Peak Oil News: 10/01/2005 - 11/01/2005

Monday, October 31, 2005

Is China to blame for the rise in oil prices?

ZNet

By Niu Li

[Many news accounts of surging oil prices have pointed at China, and to a lesser extent India, as culprits given the rising thirst for oil to fuel their high growth economies. This survey of oil demand and consumption by Niu Li challenges these assessments by showing that China's oil imports are only one-fourth those of the U.S. Equally important, China is far less dependent on oil for its energy than is the U.S., and in 2005 its oil imports increased only slightly in line with Chinese efforts to conserve energy and favor non-oil energy sources. The problem of spiking, and long-term high oil and energy prices lie above all in two realms. One is the fact that we are fast approaching the tipping point at which world oil production begins to decline, or Hubbard's Peak in the theory of peak oil explained in several Japan Focus articles. If this is correct, we face long term high and rising oil prices. The other is the failure, above all by U.S. policymakers, to make even token moves toward conservation through the use of tax and other policies to curb the rampant increases in oil consumption that distinguish the U.S. from virtually all other economies. The U.S. is not only by far the world's largest oil and gas consumer; it is also the largest importer. And in contrast to many other nations, there is no sign of policy-driven efforts to control consumption. Japan Focus.]

On October 13, the credit ratings agency Standard & Poor's released a dramatic report, claiming that China's overseas energy strategy is one of the factors destabilizing global oil markets and pushing up prices. Some domestic experts predict that China's dependence on foreign oil will by 2020 surpass that of the United States. This is incorrect and is contributing to the so-called "energy threat from China."

As a matter of fact, big energy consuming countries such as China, the United States, Japan, Germany, the Republic of Korea (ROK) and India are all contributing to rising oil prices. But in terms of total volume, the rate of increase or the energy sector per se, laying the blame at China's doorstep is not a compelling position.

First, let us look at total volume. According to BP's Statistical Review of World Energy 2005, China consumed 310 million tons of oil in 2004, accounting for 8 per cent of the world total, whereas the United States guzzled 938 million tons -- a quarter of the global total and three times China's consumption.

In the same year, China's net imports were less than 149 million tons, accounting for 6 per cent of the world total trade, while the United States took in 590 million tons -- four times China's net imports. This shows, as far as volume is concerned, China was not the most crucial factor affecting global oil prices.

Next, a brief examination of the structure of the industry. China is the world's sixth largest oil producer, and 60 per cent of its oil consumption is domestically produced. Oil makes up only 23 per cent of the country's total energy consumption, far less than coal, which accounted for 68 per cent, and also less than the world average, which is 40 per cent.

By contrast, countries such as Japan and the ROK relied almost completely on the international market for their oil, and the United States, the world's largest oil importer, bought 60 per cent of its oil on the international market. This proves that China, in terms of demand-and-supply structure, was not the major force behind the rising prices.

However, those that blame China for stimulating international oil prices can always point to growth rates. Indeed, oil consumption for 2004 grew by 15 per cent and imports of crude oil shot up by 34.8 per cent.

But this year's figures tell a different story.

The International Energy Agency estimated the growth of China's oil consumption for 2005 has so far been a mere 3.2 per cent, and the growth of import of crude for the first nine months of the year was 4 per cent, while exports of the fuel increased by 27.1 per cent. For processed oil, imports dipped by 16.4 per cent and exports climbed 38.2 per cent.

It is obvious that pointing fingers at China is groundless.

Rises in oil prices have more complicated explanations. Fundamentally, supply and demand in the global oil market is rather fragile and a primary estimate suggests that, based on supply and demand alone, the price for crude oil should be around US$40 per barrel.

Next is the "terror premium" -- the fear of emergencies such as acts of terrorism that bump up oil prices. It is reckoned that this accounts for US$10-15 of the current per barrel cost.

The "speculation premium," adds another US$15-20.

As for the comparative dependence on oil in China and in the United States, some facts should be clarified. BP's review states that US dependency in 2004 was 63 per cent, and the US Department of Energy has issued a report that predicts it will reach 72 per cent by 2020.

Let's not envision China's dependency for 2020, but even if it grows to be 60 per cent, it will still be below that of the United States today or in the future.

Of course, we should not deny that as China's economy maintains its growth and consumption escalates, the country's dependency on foreign oil will grow gradually and a problem of energy source guarantees may emerge.

It is, therefore, important to study the problem and raise alerts. But inaccurate statements only serve those who want to suppress China.

In the long run, China's energy supply has a lucid strategy, which is "reliance on domestic supply and conservation." After that comes "peaceful development," which means co-operation with international partners and utilization of foreign resources.

Niu Li is an economist at the Economic Forecasting Department of China's State Information Centre. This article appeared in China Daily October 27, 2005.


Friday, October 28, 2005

Peak Freaks

Freezerbox Magazine

By Aaron Naparstek

If you happened to be strolling down E. 35th Street in Manhattan around noon on Wednesday, October 5, you may have stumbled across the shirtless, shoeless young man with a wispy goatee meditating on the sidewalk in front of the Unitarian Universalist church between Madison and Park. Or you may have noticed the fellow in the orange jumpsuit, NASA-style, circa 1981. Perhaps you were stopped by a pasty-looking woman and asked, aggressively and completely at random, if you knew a doctor who could help her with the mysterious illness she believes she acquired while volunteering at Ground Zero after 9/11. These and about 400 others were in attendance for the first-ever Petrocollapse Conference, a day-long event organized to allow "tremendous authorities offering a wide range of expertise" to educate the public on Peak Oil, according to Jan Lundberg, a conference organizer and the morning's first speaker.

In his opening remarks Lundberg said the event was "not so much an exercise in proving Peak Oil has occurred or will occur soon, but rather an attempt to explore our post-peak options and fate as individuals and communities." A worthy and compelling task, I thought. Having written and worked quite a bit on New York City transportation issues the last few years, I was slated to do a ten minute talk as a part of the "Local Solutions" panel at the very end of the day. I had put together a presentation called "Urban Transportation in the Age of Expensive Oil" showing five transportation and urban design ideas for weaning New York City away from its costly automobile dependence.

My presentation wasn't a comprehensive policy proposal. Nor was it a revolutionary break from the current status quo (though, I'm sure many New York City traffic engineers, would disagree with that). Rather, it was meant as a grounded, pragmatic review of five car-free transportation and urban design concepts that are working well in other big cities around the world but are still considered somewhat radical here in New York. I planned to talk about London's successful congestion charging system, bike paths and pedestrian spaces in Northern European cities, bus rapid transit systems in South America, and this great project to build light rail along 42nd Street in midtown Manhattan called Vision42. I have often found that, short of flying someone to Amsterdam to ride bikes and look closely at urban design, you need photos to convince Americans that a less car-dominated city is possible or even desirable. Even to New Yorkers who mostly don't own cars, the automobile is such an intrinsic part of American life it is simply impossible for many of us to imagine or envision a life not dominated by them.

Yet, as one tremendous authority after another got up to warn us of the impending, sudden demise of Western industrial civilization due to Peak Oil, I began to get the sneaking suspicion that this crowd, or at least these conference organizers, weren't interested in bus rapid transit, bike lanes or policy proposals of any kind. The Petrocollapse Conference had been convened to warn New Yorkers that End Times were upon us.

If Peak Oil theory is now maintream, discussed on the front page of USA Today and in Chevron and BP ad campaigns, then Petrocollapse is a secular, left-wing, non-fiction version of Tim LaHaye's Christian Apocalyptic "Left Behind" series. The gospel according to Petrocollapse is that Peak Oil is coming, and it's coming soon. The transition to the post-carbon world will not be gradual, it will be sudden and massive. And when it comes, the sinners--those profligate American consumers and the corporate whores who oversee them--will all be swept away in violent social turmoil, starvation and environmental disaster. But there's good news too. After the tumultuous mass die-off, a new society will arise from the burned out SUV hulks and melted plastic detritus. In this post-carbon world, humans will have no choice but to live sustainably, in cooperation with each other and in harmony with nature. Those who get religion and accept Peak Oil into their hearts soon enough--they may be among the lucky survivors whose children grow to live in this new and better world.

In other words, "grounded" and "pragmatic" weren't high on the Petrocollapse Conference agenda. This was made immediately clear in Lundberg's opening remarks as he started off the conference by listing his own Peak Oil bonafides and criticizing other "prestigious insiders of the Peak Oil 'movement'" who advocate various political solutions and policy reforms.

