Peak Snake Oil: Richard Heinberg and his predictions

Peak Oil guru Richard Heinberg has a new book out on fracking: Snake Oil: How Fracking’s False Promise of Plenty Imperils Our Future.

Disclaimer: I have not read it, and, while curious, have no plans to in the near future, so am basing this on a couple of reviews.

I have however read some of his other books, notably The Party’s Over (2003) and Powerdown (2004), two of the most influential books of the Peak Oil movement from the past decade or so.

Apparently, Heinberg argues in his latest offering that shale gas- which has gone from zero to supplying 40% of US gas in the past 10 years -is just hype, a bubble that will burst soon, leaving society worse off (because of increasing dependence on fossil fuels and consequent climate change) than if we had never exploited it in the first place.

Let’s see what he said about fracking in his earlier books:

Nothing. Not a word. There is no mention in either about the potential of shale gas. Heinberg, who is now predicting the imminent demise of shale gas, completely missed the biggest shake up in the energy world since nuclear power, even as it emerged at the very same time he was writing his predictions of the collapse of industrial society due to peak oil (shale gas started to become economic in the US in 2003, the same year The Party’s Over was published).

In The Party’s Over Heinberg writes:

US natural gas production has been in decline for years….
The public got its first hint of a natural gas supply problem in the latter months of 2000, when the wellhead price shot up by 400%. This was a more dramatic energy price increase than even the oil spikes of the 1970s…
There are disturbing signs that rates of natural gas extraction in North America will soon start on an inexorable downhill slope perhaps within a few months or at most a few years. When that happens we may well see a fairly rapid crash in production rather than the slow ramp-down anticipated for oil.

(Emphasis added.)

In Powerdown, published the following year, he writes:

Nevertheless, while nearly everyone is upset about the shortages and high prices, it is surprising how seldom one hears or reads the word that most clearly sums up the cause of the dilemma- depletion.
The nub of the issue is that North America has passed its peak in natural gas production. US production peaked in 1971, but the country managed to maintain a fairly flat production curve until the end of the 1990s by steeply increasing investment in exploration and recovery. By 2002, the US was importing 15% of its gas from Canada; meanwhile, Mexico- which had been exporting gas north of the border- had begun importing gas from the US. In 2003 it became clear that Canada’s production was also in decline.

Instead of these dire apocalyptic predictions, the advent of shale gas in the US lead to a collapse in prices, a surge in production and now serious plans to invest huge sums to retrofit LNG import terminals to be used for export.

Not only that, but the 1971 peak in production has now been exceeded, apparently in defiance of the Peak-Oil Laws of Gravity:

File:US Natural Gas Production.svg

Does shale gas involve huge investment, thousands of wells, environmental costs and dislocation of communities? Absolutely, yes all of these things (though mainly hugely exaggerated by activists)- but so does any extractive industry have a cost. For the most part, the benefits of cheap energy outweigh the problems; gas is a low-carbon fossil fuel and, unlike wind and solar, energy-dense enough to deliver energy where it is needed and displace coal and even oil in transport (Liquified Natural gas) as is happening in some US cities where buses are being converted to run on LNG.

According to this review, which claims the book is “unbiased”, Heinberg has now revised his predictions of Peak Gas production in the US-

The evidence shows that in less than 50 years, shale gas will peak and the decline will be quick and dramatic, leaving society unprepared.

Fifty years is a looooong time in the world of energy. The shale revolution- new techniques of high-pressure fracking combined with multiple horizontal drilling- blew Heinberg’s earlier predictions out of the water, rendering them obsolete even as he was publishing his Tomes of Doom. Now he is being more cautious it seems, leaving plenty of time to publish many more failed predictions before being proved so spectacularly wrong again.

Over the next 50 years, we can surely expect further improvements in drilling technology, allowing the access to even larger volumes of gas hitherto considered too expensive or inaccessible. The Japanese are even seriously expecting commercial production of methane hydrates from the sea floor around their coasts  within just 10 years.

We can also expect of course developments in nuclear power, and yes renewables as well over that time scale. What is not likely to happen is that the world will sit back and twiddle its thumbs while draining the last of its currently recoverable resources.

This is how the world works: far from the Peak Oil view of a bucket of known resources being drained by more and more straws sucking them out, the size of the bucket is unknown and continually expands with new technology.

Will Richard Heinberg ever learn?

