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Energy Tribune Speaks with Charley Maxwell
Robert Bryce, Energy Tribune
Maxwell has been in the oil business for more than 50 years, beginning with a stint at Mobil Oil in 1957. In 1968 he began working as an energy securities analyst. Since 1999, he has been a senior energy analyst at Weeden & Co., a brokerage in Greenwich, Connecticut. Now 76 and showing no signs of slowing down, Maxwell has become one of the most quoted analysts in the business. He spoke to Robert Bryce at the John S. Herold Pacesetters conference in Greenwich on September 25. This is an edited transcript of their conversation.
ET: You’ve been in the energy industry for more than 50 years. What have you seen during your career that has disappointed you the most?
CM: The thing that’s most disappointing is that the oil business is just, in a sense, another business. You may be in oil, you may be in the lubricating part, you may be in the refining part, or the exploration part, but it’s just a business and it’s just like any other. But for some reason it requires specialized knowledge in many cases, and these people don’t run their companies like a business, they run it [like] some kind of personal fiefdom. I don’t think that is so much so in other industries,
… The oil business never seems to think about its future, and one of the reasons that they attacked [M. King] Hubbert was that he defined it in a way that they thought was unreal and unfair. Some thought it was unreal, some thought it was unfair. In any case, he defined it in a way that they could not stand, so they blamed him personally for it, which was silly. They were competing with a man instead of the ideas. He became a curmudgeon in the last part of his life because – he never expressed this – he effectively
believed he was victimized by his own success. They just picked him out as somebody to go after.
They didn’t argue with him. They just dismissed him, disdained him, ridiculed him.
(1 December 2008)
IEA WEO 2008 – Fossil Fuel Ultimates and CO2 Emissions Scenarios
LuĂs de Sousa and Euan Mearns, The Oil Drum: Europe
… Conclusions
The IEA presents a scenario for future fossil fuel use, based on doubtful reserves and production estimates that are significantly higher than the figures both the energy industry and independent researchers have assessed. This cheerful view of Man’s energy future is never set forth by the IEA in clear numbers or graphs. Instead, it is hidden behind scenarios provided by a third party (the IPCC) whose object of study is not energy.
Throughout these chapters, the IEA refers to potential climate impacts that imply a CO2 sensitivity parameter that is higher than that assessed by the IPCC and used by default in the temperature modelling software used. Such high sensitivity is incompatible with the empirical relationship between global temperatures and CO2 concentrations in recent decades.
These inconsistencies undermine much, if not all, the recommendations implicit in the 450 and 550 ppm policy scenarios. Our 2008 Olduvai Assessment suggests that CO2 emissions will fall this century with the exhaustion of fossil fuel reserves. This alone will provide the desired outcomes of the 450 and 550 ppm scenarios, without burdening the OECD and non-OECD countries with artificial constraints on their energy use.
The fossil fuel reserves and production estimates underlying our Olduvai Assessment are those produced in good faith by third parties (Samuel Foucher, Jean Laherrere, the Energy Watch Group and David Rutledge). We would be the first to agree that there are significant uncertainties in these data, and that these alone should not be used uncritically to plan the future energy supplies and CO2 emissions of mankind. The IEA should provide to us – their OECD clients – with their verifiable data on earth’s oil, natural gas and coal reserves so that mankind’s energy future and environmental impact can be properly modeled and forecast. WEO 2008 falls well short of this basic requirement, choosing instead to recycle dubious fossil fuel reserve estimates, and to draw similarly dubious conclusions about climate change from these, when their focus should be firmly fixed upon energy decline and growing energy poverty within the OECD.
(2 December 2008)
Interesting points that deserve a response from the IEA. From a lay perspective:
- Figures for coal reserves appear to be less studied and more uncertain than for oil reserves. In terms of climate change, coal use is more significant.
- How much faith should we put in estimates of CO2-sensitivity? The uncertainty is huge (e.g. because of tipping points) and the consequences disasterous. As Nassim Nicholas Taleb (“Black swan theory”) tells us, we have to be extremely prudent with “large-impact, hard-to-predict, and rare event beyond the realm of normal expectations.”
Much good discussion at original article. -BA
IEA WEO 2008 – World Oil Forecasts using Wikipedia Megaprojects, Dec 2008
Samuel Foucher (“Khebab”) and Tony Eriksen (“ace”)
In this analysis, Samuel Foucher (“Khebab”) and I (Tony Eriksen or “ace”) present an update of Wikipedia Megaprojects data. We also provide forecasts of future oil production, reflecting the Megaprojects data. The IEA uses megaprojects in its analysis and we reconcile our Megaprojects information to the data they provide in their report.
A wide variety of methods can be used to forecast future oil production. Each will provide different indications. Sam and I each make projections with megaprojects data, using somewhat different methods. Sam’s projections are shown in Figure 6. My forecasts are shown in Figures 8, 9, and 10. Despite our differing methods, the indications we produce are all substantially lower than the indications of the IEA.
(1 December 2008)
It’s nice to see some of the TODers using their real names. It helps with credibility for people who are unfamiliar with The Oil Drum. -BA
Court of Appeals judge: The bell tolls for hydrocarbons: what’s next? (PDF)
Hon. Richard D. Cudahy, Energy Law Review
Synposis: There are two major threats to the dominant, hydrocarbon-fueled energy regime in the world. First, there is the arguable peak in production and subsequent depletion of oil, the leading hydrocarbon and the world’s leading fuel. Second, there is global warming, which is significantly furthered by the combustion of oil and other hydrocarbons. These developments give rise to the same problem – a severe limitation on oil and other fossil fuels as a source of energy.
Many geologists are persuaded that oil production is currently at its peak and will soon sharply decline, but others, particularly economists, disagree. However, Peak Oil dictates the more urgent course and prudence requires that we pay heed. On the other hand, there is little scientific controversy about the anthropogenic sources of global warming and its restrictive impact on hydrocarbon use.
Responses to severe limitations on hydrocarbon use as fuel involve efforts to expand supply through development of substitute fuels and suppression of demand through demand response mechanisms, and otherwise, and through modifications to society and the economy. The supply approach would seek to maintain the existing energy base of civilization and its progressive development. Demand modifications might involve changes in society – even, in fanciful speculation, a slowing of “progress” or regression to a simpler era. Again and even more fancifully, history, based on the availability of energy,
Again and even more fancifully, history, based on the availability of energy, might tend to become cyclical rather than progressive in terms of development. There would be some differences between a decline in hydrocarbon availability based on the depletion of oil in contrast to one based on concern about global warming. Depletion of oil leaves other hydrocarbons available while global warming demands action on all fronts.
Senior Circuit Judge, United States Court of Appeals for the Seventh Circuit. Judge Cudahy has taught Energy Law at George Washington University Law School and DePaul University College of Law and has written extensively on the subject. Judge Cudahy wishes to express his appreciation to John Roberts, Jr. and David Finkelstein, his law clerks, for all their assistance in preparing this Article.
(2008)
Long article. From the Energy Law Journal, Volume 29, No. 2 (2008)
