10 Years In Peak Oil

Richard Heinberg uses his latest Museletter to revisit the publication of his most famous book, The Party's Over, published 10 years ago. This is a must read piece that examines some of those common questions of today: Is Peak Oil dead? Were the peakists right or wrong? What about Peak Oil Demand?

I'd summarize my four points of the past ten years this way:

  1. No one, optimist or pessimist, really predicted the scale of modern shale oil production. 

  2. For most of the decade, the battle was between peakist pessimists who predicted rising prices and optimists who predicted that oil's superabundance would lead to lower prices. The pessimists won this battle handily. Daniel Yergin & CERA, Michael Lynch, and many others argued the case of lower prices for years - they were dead wrong and a lot of people lost a lot of money listening to them. Once it became clear even to them that higher prices were the new norm, they threw away their old arguments as if they never made them. And it's shameful that no one ever calls the optimists on this.

  3. While no one was looking, the definition of oil was changed. 10 years ago, people were really only talking about conventional crude oil - the "poke a hole in the ground and a gusher comes out" variety. Since then, unconventional oil (shale and tight oil) and "other liquids" that aren't even oil, such as biofuels, natural gas liquids, and others, have come to take up a larger part of the "oil" pie. Kurt Cobb can explain more of how and why the definition of oil changed. But understand that the production charts would look a lot different when you look at conventional crude alone... which is probably one of the reasons that was changed.

  4. An important final point, it's important to understand how hard industry has worked over the past 3-4 years specifically to misinform, misrepresent, and mislead the public about Peak Oil. They talk about how reserves are rising, even though they know Peak Oil has to do with production rates and not reserves. They talk about how people were wrong about "oil running out" even though Peak Oil doesn't mean that. And they try to take the most extreme positions & predictions and pretend that everyone in the Peak Oil community believes those too. There are a wide variety of beliefs in the Peak Oil community, as Robert Rapier explains. Heinberg in his piece carefully explains that lots of prominent people made Peak Oil predictions anywhere from 2010-2015 and beyond. Some of those predictions are looking very good at the moment, but you'll never hear that from the people who work tirelessly to proclaim Peak Oil "dead".

More quotes from Heinberg's piece:

"The following passage from page 118 of the 2003 edition points to just how accurate the leading peakists were in forecasting trends: “Colin Campbell estimates that extraction of conventional oil will peak before 2010; however, because more unconventional oil—including oil sands, heavy oil, and oil shale—will be produced during the coming decade, the total production of fossil-fuel liquids (conventional plus unconventional) will peak several years later. According to Jean Laherrère, that may happen as late as 2015.” On page 121 of the book I explicitly endorsed the forecast of a peak sometime in the period between 2006 and 2015."

"...the ongoing erosion of global extraction rates of regular, conventional crude means that an ever-larger proportion of total supplies must come from unconventional sources. Conventional oil, with its high EROEI and low production cost, fueled unprecedented levels of economic growth during the 20th century. That party is indeed over."

 "We peakists also changed the energy conversation: peak oil has become a recognized term and concept. In a way, the current “Peak Oil Is Dead” campaign is a testament to our success: the petroleum industry’s public relations arm has been forced to expend resources putting out a fire that hardly amounted to a spark a decade ago. As a result of that campaign, even more people have heard of peak oil than before—though most probably have a highly erroneous impression of it."