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12 thoughts on “Peak Snake Oil: Richard Heinberg and his predictions

  1. Slightly over ten years ago, the price of oil was around $20 a barrel. It went up to around $100, where it has stayed for the past decade. This has had profound economic impacts, it has resulted in massive investment in production, but the fact that we are not returning to the days of Cheap Oil suggests that the Earth is not obligated to provide abundant, inexpensive oil. It seems unlikely that the production of a finite resource will keep up with exponential population growth and demand, although, certainly people will try to produce more.

    > “The Japanese are even seriously expecting commercial production of methane hydrates from the sea floor around their coasts within just 10 years. ”

    And many nations are seriously expecting nuclear fusion in 20 years (as they have done so for the past 60 years). Those are statements of expectation and hope, of subjective belief.

    >> “far from the Peak Oil view of a bucket of known resources being drained by more and more straws sucking them out, the size of the bucket is unknown and continually expands with new technology.”

    The amount of hydrocarbon fuel is limited, and the amount that is economically extractable is far, far less than the amount that exists. We will not run out of oil any time in the near future, but the energy return on energy investment will very likely continue to drop and the price will remain on an upward trajectory as we are need to devote more energy, capital and labor to extraction of oil that is deeper and more tightly bound.

    >> “… gas is a low-carbon fossil fuel…”

    The full life cycle impact of natural gas is far higher than it is at the point of ignition – if more than 3% of the methane leaks during extraction and shipping, then its impact on global warming is equal to coal… molecule for molecule, methane results in roughly 20x more trapping of heat.

    • Thanks for your comment Jonathan, but you are trapped in “bucket and straws” Peak Oil/Limits to Growth thinking.

      exponential population growth and demand

      -population growth passed its exponential phase well over 20yrs ago; the demographic transition means that as people move out of poverty, birth rates decline- indeed parts of Europe are now in negative population growth. Start with learning the facts about demography- this Malthussian thinking is the basis of all that is wrong with the environmental movement today. Not only that, but energy demand in developed countries is certainly not growing exponentially and in fact may have peaked in some countries.

      Your comments about oil are interesting, because my whole post was about gas and how the recent abundance in N. America at least has collapsed prices there. I do not expect a collapse in oil prices soon, but cheap gas will start to displace oil in transport fuels which combined with reduced demand and improved efficiency will take the pressure off. It is curious to me that you ignore this, and focus on oil. How do you explain the collapse in gas prices in the US? Of course, it is only temporary; everything is only temporary! The point is, there is a doomer mindset that is proved wrong constantly. How does Heinberg explain being so completely wrong about N American Natural gas? He doesnt seem phased at all -perhaps because he can still make a good living in the world of abundant resources writing books about depletion. In many ways he is like Ehrlich, making a life-long career of being wrong.

      So, the point about methane hydrates is that Peak Oilers ignore the impact of new technology (fracking etc) and consistently under-estimate its impact (which unfolds over a couple of decades while they build their doomster careers). Fracking has shown that drilling tech continues to advance in leaps and bounds, often in surprising ways that are hard to predict. Methane hydrate exploitation is really an extension (literally) of drilling technology, standard engineering, so it is quite false to compare this with Fusion. If methane hydrate extraction becomes a reality, energy is secure for centuries- but since shale gas is still at its early stages this also could last several human lifetimes. Not only that but Fusion is being looked at seriously with the ITER project, the largest international scientific effort in the world, so should not be dismissed lightly- progress is really being made on this.

      Nor is it inevitable that EROEI will always decrease- computing technology plays an increasing role making things possible that were simply not in the past- read this on shale for example.

      Of course, the hardened doomer will not be phased by any of this- in an entropic universe the doomer is always right in the end!

  2. > ” population growth passed its exponential phase well over 20yrs ago;”

    That is simply not true. The annual growth rate did peak over 20 years ago, but in the last 20 years, we have continued to grow exponentially, merely at a slower rate. Most models indicate that population will continue to grow until 2050, at which time it is projected to level off at 9.x billion … that is a growth of 2 ± billion in the meantime. I am glad that we are only adding 70 million people net a year, instead of 88 million net a year as we did in 1989. But we continue to grow. This reminds me of the way that people translate a study that finds that the rate of ozone loss is slowing into news that the ozone is increasing…. it would be nice, but is not supported by the facts.

    >> Nor is it inevitable that EROEI will always decrease- computing technology plays an increasing role making things possible that were simply not in the past- read this on shale for example.

    Technology clearly can indicate where the low lying fruit is, and we can pick that first. But better Earth-ultrasounds and 3D computer maps cannot change the fact that the really easy and cheap fuels are being rapidly consumed.

