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How to Address Contrarian Arguments - part I
Posted by Luis de Sousa on November 23, 2006 - 1:50pm in The Oil Drum: Europe
Topic: Miscellaneous
Tags: desilusion, gompertz curve, hubbert curve, logistic, peak oil, verhulst curve [list all tags]
Most commentators simply dismissed Peak Oil as a possibility. My first reaction was of nausea, I just couldn't believe it; these people are completely delusional. With so many people thinking like this, will we ever be able to change something, to have some kind of impact?
Then I thought I could make something good of it, because that thread had the value of being a collection of the main contrarian arguments against our message.
This is the first of a series of posts where I'll analyze the kind of contrarian arguments seen there and how to address them.
The dreaming city
If you ever read Michael Moorcock you'll probably know of Imrryr the dreaming city. Imrryr was a major city port, the center of a mighty empire, where people attained such dominance and power that they were always drugged (dreaming) in completely disconnection with reality. The dreaming was so grave that they just failed to see the end of the empire and the city, brought by the emperor himself. The folk commenting at SlashDot surely looked like Imrryrians at the edge of time.
People do not face reality. In our immense affluence and well being we just turn on the TV and let those images flood our brain without questioning it, without saying "is that so?" The Media just throw it at us without a second thought without a rebate. Remember that more than 50% of the Americans believe that Saddam Hussein was responsible for 9/11. Most of these comments got at SlashDot are based on the common sense got from the same MSM that created those beliefs. You know, at the edge of time...
There's a Peak coming
Ah! November, the month of sweet chestnut harvest, and of new wine tasting! Now, you love sweet chestnuts and on St. Martins' day you buy a hundred of them. On that day you just eat one, properly roasted on dried pine needles. But it's so tasty and sweet that on the next day you have two; on the third your mouth is watering and you have four. You go on like that until you've finished the hundred bundle. Then in your immense unhappiness you look back and see that there was a day when you ate more than on all of the other days - Peak Sweet Chestnut Day.
This small parable is just to show you a very simple (and quite obvious) fact: a Peak is a mathematical result of growing consumption of a finite resource. Nothing can change that, even if you think that Oil is abiotic in nature (this issue will be dealt with in a subsequent post).
Peak Oil also brings with it the concept of peak occurring around the point in time where half of the recoverable resource is extracted. In our first parable this isn't the case, nothing stops you from eating more sweet chestnuts every day, until the resource isn't there. Of course your digestive system could put some restrain to that.
So it's quite common to get a question like "Why is the peak at the middle?" There's no easy direct answer besides the vague "That's how things grow in Nature." To understand the peak-in-the-middle concept we need another parable: The wood pile vs. wood land parable. You can find the hole story at WolfAtTheDoor.org.uk, here's the essential (homage to Paul be made - WATD improves from day to day and it still is one of the best websites I've ever surfed to, not only in content but also in design):
Woodpile v Woodland
Oil production can be best understood by comparison with something such as wood. Imagine an island where there is one carpenter. The R/P ratio basis of oil usage revolves around the assumption that oil production works like a woodpile in the carpenter's backyard. Whenever he needs woods, he walks out to the pile and takes however much he requires. If things get busy and he needs more wood, he simply takes more wood from the pile. There is always enough to satisfy his needs until that fateful day when he removes the last plank and it is then all gone. The only factor in its price is demand - if fewer people want wooden things, the carpenter lowers the price to stimulate demand. If he has plenty of work on, he can increase the price and get the benefit.
Comparing this with oil, if the world has 1,050 Gb of oil remaining and we use 27 Gb a year, then dividing one by the other means that we will be able to use 27 Gb of the woodpile for another 39 years. Then the yard will suddenly turn out to be empty.
But oil does not sit in one huge whole in the ground, constantly being pumped out. Rather an oil field is a set of wells of different sizes, with new wells being set up as old ones dry out. The R/P ratio takes the view that the oil has already been found and is sitting patiently in the backyard. In reality, it is more like woodland than a woodpile.
