No Energy Crisis

Here are the main arguments that there is no imminent energy crisis. By the way, right now I’m just trying to establish what the current lines of thought are. I’m trying to avoid expressing an opinion right now.

A lot of experts don’t believe it. In particular, the American government doesn’t. See http://www.eia.doe.gov/oiaf/ieo/oil.html for its 2006 report, which estimates that oil production will not peak before 2030. In fact, that report estimates that production will increase by 50% before peaking.

We’ve been here before. Remember the energy crisis of the 1970’s? People were really worried then, and the problem went away before we knew it.

The size of known oil reserves increases year after year. For a number of reasons: more exploration, better technology to recover oil, and, as prices rise, previously unrecoverable (i.e., too expensive to recover) oil becomes recoverable.

Referencing my previous post, here is an item-by-item rebuttal to the arguments indicating an energy crisis:

· It all starts with oil
Yes, oil is a critical resource for the world-wide economy. If/when our supply of oil recedes, then coal, natural gas, uranium, wind, solar, biomass, and other energy sources will replace it.

· Oil is a fossil fuel, and is not readily replenished.
I was surprised to find that there is some debate on this. Well no, actually I wasn’t surprised, because no matter how firm you think a fact is, you can always find someone who thinks its false. Hooray. Welcome to the internet.

In fact, commentary on this whole peak oil subject is riddled through with wackos and conspiracy theories of all stripes. You could probably start a fun blog just detailing all of them. But for now I’m more interested in looking at the wheat, not the chaff, even if it some psycho mind-blowing chaff.

Anyways, the abiotic theory of oil generation holds that oil is not a fossil fuel. Oil is generated by physical forces and/or bacteria deep within the earth’s crust. As far as I can tell, this theory is not accepted by any petroleum geologists or oil companies, who you think would be interested. There have been no successful significant experiments confirming this or denying the fossil fuel theory (again, as far as I know). I’m going to rule this one out right now, and accept that oil is a fossil fuel.

· Oil production is peaking.
Not according to OPEC or the U.S. government.

· After oil production peaks, it drops, often symmetrically, as fast as it rose in the beginning.
The only evidence that production drops fast is due to some curve-fitting models that have insufficient empirical support. As noted above, production is sensitive to price.

· Why are gas prices skyrocketing?
Several different arguments here:
1. Demand is catching up to production, making pricing volatile, especially with regards to market disturbances (Katrina, Iraq war).
2. The oil market is not free; it is partially controlled by OPEC and also interfered with by governments.
3. The U.S. has a refinery shortage.

· For the past few years, the annual rate of oil discovery is lower than the annual consumption rate.
Again, not according to government estimates.

The next step is to take a pass at rebutting the rebuttals.