091110 082






This is the final post in a series [* links below] examining the latest entry straight from the playbook on peak oil denial—that seemingly never-ending attempt to ignore facts, mis-/under-inform readers, or create ever-rising levels of non-credible optimism.

[NOTE: Any quotes in this series are taken from the above-referenced Manhattan Institute paper unless otherwise noted. Links to sources/citations/footnotes within those quotes are located in the original report.]

~ ~ ~

Obama’s outgoing energy secretary, Steven Chu, has frequently lauded the development of ‘clean’ energy technologies. In a February 1, 2013, letter to the employees at the Department of Energy in which he announced that he would not be serving another term, Chu declared that there was ‘innovation revolution’ happening at the agency….
The only mentions of oil in Chu’s parting letter to the employees at the Energy Department were made in reference to the Deepwater Horizon accident in the Gulf of Mexico in 2010, or to America’s ‘dependence on foreign oil’ or to ‘oil addiction.’

I’m no history buff, but I’m comfortable in asserting that there’s been a Republican President or two in years past who has raised the exact same concerns. Now it’s a problem? Why? We’re four decades deep into talking about this concern raised first by Richard Nixon, and the only solution for some is “drill, baby, drill.” That does eliminate the need to think or consider options….

And what’s a good oil industry cheerleading effort without an entirely irrelevant cheap shot while ignoring some fundamentally sound considerations (unless planning in its entirety is now solely a nefarious liberal plot of some sort):

In February 2013, Michael Brune, executive director of the Sierra Club, called shale gas ‘an extreme fossil fuel.’ He stated: ‘Natural gas is not a bridge; it’s a gangplank to a destabilized climate and an impoverished economy.’ He also said that ‘the potential to develop renewable energy is limitless—if we don’t allow ourselves to be seduced by the false economies of cheap shale gas.’ The Sierra Club—2011 revenues: $43 million—isn’t just opposed to natural gas, the cleanest of the hydrocarbons. The group also has a ‘beyond oil’ campaign and a ‘beyond coal’ campaign. The group claims that ‘we have the means to reverse global warming and create a clean, renewable energy future.’

What on earth does the Sierra Club’s 2011 revenues have to do with anything? Since that seems to have some significance, how about mentioning the revenues of the Heartland Institute, or the American Petroleum Institute? (A fair number of related issues were raised here and here, also.)

In the course of his excellent account of innovative progress, Mr. Bryce offers these observations about recent discoveries [my bold/highlight]:

That formation may hold up to 15 billion barrels of oil.

The Shenandoah-2 appraisal well found a deposit that may contain as much as 3.7 billion barrels of oil equivalent.

The Sverdrup field alone contains up to 3.3 billion barrels of recoverable hydrocarbons, making it the largest discovery in the North Sea since 1980.

A recent report by the Boston Company estimated that between 2002 and 2012, more than 100 billion barrels of new oil resources were discovered in offshore locations around the world.

In February 2013, the consulting firm PricewaterhouseCoopers (PwC) released a report that estimated that global shale oil resources could be as much as 1.4 trillion barrels.

[Conveniently omitted is the starting figure in that range: “estimated at between 330 billion and….Big gap, and that’s still only a talking point about resources.]

No argument here with his concluding statement:

Cheap, abundant, reliable energy supplies are essential for economic development.

The problem is one he himself just highlighted: “Cheap, abundant, reliable energy supplies” are not available! Spending billions to drill miles below deep ocean takes care of “cheap and reliable” all by itself. As for “abundant?”

How exactly should we plan for context-free and/or unexplained “may hold up to”; “may contain as much as”; “oil equivalent”, and “recoverable hydrocarbons?” And as I stated in the first post of this series, why isn’t there an explanation that “resources” are just numbers until they can be proven to be recoverable/produced with current technology? (Never mind that economic feasibility is an entirely different matter!) Any idea about how long production might take?

Telling the public that X amount of a possible resource will last X decades at current consumption rates ignores the fact that production of anywhere near those impressive totals will take a hell of a lot longer than X decades—assuming first that current technology allows then to be moved into the reserves column. How’s that math work otherwise?

How costly is the process expected to be? Just how long will it take to get from there to here, and what percentage of that big number has even a chance of being produced—ever? What about quality? Any geopolitical issues to consider? Any refining challenges? Certain about the means of distribution? Any operational problems to worry about?

That’s all just for starters….

The above-stated trillion-plus figure relied upon came from a wildly over-optimistic, fanciful report issued by PriceWaterhouseCooper. The caveats and assumptions [p. 8] upon which the report is based are stories in themselves. I couldn’t help myself, and added bold/italic comments in the brackets:

Scenario assumptions and considerations
The scenarios presented in this report rest on a number of key assumptions:
The successful development of shale oil resources is dependent on the presence of globally distributed, large scale, good quality resources, with overall technical and economic recoverability that is broadly in line with the produced shale oil resource in the U.S. Significant exploration and appraisal will need to be undertaken in future years to prove resource quantity and quality. [Well, Duh! So … a perfect set of conditions and we should be good to go!]
The second key consideration is the timing of large scale development of shale oil resources. Development of shale gas outside the US has arguably been disappointing to date and the same issues (including regulatory obstacles, infrastructure, logistics and skills challenges) may also influence the pace at which shale oil opportunities are pursued outside the US. [For a moment, I thought there might be some issues to be concerned about! But why worry about disappointing development and pesky inconveniences like “regulatory obstacles, infrastructure, logistics and skills challenges?” We should have those cleared up in no time!] We assume that shale oil production outside the US is phased in several stages, starting with small scale production from 2015, building up to one million barrels per day by 2018 and continuing to grow thereafter.
The third key requirement for shale oil to be exploited effectively is a supportive regulatory framework. This also needs, however, to take account of local environmental concerns and to be consistent with national government objectives on decarbonisation and energy security. [Nope .. not seeing any issues or problems here. A phone call or two oughta clear that up!] Different countries are likely to strike a different balance here and this is reflected, for example, in our assumption that shale oil production develops more slowly in the EU than in the US and some other territories.


Despite many decades of dire predictions of energy shortages, along with the calamity and economic problems that would come from such shortages, the world continues to increase production of hydrocarbons. Those increases are a direct result of continuing innovation in the drilling sector, and those innovations provide plenty of reason to assume that oil and natural gas will remain dominant players in the global energy market for decades to come.

Drilling sector innovations are indeed impressive, but reality suggests some limitations in what we can reasonably expect during our lifetime! So while it sounds wonderful that these improvements “provide plenty of reason to assume” … facts suggest something far more tenuous.

If “plenty of reason to assume” is the strategy and expectation, even deniers might want to ponder that, and its implications. “Plenty of reason to assume” might not be the soundest basis to plan for a complex global future expected to meet the advanced needs of billions of people for decades and decades to come.

Finite resources are still finite. Cheap and Easy have left the building. We might want to start thinking about that more diligently—all of us.

~ My Photo: Rockport, MA – 09.11.10

* links to prior posts in this series: