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Opinion ‘Peak oil’ somehow never arrives, but COP26 may have achieved peak climate hysteria

Members of the Red Rebel Brigade protest in Glasgow, Scotland, during the COP26 climate conference, on Nov. 8. (Andy Buchanan/AFP via Getty Images)

Peak oil production has been postponed, again. Peak hysteria about climate change, however, might have been passed.

In 1914, the government said U.S. oil reserves would be exhausted by 1924. In 1939, it said the world’s reserves would last 13 years. Then oil fueled a global war and the post-war economic boom, and in 1951 the government said the world had 13 years of remaining reserves. In 1970, the world’s proven reserves were estimated to be 612 billion barrels. More than 767 billion were pumped by 2006, when proven reserves were 1.2 trillion. In 1977, President Jimmy Carter predicted the exhaustion of the world’s proven reserves “by the end of the next decade.” By 2009, the world had consumed three times more than 1977’s proven 1.2 trillion barrels, and today’s proven reserves are above 1.5 trillion.

All this disappointed those who desire scarcity of everything but government, which they think can engineer comprehensive social change by becoming the allocator of scarce resources. Such people filled the Glasgow, Scotland, streets outside the climate summit chanting “System change not climate change.”

The 33-year-old student who told the New York Times “We need a whole system change” was correct: The “system” — industrialism, enterprise, markets, economic development that expands the global middle class, economic growth that funds the social safety nets of developed nations with aging populations — is incompatible with “keep 1.5 alive.” Meaning the goal of limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit).

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This limitation will not happen. This nonoccurrence will be tolerable.

Since 2010, the New York Times reports, the great majority of the $1.1 trillion of private equity energy sector investments have been in fossil fuels, just 12 percent in renewables. The stock prices of major U.S. coal-mining companies rose at least 145 percent in the past 12 months. The amount of coal used this year to generate U.S. electricity will be more than 20 percent above last year’s amount. This might be a short-term phenomenon, produced by declining oil prices that cut shale operations and natural gas production. But nothing is more expectable than the regular occurrence of unexpected things, such as the awkward decline of Northern Europe’s power-generating winds as Glasgow drew near. (Fossil fuel-generated electricity kept the lights on for the enlightened.)

The Energy Information Administration projects that fossil fuels, which were 84.2 percent of global energy consumption in 2010, will decline only to 70 percent in 2050. India, which no later than six years hence will have the world’s largest population, and which already is the world’s third-largest source of greenhouse gases, said at Glasgow it will try to achieve net zero carbon emissions — by 2070.

India, with one-thirtieth the U.S per capita gross domestic product, cannot be faulted for barely disguising its Scarlett O’Hara stance regarding climate change: “I’ll think about that tomorrow.” Consider all that was unimaginable about 2021 in 1972: the transformation to a service economy, air conditioning — an adaptation to difficult climate — that enabled the Sun Belt to boom, etc. Now, imagine how remote 2021 will seem in 2070, when the world certainly will have unimagined worries of currently unknowable natures.

The Hoover Institution’s John H. Cochrane, a.k.a. the Grumpy Economist, notes that even with extreme assumptions about increased global temperature and negligible adaptation measures, it is difficult to postulate a cost larger than 5 percent of global GDP by 2100. Even assuming meager 2 percent growth, U.S. GDP in 2100 will be 400 percent larger than now. At 3 percent compounded growth, there will be 1,000 percent more GDP than now. From 1940 to 2000, Cochrane reminds, there was 3.8 percent compound annual growth, and GDP increased 10-fold.

Cochrane says: Suppose, implausibly, that Miami might be six feet below sea level in 2100. Amsterdam has been such for centuries. It built dikes. By hand. There is, he notes, “great disdain for adaptation.” Of course: The disdainers worry that adaptation might obviate the need for radical government micromanagement of life.

Cost-benefit analyses illuminate choices and budget constraints. “Without numbers,” Cochrane warns, “we will follow fashion. Today it’s windmills, solar panels, and electric cars. Yesterday it was high-speed trains. The day before it was corn ethanol and switchgrass.”

Tomorrow? There will be other prospective salvations. But, says Cochrane: “Notice how our policy-makers never tell us how much they think each new policy will reduce year 2100 global temperature or raise year 2100 GDP. The reason is that the numbers are tiny.” The gigantic numbers concern the resources we will squander until we follow numbers rather than fashions.