Peak Oil: A Lesson in False Prophecy

As recently as 10 years ago, we were told that the world was running out of oil soon. Horrors! Then, directional drilling and fracking opened up the prolific resource of “tight” oil shale. New production records are being set daily; the U.S. now leads the world in oil reserves, ahead even of Saudi Arabia.  

Hubbert’s Peak

Geophysicist and noted pioneer of ground water flow in aquifers Dr. M. King Hubbert was being celebrated as a prophet. He had predicted that U.S. oil production would peak around 1970 – and it did! Of course, the price of oil was then only around $2 a barrel; it is now around $75, and will surely go higher.

The National Petroleum Council [NPC], made up of the leaders of the oil industry and other experts, told us, in 1970 as I recall, that if oil prices ever reached $3 a barrel, the vast resource of the Colorado kerogen would become commercial. Some oil companies actually mined some kerogen and retorted it to extract the locked-up but uneconomic oil. The world oil price is now around $75 a barrel -- and sure to rise further. 

Hubbert also predicted that world oil production would peak by mid-century, at the same unrealistic low price; it gave a boost to the anti-growth movement and to the general feeling that we would soon deplete most of the world’s resources.

Those were the years of the “Malthusians,” mostly geologists, opposed only by a few brave “Cornucopians,” mostly resource economists, who preached that prices would rise, encourage conservation, recycling, and substitution for scarce metals.

This was also the time of Prof. Paul Ehrlich’s “population bomb” and Zero Population Growth [ZPG]. Impressionable young women were taking vows not to have any children; abortions were popular.

I was a Malthusian -- until my eyes were opened by organizing an AAAS conference in 1969, titled “Is There an Optimum Level of Population?”

Optimum Population Level?

I later edited a book on the same topic; it included contributions by nuclear pioneer Alvin Weinberg, Chauncey Starr, EPRI president and RFF president Joseph Fisher.  (Of course, Prof. Julian Simon was way ahead of me; but I only met him much later, around 1980.)

Noted Malthusians participated: geologist Preston Cloud and ecologist Garrett Hardin; agricultural experts gave talks on overpopulation and predicted world famine to occur a few years hence.

The Club of Rome and Limits to Growth

The Malthusians even had their own loose international organization, called the “Club of Rome,” founded by Aurelio Peccei, retired chairman of the Italian auto firm that produced the Fiat car. I knew him and believed in his cause -- until I edited the book and “saw the light.”

I remember critiquing, in Science and EOS, their first report, “Limits to Growth” [LTG] and debating its main authors Dennis and Donella Meadows, who were spreading the LTG “gospel.”  

Their book also made me a skeptic about computer models. They used no real data and simply assumed functional relationships between key variables. For example, pollution would kill world population, but people also created pollution. As a result, world population would swing wildly between maximum and zero -- signifying complete collapse. However, LTG made a huge impact at high government levels and supported the mantra that “economic growth was bad.”

Forecasts of overpopulation and world famine were very popular in those days. There was even a book published, by the two Paddock brothers, titled Famine 1975! -- just a few years away.

This was really the beginning of the environmental movement. The whole atmosphere of doom and gloom was ripe for that. Naturally, it boosted the craze for solar and wind energy and ethanol gasoline additive, which were said to be inexhaustible resources, unlike fossil fuels, and made “peak oil” very believable.

Anyway, those days are over -- or so it seems -- although some of the after-effects are still with us.

I was not impressed by all this noise. King Hubbert was my colleague then at the Department of Interior, where I was responsible for water research and also for estuarine preservation.

I had lunch with King, a convinced Malthusian, and told him to consider future changes in the price of oil and a possible development of new technologies. I also told him to forget about “peak oil” and go back to his pioneering work on ground-water flow. After that lunch, he never spoke to me again. He was a very austere gentleman, with no sense of humor.

In 1972, soon after our lunch, the world price of oil jumped to $12 a barrel. But U.S. production was impeded by price regulation and the general feeling that oil supplies would soon peak. President Ronald Reagan finally removed the artificial price controls. Public debate about “peak oil” resumed, as oil became available to anyone willing to pay the world price.

I should note that, the $2 price was a result of the infamous “oil import quota program,” which had been set up years earlier to ration oil imports to favored importers -- essentially a program to reward “cronies,” and to keep prices low for a while for U.S. consumers. Those were the days of 20-cents-per-gallon gasoline that our fathers keep telling us about.

The situation has changed drastically -- mainly because of new technologies and the free market. President Donald Trump has just announced the official end of the oil crisis. He also hinted at the end of the miles-per-gallon [MPG] restrictions on cars and trucks.

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