Peak oil is NOT real
Ever since I put up this post on oil, and how this wasn't a real "oil shock", I've had a slow trickle of emails from peak-oil adherents. For those of you unfamiliar with the concept, the peak oil theory (published in 1956) suggested that the world production of oil would reach a peak right about now and then drop off, making oil a rarer and rarer commodity. Here is the wikipedia entry, which goes into lots of detail.
Several people have written me and noted how the high price of oil corresponds to the "peak" on the prediction curve from the 50's. Most of these peak oil fanatics kind of ignore that Hubberts original paper was built on an assumption of fixed reserves and declining discoveries, whereas both consumption and reserve discoveries have been WAY off Hubbert's curves for years.
But I digress. Complex arguments are prone to endless nitpicking and the peak oil folks will eagerly start arguing details so minute as to be useless. I present a couple easily verified facts from right now.
- Current "conventional" oil pumping techniques draw out about 35% of a light oil reserve and less than 5% of a heavy oil reserve. These techniques are what current reserve numbers are based on.
- Current "cutting edge" oil extraction techniques (Chevron has several of these wells in existance and producing) can extract 80% of light oil reserves and 15%+ of heavy oil reserves.
- This technology alone increases light oil effective reserves by %120 and heavy by 200%+
- Combining this with newly discovered and newly exploitable sources still puts us firmly on the "upswing" portion of any attempt to draw an oil production curve.
Before I go to much further I do admit that the advanced techniques are currently more expensive, just like the techniques in use today were once more expensive when they were new. There are cheap sources of steam for steam wells and the technology is continuing to advance, not decline, so oil will have an increasing supply for quite some time.
Even Saudi Arabia is getting on the wagon at this point and building the new technology wells which double the extractable reserves.
This is a topic near and dear to my heart which I know quite a bit about from the technical side and there really isn't any question of whether the technology of oil extraction is going to advance or not. It will.
I would guess that most of us old enough to drive right now will be dead before we even reach "peak" production.