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The Peak Oil Lie, Petroleum is Plentiful

Politics / Crude Oil Dec 31, 2009 - 02:54 AM GMT

By: George_Giles


Best Financial Markets Analysis ArticleAs the first decade of the twenty-first century draws to a close it is worth reviewing topics that may impact every man, woman and child. The disastrous Bush Administration pulled the legs out from under the baby boomers retirement with his inability to veto any spending bill. He has even crippled the future of the unborn. Lil’ Bush launched a global war on an adjective (terrorism) without any strategic objective. Previous wars had nouns as the subject. Social spending increased as well, not to mention the subversion of the Constitution and the Bill of Rights. Obama HAS taken up right where Lil’ Bush left off.

Immense deficits and a monstrous national debt are threatening to consume us. As awful as this scenario is these are abstract concepts to Joe Public, something that plays little or no part in their daily lives. What about the impending eco-doom and the fact that we are running out of oil? These are abstract concepts that all the benighted masses can reify for themselves.

The conventional wisdom is that the burning of fossil fuels is leading to a global catastrophe that must be averted. At the same time we are running out of oil so quickly, the story goes, that oil production will plummet any day now sending the American lifestyle and economy into a tail spin from which it will never recover. This phenomenon called Peak Oil means that oil production has peaked and that existing fields are near depletion with no new significant oil fields being found.

I have beaten Al Gore like a government mule on multiple occasions in these hallowed pages. Al Gore is the Teflon ecologist as none of his lies, misrepresentations, and twisting of facts stick to him. Even for a politician he sets records for mendacity; Al lies like a rug. No longer in office this crank ecologist managed to get a Nobel Prize for not actually knowing anything about climate science. Al’s mantra must be that he never lets the truth interfere with a good story. This man is unbounded; there is literally nothing that he will not take the credit for (creating the Internet, saving the whole planet, blah blah blah …) with no more credentials than being a rich man’s son and dropping out of graduate school. Not exactly the credentials most Nobel laureate’s possess.

I have written about peak oil before in LRC. The most recent piece can be found here. The basic thesis is quite simple: we are not running out of oil. Hubbert is as wrong as wrong can be. The facts backing up this assertion are simple: every year in the past 60 years has had more petroleum reserves at the end of the year than at the beginning. This is certainly an odd phenomenon to be sure for something that is dooming the entire planet. This is pretty much the exact opposite of what Hubbert forecasted. Let’s get some reification: in December of 2009 world petroleum reserves were estimated to be 1.31 trillion barrels aka 131,000,000,000 of them. A barrel as a concept is only useful to a petroleum engineer. A barrel is 42 gallons. So a trillion barrels is 5,502,000,000,000 gallons, aka 5.5 quadrillion gallons, which is actually a whole lot. Experts will say that reserve estimates are crude (no pun intended) at best, and that variance can be as large of 10% or more. Ecologists always round these numbers down presaging disaster, and marketing people will round them up. Nevertheless entrepreneurs continue to explore; which is a powerful statement that the free market makes about the future profit potential. Petroleum exploration is very expensive using techniques that are right on the forefront of science and engineering.

Even if skeptics will quibble about the number I have chosen the point is still obvious: how can we be running out of something we always seem to have more of, even including the 100 million barrels or so that we consume each and every day. The balance of justice will tip in my favor, Hubbert is wrong and I am right at least in the short run. Clearly there is not an infinite reserve of petroleum because everything is finite in the very long run.

The gas giant planets of Jupiter, Saturn, Uranus and Neptune are largely composed of hydrogen and methane which indicates that crude petroleum feedstock is abundant in our solar system. Thus there is some reason to think that some of this lies in the interior of our planet which slowly but surely percolates through the rock to the upper layers of the crust. Along the way methane gets oxidized into longer chain molecule as byproducts of methanogen metabolism. Man sees rocks as solid, but scientists know that they are porous at the molecular level; a large sponge, retarding, and filtering, but not stopping migrations thanks to Archimedes’ Principal, aka buoyancy. Oil exploration does not look for oil directly. They look for the rock formations that trap oil migration through the crust. This is the abiotic theory of petroleum creation. Thomas Gold raised 25 million dollars (USD) and sunk a well 6 miles into the Swedish bedrock. Sweden is a country without any known petroleum reserves. Gold found methane; methanogen’s and longer chain organic molecules. His excellent book The Deep Hot Biosphere should be on everyone’s reading list, except apparently Al Gore’s.

