Peak oil self-perpetuating?

Have you noticed that the people who warn us about peak oil are also the ones who don’t want us to look for anymore?

So what is peak oil? An email from a reader explains:

The thesis of ‘peak oil’ is that demand will significantly exceed supply and ability to find more (hence the peak) which will start a bidding and resource war, leading to the eventual collapse of western civilization as we know it.  There are plenty of charts etc produced to prove that this will happen / or is happening right now. . .

The counter argument is that there is plenty of oil available and yet to be tapped – for example the shales, coal conversion, gas conversion, oil sands, and deep ocean fields.   The price goes up making it economic to extract from these sources, and the peak gets pushed way forward.  In the interim, because of the higher cost of oil/fuel alternative technologies – electric, hydrogen, hybrid etc make much more sense and become more widely adopted.  High speed internet makes travel for communication less of a requirement, and the whole system balances up in some degree.  Let’s say this is the technological progress continuing argument. . .

The consequences of peak oil would be dire. That makes the opposition to further exploration from those who promote the theory so puzzling unless they want to make sure their fears are realised.

Requiring safeguards to protect the environment from exploration and exploitation is eminently sensible. Taking the Luddite’s approach to banning exploration altogether turns peak oil into a self-perpetuating scenario: they say it has happened/will happen and won’t let us find more so it does happen.


39 Responses to Peak oil self-perpetuating?

  1. robertguyton says:

    So Ele, ‘peak oil’, you believe it’s real?


  2. homepaddock says:

    It takes a long, long time to make oil so we could be using more than can be replaced. However, I am optimistic about our ability to adapt and find alternatives.


  3. robertguyton says:

    So, your answer to ‘do you believe peak oil is real’ is … ‘could be’?
    You need to get up to speed here, Ele, fast!
    Try searching out what the American military ‘thinks’.
    That’ll make your eyelids fly open.


  4. Scotty says:

    So when will you be opening up your farm to oil exploration /mining Ele?
    Should not Federated Farmers as a sign of good faith be encouraging all farmers to put their land where Nationals mouth is.and offer up land for mining?
    I note that noncompliance has again increased in Sth Canty,dairy farms.


  5. homepaddock says:

    Robert – my eyelids are sufficiently open to see you haven’t addressed the issue of why people who believe in peak oil oppose exploration for more.

    Scotty – Federated Farmers respects property rights and leaves decisions on what people want to do with their own land to them.

    If there was evidence there was oil under our land we would look into exploration – I’m old enough to remember the Beverly Hillbillies 🙂


  6. Andrei says:

    As the easy exploitable sources of oil dry up the prices rise making more inaccessible sources viable. And as these come on line new and improved methods of extraction make these sources cheaper.

    For example the Canadian oil sands contain reserves greater than all the known current reserves for North America. It hasn’t been economic until recently to exploit them but with rising oil prices and new techniques for extraction they are now coming on-line, Bitterly opposed of course by the luddites because there are known oil sand resources that will provide enough oil for hundreds of years at current rates of consumption

    Indeed the EU in its wisdom is trying to impose an additional carbon levy on oil from oil sands claiming it is more carbon intensive than traditionally extracted oil. This is of course is just to try and make it uneconomic to exploit.

    Of course the last thing Big Government types want is for people to be prosperous because prosperous people are far harder to control and therefore anything that leads to greater prosperity for all has to be opposed.


  7. Scotty says:

    Federated Farmers respects farmers “rights” while spraying effluent over everyone elses..
    In the meantime your “mighty” industry apparently still cant afford to support its self.
    I know its off topic,but I couldn’t find your post re, latest Dairy farms noncompliance increase in South Canterbury.
    All rights and no responsibilty. you must be proud.


  8. Ross says:

    Andrei, you are right there regarding the economics for multiple sources of oil.

    With the current Middle East changes, and the downfall of the dictators we might also see significant oil infrastructure investment in Libya and Iraq that could lift their annual production to 2 or 3 times previous levels.

    Engines are also getting far more efficient, with other changes in energy production and usage gradually reducing oil demand.

    I am picking is will all work itself out. It seems the international Green movement thrives on scare tactics and associated government control of everything – which seems to be a road to subjection not freedom and prosperity


  9. homepaddock says:

    Scotty – Federated Farmers doesn’t spray anything anywhere. It doesn’t farm, it’s a lobby gorup for those who do and works with regional councils and milk companies to try to ensure the few negilent farmers improve their performance.

    I did write a post on the latest report on compliance a few days ago, although I had missed the non-compliance increase in South Canterbury. I have never defended pollution but some non-compliance is because of poor paper work not pollution.

