That was the industry's story right before a decade-long climb in oil prices that ended with an all-time high in 2008. Only the oil industry would now have the audacity once again to peddle a story that it has gotten wrong for more than a decade as if it were brand new. Enlisting the media and its army of paid consultants, the industry is once again telling the public that oil abundance is at hand. And, what is doubly audacious is that it is promoting this tale as oil prices hover at levels more than eight times the 1999 low. Clearly, the industry is counting on collective amnesia to shield it from ridicule.
The industry's purpose is transparent: To ensure that the world remains addicted to fossil fuels by convincing all of us that our energy sources--more than 80 percent of which are fossil fuels--don't need to change. It's a winning strategy even if the industry's premise is wrong since the oil companies still have huge inventories of fossil fuels underground that they want to sell at top prices. And, they are only going to get those top prices if government, businesses and households fail to convert to alternatives and thus remain hostage to fossil fuels.
In a stroke of public relations genius, the industry recently sent one of its own, Leonardo Maugeri, an Italian oil executive, to moonlight as a "research fellow" at Harvard. It's hard to imagine a more prestigious name to use to propagate the industry's consistently overly optimistic pronouncements about oil supplies--even though we are told in italic type at the bottom of Maugeri's policy brief that "[s]tatements and views expressed in this policy brief are solely those of the author and do not imply endorsement by Harvard University, the Harvard Kennedy School, or the Belfer Center for Science and International Affairs." Guess how many media outlets printed that disclaimer.
You can find Maugeri's report here. What you won't find there or in current media accounts are his consistently failed predictions about rising supply in the last decade, supply that was supposed to result in a flood of oil. Here's one gem from 2006 in a piece he authored forForbes Magazine: "A plausible forecast is that by the end of the decade the daily demand for oil will have expanded by 7 to 8 million barrels. If global production continues at present rates, it could grow by 12 to 15 million barrels per day in that period. In other words, there is more than enough oil in the ground." Maugeri's contention was that high prices would result in a supply response that would bring back the good old days of abundance. Of course, no one covering his recent policy brief bothers to mention that his 2006 prediction turned out to be wrong, and not by just a little. World oil production has been flat since 2005. His vaunted supply response never materialized.More
