Junk Forecasts

By Mark P. Mills

Just in case. That’s the reason global warmers give us for acting to reduce carbon emissions and mitigate global warming now. Forget the ongoing debate over scientific details.

But reducing emissions will be no easy task, given that the world meets 85 percent of its energy needs with carbon-based energy sources, a.k.a. fossil fuels. Reducing carbon emissions is of course where the economic rubber meets the road— and it’s also the reason today’s global warmers are so deep into the energy forecasting business.

But there is an instructive track record when it comes to energy forecasts. Two decades ago, in dozens of energy tomes, environmental organizations and energy experts confidently predicted a grim era of shortages would come to pass by 2000.

A multitude of energy reports, studies, and books all espoused the same argument: The availability of fossil fuels would decline, prices would soar, and economic and social chaos would follow. Intellectuals wallowed in studies, policy forums, and conferences devoted to solving the looming problem of limited resources.

The ubiquitous Union of Concerned Scientists, in its seminal 1980 study, was typical: "It is now abundantly clear that the world has entered a period of chronic energy shortages that will continue until mankind has learned to harness energy from renewable sources." And National Geographic, in a rare special issue in 1981, proclaimed the end of the oil era, predicting oil prices would reach nearly $100 a barrel before the century ended.

The belief that fossil fuels were evaporating was practically universal. Federal and state governments launched conservation and renewables programs that have cost more than $100 billion to date, all predicated on rising energy prices and disappearing oil. Incredibly—though prices have not risen astronomically as foreseen—many of these programs exist to this day.

The junk forecasts that sparked them emerged from a flood of "peer-reviewed" studies, many of them based on elaborate computer models—and not observed data. (Sound familiar_)

Keep in mind that these energy wizards were trying to peer a mere 20 years into the future. Compare this to the soothsaying reach of the global apocalysts, who today presume to forecast our climate—and the technology that may affect it—50 to 100 years out. Such hubris shouldn’t require rebuttal. But policy wonks and "experts" regularly congregate to propose taxpayer-funded energy programs designed to fit such time frames. It would be hilarious if the financial stakes weren’t so great.

How will we find and use energy a century from now_ Who knows_ But it’s foolish to imagine nothing will change. Consider some of the technological wild cards that have emerged in the past century: rockets, aircraft, automobiles, radio, television, microprocessors, electricity itself, to name only a few. Were intellectuals 100 years ago wise enough to design sensible government programs to meet today’s manufacturing, transportation, and fuel needs_

In 1893, for the World’s Columbian Exposition in Chicago, the American Press Association assembled a collection of forecasts for the year 1993. The best, brightest, and most prominent minds of the day were asked to look forward 100 years, engineers, writers, politicians, poets, and industrialists among them. This delicious collection was republished in 1992.

Of course, the forecasts seem silly today, but they do reveal the unavoidable bias engendered by the technical and social realities and fads of that day. George Westinghouse breathlessly imagined transportation that would culminate in trains that could travel as much as 100 miles per hour. Another sage predicted the complete disappearance of the nation’s forests because of wood demand for housing and railroad ties. The list is long.

What changes will the powerful synergistic interactions of accelerating technological progress make in another 100 years_ Will the future look anything like the one implied by global warming forecasters_

Posthumous humiliation of 1893’s forecasters is easy. It should also be humbling. But as a practical matter, it is more useful to evaluate forecasts made a mere 20 years ago, since many of these same people and organizations are still around to take the heat. These folks weren’t just out in left field. They didn’t even make it into the ballpark.

Remember the "energy crisis"_ Setting the tone for the era, James Schlesinger, the first secretary of the newly created Department of Energy, told the National Press Club in 1979, "The energy future is bleak and is likely to grow bleaker. We...must adjust our economies to a condition of chronic stringency in traditional energy supplies."

Instead, however, a period of energy abundance followed OPEC’s unwise short-lived price escalations of the 1970s, driven by market forces and ongoing improvements in technology. All technical and geological indicators point to a future of "chronic" low-cost conventional energy abundance. Of course, the leaders of developing nations have no intention of permitting artificial, global warming–inspired "economic scarcities" to limit their energy consumption.

