You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

Are Peak Oil Fears Really Bogus?

Earlier this week, energy consultant Michael Lynch wrote a New York Times op-ed that aimed to debunk "peak oil" fears. Lynch dismissed "the theory that geological scarcity will at some point make it impossible for global petroleum production to avoid falling." While some peak-oil proponents argue that oil companies are discovering just one new barrel of oil for every three or four that's produced (leading to dwindling reserves), Lynch argued that this is much too pessimistic, noting that estimates for known fields often get revised upward but don't get reported as "new discoveries." He then went on to say:

In the end, perhaps the most misleading claim of the peak-oil advocates is that the earth was endowed with only 2 trillion barrels of "recoverable" oil. Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent—another 2.5 trillion barrels—in an economically viable way.

In other words, even Lynch himself admits "that geological scarcity will at some point make it impossible for global petroleum production to avoid falling"—he just thinks that point is further away than peak-oil theorists claim. If you believe that technology gains will allow us to one day discover and tap a total of 3.5 trillion barrels of oil instead of two trillion, then we haven't passed the halfway point yet (to date, humanity has only produced about 1.1 trillion barrels of oil).

As you'd expect, Lynch's op-ed attracted a torrent of criticism. Nate Hagens of The Oil Drum pointed out that fears of peak oil aren't just based on capacity figures. It also has to do with flow rates, timing, and costs. That is, just because the oil's out there somewhere doesn't mean we're pumping it out of the ground fast enough to meet our needs. As the International Energy Association notes in its "World Energy Outlook 2008":

Though most of the increase in reserves has come from revisions made in the 1980s in OPEC countries rather than from new discoveries, modest increases have continued since 1990, despite rising consumption. The volume of oil discovered each year on average has been higher since 2000 than in the 1990s, thanks to increased exploration activity and improvements in technology, though production continues to outstrip discoveries (despite some big recent finds, such as in deepwater offshore Brazil).

That is, even taking into account Lynch's point about upward revisions of oil reserves at existing sites, output at many fields is declining, while global demand is rising fast, outstripping the pace of new discoveries. In order for production to keep pace with demand, the IEA estimates that we'll need 64 million barrels per day of additional capacity—the equivalent of six Saudi Arabias—to come online by the year 2030. Otherwise, prices will go up considerably. And the IEA is, suffice to say, skeptical that current investment can bring the equivalent of six Saudi Arabias online by 2030.

Meanwhile, the folks at The Oil Drum notch a couple of other criticisms of Lynch's piece. They note that recent technological improvements that have increased the flow rate at existing oil fields could lead to even faster drop-off rates in the near future. They also point out that, as oil has become increasingly hard to find and extract, the net energy gains from producing the oil have steadily declined. We're not yet near a point where it takes more energy to produce the oil then you get from the oil itself, but as extraction continues to move farther offshore and deeper underground, it's quite likely that the net gains will decrease.

(Flickr photo credit: FreeWine)