The Peak Oil theory maintains that world production of
conventional oil will soon reach a maximum, or peak, and decline thereafter,
with grave socio-economic consequences. Some proponents of the theory argue
that world oil production has already peaked, and is now in a terminal decline
Although, on the face of it, this sounds like a fairly
reasonable proposition, it has been challenged on both theoretical and
empirical grounds. While some critics have called it a myth, others have
branded it as a money-making scam promoted by the business interests that are
vested in the fossil fuel industry, in the business of war and militarism, and
in the Wall Street financial giants that are engaged in manipulative oil
Regardless of its validity (or lack thereof), the fact is
that Peak Oil has had significant policy and political implications. It has
also generated considerable reactions among various interest groups and
While environmental and similar activists have used Peak Oil
to promote more vigorous conservation and more energetic pursuit of alternative
fuels, the oil industry and its representatives in and out of the government
have taken advantage of Peak Oil to argue in support of unrestrained extraction
of oil and expanded drilling in the offshore or wildlife regions.
Because of its simple logic and facile appeal, Peak Oil has
also led many ordinary citizens, burdened by high fuel bills during periods of
energy crisis, to support unrestrained or expanded drilling. According to a
recent Rasmussen poll, 57 percent of Americans favor more offshore drilling.
Misled and misplaced popular perceptions, in turn, play into the hands of the
oil industry and their representatives to lobby for the lifting of the Federal
ban on oil production in hitherto restricted regions.
Citing voter anger over soaring energy prices, Senator John
McCain of Arizona, the Republican presidential nominee, recently argued that
opening vast stretches of the country�s coastline to oil exploration would help
America eliminate the dependence on foreign oil. �We have untapped oil reserves
of at least 21 billion barrels in the United States. But a broad federal moratorium
stands in the way of energy exploration and production,� he said. �It is time
for the federal government to lift these restrictions� .
Perhaps the financial giants of New York and London have
benefited the most from the misleading implications of Peak Oil: �As much as 60% of today�s crude oil price is
pure speculation driven by large trader banks and hedge funds. It has nothing
to do with the convenient myths of Peak Oil. It has to do with control of oil
and its price. . . . Since the advent of oil futures trading and the two
major London and New York oil futures contracts, control of oil prices has left
OPEC and gone to Wall Street. It is a classic case of the tail that wags the
dog,� points out William Engdahl, a top expert on energy and financial markets
Just as Peak Oil plays into the hands of manipulative
speculators and beneficiaries of fossil fuel, so too can it be used by the
champions of unilateral wars and military adventures, as it implies that war
power and military strength are key to access or control of the �shrinking� or
�soon-to-be-shrinking� oil. It thus provides fodder for the cannons of war
profiteering militarists who are constantly on the look out to invent new
enemies and find new pretexts for continued war and escalation of military
spending�that is, for the looting of the national treasury, or public money.
By the same token that Peak Oil can serve as a pretext for
war and military adventures, it can also serve as a disarming or pacifying
factor for many citizens who accept the Peak Oil thesis and, therefore,
internalize responsibility for U.S. foreign policy every time they fill their
gas tank. In a vicarious way, they may feel that they own the war!
Thus, Peak Oil serves as a powerful trap and a clever
manipulation that lets the real forces of war and militarism (the
military-industrial complex and the pro-Israel lobby), and the main culprits
behind the soaring energy prices (the Wall Street financial giants engaged in
manipulative commodity speculation) off the hook; it is a fabulous distraction.
All evils are blamed on a commodity upon which we are all utterly dependent.
Not only millions of lay-citizens, but also many scholars
and academics have taken the bait and fallen right into this trap by arguing
that recent U.S. wars of choice are driven primarily by oil and other �scarce�
resources. More broadly, they argue that most wars of the future, like the
recent and/or present ones, will be driven by conflicts over natural resources,
especially energy and water�hence, for example, the title of Michael T. Klare�s
popular book, Resource Wars .
