1. The Department of Energy reported today that US crude oil production for the week ending July 12 surged to the highest level since December 1990, more than 22 years ago (see chart above).
A massive oil find has put the Australian Outback on the energy map. The oil in the Southern Australia oil shale resource is estimated at 233 billion barrels, topping all of Australia’s reserves put together and nearly equivalent to all the oil in Saudi Arabia (see chart above). Some oil experts believe the deposit may eventually yield as much as 400 billion barrels, up from the initial maximum estimate.
The oil yet to be extracted is valued at US$18 trillion, putting Australia on the energy map among the big-money players. The resource is also putting the small town of Coober Pedy on the map. Coober Pedy had long been the home to 1,700 people who lived in residences literally carved out in its caves. Now another 20,000 people have suddenly flocked there, making it one of the hottest real estate markets in all of Australia.
3. From Forbes contributor David Blackmon’s article “As Fracking Rises, Peak Oil Theory Slowly Dies:”
Today, given the new abundance of shale oil, almost no real industry thought leaders are Peak Oil proponents, and the theory is now mainly advocated by self-promoting opportunists looking to gain free media attention by being contrarians to prevailing belief, and environmental activists who cobble together misleading data and fright scenarios to justify costly policies that throw billions of public dollars at renewable energy schemes.
The main reason why Peak Oil theorists always turn out to be wrong is that they by and large appear to be unable to grasp the huge role advancing technology plays in allowing the industry to discover new oil resources previously unknown, to access known resources that were previously thought to be unexploitable, and to extract an ever-increasing percentage of oil long known to be in place via secondary and tertiary recovery techniques. They appear to believe – either through lack of imagination or due to political convenience – that current assessments of available resources in known formations will always remain static and never increase, never understanding or acknowledging that those assessments will rise along with advances in technology.
4. In his classic 2009 blog post “Peak Idiocy” Mike Munger invokes Econ 101 to conclude that:
Of all the idiotic things that people believe, the whole “peak oil” thing has to be right up there. It is literally impossible for us to run out of oil. We have never run out of anything, and we never will.
The core of the Peak Oil hypothesis could be summed up as: sometime in the not so distant future we need to put some effort into finding new oil extraction techniques. This might be easy in which case there will be plenty more cheap oil. Or, it might be hard, in which case either we can switch to something else or, as with most every other good on earth, we will want to devote some fraction of our time and energy to continually pushing the technological frontier. And, while this is superficially true, it leads you to no deep conclusion and provides no serious insight into the future of humanity or the global economy.
6. Mark Mills writing today on the Real Clear Energy website:
The Oil Drum was a forum, arguably the best such, dedicated to the “peak oil” theory; the idea that mankind’s ability to produce oil had peaked and particularly in the hydrocarbon fields of America. The inevitability and urgency to subsidize alternatives to hydrocarbons was fueled by the peak oil theory. But what peaked instead was the ability to argue that the era of oil, and hydrocarbons, was over.
The notion of imminent exhaustion of hydrocarbons has been a core tenet of alternative energy pundits and rent-seekers. But considering geophysics, this has always been, to put it politely, silly. The Earth’s known, never mind unknown, quantities of hydrocarbons are countable in the tens of thousands of billions of barrels. The scale of the resource itself is bottomless. In the end, what is available is mainly about technologies. To believe oil had peaked you also had to believe that technology had peaked, which is even sillier.
The yearning of billions of people for cheap power and transportation can only be met for the foreseeable future with hydrocarbons. Fortunately, both Mother Nature and human technology are up to the task.