Lundberg isn't interested in these "agendas" because he is "promoting fundamental, system-change." He advocates a return to "complete reliance on nature" and "a real community-based" tribal culture. He believes that "we, like nature, are being raped constantly in every orifice" by Western Industrial civilization. "Progress is a new idea, and a dangerous one," at that. "Nature does not need progress."

Lundberg foresees, or advocates--it is often not clear which--a complete dissolution of the United States into locally governed bioregions and an enormous culling of the Earth's human population. There are three ways, he says, to deal with the overpopulation problem that will suddenly manifest as an overwhelming crisis once Peak Oil is reached. 1. A rational, gradual and voluntary population reduction. 2. Violent, involuntary reduction brought about by "elites" selecting survivors based on their national or genetic desirability. 3. Humanity simply killing itself off en masse.

Of these three options, Lundberg believes the third, is currently "operative" and "to avoid the second 'option' of top-down culling through violence, the first option, compassionate planning, would have to start soon."

Sure, "Our time as a species in a favorable, biodiverse ecosphere is about up" and "there appears to be little hope for a viable future," but it's not all doom and gloom to Lundberg. Upon petrocollapse, "a new society will come together on a local-ecosystem basis. Cooperation and sharing will be necessary for survival, to make urban and suburban land productive and to assure water is as clean as possible." Petrocollapse will be so shocking and so revolutionary that "a completely different approach to human relations and economics will be adopted." How we will get from here to there and in what time frame, Lundberg didn't say.

What was made clear, though, is that to Lundberg petrocollapse is not so much the problem as it is the solution. "I believe petrocollapse can cure Earth of this civilization," he said. "Civilization is the threat."

Another featured speaker at the Petrocollapse conference was Michael Ruppert, editor of From the Wilderness, a web-based clearinghouse for news headlines and original stories that tend to confirm a conspiratorial worldview of government and corporate power. His book, Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil claims that the U.S. government orchestrated the events of 9/11. There is a strong overlap between the Petrocollapse and 9/11 conspiracy communities. Conference organizers found Ruppert's version of doom so compelling they gave him two prominent speaking slots.

He introduced his talks by saying "This is the first of two cold showers I'm going to give you. Get ready for goose bumps." Ruppert's thesis: It simply won't be profitable for the big corporations and government that control us to slow the global economic decline and human suffering that will be brought on by Peak Oil. So they won't.

Peak Oil, Ruppert said, is the beginning of the end of industrial civilization and it is driving the elites of American power to implement unthinkably draconian measures of repression, warfare and population control. Bush, Cheney and Rumsfeld have know about Peak Oil for decades and they are implementing "a very clearly established plan" to crash the US economy. The crash will be worse than 1929 and it is "just a few weeks away." They have decided that the only way to control U.S. energy consumption is through "demand destruction"--impoverishing Americans, or worse, liquidating them altogether. That the city of New Orleans wasn't rescued after Hurricane Katrina wasn't due to federal government incompetence. Letting American cities filled with poor people suffer and die is simply what "demand destruction" is all about. During a break outside with a group of smokers, Ruppert went on, "Bush, Cheney and Rumsfeld all have their ranches off the grid. They're all running solar and biodiesel. They know what's coming,"

As for those who think they can deal with the global energy crisis through technology, policy or any other grassroots action, forget it. "There is more psychosis among progressives than there is in the White House." To Ruppert, environmentalists are no less delusional than the Christian Right. If you want to do something useful with your time and activism, fight the global financial system, because "until you change the way money works," Ruppert says, "you change nothing." Ruppert's only concrete recommendations for action were to buy gold and move to an eco-community. But he wouldn't say where. "My influence is such," he said, "that suggesting a location in public would create a run on property."

No one does a smarter or more entertaining Apocalypse than the day's keynote speaker, James Howard Kunstler, author of The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes of the Twenty-first Century. Unlike the Lundberg and Ruppert, Kunstler's social commentary is incisive enough that he gets away with it. He is really the only Cassandra a Peak Oil conference needs.

"In the waning months of 2005," Kunstler said, "our failure to face the problems before us as a society is a wondrous thing to behold. Never before in American history have the public and its leaders shown such a lack of resolve, or even interest, in circumstances that will change forever how we live."

"Even the greatest convulsion in our national experience, the Civil War, was preceded by years of talk, if not action. But in 2005 we barely have enough talk about what is happening to add up to a public conversation. We're too busy following Paris Hilton, Michael Jackson, and the hiring practices of Donald Trump. We're immersed in a national personality freak show soap opera, with a side order of sports 24-7." He summed it up thusly: "Our failure to pay attention to what is important is unprecedented, even supernatural." What is important is this: "We've entered a permanent world-wide energy crisis. The implications are enormous. It could put us out-of-business as a cohesive society."

The Korean War-generation guys sitting next to me winced as Kunstler went on with his assessment of the American personality. "We've become a nation of overfed clowns and crybabies, afraid of the truth, indifferent to the common good, with hardly even a common culture, selfish, belligerent, narcissistic whiners seeking every means possible to live outside a reality-based community."

Kunstler then went on to suggest one proposal. It was pretty much the only concrete policy suggestion to come during the entire morning of End Times prophecies. "Let's get started rebuilding the passenger railroad system in our country. We have a railroad system that the Bulgarians would be ashamed of."

The audience burst into applause. The Petrocollapse Conference had spent the morning telling a room filled with people who probably call themselves progressives or environmentalists that the world was about to end and they were "delusional" for trying or even caring to do something about it. It was nearly lunch and the crowd was hungry, it seemed to me, for some hope, ideas and possibility of taking action and making change.

* * * *

To the contrary, there were no shortage of policy ideas and suggestions for action at New York University's October 20th "bi-partisan town hall meeting on U.S. oil policy." I recognized a few faces from the Petrocollapse crowd among those filing into New York University Law School's Vanderbilt Hall. The sidewalk meditator, NASA-jumpsuit guy and 9/11 hypochondriac, though, were nowhere to be found amidst the mostly young men in suits and ties.

If the Petrocollapse conference was dominated by conspiracy theorists, then "Winning the Oil Endgame" was the Conspiracy. Present on the dais were former CIA director James Woolsey, Mississippi Governor and former Republican National Committee Chairman Haley Barbour, former Deputy Secretary of the Treasury Robert Altman and Amory Lovins, CEO of the Rocky Mountain Institute.

Far from doom and gloom, the Endgame speakers were nearly united in their belief that it was both possible and desirable to keep finding fixes for America's energy jones and to keep the American consumer machine rolling along using new technologies.

The meeting was a bit of an Amory Lovins-fest, no pun intended. "Winning the Oil Endgame" is also the name of the Rocky Mountain Institute's new book and Lovins kicked things off by talking about how new lighter weight vehicles and better propulsion systems that he is developing "could make SUV's that get 66 miles per gallon" and triple the efficiency of the entire transportation sector. "It's the equivalent of finding a Saudi Arabia under Detroit,' he said. "We can save oil faster than they can sell oil." Showing an optimism and an appreciation of SUV's that was utterly absent at Petrocollapse, he added, "We'll look back in 40 years when we're off the oil and ask what all the fuss was about."

Altman, who'd served under President Clinton, urged America to take on five bold initiatives: First, more drilling. Go into "under-exploited regions of the world to expand supply of oil." Second, "re-embrace nuclear power" and "get behind the development of new plants." Third, "more coal-fired electricity plants" built with cleaner, though extremely expensive and still-unproven technologies that sequester carbon emissions. Fourth, import more natural gas by building a zillion dollar infrastructure for liquefied natural gas terminals and tankers. And last but not least, we need "more fuel efficient vehicles." Charles Komanoff, a long-time energy economist and activist sitting next to me scribbled his assessment on a scrap of paper: "Final tally: Big ideas for increasing energy supply--4. Big ideas for reducing energy demand--1."

Governor Barbour found himself surprised at how much he agreed with the suggestions of Altman, the card-carrying Democrat. Barbour boiled the energy crisis down to three supply side shortfalls: insufficient domestic production, refining capacity, and "alternative fuels." By "alternatives" the governor didn't mean wind or solar. He thinks we're not burning nearly enough coal or nuclear energy in the U.S.