As a number of
critics have pointed out, this is reminiscent of Thomas R. Malthus�s theory of
�scarcity� and �overpopulation.� Malthus (1766-1834), a self-styled British
economist, argued that the woes and vagaries of capitalism such as poverty,
inequality and unemployment are largely to be blamed on the poor and the
unemployed, since they produce too many mouths to be fed, or too many hands to
In a similar fashion,
Peak Oil implies that current crisis in energy (and other commodities) markets
is to be blamed, in part, on less-developed or relatively poorer nations such
as India and China for growing �too fast� and creating �too much� demand on
�scarce� resources. (Similarities between the Peak Oil theory and the
Malthusian theory of scarcity are further discussed below.)
Peak Oil thesis is
not new: Geology vs. geopolitics
Peak Oil theory is not altogether new. M. King Hubbert, a
well-known geologist, provided a dramatic discussion of the theory in 1956. A
year later, Admiral Rickover discussed the end of the fossil fuel era even more
emphatically�at the time, he gave oil about fifty more years to run out. Thirty
years ago, the Club of Rome predicted an end of oil long before the present
Indeed, there is evidence that projections of oil peaking,
then declining and running out, have been floated around ever since oil was
discovered in the second half of 19th century. For example, the chief geologist
of Pennsylvania predicted in 1874 that we would run out of oil in four
years�just using it for kerosene .
While Peak Oil theory has been around for a long time, it
has usually been dormant during �normal� economic times, or �reasonable� oil
prices, but has gained heightened currency during periods of energy crisis and
high oil prices. For example, Peak Oil became quite popular during (and
immediately after) all of the three recent oil crises: the early 1970s crisis,
the late 1970s and early 1980s crisis, and the early 1990s crisis.
The obvious reason for the rise in the Peak Oil popularity
in the context of those periods of energy crisis was the perception that oil
shortage must have played a major role in the respective oil price hikes. It is
not surprising, then, that as recent geopolitical convulsions in the Middle
East have triggered a new round of oil price hikes, Peak Oil theory has once
again become fashionable.
It turns out, however, that oil price shocks of all the
previous periods of energy crisis were precipitated not by oil shortages, or
any real prospects of oil �peaking and running out,� but by international
political convulsions, revolutions and wars: the Arab-Israeli war of 1973, the
1979 Revolution in Iran, and the 1990-91 invasion of Kuwait by Saddam Hussein�s
armed forces. Each time, as the turbulent period of war or revolutionary
atmosphere ended, higher oil prices of the respective crisis situation subsided
The current oil price hike too is precipitated not by an oil
shortage, as popularly perceived, but by manipulative speculation in energy
futures markets�which are, in turn, prompted largely by the unstable atmosphere
of war and geopolitical turbulence in the Middle East.
Evidence is therefore unambiguous that, so far, almost all
oil price shocks can be explained not by geology, or the so-called Peak Oil,
but by geopolitics.
The paradoxical reasonableness of Peak Oil: Return of
Peak Oil has a prima
facie reasonableness that makes it readily acceptable to most people: since oil
is a finite natural resource, it is subject to depletion.
But while the
rationale behind Peak Oil seems reasonable, it is also seriously flawed and
One of the major
defects of Peak Oil is its facile extrapolation or transition from micro to
macro level, that is, an unwarranted generalization or extention of what is
true in the case of an existing oil well or oil field to the entire world oil
production. It is true that every operating or producing oil well or field increases
in production rate until it reaches a maximum or peak flow rate, after which
the rate of production enters a terminal decline. It does not follow, however,
that global world oil production as a whole must soon reach a maximum and begin
to run out afterward�some Peak Oil champions claim that this has already taken
Proponents of Peak
Oil are quick to point to oil wells or fields that have actually peaked and
declined, such as those correctly predicted by geologist M. King Hubbert. They
fail, however, to point out the ever newer discoveries of new oil fields and/or
other sources of energy that tend to more than offset the depleted ones.
The Peak Oil debate
boils down, essentially, to natural versus social limits, or
naturally-determined versus socially-determined limits. A similar debate
erupted more than 200 hundred years ago over the limits of population growth,
on the one hand, and the growth of food supplies, on the other. The debate was
prompted largely by a 1978 essay written by the British economist Thomas R.
