How many Saudi Arabias did you say that was?
It’s hard to keep up these days with claims by oil and gas drillers about how many Saudi Arabia-sized reserves of tar sands oil/shale oil/deepwater oil/hydrofracked gas that North America is now allegedly able to access due to the smarts of petroleum geologists and the tenacity of oilmen.
“Because of better technology, notably breakthroughs in drilling, the US all of a sudden realizes it is sitting on a century’s worth of gas supply,” writes Edward Luce in the Financial Times. “When Mr Obama came to office, the country faced projections of rising natural gas imports from places like Qatar.”
But now, if you believe what the industry says, the picture’s really brightening up:
The same technology has unlocked ever-growing estimates of once inaccessible “tight” oil lurking beneath America’s rocks. In its immediate neighborhood, Alberta’s huge expanse of “tar sands” contains oil reserves that rank Canada second only to Saudi Arabia. In Brazil, recent advances in offshore oil drilling will relegate Venezuela into second place in the region.
Without any real input from Washington, windfalls just keep dropping into America’s lap. Welcome to a new age of plenty.
While this new cornucopia is bad news for climate change — nations are scrambling to get at Arctic oil ironically made accessible by melting ice caps — it’s great news for US energy independence. “A new era of fossil fuel appears to be upon us and nobody saw it coming,” concludes Luce.
It burns your eyes
This is nothing we haven’t already heard from Daniel Yergin. Or from the American Petroleum Institute. Or from numerous industry front groups in Washington calling on the Obama Administration to get the EPA out of the way and let the drilling begin.
Clearly, the industry has begun a coordinated campaign to convince the public that oil is not running out, but instead, that there’s plenty of it. That would mean that we can rely on oil for years to come and we needn’t bother with hassles like conservation or clean energy.
Why would Big Oil want to lie about or exaggerate the amount of oil they can likely produce? It’s simple economics. Over the last century, oil and gas companies have invested billions of dollars into infrastructure from off-shore drilling platforms to refineries to shipping terminals. Are they just going to let all this expensive equipment sit idle and rust because the easy oil is running out? That wouldn’t look very good on the next quarterly earnings report.
If you only have a hammer
Think about it: if you owned a hammer, and it cost $10,000, you’d be pretty aggressive about hiring it out to pound some nails. But if the world was running out of nails, that would be bad news for your investment. So, if you didn’t have too many scruples about truth-in-advertising, it would just be good marketing to paint the rosiest possible picture of the global nail supply. The last thing you’d want is for your customers to start panicking about a lack of nails and start switching over to nail alternatives such as screws or glue.
And so, from nails to oil. If your business is to pound or to drill and you’ve bought a bunch of expensive machinery to do it, you’re going to try to do that as long as you can. Even if it’s not in the best interests of your customers. Even if you know that, someday, the stuff will be too expensive to use anymore, and those customers will be left in the lurch, having wasted all the time they had to find other options following your false promises of indefinite supply. But that’s not your problem. You just want to keep your equipment busy as long as you can.
So, don’t expect oil drillers to admit to peak oil until it becomes a better business opportunity for them than denying peak oil. And the day that happens is clearly in the future, if ever.
Meanwhile, as the corks pop in Houston, the silence from the peak oil community in the mainstream media is deafening. If we truly believe that cheap oil is running out, then it’s time for the white-hat oil guys from ASPO-US and the Oil Drum to step up and counter the industry’s comforting lies.
Who’s going to say boo to the Pepper Spraying Cop this time? Anyone?