The Oblivious Celebration of Oil Abundance

Steve LeVine writes, at Foreign Policy, no less, about the prospect of a century long reprieve from the peak oil scenario.

It’s quite plausible – the same advances that have led to a resurgence of American natural gas production may also produce an abundant flow of oil.  Not cheap oil, but nonetheless abundant at the level of $70 per barrel or so. Last year, for the first time in over a decade, new oil discoveries exceeded consumption.

“What’s unfolding is truly a technological revolution” : deep water, oil sands, and frackable shale vindicated the cornucopians – an increase in price is leading to a direct substitution of new sources of oil. It still can’t last forever, but it does totally disrupt the “business as usual” pictures that IPCC have been drawing.

This turns much of our conventional wisdom upside down.

Good news or bad news?

Well, if we don’t get some sort of carbon capture scheme in gear at a scale as enormous as the energy sector itself, as you can well imagine I for one think of it as a disaster. But the prospect has not penetrated into the public discussion of the environment, as LeVine points out and as an embedded 2 hour seminar video justifies.

A second aspect of the discussion was the conspicuously little discussion of global warming, which would be seriously exacerbated, as I wrote last month. One reason for this near-omission of global warming was the nature of the discussants — these are oil market and geopolitical analysts, not climate experts. Yet that in itself is illuminating. I must be missing some folks, but I can think of no one in the climate field who has injected him- or herself into the contemplations of this new age (unless one includes movement activists such as writer Bill McKibben and NASA scientist James Hansen.). One has the sense of an entire sector of business, academia and civil society — thegreen energy industry, climate scholars and environmental activists — on the verge of being obliviously bulldozed by an unseen force. McKibben and Hansen will say “game over” for the planet should the age proceed. The thing is, it appears to be proceeding of its own accord.

The indifference of the powers that be, in industry or in government or in academic engineering sectors to actually making the earth less inhabitable and grossly biologically impoverished is no real surprise. We have to be used to it. I read a book by Fareed Zacariah, a widely recognized international relations pundit, that came out two or three years ago, on the post-American-hegemony he predicted for the 21st century. His prognosis for the next century DID NOT MENTION CLIMATE CHANGE. This is the amazing victory of the denial industry – the idea that there is a risk here is not even discounted. It just doesn’t cross the minds of people in geopolitics.

I have to think this is because the extent of the change is grossly underappreciated. Calling it “global warming” and measuring it in terms of global mean surface temperature, though convenient for discussions among the cognoscenti, implicitly but powerfully understate the risks for outsiders.

And that is how we get articles like this by Paul Mulshine, the second line of defense. “You may know what is going to happen but you can’t tell me what it is going to cost”. Here is where I think the “deficit model” gets its defense. Anyone who can talk about “what it is going to cost” is clearly unaware of what it is likely to be like. And that’s why the events of the early part of this summer in America (and elsewhere) are well-billed as “what global warming looks like”.

I mean this sort of thing:

By the way, this is why I refuse to allow commenters on tis topic to fall back on that tired talking point about there being a “consensus” among scientists that man-made global warming is a danger.

That consensus extends only as far as the idea that, all thing being equal, we’d be better off not altering the atmosphere in anyway.

Well all things are not equal. Every step toward curbing CO-2 emissions has economic costs. And the “consensus” on just what those costs should be is up to the voters, not the scientists.

Yes. Of course that is all true. But it requires not just people understanding that there is a global warming consensus among scientists. It requires them understanding what that consensus actually says.

And that is why suddenly all attention is on severe events. Because whatever happened in the middle ages and however adequate or otherwise tree rings might be, they are a hell of a lot less salient than a suburban forest fire.

How far we can go from “what global warming looks like” to “this is a direct consequence of our actions” remains a difficult question for now. Different people’s intuitions go different ways and the correct statistical approach to the question is hard to define. The problem is that people want an answer. They don’t seem to realize that to some extent, the difficulty is a good thing. It means that things have not yet gotten as spectacularly bad as they might, and from all indications, probably will.