The earth’s oxygen is not a product of planet formation but has been and continues to be a product of primitive organism metabolism. Plants and other organism’s convert carbon dioxide into the oxygen we breathe. Carbon dioxide (CO2) is a food to this ecosystem. In some ecological sense the burning of petroleum is a symbiotic relationship between man (no other animal consumes the petroleum found in the crust) and the plant world. Mankind produces CO2 as a byproduct of petroleum consumption and the plants respond by producing oxygen.

Global warming is the catastrophe which has been hyped by the media and has thus been transmogrified into a cultural bogeyman targeting humanity. Global warming is the direct result of increased atmospheric CO2 which is produced by mankind in their insidious combustion of petroleum. Global warming will cause the north and south poles to melt which will destroy all waterfront property around the world; it will cause new biological threats to develop. New strains of influenza and other viral and bacterial threats will see the additional few parts per million of CO2 as the go signal to run wild. This is of course a pile of crap, but indicative of the shallow reasoning environmentalists use. Most of us learned this as a fable in grade school: "Chicken Little". Smokin’ Hot Al Gore runs around the world like a power-drunk Chicken Little searching for ignorant rubes that he can save. Runs is not accurate: Al flies around the world on private jets like a power-drunk Chicken Little. There are no TSA cavity searches for this vanguard of mankind. Still Al’s fable always ends the same way he is anointed king and the environmental ninnies open up concentration, I mean, reeducation camps. Al was so close to the levers of power that he cannot get it out of his mind. His fever dreams are replete with scenarios where he would act Presidential and force people to do the right thing. To date the American people and the Constitution have kept him at bay. He is not deterred; he spews his eco-madness non-stop as an attention-getting tool lest the public forget who their savior is.

Unfortunately the climate science to support these assertions is actually very thin even if present in copious amounts. It consists mainly of computer simulations of questionable predictive value. These models must be carefully tuned in order to converge at all. This same tuning can show many results like a perpetual ice ball planet or a raging inferno similar to Venus. A reputable climate scientist will admit this in professional publications but these facts always seems to get dropped from discussion in propaganda venues like Time, Newsweek, Financial Times, or the Economist. These models can generate many forms of disastrous outcome in glossy four-color graphics. What they can’t do is accurately predict the climate future. No amount of spending on supercomputers (always taxpayer funded) will change this fact. It is an initial condition boundary value problem for a system of coupled non-linear partial differential equations that can never be compensated for. If you read the hyperlinked data the problem is in the smoothness (the weather can never be smoothed out).

Temperature data over the last 150 is a worthless statistic when you consider that this planet has been around for 4.5 billion years, and that life emerged only in the last 600 million years. For millions of years the Earth was covered by a massive ice sheet that prevented sunlight from striking the ground. In the last hundred thousand years there have been multiple ice ages and warm periods, yet life prevails.

The mendacity of this "science" threatens all of humanity. The third world struggles to get into the first world. They do this by increasing their energy consumption in their daily lives by working in some form of hampered market economy. This increase in energy consumption allows them to produce goods like running shoes, trendy fleece jackets, and iPods. If either global-warming or peak petroleum cranks have their way energy consumption across the planet will decrease. New laws will only serve to strangle the economy of utility to be found from the division of labor. This strangulation will be most severe in the developing world; it literally threatens billions.

Socialism kills millions when confined to a single country (China, Russia, and Cambodia). If adopted on the world scale it threatens billions. Democracy is the god that the west is trying to get the whole world to implement. Ecologists and Socialists have failed miserably as the body politic knows to reject their eco-prophets at the polling place. Al Gore, John Kerry, current communist bozos and Ralph Nader have all been rejected in their manifold attempts to have their hands on the most powerful levers in the world: the American Imperial Presidency.

