A recent National Geographic article by Brian Handwerk touts Italian oil executive Leonardo Maugeri's new book The Age of Oil: The Mythology, History, and Future of the World's Most Controversial Resource, in which the author expresses the cornucopian view that much of the world is still largely unexplored for oil and there are plenty of new oilfields waiting to be discovered.
I'm not an oil industry insider, but I think there is plenty of freely available evidence that Maugeri's book is at best irrationally optimistic and at worst intentionally deceptive. Consider these facts:
- Multinational oil giants have been investing billions of dollars in recent years for nonconventional deep sea and polar exploration. Producing oil from such environments is much more expensive (and therefore less profitable) than is conventional production. If these companies believed that significant conventional oil deposits are yet to be discovered, it would be in their best economic interests to find them and produce it rather than to rely on nonconventional sources.
- Similarly, the industry would not be expected to invest as it has been doing in additional production capacity for heavy oils and syncrude if there was a belief that large conventional deposits of light sweet crude oil are yet to be discovered.
- Cornucopians like Maugeri and Daniel Yergin predict that consumption of refined products such as gasoline in the United States is destined to increase significantly in the decades to come as it has in the past. However, even at today's consumption levels there is a shortage in current refining capacity, particularly in the US. Why has there been little to no investment or proposed investment in additional refining capacity by commercial energy interests? The apparent answer is that those in the industry know that it would be an unwise investment because the volume of crude oil that will be available in the future for refining is not going to increase substantially.
- Perhaps the most telling evidence that Peak Oil may be fast approaching is the US invasion and occupation of Iraq, which was obviously justified on false pretenses, and US efforts to gain influence in energy rich Central Asia.
Why do people like Maugeri and Yergin spread obvious falsehoods? If the public at large became convinced that a long term energy shortage was imminent it would change their economic behavior. The debt leveraged world economy, which requires at least nominal economic growth to be sustained in order to avoid collapse, would be threatened. Industries and entire economies would be expected to. This will no doubt eventually happen anyway, but our corporate and political leaders would like it put off for as long as possible while their own contingency plans are put into place.