The Myth of the Oil Crisis
The tank isn't empty
By Steven Martinovich
It is taken as an article of faith, thanks largely to a decades old prediction made by M. King Hubbert on American oil production, that the world is in imminent danger of running out of oil. Peak production, the day when oil production begins its irreversible slide, may be less than a decade away, say some experts, and the world economy could collapse overnight in response.
Except that isn't the truth, argues Robin M. Mills in The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming. He believes that the world is in little danger of running out of oil, that the world has enough conventional and unconventional sources of oil to last it many decades – even centuries. The peak oil arguments are based on faulty logic and science and assumptions which aren't grounded in reality.
The peak oil argument largely stems the prediction made by Hubbert in 1956 that American peak oil production would take place in 1970. The problem with Hubbert's methodology is that it has only ever been proven correct that one time. His succeeding predictions, including that the world would hit peak oil production in 1995, have been uniformly wrong. That hasn't stopped his acolytes from continuing to promote the notion that we are in imminent danger of running out of oil.
Mills, a petroleum economics manager for the Emirates National Oil Company in Dubai, argues that peak oil advocates have long underestimated the amount of estimated and proven reserves and that exploration has largely keeping pace with production when necessary. The recent rise in oil prices doesn't reflect scarcer resources but underinvestment on the supply side and global economic growth on the demand side.
To support his argument Mills carefully surveys the world's oil producers and analyzes their past, present and predicted future output. Unlike peak oil advocates, Mills generally takes a guardedly optimistic view and argues that many nations have untapped resources that haven't been exploited for various reasons which include economics, technical and environmental, or that they simply aren't needed at the moment.
From there Mills examines what he refers to as "unconventional oil", oil that is derived from deep sea drilling, the arctic and shale, among other sources. He estimates reserves as high as a trillion barrels of oil, more than enough to keep the global economy moving for decades. Mills also looks at the role that alternative fuels will likely play in lessening oil use and acting as a cushion for the inevitable day when we transition from an oil-based economy.
Unlike many peak oil advocates, The Myth of the Oil Crisis is a thoroughly sourced effort. And while many nations are reticent to release internal data on the state of their oil resources, Mills is well-placed as an industry insider to make educated guesses utilizing available data. He has crafted a balanced and reasonable approach to the subject – one that is certainly very persuasive.
The Myth of the Oil Crisis does have one weakness and that is Mills' unquestioning belief in anthropogenic climate change. While he is rigorous in sourcing and analyzing his data and resulting arguments when it comes to oil production, he simply accepts as a given that climate change is being caused by human activity. While it doesn't detract from his wider argument on the sustainability of oil production, it is a disappointing flaw when compared the quality of his work.
That aside, The Myth of the Oil Crisis is a valuable addition to the debate over oil production. Peak oil advocates have long had the ear of the media and most of the space on book shelves despite the fact that their arguments seemed more grounded in ideology and bad science. Mills' efforts to argue the other side of the debate are welcome and a forceful rejoinder to Hubbert and his many acolytes.
Steven Martinovich is a freelance writer in Sudbury, Ontario, Canada.