Oil Supply and Demand

I got an e-mail from Marty Sereno, professor, Cognitive Science, University of California, San Diego, regarding “Oil and Instinct.” What follows is his e-mail message (minus a last paragraph about helium) interspersed with my replies.

Marty Sereno: I received an undergraduate degree in geology (currently I study the brain). As evidence against an eminent peak in petroleum production/ extraction, you recently (April 13, ’05) cited the fact that another geologist wasn’t able to get a job as a well logger (yes I read through all the original posts and only just failed to repress the urge to email). Why not also consider some physical data besides prices and one geologist’s employment history?

Sam Koritz: Actually, I posted without (relevant) comment an e-mail I had received from a former well logger. I didn’t cite it as evidence, and I’m aware that anecdotes make poor arguments.

MS: In the past year, world oil use increased 2.5 million barrels/day. This one-year increase is more than the entire current output of Iraq (1.5 million barrels/day), and almost as much as the output of Iraq in the halcyon days of the ’80s (3.5 million barrels/day). We are not close to finding an Iraq’s worth of oil every year (could this have something to do with the employment picture for geologists?). Iraq is generally assumed to contain perhaps 12% of the remaining oil on the planet. I don’t see how energy sources “have changed relatively painlessly since the dawn of the industrial age.”

SK: What I mean by “relatively painlessly” is that during the time in question the world experienced an unprecedented increase in health, wealth, liberty and longevity.

MS: After the deforestation of Europe (just after the time of Malthus, incidentally), coal was first mined and then oil and gas were drilled and pumped. Where’s the change? The so-called ‘production’ of coal, oil, and gas continues faster than ever (for now!). I’ve assembled a bunch of graphs and data on oil production and reserves, and the current status and prospects for alternative energy sources (hydrogen is not an energy source) here [PowerPoint] or here [pdf file].

SK: Where’s the change? The change is in the types and amounts of fuel used since the dawn of the industrial age. As your “World Primary Energy Mix” chart shows, oil was not used as fuel in significant quantities a century ago, but by the late 20th century it had surpassed coal (which had previously surpassed biomass) as the most-used fuel source. It’s true that worldwide coal production has increased in an absolute sense but it has declined on a per capita basis, and large, modern nations have reduced coal consumption on an absolute basis, while increasing per capita wealth. For example, according to the British government’s 2001 document, “Trends in coal production and consumption“: “Coal consumption in the UK has declined at an average annual rate of 3 per cent from its peak in 1956.”

MS: The current ratio of renewable energy sources such as oil + gas + coal to photovoltaic + wind is currently 1400 to 1. Changing that ratio to something closer to 1 to 1 doesn’t sound “relatively painless” to me. For one, replacing world electrical generation with photocells would use use up three times the total amount of silver currently thought to exist on the planet. Running your $50,000 20 kWh/day roof top solar cell system for a day would generate the equivalent amount of energy to what is found (yes, found) in about a half a gallon of gas (a car is a 100,000 watt device). And that’s assuming you used the energy immediately. Storing the energy in batteries or hydrogen and then getting it back out of them involves substantial losses both ways. I can hear people groaning, Who wants to actually learn something about the difference between kilowatts and kilowatt-hours, or silver deposits, or how to grow food? Well tough luck. Endless bloviation about money isn’t going to fix things. The data seems pretty clear to me. If you have other data suggesting a different conclusion, I’d like to see it. Where is the “junk science”? Money doesn’t make the current world go: oil, coal, gas, biomass, nuclear, hydroelectric, human and animal muscle (remember horses and slaves?), and photocells do, in that order. …

SK: Money, or rather economics, has everything to do with which of the things that make the world go are used and in what quantities. Economics explains, for example, why the amount of wealth created from each unit of fuel is increasing over time — even as the total quantity of the fuel on Earth decreases.

There are two parts to the peak oil debate: (1) that oil production is, or will soon be, in decline, and (2) that unless governments prepare for this decline it will lead to a significant crisis. I don’t believe oil production is in decline because: oil production keeps increasing, previous estimates of oil and other commodity shortages have been consistently wrong, and the price of oil does not appear to be in a long-term up trend, as one might expect if there were a supply shortage. The (inflation-adjusted) price of oil is lower than it was 25 years ago but higher than it was few years ago. The recent price rise is unsurprising, considering the surge in demand for commodities caused by China’s economic boom. Compare for example this oil price chart — here — with this iron ore price chart: here.

Regardless, both economic theory and history suggest that the market is capable of adjusting, without major crisis, to commodity depletion.

This is all Woodrow Wilson’s fault

Saturday beginning at 4pm Eastern time on the Weekend Interview Show, I’ll be talking with Jim Powell, author of Wilson’s War: How Woodrow Wilson’s Great Blunder Led to Hitler, Lenin, Stalin and World War II. In the second hour, the guests will be Elaine Cassel to discuss Ahmed Abu Ali, and Laurence M. Vance about his book, Christianity and War and Other Essays Against the Warfare State.

Update: Show’s over, Archives.

