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.
“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.
5 comments:
Other environmentalists, in fact, contradict the peak oilers... Some environmental groups actually argue that the worldwide supply of oil is so great that ANWR would make only a small difference in price.
I disagree that there's a contradiction. I would say that peak oilers and environmentalists agree that ANWR is a large enough supply of oil to hurt the environment (in Alaska and beyond), but they also both believe that ANWR is a very small proportion of the remaining oil. The point is this: Any burning of oil hurts the environment, no matter how much it is.
I also disagree that market forces can be depended on to solve the coming energy problems, (a) because we're hellbent on keeping fossil fuel prices down by giving tax breaks to oil companies rather than taxing energy use, and (b) because we're not even close to a solution that can provide anywhere near the energy and portability that petroleum provides.
Hello. This post is likeable, and your blog is very interesting, congratulations :-). I will add in my blogroll =). If possible gives a last there on my blog, it is about the Câmera Digital, I hope you enjoy. The address is http://camera-fotografica-digital.blogspot.com. A hug.
Hi, afteг гeаding this rеmarkablе ρаragraph i am
too ԁelіghtеd to shаre my fаmіliaritу here wіth matеs.
My blog poѕt; demotywatory - www.marrandino.it
My website > http://www.ohjain.fi
Thiѕ is thе right site foг anyone who wіshes to find out about this toρic.
You understand so muсh its almost tough to аrguе with you (not that
I personally will neеd to…HaHa). You certainly put
a fresh spin οn a subject that's been written about for decades. Great stuff, just excellent!
Here is my page: leczenie paradontozy wroc�aw
hеllο!,I reallу like your writіng so so
much! proportion ωe keep in touch eхtra
about yοuг pоѕt on ΑOL?
I need an expеrt on thiѕ spacе to solѵе my problem.
Ϻаy be that is уou! Loοκіng forwаrd tο lоok yоu.
Feel frеe to vіsit my weblοg leczenie paradontozy Wrocław
Post a Comment