    Andrei & Ross – exactly. The green movement takes an unnecessarily pessimistic view, forgetting people’s ability to adapt and innovate.


  10. Scotty says:

    Its not a few negligent farmers tho Ele is it ,its 25% .and getting worse
    Federated Farmers attitude towards dairy pollution / environment issues has exacerbated the problem.
    Far too much effort goes into making excuses on behalf of polluters. “non compliance because of paper work not pollution”


  11. Gravedodger says:

    Scotty if there was a possibility of oil under Ele’s farm and with coal in the area that is not unlikely, someone will eventually go looking for it.
    They will take out a prospecting licence and will be required to make good any disruption or loss Ele and her Farmer incurr from such activity.
    Same if Oil is found then extraction will be conducted under the same compensation requirements.
    A farmer has no rights to minerals under the land, such wealth is the property of the Crown and they will dispose of it under the rules and compensation to the occupier will be due.
    AFAIK thems the facts and every luddite who hears about any extraction will make the rewards as hard to access as possible.
    Thats just what they do.


  12. mort says:

    some interesting place names in Australia
    Moomba, Cooper Basin, South Perth Basin, Arafura sea, Northwest shelf
    then theres a couple of places like Brazil which are as yet to quantify the volumes of oil in fields the Tufi
    or the recent move by the seychelles to promote an oil industry to tap into the resource off their coast which looks to be Tufi sized in capacity.
    Then theres little old NZ, which has shale, coal and an as yet unquantified volume of oil reserves off the coast.

    Peak oil ain’t peaking for at least 50 years, by which time the technology behind solar will improve to make it at least viable (ie 30% of current production costs)

    And don’t forget the growth in Nuclear generation too… that will take a bit of the energy growth demands (china has 46 plants in construction/ planning at this very time)


  13. Ross says:

    Mort, I agree that NZ has a large range of energy resources just waiting for further exploration and use.

    It seems however that the Green and political left in NZ are vehemently against even looking at how to use these resources.

    In general it seems that they want us to go broke and drift back into some sort of mythical enviro utopia (which never happened here or any where else in history). It is a pipe dream that will lead to poverty.

    It will be interesting to see whether NZ ever has the will to use these resources, or whether we will wait until we are serfs in our own country and our then Indian or Chinese masters take the resources to enrich themselves.


  14. johnsonmike says:

    The green movement takes an unnecessarily pessimistic view, forgetting people’s ability to adapt and innovate.

    The green movement actually hates people and believes we are a parasite on the planet that needs to be eliminated.

    The same people screaming “peak oil!” and opposing exploration are the same ones screaming “global warming!” and praying for it to come true. The fact there has been no statistically significant warming since 1995 appals them and the wiggle every facile statistical trick they have to try to deny this inconvenient truth..

    While humans do affect the climate, through such things as the construction of massive cities that act as heat sinks, there are also natural climate cycles of warming and cooling, some cycles being decades, others centuries and others millenia.

    The world has been warming since the Little Ice Age of the 1700s, but is not yet as warm as the Medieval Warm Period 1000 years ago, when the vikings settled Greenland and named it for the grass that grew there at the time, and grapes for wine were grown in Scotland.

    The green movement denies there ever was a Little ice Age, let alone the Medieval Warm. Ask yourself why. Actually I am asking them right now, as the moment this gets posted, their alert system will be triggered and even more of them will rush over here.


  15. Ross says:


    If they acted consistently with their warped view of the world ‘parasite on the planet’ then logically they would commit suicide.

    Such self loathing and daily inconsistency (they are still alive consuming resources) must be extremely hard to live with.

    I think you are on to something here – it might help explain the enigma of Robert G. Perhaps it is all just explained by Robert having a case of deep seated self loathing.



  16. David Winter says:

    The consequences of peak oil would be dire. That makes the opposition to further exploration from those who promote the theory so puzzling unless they want to make sure their fears are realised.

    Peak oil isn’t a theory in the normal sense, its just what happens with finite resources.

    People that talk about peak oil have (by and large) heard about markets, and the progressively more dirty ways to get less useful resources. The argument is we should be preparing the economy to deal with the changes that the end of cheap oil will bring (and that the full cost of production should be included in the price consumers pay). The Market is good at allocating scarce resources, it’s less good at foresight.

    I oppose oil exploration around NZ’s coast, because I think digging stuff out of the ground isn’t a very good way to grow our economy and any oil found would be drilled at our risk and (largely) for a foreign companies gain


  17. JC says:

    “The consequences of peak oil would be dire.”

