Editorial Comment

	Vol. 224 No. 2
THOMAS R. WRIGHT, JR.,  PUBLISHER

 What a difference a year makes. There’s a saying in Houston – if you don’t like the weather, stick around, it’ll be different tomorrow. There should be a similar adage for the oil patch.

 Last February, we were counting on OPEC to support oil prices by cutting its production quotas. Now, almost everybody hopes OPEC can boost production enough to stave off the very high prices that would dampen demand and put the world’s economies in jeopardy.

 In this year’s forecast game, the obvious wildcards are Venezuela and Iraq. In Venezuela, it may take quite awhile for the situation to settle down, but even if the strike ended tomorrow, many months will be required to bring production back up to pre-strike levels. PDVSA’s fields are mature and have likely suffered damage from the sudden shutdown. Other impediments include financing of the investments necessary for reworking wells and fields, and reorganizing both field and professional personnel.

 As for Iraq, by the time this reaches you, any of many possible scenarios may have already begun. There could be a war going full tilt, Saddam may have capitulated or President Bush may have allowed him more time (least likely, we think). We confess that we don’t have any idea of how to measure the probabilities of any of these, so the forecasts elsewhere in this issue ignore any major disruption of Iraqi oil production.

 But even if Iraq stays on stream, oil supplies will be very tight throughout the year. This year’s winter is returning to normal (possibly even cooler than normal). This will keep pressure on oil stocks, which should remain low through most of 2003. And finally, the US economy is expected to grow faster this year than last, which will boost US (and world) oil demand. Almost half of the 1.3-million-bpd growth in world demand this year is projected to come from the US.

 Also complicating this year’s forecasting efforts has been industry’s performance in 2002. There were some discontinuities among the leading activity indicators, which were difficult to explain. Despite oil and gas prices that climbed consistently during first-half 2002, drilling activity went the opposite direction. The most prevalent question heard at industry gatherings was, “With current oil and gas prices, why isn’t drilling picking up?”

 The consensus answers were that operators were nervous – they wondered if prices were emotionally supported rather than demand-driven. Also cited was the effect of the gas trading scandals and the resulting drilling cutbacks by gas merchants with production divisions. Whatever the reason, we think this attitude will carry over into 2003 and hamper what should be a banner year for drilling. 

 Censored environmentalist. The Skeptical Environmentalist: Measuring the Real State of the World, which has been out for some time, is enjoying renewed interest ever since a Danish committee saw fit to institute a modern version of book burning. 

 Bjorn Lomborg, its Danish author, is a self-described liberal, vegetarian and former member of Greenpeace. He used to believe in the litany of our ever-deteriorating environment. “You know,” he says, “the doomsday message repeated by the media, as when Time magazine tells us that ‘everyone knows the planet is in bad shape.’ We’re defiling our Earth, we’re told. Our resources are running out. Our air and water are more and more polluted. The planet’s species are becoming extinct, we’re paving over nature, decimating the biosphere.”

 However, Lomborg, in a Wall Street Journal article defending his position, says that this litany doesn’t seem to be backed by facts. When he checked it against data from reliable sources, a different picture emerged. “We’re not running out of energy or natural resources. There is ever more food, and fewer people are starving. In 1900, the average life expectancy was 30 years; today it is 67. We have reduced poverty more in the past 50 years than we did in the preceding 500. Air pollution in the industrialized world has declined – in London the air has never been cleaner since medieval times,” he said.

 In the 16 months since its publication, many have reviewed the book favorably, but others, such as Nature and the Scientific American, have been strongly dismissive. Apparently unable to counter the main arguments of the book, some have tried to pressure the publisher, Cambridge University Press, to stop its publication. Others drew the Danish Committee for Scientific Dishonesty into the debate, asking it to judge the book against a complaint of deliberate and conscious distortion of the data in order to fit preconceived conclusions. 

 The committee didn’t say that the data were deliberately and consciously distorted, but did decide that the book is “contrary to the standards of good scientific practice.” The committee asserts that the book presents a “systematically biased representation.” Yet its only examples stem from a faithful résumé of the four very negative reviews from Scientific American, to which the committee devotes more than a third of its 14 pages, and which it accepts unconditionally. Lomborg wrote a 34-page rebuttal, which the committee mentions in just one line. 

 The committee report also speculates on Lomborg’s motives for writing the book. It states that The Skeptical Environmentalist wouldn’t have been noticed but for the “overwhelmingly positive write-ups in leading American newspapers and The Economist. The US (has) the highest energy consumption in the world, and there are powerful interests. . .with increasing energy consumption and the belief in free market forces. The US also is responsible for a substantial part of the research in this and other areas dealt with by Lomborg.” 

 “Some might interpret this as the committee seeming to say that I’m in the pocket of Big Bad America” said Lomborg, who professes no desire to support one group over another. “My point has been that, despite our intuition to do something about (global warming), economic analyses show that it will be far more expensive to cut CO₂ emissions radically than to pay the costs of adaptation to the increased temperatures. Moreover, all current models show that Kyoto would have little impact on climate – at a cost of $150 billion to $350 billion annually. 

 With global warming disproportionately affecting Third World countries, we have to ask if Kyoto is the best way to help them. For the amount Kyoto would cost the US per year, we could provide everyone in the world with access to basic health, education, water and sanitation. Isn’t this a better way of serving the world?”