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Monbiot writes: "A boom in oil production has made a mockery of our predictions. Good news for capitalists - but a disaster for humanity."

Oil wells burning in the Persian Gulf. (photo: Reuters)
Oil wells burning in the Persian Gulf. (photo: Reuters)

We Were Wrong on Peak Oil. There's Enough to Fry Us All

By George Monbiot, Guardian UK

03 July 12


A boom in oil production has made a mockery of our predictions. Good news for capitalists - but a disaster for humanity.

he facts have changed, now we must change too. For the past 10 years an unlikely coalition of geologists, oil drillers, bankers, military strategists and environmentalists has been warning that peak oil - the decline of global supplies - is just around the corner. We had some strong reasons for doing so: production had slowed, the price had risen sharply, depletion was widespread and appeared to be escalating. The first of the great resource crunches seemed about to strike.

Among environmentalists it was never clear, even to ourselves, whether or not we wanted it to happen. It had the potential both to shock the world into economic transformation, averting future catastrophes, and to generate catastrophes of its own, including a shift into even more damaging technologies, such as biofuels and petrol made from coal. Even so, peak oil was a powerful lever. Governments, businesses and voters who seemed impervious to the moral case for cutting the use of fossil fuels might, we hoped, respond to the economic case.

Some of us made vague predictions, others were more specific. In all cases we were wrong. In 1975 MK Hubbert, a geoscientist working for Shell who had correctly predicted the decline in US oil production, suggested that global supplies could peak in 1995. In 1997 the petroleum geologist Colin Campbell estimated that it would happen before 2010. In 2003 the geophysicist Kenneth Deffeyes said he was "99% confident" that peak oil would occur in 2004. In 2004, the Texas tycoon T Boone Pickens predicted that "never again will we pump more than 82m barrels" per day of liquid fuels. (Average daily supply in May 2012 was 91m.) In 2005 the investment banker Matthew Simmons maintained that "Saudi Arabia … cannot materially grow its oil production". (Since then its output has risen from 9m barrels a day to 10m, and it has another 1.5m in spare capacity.)

Peak oil hasn't happened, and it's unlikely to happen for a very long time.

A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun. The constraints on oil supply over the past 10 years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.

Maugeri's analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is "the largest potential addition to the world's oil supply capacity since the 1980s". The investments required to make this boom happen depend on a long-term price of $70 a barrel - the current cost of Brent crude is $95. Money is now flooding into new oil: a trillion dollars has been spent in the past two years; a record $600bn is lined up for 2012.

The country in which production is likely to rise most is Iraq, into which multinational companies are now sinking their money, and their claws. But the bigger surprise is that the other great boom is likely to happen in the US. Hubbert's peak, the famous bell-shaped graph depicting the rise and fall of American oil, is set to become Hubbert's Rollercoaster.

Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn't flow naturally.

There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 in January.

So this is where we are. The automatic correction - resource depletion destroying the machine that was driving it - that many environmentalists foresaw is not going to happen. The problem we face is not that there is too little oil, but that there is too much.

We have confused threats to the living planet with threats to industrial civilisation. They are not, in the first instance, the same thing. Industry and consumer capitalism, powered by abundant oil supplies, are more resilient than many of the natural systems they threaten. The great profusion of life in the past - fossilised in the form of flammable carbon - now jeopardises the great profusion of life in the present.

There is enough oil in the ground to deep-fry the lot of us, and no obvious means to prevail upon governments and industry to leave it in the ground. Twenty years of efforts to prevent climate breakdown through moral persuasion have failed, with the collapse of the multilateral process at Rio de Janeiro last month. The world's most powerful nation is again becoming an oil state, and if the political transformation of its northern neighbour is anything to go by, the results will not be pretty.

Humanity seems to be like the girl in Guillermo del Toro's masterpiece Pan's Labyrinth: she knows that if she eats the exquisite feast laid out in front of her, she too will be consumed, but she cannot help herself. I don't like raising problems when I cannot see a solution. But right now I'm not sure how I can look my children in the eyes. your social media marketing partner


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+15 # nirmalandhas 2012-07-03 22:14
Does an increase in production mean that there has been an increase in oil reserves?
+15 # politicaleconomist 2012-07-04 09:44
Obviously there is not more oil in the ground than when these predictions were made but the technology of extraction has improved to allow for more FOSSIL FUELS TO BE EXTRACTED AND USED in the near future. THE larger point is THIS IS A DISASTER.
+7 # Granny Weatherwax 2012-07-04 11:12
Actually, an increase in oil price made more of the known (and as of yet unknown) deposits economically viable, so the higher the price the more the petroleum extracted.

