Proponents of peak oil should not capitulate too soon, as the days of oil – like those of horses – are numbered, writes Vincent Kaminski

The closure of The Oil Drum website after eight years – a move announced by the site's administrators in a blog post on July 3 – is a sad moment for anybody with an interest in energy.

Published by the Colorado-based Institute for the Study of Energy and Our Future, The Oil Drum was a high-quality information aggregation website and discussion forum. It had a limited involvement of trolls and propagandists, was highly professional, and very effectively managed. The bloggers on the website had a strong bias in favour of peak oil theory and the decision to discontinue it may reflect the general demoralisation of this community. That has occurred in view of an incessant onslaught by the cheerleaders of fracking, along with the growing production of natural gas and oil from shale rock formation in the US.

It seems to me that the editors capitulated, like Stephen Hawking, too early.¹ Peak oil theory has multiple threads and is not a homogeneous doctrine with a central politburo deciding what the acceptable version of it is. There are, however, two obvious and indisputable points every ‘peak-oiler' would accept.

First, production flows of oil will reach a maximum limit sooner or later. A finite planet cannot support unbounded flows of any resource. What can be debated is when the peak will be reached, what the social and economic consequences will be, and how society will adjust to the inevitable. Daniel Yergin, the Pulitzer Prize-winning author and chairman of IHS Cera, the energy consulting arm of Colorado-based publishing firm IHS, observed in a widely quoted 2011 article that "there will be oil", given human ingenuity and large remaining reserves. However, it is obvious that there will only be oil up to a point.²

Second, as a society we acquire energy from fossil fuels at a growing cost in terms of the energy required. I occasionally ask students in one of my classes to imagine whether, if they were a trout, they would they prefer to dwell in fast moving streams or slow backwaters. There is no simple answer. Fast flowing water transports a lot of food, but that higher supply comes at a cost. A trout uses a lot of energy to stay afloat in a fast current. A smaller, weaker trout would wisely settle for less food, but also less effort.

Some humans may learn something from a trout. What matters is not only what we get, but also at what price. In the early days of the oil industry, the energy return on investment (EROI) was close to 100. One could poke a stick in the ground and oil would flow. Today, oil is produced at an EROI of between 5 and 10 in the Alberta oil sands to satisfy marginal demand. Yes, there is still a lot of cheap oil on the planet, but what matters is the marginal cost. While humans can play games with accounting carried out in monetary units, it is impossible to cheat Mother Nature. The trend towards more expensive traditional sources of energy is unmistakable.

What is my take on peak oil theory? I think it is somewhere between the obvious and, hopefully, irrelevant. This is my analogy: In the late nineteenth century many city planners believed there were natural limits to the size of cities.³ Moving people and goods required horses, and horses produced manure. It took additional horses to remove this manure – a measure that itself only increased the volume of manure. In this theory of 'peak manure', something had to give. We all know what happened next, although it stands to reason that one of the solutions proposed at the time was breeding stronger and more manure-efficient horses.

In the past, optimists would have argued that there would always be horses. And there are. In my country, they are used primarily as a source of entertainment for horse race aficionados, as a pastime of sportspeople and to drive nostalgic tourists around New York's Central Park. What's more, the horses used to carry tourists around Central Park will one day have to compete with vintage combustion engine cars.

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¹ Stephen Hawking made a bet in 1991 regarding the existence of so-called naked singularities and conceded in 1997. Today, it seems he may have rushed to capitulate too soon, as the scientific community seems to be moving towards his side of the argument

² Daniel Yergin, There will be oil, The Wall Street Journal, September 17, 2011

³ Eric Morris, From horse power to horsepower, Access, Number 30, Spring 2007

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