It is the developing world that will be punished the most. It should seem odd that a celebrity like Al Gore can have a mansion that consumes twenty times the monthly average utilities in the town where he lives, Nashville. He can also fly around the world in private jets to spew his provocative mendacity. His eco-devotee worshippers never question big Al’s carbon footprint either personal (currently) or the 8 years of president on-deck imperialist to Clinton. Big Al will tell us with a straight face that global cooling is really global warming that has gone into a stealth mode, just to fool us. Bill Clinton is now a fulltime buffoon and acts like one; he knows where he belongs. Gore takes himself serious and is very dangerous to mankind thanks to his Nobel status.

The Intra-Government Panel on Climate Change spews questionable science at the entire world through mass media replication of the mendacious façade of impending doom. Taxpayers around the world get bilked for this science. Their tentacles reach into all other domains via regulation. If the triple threat of climate change, petroleum production, and intra-governmental socialism are successful then billions will suffer and millions will certainly perish.

These clowns who cannot predict the weather next week want to predict it forever. Unlike TV weathermen political predictions turn into laws thanks to prevaricating politicians like Al Gore. These laws are directly targeted at capitalism to destroy it. Politicians know that capitalism via Human Action is their mortal enemy as it strips them of all their power. Politicians are just ordinary citizens that have power over others. It is this power that they crave to yield. Capitalism and Political "Science" are in a death match to the end because one cannot exist without destroying the other.

Socialism is the stealth political platform that peak oil and climate doomsayers promulgate. It is a thinly veiled menace to the body politic of the first, second and third worlds. Socialism via ecological regulation will punish the taxpayers and workers of the entire planet. The first world can adapt to some extent as they have shown through all the market crashes, recessions, regulations wars and market hampering of the twentieth century. It is the developing world that will be damaged the most, and these are the planet’s most endangered ecosystems. Energy and market transactions are the only way out of the cruel misery of poverty and ignorance. They do not love their children or their cultures any less than the developed world and should be accorded the same chance to prosper.

Let’s make the next decade one in which reason takes the field of the political debate and rolls back the twin threats of "Peak Oil" and Climate Change socialism. Ignore the Hubbert’s and Gore’s of the world. Let us welcome the developing nations like China, India and others into the fraternity of peace and prosperity through capitalism.

December 31, 2009

George Giles [send him mail] is the founder of the Gonzo School of Economics, the radical branch of Austrian Economic Theory. He was the youngest Republican ever elected in 1972 at age 17. You could be elected at age 17 if the office was not assumed until after age 18. It only took 3 months of local GOP meetings to become a virulent Libertarian ever after.

    © 2009 Copyright George Giles / - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Steve in Hungary
31 Dec 09, 10:35
Peak Oil

I'm afraid that George, along with many other similar commentators, completely misses the point of what Peak Oil is about. It is NOT and never was about reserves. It is about the rate of extraction. Currently we are extracting, and using the vast majority of, about 85,000,000 a DAY. It is fact that discovery of new oil fields peaked in the 1960s. It is also fact that the crossover point between discovering more oil than we used was back in the 1980s.

Even Fatih Birol of the IEA, who were always on the optimistic side, has issued a warning that Peak Oil will be round about 2020 ( That sets aside what The Guardian reported two IEA insiders say about the accuracy of the World Energy Outlook (

Between now and then we need to discover 4 new Saudi Arabias just to stay in place due to the depletion of old fields.

Where are those 4 new Saudi Arabias to be found, George? And please don't say The Bakken, or the Canadian tar sands. I will just laugh!

Greg Karr
01 Jan 10, 04:07
Peak oil is simply a function of holes in the ground

The world and the United States is awash is oil. And Steve is right. It is not that we are running out of oil, it is that we don't have a enough wells to get the oil out fast enough to meet demand. But this can be rememdied particularly with a shift from oil to natural gas. As a life long Geologist, I see daily we find more and more oil, but we continue to hear about "peak oil" not meeting demand. It's simple DRILL MORE WELLS!!! Oil is plentiful and natural gas is even more plentiful. Both are interchangeable with the right government incentives. WAKE UP!!!

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