J. Howard Marshall II had heard it before in his decades as an industry scholar, regulator, and executive: We are going to run out of oil! Marshall recounted one story concerning the eminent petroleum geologist Everette DeGolyer (1886–1956) in his autobiography, Done in Oil (Texas A&M University Press, 1994):
I had one such argument with Everette DeGolyer just after World War II. he insisted that we were going to be desperately short of oil by 1956. I remember saying: ‘De, that prediction has been made almost since the beginning of the oil industry. Are you sure that you are right this time?’
He said he was sure, and I suggested we wait until 1956 and find out. In that year, we had oil running out of our ears, and I said, ‘De, what happened?’ He responded that some unforeseen things occurred, and I remember asking, ‘Isn’t it always that way?’
I have come to the conclusion it is always that way.
I thought about Marshall’s story–and the certainty of peak oilers Kenneth Deffryes and the late Matt Simmons–as I read a recent article in this week’s New York Times, “Argentina Hopes for a Big Payoff in Its Shale Oil Field Discovery.”
Some quotations from the article speak volumes about big happenings within the pregnant fossil-fuel family:
“The importance of this discovery goes well beyond the volume,’ said Sebastián Eskenazi, YPF’s chief executive, as he announced the find. ‘The important thing is it is something new: new energy, a new future, new expectations.’”
“Exploration of similar shale fields has already begun in Australia, Canada, Poland and France. Indian and Chinese oil companies are investing in pilot projects that, if successful, could make their countries significant oil producers, possibly reshaping energy geopolitics and stemming future price rises. Ukraine and Russia are also thought to have sizable shale fields of oil and gas, as do many North African and Middle Eastern countries.”
“‘The potential is huge, on the order of hundreds of billions of barrels of recoverable reserves,’ said Michael C. Lynch, president of Strategic Energy and Economic Research, a consulting firm, who is preparing a report on global shale oil.”
“‘It could potentially be a game changer,’ said Fadel Gheit, a managing director and senior oil analyst at Oppenheimer & Company. ‘We are going to see much wider distribution of oil reserves, to the benefit of the whole world. It could rerank countries, in which the very needy might become self-sufficient. Countries like Canada and Australia could potentially become the new Saudi Arabia for energy.’”
“‘Tight oil is the new revolution in oil production, and it’s not just the U.S.,’ Mr. Fryklund said. “It’s worldwide.”
We are not running out of oil or gas. We are running into oil and gas. Predictions of peak oil and peak gas are not only being made for the wrong year and decade, but also for the wrong century.
Hydrocarbons are increasing their economic and job potential–and making the government-engineered investments in technologically insufficient renewable energy look like every bit the boondoggle that it really is. The hydrocarbon age is still young, making the technologies required for the renewable energies of the future far different than what is being touted today.
Government can and should get out of the energy planning business for reasons that are stronger today than ever. Peak, depleting government, let’s hope so; peak minerals, not so.