One solution would be to tax it, so that people would decrease consumption, but don't hold your breath.
+8 # The Voice of Reason 2012-07-04 12:43
Am I the only one who gets this: vehicle are designed to waste fuel so the fuel-monger and car sellers can make massive wealth at the expense of the general public.

Gas prices are a daily tax that Americans can't wait to pay more for (like they do in Europe, etc.)

Until we demand an end to fuel-based economies, and demand vehicles that don't cost to drive, we will be slaves to the oil companies and the politicians they own.

But go ahead, have another drink and forget about it. It's all our fault for consuming too much. Exxon-erate the culprits, blame the citizens. It should work.
+33 # Damien Darby 2012-07-03 22:16
I'm sorry, but Peak Oil isn't a theory, it's a certainty. You based your argument on numbers provided by the oil industry; common. Oil boom? In fact, aren't consumption levels plummeting across the modern world? The only machine still chugging it down is the corporate military complex.

Shale oil and fracking are economically viable? How can that be justified once the environmental and human health costs are factored in?

+14 # politicaleconomist 2012-07-04 09:48
In fact, aren't consumption levels plummeting across the modern world?

NO, they aren't plummeting at all. If only this were true.

Shale oil and fracking are economically viable?

Of course they aren't. But capitalism does not take into account "environmental and human costs."

+6 # Granny Weatherwax 2012-07-04 11:13
unfortunately they are not: speculation rose the price of the barrel, and so it made economic sense to extract those barrels that are expensive to drill out.
-3 # Gordon K 2012-07-03 22:49
Cornell astronomer and geophysicist Thomas Gold and numerous Russian scientists long ago rejected the Peak Oil scenario because they found compelling evidence that petroleum is not a fossil fuel, but is, in fact, produced by purely geological forces. (Extremophile bacteria living deep in the Earth feed on crude oil, and so leave the chemical signatures for life which have fooled many scientists into believing that oil is formed from "old dinosaurs.") This viewpoint is scientific heresy in the West, of course, and so is probably correct.

I suggest readers check out Gold's very readable book on the subject, The Deep Hot Biosphere.
+6 # Granny Weatherwax 2012-07-04 11:17
Check out wikipedia about petroleum and find the "formation" section.
You will see that it comes from ancient algaes, the most recent of which is about 70 millions years old.
Unless you can add algaes 70 millions years ago, I doubt you can create pretroleum now to be exploited in the foreseeable future.
+3 # Gordon K 2012-07-04 11:47
Granny, I said that the abiogenic theory of oil formation is scientific heresy, did I not? Wikipedia is great for basic information on a host of topics, but on scientific controversies almost invariably is solidly main stream.

Thomas Gold was an exceptional scientist whose accomplishments were in the fields of astronomy, geophysics, and acoustics. Read his book before you dismiss his (and the Russians') ideas on oil formation.
+4 # Bigfella 2012-07-03 23:16
This artical does not take in that the oil industry is now going 5km under to sea to the sea bed and into our frozen wildernesses and places they would never have go in the past due to cost. The middle USA, UK, North sea and Australian oil fields are close to empty....yes the oil is still frying us all but it is deeper and more remote then before and it will not last past the middle of our 21st Add in that moden machinary uses less then 1/4 of the oil they did in 1900. Don't be fooled it is past the peak! We are on the down ward slope of all this even with increased production out of countries producing a TINY part of production for political reasons.
+1 # Granny Weatherwax 2012-07-04 11:41
Regardless of how it is extracted and at what cost, peak oil is defined by the fact that the production is decreasing.
If the production is increasing as it is, obviously we are not past peak oil.
-3 # phantomww 2012-07-05 10:24
The middle USA oil fields are close to empty? ARe you serious!!!! There is an oil boom happening right now in North Dakota. We have discovered more new oil in the last 5 years than we had over the last 20 years. The PA oil fields were "dry" in the early 1900's (first peak oil scare) and now there is more drilling going on. Maybe they are just drilling dry wholes. Wonder what all that black gold is that they are getting since we know that the fields are dry. ROFLMAO
+9 # Rick Levy 2012-07-04 01:17
Whether or not peak oil is true, either way we're screwed.
+7 # JackA 2012-07-04 06:25
Oil "supply" can be understood more than one way. We're pumping more oil out of the ground daily, so the supply to markets has increased.

