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Oil Panic and the Global Crisis: Predictions and Myths

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This book offers a fresh perspective on the global oil crisis, and uses facts and clear illustrations to counter much of the common wisdom and myths about oil depletion. For example, Hubbert's famous prediction of when oil production will peak is widely thought to have been incredibly accurate; Gorelick explains why this is not the case. The book's prose is clear, well-written, and easy to read, while simultaneously educating and enlightening the reader.

In contrast to previous works that have focused on advocating a particular position with respect to the "peak oil" debate, this book carefully and rigorously examines arguments on both sides of the question. From this analysis it becomes apparent that the peak oil argument in its simple form doesn't stand up to close scrutiny. It is important to note that Gorelick is by no means claiming that oil supplies are infinite. Rather, he points out that the ultimate size of these resources is poorly known, but much larger than the conservative estimates preferred by peak oil advocates. This is due in part to an historic tendency to consistently underestimate true resource size, and in part to continuous development of new extraction technologies. Gorelick also points out that past oil production rates are principally a record of consumer demand, rather than of resource availability.

The book is clearly written, well-organized, and extensively referenced. It is well suited to use as a textbook, but also an interesting read for anyone wanting to learn more about this subject.

Why do we pay so much at the pump? What are the true cornerstones of the oil crisis? Are we fighting for a resource that's nearly tapped or for control of a product still flowing freely? Steven Gorelick's approach to these timely and pressing questions is nothing less than refreshing. Not for reasons of false optimism or of stoking fires, but for his levelheaded approach, showing the best research from both sides of the debate on how quickly we absolutely need to grow out of our oil dependency as a planet. The answers, also refreshing, often illustrate that we just might get past the oil jones before our supply runs dry.

After reading a few of the sample pages of Oil Panic and the Global Crisis here on Amazon.com, I was drawn into the concise, thoughtful writing of Gorelick and to the clear statistical illustrations (i.e. the many charts and graphs peppering his work), which rather than bog down the layperson's appreciation of the flow of information, supplemented it and drove its points home. I immediately wanted to review the book for The New York Post, where I am a freelance writer. The review was printed in the December 6, 2009 edition of the Sunday Post, and can be viewed online here: [...]

Highly recommended for students, professors, and anyone interested in the ins and outs of the state of global oil supply.

Oil was first discovered by "Colonel" Edwin Drake in 1859. This oil was distilled to kerosene for illumination to alleviate the shortage of whale oil. Even with the rather modest demand for kerosene, supplies fluctuated, which spurred some wild fluctuations in price. Soon thereafter the four-stroke engine was invented and by the time Henry Ford started mass production of the Model T in 1908, the demand for oil (gasoline distillate) expanded greatly. As dependency grew so did a fundamental worry that the world was soon to run out of oil. But rather amazingly, from 1900 to the early 1970's the price of oil remained fundamentally unchanged (~ $27/barrel in 2008 dollars). Not until the artificial manipulation of production by the oil cartel and a number of wars in the Middle East did the price of oil rise precipitously. As the price of oil climbed towards $80/barrel, conventional wisdom indicated these prices would continue to rise and high prices would be with us forever. But by the early 1990's the price collapsed to around $10/barrel. As we entered the 21st century the price of oil began to again rise and so did the number of books proclaiming the end of oil.

Should we now believe that we have reached the peak of oil production? Will the sustaining price of oil climb to $100, $200 or even $500/ barrel as some pundits are predicting? Is the worry about oil a fundamental premise for military involvement in the Middle East? Exactly how much oil does exist in the world? The answers to these questions are not as straightforward as one would like. For the past 150 years all such predictions about oil supply and future oil prices have been woefully wrong. Steven Gorelick's book, Oil Panic and the Global Crisis provides a thoughtful analysis of this issue and arms one with the tools to better evaluate data and analyses of oil supply and demand. Lives have been lost and billions of dollars squandered because of faulty thinking about our oil security. There are many reasons why we should be moving away from oil and having a knowledgeable understanding of global oil resources allows us to transition to a clean and more sustainable energy base. Gorelick's book is a must read for anyone who cares about the security of our future and wants to really understand the state of oil resources.