    >> “Your comments about oil are interesting, because my whole post was about gas …”

    Well, you first argue that Heinberg was entirely wrong about peak oil, then proceed to criticize his book on gas from the position of not having read it. The cornucopian view of peak oil has proven itself far from being correct, technology has not resulted in a return to cheap oil, and there is no sign that it will. In that sense, the peak oil crowd was quite right.

    With regards to natural gas, a number of points bear mentioning:

    1) Fracked wells have a rapid rate of decline – within a few years of opening one, the output drops to a trickle of the initial production values … it doesn’t seem like much to hang one’s hope on. Maybe we can increase the number of wells drilled every year, forever??

    2) The numbers on natural gas are not only squishy, but they are misleading as they typically express years of consumption at current rates. If we were able to funnel nat-gas as a replacement for other sources (especially liquids), that number (be it 50 or 100 or 30) would be greatly reduced.

    3) The market for natural gas has always been volatile and prone to booms and busts. Many of the big players (like Chesapeake) are losing lots of money, as their business model seems to be based more on buying leases and flipping them (and unless they put a well in place within a few years, they lose their lease, so they have drilled and dumped natural gas onto the market at below their production costs) .. classic bubble economics. Today’s euphoria is not based on a medium or long-term equilibrium price, but on a temporary fluctuation that is being extrapolated out forever by boosters.

    4) The fact that natural gas is so cheap in the US is largely an artifact of geography – if we had more efficient ways to transport the gas, it would go first to other parts of the world (like Japan) that are willing to pay 3x or 5x as much as we have been. Rest assured, the technology and infrastructure to overcome distance is making steady progress; natural gas will soon be a commodity of the world market, not a commodity of many regional markets. This will change the economics in a way that does not favor the US consumer, and it will accelerate depletion. Not that this is good or bad, merely inevitable IMO.

    It’s not that I am a doomer – it is that I am disillusioned member of the Cornucopian cult of pseudoscientific eternal growth. I was an ardent member of that group as an elementary school child, when I too repeated visions of nuclear energy too cheap to meter and flying cars and million person moonbases. But somewhere along the road, I realized that I was never going to get a flying car, that it took a huge amount of energy and capital to get two men to the moon for a few days, and that regardless of exactly when we hit the peak, the era of cheap fossil fuels is likely nearing its twilight.

    • we have continued to grow exponentially, merely at a slower rate.

      Please look up the meaning of the word “exponential”- your statement is a contradiction in terms. The exponential phase of global population growth was roughly from 1950-1980. Since then the rate has been slowing. This is not a small point- it is often deliberately ignored/denied by Malthussians, so it is very common to hear that world population growth is wildly out of control and we are doomed. In much of the world the birth rate is dropping far quicker than expected; most importantly, the reason for this is the demographic transition, a result of people rising out of poverty. Continued rapid population growth in places like Nigeria is largely a symptom of poverty.

      Well, you first argue that Heinberg was entirely wrong about peak oil, then proceed to criticize his book on gas from the position of not having read it.

      No, the post is about gas! No, really, it is, it’s about gas and how spectacularly wrong Heinberg was on gas. Read it again! I say nothing about oil per se. No, I havnt read the book, but I do know that he is making more or less the same predictions about US natural gas as he was in 2003. When he was wrong. Just sayin’.

      The market for natural gas has always been volatile and prone to booms and busts.

      You dont say!! Try telling that to Mr. Heinberg. He was wrong about gas prices and supply- completely wrong, couldnt have been more wrong- in 2003. He does not believe the gas market is volatile ad prone to booms and busts, he believes he has a crystal ball and can predict the future. Maybe you do to- but first please provide a comprehensive list of all the technological developments that will happen in the next 10-20yrs to prove you wrong.

      Yes, the US will start exporting gas and the price will go up. Maybe that will help Chesapeake? Then you will have to change your story: higher gas prices dont mean a volatile market and “classic bubble economics” !! They mean shortages! Peak Gas! Doom!!!! Ovver the next few years we can expect at least some other countries- China perhaps, Russia maybe? The UK or Poland? Some of these countries will begin to exploit their own shale, thus putting downward pressure on prices again- Bubble! then demand will increase- especially if gas starts to substitute for oil more- prices will go up!! Then technology will improve to access even more of the resource- rices will drop! Companies will go out of business! So you win either way- cheap gas= bubble economics (which is wrong anyway, never mind), high prices =depletion. ‘Twas ever thus. Some might think that spending $$$bilions on export terminals in the US might, just might be evidence of abundance; but of course it is just over-confidence from blustering Cornucopians.

      I realized that I was never going to get a flying car

      Yes, I too am totally bummed about this and I do sympathise. On the other hand, you just never know….

