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Kunstler on the CERA report

     Last week, Cambridge Energy Research Associates (CERA) released a report saying that there was no imminent global oil problem and that enough new oil would come on-line to permit current levels of consumption -- and beyond! -- for more than a hundred years into the future. CERA's stunningly disingenuous report flies in the face of everything that is known about the current world oil situation.

      CERA is fronted by Daniel Yergin, author of the Pulitzer Prize-winning history of the oil industry, The Prize. Apparently, Yergin has parlayed his legitimacy as an historian into running a disinformation service wholly owned by the IHS Corporation, a lobbying and public relations firm serving the defense, oil, and automotive industries. Apart from making a lot of money as executive vice-president of a company with about $300 million in net annual profits over about $500 million in gross revenues, it is a little hard to discern what Yergin's motives might be in shoveling so much bad information into the public arena.

     Much of CERA's "story" hinges on the supposition that snazzy technology will allow the recovery of "oil" (liquid hydrocarbons) from solids that require costly mining and processing operations to covert them to liquids. In effect, CERA says that tar sands, kerogen shales, coal-to-liquids, plus super-deep ocean drilling will not only make up for currently depleting fields of easily-acessed liquid sweet crudes, but actually surpass current total production. This would seem, on the face of it, to violate everything that is known about Energy Returns on Energy Invested (ERoRI). And, in fact, the very companies working the tar sands in Alberta, Canada, have just this year steeply raised their dollar estimates of what it will take to convert that stuff into usable liquids -- it ain't a pretty story.

     CERA does not acknowledge some of the fundamental facts of the current situation, for instance that the world's four super-giant fields responsible for at least 15 percent of total global production since 1980 (Ghawar in Saudi Arabia, Burgan in Kuwait, Daqing in China, and Cantarell in Mexico) have all passed peak and turned down into depletion. CERA doesn't acknowledge that discovery of new oil peaked worldwide in the 1960s with more than 40 years of steady decline since then. Or that there has been almost no provable meaningful discovery the past several years (and Chevron's as yet unproved deepwater "Jack" claim of 3 to 15 billion barrels total is not significant in the context of a world that now burns through 30 billion barrels a year.) CERA doesn't acknowledge that the predicted US peak of 1970 was absolutely on target and that our domestic production of regular crude has fallen from around 10 million-barrels-a-day in 1970 to under 5 m/b/d now (still declining yearly, including the Alaska North Slope fields). CERA doesn't acknowledge that current total global oil production through 2006 is at least absolutely flat and more likely falling (depending on whose numbers you look at), which would tend to indicate that the world has bumped up against the ceiling of its all-time total capacity. CERA doesn't acknowledge that exports are down nine percent this year because the nations with export capacity have growing populations and economies that require more and more of their own oil.

      The CERA story also tragically gives aid and comfort to those who deny that climate change needs to be taken seriously, since it is saying, in essence, that we can easily continue pumping carbon dioxide into the atmosphere -- by burning as much coal as we can. The CERA report amounts to "don't worry, be happy."

     Perhaps most tragically, there is no corrective for this mendacious PR. It's not against the law to spread lies about a business venture -- which is what the oil industry is -- even if its truthful condition is critical to the functioning of our society. There's no oversight committee or agency authorized to investigate public relations activity. It's a basic case of buyer beware. Unfortunately, the buyers in this case are America's political leaders and the news media responsible for informing the public.

     The mainstream media last week swallowed CERA's PR hook, line, and sinker, without a single reflective burp. It even drove the prices on oil futures markets down a few dollars a barrel -- though the price was back up by Friday. The only cogent analysis of the CERA report took place on the Internet, and for the most part on a single site: TheOilDrum.com, which is the best-informed forum of debate on these issues operating in the United States.You can go directly to their initial response, composed by Dave Cohen by clicking on this link. It's worth taking the trouble to read.

Editorial Notes: James Howard Kunstler weighs in. Like many others, though, he underestimates what can be done to counteract a public relations campaign, saying:
there is no corrective for this mendacious PR
Au contraire! Plenty is being done and much more could be. First, the Web enables the network of Peak Oil writers and researchers to respond quickly and fully to the claims of the CERA report. Second, Peak Oil proponents can also use the tools of public relations. For example, the press offices of Reps. Bartlett and Udall are to be congratulated for their press release distributed immediately after the one from CERA. Third, events like the CERA report in fact represent a tremendous opportunity for publicizing peak oil. Peak oil got more publicity last week than it had in many months. True, many of the items that appeared in the press had headlines like "Peak oil theory is bogus." However, public relations has a logic of its own, which is misunderstood by people from an academic or engineering background: "Any publicity is good publicity." Also, "You can turn any story to your advantage." The peak oil community desperately needs to become more sophisticated about public relations. Anger and righteous indignation about the CERA report are fine, but they don't lead anywhere. Better to learn the tools that make CERA and the oil industry so effective at PR. Public relations is the craft of dealing with the media, so as to advance the interests of your organization. It involves:
  • Understanding how reporters and the media work (e.g., timeliness, news hooks, journalistic style).
  • Cultivating contacts in the media and developing relationships.
  • Providing people in the media with information to help them do their job.
  • Determining what messages one wants to convey and planning strategies to deliver them.
Public relations is a good path for communicators: people with a gift for words or with a journalistic background. Anybody involved with an effort like peak oil should learn the basics. Public relations - the next step for the peak oil community. -BA

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