One of my ongoing frustrations with energy and environmental issues is the dreadful quality of the treatment of them by the mass media. Between the mindless hyping of hydrogen fuel cell vehicles and clean coal, to a refusal to talk about global warming beyond the “it’s bad we need to emit less CO2″, I spend more time yelling at my TV, computer screen, or radio than I care to admit.

There are some exceptions, particularly in the business press, where people who actually understand what “peak oil” means often get a fair hearing. I don’t even mind (at least not too much) the way those media outlets almost universally resort to the “faux balance” tactic of having someone on at the same time who tells us not to worry, be happy, and vote for more tax breaks for the oil companies. Keeps the debate going, and hey, it’s good for ratings, which is the only thing the large media companies care about.

This simmering annoyance with the media is why I feel an obligation to point out those mainstream treatments that seem to be at least reasonably enlightened, even when they dance right up to the truth and then trip over their own feet. A case in point comes from our friends in Canada at the Globe and Mail, in the article, Reserves don’t matter as much as the cost of getting the oil out the ground:

Reserves on their own don’t matter. What matters is the cost of getting the reserves. Shell’s investment per barrel of oil and gas has increased fourfold in just three years, a period during which the oil multinational’s output has not increased. The company displayed another chart showing the average spending of the big oil companies. Per barrel of hydrocarbons, spending rates were pretty static during the 1990s at between $5 (U.S.) and $6 a barrel. In 2003, the rate of investment began to escalate and is now shooting higher, rising at an alarming pace. Last year, the average investment per barrel was just shy of $15.

On top of that, you must load the daily cost of operating wells and pipelines and the colossal overhead of running a big oil company. Moreover, we know that the $14-to-$15-a-barrel average investment is just an average and it is rising. Every new barrel is a more expensive barrel because in order to get the oil, Western oil companies must push the technology envelope even further, into deeper water and more heavy oil, such as Alberta’s oil sands. The only giant discovery of the past decade has been Tupi, the eight-billion-barrel oil field discovered offshore of Brazil in water depths of two kilometres.

Technology is expensive, but it is the materials, manpower and energy cost that hurts. Shell estimates that the operating cost per barrel of the Athabasca project is between $20 and $25, of which a third is energy - the cost of natural gas used to heat water to extract bitumen from sand. Shell won’t reveal the capital cost of an Alberta oil sands barrel, but it is certainly a lot higher than its average of $7 and likely near the top rate of $15 to $20.

…

That [a bust cycle] can happen only if the West’s big oil companies repeat their achievements of the 1970s and 1980s with a series of exploration successes, such as Brent and Forties in the North Sea and Prudhoe Bay. The worry is that today’s spending is not delivering many more barrels, just more expensive barrels. The cheap barrels are out of reach in Iraq, Iran and Russia. It’s not peak oil we have to worry about but oil inflation.

They got it right through about 90% of the article, only to veer into the nearest ditch at 100MPH in the last paragraph.

I will never understand why so many people have such a hard time getting that the “oil inflation” we’re experienced over the last several years is the beginning of peak oil’s impact. It’s not two completely distinct phenomena, but different stages of the same process. It’s directly analogous to the global warming situation, where we saw evidence of a warming planet for years before the changing climate started causing or contributing to drought, low-lying coastal farmland in Asia being infiltrated by sea water, small island natins being swamped by rising sea levels, etc.

I realize there’s a way to argue that the oil prices we’re seeing and the peak oil phenomenon really are two different things. There’s no a priori reason why we would have prices rise only because of the approach to the pea and the inability of cheap oil to meet world demand. But to believe that one would have to accept that the decline of cheap oil in readily accessible areas agrees completely with a near-term peak oil scenario, but then to say that it doesn’t apply to the less-conveniently located (from a geopolitical standpoint) oil reserves by… what magic, exactly? Are we to conclude that “cheap barrels [that] are out of reach in Iraq, Iran and Russia” are somehow immune to the basic fact that you can’t consume a non-renewable resource forever? Or is it that those reserves are so immense that they can be developed enough to both meet growing world demand and compensate for the lost oil production elsewhere?

I suspect we’ll see a lot of back-and-forth on this issue in the coming years. All the most reasonable, to my eye, predictions say that we will see world oil production rise for a few more years–that’s what any prediction that says we’re not at the peak right now means. We finally seem to be coming off the 2005-2007 production plateau, which will cause no end of chest thumping from the cornucopians about how peak oil was a Bob Lutzian “crock”, which is precisely the equivalent of the global warming deniers saying that because one year or one month or one day is unusually cold that the planet is warming and we should ignore the IPCC, Al Gore, et al.

In this context, perhaps one of the scariest things I’ve ever heard is the observation that reality is that which, when you cease to believe in it, still exists.