The way I saw things

August 23, 2013

I often find myself wondering where my life would be today had I not stumbled across The Oil Drum in 2005. I don’t know that I would still be writing today were it not for my early experiences with TOD readers. As TOD winds down, I thought I’d share my story, which I have not told before.

In 2005 I was a chemical engineer at the ConocoPhillips Refinery in Billings, Montana. I worked in the group that among other things did refinery economics. We optimized the refinery for which crude slates to run and how the refinery should be run, depending on the crude slate as well as whether margins were higher for diesel or for gasoline. We could shift production about 5% one way or the other. We often joked about the fact that my boss was the Director of Optimization, Process, and Economics (the “DOPE”).

At that time the Montana government was in the midst of trying to implement an ethanol mandate for the state, and the refinery manager knew I had some background with ethanol from my graduate school days at Texas A&M University. So whereas other refineries in the state were sending their plant managers to testify, I was asked to go to the Montana State Legislature to provide testimony on this bill. As I was preparing for my testimony, I wanted to be sure I also emphasized the dangers of being overly dependent on a depleting resource like petroleum. I wanted the legislators to know that my testimony was not to maintain the status quo, but that instead we needed a different model. In the course of preparing my testimony, I read The Long Emergency and Twilight in the Desert – both books that had a big impact on my thinking — and I began to frequent The Oil Drum and make comments.

I had started a little blog I called R-Squared – a play on my initials but also a term frequently used by engineers – to document and archive my findings as I prepared for my testimony at the legislature. I found that there was so much misinformation related to ethanol that I began to write essays debunking these claims. At some point Kyle Saunders, aka Professor Goose, asked me if I would become a contributor and share some of these articles at The Oil Drum as he felt like they could use some people with oil industry experience.

As a side note, when I started my blog I was really looking for a hobby. I wanted something to take up a bit of time in my day. I narrowed it down to learning to brew beer (I actually read some books on this and investigated setting up the equipment) or to start writing about energy. Needless to say, I chose the latter and I still don’t know how to brew beer.

Not long after joining TOD, I talked a TOD poster known as “thelastsasquatch” into posting under his real name. I thought his postings were superb, and that the moniker behind those postings should take credit under his real name. That’s how TOD and the rest of the world came to know Nate Hagens. You’re welcome.

In those early days on TOD some people didn’t know quite what to make of me. I certainly agreed that we faced a serious problem and had to do something about it, but also, because of my experience from working in the industry, took the unpopular position that in 2005 oil was not yet reaching its peak. I also took issue with the Hubbert Linearization (HL) technique that was being used to suggest that peak was taking place in 2005.

I devoted several posts to showing that the HL technique didn’t in fact work that way by doing a series of backcasting. What I discovered was that using historical cases, the HL could not have reasonably predicted peak oil in the US until about seven years after the fact. But the most damning indictment of all is that I took a hypothetical case of a country in which oil production increased slightly each year for eternity – and yet the HL predicted a peak.

I took a lot of flack from some TOD posters for this work, but I also received support from popular posters like Stuart Staniford who proclaimed that this case indeed showed that HL can’t be used in the way it was being used to make a peak claim in real time. As Stuart said, I had shown that the HL technique doesn’t really work that way. Some readers responded by suggesting I had ulterior motives, and the experience left a bad taste in my mouth.

Usually my posts were about how the energy industry really worked. I also spent a lot of time debunking claims around various biofuel technologies. I highlighted the problems at Range Fuels early on, and think I was the first to publicly proclaim that the emperor had no clothes long before they went bankrupt. Along the way I coined the term “XTL” (right here on TOD) to describe various (biomass, coal, or natural gas) “to liquids” technologies in which the carbon source is converted to synthesis gas and then subsequently to liquid fuels by the Fischer-Tropsch process.

I also coined the term “Peak Lite” to refer to a situation that behaves like peak oil, but isn’t a true peak because production is still rising. After all, peak oil really means that there is not enough oil to meet demand, and prices will become very volatile. But that situation doesn’t require a production peak to occur; rapidly increasing demand in the developing world can achieve the same thing: Not enough oil to supply demand at a certain price point, and prices inevitably rise.

