the operation of a 60-year-old radio telescope that he calls a "stethoscope for the sun." But he and his colleagues need better equipment.

In Canada, where radio-telescopic monitoring of the sun has been conducted since the end of World War II, a new instrument, the next-generation solar flux monitor, could measure the sun's emissions more rapidly and accurately.

As we have noted many times, perhaps the biggest impact on the Earth's climate over time has been the sun.

For instance, researchers at the Max Planck Institute for Solar Research in Germany report the sun has been burning more brightly over the last 60 years, accounting for the 1 degree Celsius increase in Earth's temperature over the last 100 years.

R. Timothy Patterson, professor of geology and director of the Ottawa-Carleton Geoscience Center of Canada's Carleton University, says that "CO2 variations show little correlation with our planet's climate on long, medium and even short time scales."

Rather, he says, "I and the first-class scientists I work with are consistently finding excellent correlations between the regular fluctuations of the sun and earthly climate. This is not surprising. The sun and the stars are the ultimate source of energy on this planet."

Patterson, sharing Tapping's concern, says: "Solar scientists predict that, by 2020, the sun will be starting into its weakest Schwabe cycle of the past two centuries, likely leading to unusually cool conditions on Earth."

"Solar activity has overpowered any effect that CO2 has had before, and it most likely will again," Patterson says. "If we were to have even a medium-sized solar minimum, we could be looking at a lot more bad effects than 'global warming' would have had."

In 2005, Russian astronomer Khabibullo Abdusamatov made some waves — and not a few enemies in the global warming "community" — by predicting that the sun would reach a peak of activity about three years from now, to be accompanied by "dramatic changes" in temperatures.

A Hoover Institution Study a few years back examined historical data and came to a similar conclusion.

"The effects of solar activity and volcanoes are impossible to miss. Temperatures fluctuated exactly as expected, and the pattern was so clear that, statistically, the odds of the correlation existing by chance were one in 100," according to Hoover fellow Bruce Berkowitz.

The study says that "try as we might, we simply could not find any relationship between industrial activity, energy consumption and changes in global temperatures."

The study concludes that if you shut down all the world's power plants and factories, "there would not be much effect on temperatures."

But if the sun shuts down, we've got a problem. It is the sun, not the Earth, that's hanging in the balance.