The ideas that the “rich Bangladeshis of the future” will “just move inland” shows a touching faith in economic dogma that presents an interesting contrast to the adamant contempt of climate science. I really wish I could reverse my perspective to that one. It would help one sleep easier, wouldn’t it. But if the dewpoint in Bangladesh ever consistently goes above 40 C, it won’t matter much whether there is money or higher ground in that country. Everybody who ventures outside without a space suit will die. Every vertebrate creature in the tropics will die.

What is the economic value of not turning the non-economic parts of the earth into lifeless desert? I mean, they hardly contribute to production at all!

Since sarcasm is occasionally lost on the internet I’ll plainly assert that anyone asking this question is missing the point, to say the least. Nature is not ours to destroy.

At the very least, most human ethical schemes would allow our descendants a say in the matter. We shouldn’t be foreclosing their options because we’re too lazy to reinvent our transportation infrastructure, and then claim that it’s an economic imperative. If we can’t afford a living planet, what the hell good is an economy anyway?


  1. Pingback: AGW Assclown QOTD « SOYLENT GREEN

  2. It's perfectly natural that many of those who think that our current consumption-driven pathway is unsustainable should be sympathetic to the idea of peak oil. The brutal fact, though, is that the oil and gas industry, particularly the N American industry, is very good at what it does and has responded to the past decade of high oil prices (>$50/bbl) and limited investment opportunities overseas with new technologies. We have always known we had enough coal to fry the planet and now it seems probable there's more than enough oil and gas, as well.

    As LeVine says, is not just due to cornucopian capitalists ignoring climate change (although they do), but also climate activists who deny the prospect that fossil fuel use may be economically sustainable for decades to come. Climate change and peak oil should never have been muddled up in the first place. The Transition movements are particularly bad in this regard, placing peak oil ahead of climate change in their main concerns.

    George Monbiot got a lot of stick for his recent article describing his U-turn on peak oil, as if he was being disloyal to the environmental movement or acting as a dupe of big oil. This is crazy.

    We have to face the fact there are abundant resources in the ground of gas(almost certainly), oil (probably) and coal (certainly) and that we will very likely be able to exploit them economically for decades to come, as long as we continue deferring payment on the externalities to future generations, of course.

  3. Based on a paper I'm currently reading from Metis Risk and Feasta, entitled "Trade-Off - Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse" by David Korowicz at

    it doesn't seem too far out of the question that various feedbacks of which we have little understanding in the economic system (speaking broadly) will propagate a collapse that will make exploitation of these fossil fuel resources unlikely. Of course, this collapse would be a VERY BAD THING at a level of the worst AGW possibilities (well, maybe not the most extreme outlier possibilities).

    Back to equipping my desert survival truck and buying MREs and ammunition I guess.

    H/t to Alex Steffen (@AlexSteffen) for linking the paper.

  4. David Roberts recently posted a four-part interview (start here) with an energy expert who thinks there will be enough oil for the foreseeable future, but at a price that will remain high and increase over time as more and more expensive sources are tapped (multiple Hubbert Curves, more or less). That would seem to feed into Rob's point.

  5. I hate it when confusion about imaginary systems impacts real lives.

    Yes, this is a real possibility. Climate is hardly the only existential risk on the table. And they are coupled, potentially in ways that nobody sees in advance.

    The thing about existential risks (at the level of collapsing civilization, nature, and/or population) is that we have to bat 1000 on them. We don't get to pick and choose.

  6. I'm not at all sure I understand your comment. I believe that the connection is that, with the complex interacting systems for finance, trade, just in time inventory and production management, etc. together with nascent and active credit crises everywhere, our lack of understanding of the dynamics of these systems may make it impossible to capitalize and logistically manage the extraction of tight oil and other difficult fossil fuel resources - particularly those with diminishing EROEI.

    The paper itself is, obviously, a couple score of pages describing the interactions and feedbacks (to the extent that they are understood) followed by one (arguably) plausible scenario under which these systems would suffer cascading failures.

    Should such an eventuality occur, whether precisely as described or through some other mechanism, extracting oil from the Arctic Ocean floor or the Athabasca sands or other exotic locations may not be achievable, thus eliminating our ability to fry the planet in that way. On the other hand, it would obviously not be Utopian.

