Oil Panic and the Global Crisis: Predictions and Myths
Article first published online: 31 MAY 2010
© 2010 Blackwell Publishing Ltd
Volume 10, Issue 3, pages 455–456, August 2010
How to Cite
Peters, K. E. (2010), Oil Panic and the Global Crisis: Predictions and Myths. Geofluids, 10: 455–456. doi: 10.1111/j.1468-8123.2010.00297.x
- Issue published online: 17 AUG 2010
- Article first published online: 31 MAY 2010
Oil Panic and the Global Crisis: Predictions and Myths Geofluids (2010) , 2010 . Wiley-Blackwell , Chichester, UK , 241 pp .
‘It’s the end of the world as we know it’ by R.E.M. is a favorite of rock music aficionados. Hollywood also clearly understands our insatiable appetite for disaster. Will Earth be struck by a meteor like the one that caused the extinction of the dinosaurs? Will a new superbug end civilization or will we exterminate each other in a global nuclear holocaust? Worse yet, will I have enough gasoline to drive to the beach this weekend? Is the world running out of oil?
The book ‘Oil Panic and the Global Crisis: Predictions and Myths’ by Steven M. Gorelick is a refreshing and methodical exposé of the most common myths about oil that many of us hold as truths. Gorelick weaves an intriguing story from what might have been a dreadfully boring, yet impressive collection of data and observations. It was a pleasure to read and learn from this book, which I highly recommend to experts and non-experts alike, particularly our leaders in government. Every president of the USA since Eisenhower has promised to reduce America’s dependence on foreign oil, yet as each administration nears the end of term, we are more addicted than ever and we still lack a coherent national energy policy. We currently import about 70% of our oil at a cost of $700bn per year; four times the annual cost of the Iraq war. Perhaps this book is a small step in the right direction.
The book begins by asking the reader whether five deceptively simple statements are true or false. By the end of the book, I was convinced that two of my answers were wrong and another was at best a bit shaky. Gorelick never formally answers these questions; he leaves that work for the reader, but the book provides a wealth of information that instills doubt, shakes paradigms and forces some serious rethinking of one’s opinions.
The book is divided into five chapters, each with a summary and appended list of notes and supporting references. Chapter 1, ‘End of the Oil Era’ introduces the problem: if peak oil production marks the beginning of the end of the Oil Era, then as we reach that point it becomes ever more urgent that we re-structure our oil-based society. But when will peak oil production occur? The chapter gives a clear description of the three adjustable parameters that control the slope, peak height and time of the peak for the famous (or infamous, depending on your viewpoint) M. King Hubbert logistic curve that predicts the availability of petroleum resources versus time.
Chapter 2, ‘The Global Oil Landscape’ sets the stage for further discussion by defining key terms, and discussing the oil business, OPEC, and where oil is produced and consumed. Chapter 3, ‘The Historical Resource Depletion Debate’ explains neo-Malthusian doctrine, which dominates the resource depletion debate and has been linked by many with Hubbert’s conjecture on global oil depletion.
In Chapter 4, ‘Counter-Arguments to Imminent Global Oil Depletion’ Gorelick shines as an independent thinker who does not simply accept what the ‘experts’ say. I thoroughly enjoyed his methodical disassembly of various myths: Hubbert’s predicted production rates were accurate; a decline in production indicates scarcity; resource assessments provide useful endowment estimates; there is little oil left to be found; the world cannot afford increases in oil use as developing nations demand more oil; there are no substitutes for oil.
Chapter 5 ‘Beyond Panic’ considers three key questions: (1) where is an efficiency gain possible, (2) will increases in efficiency reduce demand, and (3) what might ultimately substitute for oil? Rather than steal thunder from the book, I leave it to the reader to study Gorelick’s suggestions about how we should proceed to address the global oil crisis. As a teaser, Gorelick convincingly argues that our current paradigm to explain oil depletion is simply wrong. That paradigm is based on the assumptions that the global oil endowment is a known quantity and that consumers buy what is available because production rates control delivery to the market. The book unequivocally shows that these two assumptions are false. First, an accurate mass balance calculation is impossible for various reasons, such as technological advances and the politics of oil-producing countries, which can transform resources into reserves and vice versa. For example, resource assessments as conducted by the US Geological Survey consistently project larger and larger estimates of the worldwide oil endowment over time. The end of the Oil Era is a moving target that continues to march into the future. Forecasts of global oil depletion should not depend on these global resource estimates, nor should they rely so heavily on simplistic projections of recorded discovery and production data. Second, production does not limit oil consumption; rather consumer demand at a given price controls how much oil is produced. If there is a Hubbert-like peak in global oil production in the next few decades, it will probably reflect decreased oil demand rather than oil depletion.
The value of this book and other pleas for rational planning of a future after the Oil Era, such as the T. Boone Pickens Plan, can only be realized if the right people learn the facts and are willing to act. In the words of Mr Pickens, ‘America is in a hole and it’s getting deeper every day’. The world is not far behind, but as R.E.M. would say ‘It’s the end of the world as we know it (and I feel fine)’.