Sunday, September 20, 2009

The Oil Industry at 150: A Celebration or a Funeral?

You have to wonder if Alex Epstein on the blog Voices for Reason, grasped the irony of the title of his recent post, Oil at 150: An Unhappy Birthday. The blog is operated by The Ayn Rand Center for Individual Rights, which is headed by her designated spokesman and intellectual heir, Dr. Leonard Peikoff.

This article was a follow up piece to his previous post, Oil at 150:Celebrating Oil's Birthday, a short piece lauding the first drill in Pennsylvania 150 years ago and the ensuing discovery of the incredible power and versatility of the liquid that literally built the modern world and to which we owe every essential of modern life.

In his follow-up post, Mr. Epstein lamented that there had hardly been any comment on the occasion at all from either our opinion makers or oil industry leaders themselves.

That might possibly be because for the oil industry and for everyone who aspires to a lifestyle better than that of a 19th Century subsistence farmer, this is a time of grief, not joy, for the landmark Epstein commemorates will more likely be the industry's tombstone, and no one knows it better than oil industry insiders themselves.The most prominent Peak Oil spokesmen are, after all, alumnae of the oil industry; Colin Campbell and Kenneth Deffeyes are retired petroleum geologists who spent their professional lives in the employ of major oil producers, Matthew Simmons is a prominent investment banker and oil analyst, and former U.S. Vice-President Dick Cheney, who remarked on disparity between growing demand for oil and the ever smaller and less frequent discoveries of unexploited reserves, is the former Chairman and CEO of Halliburton. Each of these men, along with dozens of fellow executives and scientists in the energy industries, has expressed their conviction that we have arrived, or will soon arrive at, the peak of global oil production and the inevitable steep decline in available oil supplies.

And none of them, nor anyone else, can say for sure what will replace oil, but there is among them and other students of Peak Oil, the disquieting thought that there will be no replacement for it. And neither the cornucopians nor the "green"' promoters of renewable energy care to dwell on the thought.

I like Alex Epstein and many of the other intellectuals whose writings appear at The Ayn Rand Center for Individual Rights, and intend no disrespect for them or the Objectivist philosophy that they articulate and that I share, when I say that their extremely linear logic regarding the necessity of oil fails to factor in a number of important points, like the possibility that we will likely have to do with a steeply reduced supply of it. Another contributor, Dr. Keith Lockitch, author of The True Meaning of Earth Hour, criticizes the movement to reduce carbon emissions because a steep reduction in emissions would mean a steep reduction in our lifestyles. His reasoning is likewise rigidly linear to the point of simple-mindedness: it says, our comfort and advanced technologies depend upon the ability to consume large amounts of fossil fuels, therefore we must have fossil fuels, and since we demand them they must therefore be available. Well, what happens when they no longer are available, or supplies are steeply reduced from current levels? Will our demand for them in and of itself produce them once every oil field on the planet is in steep depletion along with most gas wells and coal mines?

This is not Objectevist thinking, this is not rationality. This is wish-based thinking that refuses to recognize a distressing reality.

Unfortunately, Dr. Lockitch, Mr. Epstein and other writers at the Center have fallen into the Cornucopian trap that has ensnared most "conservatives", a variety of wish-based thinking that believes that just because our civilization badly needs dense, energy-intensive fuels in order to drive our advanced technology and supply the comforts and amenities that are the difference between a long, healthy life with opportunity, choice, and incredible luxury; and a life that's nasty, brutish, and short, that those fuels will always be there and that the market will provide them simply because we want them, need them, and demand them.

The "conservative" cornucopians are as in denial regarding the hard limits we are confronting as the "liberal" environmentalists and "greens" in their approaches to the inevitable depletion of fossil fuels and other essential resources, and just as irrational, and neither mode of thinking will help us negotiate the tectonic economic and social shifts that are sweeping the globe, and sweeping away our favored way of life and the assumptions we have based our thinking and planning on.

If ever we needed rational philosophy, this is the hour, but the latter-day spokesmen of the philosophy that supplies the epistemology that supports it and defends it are frantically evading it and denying the conclusions to which it would lead them.Evasion, denial, and emotion-based thinking are the hallmarks of irrationality and subjectivity, which are not only cardinal sins in Objectivist philosophy, but will lead us to the same place that they always have, and will defeat our efforts to retain our civilization and develop the techniques and organization we will need to cope in a resource-constrained world.


consultant said...

I know the mainstream media has a role to play in documenting the day-to-day stuff that happens in our lives, but would it hurt to have a little perspective in their articles?

Here's today's piece from the NY Times on new oil discoveries:


Without the perspective, it sounds too much like an oil industry press release.

Although today, 'perspective' for much of the media involves a laughable (I would say lazy if I were naive) attempt at balance. This is where they go get someone with the opposite opinion on a matter.

I don't think we're far from the day when the mainstream media, led by local TV news, starts asking known criminals their opinion on local police arrests. You know, just so the news media can say they are fair and balanced.

The North Coast said...

I had read that article about the new discoveries, and was about to remark on it.

Most people are careless readers and won't notice what the article makes very clear, which is that higher oil prices are necessary for exploration to continue because the cheap, easy-to-find and easy-to-extract stuff is gone. Below $70 a barrel, exploration stops. There is no profit at all below that level.

What the article does not make clear is how little oil 10 billion barrels really is and that even with current reduced demand this country rips through 7 billion barrels a year.

Before 1970, we were finding far more than we were using. This country used 10 million barrels a day, which is still a gigantic draw, but many big finds lay before us. Now the finds are small- 10 billion being on the high side. Now we use 20 million a day at least, and the finds are getting smaller and smaller.

Maybe there's another elephant out there in the middle of the ocean. But is it recoverable? Or is it economically recoverable?