Interestingly the meeting's most arch-conservative speaker was in some ways the most reminiscent of the Petrocollapse conference. Like Ruppert, Barbour had nothing but derision for environmentalists. Since the days of the Nixon administration, he said, "environmental policy has trumped energy policy at every turn." The result is the mess we're in today.

Also like Petrocollapse, Barbour showed himself to be profoundly gloomy about America's energy future, though he hid it beneath a Southern salesman's optimism. His goal, he said, is for "Mississippi to be recognized as the reliable energy state." He envisions a day when things are bad enough in the U.S. that he can lure big business to Mississippi simply by guaranteeing that it is a place where the lights turns on, and stay on, when your company flips the switch. Towards this end, Barbour is digging into eastern Mississippi's abundant supply of soft light coal, working to build a new nuclear plant and oil refinery, criss-crossing the state with new pipeline, and permitting extraordinarily expensive liquefied natural gas terminals on the battered and vulnerable Gulf Coast.

Sitting to Barbour's left was Columbia University Earth Institute Director Jeffrey Sachs, the only speaker to bring up the "profound environmental problems" of fossil fuels. Speaking immediately after Barbour, Sachs argued that the "evidence is becoming extremely clear" that hurricanes such as the ones that devastated Mississippi this summer are the result of man-made changes to the Earth's climate due to the burning of fossil fuels. Barbour clearly wasn't having any of that. Rather than challenging the professor directly he launched into a lengthy recital of big hurricanes that have hit his state over the last 150 years and an ode the resilience of the people of Mississippi. It was an exquisite example of Republican climate change denial. If you argued with anything Barbour said you'd sound like you were insulting homespun common sense and the good people of Mississippi.

And that's the funny thing about the Conspiracy. Barbour, the ultimate Republican insider power player, isn't hiding his agenda. He came right out and said what he is up to. He wants to build massive amounts of new fossil fuel and nuclear energy infrastructure in his state. He wants to keep the American consumer machine rolling along. SUV's, strip malls and suburban sprawl aren't a problem to him, they are the American way of life and they are entirely desirable. Barbour can't really imagine or simply doesn't see the point in bothering to envision any other way of doing things than the way we're doing them now. Focused on keeping the system going, he can see that there is a heck of a lot of easily accessible natural gas in the Caribbean. If he can figure out a way to get some extremely expensive liquefied natural gas terminals built on his state's Gulf Coast, then the rest of the U.S. will have to go through Mississippi to get a hit of that energy. Talking about man-made climate change and increasingly intense hurricanes doesn't help that project along. It just scares off the investors. This isn't conspiracy. It's consumer capitalism. And it's inertia.

Charles Komanoff has been involved in the energy and environmental movements pretty much since they began in the early 1970's. He's a good person to talk to for some perspective. I was surprised when Komanoff first told me that he wasn't particularly interested in the Peak Oil argument. "I think there's an element of wishful thinking and that some Peak Oil adherents are looking for a deus ex machina to sweep away the disaster that is contemporary industrial civilization," he said. "And understandably so. Waiting for Peak Oil is so convenient, so much simpler, and so much more seductively effective than the hard work of organizing for social ecological change."

I sat next to Komanoff during the Endgame conference and saw him frequently chuckling and shaking his head, particuarly during Lovins' presentation. Afterwards he said, "There is a big disonance between Amory's kind of chirpy optimism and actual realities on the ground and actual energy trends." Three decades after Lovins unveiled his revolutionary "soft energy path," Komanoff points out, the U.S. uses 25% more oil, burns 75% more coal and generates 35% more greenhouse gases than it did in the mid-1970s. Though a 66 mpg SUV is certainly more desirable than Detroit's current state of the art, Komanoff doesn't believe Lovins' hyper car project provides us with real answers for our global energy and environmental quandry because the project is "only about improving the fuel efficiency of the vehicle and does nothing about addressing the social and whole system efficieny of travel and mobility and community."

It's "tragic," Komanoff says, because "of the top ten energy thinkers in the world, the first five slots would have to be Amory. Yet, there's so much else missing in his vision, namely the centrality of price." Komanoff believes the solution to our global energy problems will only come about through serious discussions about the pricing of road useage and taxation of carbon emissions. "It's a law of nature. Anything inexpensive will never be conserved. Make fuels expensive -- really expensive, as befits the climate wreckage and political violence endemic to coal and oil -- and everything changes."

Chatting with Komanoff I quickly realized that these were the kinds of pragmatic but forward-thinking conversations and policy ideas that were mising from the two conferences. Though the two Peak Oil meetings came at the problems from completely different angles, I found both to be equally discouraging and even a little bit crazy. Neither gave attendees much of anything that we could do as concerned citizens with limited means to deal with our increasingly dire national energy situation. And both conferences seemed intent on paralyzing us into inaction by suggesting that all we could really do is wait. Wait for the Petrocollapse or wait for Amory Lovins' 66 mpg SUV's. Frankly, both events were just depressing.

Fortunately, there is a place for me to work out those feelings.

* * * *

The New York City Oil Awareness Meetup gathers the second Wednesday of the month at 7:00 pm at Wai Caf�, a Chinese health food take-out joint in the Flatiron District. Dan Miner, a senior vice president for business services at the Long Island City Business Development Corporation, runs the meeting. Miner is rapidly making a name for himself as a leader in New York City's sustainability movement. In addition to running the Peak Oil Meetup he has formed a New York City Energy Policy Working Group and authored a paper called "Preparing New York City for the Coming Energy Crisis."

On Wednesday, October 12 a group of about 25 people gathered in the back section of the restaurant for dinner, drinks and Peak Oil. Perhaps not a good sign for the ultimate survival of the species, only five or six women were on-hand. Tapping a piece of silverware to a glass, Miner got the meeting started by asking if anyone new to the group would like to introduce themselves. A skilled and natural facilitator, Miner makes people feel comfortable to talk yet he keeps his meeting on-task and moving.

One regular member makes it clear at the outset of the meeting that he is there for the emotional support. A big, handsome New Yorker with a job in information technology, Rob is not the type you expect to get all touchy-feely. "I was dealing with Peak Oil by myself for a long time," he says. "My family got sick of hearing me talk about it so I started seeing a psychiatrist." An active member named Phillip chimes in, "You're not the only one. I know 20 other people who are seeing shrinks because of Peak Oil."

To address the emotional side of the issue members Simon and Bill started a sub-group called "The Clinic / Peak Oil 101." For many "there is a paralysis that comes when you first start dealing with Peak Oil," Simon says. The Clinic is designed to help people "start moving." Once you've gotten over the initial emotional reaction you can "start doing practical things. Get out of debt. Learn a new skill. Think about moving to a new place and buying gold." Phillip adds, "There are no easy solutions. No matter how you tell people about Peak Oil, you're going to have to change your life. At some point people are going to have to accept the fact that the lifestyle we live here isn't going to be maintained."

Since Miner took over as moderator, the New York City gathering has grown into the biggest Peak Oil Meetup in the world with 167 members and as many as 35 people attending meetings. These divide broadly into two broad groups. The Relocalizers believe New York City won't be viable in the age of Peak Oil and are looking for new places to live and new skills to live in a world without modern conveniences. The Sustainable New Yorkers are dedicated to staying and preparing the city for what they see as a lengthy and potentially tumultuous energy crisis.

Relocalization meetings are often run by a graphic designer named Elise. At the Meetup, she invited people to join her in Clarksville, New York for a workshop on outdoor survival skills: how to start a fire with flint, build shelter out of natural materials, and prevent hypothermia if you're stuck outdoors in the cold. "If you need to get out of New York City quickly, you might need to know how to survive in the woods," she said mater-of-factly.

"People are ready for something else. They're sick of reality shows and consumerism. They're hungry for sustainability." In San Francisco, she noted, "they're turning ornamental gardens into vegetable gardens. Can you imagine Park Avenue, instead of tulips, tomatoes?" Elise is working towards joining an eco-village or starting one. Her ultimate goal is to "be part of a secure, sustainable food network." She is planning a trip to Vermont to learn vermaculture, the practice of cultivating worms to use their castings, that is, their poop, as a natural fertilizer. In the Peak Oil future that Elise envisions, the staples of industrial agriculture; mechanical combines, nitrogen fertilizer, trucks shipping lettuce 3,000 miles across the country, will not be available to us

Phillip is also a Relocalizer. After Elise gave her report, he invited the group to join him in Hancock, New York from October 31 through November 12 for a 72-hour permaculture course taught by Australian Geoff Lawton. Phillip also said that he and his partner were "doing a weekend trip to a dairy farm." One caveat: "It's a gay thing. We're going to make wreathes and learn how to milk cows. And I've never touched a teat." No one laughs. "Come on folks, a little sense of humor!"