    The name “Peak Oil” was defined by an American oil expert to quantify the peak for oil in the US.. he was right within the limits of his knowledge.

    However, right now the US has started the march towards energy self sufficiency and the evidence is that Canada, North and South America have an oil equivalent at least 6 times of Saudi Arabia.

    “Peak Oil” is thus a misnomer because its “energy” we should be talking about.. and there’s no shortage or peak of that in terms of unconventional sources.

    The other thing that this foolish term does is propel dumb decisions. Right now the vast US Cornbelt is producing more corn for ethanol (via subsidies) than for animals and humans.. result.. increased hunger around the world. Those rioting Arabs in the ME are are fighting for more and cheaper food than liberty, equality and the American Way.



  18. Andrei says:

    I oppose oil exploration around NZ’s coast, because I think digging stuff out of the ground isn’t a very good way to grow our economy and any oil found would be drilled at our risk and (largely) for a foreign companies gain

    And how do you propose to grow the economy – the market for bullshit is fairly limited,

    There is nothing in this world that is risk free – you take your life in your hands every time you leave your front door but mostly it works out OK and you get where you are going and back again.

    It is a mental illness when fear keeps people from leaving their house and getting on with what needs to be done.

    Likewise, I’d posit, it is a mental illness when people try to block the use of a valuable resource out a fear of the remote chance something will go wrong.

    Of course the naysayers are usually Government employees somewhat protected from the vicissitudes of life the more productive elements of society contend with – remaining blissfully ignorant of the fact that their comfortable positions in life are supported by the farmers, miners, oil drillers, engineers, container ship operators etc who keep things going and without whom said civil servants would be reduced to penury


  19. David Winter says:

    And how do you propose to grow the economy

    We should make things that the world needs.


  20. Andrei says:

    We should make things that the world needs.

    Indeed – but what “things” that is the question?

    And out of what shall we make these mysterious unspecified
    things” might be another somewhat pertinent question along with where shall we get it from?.

    And what will power the machines in the factory where these
    things” are made I wonder?


  21. mort says:

    oil, coal, and LNG are things that people elsewhere want to buy.
    Hell People in NZ want to buy it too, they want cheap energy to make it feasible to start new businesses, warm their homes, and generally improve their lives. But alas we have the naysayers blocking cheap energy, and a willing govt who uses electricity as a form of taxation, so play along with the wrong-headedness, all for the short term gain, whereas if they really wanted to provide leadership, they would allow 3 more Huntley type power stations (obviously they’d be modern day increased efficient versions) to be built on the Westcoast, fuelled with coal that would otherwise be shipped offshore to be burnt in less efficient plants.
    Or alternatively they could be LNG powered and run off Coal seam gas or shale oil/ gas.


  22. mort says:

    Andrei, I think you’re wrong about there being a small market for bullshit. Look around the western world and check out the Welfare warfare states, and you’ll see the market for bullshit is actually half the world economy. 46% of the population bludging off the rest of us. That is the bullshit industry.


  23. johnsonmike says:

    And what will power the machines in the factory where these
    “things” are made I wonder?

    There wouldn’t be any factories. They would have us all making baskets out of flax. And eating organic potatoes. And living in caves and mud huts.


  24. mort says:

    potatoes are the fuel of the colonialist oppressor, as evidenced by the liberation of Maori warriors in the Musket wars, who were freed up from menial tasks like cultivation of kumara, so they could cultivate moko mokai


  25. jabba says:

    Hands up those of us can get by without the use of oil based products .. bObby G has admitted it but chooses to ignore the fact as it makes him look like a hypocrite .. oh, hold on!!


  26. david winter says:

    This is sort of beside the point, but…

    If we dig stuff out of the ground slowly it won’t add much to out GDP (maybe 1%) if we did it quickly it would all be gone quickly. Gerry Brownlee’s Jed Clampett school of economics isn’t much help.

    I’d like a cycle path, but, really, more tourism isn’t going to help much. We can’t intensify agriculture much further.

    What we can do is get better, employ technology to get the most out of out agricultural products; use science, research and engineering to manufacture niche products that the mega-economies can’t compete with us on.

    Would you rather be the country that sells raw goods to make its way in the world, or the one that takes materials and turns them into products?


  27. homepaddock says:

    “Would you rather be the country that sells raw goods to make its way in the world, or the one that takes materials and turns them into products?”

    Both. It doesn’t have to be either or.

    One way to make our way in the world is to reduce our reliance on exports imports, among which is oil.