How to make a difference in Iraq

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L to R: Rafat, Dr. Salam and Raed

Raed Jarrar, his family and girlfriend Niki began a project some five months ago to purchase and distribute medicines in Iraq. They thought that being Iraqi (except Niki, who’s Iranian), they’d know the best places to distribute the aid so that it did the most good. So, they began taking donations, buying medicines and medical supplies in Jordan and distributing them in Iraq. Raed documents everything they do with photos and scans of documents, so that he’s not only doing a good deed in a very aboveboard and accountable fashion, he also almost inadvertently creates a heartwarming story on his blog. So go here and scroll up through the story of the third batch of medicines and how it got to Iraq, or just go here and scroll down.

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Raed: I tried to cover some of the medicines so that when my mom woke up she wouldn’t have a heart attack… Raed’s Mom having a heart attack over the redecoration of her living room


All the medicines in this, the third batch, were bought with only a little over ten thousand US dollars in donations. In all, Raed has received almost eighteen thousand dollars (US). Oddly, the donors seem to be mainly Canadian? How is that possible?

I think Raed and his friends and family have done a great job with this project.

Iraqi Victims of American Delusions

Since a murderous, violent resistance movement (which antiwar people predicted) rules much of Iraq rather than the liberation cakewalk and democratic utopia (that prowar people predicted), an inevitable class of victims of the American invasion of Iraq has emerged (just as it always does, after an invasion.)

To the resistance, they’re collaborators and to the occupiers they’re living proof of failure. They want to get out of Iraq before the resistance kills them and their families for aiding the US occupation. The Americans in Iraq want them to shut up and go hide somewhere, so they won’t be embarrassed back home by the spectacle of Iraqis fleeing the US-recreation of the Garden of Eden in Mesopotamia. This woman sums up their predicament poignantly,

Alyaa hoped to find a haven in the United States but discovered the State Department isn’t resettling refugees from Iraq. She’s lost her faith in the country she once loved.

“We gave them our friendship,” Alyaa said during a recent interview at an Amman restaurant, wearing jeans and smoking cigarettes. “We gave them our hard work. And they don’t even help us to have a new life.” Is it so hard, she asked, “for America to give a visa to Iraqis to have a new life that they took from them?”

Iraqi refugees in mortal fear at home can’t get entry into United States

Recommended reading

Jonathan Schwarz has a great interview with Chris Floyd posted. Just so you know what you’re missing if you don’t go over there and read this interview, here’s Chris Floyd on Matt Taibbi (who I vote for as the subject for Jonathan’s next interview, if he can’t get JD Guckert.)

There were lots of people from the paper [The Moscow Times]during that period who you see now all over the place. Carlotta Gall, who’s in Afghanistan now for the New York Times. I used to take her dictation when she’d call on her satellite phone from Chechnya. Anne Barnard, who’s in Baghdad for the Boston Globe. Frank Brown, my roommate in Moscow, who writes for Newsweek now. Matt Taibbi was there.

Taibbi was a great reporter, a big, honking goon of a guy who’d ride with the police and get down in the real Moscow dirt. He used to make fun of me because I wore this black shirt with a pink tie—I had about four changes of clothes altogether while I was there, living out of a couple of suitcases—so he started calling me “Cheap Trick,” because he thought I looked like one of the singers from that old band. Which I suppose tells you something about his musical tastes.

Oil and Instinct

I’ve received some replies to my blog entry of April 3. Unfortunately, most of them rehash issues I’ve already addressed. I did provide a link to the pre-April 3 debate but I don’t blame people for not going back and reading all that before e-mailing in their criticism, questions, and mockery; it’s quick and easy to send an e-mail, while reading is time-consuming and brain-tiring. In this same spirit I’m going to refrain from replying to the rehashing e-mailers. I find myself unable, however, to refrain from replying briefly to an essay titled “Is Peak Oil a myth? Just so long as we can catch the goddamn monkey,” posted on the (apparently popular) Daily Kos blog by a self-described “Mom of 2, Ex-Yuppie, 3rd Generation Democrat, Engineer, MBA, Silly Goose” calling herself Lawnorder. Her first sentence introduces one of her (long) essay’s main themes:

“AntiWar.com editor Sam Koritz thinks Big Oil and imperialist neocons are fooling us all into believing the world’s supply of oil is ending and that the end of Oil would amount to such a big crisis.”

Nope. I never wrote that anyone was fooling anyone else into believing in peak oil theory (POT). Erroneous economic beliefs — from the lump of labor fallacy to the potty “lump of fuel” fallacy of our current debate — are the norm; no conspiracy required. (My guess is that much of this economic ignorance can be explained by natural selection: we intuit our ancestors’ world of warring tribes and privation.)

The strange thing is that, before writing her piece, Lawnorder actually did bother to go back into the archives and read my “Economics of Oil, Part 2” posting in which I answer a similar mistaken criticism from a reader named Joseph O’Ruandaidh, and in which I explicitly deny having claimed that any oil conspiracy exists. Lawnorder, in her Kos essay, prominently quotes O’Ruandaidh’s criticism but not my reply.

I just want to rebut again this misrepresentation of my argument: I have not claimed that there is a conspiracy of any sort involving oil. I’ll leave the rest of Lawnorder’s essay alone, except to point out that evidence for POT (the theory that oil production has peaked or is about to peak, and that this will cause a major world crisis) does not include ecological disaster on Easter Island, North Korean famine, global warming, or the fact that fuels are not free.

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