With the majority of the Meetup members seemingly falling into the Relocalizer category, discussion does turn fatalistic. Simon says, "If we don't smarten up real fast, 3 to 6 billion people will die in the next 40 years." Perhaps sensing that he's getting a little grim, he quickly adds, "We're living through the death of a civilization and the birth of a new one. It's going to be exciting if you survive."

Despite such dread, and despite another grim speech by Jan Lundberg at the end of the meeting, there is a real sense of action and possibility at the monthly meeting. Miner makes a point of emphasizing that there are things you can do to prepare for Peak Oil and people interested in doing them with you. Much of the action takes place on the Meetup web site.

In a recent message board posting Rob asked if anyone wanted to split the cost of "The Beginner's Guide to Raising Chickens," a 25-minute video available at www.chickenvideo.com for $14. And he threw out a question: "So I was reading one day on survivingpeakoil.com about how foraging for food takes much less energy than hunting. The article mentioned that acorns are a good source of protein. I noticed in my area that there are a lot of acorns just lying on the side of the road. I started collecting them and storing them." After spending some time in jars, Rob noticed that "many of the acorns have a sprout growing out of them. I am thinking to myself, could I still eat that if I was really hungry? What do you guys think?"

If you are not interested in raising chickens or harvesting acorns, then the Sustainable New York Committee is probably more for you. The bottom line is that, at the Meetup you aren't assaulted by the gloomy hoplessness that pervaded the Petrocollapse and Endgame conferences.

That is, until Miner announces that we have a special guest and Jan Lundberg is invited to say a few words. Lundberg used to produce an oil industry but has since renounced any ties to the petroleum business and now runs a web site called CultureChange.org. Lately he's been touring the country via Amtrak, speaking to groups about Peak Oil and showing a movie about plastics pollution.

Lundberg immediately kicks into 60's revolutionary mode. "We've got to pull the rug out from under the system, subvert the fascist police state and subvert corporate fascism. We've got to stop buying new cars. Buying an old car at least undermines the enemy." The speech grows darker. "We could see the final energy crisis this winter. It would create a cascade of effects in which the house of cards collapses. Then we have mass starvation and exodus from high population areas for the land."

I interviewed Lundberg a couple of days after the Meetup to try get more of a sense of how he sees us getting from petroleum-addicted society to the sustainable future that he foresees. Still, he focused mostly on the critique side of the equation. "We've paved over the best farm land. We've ruined water sheds. And we've become isolated individual units of consumption. We've lost family cohesion. Peoples' traditions have been trampled. When people have sold each other out in their own families and they imagine that they are above and separate from nature, they will pay a very large price."

As he digresses down this path I recall a moment during the Meetup when someone asked Lundberg why his sister Trilby, who now runs the family business, The Lundberg Report, doesn't use her position as a prominent energy industry pundit to talk about Peak Oil. In his response, you begin to get the sense that there is, perhaps, something very personal behind Lundberg's dark vision. "Trilby seized the company in a hostile take-over that involved the abuse of our mother. Her husband is an OPEC gigolo. She's nothing more than a mouthpiece for the major oil companies. It's a complete waste of what was once America's most trusted energy industry newsletter. They are sell-outs for the buck. That's what most people are in the professional classes. They just want to be praised for earning a dollar and reporting to work every day."

* * * *

A couple of days after the Petrocollapse conference, I received an e-mail from Lundberg. It was a surprise because up until that moment, all of the e-mails and phone calls that I had left with him had gone unreturned.

He thanked me for my presentation before delving into a critique. My presentation, he felt, didn't do a good enough job explaining what would be necessary in a world in which "gasoline and diesel are gone." The car-free urban transportation ideas I presented seemed "more geared toward business-as-usual reforms." Next time I "might want to put more visionary images out there that depict scenes more like Cuba in their Special Period -- or use your imagination." Forget for a moment that not even the most pessimistic Peak Oiler believes that gasoline and diesel are going to be "gone" any time soon. If there is one thing I've learned from reading the literature and going to the conferences it's that there is no bigger put-down in the Peak Oil world than calling something "business-as-usual." That's about as rough as it gets.

Curious about what kind of urban transportation presentation Lundberg would have rather shown at his conference, I e-mailed him back a couple of days later. "Jan, what are you saying? You'd have liked to have seen Cuba-style images of horses pulling SUV's down Park Avenue?"

"Actually, Aaron, yes," Jan replied. "Although SUVs are heavy."

Who says the Petrocollapse crowd isn't grounded and pragmatic?


Understanding peak oil

Vermont Guardian

By Greg Pahl

In recent months, the term “peak oil” has begun to enter the mainstream, yet most people are not familiar with what it really means. I have been deeply concerned about this issue for a number of years, both as a writer focusing on renewable energy, and in my work with the Vermont Biofuels Association. My conclusion is that it deserves our immediate attention, and here’s why.

Peak oil is now viewed by a growing number of observers as a more imminent danger to human society than global warming. That doesn’t mean that global warming isn’t a serious problem. It is. But the modern global economy is almost totally dependent on enormous quantities of (still) relatively cheap petroleum products or their derivatives. Anything that seriously disrupts the supply or price of oil means big trouble, and the current extreme volatility of oil prices caused by tight supplies and rising demand is already causing problems that are beginning to ripple through the national and global economies. This is just the beginning.

So, what does the term really mean? When we arrive at peak oil, we will have consumed half of the total recoverable global reserves. That might not seem like a big deal, since the other half is still available. But that first half was the easy part to find and exploit, and also represented the highest quality. While the remaining half is still in the ground, it’s generally much lower quality, and is located in much smaller fields in, shall we say, inconvenient places like the Arctic, or under deep water. Consequently, what remains is going to be much harder and more expensive to extract and produce.

Worse yet, serious doubts have recently arisen about the size of reserves claimed by many oil companies and oil producing nations. The massive 2004 accounting scandal involving oil giant Royal Dutch/Shell and the subsequent 22 percent (or 4.3 billion barrel) cut in the company’s petroleum reserve estimates is viewed by some industry experts as just the tip of the iceberg of over-inflated reserve figures for the industry.

The main problem is that after peak production is reached, the global supply of oil will inexorably begin to decline while demand continues to increase. When the descending line on the chart for supply crosses the rising line for demand, we will have reached what is known as the “tipping point.” The huge price increases for oil predicted after we reach that point will unquestionably lead to much higher prices for almost everything, especially food.

Unfortunately, the onset of peak oil may arrive much sooner than most people think. The experts, as always, are divided on when this will happen. One of the most optimistic views, promoted by the U.S. Department of Energy, maintains that oil production won’t peak until 2037. Most observers feel this is far too optimistic, especially considering the huge increase in demand from countries like China, which overtook Japan as the world’s second largest oil consumer in 2003.

Renowned petroleum geologist Colin Campbell estimates that global extraction of oil will peak before 2010, probably around 2007. Geophysicist Kenneth Deffeyes says the date for maximum production will be this November. The current instability in the international oil market tends to confirm that we probably are very close to that point.

The exact date may be somewhat academic. If the rollover point does occur within the next few years, there simply isn’t enough time left to make the massive shift to the renewable energy strategies that would allow for a smooth transition from our present oil-based economy. That smooth transition would have been possible if we had started the process 10 or 20 years ago, as many environmentalists and scientists urged. But it didn’t happen. Now, we are simply unprepared.

According to a Feb. 8, 2005, report prepared for the U.S. Department of Energy, “the world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions were gradual and evolutionary. Oil peaking will be abrupt and revolutionary.”

Unfortunately, we are also facing a similar dilemma with natural gas, which was supposed to be a cleaner and abundant substitute for oil and coal. It turns out that domestic supplies of natural gas are declining almost as rapidly as supplies of oil. And filling the gap with imports from Canada, or liquefied natural gas (LNG) from unstable countries overseas is, at best, a problematic — and temporary — strategy, since natural gas (another fossil fuel) is part of the problem, rather than a long-term solution.

Hurricanes Katrina and Rita, and the damage they have done to the oil and natural gas infrastructure in the Gulf Coast region, have made an already bad situation even worse. There is no question that these hurricanes are the product of global warming. And virtually every responsible scientist says that global warming is the unfortunate (but predictable) result of our excessive burning of fossil fuels.

