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Oil Companies Are Now Debunking 'Peak Oil' Alarmists

It is high time we put these modern-day robber barons out of the gouging and climate change business.
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"That argument known as peak-oil theory has provided intellectual backing for the boom in crude prices. . ." This quote comes a September 14 Wall Street Journal article that was entitled "Producers Move to Debunk Gloomy 'Peak Oil' Forecasts" and detailed efforts by Exxon Mobil and Aramco to counter peak oil advocates.

The piece appeared more than a year after the publication of my book, "Over a Barrel," the first chapter of which challenged the notion of oil as a scarce resource. And it was published barely a week after my post, "Massive Oil Find in Gulf of Mexico Brings Gloom to Peak Oil Pranksters" 9/08/06 (you always read it first on Huffington). That post, focusing on the important Gulf of Mexico find underlined the vast potential for new oil discoveries not only in the Gulf but across the planet. The giant Gulf find serves as a harbinger of significant oil discoveries to come, and it highlights why we should all be skeptical of the peak oil theorists.

What I forgot was the peak oil pranksters view their opinions as closer to theology than theory. My Huffington article was bombarded with barbed comments and understandably self serving challenges. It was as if I had questioned received wisdom and, possibly more significantly, a key link to ever higher prices.

The truth is, the peak oil alarmists have been around in one form or another since -- or even before -- the first U.S. oil well was drilled in the nineteenth century. In 1855 when people were making patent medicine from crude oil that bubbled to the surface in Pennsylvania an advertisement for Samuel Kier's Rock Oil cautioned buyers: "Hurry, before this wonderful product is depleted from Natures laboratory!"

And so it is today with the peak oil pundits. Their convoluted geological and too-often-opaque jargon tells us as much about current world oil reserves as predictions back then, that oil in Pennsylvania would run out. It did, but by the time that occurred there was more oil around than Samuel Kier ever imagined.

Two things, though, make me nervous. According to the Journal article, I find myself allied with Exxon Mobil and Aramco on an issue. They are attacking peak oil but not because the price of crude is at stratospheric levels (even with recent pullbacks). They want policy makers and consumers to be comfortable about using oil and planning for petroleum consumption in the future. They are obviously becoming frightened that the search for oil substitutes could be harmful to their prospects in the years ahead. And, indeed, they should be. It is high time we put these modern-day robber barons out of the gouging and climate change business.

To be clear, my argument with peak oil is that it has been used as an effective yet spurious tool to ratchet up oil prices and transfer literally trillions of dollars to the myriad players of the oil industry and their hangers on -- all at our expense. I'm not arguing for lower prices so that we can use more. Given the looming disaster of global warming, it is essential that the price of oil come down and our utization of oil decline. The money now pouring into Big Oil's coffers needs to be used for more productive and environmentally urgent purposes, rather than public relations and 'K Street' lobbying billions, that are deflecting our attention from such urgent issues as green house gasses, global warming and their impact on our future.

And here's another twist: The U.S. Department of Energy, our government's ambassadorial mission to the oil and gas industry has asked The National Petroleum Council, an oil and gas research group, to investigate peak oil claims. To head this study will be none other than the "Gipper" himself, the oil industry's own Lee Raymond, the former chairman and chief executive officer of Exxon and the famous recipient of a $400 million plus retirement package. It was through his actions, by example and deed - serving as a beacon to others in his industry -- that we are now being held up at the gas pump to fatten their bottom line and make those payouts possible.

To paraphrase, "We're in good hands with the oil boys!"

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