First They Ignore You . . . Or the Wall Street Journal Confronts Peak Oil.

“First they ignore you, then they laugh at you, then they fight you, then you win.”
–Gandhi

Yesterday, the Wall Street Journal carried a story on it’s front page entitled: “Oil Officials See Limit Looming on Production” which reported that

“a growing number of oil industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.”

It described this new position as “a significant twist on an older, often-derided notion known as the peak-oil theory,” which, the authors report, has been “proved wrong” so often in the past that the theory has “become debased.”

As Bart Anderson of Energy Bulletin writes, the tone of the article “sounds rather like the Politburo trying to adapt political orthodoxy to unavoidable new evidence.”

I have been following the peak oil story closely for over two years now. In that time, the course of events has followed the predictions of “peak-oilers” like a script, while the scoffers who have been predicting an imminent increase in supply and falling prices have been wrong again and again.

I’m not sure where the idea that peak oil theorists have ever been successfully “debunked” comes from. Colin Campbell (the founder of the Association for the Study of Peak Oil and Gas) is frequently mentioned as one who made erroneous predictions in the past, but as of 1998 (nearly 10 years ago) he was writing in Scientific American that supply would fail to keep up with demand “within the next decade”—a prediction that so far has not been proven false. It is interesting to note that the same article correctly predicted that North Sea oil would peak by the millennium—which it did, to the surprise and continued denial of the oil officials who own them. (Depletion rates in the North Sea have been staggering since then).

The situation is analogous to the housing crisis, which any thoughtful observer could see last year was a lot more than just a blip. For a year before the credit crisis of last summer, authors like Jim Puplava, Michael Panzner, Peter Schiff, Stephen Leeb and numerous others have been arguing that the housing crisis would worsen and most likely create an “accident” in the financial markets, causing the Federal Reserve to sacrifice the dollar by slashing interest rates. It is now November; the housing market has precipitated a credit crisis, the Federal Reserve has slashed interest rates, and the dollar is dropping sharply—and still, the mainstream business press reacts to every twist of the plot as if it were a great surprise, while those who correctly predicted it are still considered fringe.

In spite of Ghandi’s quote, it seems that prescience alone is no guarantee of victory. Even as they are proven wrong, the cornocopians and “skeptics” still have the nerve to laugh.

Comments

[RK]

We can never forget that the main objective of the pundits is to maintain their own position as experts. They will do this to the sacrifice of everything else, and in this context it would be nearly impossible to admit defeat (even temporary) and yield the floor to another "expert." They risk never getting the floor back. So, the fringe must always remain the fringe, no matter what useful information and opinions they have to offer. And the pundits continue jockeying for position. But within that -- keep making your astute points. Someone is listening.

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