However, hurricanes aren’t the cause of our energy problems. Rather, the culprit is decades of bad planning and bad choices at the national level. The hurricanes were simply one of the possible trigger events that pushed us over the edge — and into the early stages of what James Howard Kunstler aptly describes as The Long Emergency, the title of his 2005 book.

It’s time to get educated about peak oil and think about local responses that reduce our consumption of fossil fuels. As part of that process, we also need to develop a wide range of locally-based renewable energy strategies that help us to make this vital transition as soon as possible.

Weybridge resident Greg Pahl is the author of Biodiesel: Growing a New Energy Economy and Natural Home Heating: The Complete Guide to Renewable Energy Options. He is also a founding member and current president of the Vermont Biofuels Association. For more information, visit www.postcarbon.organd www.peakoil.net.


What�s peak oil? It�s time to learn

PortlandTribune.com

By Robert Pace

Peak oil is an important concept, from the local level to globally, but few know the term. That will change.

In a broad international sense, the term “peak oil” signifies a time when the finite amount of crude oil is unable to meet the growing demands of our world economy.

In other words, it’s the end of cheap energy.

Peak oil affected U.S. domestic crude discoveries around 1971. That’s why we are so dependent on foreign sources. Access to those sources makes up the balance of our nation’s energy needs.

Some people believe “peak oil” soon will become a household term, while others think it’s a few years before it’s commonly understood. Still others claim a date even further out. Industry officials are all over the board about its timing. Regardless, it’s for real and will affect everyone probably sooner than later.

For instance, look at the current price of gas and ask yourself, “Why does it cost so much to fill up a gas tank?” Later this year, you may be saying something similar about heating your home. This is what happens when demand exceeds known reserves of anything.

Just as the conversion from the agricultural age to the industrial age had an impact on how our nation developed, peak oil likewise will be a huge factor in how our communities and governmental agencies do business in the future.

The advent of peak oil doesn’t mean we will run out of oil anytime soon. It does mean, though, that the possibility of finding large new reserves is unlikely. Our current reserves, still untapped, are minuscule in comparison to the daily per barrel usage of our international economy.

The term “peak oil” also may help you understand why the United States and other nations have a vested interest in maintaining access to Middle Eastern oil. The largest reserves of crude can be found there, and access to them is a strategic part of our economic system.

As long as we maintain our current levels of energy consumption and have no viable and price-comparable energy alternatives in place, the United States will require unimpeded access to the Middle East’s oil fields as well as to the natural gas fields north of Afghanistan.

Some people project that because of peak oil we will see a return to denser inner-city populations across the nation. It is economically advantageous and practical to move goods into central locations rather than trying to cover larger areas with many long-distance deliveries. Just about everything we touch had to be moved here by a truck or train. And those forms of transportation rely on oil for fuel.

Has the city you live in been increasing its housing density? Ever wonder why inner-city property is becoming so expensive? I recommend the movie “The End of Suburbia,” about how the American economy became more suburban-based and how the face of suburban life may look after the peak oil age becomes a reality.

At this point, I want to make our communities aware of the term “peak oil.” Preparation will help us transition into what will become known as the Peak Oil Age.


The Peak Oil Crisis: Waiting For Winter

Falls Church News-Press

By Tom Whipple

In the fourth quarter, worldwide demand for oil goes up by 2.5 million barrels per day over summer demand to keep the northern latitudes warm during the winter months. Given that we might have an unusually cold winter this year, the demand increase might be conservative.

The Chinese government recently announced their economy is going to grow another nine or ten percent this year. Maybe they have figured out how to grow without increasing their oil consumption. If they expect in keep this up, their oil imports should start increasing The US economy is still bouncing along fairly well with predictions of pretty good growth next year. More oil needed!

Although many of our flooded refineries are getting back into operation, about a million barrels per day of refining capacity has not yet recovered from the hurricanes. Two-thirds of our Gulf oil production is still shutdown and it’s beginning to look as if government predictions that all will be well in the Gulf by Christmas are optimistic. In Iraq , the insurgents continue to blow up oil pipes at a steady pace and it is only a matter of time before they figure out how to shut down production completely. The shipments of refined gasoline to the US from our fellow International Energy Agency members will soon be drawing to a close. The first signs of serious inflation are beginning to stir.

Despite all this bullish-for-oil news however, prices have dropped some 15 percent since the Katrina peak of over $70 dollars. Wall Street oil traders and analysts are starting to tell financial reporters that the hurricane dislocations are over for a while and the good times may roll for a while longer. Indeed earlier this week the Dow flew up 170 points on the idea that our oil problems no longer look as bad as they did a few weeks ago.

Where did all this optimism come from? Is it justified? The root cause, of course, is that the securities industry is based on eternal optimism and growth. Few have grasped, or are willing to admit, how close we are to the final oil crisis of all time.

The more immediate reasons for the spectacular price drop in the price of oil, and the price at our gas pumps, seems to be the lack of more production-damaging hurricanes and the perception that we Americans have slowed our driving in response to "expensive" gasoline.

After two months in which one hurricane after another has threatened or actually wiped out Gulf oil production and refining, any news that this is not about to happen in the immediate future drives oil traders to sell and sell some more.

Another reason for the price drop, however, is the "demand destruction" (a fancy term for "it costs too much so I am not going to buy as much) said to be taking place in the United States .

Last week the Department of Energy reported US demand for petroleum products had dropped by 2.3 percent as compared to 2004. The American Petroleum Institute did DOE one better by announcing that demand during September had dropped by nearly 4 percent. This was backed up by a consumer survey in which 69 percent claimed to be driving less.

There you have it. Economic theory worked. Higher gas prices have finally driven Mr. and Mrs. America to slow down, ride a bus now and them, or to simply stay at home and watch TV. Supply and demand will soon be back into balance and the crisis will be over for a while. There is no doubt some are cutting back on their driving, but how much and will it last enough to bring supply and demand back into balance without sharply higher prices?

That the US 's hurricane-disrupted crude production fell to less than 4 million barrels per day during September — the lowest since 1943 — does not seem to bother anybody. Just for the record, this means we are currently importing or withdrawing from our strategic reserve some 80 percent of our daily oil consumption.

Why didn't we fall flat on our backs with much of our crude production and significant pieces of our refinery production still out of service in the last six weeks? The answer is, our fellow members in the International Energy Agency (IEA) are letting us have an additional 800,000 barrels of gasoline per day out of their reserves. Moreover it seems our domestic refineries are still deferring maintenance and are still cranking out gasoline rather than switching over to more heating oil production at the end of the summer driving season. It is this combination that has kept us going.

The IEA, however, has already voted to stop letting us have world reserves beyond what was voted immediately after Katrina and the advent of colder weather will quickly force a choice between driving and staying warm.

On top of all this, some commentators are voicing concern that instead of reporting an actual reduction in demand, the government is really measuring a reduction in refinery output which, given all the flooded refineries, should be completely obvious.

The replacement for reduced gasoline production comes from local storage tanks and increased imports of foreign gasoline. In the current hurricane-induced dislocations in much of the US oil industry, one would suspect it is difficult for the government to accurately track just what is going on.

All this is saying it may be a touch too early to start celebrating the end of $3 gasoline. Even if the Caribbean is through generating hurricanes for the year, the world's supply/demand balance is very tight. So fill up your tank while prices are low and hold off on that new SUV for a while. It looks like a long harsh winter ahead and Katrina's second shoe has yet to drop.


Wednesday, October 26, 2005

The Coming Petro Collapse

New York Press

The living feed on the dead, and burn the remains.

By Grant Causwell

By the '80s no one who had any idea what they were talking about seriously thought the world was imperiled by strategic arms, as it was clear that the worst case would involve limited tactical exchanges against massed targets in Germany and, just possibly, with Brigadier Generals Ripper and Ripperkov at the helm, against military targets on the great unpopulated plains of both country's interiors—a nightmare, but nothing like an apocalypse.

None of this kept the adults from using the idea of death by radiation poisoning as a way of keeping us kids from growing up to be Republicans. (Democrats, my mother assured me, weren't madmen who wanted me to die a horrible death, unlike President Reagan.) Nor did it keep the adults from doing ridiculous things like building fallout shelters in their backyards or stockpiling Spam. Baptists aren't the only ones who feel the lure of that bright and ever-nearer day when the world will end and society, with all its inequities, will be swept away in a cleansing fire.

