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Re: ARE We Out of Gas Yet? (Score: 1)
by alecifel (resident@olduvai.net) on Thursday, July 27 @ 14:10:34 PDT
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I would not say that Lynch is an idiot. If you've never read Adam Smith's The Wealth of Nations, I heartedly recommend picking up a copy.
Nor would I say, after reading his work, that Lynch denies the reality of Peak Oil. Instead, he's putting a little reality ice on the hellfire and brimstone that the Prophets of Doom use to boost their book sales. The economy is a very resilient thing. While alternatives to oil aren't really over-running us in spades, high prices will curb demand anyway. People will switch to more fuel-efficient ways of doing things as prices escalate.
Production is limited by demand as much as it is by geology. There seems to be a mistaken assumption out there that oil producers pump out as much as they can, as fast as they can. But they can't sell any more than there are buyers for it. So, they pump what the market needs, and a little extra to put in a tank for someone who underestimated their needs for the month (that's called the spot market, and it's located right here in Cushing, OK.) He's NOT implying that more oil will magically appear because the market demands it. No person with even a rudimentary education could believe that. What he is saying is that, simply, we cannot say that oil has peaked until demand has outstripped all possible sources of supply. Given that every potential oil-bearing patch of shale on the planet has not yet been explored, it's impossible to say that we have reached the limits of production.
That said, I would like to add that the likelihood of finding another Ghawar is pretty slim, and that even if we're not at a peak we are certainly approaching the top of the hill. Even if tomorrow more oil was discovered than all we have known about up until now, there will be a peak production at some point in the future. What is frightening, is that advances in extraction technology DO increase the percentage of a field that can be extracted.. which makes the front slope of the curve longer, but the back slope shorter and steeper. I.E. if we get much better at removing the stuff, we may face a calamitous drop in production and a faster rate of collapse in the end (such as the rapid declines at Cantarell).
Reality lies somewhere between Kunstler's "Chicken Little" act (where was he on Y2K?) and Lynch's "good times forever". Buckle your belts, keep your head level, and you all may make it through this transition a little battered but still kicking.

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