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Michael Lynch has been spewing this nonsense for awhile now. I would take everything he says with a grain of salt. Below is a link to a Forbes article from 2006.
Gasoline for $2? Michael Lynch says those good old days are just around the corner.
Don’t sell that SUV just yet. Oil, at a recent $66.50 a barrel, will fall to $45 by mid-2007 and could dip briefly into the 20s in 2008. Sometime next year you are going to see a $1.95 price on a gas pump.
So says Michael C. Lynch, 51, president of Strategic Energy & Economic Research in Amherst, Mass. He swears he hasn’t been inhaling fumes. His reasoning: New supply, coming online from all corners of the world, is more than ample to satisfy growth in demand and sufficient even to withstand an embargo against Iran, which produces 3.75 million barrels of oil a day. Lynch argues that the threat of disruptions–nuclear brinkmanship, war, terrorism, hurricanes, pipeline corrosion–has larded oil prices with a $20-a-barrel risk premium. As these perils recede, oil prices will fall.
A refreshing but distinctly minority view. Over the last two years, as prices have soared, proponents of the Peak Oil theory–which argues that we will soon pass the point of being able to replace reserves as fast as they are consumed–have resurfaced in force. Of course, folks have been predicting the end for 50 years. In fact, there’s still plenty of fuel to be sucked out. Consider that over the past 100 years the U.S. has drilled 3.5 million wells into most of its oil basins yet still produces 5 million barrels a day. In the Middle East only 50,000 wells have been drilled into far more prolific basins, yielding 15 million bpd. While the world has consumed maybe 1 trillion barrels of oil in the last century, there are at least 1 trillion barrels waiting to be exploited, reports the U.S. Geological Survey. Add to that an estimated 1 trillion barrels of oil sands resources and another 2.8 trillion barrels of oil shale, and we can all afford to put down our “End Is Nigh” placards. “The oil price spike was caused by geopolitical issues that can be fixed or overcome,” says Lynch. The real issue is geology. Recent discoveries–and the prospect of new ones–sketch a bright future.
One of the industry’s most enduring optimists, Lynch spent 20 years working on energy policy at the Massachusetts Institute of Technology’s Center for International Studies, his alma mater. Four years ago he opened his own shop to advise oil companies, governments and investment banks. While a student at MIT during the Cold War, he studied national defense. He became frustrated because “no matter how much we knew about the Soviets, we would never be able to fully predict whether a madman might launch a nuclear first strike. Psychology is not inherently knowable,” he says. “Geology is.” His abiding faith in technology’s ability to wring oil from the most tucked-away places have put him on the outer margins of conventional thinking. He says, “I’ve been a gadfly since I started.”
He is missing the point about peak oil, it is all about flow. The oil cornucopian business as usual people always talk about all the oil shale and oil sands that are available as reserves. They do not talk about the EROEI (Energy returned on energy invested). They also don’t talk about the environmental devastation to accompany it. Maybe he should watch the Crash Course, Dr M has a nice chart for that. Also, the number of wells we’ve drilled in the US is extremely misleading. The wells that we have drilled in the lower 48 post peak were for smaller and smaller resevoirs. We have 400,000 stripper wells in the US each producing less than 10 barrels of oil per day. If the Middle East is lucky they will have the resources to drill their land like swiss cheese. Saudi Arabia has been drilling offshore as well, in fact they have more drill rigs today than 5 years ago, yet they are producing less oil. This graph is in Stephen Leeb’s book “Game Over”, I’m sorry, I could not find it to post.
UK has plenty of sun and photovoltaic produces electricty during cloudy conditions. Solar thermal has the means to store heat for night time and, if one wants to, build a high mass system that could conceivably store enough heat from the summer for the whole of winter. Of course, there is wind in the UK. With all of these measures taken into account, the UK could drastically lower coal burning for producing electricty and heating fuel use as well.
All one has to do is make the choice.
I certainly appreciate your thoughts on renewables. It is certainly what we will be left with at some point in the distant future. We might as well get started in earnest. Having said that, at this time renewables have a long way to go to replacing any sizeable portion of our energy demand. At my house, I offset all of my energy use with solar. No gas or oil for heat, everything is electric. My house is as efficient as we could possibly build it. The solar system to offset with batteries was about 100K. Furthermore, when it’s sunny we produce around 80 KW per day, and when it’s cloudy about 5-10 KW, and if it is really cloudy, we may only get 1 or 2 KW’s. If I wasn’t grid connected to my neighborhood coal plant, I would need another 10K in batteries that only last 10 years, and I would have to be more careful about what I do, and when. I actually think geothermal has a future. There is a plant in France that is still running from the early 1900’s. The geothermal plants don’t have to worry about the intermittancy of the power like solar and wind. However, as James said not everyone has access to good geothermal properties. Of course the real issue will be how we accomplish the massive build out that is needed in a world of declining resources and capital. Unfortunately, I just don’t see it happening at a scale that will keep us in the lifestyle we have grown accustomed to.