Skip to main content

'Peak oil' doomsayers proved wrong

By David Frum, CNN Contributor
updated 9:47 AM EST, Mon March 4, 2013
The world's oil production is far from peaking, David Frum says.
The world's oil production is far from peaking, David Frum says.
STORY HIGHLIGHTS
  • Five years ago, speculators predicted that oil production was peaking
  • David Frum says recent evidence is that energy sources are plentiful
  • Iraq and Mexico can produce much more oil, and United States is awash in natural gas, he says
  • Frum: Gas surplus is enabling U.S. to reduce carbon emissions that change climate

Editor's note: David Frum, a CNN contributor, is a contributing editor at Newsweek and The Daily Beast. He is the author of eight books, including a new novel, "Patriots," and a post-election e-book, "Why Romney Lost." Frum was a special assistant to President George W. Bush from 2001 to 2002.

Washington (CNN) -- Remember "peak oil"?

Five years ago, some oil market speculators became convinced that the world was nearing the limits of oil production. Sometime soon -- the 2010s? the 2020s? -- oil production would begin a long steady decline.

Think again. World oil production continues to rise. Leading the oil renaissance: the United States. The International Energy Agency predicts that the United States will overtake Saudi Arabia and Russia to become (again!) the world's leading oil producer by 2017. If the agency's estimates prove correct, the United States and Canada together will become net energy exporters by about 2030, and the U.S., which uses 20% of the world's energy, will achieve energy self-sufficiency by the mid-2030s.

David Frum
David Frum

Predictions that the world would imminently "run out of oil" have been worrying oil consumers since at least the 1920s. They always prove wrong, for reasons explained by the great oil economist M.A. Adelman after the last "oil shortage" in the 1970s:

Oil reserves, Adelman writes, "are no gift of nature. They (are) a growth of knowledge, paid for by heavy investment."

For all practical purposes, the world's supply of oil is not finite. It is more like a supermarket's supply of canned tomatoes. At any given moment, there may be a dozen cases in the store, but that inventory is constantly being replenished with the money the customers pay for the cans they remove, and the more tomatoes that customers buy, the bigger an inventory the store will carry.

Someday, of course, consumers will decide they want less oil at the current price. Someday we may move beyond oil altogether. When that day comes, the investment will stop -- and nobody will ever know or care how much oil remains in the ground.

Become a fan of CNNOpinion
Stay up to date on the latest opinion, analysis and conversations through social media. Join us at Facebook/CNNOpinion and follow us @CNNOpinion on Twitter. We welcome your ideas and comments.



Adelman's assessment is being corroborated once more, this time in Mexico. Mexican oil production has been declining over the past decade, mostly because of under-investment and mismanagement by the state oil monopoly, Pemex. (On January 31, a deadly tragedy reminded the world of Pemex's troubles when a methane leak in a Pemex building in downtown Mexico City exploded, killing more than 30 people and injuring 120 others.)

In October, Pemex announced discovery of a big new field in the Gulf of Mexico. Newly elected Mexican President Enrique Pena Nieto is urging his country to amend its constitution to allow foreign investment in Mexican oil fields. Experts assess that opening the Mexican oil industry to global investment will revive Mexican oil production and boost Mexico's economic growth by potentially 2 points a year. Nieto's PRI party -- the very party that nationalized Mexican oil 80 years ago -- is expected to vote this weekend to approve the new policy.

Meanwhile, the International Energy Agency is warning oil markets to ready themselves for a "flood" of cheap oil from Iraq. Last year, Iraq for the first time exceeded pre-1990 oil production. The agency expects Iraq eventually to overtake Russia as the world's second-largest oil exporter.

In 1972, the year of the famous "Limits to Growth" report by the Club of Rome, the world produced about 55 million barrels of oil per day. In 2011, the world produced almost 80 million barrels. If today's prices hold, many experts expect production of 90 million barrels by decade's end.

Our oil problem is not that "we're running out." Our oil problem is that we're producing so much of the stuff that we are changing the planet's climate.

Yet on the environmental front too, there's reason for optimism. One of the technologies developed by the oil industry -- fracking -- has made available vast new supplies of cheap natural gas. Gas has become so cheap that it can be substituted for coal as an electricity-generating fuel. In just eight years, coal's share of the U.S. electricity market has tumbled from one-half to one third -- and still falling. Gas emits only half the carbon per unit of energy of coal. The transition from coal to gas explains why U.S. carbon emissions declined 8% from 2011 to 2012, reaching the lowest level since 1992.