If we imagine instead that our carpenter had to chop down a tree every time he needed to make something, the problems become more evident. Trees vary in their size, proximity and quality. Initially our man would pick those that were large, good quality and nearby. As this was relatively easy, his prices could be kept low. But, as time went on, he would have to cut more trees of smaller sizes, travel further to find them and use wood of a lower standard. This extra work would take longer and naturally result in higher prices. Eventually, unless the trees were managed and replaced, he would find himself unable to find enough wood to satisfy his customers.
But couldn't he cut the trees quicker to keep production up? He certainly could employ someone to help him (which would be like drilling more wells) but that would result in depletion occurring more quickly, and the quicker you cut away the large and nearby trees, the quicker you have to resort to the small and distant ones. New technology can only help so much; no matter what circular saw or four-wheeled vehicle you have, there's always a certain minimum time needed to cut down and drag a tree to the workshop. Production still falls, the best you can do is change the angle of the slope on the chart. Any increase in production means a gentler initial decline and a steeper subsequent one.
Oil production works in a similar way with the important distinction that, unlike trees, we cannot replace the oil we use. It is as if every tree the carpenter cut down was gone forever.
Looking at it from an EROEI perspective: as consumption grows, the resource needed to feed it also grows. Imagine Conventional Oil has an EROEI of 1 to 10, if in 2005 26 Gb where consumed, the equivalent to 2.6 Gb of past production was used to create the current rate of consumption. If you want to produce 27 Gb the next year you'll have to spend 2.7 Gb of past production to achieve it.
Like Paul explains the problem is that the biggest and closer to home trees go down first (the low hanging fruit). This tells you a very important thing: EROEI for an unevenly distributed finite resource is not static; it decreases with the amount of resource consumed.
And this is the drama, the fraction of the current harvest used to maintain and grow the future harvest starts increasing, eventually overwhelming the harvest - making it peak and decline. Going back to the previous example if EROEI felt to 1 to 5, instead of neading 2.7 Gb to get 27 Gb the next year, you would need 5.4 Gb.
Curves
The Hubbert Curve is the first derivative of the symmetric Logistic Curve (seen here at the right). The Logistic function was formulated by Verhulst (and hence also called Verhulst curve) in the XIX century, to model population growth in Nature. The Verhulst curve gives you the cumulative growth (e.g. total oil consumed up to each point in time), whilst an Hubbertian gives you the rate of growth (e.g. the oil consumed in each point in time). The first is an S-shaped curve, the second a Bell-shaped curve. Not only in Nature, but also in Human-led events, these kind of curves model growth with success.
The Verhulst curve can have all sorts of forms with a later or sooner peak producing an asymmetric first-derivative curve. In Nature you can find different kinds of Verhulst curves each representing different environments of growth; one very common is the Gompertz Curve, which describes asymmetric growth that starts stronger and ends weaker (such was the case of cell-phone use growth).
Unconstrained growth in an environment where the resource is finite and unevenly distributed usually follows a symmetric curve, hence having an Hubbertian first derivative. I surely haven't seen any example where it happens differently.
The robustness of the Hubbert curve is its simplicity (only two parameters) making it really easy to use (Hubert Linearization). Moreover, if you are in presence of an asymmetric growth phenomenon you can still use the Hubbert curve to get an idea of when the peak will be.
An Hubbert curve can be used to find the peak epoch of an asymmetrical growth phenomenon.
Summary
A peak in consumption versus time is a mathematical result of growing consumption of a finite resource. Denying it is going against mathematics, or saying that 2 + 2 != 4.
Oil will likely present a peak at midways of depletion for it is an unevenly distributed finite resource. The "low hanging fruit" goes first - it's easier to find and maximizes profit - making EROEI decreasing with time.
The bell-shaped curves allows for the mathematical modeling of growth phenomena. Even if oil proves to yield an asymmetric bell-shape curve, modeling it with a simple symmetric curve can identify the epoch of peak.