Malthus, titled �An Essay on the Principle of Population.�
Malthus projected an
alarming specter of food shortages, hardship, and even starvation �because of
faster population growth than food supply.� According to his theory, poverty
and distress are unavoidable because, if unchecked, population increases at a
geometrical rate (i.e. 1, 2, 4, 8, 16, etc.), whereas the means of subsistence
grow at an arithmetical rate (i.e. 1, 2, 3, 4, 5, etc.), thereby leading to
inevitable shortages of foodstuff.
As Malthus thus
blamed misery and poverty on the poor and the miserable (for giving birth to
too many mouths to be fed), he also concluded (logically) that poverty
alleviation depended on selective restriction of population growth, that is,
curbing the number of the poor and working people.
As checks on
population growth, Malthus accepted war, famine, and disease. He also
recommended �moral restraint� (marrying late or not at all, coupled with sexual
abstinence prior to, and outside of, marriage) as additional checks on the
growth of population. His hostility toward the poor was expressed most vividly
when he openly argued in favor of dismantling social safety net programs,
called �poverty laws�: �We cannot, in the nature of things, assist the poor, in
any way, without enabling them to rear up to manhood a greater number of their
By blaming social
ills and economic calamities on the poor and working people, Malthus�s views
tended, willy-nilly, to exonerate the underlying socio-economic structure, and
to prove the inevitability of privation and misery under any social system.
What Malthus failed
to see is the fact that growth rates of population and food supplies are not
determined purely by nature as fixed, innate, or immutable rates. Instead, they
are dynamic categories that can change drastically, depending on the level of
economic development, social structure of production, and the state of
identical, the Peak Oil theory is similar to the Malthusian theory in that it
too is based on natural, innate, or fixed and immutable limits. There are, of
course, limits to everything�energy, food, water, population. But those limits
are not absolute or pre-determined, as implied by the Peak Oil thesis. They are
perhaps more social than natural limits.
This is why although
the Peak Oil theory is not false in saying that there are limits to oil
production, it does not explain much. In a real sense, it is a truism. It
explains neither the current energy crisis nor any of the past ones. Nor can,
therefore, its dire predictions about future global oil production be
More oil found than used up
misconceptions have many times led to alarmist predictions and dire warnings of
an end of global oil production before the current day. Time and again, those
forecasts turned out wrong because oil reserves, including proven or
cost-efficient reserves, have continued to grow, and more oil wells or fields
have been brought under utilization than those peaked and declined. The
following is a partial list, as collected by Jason Schwarz, Options Strategist
for Lone Peak Asset Management, Westlake Village, CA:
1. An offshore find
by Brazilian state oil company Petrobras (PBR) in partnership with BG Group
(BRGYY.PK) and Repsol-YPF may be the world�s biggest discovery in 30 years, the
head of the National Petroleum Agency said. A deep-water exploration area could
contain as much as 33 billion barrels of oil, an amount that would nearly
triple Brazil�s reserves and make the offshore bloc the world�s third-largest
known oil reserve. �This would lay to rest some of the peak oil pronouncements
that we were out of oil, that we weren�t going to find any more and that we
have to change our way of life,� said Roger Read, an energy analyst and
managing director at New York-based investment bank Natixis Bleichroeder Inc.
2. A trio of oil
companies led by Chevron Corp. (CVX) has tapped a petroleum pool deep beneath
the Gulf of Mexico that could boost U.S. reserves by more than 50 percent. A
test well indicates it could be the biggest new domestic oil discovery since
Alaska�s Prudhoe Bay a generation ago. Chevron estimated the 300-square-mile
region where its test well sits could hold up to 15 billion barrels of oil and
3. Kosmos Energy
says its oil field at West Cape Three Points is the largest discovery in deep
water West Africa and potentially the largest single field discovery in the
4. A new oil
discovery has been made by Statoil (STO) in the Ragnarrock prospect near the
Sleipner area in the North Sea. �It is encouraging that Statoil has made an oil
discovery in a little-explored exploration model that is close to our North Sea
infrastructure,� says Frode Fasteland, acting exploration manager for the North
5. Shell (RDS.A) is
currently analyzing and evaluating the well data of their own find in the Gulf
of Mexico to determine next steps. This find is rumored to be capable of
producing 100 billion barrels. Operating in ultra-deep waters of the Gulf of
Mexico, the Perdido spar will float on the surface in nearly 8,000 ft of water
and is capable of producing as much as 130,000 barrels of oil equivalent per
6. In Iraq,
excavators have struck three oil fields with reserves estimated at about 2
billion barrels, Kurdish region�s Oil Minister Ashti Horami said.
