Peak Oil? Not Yet, Stephen Leeb

 Originally published in Flourishing February 2012.

Here and elsewhere over the last forty years, I’ve discussed the nonsense theory of “peak oil”, formerly promoted by newsletter writer, Stephen Leeb, and others.  In case you missed it, “peak oil” means we’re running out of oil.  We aren’t, and a new report, North American Energy Inventory*, dated December 2011, provides more incontrovertible evidence.

Based on data from the U.S. Geological Survey and the Energy Information Administration,  the Energy Research Institute concludes, “The massive supply of available resources means that North America’s access to affordable energy is limited only by the government policies we choose to adopt.”

The report provides data on oil, natural gas, and coal, but for this article, I’ll restrict myself to oil. 

North America has 1.79 trillion barrels of recoverable oil.  That’s almost twice the combined reserves of all the OPEC nations, and more than six times the proved reserves of Saudi Arabia.  It’s also more oil than the entire world has consumed since the first domestic oil well was drilled in Titusville, Pennsylvania more than one hundred and fifty years ago.

Based on those figures, Kansas could continue its current rate of oil consumption for another 23,358 years.  However, you should probably be told that those greedy oil people in Texas will run out in only 1,570 years, and when they do, they’ll come after our share.  Okay, however unfunny our government’s energy policies are, that last remark was a joke.  mh

North American Energy Inventory, Institute for Energy Research, December, 2011.  Available in PDF at http://energyforamerica.org/.

A Brief Economic Update on Oil

Originally Published in eFlourishing Issue 10, May 30, 2010

The theory of “Peak Oil”, like the theory of “anthropogenic global warming”, is, I believe, factually unsustainable. Both theories conveniently discount the scope and effects of natural phenomena and the unlimited potential of the liberated human mind. Fortunately, as Mrs. Cunningham taught her history students nearly fifty years ago, the truth will out. According to a recent Gallup poll (http://www.gallup.com/poll/126716/Environmental-Issues-Year-Low-Concern.aspx) , the number of people who take “Global Warming” seriously has fallen to 28%. “Peak Oil” is headed for the dust-bin of science, too.

Oil production increased in the Gulf of Mexico and North Dakota last year. Those increases more than offset declines elsewhere in the U.S. for the first annual increase in U.S. oil production since 1991. The U.S. Energy Information Administration (EIA) reported in its March 2010 Short-Term Energy Outlook that U.S. oil production in 2009 averaged 5.32 million barrels a day, up from 4.95 million in 2008. That’s an 8% increase.

Several weeks ago, a subscriber/client sent me a link to some information about the Bakken Formation in North Dakota. I checked it out. According to a 2008 report by the U.S. Geological Survey, Bakken could increase technically recoverable reserves by up to 4 billion barrels. Though newsletter and stock promoters often exaggerate the potential of the Bakken Formation, the recent EIA Outlook shows that Bakken does add significantly to production. The increases in production in both the Gulf of Mexico and North Dakota’s Bakken Formation show – yet again – how oil company investments in rapidly developing technology can increase both known reserves and current oil production.

As the economist Dr. Reisman reminds us, from its surface to its center – a distance of four thousand miles – the Earth is nothing but a solidly packed ball of natural resources. Even with the scientific and technological progress we’ve made during the 150-year history of the oil industry, we’ve succeeded in drilling in just a few places to a depth of only about seven miles – a pin prick.