This first post laid down some mathematical grounds for a layperson to understand that Peak Oil is a reality; in the following posts we'll deal with comments like this:
Using energy, particularly derived from fossil fuels, is a RIGHT! Nay, an OBLIGATION!
Only a terrorist or a commie pinko would think of energy usage as a cost, something to be balanced and minimized!
See ye,
Luís de Sousa (fka lads)
TOD/EUR is one place I am going to have to check more often because of the quality of the posts! Hopefully more Americans will become concerned enough to check what is happening on 'the other side of the pond'.
As I see it, the biggest problem overcoming denial of Peakoil is that right at the Peak is when there is the maximum of everything.
Plastic junk, # of car & SUV models, cheap vacation flights, grocery stores full of food choices flown & trucked in from who knows where all year round, cheap computers and other appliance items, maximum extent of maintained asphalt & concrete roads,...on and on!
People cannot believe it could ever end! Their eyes, ears, sense of touch and taste, even their emotional desires are maximized to the full extent they can afford.
Even if you are a poor Bangladeshi, who has never known anything but a bare subsistence lifestyle: as long as your decline occurs slowly so as not to radically jar your memory: he still cannot comprehend the true magnitude of the forces arrayed against him.
It is only when a person truly engages their grey matter above the higher level of the lizard brain that they wake-up and say 'uh- oh, something is not right with my mental picture".
Even I find it very hard to overcome my senses in terms of Peak Everything. A good mental 'grasp' of the true situation is like
wanting to hold a red-hot steel poker in your bare hand. Sometimes, even I get burned out on PO + GW and have to temporarily withdraw into what I call my happy, mindless idiot mode. The truth hurts.Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Inebriated by all that comfort and easy living, they lost contact with the physical realities of the environment where they live. The more they break the physical constraints around them the harder it gets to see the consequences.
They don't know it, but they are On The Edge of Time.
Having been basically called names (for questioning whether Peak Oil would happen, and how it would happen) it is my first experience of the 'persecuted minority' thinking in some time.
I'm not adverse to the principle of Peak Oil (it's trivially true, in the sense that oil is an exhaustible resource-- one simply needs to remember that control of Rumanian (or Romanian ;-) oil in the first half of the 20th century was a major strategic issue-- to remember that oil is produced, and production declines).
Then I committed the heresy of suggesting that 'Peak Coal' wasn't something we should worry about too hard, because the CO2 emissions from our existing, proven coal reserves could kill us off first ;-).
I basically got told that I should google world coal reserves, and then I would agree with the poster's analysis that we only have 30 years of coal left (in the scenario of Peak Oil. So the logic chain isn't just 'we don't have much coal' but 'PO is now, therefore we don't have much coal').
If the first was questioning the divinity of Christ, the second was questioning the virginity of Mary ;-).
We need to unify against our true enemies here, gang, I mean the People's Liberation Front of Judea ;-).
So it fascinates me what reception a genuine PO sceptic would get from the 'informed' 'thinkers' here. Probably a public lynching ;-).
The only true signal one would get of Peak Oil is an explosion in the oil price*. Because
Demand = supply + changes in inventories
Only in an extreme case (where a much cheaper substitute had emerged) would the price of oil be falling at the same time as supply was peaking ie you would need wholesale 'demand destruction'.*
Since there is no sign of that at the moment, and indeed oil prices are falling, we are not (yet) at Peak Oil.
* that signal would not be unambiguous either, unfortunately. There are lots of reasons why the price of oil might go up, or production might decline, which are *not
the result of geologic oil exhaustion. Mostly they are geopolitical in nature.* there are some interesting results out of Systems Dynamics models. If you postulate very long supply and demand lags in response to changes in price (which is what oil is) then you could get a 'stuttering' market effect, where prices are very volatile.