7. Iran has
discovered an oil field within its southwest Jofeir oilfield that is expected
to boost Jofeir�s oil output to 33,000 barrels per day. Iran�s new discovery is
estimated to have reserves of 750 million barrels, according to Iran�s Oil
Minister, Gholamhossein Nozari.
8. The United States
holds significant oil shale resources underlying a total area of 16,000 square
miles. This represents the largest known concentration of oil shale in the
world and holds an estimated 1.5 trillion barrels of oil with 800 billion
recoverable barrels�enough to meet U.S. demand for oil at current levels for
110 years. More than 70 percent of American oil shale is on Federal land,
primarily in Colorado, Utah, and Wyoming.
9. In western North
Dakota there is a formation known as the Bakken Shale. The formation extends
into Montana and Canada. Geologists have estimated the area holds hundreds of
billions of barrels of oil. In an interview provided by USGS, scientist Brenda
Pierce put the North Dakota oil in context: �Of the current USGS estimates,
this is the largest oil accumulation in the lower 48. . . . It is also the
largest continuous type of oil accumulation that we have ever assessed.� The USGS
study says with today�s technology, about 4 billion barrels of oil can be
pumped from the Bakken formation .
In the face of such
overwhelming evidence, which seriously undermines the Peak Oil theory,
proponents of the theory argue that their thesis is based on �proven,� not all,
reserves. Proven reserves are reserves that, given a certain level of
technology and a certain amount of investment, are proven or estimated to be
economical, or cost efficient. Let us briefly examine this �proven vs. total reserves�
argument of the Peak Oil champions.
Proven reserves are not a measure of future oil
production: Short-term market imperatives vs. long-term public policy/interests
That oil companies
would want to invest only in the narrow category of proven, or cost efficient,
reserves is understandable; it is a simple business principle. But to base
future oil supplies on the currently proven reserves, as Peak Oil theory does,
is problematic. It represents a short-term, static view of future oil supplies
that implicitly ignores the critical role of new investments and technological
innovations that can make profitable, or cost efficient, what is currently
considered unprofitable, or cost inefficient.
M.A. Adelman points
out that �in 1944 a special expert mission estimated Persian Gulf reserves at
16 billion proved and 5 billion probable. By 1975, those same fields had
produced 42 billion barrels and had 74 billion remaining. In 1984, geologists
estimated a five percent probability of another 199 billion barrels remaining
to be added in the Gulf region. In five years those reserves had already been
and short-term profitability measures, thus severely limit oil reserve
estimates because they effectively exclude not only huge reserves of
unconventional oil, but also vast reservoirs of conventional oil that are not
currently profitable. This is obviously a major flaw of the Peak Oil theory, as
it judges future supplies of oil by the narrowest definition of oil production:
currently proven reserves.
However, just as
proven reserves determine the current level of oil production, and therefore of
investment, the amount of current investment also plays a crucial role in the
determination of the amount of proven reserves in the future. Peak Oil views
this mutual relationship as a one-way street, or causality�going from the
amount of currently proven reserves to the level of the necessary (or cost
efficient) investment, and the global production of oil.
reserves that may be considered unprofitable from the viewpoint of private oil
companies may well be economical from the viewpoint of state- or
publically-owned companies. For example, while a private oil company, may find
an estimated profit rate of below x or y percent cost inefficient, a
publicly-owned oil company might invest in reserves as long as estimated profit
rate is not negative.
Indeed, as the
experiences of state-owned oil companies in Russia, China, Venezuela, and many
other countries show, publicly-owned oil companies often take large short-term
losses in pursuit of long-term returns or rewards. Free from short-term market
imperative, Russia, for example, has invested heavily in long-term oil
projects, with fantastic results that have more than offset the enormous short-term
costs of those projects. Here is how Joe Vialls, an expert with first-hand
experience in �ultra-deep drilling,� explains:
�In 1970, the
Russians started drilling Kola SG-3, an exploration well which finally reached
a staggering world record depth of 40,230 feet. Since then, Russian oil majors
including Yukos have quietly drilled more than 310 successful super-deep oil
wells, and put them into production. Last Year Russia overtook Saudi Arabia as
the world�s biggest single oil producer, and is now set to completely dominate
global oil production and sales for the next century. . . . With no
shareholders holding out their grubby little hands for a wad of pocket money
every month, the Russian oil industry managed to surge ahead, under-reaming
thousands of its older existing onshore wells in less than ten years� .