  28. robertguyton says:

    Surely you mean ‘imports’.
    Nobody needs Southland’s lignite. Yearns for, perhaps, but not needs.
    The loss of productive farmland and the on-going riches quality farmland brings, negates the supposed value of the dirty brown lignite that sits underneath that lovely soil. Short-sighted, greed-fuelled business, that mining.
    The risks of deep-sea drilling in the Great South Basin make plans by the oil industry to do just that, reckless and irresponsible.


  29. Mort says:

    David Winter: you raise some interesting points, but who is going to start the businesses to invent, or porduce these advances? The capital that the entrepneur needs is being sapped by the over taxation, over regulation, and then any working capital that the business owner may have is sucked dry by exorbitant energy costs (is $400-700 per month to warm a family home reasonable in a low income country like NZ), not to mention the ancilliary taxes, levies, and regulation they then have to endure from the likes of OSH, ACC, and the threat of IRD invading the business premises at any stage… it is little wonder people cbf starting new enterprises… its just about too hard. It takes pretty big cajones to take on the clipboard weilders and their jumped up sense of worth to the economy.
    Its time the govt made the environment for entrepeneurs to do what they do best easier, and just get the hell out of the way, and stop trying to suffocate the economy with micromanagement and the incessant layer upon layer of taxation or redtape.
    Dig up the coal, and burn it in new power plants, and reduce the waste of energy transporting the stuff to INdia/ China to have it do the same thing.


  30. Cadwallader says:

    A piece of logic: If peak exploration hasn’t been achieved how can anyone pose that peak oil can be measured? (Let alone achieved.)


  31. mort says:

    time to drill dig, and frack our selves to wealth


  32. robertguyton says:

    Cad – that’s not ‘a piece of logic’, it’s a question and I weep for your foolishness.


  33. mort says:

    why is the default setting for Lefties personalised abuse when a legitimate question is raised, but the answer is an inconvenient truth?


  34. Ross says:

    I think NZ will end up having to make a choice on this – if we want to maintain a generous and expensive social security system over the next 40 years we are going to have to find major new sources of income.

    Tapping into our abundant energy reserves in multiple forms – gas, oil, coal, wind, solar, tidal, hydro (another dam on the Clutha eh) is a straight forward and logical response.

    If we do nothing the current superannuation, health and welfare arrangements are unsustainable in the long term.

    My pick is we will go for the energy option, especially as world demand increases and the prices start heading steeply up.

    By using the energy we have available to us, we will be able to continue some derivation of the current welfare system, correct our balance of payments problems, and look forward to a reasonably prosperous future.

    The issue will be balancing this with protection of the environment, which is vital – us, our children, and our grand children still have to live here.

    There are major oil reserves off the NZ coast, and bringing them on stream will continue to assist with meeting overall world energy demand, and putting back any perceived peak.


  35. mort says:

    Developing nations will continue to desire equality or superiority with the Western developed nations. Therefore the energy requirements of the world will intensify. The Caliphatic Civil War will is going to pose many serious qurestions. The Chinese have taken a bet each way, by supplying arms to the Iranians as well as building pipelines for gas and oil, they are also the Saudi’s biggest customers. The Qatar Sultanate has the largest gas reserves, and the Chinese are busy securing a majority of them too.Eventually, the west will be irrelevant to the middle east. But the west will still require energy. We would be foolish to over look the riches nature has bestowed upon us. Especially given that one day hydrocarbons will be an inefficient energy source compared to newly invented sources, and so will be worth nothing (much like whale blubber powered light sources)


  36. Ross says:

    Mort – so is it use it or lose it?


  37. mort says:

    not as simple as a use it or lose it model, but once the technology supersedes it, the worth will plummet. Why not make hay while the sun shines?


  38. Ross says:

    you make a good point


  39. Peak oil is simple really. Economic theory does not dictate geological limits. What does that mean? That anything we think or do does not produce one iota of oil.

    When we think of oil, we picture the gas tank analogy. When the needle reaches E for empty is when we are in trouble. The world does in fact have a trillion barrels of oil left to produce. The real analogy is like a Pearl Harbor reconnaissance plane flying its mission over the ocean. The plane flies as far as it can for as high as it can. The pilot fulfils the mission of aerial photography of enemy positions. At a certain point though the pilot knows he must turn around at the HALF WAY point of the gas gauge to make it back home. When the needle reaches at half the tank the pilot MUST RETREAT and DESCEND to make it back to base. When the world has produced as much oil as it ever can in one day (peaked), when it has flown as far as it can for as high as it can the world economy MUST RETREAT and DESCEND.



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