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November 22nd, 2008

To The Peak Oil Community

This message from Robert Hirsch to the peak-oil community appeared in the November 14 issue of the Wall Street Journal. He's asking us to take a vacation from preaching Hubbert sermons.

To The Peak Oil Community:

The world is in the midst of the most severe financial crisis in most of our lifetimes. The economic damage that has already been wrought is considerable, and we have yet to see the bottom or the turnaround. Against this background, I suggest that the peak oil community minimize its efforts to awaken the world to the near-term dangers of world oil supply. The motivation is simple: By minimizing our efforts in the near term, we may not add fuel to the economic fires that are already burning so fiercely.

We are all aware of how disoriented governments and business are right now. Our leaders, leaders-to-be, and best minds are disoriented and seeking pathways out of the current morass. The public is in a quiet panic mode – those who were reasonably well off are less well of, and their options for action are limited. Those that have lost their jobs and/or homes are desperate. Businesses and the markets are in what might be called a free fall. If the realization of peak oil along with its disastrous financial implications was added to the existing mix of troubles, the added trauma could be unthinkable.

Like many of you, I've devoted my recent efforts to trying to wake the public and governments to the impending horrors of peak oil. As much as that awaking is urgently needed, continuing to press forward now is almost certainly not in the broader interest.

Many may be tempted to directly challenge the recent IEA World Energy Outlook. I am among those who were very disappointed. Pressing those concerns at this time might further the peak oil "cause," but it could well do much more damage than any of us really intend.

Please keep up your studies and thinking, because helping the world realize the dangers of peak oil is an absolute must. In the near term, keeping relatively quiet is likely the better part of valor.

OK, OK, I'll grit my teeth and ignore the split infinitive in his next-to-last paragraph. World crude oil production stopped growing in 2005, it's hard to hide that one behind the curtain. But with oil less than $50 per barrel and gasoline under $2 per gallon, we could pretend that the oil problem has gone away.

Many of us are hoping that President Obama will be another FDR. If the oil trap snares him, he could be forced into the Herbert Hoover mold. Maybe Karl Marx was right.

Don't nobody tell, but Oil & Gas Journal (November 17, 2008) reports that Henry Waxman, the new chairman of the House Committee on Energy and Commerce, is an opponent of the hydrofrac technique. Frac jobs have been around a while; Hubbert and Willis published on frac physics in 1957. Anybody know where Waxman stands on water flooding and drilling mud? Don't ask, don't tell.

I promise not to relay the many postponement or cancellation announcements of energy project construction, drilling campaigns, or equipment manufacture. If the investors can't see the bottom of the oil-price drop, they won't put up the money. Matt Simmons, for good reason, has proposed a minimum support price for oil and natural gas. Forewarned is forearmed.

This morning's New York Times reports on page 1, above the fold, that the Standard & Poor's index of 500 stocks dropped more that 6 percent on both August 19 and August 20, 2008. Not to worry, that has happened before. Most recently, it happened on July 20 and 21 of 1933. Try not to worry about it.

It's still there. "Eppur si muove."

But I'll take Hirsch's advice. I'm taking my family on vacation to Hawaii. We'll be on the west slope of Hualalai, which last sent lava flows to the sea in 1801. What, me worry?