British Petroleum ranks as one of the lead members of the peak oil denial club. ASPO’s Colin Campbell and Kjell Aleklett both took BP to task for recent comments slamming the peak oil perspective, even denying its validity. (More on the latter point in a moment.)
But it wasn’t always this way. Just over a decade ago, and as recently as 2001, one could fairly say that-based on at least two notable points made over a 5-year period-BP ranked as one of the more realistic oil majors when it came to looming world oil production limits.
Back in January 29, 1996 issue of the Oil & Gas Journal, London-based columnist David Knott featured Colin Campbell vs. BP’s senior economist Paul Appleby in a piece entitled “Reserves Debate.” Appleby hadn’t wandered off the reservation with his comments; in fact, Knott quoted the economist from a piece Appleby wrote for a house magazine published by BP. Some clips from Knott’s piece:
“Appleby, sounding the optimist’s view, said this reserves growth and new discoveries have enabled total reserves to grow faster than production. ‘By this measure, rather than running out of oil we seem to be running into it. The perception of oil as a dwindling resource seems to be a hangover from the late 1970s.’”
“BP predicts that within the next 15 years the industry will reach the point at which half of the world’s oil reserves will have been recovered. Appleby said worldwide oil production will flatten and start falling by 2010.”
Yes, the first point is one often made by today’s peak oil denial gang-Cambridge Energy Research Associates, Exxon-Mobil, the US Energy Information Administration, and individuals like economist Michael Lynch. But the second point put BP squarely in the realistic camp. Peak oil by 2010-that statement from an approved BP source made Knott’s piece an instant keeper.
Fast forward to late January 2001, in Davos, Switzerland, where the tony World Economic Forum met to discuss perceived global concerns. Among the issues aired was a panel entitled “The Price and Supply of Oil.” Presenting for BP was none other than CEO Sir John Browne, alongside CERA’s CEO Daniel Yergin and Venezuela’s President Hugo Chavez. Here’s the key statement from Jeremy Warner’s article of January 29, 2001, published in The Independent (UK newspaper) and entitled “Future of Oil Supplies.”
“The BP chief executive is predicting that world oil demand will rise by 2 per cent a year for the next 10 years up to a peak of about 90 million barrels of oil a day, a level he believes might be close to the industry’s maximum production capacity. Furthermore, with developments in technology, allowing deep water drilling in the Gulf of Mexico and elsewhere, that level of production might be maintained for 30 or 40 years before known oil reserves begin to run dry.”
There you have it: peak oil by 2010 at 90 mmb/day, plus or minus, followed by an enormously long plateau. End of story? Not even close. Within months, BP became a full-fledged member of the peak oil denial club. Most recently, if you haven’t read the November 2008 ASPO-Ireland newsletter, Colin Campbell laid out the latest view from BP’s chief economist Christof Ruhl, who stated the following in an interview published Oct 1, 2008:
“Physical peak oil, which I have no reason to accept as a valid statement either on theoretical, scientific or ideological grounds, would be insensitive to prices. In fact the whole hypothesis of peak oil – which is that there is a certain amount of oil in the ground, consumed at a certain rate, and then it’s finished – does not react to anything.
And you can turn anything into oil into if you are willing to pay the financial and environmental price….It is more likely that demand will peak, which is what we are seeing in Japan and in Europe…Peak oil has been predicted for 150 years. It has never happened, and it will stay this way.
Why did BP end up rejecting their more realistic view of peak oil that they held at least between 1996 and January 2001? How could Christof claim peak oil “has never happened” when the UK had clearly peaked back in 1999? One strongly suspects that CERA’s Yergin whispered long and hard in Browne’s ear right after their 2001 panel, possibly over a few Davos martinis.
Perhaps BP decided it was not in their stockholders’ interests to acknowledge the looming reality of peak oil. Perhaps leadership perceived the resource as being sufficiently large that they could for now ignore the fact that world oil production has been relatively flat for the last three-plus years and will likely struggle going forward in the deteriorating economic climate. Whatever the cause of BP’s most recent definitive denial, their present position makes it harder for today’s public- and private-sector decision makers to both grasp the significance of the peak oil dilemma and make a commitment to respond proactively to it.
(Note: Commentaries do not necessarily represent ASPO-USA’s positions; they are personal statements and observations by informed commentators)
Steve Andrews has been a Denver-based energy consultant and freelance writer for over 25 years. After interviewing Dr. M. King Hubbert at his home during the 1980s, Steve steadily followed the world oil picture. He began speaking and writing about world oil issues during the 1990s and he co-chaired Denver?s “World Oil Forum?When Will Global Oil Production Peak?” in 1998. After attending and presenting at previous European ASPO Conferences, he helped establish ASPO-USA in 2005.
