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I began the first post in this series with this observation: “Some day (soon, I hope) audiences for whom peak oil denial nonsense is intended will ask themselves: what are the reasons—and supporting evidence—for these kinds of assertions?

Contributors to Forbes in particular seem intent on peddling a sliver of truth wrapped with a generous supply of disingenuous propositions.* Why they do so remains the puzzle, and I still don’t know which is worse: that they write about issues which they truly do not understand; or they do understand but aren’t particularly interested in sharing information that conflicts with ideology—truth, facts, or consequences to the public be damned….

I’ll point out a few examples in this post. More to follow, unfortunately.

This Is Important … Why?

With U.S. oil imports hitting a 17-year low, the mainstream media has awoken to the fact that, as I pointed out three years ago, peak oil is not happening anytime soon.  Charles Mann’s excellent cover story in this month’s Atlantic, “What If We Never Run Out Of Oil [citation in original]” focuses on an obscure, though potentially vast source of energy: methane hydrates, or crystalline natural gas trapped below the seabed. If early exploration ventures by Japan and other countries, succeed, this gas ‘could free not just Japan but much of the world from the dependence on Middle Eastern oil that has bedeviled politicians since Churchill’s day.’ [1]

Nothing like counting on a healthy dose of if-could-might-perhaps-possibly-someday.

This assertion would be true, of course, because the transition to the use of “obscure, though potentially vast” methane hydrates shouldn’t take much more than what … 7 – 10 days? No doubt this same Forbes contributor intended the observations to be supported by his subsequent comment: “Often, as in the case of the 21st century oil and gas boom, imaginative tinkering can be more fruitful than reinvention or laboratory R&D.”

Tinkering Our Way To Salvation

After all, who needs knowledge or science when we have the possibility that engineers might perhaps tinker successfully? I’m sure they’ll have the whole methane hydrate extraction, conversion, utilization, delivery, testing, affordability, expertise, infrastructure re-engineering inconveniences successfully tinkered in full by late afternoon, or tomorrow morning at the latest. Did I mention financing?

Chris Nelder, whose work I’ve frequently cited, is one of those annoying people holding the ridiculous notion that facts and evidence actually matter! Context is apparently important to people like Chris. Can you imagine? He is almost never satisfied with just accepting exuberant statements about fossil fuel supply from the likes of Forbes contributors.

A Shock Wave Of Arithmetic

No, Chris has to get all “reality” on us, and it really ruins a lot of uplifting work by those who see no reason to waste time with facts. Here’s his take on the above-referenced Charles Mann article:

If Mann’s data on methane hydrates is correct, then Japan’s experiment so far has taken 10 years and $700 million to produce four million cubic feet of gas, which is worth about $16,000 at today’s U.S. gas prices, or about $50,000 at today’s prices for imported LNG in Japan. At this point, it is an enormously expensive experimental pilot project, and nothing more. We do not yet know when it might be able to recover commercial volumes of gas, or at what rate, or at what price. We have no reason to believe that if commercial quantities are recoverable by 2018 as Japan hopes–which seems incredibly optimistic–that the price of that gas will be competitive with imported LNG. [2]

I’ll admit to being curious as to how another Forbes contributor, diligently ridiculing a thoughtful discussion on related topics, squares Chris’s math with this comment:

The utter lack of logic, context, or knowledge about how decisions about capital allocation are made within these companies, as we detailed in this piece [citation in original] a few weeks ago, is almost breathtaking. [3]

My math skills haven’t improved since my last post, but ten years; $700 million; maximum return of $50,000 = about seven one-hundred-thousandths of a percent return. Retirement fund, here we come! Perhaps my handy-dandy calculator isn’t working properly, but spending $700 million over ten years to get $50,000 seems to suggest an utter lack of logic, context, or knowledge about how decisions about capital allocation are made.


* A noteable exception is this terrific piece by Stephen Leeb

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[1] http://www.forbes.com/sites/pikeresearch/2013/05/12/old-technology-fuels-new-energy-boom/; Old Technology Fuels New Energy Boom by Richard Martin – 05.12.13
[2] http://www.theatlantic.com/technology/print/2013/05/are-methane-hydrates-really-going-to-change-geopolitics/275275/; Are Methane Hydrates Really Going to Change Geopolitics? by Chris Nelder – May 2013
[3] http://www.forbes.com/sites/davidblackmon/2013/05/13/the-illogic-and-folly-of-peak-oil-or-is-it-peak-gas-alarmism/; The Illogic And Folly Of Peak Oil (Or Is It Peak Gas?) Alarmism by David Blackmon – 05.13.13