These days, there aren't many threats to the actual survival of mankind. Even people who are as concerned as they should be about nuclear terrorism or potential pandemics like avian flu don't think everyone in the world is going to die if a suitcase bomb goes off in the Holland Tunnel or if the HN51 virus mutates and becomes communicable. We must work with what God and history have given us.

The last month has seen some people here in New York working very hard. Last week was the Winning the Oil Endgame conference, where the technocrats met the plutocrats at NYU to imagine a fine new world where slightly less gluttonous SUVs and vague technologies take care of any problems that might arise from our 700 billion barrel a year gas habit.

More in the sprit of the age was the Petrocollapse New York conference held at the Unitarian Universalist Church on E. 35th Street earlier this month. The unifying idea of the conference seemed to be that an imminent shortage of energy is about to reduce the world to a bleak, barren landscape where the living feed upon the dead and burn the remains for warmth.

"I believe petrocollapse can cure the Earth of this civilization," former energy analyst Jan Lundberg told the assembled, adding that, "although there will be insufficient food and therefore massive upheaval culminating in die-off, there will be plentiful land and housing...A lifestyle of separateness or non-community behavior, so rife in today's dominant, mainstream culture, would be seen as threatening the common good and a throwback."

Lundberg—whose Web site Culturechange.org features nifty headlines like "Petrocollapse: Can you live without indoor running water?" and "System failure requires visionary opposition movement"—was a star speaker at the conference, which was attended largely by the sort of persons you might see at Union Square holding up hand-lettered signs purporting to prove that Dick Cheney personally orchestrated the terror attacks of September 11.

Michael Ruppert, another star speaker, makes money writing books purporting to prove the same. There was a time when Ruppert, a stumpy former cop who looks a bit like the badly sanded end of a coffee table stuffed in a suit, made his money claiming to have inside knowledge of how the CIA was selling drugs in the poor parts of American cities. Now, he's tied together 9/11, the Iraq war and the idea of peak oil (to simplify, it's the point when the amount of oil that's been extracted from the earth becomes equal to the amount left in reserve; some scientists think it's decades off, while others think we're there now) into a vast, and vastly vague, brew of paranoia and imminent chaos, which he peddles in a book, speeches and on his Web site Fromthewilderness.com.

"They will allow and facilitate population reduction through famine and disease," Ruppert told the crowd at the conference. (Do I need to explain who "they" are?) Because, according to Ruppert, we are now experiencing peak oil, "Today we are, especially in the wake of Hurricanes Katrina and Rita, within mere weeks of an economic collapse that may well surpass the one that began with the stock market crash of 1929, and from which there will be no recovery."

There's not much to distinguish such doomsaying from that of the UFO cultists, believers in astral projection, Communists and magnetism enthusiasts Lundberg and Ruppert so resemble. Like their fellow flim-flammers, the prophets of petrocollapse rely on dark assertion, appeals to authority (Ruppert's Web site prominently touts an endorsement from comedian Dick Gregory and a write-up he once received from People) and faith in a future, tantalizingly near at hand, where the true believers will be vindicated—in this case by mass starvation and the complete collapse of the global economy rather than by a study in the New England Journal of Medicine touting the benefits of magnetic bracelets. But really it's all the same thing. Like similar movements, the petrocollapse one has its superstars, obscure doctrinal splits (the proprietor of Survivingpeakoil.com, for instance, posts a notice that he is "no longer associated with Michael C. Ruppert or From the Wilderness publications" right at the top of his site's home page) and articles of faith. The curious and interesting thing about the movement is that its articles of faith are valid and undisputed.

The basic argument is mere common sense. Oil and natural gas are finite resources without which we can currently do almost nothing. The food you eat is grown with petrochemical fertilizers, harvested by men wearing petrochemical-based clothes using petrochemical-based tools riding gas-fueled machines, packaged in plastics and shipped on the back of heavy, diesel-fueled trucks to your local store, where you buy it, then take it to a likely gas-heated home, where you cook it on a gas-heated stove. At some point—and there are serious geologists who think we've reached it—the global demand for oil and gas will grow larger than the supply of it, and everything from the farmer's fertilizer and wristwatch to the trucker's diesel to the gas in your stove will become prohibitively expensive. Apply the same effect across every industry you can imagine, and the scale of the potential crisis becomes clear.

The problem is not that we're running out of oil and gas, or close to doing so. Instead, it's that when we reach the point where demand exceeds supply, the global economy may stop working. Take Wal-Mart, for instance, as a frequently cited potential casualty of peak oil. It is the biggest employer in the United States, Canada and Mexico; it controls nearly 10% of the entire retail industry in America; and its business model is entirely based on the idea of just-in-time shipping from its massive central warehouses to its stores, which eliminates dead stock and allows the company to make money even when selling below cost. At what point would an interruption in gas supplies destroy the company? At what point would high gas prices do so?

Or, take another example—heat. Last winter I was living in Chicago in a 1900-square foot loft with 13' ceilings and a gas furnace. The wife and I, accustomed to smaller New York apartments where the landlord footed the heating bill, were startled to receive a $250 heating bill for December—nearly a quarter of our monthly rent. In the aftermath of the recent hurricanes, analysts are now projecting that home heating oil will be 30% more expensive this year than it was last year, and gas 50% more expensive. That doesn't mean a lot to New Yorkers in cramped apartments, but to heavily leveraged suburbanites living in cheap, spacious new construction, it can be the difference between being tight and being insolvent. And it ought to mean a lot to New Yorkers—as James Kunstler, by far the most lucid and engaging of the big stars on the peak oil circuit (this isn't meant to damn with faint praise) likes to observe, something far less than an energy apocalypse could make it so expensive to heat Manhattan skyscrapers that they'd have to be abandoned.

Fortunately for any attendees who were hoping to hear from non-charlatans, Kunstler spoke at the Petrocollapse conference. The speech is posted at his Web site, Kuntsler.com, and is worth reading in its entirety, but a passage near the end lays out the stakes:

"At the bottom of the Peak Oil issue is the fear that we're not going to make it.

"The Long Emergency looming before us is going to produce a lot of losers. Economic losers. People who will lose jobs, vocations, incomes, possessions, assets—and never get them back. Social losers. People who will lose position, power, advantage. And just plain losers, people who will lose their health and their lives."

The peak oil movement is, right now, no matter how many write-ups it receives in the New York Times Magazine, a movement of people who have already lost, just as all survivalists' movements are. (I suspect Jan Lundberg would have done well for himself giving speeches about the need for fallout shelters 50 years ago.) Those who have the least worry most about losing it. In this case, it's those least tethered to the hectic crash and race of motorized life, those who not only despise it, but tremble with anticipation of the glorious day when the ones tethered to it and secure in their place are similarly lost, who drive the movement. They're the ones who buy books like "When Technology Fails: A Manual for Self-Reliance & Planetary Survival" or "Strategic Relocation: North American Guide to Safe Places" (hint: you want "a climate which can sustain life in an energy crisis but won't attract marauders"), and pay Michael Ruppert $50 a year to read his lurid fantasies about crack-dealing spooks and economic collapses that are always, from what I can tell, just a few weeks off.

Peak oil isn't just a scary story, though. Sober forecasts have it arriving by the end of the decade, and even the lightest effects of demand suddenly exceeding supply would include ruinous inflation, the sort that could wipe out pensions and leave millions unable to pay their mortgages, and gas prices that would leave millions unable to make their daily commute. Utterly commonsense policies like shifting the shipping burden from highways to rail lines, imposing high fuel efficiency standards on SUVs, levying a stiff national gas tax and seeking to make every city's public transit system as comprehensive as those in New York and Chicago are just fantasies right now.

Most worrisome of all—and this is, again, an idea Kunstler frequently returns to—is the general attitude that American science will somehow arrive at a magical solution, mainly because there never has been any large-scale need our science hasn't met. This sounds like the logic that led to the botched occupation of Iraq—America had never failed at anything similar, and so would never do so. The effects of the coming energy crisis may in the end prove more like those of an exchange of nuclear artillery shells in north Germany than like an exchange of direct hits on New York and Moscow. It's not a comforting thought.


