As a geophysicist and Fellow of the American Geophysical Union, I don't qualify to be a "Flat-Earth Economist"—to use Colin Campbell's terminology. Just the same, in this debate about imminent oil depletion I come down squarely on the side of economist Michael Lynch. But Campbell is at least half-right. Low-cost oil will gradually be depleted and prices will rise as even Arabian oil becomes more costly to lift. However, higher prices will bring forth new discoveries in frontier provinces, unconventional oil, and of course, increased efforts of conservation. Hybrid-electric cars running at 40 to 80 mpg will soon take over, and Albertan tarsands are already commercial—with production costs around $8/bbl—if only the Canadian government would dump the Kyoto Protocol that is discouraging the necessary capital investments.
So yes, conventional oil production will inevitably peak—sometime in the future. The more interesting and much more important question is whether there will be a smooth transition to an equivalent energy source— without significant economic disruption. On this score, we rely on the "invisible hand" that has always performed in the past and about which Campbell and Hubbert express some skepticism.
I knew M. King Hubbert at the US Department of Interior some 30 years ago as a very senior and rather cantankerous colleague. I remember once telling him over lunch that he should forget about the use of the Bell-curve for predicting oil supplies and go back to doing more of his pioneer work on groundwater flow. He never spoke to me again. Nor would he admit that rising prices or advancing technology could affect his estimates. He was completely taken by the fad of population explosion and resource exhaustion that geologists like Preston Cloud were then preaching—even before the Club of Rome's 1972 project on "Limits to Growth."
The debate about Hubbert's peak actually peaked in the mid-seventies. The National Academy of Sciences had published the Malthusian views of the Cloud panel, with the lone economist on the panel dissenting. I remember writing a couple of critical letters in the journal Science in response to ecologists who took such estimates quite seriously. In particular, in another aspect of his work, Hubbert had found that oil-discovered per foot-drilled was declining and took this as evidence of running out of oil. I argued instead that the high price of "new" oil simply encouraged more wildcatting and therefore produced more dry wells.
I almost got back into the debate 2 years ago when I received a call from the editor of Wired magazine. Would I take a bet of $1,000 offered by Princeton professor Deffeyes, who had just published his book "Hubbert's Peak" which placed the peak of world oil production between 2004 and 2008? I eagerly accepted—only to find that Deffeyes withdrew his bet and beat me out of making an easy grand. So I hereby offer the same bet to Campbell and his fellow "peakers" and hope they will make me rich.
S. Fred Singer
Professor Emeritus
Environmental Sciences
University of Virginia
Petroleum resources debate
I don't think much of Michael Lynch's article, "Petroleum resources pessimism debunked in Hubbert model and Hubbert modelers' assessment (OGJ, July 14, 2003, p. 38)."
It is easy to debunk someone's ideas after he is dead and unable to defend either them or himself. Lynch's ideas would have been better if he had not waited 20 years to present them and had been a little more temperate in his deriding of someone else. Of course if he had not waited, he would not have had all the evidence that people 20 years ago did not have.
Fred Haeberle
