The Oil Industries Fake Abundance Story: Is Distortion of the Truth Ever Appropriate?

Abstract:

The oil industries and their cornucopian supporters (press, politicians, energy agencies) promote the story that in the oil is abundant and oil production will increase. The reality is that 1) World crude oil production has been on a plateau since 2005, in spite of new technology (fracking), record high prices (Brent Oil > $100 per barrel) and record spending on exploration and development ($5.4 trillion over the past six years) and 2) The price of oil has risen steadily from 1999 to present. Typically when commodities are abundant the price tends to fall.

How is this reality being distorted? 1) Resources are being equated with reserves (both are amounts), neither of which can be equated with each other or with production (a rate). 2) Crude oil (the price or which is rigorously defined by API density) has been redefined as total liquids, which includes substances (lease condensates, natural gas liquids, biofuels, refinery gains) which can not be used in the same way oil is or sold for the same price as oil. If what you are selling cannot be sold on the world market as crude oil, then it is not crude oil. 3) The demand for oil remains high, but World production is stagnant and World net-export production has been decreasing since 2005. Thus the price remains high and will only increase in the future. Growth in Global GDP is impacted by high-priced oil.

How do you know unethical behavior when you see it? It has to do with intentionality and motivation. “Advocacy science” often reports data to support their cause. Is that unethical? Where is the divide between being an “Issue Advocate” and “Advocacy Science”? If data are reported poorly, is it unethical or just “bad science”? Do the same ethical standards apply to businesses (when profits are involved) and politicians (when elections are at stake)? Why would the definition of oil include NGL, condensates and refinery gains if not trying to inflate the numbers. The standards should be the same, but when there are no reliable independent sources of data, different definitions and uncertainty in the data allow a range of interpretations. Within these limits it allows some to bend the truth for their needs.

What is the solution? With so much at stake, why have the uncertainties in these issues been so poorly examined by the academic community? Doing so will encourage alternative sources of energy to be developed.