The peak oil theory is widely contested. It’s usual proponents include the usual slew of leftists, doomer/survivalist types, gold bugs, retired geologists and a growing group of economic writers while it’s naysayers are usually people and organizations with a vested interest in the status quo: big oil, mainstream economics writers, politicians, globalization proponents, etc. One of the most vocal critics of peak oil is Cambridge Energy Research Associates, or, as they are more commonly known, CERA.
Led by Daniel Yergin, CERA has constantly ridiculed, critiqued and otherwise denied that the world is even close to reaching it’s theoretical production limit. CERA’s forecasts have been routinely criticized for relying too heavily on very optimistic statistics from the Department of Energy and elsewhere who maintain that Saudi Arabia will be able to more or less double their production of oil by 2020 even though their production has been flat or declining since the late 1990’s, even in the face of rising oil prices.
In their latest attempt to discredit peak oil, CERA has released a new essay “Why the Peak Oil Theory Falls Down,” a 16-page paper that’s a bargain at only $1000. CERA analysts claim that the there’s plenty of oil left to be discovered and that oil production will level off, but not really decline sometime after 2030. This graph from CERA tells us all we need to know, and remember, this is the optimistic scenario, folks:
I’d love to spend some time ripping this report to shreds, but it’s being done much better elsewhere by better-educated and talented writers than myself. Looking at the graph above, it’s clear that CERA is embracing the concept of peak oil; they are just debating when it happens, and how quickly production will decline once we reach the peak. Even if something amazing happens and peak doesn’t arrive until 2030, that’s still only 23 years away. Since CERA is relying on a lot of unverified reserve numbers that are widely believed to be only slighty more accurate than Enron’s last annual report, odds are good that we’ll see the peak much sooner than that.
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