Democrats Trot Out 'Peak Oil' Again, and Are Just as Wrong as Ever
Just when we thought it was safe to assume a reliable supply of oil due to the miracle of fracking, liberals have come up with a new excuse to shift from fossil fuels to renewables. They've discovered — as everyone invested in oil has known since before the early 2000s — that fracked wells are frontloaded, producing their largest return in the first year or two after completion.
The most productive fields at present are in the Permian Basin of West Texas. So it's not surprising to find analysts bemoaning "peak Permian," as Julian Lee wrote in a Jan. 26 Bloomberg opinion piece. The reality is that oil and gas production from the Permian Basin is at or near an all-time high and that any pull-back in the near future may be the result of low energy prices, which have discouraged new well starts.
But what happens if production eventually does fall off, as it will, from recent levels in the Permian? U.S. production will fall — unless new wells are drilled to replace those just a few years old. Unless...there's more to the Permian than critics think. Advances in recovery technology have steadily increased the percentage of reserves that can be recovered in any one field. There is every reason to believe that more efficient methods will be developed in the future.
Unless...old fields, such as the Anadarko and Woodford shale basins in Oklahoma, are re-drilled using fracking techniques. Unless...New York State and other areas now closed to fracking are opened up. Unless...offshore fields, which, according the U.S. Minerals Management Service, contain as much as 115 billion barrels of recoverable oil (an estimate subject to increase), are opened up for drilling. Unless, unless...
The truth is that "peak oil," the anti-drilling rallying cry for more than half a century, is an ideological concept, not a scientific fact. U.S. production fell off after the 1960s because it was cheaper to obtain supply from the Middle East than to drill in North America. Fracking has partially reversed that assumption, bringing with it a more secure and stable supply.
The idea that U.S. energy production will fall as a result of the frontloaded nature of fracking is like saying we'll run out of food if we don't plant new crops. As long as we plant new crops, we'll have plenty of food — and as long as we continue fracking, we'll enjoy a reliable source of cheap fuel for a long time to come.
Just how long? The latest U.S. Energy Information Agency report confirms the continuing importance of fossil fuels for our economy. The 2020 report makes several key points: overall U.S. energy demand will grow more slowly than GDP through 2050 due to increased usage efficiency; use of coal and nuclear power will decline; the U.S. will continue "to produce historically high levels of crude oil and natural gas." And, according to the EIA, by 2050, even with substantial population growth, U.S. emissions of CO2 will be at 4% below 2019 levels.
Unlike the ill informed peak oil enthusiasts, America's official source for energy information projects that fossil fuel production will continue to be "historically high," so much so that the U.S. will become a major exporter of oil and gas. Indeed, in its projection of total oil and condensate production through 2050, the EIA predicts rapid increases in oil and gas production between now and 2025, followed by a long period through 2045 during which oil and gas production plateaus, thereafter falling below current levels sometime about 2050. That is not a peak oil scenario unless one means that production peaks in 2032 and remains high until at least 2050.
Contrary to those who now speak of peak oil, or "peak Permian," the fact is that vast reserves of oil and gas still exist in the Permian Basin and in many other shale fields in the U.S. and Canada. In fact, North America is especially rich in shale — no other region of the world possesses such a treasure of energy supplies. Advocates of peak oil want to shut down this source of wealth and replace it with costly, and environmentally destructive, alternative sources of energy. California is already firmly on that road to poverty. According the EIA, the price of electricity in California is already 1.6 times higher than the U.S. average, and that price differential will increase as the state's mandates for eliminating fossil fuels kick in.
There are many who believe that we must shift from fossil fuels because those fuels emit CO2 and contribute to global warming. The reality is that clean-burning natural gas has helped bring U.S. carbon emissions down to the level of the early1990s (2017 figures) and likely beyond. U.S. emissions are currently more than four times less than those of China and just above those of Europe overall. According to the 2018 EPA report, "the US has reduced greenhouse gas emissions more than any other country on Earth over the last decade." Without natural gas, electricity plants — the ones that are expected to fuel electric vehicles — would still be burning coal, and America's air quality would be worse than it is.
Those who believe that greenhouse gases are causing global temperatures to rise (despite the fact that temperatures have barely budged in recent decades) should be cheering U.S. natural gas production. The combination of the shift from coal to gas and increased efficiency continues to drive CO2 emissions lower.
Even those of us who know that global temperatures are not skyrocketing — and that natural forces contribute more to warming or cooling than do anthropogenic causes — can cheer the increased U.S. production of fossil fuels. Lower energy prices ripple through the economy, lowering the cost of everything produced or transported. Low U.S. energy prices are one reason why the real standard of living is far higher in the U.S. than in Europe. In fact, the U.S. ranks higher than every country in Europe (50% above France) on the OECD Individual Consumption Index, a reliable measure of real living standards. And yet Bernie, Pete, and Liz want to turn us into France or Sweden.
Environmentalists should be careful before they talk of peak oil. They've cried peak oil so many times in the past that their warnings are no longer credible. Fossil fuels will remain a major contributor to our energy system well into the 21st century if not beyond.
Americans should be cheering the increased supply that fracking technology has made possible. In contrast to Europe, China, South Asia, and other parts of the world, America possesses a reliable and inexpensive supply of energy to run our economy. We are richer and more secure as a result.
Jeffrey Folks is the author of many books and articles on American culture including Heartland of the Imagination: Conservative Values in American Literature from Poe to O'Connor to Haruf (2011).