THREE summers ago, the world’s supertankers were racing across the oceans as fast as they could to deliver oil to markets growing increasingly thirsty for energy. Americans were grumbling about paying as much as $4 a gallon for gasoline, as the price of crude oil leapt to $147 a barrel. Natural gas prices were vaulting too, sending home electricity bills soaring.First of all, it's just not the case that Twilight became conventional wisdom. In particular, the New York Times spent the entire period running calming articles full of CERA quotes about how oil prices would go back to normal real soon now, even as they continued to climb higher and higher - almost to $150/barrel - only finally going down when the global economy almost collapsed in a financial crisis.
A book making the rounds at the time, “Twilight in the Desert,” by Matthew R. Simmons, seemed to sum up the conventional wisdom: the age of cheap, plentiful oil and gas was over. “Sooner or later, the worldwide use of oil must peak,” the book concluded, “because oil, like the other two fossil fuels, coal and natural gas, is nonrenewable.”
But no sooner did the demand-and-supply equation shift out of kilter than it swung back into something more palatable and familiar. Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.
Yet, the outlook, based on long-term trends barely visible five years ago, now appears to promise large supplies of oil and gas from multiple new sources for decades into the future.is just not true with respect to oil. Nothing has materially changed in the fundamentals of oil supply from three years ago except the shaky prospect that Iraqi supply will increase considerably in the future. Other than that, we have a few million barrels/day of spare capacity in OPEC, and whenever the global economy finally recovers sufficiently from the financial crisis, that will be used up in short order and then oil prices will go stratospheric again.
Presumably, having noted that the IEA is now acknowledging peak oil, this is the NYT's response (since they failed to even mention the IEA discussion of the issue).
I guess the thing that bothers me is this: the piece reads to me as deeply and intentionally deceptive, while being skillfully crafted to avoid saying anything verifiably untrue. The constant mixing of oil and gas as though the two situations are the same. The cherry picked and misleading comparisons. For example, "oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia." - Saudia Arabia has never been a large direct supplier of oil to North America - and so this is an irrelevant example intended to mislead someone who isn't intimately familiar with the stats. Clifford Krauss knows perfectly well that CERA has always said that oil will be plentiful and moderately priced in the near future. There is nothing new about this in the last three years. He knows that their track record of prediction in the 2005-2008 oil shock was dreadful. But he says nothing to clue his readers into any of this context.
And whatever happened to at least nominal adherence to the rule of journalistic balance? There isn't even one quote from anyone who would dissent from the cornucopian point of view peddled in the article. According to him, it became "conventional wisdom" that the age of cheap oil was over, but he can't find anyone to talk to who would still defend that view?
I have no idea what motivates the New York Times to publish this kind of dishonest propaganda masquerading as journalism, but it is extremely unhelpful.