Simmons, chief executive of investment bank Simmons & Co. International and
former energy advisor to President George W. Bush, said in a March, 2004 Dow
Jones Newswires series on peak oil:
Trade and oil: U.S. agriculture exports only buy 11% of oil imports, whereas before the 1970s oil shocks it was one bushel of wheat per one barrel of oil. Read more from Lester Brown (author of the new book Plan B) on our Trade and Petroleum webpage.
Kurt Vonnegut's gut reaction to today's petroleum situation: Cold Turkey ahead.
Resources of information available to the public are increasing tremendously,
intensifying the absurdity of so little action on
As if to acknowledge the shrinking world supply
of oil, the Bush team targeted Iraq and its oil longer ago than you
thought. See these articles on our website:
"Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil."
- US deputy defense secretary, Paul Wolfowitz, in Singapore, May 31-June 1, 2003
"...for reasons that have a lot to do with the US government bureaucracy, we settled on the one issue that everyone could agree on: weapons of mass destruction."
- Paul Wolfowitz, Vanity Fair magazine, May 2003
Conflict intensifies with insider deals
David Ehrenfeld's Orion
magazine article is a wonderful exploration of issues of shortage. Read
The Joseph Strategy - "As the energy emergency unfolds, is
the blackout of 2003 a preview of things to come?" Click
"This much is certain: no initiative put in place starting today can have a substantial effect on the peak production year. No Caspian Sea exploration, no drilling in the South China Sea, no SUV replacements, no renewable energy projects can be brought on at a sufficient rate to avoid a bidding war for the remaining oil."
- Hubbert's Peak, by Kenneth S. Deffeyes, Princeton University Press, 2001
What is going to happen to us all? The environment has been trashed to a perilous degree. Human population continues to grow along with ever-more dangerous strife. Climate change could be irrevocably getting out of control. Yet, the solution favored by government and the mega corporations is not to have honest public debate or integrity, but instead start wars and keep the juggernaut of the world economy rolling along without deviation.
Transitioning to sustainable, ecological economics is a non-issue to our "leaders," while many of usalmost invisible to the mass mediapursue sustainability and
justice. Hence, we must now address:
The fall of petroleum civilization is beginning, no matter if we want such a historic change or not. The implications of the world's having reached peak oil production are little understood. To pinpoint exactly when the crash of the petroleum-fired economy will occur is to be drawn into a distracting debate. The signs pointing to the fall of petroleum civilization are numerous, and have been increasingly obvious as the years go by. The U.S. turned its back on sensible energy policy in 1980 and has opted for "endless" growth. Trends in wasteful transportation, for example, have gotten surreal.
Astute observers from all walks of life took note and have begun to take action. They are adopting a multitude of solutions toward eliminating petroleum and fossil fuel dependency. Sustainable living and alternative energy, along with communal and non-authoritarian life-styles, are on the rise.
Today's society of materialism is about to see radical changes, if it survives at all. Opponents of anti-life, oppressive rule by corporate government have mounted a fight in the streets periodically, such as in protests against the World Trade Organization and the G8 meetings around the world. See webpages for the Sacramento demonstration against the WTO's agenda for agriculture.
When we watch economic indicators, we anticipate the big depression that follows periods of economic boom. The business cycle is well known to economists, but the powers that be have frantically tried to extend growth and stave off a correction or shake-out. Here is one unsettling statistical fact that has much more to do with the real state of the economy and the future than stock market indicators:
"The economy has now lost almost 2.5 million jobs since February 2001, more than the government said previously, according to annual revisions released today by the Labor Department. It is the longest sustained period without job growth since the period before World War II." [- the New York Times, June 7, 2003]
Will anyone be immune to the coming oil-deprived, wrenching adjustment to a post-petroleum civilization? Agriculture will be affected along with transportation, in a final energy crisis that will see us all reaching desperately for conservation and renewable energy alternatives. It will not be the techno-Utopia pushed by mainstream environmental groups: visualize depaving, car-free living, and hauling local produce via bike cart, to name a few sustainable practices.