The role of technology: a dynamic, not static, process
A major flaw of Peak
Oil, as already pointed out, is that it discounts
the fact that energy-saving technologies have drastically improved (and will
continue to further improve) not only the efficiency of oil production but also
of oil consumption. Evidence shows that, for example, �over a
period of five years (1994-99), U.S. GDP expanded over 20 percent while oil
usage rose by only nine percent. Before the 1973 oil shock, the ratio was about
one to one� .
Cars, airplanes and
other means of transportation have become more fuel-efficient than ever
before�though not as much as they could, or could. Both businesses and
consumers are also doing a better job of trimming their energy costs.
Obviously, this means that our demand for energy does not grow as fast as the
growth of our economy. For example, According to the Energy Information
Administration, in 1981 the United States devoted nearly 14 percent of its
overall gross domestic product to energy; by 2006 that number had fallen to
about 9 percent.
One of the results of the more efficient means of research
and development has been a far higher success rate in finding new oil fields.
The success rate has risen in twenty years from less than 70 percent to over 80
percent. Computers have helped to reduce the number of dry holes. Horizontal
drilling has boosted extraction. Another important development has been
deep-water offshore drilling, which the new technologies now permit. Good
examples are the North Sea, the Gulf of Mexico, and more recently, the
promising offshore oil fields of West Africa .
The following are
some of the recent technological advances that (as described by Red Cavaney, a
top oil expert) have dramatically increased the ability not only to find and
extract new oil, but perhaps more importantly, to recover more or additional
oil from existing reserves that were formerly considered �peaked and dried�
under old technologies.
Drilling. It used to be that wellbores were basically vertical holes. This made
it necessary to drill virtually on top of a potential oil deposit. However, the
advent of miniaturized computers and advanced sensors that can be attached to
the drill bit now allows companies to drill directional holes with great
accuracy because they can get real-time information on the subsurface location
throughout the drilling process.
● Horizontal Drilling. Horizontal drilling is similar to directional drilling,
but the well is designed to cut horizontally through the middle of the oil or
natural gas deposit. Early horizontal wells penetrated only 500 to 800 feet of
reservoir laterally, but technology advances recently allowed a North Slope
operator to penetrate 8,000 feet of reservoir horizontally. Moreover,
horizontal wells can operate up to 10 times more productively than conventional
● 3-D Seismic Technology. Substantial enhancements in computing power during
the past two decades have allowed the industry to gain a much clearer picture
of what lies beneath the surface. The ability to process huge amounts of data
to produce three-dimensional seismic images has significantly improved the
drilling success rate of the industry .
�Primarily due to these advances,� Cavaney further points out, �the U.S.
Geological Survey (USGS), in its 2000 World Petroleum Assessment, increased by
20 percent its estimate of undiscovered, technically recoverable oil. USGS
noted that, since oil became a major energy source about 100 years ago, 539
billion barrels of oil have been produced outside the United States. USGS
estimates there are 649 billion barrels of undiscovered, technically
recoverable oil outside the United States. But, importantly, USGS also estimates
that there will be an additional 612 billion barrels from reserve growth�nearly
equaling the undiscovered resources. Reserve growth results from a variety of
sources, including technological advancement in exploration and production,
increases over initially conservative estimates of reserves, and economic
Thanks to new
technologies, additional oil can now be recovered from the apparently exhausted
reserves. Specifically, the peaking and declining of oil from an existing well
is not the same as the peaking and declining of oil from the respective oil
field or reservoir. While oil production from an existing well is bound to peak
and then slow down, �offset wells� can be drilled later into the same field or
reservoir to produce more oil. Here is how Vialls explains:
�Now we come to the
completely false [or deliberately misleading] claim by Peak Oil shills that
production from existing oil wells is �slowing down,� thereby proving that the
oil fields are �running dry.� This is so wrong that it is almost breathtaking.
