Will fracking lead to cheap oil for all? Not necessarily

Ceteris paribus. Always with the ceteris paribus.

FT Alphaville's Kate Mackenzie has an excerpt of a very interesting research note from energy consultant Phil Verleger. The bulk of the note is a look back at the apparent vindication of MIT economist Morris Adelman, who rejected the ideas of "peak oil" at the time when they were most fashionable. Adelman, Verleger writes, accurately surmised that technological advances would mean the total reserves are far less predictable than a narrative of rising prices and increasing scarcity would imply.

But Mackenzie picks out the surprising twist in Verleger's note. While he, like so many others, points to the massive change wrought on the global energy market by the invention of fracking and other techniques for extracting unconventional reserves, he doesn't see that as leading to a predictable fall in prices. While a glut of unconventional oil would be good enough to depress prices, it couldn't simply replace the traditional OPEC countries. And the way they would deal with that squeeze could have strong repercussions:

Periods of low oil prices will undermine existing governments in nations such as Russia, Kuwait, Iraq, Algeria, Nigeria, Iran, United Arab Emirates, and Venezuela. These countries have not used oil revenues to diversify economies and build infrastructure for the post-petroleum future. Instead the monies have gone to fund larger and larger transfer (welfare) payments to mushrooming populations.

Adelman’s vindication will mean these nations must curtail such payments when they are forced to cut sales and production sharply or when prices fall. Political instability will increase as such times.

Supply and demand are complicated things. There's a reason economists love the phrase ceteris paribus – "all else being equal" – and thats because most of the time, they aren't. Fracking will introduce a downward pressure on prices, we know that. But the responses of the multifarious other producers and consumers to that pressure are chaotic and barely predictable. A simple prediction of a world of cheap oil might not be as safe a bet as it seems.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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An alternative Trainspotting script for John Humphrys’ Radio 4 “Choose Life” tribute

Born chippy.

Your mole often has Radio 4’s Today programme babbling away comfortingly in the background while emerging blinking from the burrow. So imagine its horror this morning, when the BBC decided to sully this listening experience with John Humphrys doing the “Choose Life” monologue from Trainspotting.

“I chose not to choose life: I chose something else. And the reasons? There are no reasons. Who needs reasons when you’ve got Radio 4?” he concluded, as a nation cringed.

Introduced as someone who has “taken issue with modernity”, Humphrys launched into the film character Renton’s iconic rant against the banality of modern life.

But Humphrys’ role as in-studio curmudgeon is neither endearing nor amusing to this mole. Often tasked with stories about modern technology and digital culture by supposedly mischievous editors, Humphrys sounds increasingly cranky and ill-informed. It doesn’t exactly make for enlightening interviews. So your mole has tampered with the script. Here’s what he should have said:

“Choose life. Choose a job and then never retire, ever. Choose a career defined by growling and scoffing. Choose crashing the pips three mornings out of five. Choose a fucking long contract. Choose interrupting your co-hosts, politicians, religious leaders and children. Choose sitting across the desk from Justin Webb at 7.20 wondering what you’re doing with your life. Choose confusion about why Thought for the Day is still a thing. Choose hogging political interviews. Choose anxiety about whether Jim Naughtie’s departure means there’s dwindling demand for grouchy old men on flagship political radio shows. Choose a staunch commitment to misunderstanding stories about video games and emoji. Choose doing those stories anyway. Choose turning on the radio and wondering why the fuck you aren’t on on a Sunday morning as well. Choose sitting on that black leather chair hosting mind-numbing spirit-crushing game shows (Mastermind). Choose going over time at the end of it all, pishing your last few seconds on needlessly combative questions, nothing more than an obstacle to that day’s editors being credited. Choose your future. Choose life . . .”

I'm a mole, innit.