  3. >> Please look up the meaning of the word “exponential”- your statement is a contradiction in terms.

    Have we reached a situation where population is decreasing? No, it is clearly still growing. Is that growth accurately described by a simple linear function? No, it is not. It is best described as an exponential function, where the exponent for the past few years is somewhat lower than it was before that. In simplest terms, we can describe current population growth in percentage terms, and that percentage results in compound growth.

    • There is a term for that Jonathan: the logistic function. Which was actually developed specifically for studying population growth.

      Of course the cornucopians point out that the logistic ends with a flat equilibrium population and that is the region we’re entering, without ever noting that studies of real world populations show that the resources consumed to get to the equilibrium point undoubtedly lower the carrying capacity. This leads to exponential population decline and disequilibrium.

      The demographers look at the curve and conclude we will soon be saved, while systems ecologists conclude we will soon perish.

  4. […] #3: here’s an example of what I mean from Graham Strouts, an aggressive eco-panglossian: ‘Fifty years is a loooong time in the world of energy’. Well […]

  5. Actually in chapter 1 of his book Heinberg reflects quite a bit about the past blind spots of the peak oil view, including the failure to anticipate the natural gas boom. You can read it on his website: http://www.resilience.org/stories/2013-09-18/snake-oil-how-fracking-s-false-promise-of-plenty-imperils-our-future-introduction

    • Thanks for that. From the book chapter you link to:

      It is especially directed toward local anti-fracking activists across the United States and throughout the world who are working hard to limit or prevent harms to water and air quality, wildlife, and human health. Bolstering environmental arguments with economic data showing the likely brevity of the fracking boom can only help win debates regarding the regulation of this dangerous technology.

      Heinberg is an activist/fracktivist. He is stating here his purpose is to bolster and play to a specific political constituency- should we take him seriously as an objective commentator? I hardly think we should. I also think his mixing of wildly different issues- depletion with safety concerns and climate change -is not likely to produce accurate results- he is flitting around all over the place like all activists do: if depletion doesnt work, get them on risks to water quality will, and vise-a-versa. It sounds like entirely activist spin to me, with one agenda: to ban fracking. Truth, balance and facts tends to get lost along the way when you have a Cause.

      The risks of water contamination have been hugely over-blown by activists. Out of tens of thousands of wells drilled in the US, hardly any have been genuinely shown to have cause any contamination. This post by James Verdon has a good summary of some of the technical issues and the false claims of the Gasland movie.

      Let me be clear: I am not saying that the United States will run out of shale gas or tight oil sometime in the next five to seven years, but that the current spate of oil and gas supply growth will probably be over, finished, done and dusted before the end of this decade. Production will start to decline, perhaps sharply.

      -which is exactly what he was saying in 2003. But he has to earn a living, so he writes another book making exactly the same predictions. Even if he turns out to be correct, there is no possible way he can actually know.

      We are starting the energy transition project of the 21st century far too late to altogether avert either devastating climate impacts or serious energy supply problems, but the alternative—continued reliance on fossil fuels—will ensure a future far worse, one in which even the bare survival of civilization may be in question. As we build our needed renewable energy system, we will also need to build a new kind of economy, and we must make our communities far more resilient, so as to withstand environmental and economic shocks that are inevitably on their way.

      Thsi sums up well the ideology of Heinberg and the Green-liberal elite he panders to: apocalyptic hyperbole as standard; lip-service to the nebuous concept of climate change because noone is allowed to question that; appeals to building a renewable energy infrastructure, which just shows he does not understand basic physics since diffuse renewables cannot replace fossil fuels, and modern wind-farms and solar arrays are also products of industrial society and cannot be made or maintained without modern economies; the clarion call to return to “resilient” communities, which apparently means all of us going back to the land and living like Medieval peasants. Hard to take him seriously to be honest.

  6. Looks like we were both wrong about the collapse of oil prices. And here’s recent statistical modelling that suggests that the demographer’s notion that population will level off sometime around 2050 is balderdash.

    http://m.csmonitor.com/Environment/2015/0812/Global-population-soars-toward-11-billion-by-2100.-Can-Earth-support-growth

  7. Jerry presswood

    I predict the sun will swallow the earth. There is fact and there is speculation, I think Richard Heinberg is calling speculations fact, unless he means everything must come to an end, in which case that would probably be a fact.P.s. Global warming is a fact.

  8. Commercial exploitation of methane hydrates is some way off yet. The present price of oil (36 dollars) will kill the north sea and all deepwater activity. It will also destroy any attempts at shale gas capture in the UK. The economic model simply fails at these crude prices.

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