Peak Oil is a Paranoid Delusion
Over the past few years, more and more apocalyptic stories have been
popping up about a supposed phenomenon known as “peak oil.” The
theory is that we’re running out of oil, the big powers are keeping it
quiet, and as supplies dwindle, world-wide economic chaos will ensue.
This is hardly a new theory. According to the Chicken Littles of the
world, we’ve been “about to run our of oil” for over thirty years.
Obviously it hasn’t happened yet. With the recent upswing in strife
in the Middle East, however, the notion has gained in popularity.
The thing is, the theory is utterly false, and can be laid to rest
with a single well-established fact: there is more oil in the Colorado
shale fields than the entire Middle East had at its peak. The only
reason we’re still importing oil is that, at present, it is cheaper to
do so than to extract it from shale. Until recently, getting oil out
of shale has been a nasty and expensive business.
That’s about to change, though, as engineers at Royal Dutch/Shell have
applied for a patent on a new method of extracting shale oil cheaply
and cleanly. (As an interesting side note, it is the largest patent
application in U.S. history.) Amazingly, this method:
- Is cleaner than conventional drilling
- Generates the highest grade of light-sweet crude oil,
which burns cleaner than other varieties.
- Becomes profitable with oil just north of $30 a barrel
(which we’ve already blown past.)
In other words, with Shell’s new technique, it actually
benefits the environment to switch to shale oil. I found this
hard to believe at first, but seeing as I am a patent lawyer, I
decided to pull the patent application to see for myself. When I saw
the invention laid out on paper, I was convinced that it would work.
As with most great ideas, the basic concept is simple. In brief,
engineers dig holes around the extraction area, into which they insert
giant cooling rods. The water in the soil freezes, and forms an
“ice-bowl,” which traps the oil and prevents seepage. The center of
the formation is then heated, causing the oil to bubble up through the
rocks, from which it may then be extracted with ease. The ice-bowl
prevents all the nasty chemicals released by this process from getting
into the water table. This href="http://en.wikipedia.org/wiki/Oil_shale">Wikipedia Article provides more details. Shell has been granted rights to a small patch of shale field in Colorado to make an experimental run with its new method, and all present signs suggest it will be a success. Make no mistake, however. Even if Shell’s idea is a disastrous failure, existing technologies can get oil out of the shale — it’s just expensive. Other new extraction methods are also being tried by a number of companies. Here’s a partial list: The absolute worst case scenario I can fathom is that oil prices could get high enough to make existing shale extraction techniques economically feasible (some estimates put the break-even point at about $75 a barrel). At that point, we could tap our shale reserves and continue on, whether any of the new methods work or not, without any significant changes in infrastructure. Sure, gas would be more expensive, but probably no more-so than Europeans pay now. The economy may go through a rough patch during the transition, but the theory of a global economic meltdown over peak oil just isn’t credible. In fact, once shale production takes off, we could easily become the world’s biggest exporter of oil, with China as our biggest customer. Strange as it may sound, it is quite possible that, within our lifetimes, Chinese government officials may take to fretting about their dependence on “Middle-Western” oil. In short, don’t buy into the peak oil paranoia. It is nothing more than a fairy tale, and is dangerous in that it distracts attention from the real impending crisis within our energy policy: global warming. It makes no sense to waste our time fretting about running out of oil when we in truth should be concentrating on figuring out how to curb our usage of it. After all, even if we were running out, wouldn’t the best solution be the same?