Peak Oil

Peak Oil is the theory that the world has already used (or soon will) all the oil that we are endowed with. Michael Lynch debunks the theory in the NYTimes.

Like many Malthusian beliefs, peak oil theory has been promoted by a motivated group of scientists and laymen who base their conclusions on poor analyses of data and misinterpretations of technical material. But because the news media and prominent figures like James Schlesinger, a former secretary of energy, and the oilman T. Boone Pickens have taken peak oil seriously, the public is understandably alarmed.

A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again: the founder of the Association for the Study of Peak Oil first claimed in 1989 that the peak had already been reached, and Mr. Schlesinger argued a decade earlier that production was unlikely to ever go much higher.

There are two big problems with the theory. First, it ignores improvements in technology which lowers the cost of recovering oil that was previously thought uneconomic. Second, it ignores the effect of rising prices on the search for new oil.