The crisis is a moral one, when 1.2 million people a year around the world die from car crashes. To this the pro-car, mainstream environmental groups have no solution when they refuse to condemn the car. Does this make them almost as accountable and manufacturers of motor vehicles and politicians?
Jay Hanson, the premier lay student of
peak oil and related issues, creator of dieoff.org, gave a final message when
retiring in winter of 2003 [excerpt]:
Imperial U.S. House of Cards - by
Alternatives and solutions
More information-resource-links are at bottom of page.
We at Sustainable Energy/Culture Change recommend the largest archive of essays and studies on energy, agriculture, and population: dieoff.org. Another helpful and more political site is oilempire.us. Education of the public on these issues has been so far been almost completely lacking. What we do upon becoming informed is more than a large question: it is our very future. It is filled with opportunity for a more rewarding personal life, and presents us a chance to fight for who and what we love and care about.
Articles on this website:
Additional information resources
Oil prices, at their highest levels for more than a decade, are trending upward. Natural gas prices are going out of sight. Yet more blips in the ups and downs of fuel costs? Or, as many believe, the start of an era of ever-more-expensive energy?
Industry magazines have been tracking a controversy about "peak oil": the notion that world oil production will soon outstrip demand.
Pessimists in this controversy, mostly geologists, are impressed that oil discoveries peaked worldwide in 1960, and have been running well below actual extraction levels since the early 1980s. On the other side, the optimists, mostly economists, believe human ingenuity can postpone the peak in oil production, perhaps indefinitely.
If the pessimists are right, potential demand will run far ahead of supply soon after 2007. This mismatch will raise prices to spectacular heights that will keep actual demand in line with the dwindling supply. The high prices will wreak economic havoc, as they are already doing to the airline industry. Worse will be shortages of the liquids that fuel more than 95 per cent of the world's transportation and make modern civilization possible.
If the optimists are right, technological solutions will be found to keep the oil flowing. Prices will stay within reason, allowing the continuation of "business as usual."
A dispassionate look at the controversy exists in a recent 103-page paper by the Society of Danish Engineers and the Danish Board of Technology, science adviser to the Danish Parliament. It doesn't draw formal conclusions but makes several points worth restating:
1. There will be a peak in oil production, likely before 2020;
2. Forcing a later peak, if possible, will require huge investment in exploration and technology, which may well be wasted. Money would be better spent reducing oil use;
3. An earlier peak would be "less unfortunate" than a later one. With an earlier peak, there would be less worldwide dependence on cheap oil and a more gradual post-peak decline in production, which could be more easily accommodated;
4. The priorities of governments in energy matters should be to figure out when the oil-production peak will occur, and then to work to ensure that oil use peaks before the production peak.
The last point is profoundly important. It would mean high oil prices would be avoided, or their proceeds could go toward conservation rather than oil profits.
These challenges are more urgent than meeting Kyoto targets for greenhouse-gas emissions. Lack of adequate preparation for peak oil could result in catastrophe.
There's much scope for reducing oil use. The U.S. government reports that the average fuel economy of light-duty vehicles (including cars, SUVs, and minivans) is 6 per cent better than its 1987 peak. Meanwhile, average horsepower has increased 76 per cent, and average vehicle weight is up 26 per cent. If horsepower and weight had stayed the same, the average light-duty vehicle could now use 58 per cent less fuel not 6 per cent less.
Natural gas offers clues to what might happen with oil. It's a North American rather than a world market. Production here seems already to have peaked, and prices are rising beyond anything anticipated. For natural gas, there is possible relief. Spare production in Algeria, Russia and elsewhere can be liquefied and shipped to North America.
