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Locked In to ‘Peak Oil’ Nonsense December 11, 2008 Seven months ago, Terry Backer, a state representative, penned an op-ed for the (Bridgeport) Connecticut Post titled “Peak Oil: Everything is going to change.” Has Backer been to a gas station lately? If so, perhaps he realizes that the legislature’s “Peak Oil and Natural Gas Caucus,” a group he helped organize in 2007, is a joke. Unfortunately, if you’re trapped in a heating-oil contract, you’re not laughing. Earlier this year, many Connecticut homeowners signed agreements to purchase heating oil at well over $4.00 a gallon. Today, a cash-on-delivery gallon might cost you as little as $2.15. (Paying two bucks a gallon less than your neighbor means your bill will be about $1,400 cheaper this winter.) If you didn’t sign a heating-oil contract, that doesn’t mean you’re not bearing the indirect costs imposed by the municipal pols who did. Taxpayers in Ridgefield are picking up the tab for their school district’s boneheaded decision to lock in heating oil at $4.18 a gallon. Backer and his eco-left cronies bear a great deal of blame for these unnecessarily expensive bills. (The Stratford solon is a Democrat, but peak-oil silliness is bipartisan: U.S. Rep. Roscoe Bartlett, a Maryland Republican, is an adherent.) The hooey they spew about a world “running out” of petroleum did much to push the price of crude-based fuels into orbit. True, booming worldwide demand and a speculative bubble played roles as well, but alarmists -- and the mainstream media outlets that uncritically transmit their claims -- surely convinced millions that not locking in a “low” rate would be madness. After all, the “era of cheap oil” is over. It won’t be long before the world looks back fondly at $150-a-barrel crude. In the decades to come, life will resemble The Road Warrior, with armed bands battling over access to dwindling energy resources. The living will envy the dead! Since the development of petroleum-based energy, ignoramuses have predicted the imminent exhaustion of the planet’s oil. None of their doomsday scenarios has come true. Indeed, the International Energy Agency, no mouthpiece for “Big Oil,” predicts that the approximately 80 million barrels produced daily by the world’s suppliers will reach 125 million barrels by 2030. Even the most cursory examination of energy articles, commentary, and research confirms that the globe is awash in oil -- from Alaska to the Gulf of Mexico, Ecuador to Chad, Saudi Arabia to Russia’s Pacific coast. New, significant discoveries are constantly announced. In addition, high-tech equipment will soon unlock the potential of unconventional sources. Tar-sand fields in Canada and heavy-oil deposits in Venezuela are immense. The potential for oil shale here at home is almost incalculable. “The United States has three times more petroleum locked up in shale rock than Saudi Arabia has in all its proved reserves,” notes the Cato Institute’s Jerry Taylor. Technology might also make it possible to tap conventional reserves that are far deeper than today’s wells can reach. The late Thomas Gold, an iconoclastic scientist and author of The Deep Hot Biosphere, claimed the term “fossil fuels” is a misnomer. Oil and natural gas are not the decayed leftovers of long-dead plants and animals, Gold insisted. He believed enormous quantities of hydrocarbons were trapped inside Earth as it formed. If that’s true, oil can be found just about anywhere. All that’s needed is machinery that can reach tens -- perhaps even hundreds -- of miles underground. But exponentially increasing the depth of drilling equipment may not be necessary to reach Gold’s hypothetical mega-reserves. In recent years, deposits in both the Middle East and the Gulf of Mexico have demonstrated the ability to replenish the oil that is taken from them, possibly by siphoning from larger sources of crude farther below. The huge petroleum-price spike that began in 2005 was certainly scary. But it wasn’t unprecedented. Rapid price hikes occurred many times in the last few decades, most notably in the 1970s. Oil is produced and sold on the world market. Countless factors -- taxes, regulations, monetary policy, economic expansions and contractions, outbreaks of speculative groupthink, technology breakthroughs, Acts of God, oil-industry workforce shortages, wars, and coups -- impact supply and demand. As a result, sometimes the price of petroleum goes up. Sometimes the price of petroleum goes down. Will Nutmeg State policymakers learn anything from this latest example of marketplace karma running over junk-science dogma? Probably not. But Connecticut’s consumers certainly should. Here’s a safe conclusion: It’s not wise to base decisions about energy purchases on the ravings of people who know nothing about energy. D. Dowd Muska is a writer, commentator and lecturer. His website is www.dowdmuska.com. # # # # #
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