Think of this slowing down process in the same way you might think of the
engine oil in your automobile. The longer you run the engine, the higher the
level of contaminates that get into the oil. The higher the level of contaminates,
the higher the level of friction. Sooner or later you have something closely
akin to glue coating your piston rings, and the performance of your engine
declines accordingly. This is an inevitable mechanical process well known to
all automobile owners.
�Henry Ford and
others managed to slow down the rate of contamination in engine oils by
inventing the oil filter, through which the oil has to circulate each time it
passes around inside the engine. A high percentage of the contaminates stick to
the filter element, thereby allowing extra miles between oil changes, though
heaven help the careless motorist who thinks he can get away without ever
changing his clogged oil filter when recommended.
�When oil is
extracted from a producing formation underground, it flows out through pores in
the reservoir rock, and then into the open borehole, from where it is
transported to surface by the production tubing string. So by the very nature
of the beast, the bottom section of the well is �open hole� which allows the
oil to flow out in the first place, but because it is comprised of exposed and
sometimes unstable rock, this open hole section is also continually subject to
all manner of turbulence and various contaminates. For example, tiny quantities
of super fine silt may exit through the pores but not continue to the surface
with the oil, tumbling around in the turbulence instead, until the silt very
slowly starts to block off the oil-producing pore throats. Yes, of course there
are a variety of liners that can be used to slow down the contamination, but
there is no such thing as a Henry Ford oil filter 10,000 feet underground.
result of this is that over time, the initial production rate of the well will
slowly decline, a hard fact known to every exploration oilman in the business.
However, this is certainly not an indication that the oil field itself is
becoming depleted, proved thousands of times by �offset wells� drilled later
into the same reservoir. Any new well comes on stream at the original
production rate of its older cousins, because it has not yet had time to build
up a thin layer of contaminates across the open hole. Though as we shall see it
is possible to �do an oil change� on a producing well and bring it back to full
production, this is extremely expensive, and rarely used in the west� .
Substitutes or alternative sources of energy
Peak Oil is also subject to criticism because it pays
insufficient attention to substitutes or alternative sources of energy, both
actual and potential. These include solar, wind, non-food bio-fuel, and nuclear
energies. They also include natural gas. Natural gas is now about 25 percent of
energy demand worldwide. It is estimated that by 2050 it will be the main
source of energy in the world. A number of American, European, and Japanese
firms have and are investing heavily in developing fuel cells for cars and
other vehicles that would significantly reduce gasoline consumption .
Peak Oil also pays short shrift to what is sometimes called
�unconventional� oil. These include Tar Sands, Heavy Oils, and Oil Shale.
Tar Sands can
be recovered via surface mining or in-situ collection techniques. Canada�s
Athabasca Tar Sands is the best known example of this kind of unconventional
reserve�estimated at 1.8 trillion barrels. Although this was originally
considered cost inefficient, experts working in this area now claim that they
have brought down the cost from over $20 a barrel to $8 per barrel.
can be pumped and refined just like conventional petroleum except that they are
thicker and have more sulfur and heavy metal contamination, necessitating more
extensive refining. Venezuela�s Orinoco heavy oil belt is the best known
example of this kind of unconventional reserve�estimated at1.2 trillion barrels.
requires extensive processing and consumes large amounts of water. Still,
reserves far exceed supplies of conventional oil, and costs are bound to
decline as newer and more efficient processing techniques become available
A rarely mentioned
but potentially very important substitute for conventional oil �is an even
bigger hydrocarbon resource that can be developed to provide nearly endless
amounts of energy: methane hydrates (methane frozen in ice crystals). The
deposits of methane hydrates are so vast that when we develop the technology to
bring them to market, we will have clean-burning energy for 2,000 years. It�s
just one of the exciting scenarios we may see in the far-off future� .
