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Say Goodbye to Peak Oil, for The Time Being

COMMENT: We’ve exam­ined the Peak Oil pro­pa­gan­da phe­nom­e­non in sev­er­al past broad­casts. Based on the notion that the world is run­ning out of oil, it has been used as jus­ti­fi­ca­tion for cast­ing aside envi­ron­men­tal con­cerns, rais­ing prices and impos­ing dra­con­ian social pro­grams to deal with the “emer­gency.”

As we saw in FTR #506 [1], the petro­le­um com­pa­nies have been say­ing the world has been run­ning out of oil since the 1920’s. (That was the jus­ti­fi­ca­tion for the devel­op­ment of the Fischer/Tropsch process to syn­the­size oil from coal.)

The epi­cen­ter for the Peak Oil ide­ol­o­gy is HIS Ener­gy Group, a sub­sidiary of Thyssen/Bornemisza indus­tries, which draws its con­clu­sions based on data fed to them by the very com­pa­nies that ben­e­fit from the dis­sem­i­na­tion of the the­o­ry.

It is no coin­ci­dence that Thyssen/Krupp bought the Leu­na hydro­gena­tion plant, orig­i­nal­ly built by I.G. Far­ben dur­ing World War II to syn­the­size oil uti­liz­ing the Fischer/Tropsch process.

The fear mon­ger­ing over Peak Oil has been used to pro­pose a Nazi-linked social agen­da [2].

For now at least, the oil com­pa­nies and their amen cho­rus have relaxed their pro­pa­gan­da, see­ing plen­ty of oil for decades to come.

It will be inter­est­ing to see how long this “Petro­le­um Pro­pa­gan­da Ploy” remains dor­mant. When prices get too low, or envi­ron­men­tal restric­tions too high for the lik­ing of the oil barons, don’t be sur­prised to see it reemerge.

In pass­ing, I will note that I am fun­da­men­tal­ly crit­i­cal of the fos­sil fuels industry–two thumbs down on oil. We should be going full speed ahead to devel­op renew­al ener­gy sources. Many pro-envi­ron­ment advo­cates have been suck­ered by the peak oil phe­nom­e­non, see­ing it as a “green issue.” It is noth­ing of the kind.

“Peak Oil Scare Fades as Shale, Deep­wa­ter Wells Gush Crude” by Joe Car­roll; Bloomberg News; 2/6/2012. [3]

EXCERPT: When Daniel Lacalle, in his ear­ly 20s, took a job with Span­ish oil com­pa­ny Rep­sol YPF SA in 1991, friends chid­ed him for enter­ing a field with no future. “They all said, ‘Why do you want to do that? Don’t you know only 20 years of oil is left in the whole world?’ ” he recalls.

Two decades and four ener­gy crises lat­er, the U.S. Geo­log­i­cal Sur­vey esti­mates that more than 2 tril­lion bar­rels of untouched crude is still locked in the ground, enough to last more than 70 years at cur­rent rates of con­sump­tion. Tech­no­log­i­cal advances enable com­pa­nies to image, drill and shat­ter sub­ter­ranean rocks with pre­ci­sion nev­er dreamed of in decades past. Tril­lions of bar­rels of petro­le­um pre­vi­ous­ly thought unreach­able or nonex­is­tent have been iden­ti­fied, mapped and in many cas­es bought and sold dur­ing the past half decade, from the bog­gy wastes of north­ern Alber­ta, to the arid moun­tain val­leys of Patag­o­nia, to Africa’s Rift Val­ley.

“Bet­ting against human inge­nu­ity has been a mis­take,” says Lacalle, who today helps over­see $1.3 bil­lion as a port­fo­lio man­ag­er at Ecofin Ltd. in Lon­don. “The resource base is absolute­ly enor­mous, so much so that we will not run out of oil in my life­time, your life­time, our chil­dren’s life­times or our grand­chil­dren’s life­times.” . . .