Price is the bottom-line indicator of the effects of technology. Consensus forecasts in 1975 for coal, oil, and natural gas prices in 1995 overestimated reality by a whopping 200 percent to 500 percent. Yet we haven’t heard anyone who’s responsible say, "Sorry, we launched billions in ‘cost-effective’ energy programs predicated on those escalating price forecasts.

Like today’s experts on energy-induced global warming, experts two decades ago presumed to know much about the geophysics of the earth—although then it was what was below the surface, not above it—and presumed to know much about technological progress.

Clearly, they were wrong. The forecasters’ predictions reached beyond conventional resource forecasts to include what new alternatives energy technologies would—must—evolve. Highlights of those techno-goofs of two decades ago were predictably preoccupied with solar energy and similarly silly.

Weighing in again with scientific acumen, the Union of Concerned Scientists in 1980 intoned, "One clear solution emerges: A variety of attractive solar technologies can lead us out of the morass." From the Harvard duo: "...solar could meet one-fifth of U.S. energy needs within two decades."

Reality check: U.S. energy use grew by the equivalent of 2.5 billion barrels of oil per year, with fossil fuels supplying 90 percent of all the growth. Nuclear energy made up most of the rest with renewables accounting for less than 2 percent if we generously count burning wood.

Unfettered by failure or embarrassment, government energy forecasters today echo the same wishful thinking as the 1979–1980 scholars. The Department of Energy released last year—drumroll, please—a "peer-reviewed and exhaustive study" of the nation’s energy options for a global warming–constrained world. Its forecasts read like they were written 20 years ago and locked in a time capsule: solar, wind, and renewables.

So they were wrong about the energy crisis two decades ago. Global warming is different. And anyway, everyone "knows" we’re still running out of oil.

That reality has trashed the idea of energy scarcity and rising prices does not mean environmentalists have abandoned this belief system. The reason is simple. If fossil fuels are going to disappear eventually anyway, maybe soon, why not start the shift now_ And, because of the urgency of global warming, environmentalists say we must accelerate (i.e., subsidize) a move to alternative energy. Witness the March 1998 issue of Scientific American, and its special feature entitled, "The End of Cheap Oil." Back to the future.

As oil prices drop, expect an inversely proportional increase in environmental claims about impending oil shortages.

Any lessons in all this_ Sure. Every environmental or anti–fossil fuel organization was wrong because they completely missed the potential for technological progress in the fields they despised or just didn’t understand: Conventional fossil fuel exploration, extraction, and utilization.

Those energy experts did not foresee the advances in supercomputers and geophysics that allow satellite-based exploration; advances in materials science and engineering that permit unprecedented construction of multibillion–dollar oil platforms in waters more than a mile deep; advances in robotics that permit operations in hostile and deep waters; combustion technology that create ever more efficient fuel-burners in power plants and cars (SUVs get better mileage than the midsize cars of 1975); mechanical engineering and controls that permit safer and low cost extraction of coal, and on and on.

Today’s forecasts once again assume that technology progress is essentially arrested everywhere but for windmills, solar cells, and hemp-derived alcohol fuel. In fact, progress is accelerating in every energy-technology arena, especially those labeled "conventional."

The central problem for forecasters is that energy-related technologies impact all htmlects of society; not just the kinds of SUVs people choose to drive, but also how cars are manufactured, not just what people eat, but how food is processed and distributed, not just the kinds of computers people buy and how they’re energized, but how computers are made. The complex web of trajectories for all technologies is relevant to energy forecasting. To succeed by government prescription, it is vital to have a high degree of forecasting accuracy about how technology advances in all such fields. Forecasters have demonstrated no such prescience.

Prediction No. 16, The Dilbert Future (Scott Adams, 1997): "In the future, scientists will learn how to convert stupidity into clean fuel."

Oh, Dilbert, were it only so.

Physicist Mark P. Mills is a technology strategist and energy consultant and president of the research-consulting firm Mills•McCarthy & Associates Inc. He also serves as a science advisor to Greening Earth Society