Depletion Book
Last Sunday's NY Times Book Review carried this review of "Out of Gas", by David Goodstein, a Cal Tech physicist. Although I haven't read the book, it would appear to move the topic I covered in last Friday's blog out of the technical press and into the mainstream. This should enlarge the debate, and that seems healthy.

Nevertheless, I can't help feeling that there are a lot of folks out there trying to pin down something that is inherently unknowable until you can look back and say, "Yes, that was the peak of oil production." If I have understood all the analysis, arguments, and evidence, then there probably is a geologically-determined peak of production looming somewhere ahead, whether this decade or 50 years from now. However, as I said earlier, I believe we could experience a practical peak with higher certainty and sooner than the theoretical peak.

This is a little like the oft-quoted remark by Sheik Yamani, the former Saudi oil minister, "The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil." My paraphrase of this would be that we won't run short of oil because there isn't enough left in the ground, but because it won't be politically or economically feasible to produce as much as people want.

The distinction between my argument and the depletion crowd's view may seem esoteric and trivial, but I think it matters for the following reason: Because no one can predict precisely when a geology-driven decline will happen, it makes it very difficult to justify taking any action now, particularly an expensive one such as switching to an alternative energy source. Conversely, because we can monitor the economic and geopolitical factors that would create the kind of practical oil peak I suggest, we will have more advance warning of such an event and can also contemplate action to stave it off through changes to trade policy, industry structure, tax regulations, and contractual terms between companies and sovereign countries.

The latter approach has the added advantage of avoiding the kind of wolf crying that has been going on for at least the last 50 years, with every generation of oil professionals signalling an imminent decline. It is one thing to tell people we are running out of oil and quite another to say that, due to industry consolidation, low returns relative to other investments, and political squabbling over pipeline routes, it appears we may not be drilling enough wells and building enough infrastructure to ensure that the oil (and natural gas) we will need in the future can be brought to market quickly enough to avoid a shortfall.