  7. Rob, as I think I argued to you on a frozen walk in Evanston in 1975 or so, I thought of and still think of money is something of a shared delusion which we continue to share because of its utility. The problem is that when "financial crises" happen, it has impacts that are outside the frame of reference of the useful shared delusion. It becomes a dangerous delusion instead.

    Consider the crash of 1929. America was in great shape one day - farms and factories spinning, people usefully employed, the rich getting richer and the poor fighting the good fight to get their share, all right with the world. A week later it was spinning down the drain. No drought, no war, no asteroid was involved. Every physical tool that was available the week before was still available. What was missing was "credit", but that is simply an artifact of the game, not a real thing.

    The fact that we are vulnerable to financial upheavals is a misdesign. The somewhat successful Geithner intervention of '09 showed that all we have to do is find a way to redesign this wholly artificial and largely imaginary structure. Unfortunately, the real elites (and I am sorry to say I don't think you are included, private plane or no) mostly exert their control and extract their wealth by means of this structure and are defending it with enormous tenacity. They have even come up with this somewhat horrifying Romney creature to tighten their control. But tight control means limited flexibility. The fact that most financial instruments are traded for other financial instruments and not for real goods is a source of instability for the system. The details of how it might break are irrelevant.

    The problem that money controls real wealth but most of it isn't real wealth. The more money is concentrated in the "financial sector", i.e., in the hands of the Romneys of the world, the less it represents a measure of real physical capital, and hence the less it is an effective cybernetic mechanism in the economy. The rich people who claim to be the defenders of capitalism seem to me to be bent on destroying it.

  8. "enormous tenacity"

    And even more enormous self-dealing and fraud, as demonstrated for the nth time by the Peregrine and hedge fund scandals of the last week (hedge fund story on today's NYT front page). It also turns out that the New York Fed knew about LIBOR fixing in 2008, although oddly the several articles I saw on that subject neglected to mention who was in charge there at the time. Funny that.

    At this point, it looks as if the entire system would collapse if all of this stuff were brought to a sudden stop. IOW, not that this is an amazing insight, the corruption is a core feature.

  9. A paper worth a permanent bookmark IMHO, public copy here. I notice there's a followup paper, which I haven't read yet but concludes among other things:

    "A further 2 °C warming from the present is sufficient to push peak WBGT [wet-bulb globe temperature] above 35 °C, an extreme heat event, in all regions except the UK."

    WBGT is similar to heat index or humidex (for any Canadians present) but with a term added for sun exposure, meaning that it's useful for determining when it gets too hot for field or other exposed labor (a big deal in poor tropical countries, obviously). The WP article is short but has useful links. .

  10. Sigh. No, I've never considered myself among the real elite (by the way, I find it interesting that you use the word in an implicitly derogatory fashion, given the conversation we've had in the past regarding AGW skeptics using it as a pejorative term when referring to academics), private plane or no. I am among the fortunate though.

    In any event, if money didn't exist it would be invented. Having looked at (though not participated in) various barter communities, even in the internet age a medium of exchange is necessary. It may be a delusion but you and I both need our share of it. I spend a lot of time at what I do to make a living, the result of which, for me, is money.

    Credit is both an interesting and a baffling concept. Like thermodynamics, I think that anyone who claims to fully understand it as it's implemented today is delusional. It's a claim on future production of .... something. That something could, of course, be debt.

    But credit is not the only thing that can destabilize the system. Fear, founded or otherwise ("the only thing we have to fear..."). If I'm afraid to buy the refrigerator, car, airplane, book, whatever, or if the seller is afraid that I'll be afraid, or if I'm afraid that the bank won't be able to cash me then out the system derails. Credit was not the only thing missing, equally important was confidence - the perception that economic activity would continue thus justifying purchases, investment, etc.

    Captain Obvious says that people will act in what they perceive to be their self-interest (broadly interpreted). They will find a way to rationalize these actions as for the greater good in many cases. Most people don't think "if I can only get this bill passed, this regulation repealed, this deal done I can screw my grandchildren and the underdeveloped world." The Kochs (and even Romney) may very well believe that they're about their Father's business.