But liquefied natural gas (LNG) is dangerously flammable and explosive. Logan Airport closes when an LNG tanker enters Boston Harbour to unload at one of North America's four LNG terminals. The U.S. Coast Guard imposes a two-mile moving safety zone around each tanker. Nevertheless, new LNG terminals are proposed for more than 30 locations in North America, including several in Canada. LNG imports could at best provide temporary relief. The worldwide peak in natural-gas production may not be far behind the peak in oil production.
What about hydrogen, proposed by many as the panacea for energy woes? More than 90 per cent is produced from natural gas, already in short supply, and no other mass production method seems feasible.
We are seeing the end of cheap energy, which shapes every aspect of how we live, and even sustains a far larger population than the planet could otherwise support. It's time to stop complaining about pump prices and start figuring out how our dependence on fossil fuels can be dramatically reduced.
The above article appeared May 11, 2004 and was called Peeved at the pump? Richard Gilbert is an energy and transportation consultant.
Angry truckers celebrated this May Day by blocking freeways in Los Angeles and container terminals in Oakland and Stockton. With diesel fuel prices in California soaring to record levels in recent weeks, the earnings of independent container-haulers have dropped below the poverty line. Lacking the power of big trucking companies to pass rising fuel costs onto customers, the port drivers many of them immigrants from Mexico have had little choice but to share some of their pain with the public.
In one action, abandoned big rigs blocked the morning commute just south of downtown Los Angeles on Interstate 5, making tens of thousands of motorists temporary hostages of the fuel crisis. As one exasperated commuter complained to a radio station, "This is really the end of the world."
Perhaps it is. As Venezuela's energy minister Rafael Ramirez told the Financial Times on May 24, "The history of cheap oil may have ended."
Although real (inflation-adjusted) fuel prices are still well below their 1981 maximum, an ever-growing chorus of voices, ranging from former UK environment minister Michael Meacher to National Geographic magazine, echo Ramirez. We will soon arrive, they claim, at the summit of "Hubbert's peak."
M. King Hubbert was a celebrated oil geologist who in 1956 correctly prophesized that U.S. petroleum production would peak in the early 1970s, then irreversibly decline. In 1974 he likewise predicted that world oil fields would achieve their maximum output in 2000; a figure later revised by his acolytes to somewhere between 2006 and 2010.
If the curve of global oil production is indeed near the point of descent, as these experts believe, it has epochal implications for the world economy. More expensive oil will undercut China's energy-intensive boom, return OECD countries to the bad old days of stagflation, and accelerate the environmentally destructive exploitation of low-grade oil tars and shales.
Most of all, it will devastate the economies of oil-importing third-world countries. Poor farmers will be unable to purchase petroleum-based artificial fertilizers just as poor urban-dwellers will be unable to afford bus fares. (Already, rising oil prices have brought chronic blackouts to cities throughout the globe's southern hemisphere.)
The only certain beneficiaries of this coming economic chaos will be the big five oil corporations and their corrupt partners: the Nigerian generals, Saudi princes, Russian kleptocrats, and their ilk. Crude oil truly will become black gold.
The rising value of an increasingly scarce resource is a form of monopoly rent, and a future permanent crude-oil regime of $50 per barrel (or higher) would transfer at least $1 trillion per decade from consumers to oil producers. In plain English, this would be the greatest robbery by a rentier elite in world history. Someday, Enron may seem like the equivalent of a liquor store hold-up by comparison.
The oilmen in the White House, of course, have the best view of the lush terrain on the far side of Hubbert's peak. No wonder, then, that a map of the "war against terrorism" corresponds with such uncanny accuracy to the geography of oil fields and proposed pipelines. From Kazakhstan to Ecuador, American combat boots are sticky with oil.
To cite two recent, almost random examples: First, the Malaysian foreign minister warned in late May that Washington was exaggerating the threat of terrorist piracy in the Straits of Malacca in order to justify the deployment of forces there right at the chokepoint of East Asia's oil supply.
