<News Deposit/Open Thread The Oil Drum Shepherd Bliss: Hurricane Katrina, New Orleans and Peak Oil>

29 comments on Yergin: The Katrina Crisis, a hurricane produces an integrated energy disaster

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NC on September 3, 2005 - 2:47pm Permalink | Subthread | Parent | Comments top
Dave,

Thanks for response and I have read the posts religiously.  

How has Yergin said with a straight face in the past that we do have spare capacity.  Because this all seems to me to be the definition of peak oil, not post peak, just peak.  Any disruption anywhere reduces supply, that can't be replaced.

I know many of us at this site believe we are at or close to the peak.  I am trying to understand how Yergin is convinced we are not.

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Stuart Staniford on September 3, 2005 - 5:18pm Permalink | Subthread | Parent | Comments top
I see less inconsistency between Yergin's piece in the WSJ and his position in the past than others seem to. I don't think he's ever denied that crude supplies are very tight *this* year. He's just been arguing (I think implausibly) that they are going to loosen up very much over the next five years. In his WSJ piece, he's mainly emphasizing the refinery bottlenecks.
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Dave Cohen on September 3, 2005 - 5:39pm Permalink | Subthread | Parent | Comments top
Actually, responding to NC and Stuart here, I see no inconsistency between Yergin's earlier statements and this latest missive in the WSJ. It's just that at the moment, he's a little freaked out not having anticipated what a Category 5 hurricane could do to GOMEX production.

NC, Yergin has consistently said that we do not have spare capacity now. The magical new capacity (much from unconventional sources e.g. Canadian tar sands) is coming online in the future.... He is not unlike Nostradamus in this respect. For example, for these oil-rich sands, the best estimates I've seen indicate an additional 4.0/mbd by 2020. I'm not impressed.

Nonetheless, his latest remarks still illustrate his delusional optimism.... See my earlier analysis in this thread of his WSJ editorial with respect to future GOMEX production, preparing for intense hurricanes, et. al.

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NC on September 3, 2005 - 5:46pm Permalink | Subthread | Parent | Comments top
Dave,

In past production of oil and distillates, have we ever been in this position before?  Not being able to meet demand?  I don't count the late 70's.  That was an artificial witholding of supply.

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Dave Cohen on September 3, 2005 - 6:21pm Permalink | Subthread | Parent | Comments top
Things get a little thin on the page as responses get deeper...

Re: NC's "Not being able to meet demand?"

Yergin is actually an historian of the oil business and knows better than I that there have been several such crises in the past.... However, what makes our times unique, in my view, is how large oil demand is now (about 84-85/mdb), how quickly it's been growing over the last couple years (+1.5 to 3.0/mbd/year) and the inelasticity of this demand. On this last point, we are simply talking about a crack-addict's evergrowing need for a larger fix (excuse the analogy, nod to PG). With respect to the increase in demand, Asia (mostly China and India) are now taking up "demand space" that formerly was the sole province of the developed "Western World". All of this is unprecedented historically -- it is all new. I don't see much resemblance between what is happening now and the 70's/early 80's. Since Yergin, Freakonomics author Steven Levitt and many other mainstream economists have a religious faith in free markets, they would not make, as I do, any distinction between earlier supply/demand crises and what is happening now. In that sense, their point of view is ahistorical whereas mine is not. I believe we are in an historically unique period which points to the phenomenon called "peak oil".

Old curse: "May you live in interesting times".
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29 comments on Yergin: The Katrina Crisis, a hurricane produces an integrated energy disaster

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