Some interpreted my usage of peak lite to mean that peak oil will be a “lite” event, but that’s not what I meant. It is simply “lite” because it has the symptoms of peak oil without actually being peak oil. Another way to think of peak lite would be to consider it as peak oil as a function of price. Peak lite may imply for instance that the world has already passed peak $25/bbl oil. If oil prices were at that level, we would see oil production declining rapidly. But supply and demand work together to set prices, and I think many peak oil advocates underestimated the effect higher prices would have on oil production.

I eventually met quite a few contributors and readers at ASPO conferences I attended (and presented at) in Sacramento, Washington D.C., and in Austin. What sucked me in and kept me writing were the debates with others in the TOD community. People were reading, and they were engaging. This kept me interested. I like to write to educate, but in many cases I found that I learned just as much from readers – many of whom also had industry experience. I was happy after writing an article if I had learned something new.

Most people at TOD would consider me a bit of a contrarian in that I was not in the early peak (~2005) camp, but I still took peak oil very seriously and thought the world needed to be preparing for the possibility of a crisis. My position falls very much into the category of people like Robert Hirsch, Jeff Rubin, and Stuart Staniford. I was particularly concerned that by loudly predicting a date for peak oil (e.g., 2005) that the implications would be severe loss of credibility if that was shown to be another incorrect prediction of the timing of peak oil. I was worried about the boy crying wolf too many times. My own position tended to be “Peak oil soon, but not yet. I believe we have a few more years, but we can’t waste them.”

I tried to explain to people why we really use (and will continue to use) fossil fuels. I tried to give people a better understanding of how the oil industry works, as I feel most people have a comic book understanding of what goes on inside the industry. I tried to reason with people who protested the oil industry in general and to get them to understand what the world would be like if the oil industry suddenly stopped producing oil. (I am not suggesting that the oil industry is without flaws, but I think most people can’t comprehend what their lives would be like without it).

I ultimately found myself more at odds with the general consensus of TOD readers, and as a result I spent more time writing on my own R-Squared Energy Column. (Those of you who like to talk energy are more than welcome to drop by and engage in discussions with our many columnists). I was also sidelined for a while because I was asked to write a book along the way (Power Plays: Energy Options in the Age of Peak Oil), and in it I very much emphasize the risks to the world of peak oil.

In the end, I wasn’t contributing as much to TOD, but I did contribute half a dozen articles last year (including the most read and 7th most read articles of the year). But I also checked in with Drumbeat every time it was posted, because I don’t think there is a better collection of energy-related news links out there. I am amazed that Leanan continued to do this as long as she did, and many of us are grateful that she did.

To close, I will repeat something I repeated many times here. I know many of us think we are dead certain about what the future holds. But nobody on TOD predicted that US oil production would turn around as the fracking revolution began to turn oil and gas resources into reserves and subsequent production. In 2005 if someone suggested that by the end of the decade US oil production would be rising rapidly they would have been laughed off the site. We should take those lessons to heart. Keep an open mind.

There will be many surprises along the way. So remember that there is a lot of uncertainty about the future, and we shouldn’t be too quick to ridicule alternate viewpoints about how things may play out in the interim. It is my philosophy that it is much better to operate with some level of uncertainty and be generally correct than to operate with dead certainty and be dead wrong. Although admittedly I am amazed that some can be dead wrong again and again and still maintain faithful followings.

Yes, peak oil is still very much a threat, but we don’t know exactly when the most serious consequences might manifest themselves. $100/bbl oil is certainly a hardship for many, but it is still mostly business as usual to this point. People sometimes ask me for advice on what to do given the threat of peak oil, and I generally say "Live your life, take care of your loved ones, and just try to make the world a slightly better place."

Thank you to the TOD community for the influence you have had on the course of my life. I am not sure which direction I might have gone without the early opportunity to write for TOD, and more importantly without the valuable feedback I got from TOD readers. Don’t be strangers. Stop by my site, or find me on Twitter, LinkedIn, or Facebook and let’s keep the conversation going.

Tags: Energy, Oil