Soon the United States and Canada will be producing so much gas that they can export it to Europe, perhaps also to China, helping to cut carbon emissions in those economies as well. No, it's not the answer to everything: Gas still emits carbon. But it's an improvement -- and that's how progress comes.

Instead of fantasizing about catastrophes (running out of oil) and miracles (a rapid transition to solar power), our energy thinking needs to emphasize the achievable and the incremental. Convert from coal to gas. Tax gasoline to induce people to live closer to work and to buy more fuel-efficient cars.

We can enjoy a rising quality of life with declining energy inputs. Put us on the path to the right kind of "peak oil" -- and peak carbon -- the peak that comes, not because we find less and less, but because we want less and less.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of David Frum.

ADVERTISEMENT
Part of complete coverage on
updated 2:15 PM EDT, Sat July 12, 2014
To prevent war with North Korea over a comedy, what would Dennis Rodman say to Kim Jong Un? Movie critic Gene Seymour weighs in.
updated 9:15 AM EDT, Fri July 11, 2014
Michael Werz says in light of the spying cases, U.S. is seen as a paranoid society that can't tell friends from foes.
updated 9:17 AM EDT, Fri July 11, 2014
Eric Liu explains why in his new book, he calls himself "Chinese American" -- without a hyphen.
updated 11:12 AM EDT, Fri July 11, 2014
John Bare says hands-on learning can make a difference in motivating students to acquire STEM skills.
updated 9:20 AM EDT, Fri July 11, 2014
Karl Alexander and Linda Olson find blacks and whites live in urban poverty with similar backgrounds, but white privilege wins out as they grow older.
updated 12:20 PM EDT, Thu July 10, 2014
Frida Ghitis says a poll of 14 Muslim-majority nations show people are increasingly opposed to extremism.
updated 2:28 PM EDT, Thu July 10, 2014
Ruben Navarrette says spending more on immigation enforcement isn't going to stop the flow of people seeking refuge in the U.S.
updated 4:48 PM EDT, Thu July 10, 2014
Faisal Gill had top security clearance and worked for the Department of Homeland Security. That's why it was a complete shock to learn the NSA had him under surveillance.
updated 2:41 PM EDT, Thu July 10, 2014
Kevin Sabet says the scientific verdict is that marijuana can be dangerous, and Colorado should be a warning to states contemplating legalizing pot.
updated 4:47 PM EDT, Wed July 9, 2014
World War I ushered in an era of chemical weapons use that inflicted agonizing injury and death. Its lethal legacy lingers into conflicts today, Paul Schulte says
updated 7:37 AM EDT, Thu July 10, 2014
Tom Foley and Ben Zimmer say Detroit's recent bankruptcy draws attention to a festering problem in America -- cities big and small are failing to keep up with change.
updated 8:01 AM EDT, Thu July 10, 2014
Mel Robbins says many people think there's "something suspicious" about Leanna Harris. But there are other interpretations of her behavior
updated 1:53 PM EDT, Wed July 9, 2014
Amy Bass says Germany's rout of Brazil on its home turf was brutal, but in defeat the Brazilian fans' respect for the victors showed why soccer is called 'the beautiful game'
updated 5:07 PM EDT, Wed July 9, 2014
Aaron Carroll explains how vaccines can prevent illnesses like measles, which are on the rise
updated 8:08 PM EDT, Tue July 8, 2014
Aaron Miller says if you think the ongoing escalation between Israel and Hamas over Gaza will force a moment of truth, better think again
updated 3:03 PM EDT, Tue July 8, 2014
Norman Matloff says a secret wage theft pact between Google, Apple and others highlights ethics problems in Silicon Valley.
updated 6:37 PM EDT, Tue July 8, 2014
The mother of murdered Palestinian teenager Mohammed Abu Khder cries as she meets Palestinian president Mahmoud Abbas in Ramallah, West Bank on July 7, 2014.
Naseem Tuffaha says the killing of Israeli teenagers has rightly brought the world's condemnation, but Palestinian victims like his cousin's slain son have been largely reduced to faceless, nameless statistics.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT