It's a bit hard to believe that in 2012 anyone is still unclear about what "peak oil" means, but enough confusion about it has surfaced in the past week that I feel compelled to, once again, try to set the record straight.
"Peak oil" refers to the maximum rate of production of regular crude oil. Period. It's a number.
It is not a theory.
It does not mean "running out of oil."
It is not the moral equivalent of Malthusianism.
It is not a political movement, or a religion.
It's not a dessert topping. It is not a floor wax.
It is not about oil reserves (oil that has been proved to exist and to be producible at a profit), or resources (oil that may exist in the ground, irrespective of its potential to be produced profitably). Those quantities do play a role in estimating the peak, but do not determine it in any way.
"Peak oil" is not the same as "the end of cheap oil," although the latter is also true. Price is not a proxy for production.
"Unconventional" liquids such as biofuels, natural gas liquids, synthetic oil made from bitumen in tar sands or from kerogen in shales, and liquids made from coal or natural gas are not regular crude oil, nor are they equivalent to crude on several important counts. When you're talking about unconventional liquids, you are not talking about oil, and lumping them in with oil does not increase the volume of oil. That's why it's called "peak oil" and not "peak liquid fuels."
This is why I insist on the term "tar sands." They contain not oil, but bitumen, a low-grade hydrocarbon which is a tar-like solid at room temperature, and must be upgraded with substantial inputs of energy to turn it into a synthetic oil. Calling them "oil sands" is nothing but a PR stunt.
Likewise, if you're not talking about data on oil production rates, or the general topic of reaching the peak rate, then you're not talking about peak oil.
I hope that's clear, and I hope to never have to say it again.
Since it may seem pedantic to be so fussy about the definition, I will explain why it matters.
What is "oil?"
An editorial titled "Climate policy: Oil's tipping point has passed" was published in the journal Nature last week, which immediately grabbed the attention of other major publications, including Scientific American, Wired, and the New York Times. Unfortunately, all of them showed a weak grasp of the subject.
In Nature, James Murray and David King wrote, "In 2005, global production of regular crude oil reached about 72 million barrels per day. From then on, production capacity seems to have hit a ceiling at 75 million barrels per day." Data from the U.S. Energy Information Administration (EIA) shows 72.565 mbpd in 2004, 73.802 mbpd in 2005, and a ceiling around 74 mbpd, not 75 mbpd, as my colleague Gregor Macdonald's handy chart shows:
Source: Gregor Macdonald
Both Murray/King and Macdonald are using data from the EIA, so I'm not sure why there's a discrepancy. It's not clear which EIA data set the former are using, but Macdonald notes that because EIA doesn't update its multiple data sets uniformly, he always uses the most recent Monthly Energy Review. (I did not spot any other glaring data issues in the rest of the Murray/King article.)
Unfortunately, the 75 mbpd figure was then propagated by those who covered the Murrary/King piece. In Scientific American, David Biello went on to suggest, "Other statistics, however, argue against a plateau," and referenced BP's data set, which shows oil production at more than 82 mbpd in 2010. As Biello apparently suspected, but wasn't quite clear about, this is because everyone uses different definitions of "oil." EIA restricts its definition to crude plus lease condensate (natural gas liquids that are produced and naturally associated with the crude). BP includes unconventional liquids like shale oil, oil from tar sands, and a more liberal definition of natural gas liquids. Biello was also unclear that Murray/King were talking about a bumpy production ceiling that began in 2005 and continues into the present, while the International Energy Agency (IEA) has cited a specific peak production year of 2006 using yet a different definition of oil. And as the above chart shows, according to EIA data the peak year so far is 2010. I found numerous other non-sequiturs and irrelevant speculations in Biello's piece, but I sent him my critique privately and won't delve into them here.
The important concept is that after some 150 years of growth, oil supply stopped growing and hit a peak-plateau at the end of 2004. The exact day, month or year that the peak rate was reached is irrelevant to policy. What should concern us is the inevitable, long decline at the end of that plateau, which I now expect to begin around 2014-2015.
In Wired, John Timmer struggled with the subject, claiming that oil production "peaked in 2008, declining ever since." He was in the right ballpark, but neither statement is true. After a cursory treatment of price and supply, he then slipped straight into confusing production with reserves: "The strongest argument against this being a real peak is the increasing volume of petroleum reserves," but then immediately noted that "those reserves clearly have not brought increased production." He also bungled his re-write of Murray/King's piece with respect to unconventional oil production; the problem of maintaining current production levels against background depletion; and the challenge of making up for the decline of oil supply with efficiency and renewables.
In the New York Times, Justin Gillis' take on the Murray/King comment was too brief to make any serious errors, but it positioned the concept of peak oil as a he-said-she-said debate, characterizing it as a "less feverish version of the peak oil case."
This is the biggest problem of all with respect to peak oil, because it turns the subject into a political debate. "Fever" should not apply to data. If we really want to know about the reality and impending challenges of our energy supply, then we must have a sober, neutral examination of hard data, not general rhetoric pitting one expert opinion against another. Like climate change, it has become a political football, and sadly, most journalists have even less literacy about peak oil than they do about climate change.
The politics of peak oil press
The Murray/King comment was essentially a summary of other people's work over the past seven years or so, although very few of them were credited in the article. (Apparently, Nature only allows a small number of citations, and only to respected journals.) Any regular reader of The Oil Drum would have instantly recognized every one of the ideas in the piece, and known their true provenance was in the work of analysts like David Murphy, Stuart Staniford, Dave Cohen, and many others who I hope will forgive me for not mentioning them by name here. In fact, the Nature authors could have cobbled that piece together using only my work as a source, as I have covered every one of the ideas in it over the years. To cite just one example, they wrote, "Production of oil derived from Canada’s tar sands — sometimes called the ‘oil junkie’s last fix’..." Called by whom? That would be me, here, here, and just one month ago. As far as I can determine, no one else called them that before I did, nor has referred to them that way since.
There are two reasons, I think, why the Nature comment was so acclaimed. One is that it was a good, pithy, well-argued overview of a great deal of work, clearly written, and backed up with reasonably accurate data. But the more important reason was authority. James Murray, a scientist from the University of Washington, is an authority on the subject of climate change. David King, a scientist from University of Oxford, is a respected and well-connected senior advisor to the bank UBS, and a former advisor to the UK government. As far as I am aware, neither author has contributed anything original or significant to the scholarship of peak oil. But they had the ability to open the door at Nature—itself, an authority—and get a good story about peak oil published against what I gather was fairly substantial opposition from peers and other powers-that-be. By virtue of their authority, they scored for Team Peak Oil.
And really, that's all that matters. Because the opposition is fierce, and they've had near-total control of the megaphones in the press and government. They really hate the peak oil story, even more than they hate the climate change story. After all, the two are really part of one larger story about human population and burning fossil fuels, and the end of status-quo economics. As King/Murray put it, "Climate change and changes in fossil-fuel production are generally seen as separate phenomena. But they are closely linked. The risk of fossil-fuel supply limitation should be included when considering the uncertainties of future climate change. The approaches needed for tackling the economic impacts of resource scarcity and climate change are the same: moving away from a dependence on fossil-fuel energy sources." It's an important message, one that I have hammered away at for so many years I should just have it tattooed on my face.
Those with vested interests in the status quo—which is to say, pretty much everyone in government, business, and the media—have much to lose, and they are deeply fearful that the slumbering beast of the public will wake up about peak oil and climate change.
This is undoubtedly why, on the very same day that the Nature comment was published, a political hit piece appeared in Bloomberg Businessweek, titled "Everything You Know About Peak Oil Is Wrong." It said not one word about production rates, trotted out the tired argument about Limits to Growth (which is wrong anyway), and cited oil cheerleader Daniel Yergin as a primary source. Peak oil deniers always talk about reserves, not production rates, for the same reason a squid squirts ink when it is threatened. Either they haven't the foggiest idea what "peak oil" means, nor a grip on production data (let alone the key production/reserves ratios). . . or clouding the issue, and painting peak oil analysts as Chicken Littles, is their explicit intent. After a decade of observing this behavior, particularly in publications which should know better, I'm now inclined toward the latter view.
The Wall Street Journal is a notable example, having long taken a hostile editorial stance toward both the peak oil and climate change stories. For a glimpse of that battleground, see the rebuttal to one of Yergin's anti-peak oil screeds in the Journal which Macdonald and I published in the Harvard Business Review blog last October. Or consider their decision last Friday to reject a letter about the risks of climate change, which was signed by 255 members of the U.S. National Academy of Sciences with real expertise on the subject, then turn around and publish an anti-climate editorial by 16 very dubious signatories. (For more, see the takedown of that editorial by Media Matters, the comments of climate journalist Andrew Revkin, and the rebuttal from active climate scientists which was published in the Journal this week.) None of this should be surprising, considering that the Journal is owned by News Corp., whose CEO Rupert Murdoch has deep connections to the oil industry.
One final, incredibly depressing example: Last week, at a town hall meeting at Commonwealth University, U.S. Transportation Secretary Ray LaHood told a student that fuel supply won't a problem ". . . in your lifetime. Not in my lifetime. . . We’re not going to run out of gas, we’re not going to run out of oil for a long, long, long time. Many countries have an unlimited supply.” You should be able to spot at least three obvious problems with that statement. No doubt this explains why, despite the exhortations of analysts like me, our country still fails to come to grips with the issue of peak oil. LaHood has been an ardent champion of building rail infrastructure, and for that I have applauded him. But if he labors under such fantastic hallucinations about oil then , which I believe we desperately need to do, isn't going to happen on his watch.
I only hope that the next ink about peak oil will emanate from the pen of serious analysts, not from the hind end of a vampire squid.
Photo: Steve Andrews, co-founder of the U.S. chapter of the Association for the Study of Peak Oil (ASPO), poses with kids who were hired by someone in the oil industry to stand outside the ASPO 2009 conference in chicken suits and hand out anti-peak oil propaganda calling the attendees "Chicken Littles." Interested readers may want to explore my notes from that conference. Photo used by permission of Steve Andrews.
This post was originally published on Smartplanet.com