One of the questions that plagues me constantly is, “Why is energy journalism so bad?” Most mainstream articles about energy will leave you horribly confused at best, or horribly misled at worst. Today I will try to teach you how to read reports on energy without getting lost.....So which is it? How can three stories from a single source, published over a five-day span, simultaneously claim that supply is adequate and inadequate; and that prices would remain high due to strong demand, but would be so high that they would destroy demand?
...The author did not mention that the NPC report also included an alternative, “2035 Limited” scenario, in which North American production actually falls about 1 mbpd from 2010 levels. ...But a simple reality check should give any author pause before suggesting that some magical array of technologies will somehow double North American oil production over the next two decades, or that within the next decade unconventional supply in the U.S. and Canada, with a production cost in the range of $80 to $90 a barrel, will exceed supply in Saudi Arabia or Russia, where their production costs are half of that or less. And it doesn’t seem too much to ask that journalists bring a modicum of skepticism to their coverage of oil industry propaganda.
Let’s have another look at the chart of historical U.S. oil production, freely available on the EIA’s web site for anyone who cares to look at it:
That little bump at the end is what all the fuss over unconventional oil in the U.S. is about. I suppose if one ignores the production costs and flow rates and takes plenty of antidepressants, one could imagine that bump is a U-turn that could eventually send U.S. production back up and over its 1970 peak. But I assure you that once you spend a few thousand hours gaining literacy in the subject, such that you can read and understand these scenarios, such optimistic visions begin to sound more like whistling past the graveyard than serious forecasting.
Just remember this: In the eyes of most editors, an optimistic take on future supply is just good energy journalism. And a balanced, nuanced article with indeterminate conclusions doesn’t sell papers. But a pessimistic take (no matter how true, or buttressed by facts) is editorializing, which is bad.
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