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Global Warming in the Golden Age of Oil

Remember peak oil? This was supposed to be the time when the earth’s oil supply began to run dry. Green energy buffs told us that one reason for subsidizing expensive green energy boondoggles was that the oil would soon be gone and we had to have something to put in its place.

As Aragorn might have put it if he was in the oil business, “A day may come when the hydrocarbon supply of men fails, when we forsake our internal combustion engines and break all pipelines and refineries, but it is not this day. An hour of woes and solar cells, when the age of oil comes crashing down! But it is not this day! This day we frack! By all that you hold dear on this good Earth, I bid you drill, Men of the West!”

These days we hear much less about peak oil, and the energy buzz is about the new “golden age of oil” instead. All over the world, from Madagascar to Brazil to Cuba to the South China Sea, oil (and gas) is being discovered in huge amounts in places no one could get to before. Sorry greens, fossil fuels still reign. But what, asks Michael Levi, a former WRM colleague at the CFR, does the golden age of oil mean for the environment? In our happy fracking and drilling, will we bring on “climate doom”?

Michael makes the point that the golden age of oil isn’t necessarily going to make a big difference to the CO2 numbers; data from the International Energy Outlook shows that low oil prices don’t make a big difference to the carbon trend. Here’s the graph Michael posted:

He writes:

Lots of oil intuitively means lots of emissions. How, though, does this shake out economically? The likely impact is smaller than you might think, in part because oil is only part of the emissions picture, and in part because oil consumption is driven by a lot more than how easy the fuel is to produce.

He moves on to raise the key question: what will an era of abundant oil, particularly in the U.S., do to the politics of climate change?

One variable we would add to his analysis: with more regions in the U.S. benefiting from the oil boom, there will be more political clout for the energy lobby in U.S. politics. States like Ohio, Pennsylvania, and ultimately even New York might join Texas, Oklahoma and Lousiana as pro-extraction states on some issues, for example. When oil is abundant, the urgency on climate change influence dissipates, and when oil lobbies grow more powerful, the greens will see their agenda evaporate that much faster.

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  • Shawn Aune

    “Remember peak oil? This was supposed to be the time when the earth’s oil supply began to run dry.”

    Nice straw man 🙂

    Peak oil is about the flow rate peaking and then declining. It doesn’t have very much to say about quantity.

    There is a lot of evidence that the flow rate is already at peak or close to it.

    If I’m right we will experience declines in the next few years.

    The plateau in production since 2004 led directly to the global recession in 2008.

    What will the decline look like?

    The world has used as much oil in the last 22 years as it did in all the years previous.

  • Kenny

    1. ” …and when oil lobbies grow more powerful, the greens will see their agenda evaporate that much faster.”

    Saints be praised!

    2. Re: Peak Oil.

    a) True, there is much oil being found than people thought was possible number of years ago. But I’m not sure that this can compensate for the depletion in the older oil fields.

    b) What does seem certain, however, is that the new oil finds are not only more costly to discover & extract but also tend to be of a lower grade of oil, making its refinement into gasoline, etc. more costly.

    In terms of pure quantity, we may or may not have hit the peak But we sure have hit the peak in terms of ‘cheap’ oil.

  • wanderer

    “This day we frack! By all that you hold dear on this good Earth, I bid you drill, Men of the West!”

    Consider Ghawar, the great-granddaddy of all oil fields. It’s been punping out Two. Hundred. Million. gallons of oil per day for a bunch of decades. Individual wells have produced prolifically for decades. In the early days, the oil didn’t need pumping, it gushed on its own.

    Now, Bakken. It consists of tiny bits of oil locked in shale. Fracking solution has to be pumped into the well at prodigious pressure to crack the rock and free the oil. And production at each well declines sharply after about a year. Singular case. Which means you have to go to the work and expense of drilling and pumping in fracking solution all over again.

    Again, that we hype such a marginal and expensive-to-exploit resource is the clearest possible confirmation of peak oil.

  • Xenophon

    Yes, a ridiculous premise for this post. If so much oil is being discovered globally and given that we are facing deflationary pressures all over the place, why is oil still near $100 bbl? It should be in free-fall if what Mead says is true.

  • phil g

    This data won’t help the drama green lobby much either.

    Seems we’re lowing CO2 (not that that actually affects climate in the real world) just by using more NG. No useless cap and trade even required.

  • phil g

    It takes awhile to get it all on-line so perhaps this new info is not factored into the price yet. Also other factors affect price than just supply/demand…Cartels, political volatility, etc.

  • phil g

    Perhaps the end of peak super cheap oil, but not certainly the end of peak oil.

  • Jared

    Anyway you put it green energy is currently too expensive and the technology insufficient to over take oil/coal.

    This was a very fun read… thanks for the unique angles and original thought you put into you posts.

  • John Minehan

    The issue is less “peak oil” as “peak CHEAP oil.” The things like shale oil and tar sands are more expensive to recover and refine. This is not likely to change due to technology. Prices have to be fairly high to make exploiting these reserves tenable.

  • Walter Sobchak

    Peak Oil. Same old Malthusian stuff.

  • David Hoffman

    I have been reading The Deep Hot Biosphere by Thomas Gold. His theory is that fossil fuels are not fossils at all, that is, that oil, coal etc were not produced by life in past ages but have their origin as the carbon that became part of the earth as it formed. This carbon exists in large quantities deep in the crust and mantle and under certain circumstances is brought closer to the surface where it is used and transformed by underground bacteria (the deep hot biosphere). If his theory is correct,and he makes a good argument, then there is a practically unlimited supply of fossil fuels.

  • Corlyss

    Cheap energy = prosperity. Prosperity, as we all know, is the abiding foe of the Gaia crowd. Prosperity = more meat-eaters. More meat-eaters = healthier people. Healthier people = more babies surviving to adulthood. More babies surviving = more people consuming Earth’s bounty. And people, as the Gaia crowd reminds us constantly, are the bane of a happy planet. The planet cannot be happy with one person more than 2 billion. Genocide to follow, as soon as the Greens get political power.

  • Randy

    Clearly the peak oil crowd is being secretly funded by Exxon Mobil and their minions. By endlessly droning on and on that We Are Running Out Of Oil they manage to prop the price up artificially, and Rex Tillerson laughs all the way to the bank!

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