Except for natural
gas and nuclear energy, most of these alternative sources of energy are still
highly costly, and are therefore used in only insignificant quantities. But,
considering the ever evolving newer and more efficient technologies, they are
bound to rise in significance. This means that the prospects of reaching a day
in our search for energy sources when conventional oil is no longer the world�s
dominant source of energy are quite realistic. Humans did not invent motor
vehicles because they ran out of horses or horse-driven carriages; nor did they
invent electricity because they ran out of candles.
global oil production peaking, and then running out, have been around almost as
long as oil was discovered in the second half of the 19th century. Time and
again, such dire predictions turned out to be false, largely because of the
Peak Oil�s apparently sound but actually deceitful logic: while it is
true that, as Peak Oil maintains, oil is a finite natural resource that is
bound to run out some day, it does
not follow, again as Peak Oil argues, that therefore oil is or must be running
A major flaw of Peak Oil is that it is based on a static, or
technology-neutral, assumption: it implicitly assumes that limits to oil are
set as natural, innate, and immutable. Yet, limits to oil, like those to most
other resources, are determined as much (if not more) socially as they are
naturally. Research, development, and technological advances have made (and
will continue to make) both the amounts of oil reserves and of oil production
much more fluid or elastic than perceived by the champions of Peak Oil.
Another equally-flawed proposition of Peak Oil is that it
implicitly views the limits of oil supply independent of substitutes or
alternative sources of energy. These include solar, wind, non-food bio-fuel,
and nuclear energies. They also include natural gas. Further, they include
�unconventional� oil: Tar Sands, Heavy Oils, and Oil Shale. Although, with the
exception of natural gas and nuclear technology, the use of these substitutes
is sill quite expensive, and therefore, limited, technological advances are
bound to reduce their cost and increase their sue.
Viewed in conjunction with the vast pool of substitutes,
both actual and potential, oil limits would loom much wider than when they are
considered in isolation from such energy alternatives. The constantly evolving
newer and more efficient technologies are bound to further expand those limits
far beyond the narrow, �natural� limits set by the Peak Oil theory.
 Robert L. Hirsch, Roger Bezdek, and Robert Wendling, �Peaking
of World Oil Production: Impacts, Mitigation, and Risk Management,� Testimony
on Peak Oil before the House Subcommittee on Energy and Industry (7 December
 Matthew Mosk, �Industry
Gushed Money After Reversal on Drilling,� Washington Post (27 July 2008).
 F. William
Engdahl, �Perhaps 60 Percent of Today�s Oil Price Is
Pure Speculation,� financialsense.com (2 May 2008).
T. Klare, Resource Wars: The New Landscape of Global Conflict (Holt Paperbacks, 2002).
Oil Production about to Peak? A Recurring Myth,� World Watch (01 January 2006).
 Eliyahu Kanovsky,
�Oil: Who�s Really Over a Barrel?� Middle East Quarterly (Spring 2003).
 Jason Schwarz, �The Peak Oil Myth: New Oil is Plentiful,� Seeking
Alpha (22 June 2008).
 M.A. Adelman, The
Genie out of the Bottle: World Oil Since 1970, (Cambridge: MIT Press,
1995); cited in Bill Kovarik, �The Oil Reserve Fallacy: Proven
reserves are not a measure of future supply.�
 Joe Vialls, �Russia Proves �Peak Oil� Is A Misleading Zionist Scam,� rense.com
(25 August 2004).
 Eliyahu Kanovsky, �Oil: Who�s Really Over a Barrel?� Middle East Quarterly (Spring 2003).
 Red Cavaney, �Global Oil
Production about to Peak? A Recurring Myth,� World Watch (01 January 2006).
 Joe Vialls, �Russia
Proves �Peak Oil� Is A Misleading Zionist Scam,� rense.com (25 August 2004), http://www.rense.com/genera175/zoil.htm
Wall Street Journal (10 March
1998); cited in Eliyahu Kantovsky, �Oil: Who�s Really Over a Barrel?� Middle East Quarterly (Spring 2003).
 For an
informative discussion of unconventional oil reserves, and a scathing critique
of Peak Oil see Bill Kovarik, �The Oil Reserve Fallacy: Proven
reserves are not a measure of future supply.�
 Red Cavaney, �Global Oil Production about to Peak? A
Recurring Myth,� World
Watch (01 January 2006).
author of the recently published The
Political Economy of U.S. Militarism (Palgrave-Macmillan 2007),
teaches economics at Drake University, Des Moines, Iowa.