However, as I understand the definition of peak oil, it has to do with the amount of crude oil remaining on Earth. The Earth isn't making any more of it, so as we pump it from underground, the global inventory of crude is decreasing. Peak oil is the point at which half of the global supply, calculated from the point we started pumping it out of the ground, has been consumed.

I've heard various claims about the year we had half of it remaining, but my understanding is that we passed that point a few years ago. That is less significant than the dramatic increase in demand in developing nations, China foremost. The people in these countries want the benefits that fossil fuels bring and there are billions of these people. The result is the vastly increased rate of depletion of crude oil.

That is to say, we'll consume the second half much faster than we consumed the first half. The estimates I've seen suggest that will happen this century, absent a dramatic shift to alternative energy sources.

Like crude oil, there is a fixed amount of carbon on the planet. Nature isn't making any more of it, nor removing any. The critical issue is that as we consume fossil fuels, we will be shifting the carbon inventory of Earth from underground to the atmosphere. There are significant consequences for doing that.
+3 # Granny Weatherwax 2012-07-04 11:44
Peak oil has nothing to do with the amount of oil remaining in the ground: this has been decreasing since the beginning of the usage of internal combustion engine by human beings.
Peak oil has to do with the yearly volume of petroleum extracted from the ground, regadless of the cost thereof.
-4 # phantomww 2012-07-05 10:16
Who says nature is not making any more oil? Or do you believe that oil came from dinosaurs and since there are no more dinos there can't be any more oil beign made? Thus the reason it is called "fossil" fuel. Or maybe, it is just made from organic matter and since we have lots of organic matter, the world will continue to make oil.

then again, I hear how environmental wackos actually think that solar is a renewable energy source. What a joke because there is nothing renewable about the sun. Now IT is running out of fule to burn and IT WILL go away. Just a scientific fact of life.
+1 # ruttaro 2012-07-11 10:42
phantomww, yes, the sun will burn about 5 billion years! But that has nothing to do with the problem confronting us which if unaddressed will change existence on this planet in ways we just don't know. Multiple species extinction is a real possibility within decades and human existence is not necessarily immune to the same. Rather than dismiss people as environmental whackos because they agree with settled science that burning of fossil fuels is radically and rapidly altering the climate, it would be better to consider the problem at hand and offer solutions. Instead of parsing words and terms so one can fly off in a rant how about thinking about what is meant by the terms used. Are fossil fuels renewable? In the context of what is being discussed here, no, they are not. Why? Because once burned they become something else that cannot be captured and reburned. Is solar renewable? Yes, for the opposite reason: it remains the same, available every moment and releases no pollution. But if you are having problems with the concept of renewable sources, then how about a simpler distinction: clean by-product energy vs polluting by-product energy. If you can tell me what the output of pollutants or green house gasses amounts to with solar vs the same measurement of fossil fuels and that solar is greater, than you have a point. The challenge before the world community is to lower the amount of CO2 output to keep the climate in balance. That means much less fossil fuels.
+5 # njinear 2012-07-04 09:39
there will be peak oil, along with peak everything else. this is just a temporary delay. there was already enough known reserves to fry the planet.
when it goes down it will go down fast as the increasing technological infrastructure to keep it flowing gets more and more complex and fragile.
-16 # phantomww 2012-07-04 09:45
Peak Oil is just another enviromental lie. The first "running out of oil" scare happened in the early 1900's when the PA oil fields went "dry". Of course oil was then discovered in TX and other places. Amazing how the "dry" oil wells in PA are now not so dry and the US now has more oil than Saudia Arabia. If the environmental wackos would get out of the way the US could be energy independant just using our own oil (but I would still import oil from our friends in Canada).
+1 # stonecutter 2012-07-04 11:13
Someone ought to plan a memorial for all those polar bears and seals.

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