A Reply by John Attarian
download pdfImportant Notice: This is a plain text article extracted from Dr Colin Campbell's ASPO Newlsetter 34 (October 2003). Any images, graphs and other non-text components are not shown here. To view this article in its full context and with non-text components, please download the PDF version of the full newsletter. You should look for article #259. PDF versions of all newsletters can be found in the newsletter downloads section.
First published October 2003; article no. 259
Michael Lynch's article in the July 14 issue of the Oil & Gas Journal is a peevish exercise in intellectual dishonesty. He sneers at Colin Campbell, Jean Laherrere, et al. as erroneous, lacking in rigor, etc. His own performance strikingly demonstrates these flaws. The depletion school, Lynch says, notes that most estimates put ultimately recoverable resource (URR) at roughly 2 trillion bbl. True, but he defines URR as "the amount of oil thought to be recoverable, given existing technology and economics (price and cost). It includes estimates of undiscovered oil but is only a fraction of the total resource." (note 1) But the qualifier "given existing technology and economics" applies to reserves, not resources--and Campbell et al. are talking about resources, not reserves! So much for Lynch as watchdog of rigor.
Lynch makes an utterly misleading fuss over "the Hubbert curve."
"The initial theory behind what is now known as the Hubbert curve was very simplistic. Hubbert was simply trying to estimate approximate resource levels, and for the US Lower 48, he thought a bell curve would be the most appropriate form. It was only later that the Hubbert curve came to be seen as explanatory in and of itself, that is, geology requires that production should follow such a curve.
"Conceding that a bell curve is typical of large populations and persistent capital stock, he chides, "it is a mistake to interpret this to mean that the system is constrained to a bell curve." This falsifies Hubbert. Per his "Energy From Fossil Fuels" (Science, February 4, 1949), Hubbert started from the irrefutable fact that a fossil fuel's endowment is fixed; therefore its production curve "will rise, pass through one or several maxima, and then decline asymptotically to zero." He stated explicitly that such a curve may have "an infinity of possible shapes." He never claimed that "the system is constrained to a bell curve."
Lynch asserts, without documentation, that Campbell and Laherrere initially argued "that production should follow a bell curve, at least in an unconstrained province. In fact, discovery sizes tend to be asymmetric, with an early peak and a long tail." So do production plots, Lynch says, and because of taxes etc., "oil production rarely follows a bell curve." Much ado about nothing! Hubbert was not wedded to a bell curve, as the foregoing quotes make clear. Neither is the depletion camp. Campbell's companion article explicitly distinguishes "theoretical unconstrained production" (which may resemble a bell curve) and "real-world production as constrained for economic or political reasons."
Real-world data don't necessarily conform to idealized shapes generated by mathematics--and aren't expected to. The bell-shaped curve is simply a stylized, idealized representation of the phenomenon of rise, peak, and decline of output, amenable to mathematical expression and analysis, useful as a pedagogical and forecasting device--in fact, the sort of thing economists do all the time. Indeed, it ill behooves Lynch to fixate on the bell curve and accurse Hubbert modelers of "lack of rigor" and "statistical illusions." As an economist, Lynch knows--or should--that demand and supply for virtually all goods and services occur in whole numbers; nobody buys 1.5 cars or sells 0.75 sweaters. Yet all economists, doubtless including Lynch, draw continuous supply and demand curves--a useful teaching device, but accurate demand and supply schedules would be sets of unconnected points.
Worse yet, economists have been using calculus for generations. Calculus requires continuous functions. Economics doesn't have any. Its pretentious higher mathematics, then, rest on sleight of hand and mumbo-jumbo. Its vaunted "rigor" is bogus. People who live in glass houses shouldn't throw stones.
So real-world data aren't a smooth bell curve. Big deal. What matters is the general pattern of rise, peak, and decline. Lynch is bashing a straw man. Pontificating that "only 8 of 51" non-OPEC countries' production plots in Campbell's _Essence of Oil & Gas Depletion_ follow a bell curve enables Lynch to evade the reality that _every last one_ of the 51 shows annual extraction rising, passing through one or more maxima, then inexorably declining. That alone vindicates Hubbert and discredits Lynch, but there's more. Perusal of the last column in Campbell's table "Regular Oil Production to 2075" (_Essence,_ p. 237) reveals that one country peaked in 1951-1960; four in 1961-1970; 11 in 1971-1980; 11 in 1981-1990; and 18 in 1991-2000 (12 in 1996-2000). That ever-more producers peak as time advances, and that 45 out of 64 have already peaked, signals strongly that we are approaching worldwide peak. Lynch obviously read Campbell's book. Equally obviously, he failed to pick up on this trend. Divining patterns in data is something economists are supposed to be good at. Can't flat-earth economists see what they look at? Or is it they just don't want to?
The fundamental issue is this: is the oil endowment fixed and finite, or isn't it? If it is, peak and decline are inevitable; if not, not. Geologists have known for decades that oil's formation requires certain heat and pressure conditions operating over geologic time. This necessarily makes the quantity finite--implying that the Hubbert camp is ineluctably right.
The only way around this is Thomas Gold's "deep, hot biosphere" which would keep augmenting the oil endowment (how quickly?) The physicist Albert Bartlett assured me in private correspondence that he didn't know of "any scientists who count on the kind of oil Thomas Gold postulates." Game, set and match to Hubbert, Campbell, Deffeyes, Laherrere, et al.!
Lynch also misrepresents the Hubbert modelers as claiming that "geology is the sole motivator of discovery, depletion, and production." They never said geology is the "motivator"--curious choice of words!--of anything. What they do say, and as Lynch's immediately following quotes from their works make clear, is that geology limits what is possible in discovery and production. Which of course it does.
He further misrepresents the Hubbert camp as saying that geology determines everything single-handed: "The idea that production is influenced by prices . . . is considered foolish." Oh? Campbell's Essence, which Lynch cites, maintains explicitly that "demand naturally influences the rate of depletion" (p. 9) and that "In forecasting oil production, it is important to take into account demand as well as supply" (p. 182). A fair treatment of the Hubbert camp would include this qualification. Or did Lynch and I read different books?
Nor do the Hubbert modelers "attempt to divine physical laws" from "particular shapes." As the foregoing quotes from Hubbert make clear, the reverse is true: the reality of limits means production must rise, peak, and decline. The "particular shape" is irrelevant.
Lynch claims that "The primary flaw in Hubbert-type models is a reliance on URR as a static number rather than a dynamic variable, changing with technology, knowledge, infrastructure, and other factors, but primarily growing." But Campbell et al. are referring to resources, not reserves. URR is fixed because Earth's oil endowment is finite. Seeing it as "static" is not a "flaw." It's fidelity to the facts.
Falsifications and distortions of their opponents are common among cornucopians. That, plus their refusal to acknowledge the reality of limits, destroys their credibility in my eyes.
peakoil.ie |