Tuesday, October 25, 2005

The House Of Cards

Countercurrents.org

By Dan Benbow

In the wake of Hurricane Katrina, buried under the transitory media focus on the one-third of local National Guard protecting oil in Iraq and the related suffering of America’s urban poor on home soil were urgent articles about the damage Katrina had done to oil refineries located in the Gulf of Mexico. Gas prices that had already gone up 20% over the previous year were expected to go higher, possibly much higher.

Gas prices quickly rose to more than $3/gallon, about half what Western Europeans pay. Opportunistic lawmakers proposed suspension of the gas tax as paroxysms of panic surfaced in long gas lines reminiscent of the late ‘70’s, when the CIA's 25-year experiment in replacing a popularly-elected leader with an oil supply-friendly dictator backfired in Iran. The panic died, the media turned the public eye back to the flavor of the moment, and the corporate predators once again slipped back into the shadows waving their bags of gold to the gods of deregulation.

Absent in the 24-hour news cycle was a serious public dialogue about the larger implications of Katrina, from America’s abandonment of its most vulnerable citizens to the folly of thinking man can develop anytime, anywhere by “taming the land” to the utter insanity of constructing an economy and a lifestyle around a finite resource.

Ending dependence on foreign oil has gotten lip service from American leaders since 1973, when OPEC retaliated against the United States for its support of Israel in the Yom Kippur War, but little has been done because America’s drivers are a special interest without peer.

The second major American oil crisis came in 1979, when the price of oil doubled in six months during the Iranian revolution. Jimmy Carter was saddled with the fallout, and made the colossal political mistake of telling Americans the truth: that they were in a bad time that ought to be a reminder of the need for short-term sacrifice in service to long-term sustainability. Voters responded by pulling the lever for Ronald Reagan’s sacrifice-free “optimism.” 1980 was a particularly good year for Big Oil. Reagan won with the expectation that he would open public lands for drilling and gut government funding for the competition, alternative fuel research, and Reagan’s future compa�ero Saddam Hussein picked up a key to the city of Detroit.

Reagan didn’t pester Americans with sober talk about conservation, but he did take action on alternative fuel with substantial cuts in their funding. A worldwide recession in ’81 and ’82 lowered the price of crude oil by 75%, which spurred an American economic recovery and a premature death of the 70’s conservation spirit. The low price of oil in (most of) the twentysome years since opened the showroom gates to minivans and SUVs, perhaps the deadliest penis substitute ever. U.S. oil consumption since Reagan’s inauguration has grown 25%, to three gallons/day per capita, twice that of our nearest competitor, Western Europe.

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2004 saw the biggest annual increase in world oil consumption ever (3.4%), a fact that ought to give pause to globalizationistas who pontificate about the oozing potentialities of America’s extraction-based economic model. Much is said about the rise of China and India in the oil sweepstakes, but China’s per capita consumption is currently just 1/15th that of the U.S., 5% of the world that guzzles 25% of the oil. U.S. domestic oil production peaked in 1970, guiding the United States military presence ever deeper into the Middle East as imports (currently between 53 – 65%) fill an increasingly larger portion of demand. The National Energy Policy 2001 report predicts that domestic oil production will decrease 18% by 2020, while consumption will grow 31%.

Saudi Arabia, an ally of sixty years standing with the largest reserves in the world, promises to open the spigot to meet Western demand and keep prices stable, but refuses to release credible metrics of its supplies, feeding uncertainty about the size of the world oil supply. Some experts claim that we may’ve already reached “peak oil,” the point where half the world’s oil has been drilled and what’s left is harder (and more expensive) to find and extract. When investors get a suspicion that peak oil has been reached, prices are bound to go up. An increase in oil prices could conceivably cause or contribute to an international recession by raising prices on oil and all oil-related products, thereby raising prices and reducing spending on everything else. As is the case with all instances of oil addiction backlash, one person’s independence becomes another’s purgatory, as severe consequences of the first world lifestyle ricochet indiscriminately worldwide.

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Economic hardship is only one of several potentially catastrophic ramifications of oil addiction. In between Hurricane Katrina and Hurricane Rita, MIT climatologist Kerry Emanuel released a study in Nature magazine theorizing that global warming was significantly exacerbating hurricanes by warming up the ocean. Data showed that hurricanes in the Atlantic Ocean and the Gulf of Mexico have doubled in intensity and duration over the past three decades. Emanuel’s study was echoed by Georgia Institute of Technology's recent study and the 2001 finding of the Journal of Climate that greenhouse gases could triple the number of category five hurricanes.

Skeptics of a connection between warming and hurricanes claim that overdevelopment of coastlines has skewed impressions of recent storms, and that the data on past storms is too scarce to draw long-term conclusions about present storms. The overdevelopment argument has merit, and is applicable to California as well, where mega population centers bestride an earthquake fault line. But the reflexive argument that extreme natural phenomena are merely cyclical has taken a thorough drubbing in the one-time debate over the existence and causes of global warming. The rapid changes all around us and the the overwhelming scientific consensus are now so obvious that even George W. Bush, the inspiration for the Fossil Fuel Hall of Fame, recently said “We know the surface of the Earth is warmer and an increase in greenhouse gases caused by human activity is contributing to the problem.”

In fact, recent events such as record thinning of Arctic ice this September, and a related projection that the Arctic will be ice-free during the summer by the end of this century for the first time in a million years, hint that today's seemingly gloomy theories may be too optimistic Here a study by the Australia Medical Association predicting that warming could cause the spread of deadly viruses (smallpox, polio, influenza, Hepatitis A), there a prediction by the United Nations University that global warming “will create up to 50 million environmental refugees by the end of the decade…”

The severe weather disruptions over the past decade have come from a gain of just one degree Fahrenheit over the last century. The next century will bring an increase of one degree minimum, and probably more, as oil consumption in the United States and developing countries continues to grow. Reputable climate science predicts more of what we’ve already seen and worse – drought, desertification, crop damage, vanishing habitats, species extinction, rising sea levels, mass flooding, an increase in the number and intensity of hurricanes, cyclones, wildfires and heat waves of the kind that left over 35,000 dead in Western Europe in August 2003, the hottest European summer in 500 years.

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As global warming gently wafts into the public consciousness like the smoke trilling through the bottom of the doorway, the threat of Al Qaeda takes center stage in the collective American mind. Al Qaeda sprang from the Mujahedin (once called "the moral equivalents of the Founding Fathers" by Ronald Reagan), the Muslim nationalists who repelled the Russian Army with generous CIA investment in the ‘80s.

Once the Russians retreated, the U.S. and British abandoned Afghanistan and left a vacuum of chaos and civil war that the Taliban eventually capitalized on. As ever, the vast majority of Americans are unaware of the latest greatest Frankenstein narrative, making it easier to pitch black and white boilerplate of the with us or against us variety.

9/11 was extraordinarily barbaric and completely unjustifiable, but no historical event of such magnitude happens in a vacuum. According to a study conducted in the time prior to 9/11 by Maritz Marketing (for Ford), and later later cited in the November 2001 Harper's Index, fuel economy ranked 20th of 35 criteria Americans used when buying an automobile. Callous indifference to passing pollution, ozone depletion, unsustainability and violent ecosystem disruptions on to present and future generations was and is enabled by a a continually growing U.S. military presence massed in the oiligarchies of Central Asia. The invasion of Iraq was just one part of a larger plan to commandeer the resources in the Persian Gulf – where at least 60% of the world’s oil is located – to control the world, China and Russia in particular, and delay America’s day of reckoning.

The colonization of the Middle East gained currency on the neo ("new") American right in 1973, when OPEC countries nationalized oil, which caused huge spikes in the cost of a barrel and spiraling inflation in the U.S.

Due to the disaster in Vietnam, direct military action was not a popular option for some time after, so Ronald Reagan worked through back channels, making nice with dictators in Iraq, Iran, Saudi Arabia and other oil kingdoms, and creating the Joint Task Force-Middle East to protect oil tankers in the Gulf. In the early nineties, Bush Sr. used Gulf War I as a platform to establish bases in Saudi Arabia and adjoining areas, stoking Al Qaeda’s primary grievance.

Following U.S. military operations in Kuwait, then-Secretary of Defense Dick Cheney drew up The Defense Planning Guidance, a brief calling for US world dominance via means of a mobile, technologically-advanced military rapidly deployable on up to two fronts at once, unilaterally and preemptively if necessary. Controlling the world’s oil supply to exert leverage in the international economy was among the central goals outlined.

