The two major threats to the continued viability of the fossil fuel industries (in our current economy) are decreased public demand for their products and a decreased ability to supply them.
The main threat to demand for fossil fuels is public concern over climate change due to carbon dioxide emissions. As revealed by Suzanne Goldenberg in an article in The Guardian, “Secret funding helped build vast network of climate denial think-tanks” (14 Feb 2013) over $100 million was channelled to anti-climate science groups between 2002 and 2010 from wealthy conservatives in the USA. This included funds from oil industry actors such as ExxonMobil and Charles and David Koch. As Giles Parkinson wrote after the release of the International Energy Agency’s (IEA’s) World Energy Outlook (WEO) report for 2012 (Reneweconomy, 13 November 2012),
“Basically, the WEO data suggests, there are a trillion reasons for the global coal lobby to resist change. That’s one trillion dollars each and every year – the loss in annual revenue for the coal industry if the world takes serious action to prevent global warming, rather than just continuing on in business-as-usual.”
An imminent decline in the ability to “produce” fossil fuels following peaks in production threatens not only the future income of fossil fuel companies but also their ability to find investment funds for future production. According to the IEA’s 2011 WEO report [16], almost $20 trillion must be invested in oil and gas energy supply infrastructure between 2011 and 2035 to ensure supply. That is approaching $1 trillion per year. Governments also fear the concept of peak oil since a belief in future scarcity might wipe out confidence in economic growth, disrupt stock markets and cause economic contraction before the inevitable contraction that reduced energy production itself would bring.
The main tactic used by the fossil fuel industry to avoid discussion of peaking production is to focus on the size of apparent resources. The idea it promotes is that remaining fossil fuel resources far exceed those that have already been consumed. While this is debatable it is also misleading since peak oil / gas / coal refers to peak rates of production, not the size of remaining resources or apparently economically producible reserves.
A rather tragic example of the propaganda campaign to suppress the idea of peaking oil production is a discussion paper published in June 2012 by Leonardo Maugeri of the Belfer Center for Science and International Affairs under the moniker of Harvard University’s John F. Kennedy School of Government. The paper, “Oil: The Next Revolution: The Unprecedented Upsurge of Oil Production Capacity and What It Means for the World” dismissed peak oil concerns and predicted a possible future glut of oil production [17]. Unfortunately (for the author and Harvard University) the paper is riddled with simplistic and serious arithmetic errors and confusions of terms. These are well summarised in an article by the English energy journalist David Strahan, “Oil Glut Forecaster Maugeri Admits Duff Maths” [18]. Nevertheless, the publication online of this paper without peer-review led to widespread and rather triumphant dismissal of peak oil concerns. Most famously, the British environmental columnist George Monbiot responded to Maugeri’s paper with an opinion piece, “We were wrong on peak oil. There's enough to fry us all: A boom in oil production has made a mockery of our predictions. Good news for capitalists – but a disaster for humanity”. Maugeri’s deeply flawed report remains available at the Belfer Center website.
resilience