Basically demand is lumpy (the decision to close an oil refinery, or to switch locations to economise on road transport, is a major capital decision), associated with the differences between fixed and variable costs. At the household level, the decision to add extra insulation or buy a more fuel efficient car won't happen just because oil prices have shot up-- it will have to look like those changes in oil price are *permanent
and worth the additional cost. And households are constrained in all kinds of ways (borrowing limits etc.).Supply is lumpy in part because there is oligopoly in the oil production market: for small oil producers especially, it may be sensible to ration supply in face of future prices (this is called 'OPEC' in the real world ;-). It's also lumpy because of the 'hit and miss' nature of oil development-- you pay lots of money for drilling rights, and then you hit dry holes.
Deffyes talks about this 'stuttering' in prices in his second book (inferior to the first, I thought) ie the idea of applying queuing theory.
I think that what you wrote about "stuttering prices" is right, but therefore negates what you wrote above that: "an explosion in the oil price... there is no sign of that at the moment". It's fallen somewhat in the last couple of months, but it's triple what it was a few years ago. If you look at the big picture and ignore the "stuttering" I think that the price signal is there. There are also indications of some "demand destruction", and no indication of "spare capacity".
I was struck, f'rinstance, by the rise in US SUV and light truck sales. Not a harbinger of falling gasoline consumption!
As to prices. In a world with very price inelastic supply and demand, you would get the same kind of price volatility. I think you could fairly argue that the previous price of oil was 'too low' rather than the current price is 'too high'. There is a minimum price (around $40-45/bl) which triggers new entrants such as Canadian oil sands production-- which is, indeed, happening.
The fact remains oil prices are below their recent peaks, below their all time peaks (1980) by a considerable margin, and consumption, AFAIK, is still rising.
We might be close to Peak Oil, but the market isn't telling you that yet.
It seems as if oil consumption is still rising, inventories are static, therefore supply is still rising. And, indeed, prices have fallen back.
You can tell a commodity is exhausting, if the price rises. For a long time, the real price of oil fell (1). It has now in some sense 'caught up' to where it might be (on a long term growth track).
(1) my own theory on that is that for a long time, OPEC was able to hold the price of oil higher than market forces would have let it. OPEC is a profit maximising oligopolist, and therefore reduces the quantity of its commodity supplied below the free market level (and secures a higher revenue for its efforts).
And there were genuine efforts to conserve energy (not so much in the USA post CAFE, but in Europe with high gasoline taxes, encouragement of diesel cars etc.-- and businesses worldwide sought to reduce their vulnerability to oil price swings). So you had less demand than market forces would have dictated, and at the same time 'held back' supply.
Eventually that played out as the oil price collapse of the late 90s. But in the 2000s the rise of China and India, plus continued growth in US oil consumption, has 'eaten up' the slack capacity in the system.
The oil traders, who have a big influence on the day-to-day price, seem to react to the "inventories". But I think those inventories are vastly over-rated. They are only a few days, perhaps 2 weeks, of supply. And they're not a lot higher than they were - the "increase" is what, less than one day's supply? Drawdown form tank farms in KSA and Europe can easily explain the commercial "inventories" in the USA. Meanwhile the SPR is lower than it was (pre-Katrina).
Also, like WT says, the bidding war for oil happens in spurts. So the "demand destruction" in poorer countries brings a temporary bit of "relief" to the richer countries, until the next round of bidding. It's a "musical chairs" game and the chairs are slowly disappearing even if some fat asses are still sitting.
Anyway, I am not saying that the price signal is perfect. Not at all -- that is why Peak Oil is so difficult to tackle. The Market is mostly blind, until near the end. The current visibility of some price signal is thus a sign, although uncertain, of imminent peak.
Finally, I don't think that "peak" is the important point in time. Supply can fall behind demand even before the peak. You would expect it to, since the supply curve flattens out as you near the peak, and the demand curve is still rising, even faster (e.g. China). With the globalized economy dependent on "growth" that's catastrophic. Moreover, worldwide per capita oil peaked in 1979, thus any "growth" since has been due to increasing inequity.
The supply of oil exactly equals the demand for oil, plus or minus any change in inventory.
And most oil changes hands at the market price.
