The Financial Times and the Oily Straw Man

by Val Germann

In a recent Star Phoenix Base article this writer commented on the phony argument used by an academic to discredit those of us concerned about world oil production.   The method in that case involved setting up a false premise (“the world is running out of oil”) and assigning that view to “peak oilers” and certain fellow travelers.  Never mind that this is NOT the actual position of the target group, it’s an easy premise to attack, and therefore makes the casting of aspersions very easy work indeed.  This tactic is a fairly obvious dodge, once you have been sensitized to it, and it shows up quite often.  For instance, the FINANCIAL TIMES of London used it just the other day, and in a lead paragraph, to boot:

As major oil discoveries become rarer and as motorists face the highest petrol bills in a generation, the debate over whether the world is running out of oil is again rearing its head. 

Yes, I suppose it is, but just where are the headwaters of the “running out of oil” part of the thing?  The “peak oilers” are not saying that.  No, they are talking about the end of any increases in petroleum production, not that oil is suddenly going to disappear.   Note that the TIMES in the very next paragraph sort of states that, but in a vague way that includes another error:

In books, speeches and articles, and particularly on the internet, the doomsayers – known as “peak oil” theorists – are warning that the world’s oilfields are on the decline and will soon be unable to match mankind’s insatiable appetite for energy.

The implication that all of the world’s oil fields are in decline is not a part of the peak oil argument.  Rather, it is the fact that most of the big fields are faltering, just as mankind’s ever-increasing demand for energy has taken a step up.  That is the big problem now, as the TIMES also alludes to, down the page: 

The IEA estimates that, by 2030, the Organisation of the Petroleum Exporting Countries, owners of most of the world’s remaining oil supplies, will need to almost double their production and pump 57m barrels per day. Of this, Saudi Arabia is expected to provide about one third, and already it is taking steps to try to deliver this amount.

Never mind that the Saudis, despite all their rhetoric about increasing production, are not able to pump now even the 10-million barrels-per-day they were getting just a few years ago.  And this is in spite of more new wells and the increasing use of “enhanced recovery techniques” on the older ones.  The world gets 5 percent of its petroleum from one giant Saudi field, a field that is undergoing massive water injection and may have reached its own “peak” at this time. 

If this is true then there is no way the Saudis can ever double their current production.  They don’t have enough potential elsewhere to make up for the peaking of that one super-giant field, should it actually occur.   That this peaking may in fact be happening is strongly implied by this paragraph in the TIMES piece:

This year, Saudi Arabia, which says it holds 260bn barrels of oil and the potential of another 200bn, will have 90 operating drilling rigs. That is twice as many as in 2004 and three times as many as in the previous decade.

Do you think that the light went on for most TIMES readers as they read that paragraph?   No, it likely did not  because the TIMES did not include the production information above, the fact that the Saudis aren’t pumping as much now as they were 20 years ago, or even ten years ago, in spite of massive investments in wells and technology. 

This is a hugely important fact because the skyrocketing oil prices of recent months have in part taken place because the Saudis have not been able to do what they have in the past: flood the market with oil and stabilize things.  No, if anything, their production has declined this year, though no one dares say that out loud.  With the Saudis out of the picture as “producer of last resort” the oil market is wilder and woolier than it’s ever been before, with unknowable consequences for our divided world.

The plain fact is that today’s oil production is still strong, but not strong enough; still increasing, but not fast enough.  A bidding war has broken out over oil, and so have actual shooting wars, as we know. 

The “peak oilers” merely point out the fact that nearly all of the “cheap, easy oil” on Earth has been burned and that much of what is left is of lower (even much lower) quality, and is found in ever-more-remote locations.  What do you think tar sands and miles of ocean water imply for petroleum price and production? 

We here at Star Phoenix Base think the implications are fairly obvious and should have been set out in the article.  The fact that they were not, and that some obvious sleight-of-hand was indulged in, is a sad but in the end not surprising thing to see.  It’s just the way oil is covered right now even in the specialty press.

Read the entire FINANCIAL TIMES article here.

About Val

I am a long-time teacher of science and astronomy with a strong interest in resource conservation and the environment.
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