Central question on everyone's mind, given the importance of crude oil in our lives is - are we running out of the crude stuff? No one discounts the fact that oil is a non-renewable and finite hydrocarbon, but the positions people take on either side of the peak oil hypothesis evoke fierce emotions. The author of this book - Steven M. Gorelick - examines both sides of the argument and allied topics on the subject at length.

Neither side, their respective stances and arguments are free of some pretty major assumptions, Gorelick notes. He examines data and market conjecture that both supports and rejects the idea that the world is running out of crude oil. In a book of just under 250 pages split by five detailed chapters, Gorelick has tackled the subject head-on. Prior to entering the resource depletion debate, he charts the landscape, outlines the history of the oil trade and crude prospection, exploration and logistics in the first two chapters.

Following on from that, the next chapter discusses the resource depletion argument followed by a refreshingly well backed-up chapter offering counter arguments to imminent global oil depletion. The veracity of the research is simply unquestionable and the figures are not substantiated by rants or guesswork, but by a methodical analysis which makes the author's argument sound extremely persuasive.

Gorelick notes that while the era of "easy" oil may well be over, how much oil is extracted from difficult sources remains to be seen. I quite agree with the author that the next or shall we say the current stage of extraction and prospection would ultimately be dictated by the price of oil. Many commodities traders believe a US$50 per barrel price or above would ensure extraction from difficult to reach places. However, that is not to say that a high price equates to the planet running out of oil according to the author.

Every key topic from the Malthusian doctrine to M.K. Hubert's approach, from Canadian Oil sands to drilling offshore and the relative cost of imported oil for consuming nations has been discussed in context of the resource depletion debate and in some detail. The text is backed-up by ample figures, graphics and forecasts from a variety of industry recognised sources, journals and organisations. Unlike a straight cut bland discourse, the narrative of this book is very engaging.

It may well be data intensive, but if the whole point of the book is substantiating an argument - then the data adds value and makes for an informed argument - for which author deserves full credit. In all my years as a journalist who has written on oil and follows the crude markets closely, I feel this book is the most engaging, detailed and well written one that I have come across in its genre. I am happy to recommend it to commodities professionals, economists, students and just about anyone interested in reading up on the oil depletion debate.

Kind regards,
Gaurav Sharma
[...]

Most books take a viewpoint and pound it in the reader through repetitive use of anecdotal information. If you agree with the viewpoint, it's a fun read; otherwise, you may not finish it.

Gorelick provides a much better approach to the questions of peak oil production and how long before we run out. He looks at all sides of the issue and analyzes specific questions using a variety of approaches that make good sense and leave the reader understanding how he derives his conclusions. His ample use of well-designed graphics contributes greatly to the clarity of the presentations, but it is his disciplined use of logic and scientific skepticism that really makes this book exceptional. No great leaps of faith are required. Neither are you left wondering about the hidden and unacknowledged assumptions made by the writer. Gorelick builds his case with iron-clad logic, but with a fun-to-read, easy style.

It turns out a fundamental assumption in predictions of peak oil production is flawed. That assumption is that the rate of oil production growth will be mirrored in the decline of production. Gorelick thoroughly debunks peak oil predictions, showing that even in the US, production decline is not as steep as predicted. Likewise, he demonstrates that whenever future reserves have been estimated from the 1950's to the present, the world seems to have 30 to 40 years of oil remaining. So, regardless of huge increases in demand for oil and fantastic leaps in technology, we always have about the same years of future oil left. We always have in reserve what is economical to discover.

The real value of this book to me is reaffirmation of the value of scientific skepticism to challenge the assumtpions that underlie many of the larger policy issues we face. Policy is driven by perceptions of reality based on a technological or scientific assessment, and the strong tendency is to build upon these assesments without ever looking back. Thus are errors compounded. Maybe this book will inspire someone to challenge and test other assumptions driving public policy today, such as those involved in climate change modelling.