When you say 'supply can fall behind demand even before the peak' that is actually logically impossible (except for changes in inventories).
I'm not aware of evidence that total world oil consumption has fallen, so if there is 'demand destruction' it's not evident in the aggregate. That (the quantity of oil demanded) would be a higher quality statistic than total oil produced.
The fall in oil per capita isn't particularly concerning. Merely a sign that the world has gotten better at generating GDP, per barrel of oil consumed. (It also uses less copper per unit of GDP than it did in 1979).
If we look at some other measures like life span and average life expectancy, or number of mobile phones in the world (1979: people connected to a phone system of any kind), proportion of people who are starving, etc. then the world is a richer place than 1979 (with the striking exception of sub-Saharan Africa, where AIDS has taken a horrific toll).
Where there is room for concern is in total pollution and in other measures of ecosystem degradation. The capacity of the Earth to handle our polluting output is finite (albeit elastic).
This I think is the #1 or #2 problem. Even with intelligent people this is not going to happen. "Don't bother me with all that negativity" they think. Technology will save us.
People have a "comfortably" delusional life - at least for now.
DelusionaL ;/
Of course, this is only tenable if you believe that there really is nothing to be done. I don't believe that, and I hope to give Slashdot a glimpse of the alternative.
the best return on investment is to do stuff that helps you and your family rather then trying to save the world as we know it.
The problem I see with trying to save your family (and the devil take everyone else) is that the social upheaval which would come with a collapse of the current social order (as opposed to one of its current power elements) would place everyone and everything at risk. You might have detailed plans to ride out the crisis and grow your own food afterward, but it only takes one angry or hungry mob to throw them all in the crapper.
I'm not going to bother making plans which probably won't be useful beyond the second event of a crisis, or even the first. Steering a path around the crisis is the way to go. And there's at least one reason to take this path, no matter what your leanings:
It doesn't matter which one motivates you, the solution is the same.
Someone who is worried about energy entirely from a geopolitical standpoint will want to maximise coal use, particularly in the US case.
From a global warming point of view (without carbon capture and storage) that is the worst thing you can do.
The coal industry, and some of the power plant industry, and to some extent the aviation and auto industry, are playing a game of chicken: keep denying global warming, keep putting obstacles in the path of doing something about it, and hope that they are right (and we are wrong) about the consequences.
Conversely the most positive step taken (inadvertently) against global warming was the 'dash for gas' by electric utilities in the US and UK, following deregulation of those industries. Big savings in CO2 emission by displacing coal with gas (the main reason why the UK has a chance of meeting its Kyoto targets).
From a Peak Oil/ energy autonomy perspective, that tied our economies into a declining energy supply, coming from politically unstable countries.
I like the idea of this series of posts on how to address contrarian arguments. Regarding the bell shape of the oil production curve, I would comment that perhaps its not so important to concentrate on the mathematical theory behind the shape of the curve or the position of its peak. A better, quicker and more convincing argument is simply to show people plots of real data for real countries or fields which have already peaked. Plots of oil production in the US are particularly good for dramatic effect. Showing people such graphs means that there is less need to concentrate on the math which for many people will always be impossible to understand and therefore highly "suspicious" to them.
Looking forward to the next post.
I think you're right in everything you say, those graphs of real things will come later in the series.
Hope to see you around at TOD:E.
In an attempt to understand PO better, I tried modelling PO using a "woodland" model, but it didn't work. Peak production in the woodland model occurs near the start, and then declines thereafter. It doesn't exhibit the classic logistic curve I was expecting.
In fact I have never come across a real world example of resource depletion that people can directly relate to, and is obviously applicable to oil - people usually quickly come back to talking about oil, as you do.
You then quickly jump into mathematics with the statement Unconstrained growth in an environment where the resource is finite and unevenly distributed usually follows a symmetric curve, hence having an Hubbertian first derivative. If I was a sceptic, I would like to a see a little more justification of that statement.
Incidentally, the statement "that's how it works in Nature" is only true for certain ideal conditions. The general formula for population growth is chaotic.
