I was pretty skeptical when I received Robin Mills Myth of the Oil Crisis because Peak Oil makes intuitive sense. Oil is a finite resource, demand is skyrocketing and there is no doubt that, at some point, demand will outstrip supply. However, Mills, a geologist and economist, makes a convincing case that Peak Oil is not imminent. If true, this finding has important implications for the global economy and environment.
In brief, Mills argues:
- supply is greater than we think
- supply and demand responsive to prices
- current high prices result of underinvestment due to oil glut of 80s-90s
- gas, unconventional, and alternative fuels can make up balance
- peak oil reasoning will lead us into bad decisions
If Mills is correct, then some of the assumptions regarding global climate change need to be reconsidered. Many carbon scenarios suggest that a major decline in hydrocarbon availability will force carbon reductions by default. Governments will not need to make painful choices now because "the invisible hand" will make those choices for them. If hydrocarbon supply is not at risk, then we will need government manipulations of oil supply and demand to alleviate human induced climate change.
Some of Mills' arguments, however, ring false. The contention that supply is underestimated because large unconventional reserves (off-limits oil, coal, oil sands, gas) will seamlessly replace conventional oil is demonstratively false. Some unconventional reserves will have a much greater negative environmental impact and should be taken "off the table". For example, a recent report by David Israelson of the University of Toronto claims that developing the Alberta Oil Sands will devastate the Great Lakes basin.
"Difficult to extract and dirty to process, tar sands oil is coming to the Great Lakes via a planned network of pipelines and refinery expansions. Currently disclosed project costs show that pipeline companies and U.S. refiners plan to invest more than U.S. $31 billion between now and 2015 to upgrade, export, and refine tar sands oil. This expansion promises to bring with it an exponential increase in pollution – discharges into waterways including the Great Lakes, destruction of wetlands, toxic air emissions, acid rain, and huge increases in greenhouse gas emissions. All of this comes before anyone even uses a drop of this oil in their cars and trucks and factories, before the oil is even processed in these expanded refineries. If the great challenge of the 21st century is to figure out how to wean society off oil, this is the diametric opposite of the way to go about it."
The one thing we must not do is sacrifice our ecological future for our present comfort. Mills does make some concessions to this need in his final chapter on "Green Oil". However his willingness to advocate environmentally disastrous sources of energy make me queasy. Ultimately, while I subscribe to much of what Mills says, I think Peak Oil is probably closer than Mills believes, not because oil is running out, but rather the consequences of oil use is making it unsustainable. Despite these failings, I thought Mills' book was eminently readable, thought provoking and a worthy contribution to the Energy Debate.
In research for this post, I came across this great poster.