    But in any event, my point was that there's a better than zero chance that, however it's constructed and whatever real or imaginary accounting gimmicks make it tick, that the economy will derail in such a way as to prevent the burning of a very significant portion of our so-called fossil fuel endowment.

    I haven't actually completed reading the paper yet, but what I've read so far is fairly compelling.

    It couldn't have been 1975 - that was 37 years ago and that would make me how old?

  11. "Money is something of a shared delusion which we continue to share because of its utility... What was missing was 'credit', but that is simply an artifact of the game, not a real thing."

    I took from your point, MT, that money is dangerous *because* a (delusionary) social construct. But it's only a shared delusion in the same way that language is - which is to say, so essential to us as a species that it can't really be considered delusional. A manifestation of that like money may be dangerously abstracted, but real as anything else we create with language structures.

    There's an almost infinite space of ways in which we can collectively manage resources. Language and symbol (including money) are like a flock in that space. The elements have to be in close relation to each other, as it's their inter-relations that define them - the separate elements mean/do nothing in isolation. (I have some vague memory of this being a Wittgenstein point about language.)

    But money is abstract compared to other structures we use (I've wiffled before about specific examples like Balinese rice management analysed by Lansing and Kremer in Priests and Programmers and Perfect Order, or van der Ploeg's work on Andean potato cultivation, which you can read in the Google book of 'Seeing like a State' here - only a few pages, but Scott does a great summary).

    There's a parallel in Milgram's work on obedience to authority:

    "While structures of authority are of necessity present in all societies, advanced or primitive, modern society has the added characteristic of teaching individuals to respond to impersonal authorities. Wherea submission to authority is probably no less for an ashanti than for an American factory worker, the range of persons who constitute authorities for the native are all personally known to him, while the modern industrial world forces individuals to submit to impersonal authorities, so that responses are made to abstract rank, indicated by an insignia, uniform or title." (p.137).

    I don't think this means abstract resource management systems (like money) should necessarily be 're-embedded', though there are plenty of people who do (e.g. this on reputation currencies. Blech.) But - to take a specific example - if you think the future is likely to include computers, we'd be hard pushed to come up with anything better than money for organising their development & construction. Even a single component like a hard drive has production and design spread across a number of countries. If you could map the computer you're using now into money and information exchanges, how far would the network go, how many connections would there be? What else could achieve that?

    The financial system's sort of combined a metastasised cancer with a worm-hole into another universe, where it grew uncontrollably and parasitised its useful social function. It shouldn't be beyond our wit to fix that.

    Perhaps the oil question is actually relatively easier. Maybe no market mechanism (or other complex resource management structure) can deal with it. Perhaps it's simply a case of slowly making everyone realise it has to stay where it is, and declaring its extraction off-limits - as we do in National Parks now (though in how many places is that being reversed?) The message is at least very simple: we either keep it where it is, or we set up the conditions for unthreading civilisation. The question then becomes about how best to communicate that message? I can't help but think, however much I enjoy my ergonomic on-screen pontificating, this is going to require direct action. Think about how much difference the occupy movement made to the conversation about inequality. A liveable climate is more important than this.

  12. Peak oil was always a theory about maximum flow rate, not availability per se. Texas still produces oil - just much less than when it peaked. Global oil flow rates seem to be close to peak - it has basically been flat for the last 5 years, despite heavy investment. The feedback is that capitalism is geared to growth - so what does a flat rate of flow in a key resource imply? I don't know, but I would look to financial rather than energy flows for the outcome.

  13. A similar piece in an Australian outlet, Climate Spectator, meets with considerable doubt from the readership.

    However, presumably that readership has not been driving around rural Texas much. It sure LOOKS like a new oil boom from here on the ground.

  14. Michael Levi seems to think so: check out his blog. M. King Hubert stlye Peak oil assumes fully mature oil production technology; turns out that the newer, so-called unconventional drilling techniques can tap still more petroleum from older fields.

    It is sufficently expensive that perhaps we'll see rather more stable prices for some time to come.

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