You conclude with Oil will likely present a peak at midways of depletion for it is an unevenly distributed finite resource, but without real justification apart from "mathematics says so". As a sceptic I would not think my original question "Why does the peak occur in the middle?" has been satisfactorily answered.
I think the problem with this general line of argument is that no-one really knows why oil production follows a logistic curve. Even Hubbert did not make that assumption, he just said that production of a finite resource must be zero at the start and end, but that in between any production curve is possible. By observation of past data, it can be seen that production generally does follow a logistic curve, but that does not identify a causal relationship. For modelling and prediction purposes, a symmetric curve is easiest to deal with.
I aplogise if this comes over as negative, I appreciate your attempt to explain PO, but you will need a rigorous case to persuade the likes of the sceptics at Slashdot! For me, a powerful case is made by the observation that production follows discovery, and discovery has almost dried up. That is the argument I usually lead with when making the case for PO.
How General is the Hubbert Curve?
He gave nice examples of Hubbert cycles:
Caspian sturgeon:
I bet the whalers came back to port boasting about the numbers of whales they'd seen and that whale oil was a plentiful, indeed, near infinite resource. Who would have been in a position to challenge them?
I bet also that, towards the end of whaling, many whale boats returned to port empty or near empty - and that folks will have found a myriad of reasons to explain this disappointment away - before forgetting about it. The whalling ports collective memory will have been focussed on those boats and whalers that returned with bounty and boasting of massive resources.
Its also worth remembering that it takes just 50 years or so to grow a whale. 200 million years on average to grow an oil field.
Why is it that the Whale depletion cycle is one not cited more often to counter the argument that more sophisticated technology will improve reserves and production. Surely we can point to the existence of new ships, equipment and technology providing no increase in catches after a certain point?
We will end our carbon party at some point. Mother nature will strike a balance.
If it is cheap enough, then we never fully exhaust the original resource: we just find it no longer necessary.
(I have my private hopes for coal on this score).
In the case of whales, the whale population (the exhaustible resource) at least in theory began regenerating once geologic oil became the primary source.
What is harder to show (see Jared Diamond 'Collapse' for a popular effort at it) is that there are environments, contexts and civilisations which don't recover from an exhaustion of the capacity of their ecosystem. Because recent history says we do overcome these shortages.
An oil dependent civilisation, which runs out of oil, would be a subset, or an example of Jared Diamond's collapsing societies.
It also throws up the question about what we do about it.
The answer is both simple (invent non oil technologies, find non oil energy sources) and difficult (because most of the physical capital of our civilisation is tied up in oil-dependent capital: buildings, power plants, cars etc.).
Which is really where Diamond comes in (there are others: Thomas Homer Dixon has a new book, Ronald Wright has a good book 'A Short History of Progress'-- what is it about these Canadian authors eh? ;-). That some societies surmount these obstacles, and some fail.
Tainter's view is perhaps most appropos because it's basically a thermodynamic argument. It's based on energy - in particular, the energy costs of complexity. If a society can find a source of energy that's better than one they were using before, they can continue to become more and more complex. If not, they collapse.
I think we have (almost) all the pieces of the post carbon world, or they are all within reasonable extrapolation of current knowledge. I include 'bridging' technologies in this (nuclear fission, carbon sequestration etc.).
We haven't yet knitted them all together, nor agreed amongst ourselves that we need to drive for them.
it is the current population with the current standard of living and way of life
and the answer is inevitably, no. But life will change. You cannot now stride out your door in London and go for a walk in the woods (other than a park)-- you could in the 1820s, when London only had 2 million people. Nor can you shoot passenger pidgeons from your doorstep in North America (as they are extinct). But you can log on to the internet, and the medical technology available to you is vastly better than it was in 1970, say.
A lot depends on speed of onset and what we do in the interim. If Peak Oil is now, then Houston, we have a problem. If it is 25 years from now, then what we have to do about global warming induced by CO2 emission has a lot of (positive or negative) bearing on what we do post oil.