Second, T. Christian Miller, reporting in the Los Angeles Times, revealed that U.S. Special Forces, as well as the CIA and private American security contractors, are integrally involved in an ongoing reign of terror in Columbia's Arauca province. The aim of "Operation Red Moon" is to annihilate the leftwing ELN guerrillas threatening the oilfields and pipelines operated by LA-based Occidental Petroleum. The result, Miller reports, has been a slow-motion massacre.
"Mass arrests of politicians and union leaders have become common. Refugees fleeing combat have streamed into local cities. And killings have soared as right-wing paramilitaries have targeted leftwing critics."
Latin America Mexico, Venezuela, Columbia and Ecuador currently supplies more oil to the United States than the Middle East, and, from the very beginning, the White House has defined the War on Terrorism as including counterinsurgency in the Western Hemisphere.
Is there a pattern here? Indeed, is there a US master plan for the control of oil in an age of diminishing supply and soaring prices? Obvious questions, but don't ask a Democrat. Although many ordinary Americans have little difficulty connecting the dots (to use a currently popular expression) linking blood to oil, the Democrats, with few exceptions, refuse to ask any deep or probing questions about the economic architecture of the New American Empire.
Thus John Kerry has waffled between advocating an energy version of Fortress America (via the integration of Canadian and Mexican oil resources) and complaints that the Bush administration hasn't put enough pressure on OPEC, especially Saudi Arabia, to expand production. One of the richest members of the Senate in history, Kerry seems congenitally allergic to the kind of anti-corporate populism and bold muckraking that has made Michael Moore an international anti-Bush icon.
Too bad. A genuinely progressive candidate might have found a rich precedent in the proceedings of a celebrated 1930s Senate investigation into the role of the international arms trade in fomenting war and intervention. The Nye Committee, named after the senator from North Dakota who chaired it, probed deep into the shadow world of arms dealers and munitions corporations. Is there any less urgent need to call today for congressional hearings into the oil industry's comprehensive corruption of US foreign policy?
Mike Davis is the author of Dead Cities: And Other Tales, Ecology of Fear, and co-author of Under the Perfect Sun: the San Diego Tourists Never See, among other books.
is running out, but the west would rather wage wars than consider other energy
Sadly, the accusation is false. Kerry has been demanding that the price of oil be held down. He wants George Bush to release supplies from the strategic reserve and persuade Saudi Arabia to increase production. He has been warning the American people that if the president doesn't act soon, he and Dick Cheney will have to share a car to work. Men riding bicycles and sharing cars? Is there no end to this madness?
Like the fuel protests that rose and receded in Britain last week, these exchanges are both moronic and entirely rational. The price of oil has been rising because demand for a finite resource is growing faster than supply. Holding the price down means that this resource will be depleted more quickly, with the result that the dreadful prospect of men sharing cars and riding bicycles comes ever closer. Perhaps the presidential candidates will start campaigning next against the passage of time.
But a high oil price means recession and unemployment, which in turn means political failure for the man in charge. The attempt to blame the other man for finity will be one of the defining themes of the politics of the next few decades.
This conflict was exemplified last month by the leader of the British fuel protests of 2000, Brynle Williams. "I'm afraid to say I'm not very proud of what happened three years ago," he admitted in a documentary broadcast on S4C on May 4. "We all want turbo-charged motors now ... but we must remember that it's some poor sod at the other end of the world who ends up paying for it." Five days later, on May 9, he told GMTV that he was ready to start protesting again. Self-awareness and self-interest don't seem to mix very well.
To understand what is going to happen, we must first grasp the core fact of existence. Life is a struggle against entropy. Entropy can be roughly defined as the dispersal of energy. As soon as a system - whether an organism or an economy - runs out of energy, it starts to disintegrate. Its survival depends on seizing new sources of fuel.
Biological evolution is driven by the need to grab the energy for which other organisms are competing. One result is increasing complexity a tree can take more energy from the sun than the mosses on the forest floor; a tuna can seek out its prey more actively than a jellyfish. But the cost of this complexity is an enhanced requirement for energy. The same goes for our economies.
