Implications of Peak Oil - Criticisms

Criticisms

Oil industry representatives have criticised peak oil theory, at least as it has been presented by Matthew Simmons. The president of Royal Dutch Shell's U.S. operations John Hofmeister, while agreeing that conventional oil production will soon start to decline, has criticized Simmons's analysis for being "overly focused on a single country: Saudi Arabia, the world's largest exporter and OPEC swing producer." He also points to the large reserves at the U.S. outer continental shelf, which holds an estimated 100 billion barrels (16×10^9 m3) of oil and natural gas. As things stand, however, only 15% of those reserves are currently exploitable, a good part of that off the coasts of Louisiana, Alabama, Mississippi, and Texas. Hofmeister also contends that Simmons erred in excluding unconventional sources of oil such as the oil sands of Canada, where Shell is already active. The Canadian oil sands—a natural combination of sand, water, and oil found largely in Alberta and Saskatchewan—is believed to contain one trillion barrels of oil. Another trillion barrels are also said to be trapped in rocks in Colorado, Utah, and Wyoming, but are in the form of oil shale. These particular reserves present major environmental, social, and economic obstacles to recovery. Hofmeister also claims that if oil companies were allowed to drill more in the United States enough to produce another 2 million barrels per day (320×10^3 m3/d), oil and gas prices would not be as high as they are in the later part of the 2000 to 2010 decade. He thinks that high energy prices are causing social unrest similar to levels surrounding the Rodney King riots.

In 2009, Dr. Christoph Rühl, chief economist of BP, argued against the peak oil hypothesis:

Physical peak oil, which I have no reason to accept as a valid statement either on theoretical, scientific or ideological grounds, would be insensitive to prices. (...) In fact the whole hypothesis of peak oil – which is that there is a certain amount of oil in the ground, consumed at a certain rate, and then it's finished – does not react to anything.... (Global Warming) is likely to be more of a natural limit than all these peak oil theories combined. (...) Peak oil has been predicted for 150 years. It has never happened, and it will stay this way.

According to Rühl, the main limitations for oil availability are "above ground" and are to be found in the availability of staff, expertise, technology, investment security, money and last but not least in global warming. The oil question is about price and not the basic availability. This is entirely compatible with Hubbert's empirical method, which focuses on observed patterns of extraction rather than their causes. Rühl's views are shared by Daniel Yergin of CERA, who added that the recent high price phase might add to a future demise of the oil industry - not of complete exhaustion of resources or an apocalyptic shock but the timely and smooth setup of alternatives. Note that this "timely and smooth" setup will only start once people acknowledge the need for it. From there, it will take many decades to build an alternative infrastructure, as it has taken around a century to build up fossil-fuel infrastructure.

Clive Mather, CEO of Shell Canada, said the Earth's supply of hydrocarbons is "almost infinite", referring to hydrocarbons in oil sands. Engineer Peter Huber believes the Canadian oil sands can fuel all of humanity's demands for over 100 years.

Industry blogger Steve Maley echoed some of the points of Yergin, Rühl, Mather and Hofmeister.

Environmentalist George Monbiot holds the view on peak oil (citing a report of 110 million barrels per day in 2020) that there is more than enough oil to fuel capitalism, and the 20 years of moral efforts to prevent ecologic disaster have failed. Stephen Sorrell, senior lecturer Science and Technology Policy Research, Sussex Energy Group, and lead author of the UKERC Global Oil Depletion report, and Christophe McGlade, doctoral researcher at the UCL Energy Institute have criticized Maugeri's assumptions about decline rates.