Whenever you encounter an anti-Peak Oil article, the same two questions should always be present in your mind.
First, are there numbers? Seriously, that's the question. Quickly scan the article and verify that numbers actually exist. Peak Oil discussions are discussions about data. It's surprising how often one finds articles that drone on endlessly about "innovation" and "human ingenuity" without ever getting around to talking about data.
Second, if data is present, is it the correct data? The one and only definition of Peak Oil is "the maximum rate of oil production," this is most often stated as mbpd or million barrels per day. It's important to remember that the Peak Oil discussion is a discussion about the rate of oil production, where it is now, where it was in the past, and where we think it will go in the future.
If the author isn't discussing the rate of oil production, they aren't discussing Peak Oil.
With that in mind, let's dive into the World Economic Forum piece by Chevron CEO John Watson titled "We Used to Worry about Peak Oil then the Technological Revolution Happened." Watson's effort is a specific type of anti-Peak Oil article that I frequently call the "tech dump," a piece that throws a word salad of new tech and innovations at the page, leaving the reader awed and impressed while not actually addressing the central issue at hand.
"Since the discovery of California’s Kern River oil field in the late 1800s, the industry has used technology to grow supplies and deliver affordable and reliable energy to the world. Continuous advances in technology have enabled us to keep 100-year-old oilfields producing, to develop cleaner-burning fuels, and to do so with an increasingly smaller environmental footprint."
Remember, the key here isn't that Kern River is still producing - but producing at what rate? How does that compare to past results and future prospects?
"...the global energy system delivers the equivalent of more than 280 million barrels of oil every day from across all sources – oil, natural gas, coal, nuclear and renewables – of which oil and natural gas account for 149 million barrels. Meeting that total energy demand requires sufficient liquids to fill more than 18,000 Olympic-sized swimming pools each day, or more than 12 Olympic-sized swimming pools every minute of every day."
At last we meet our first "rate of oil production" value so it's worth digging into it and pointing out that the world doesn't actually produce 280 mbpd of oil, nor does it produce 149 mbpd either. So how do they get these values? To get to 280 you first add in oil production, that's the easy part. Next you figure out the energy content of natural gas, coal, nuclear, and renewables production. Once you have that, you can convert everything into British thermal units (BTUs) to give them all a common unit, and finally convert everything into "barrels of oil equivalent (BOE)," a unit of the energy contained within one barrel of oil. Since they now all have the same unit, you can theoretically dump them all in the same energy bucket to finally arrive at 280. You can do the same thing to get 149 if you only consider oil and natural gas production.
To see why calculations like this are troubling, look at the next sentence: "Meeting that total energy demand requires sufficient liquids to fill more than 18,000 Olympic-sized swimming pools each day..."
That's an easy conversion too: An Olympic swimming pool holds 660 thousand gallons of water. And a barrel of oil is about 42 gallons. So the volume of 18,000 swimming pools gets you back to the 280 million barrels.
"We don't have an energy problem, we have a liquid fuels problem," to paraphrase a line Robert Hirsch used to say. And as you've probably noticed, most of the 280 isn't liquid fuels. No matter how much we may want too, we can't sit here and pretend that natural gas, coal, nuclear, and renewables are oil, they're not. So no, we can't use liquids to fill up the 18,000 pools, because most of it isn't liquids to begin with.
This is discussion about the rate of oil production. And Watson tried to muddy that water with a bunch of irrelevant data about things that aren't oil.
If you're reading any energy document, even if it's from the EIA, and the authors are going out of their way to take the extra steps to convert values into big combined piles of BTUs or BOE, it's time to ask "Why" and dig a little deeper into the author's intent. And if you write about energy policy, please resist the temptation to convert fuels into BTUs or BOEs and lump unrelated energy production together. There's rarely a good reason to do so.
From here the article really moves into the "tech dump" category for the next few paragraphs. And remember, after each new technological reveal, like a broken record, your next comment should be: "Great, but what does this new tech mean for the future rate of oil production?" Technology improvements are a wonderful thing, but they have to be considered with the proper context. The shale revolution, for instance, has been a remarkable achievement. But for all it has done, here at the end of 2016, U.S. oil production still has not reached its all time height set all the way back in 1970. And that's the context to consider. It's important to understand why we could do so well back then with only 1970s technology and knowledge. We didn't move from onshore drilling to offshore to deepwater and now to shale because we wanted too. We moved in that direction because the limits of geology forced us too.
"The United States is now the global leader in total combined crude oil and other liquids production, overtaking both Saudi Arabia and Russia. In addition, we’re number one in terms of natural gas production."
Here again your eye should immediately center on the "other liquids production" part, because you'll frequently hear the incorrect claim that the U.S. has overtaken Saudi Arabia and Russia in oil production. It's not true, and the only way to make it true is to stretch the definition of "oil" by adding additional liquids into the mix. It's also key to spot when authors try to interchangeably use the terms "crude oil" and "petroleum." Of the two, petroleum production is always higher because it includes the other liquids as part of its definition.
Finally we reach the climax of the piece that proclaims Peak Oil dead:
"The technology we’re using today has evolved so profoundly from the early years of the Kern River oil field that the topic of 'running out of oil', which once dominated every industry conference, is rarely discussed today. The advances in finding new resources and extending the life of existing ones are so far-reaching that we in the industry have a common refrain: 'Tell me when technology will stop advancing, and I’ll tell you when we’ll reach peak oil.' Given how much we’ve advanced our industry – from the days of the simple land-based pump jack to today’s high-tech, digital oil field – I cannot imagine when that day might come."
There are proper and improper ways to have an optimistic position in the Peak Oil Debate. Improper ways rely on unrelated strawmen to make the case. Proper ways focus on explaining how the future rate of oil production will continue to increase or, at worst, plateau while resisting decline.
Unsurprisingly, Watson avoids the rate discussion entirely and chooses the most popular Peak Oil strawman in the book: the phrase "running out of oil." Anyone who ever uses that phrase either does not properly understand Peak Oil or is trying to intentionally mislead an audience about it. And it's easy to see why. It's human nature to relate a problem to "running out," think of the gas tank in your car for instance. Everything is perfectly fine until the needle is somewhere near "E". And if an audience allows them to move the goalposts and re-frame the debate to a simple question of "Do we still have oil? Yes/No" then they can set themselves up for a very easy debate victory.
Unfortunately, that's not at all how Peak Oil works. Oil will NEVER run out, but that's not the issue we're addressing here. By definition, peaking in production means that you still have lots oil left (maybe even up to 50% left). The problem is not that the oil isn't there, the problem is that after peak, producing at that same colossal rate becomes increasingly more difficult and expensive.
It's one thing to fill an industry keynote with pithy yet asinine phrases like "Tell me when technology will stop advancing..." or "Oil is created in the minds of men..." or "The stone age didn't end for the lack of stones..."
But at the end of the day, oil is a depletion business. You go after the cheap and easy oil first, and move on to the more expensive and difficult oil later. Price signals help move new technology into the picture that can help make things a little less difficult and a little less expensive. But the overall story is still the same.
Don't just tell us about your cool new tech. Show us that the tech can cheaply and easily move the global rate of oil production much higher decades into the future.
You don't kill Peak Oil by pointing out that the price is low. You don't kill it by bringing up incorrect predictions that only prove predictions are difficult. You don't kill it by confidently proclaiming near term peaks in demand and pretending that somehow solves any and all production challenges. And you don't kill it by wildly affirming your faith in innovation and an unwavering belief in human ingenuity.
You kill it, quite simply, by continuously increasing the global rate of oil production.