They evolved in the presence of a source of energy that was both cheap to extract and cheap to use. There is, as yet, no substitute for it. Everything else is either more expensive or harder to use. Without cheap oil the economy would succumb to entropy.
But the age of cheap oil is over. If you doubt this, take a look at the BBC's online report yesterday of a conference run by the Association for the Study of Peak Oil. The reporter spoke to the chief economist of the International Energy Agency, Fatih Birol. "In public, Mr Birol denied that supply would not be able to meet rising demand ... But after his speech he seemed to change his tune 'For the time being there is no spare capacity. But we expect demand to increase by the fourth quarter by 3m barrels a day. If Saudi does not increase supply by 3m barrels a day by the end of the year we will face, how can I say this, it will be very difficult. We will have difficult times.'" The reporter asked him whether such a growth in supply was possible, or simply wishful thinking. "'You are from the press?' Birol replied. 'This is not for the press.'" So the BBC asked the other delegates what they thought of the prospects of a 30% increase in Saudi production. "The answers were unambiguous 'absolutely out of the question'; 'completely impossible'; and '3m barrels - never, not even 300,000'. One delegate laughed so hard he had to support himself on a table." And this was before they heard that two BBC journalists had been gunned down in Riyadh.
The world's problem is as follows. We now consume six barrels of oil for every new barrel we discover. Major oil finds (of over 500m barrels) peaked in 1964. In 2000, there were 13 such discoveries, in 2001 six, in 2002 two and in 2003 none. Three major new projects will come onstream in 2007 and three in 2008. For the following years, none have yet been scheduled.
The oil industry tells us not to worry the market will find a way of sorting this out. If the price of energy rises, new sources will come onstream. But new sources of what? Every other option is much more expensive than the cheap oil that made our economic complexity possible.
The new technology designed to extract the dregs from old fields is expensive and doesn't seem to work very well, which is why Shell was forced to downgrade its anticipated reserves (other companies, under pressure from the US Securities and Exchange Commission, will surely follow). Extracting oil from tar sands and shales uses almost as much energy as it yields. The same goes for turning crops such as rape into biodiesel. Nuclear power is viable only if you overlook both the massive costs of decommissioning and the fact that no safe means has yet been discovered of disposing of the waste. We could cover the country with windmills and solar panels, but the electricity they produced would still be an expensive means of running our cars.
Just as the oil supply begins to look uncertain, global demand is rising faster than it has done for 16 years. Yesterday morning, General Motors announced that it is spending $3bn on doubling its production of cars for the Chinese market. Seventy-four minutes later, we saw the first signs of entropy the International Air Travel Association revealed that the airlines are likely to lose $3bn this year because of high oil prices. The cheap carriers complained that they could be forced out of the market.
If the complexity of our economies is impossible to sustain, our best hope is to start to dismantle them before they collapse. This isn't very likely to happen. Faced with a choice between a bang and a whimper, our governments are likely to choose the bang, waging ever more extravagant wars to keep the show on the road. Terrorists, alert to both the west's rising need and the vulnerability of the pipeline and tanker networks, will respond with their own oil wars.
"Every time I see an adult on a bicycle," HG Wells wrote, "I no longer despair for the human race." It's a start, but I'd feel even more confident about our chances of survival if I saw George Bush and Dick Cheney sharing a car to work.
George Monbiot's book The Age of Consent a Manifesto for a New World Order is now published in paperback. www.monbiot.com
Concerning the use of the above articles: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Culture Change has no affiliation whatsoever with the originator of this article nor is Culture Change endorsed or sponsored by the originator.
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Peak oil forums: http://peakoil.com/sample/index.html
The First U.S. Conference on Peak Oil and Community Solutions, November 12, 2005: http://www.communitysolution.org/pconf1.html
The Energy Bulletin (devoted to peak oil): http://www.energybulletin.net/index.php