When Cheney’s baby was leaked to the New York Times in 1992, George Bush Sr.’s re-election campaign stuck their tail between their legs and Cheney denied ownership of the document’s clearly stated intent, but as the right never tires of saying, 9/11 changed everything. Today Cheney’s vision is reality, as the United States military spends in excess of a billion dollars a day, about as much as the rest of the world combined, to maintain over 700 bases around the world - with many more to follow, if the neocon mandarins have their way.

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The invasions of Afghanistan and Iraq have provided the US with a foothold to cement a network presence now in Turkey, Pakistan, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates. Far from the eyes of the press and the public, the administration is in talks to muscle in on old Soviet territory (with bases in Kazakhstan, Uzbekistan, Kyrgyzstan, Azerbaijan and Georgia), Eastern Europe (Romania, Poland, Bulgaria), and Asia to the West (Singapore, Vietnam, Malaysia), while pulling out of useless pacifist redoubts like Germany and France. With American oil imports certain to increase substantially, the occupation trend is likely to continue, further inflaming the battle with Al Qaeda and other Muslim groups opposed to occupation.

The hawk of today not surprisingly finds his base of support in have-your-cake-and-eat-it-too areas of the country that bray about small government and self-sufficiency while getting more from the federal government than they pay in while being the most helpless oil addicts in the world. These transit-last areas of the country most sincerely truck in a desire for vengeance while conveniently being unlikely to suffer suicide bombings, due to lack of population concentrations. The distance from the realities of war is well-reflected by Rush Limbaugh's GITMO t-shirts and Sony's trademark of the phrase "Shock and Awe" for a videogame the second day of Iraq II.

America’s utter failure to change the hearts and minds of foreign “savages” is reflected by polls in the Middle East consistently showing overwhelming distrust of the motives of the United States, Bush in particular, whose approval ratings in the region run about even with cholera and colon cancer.

No matter how ugly the situation in Iraq becomes, between 35 and 40% of Americans are lockstepped into the neocon plant of bringing democracy to the Midde East with a coalition of troops from a host of undemocratic countries. Unflinching jingoism doesn’t change the inescapable fact that no amount of military spending can purchase complete control over the rules of engagement. Absent negotiations on troop withdrawals and ultimately, Middle Eastern autonomy, the West is bound to take some pretty big lumps. It’s no coincidence that the victims of Al Qaeda’s last three big strikes came from countries that supported the invasion of Iraq; exploding populations of poor and desperate young men across Central Asia with no freedom and little hope are sure to provide an endless supply of future suicide bombers. The longer and more forcefully the West meddles, the higher the stakes and the larger the likelihood of a chemical or nuclear terrorist attack that eclipses 9/11 in devastation, disruption, fear, anxiety, and damage to democratic institutions.

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There are plenty of things we can do at home to reverse – or at least slow down - this selfish and destructive slide. First there’s common sense: shutting lights, fans and powerstrips off, turning the heat/air conditioning down or off by dressing for the weather, keeping our homes well-insulated, using clotheslines when possible, washing dishes manually, and/or buying fuel-efficient appliances.

Those who can’t live without a car can consider scooters (up to 90 MPG), motorcycles, or fuel-efficient cars, and should be smart enough to save lives and gas by driving the speed limit and keeping tuned up. Those who don’t have lengthy commutes can walk or ride their bikes to work, while those a little further from their place of employ can use some combination of carpooling and public transportation.

Which brings us to the government. As explained in Eric Schlosser’s Fast Food Nation, America’s auto companies padded their profit margins in the first half of the twentieth century by doing what they could to rid the States of public transportation. Once rail lines were ripped out quick-buck developers ushered the second half of the twentieth century in with a soulless postmodern nightmare of suburbs, strip malls and chain stores built around the automobile. As oil becomes more expensive, this development model will prove definitively to be what one could call “dumb growth.”

To counteract this gross miscalculation, future development could focus on restoring countrysides and revitalizing cities with locally grown food and bike lanes blended with more green space to restore balance with nature, along with high-density mixed used buildings with firm conservation codes constructed along well-funded public transportation corridors. Railroads as a transport option could come back into broader use and the government could shift tax incentives from the dirty energy sources of yesterday to the clean energies of tomorrow, which would encourage mass production of (and lowered costs for) renewable forms of energy. Since American business never does a damn thing unless the price is right, incentives could be given to auto companies to produce electric and hybrid autos.

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I’m dreaming. Obviously sometimes there is no reasoning with a junkie. Skewering “politicians” from a faux-populist pose is ancient American sport, but given a choice between short-term sacrifice for long-term gain and a quick fix, a majority of Americans can be guaranteed to choose the latter, making it hard for elected followers at any level of government to the do the right thing. Public servants with vision will be needed to do what is necessary: all of the above plus lowering the speed limit, raising gas mileage standards slowly and surely, and disincentivizing driving with increases in registration fees, parking fees and other tickets.

Also pushing history forward like a long overdue colonic is the lawsuit. eight attorney generals filed a lawsuit against five energy companies responsible for 10% of America's carbon dioxide emissions Given time, lawsuits forcing the hand of polluters on climate change could bear fruit, though a solid majority of today’s federal judges are Republican appointees who genuflect before Big Business.

The best idea, given the overwhelming reality of America’s sense of resource entitlement, has long since been the norm in Western Europe: steep gas taxes. Since drivers are already lowering the quality of life of and passing a tax on to everyone by shrinking a dwindling energy supply and raising prices on all oil-based goods and services, this makes perfect sense. In Western Europe, one sees very few big, dumb, tacky tanks of the Expedition, Escalade, Suburban model, and people don’t exactly miss the 134 tons of carbon dioxide a Suburban spews into the air over its bloated lifetime.

Another effective disincentive is a congestion charge. In 2003, to unclog horrid downtown traffic jams, London mayor London mayor Ken Livingstone levied a congestion charge of $8/day on any autos that came into downtown London. On the first day of the new policy, 60,000 fewer autos made their way in to downtown London; in the time since, congestion has decreased substantially, by up to 20%. Though Tony Blair and like-minded lily-livered career politicians bailed on Livingstone’s brave policy for fear of political retribution, Livingstone was rewarded for his vision with a cozy re-election margin.

Months earlier, Livingstone, the rare politician of conviction, had referred to George W. Bush as the "greatest threat to life on this planet that we've most probably ever seen." The comment was a crystalline reflection of worldwide opinion, but it got little play in the media chain that spoonfeeds information to the better portion of American voters. No matter what happens on the world stage, many Americans remain oblivious to – and in some cases resentful of - the whys and wherefores of this universal global distrust, a fact still in evidence in a recent ABC poll showing that 66% of Americans don't feel they will be effected by global warming.

Let’s hope it doesn’t take a series of unambiguously cataclysmic events, natural or otherwise, to wake the little piggies up to the obvious: they don’t hate us for our freedoms; they hate us for our greed.

© Dan Benbow, 2005


Escaping The Road To Extinction

Countercurrents.org

By Bill Henderson

The Gaia hypothesis is a biological idea, but it’s not human-centered. Those who want Gaia to be an Earth goddess for a cuddly, furry human environment find no solace in it. They tend to be critical or to misunderstand. They can buy into the theory only by misinterpreting it. Some critics are worried that the Gaia hypothesis says the environment will respond to any insults done to it and the natural systems will take care of the problems. This, they maintain, gives industries a license to pollute. Yes, Gaia will take care of itself; yes, environmental excesses will be ameliorated, but it’s likely that such restoration of the environment will occur in a world devoid of people.

Lynn Margulis “Gaia is a Tough Bitch,” in The Third Culture, John Brockman, ed.

Terrorism annually kills and injures minor hundreds or thousands although there is a potential death toll in the hundred thousands or low millions possible from some variety of dirty bomb in crowded cities.

The next global flu epidemic could kill millions, probably tens of millions.

But there is a tsunami building which threatens billions - maybe, in the darkest scenarios possible, all of us, humanity and most of our fellow flora and fauna on this planet too.

Fighting terrorism is the new growth industry; avian flu has precipitated global public health planning and preparedness. But escaping the path to extinction isn't possible because our lifestyle is not negotiable.

Man's exponential increase over the past several centuries will outgrow the planet's carrying capacity, probably in our time. Animal populations that bloom exponentially usually crash. Increasing population armed with powerful technologies will cause severe resource depletion and large scale changes to the biosphere engendering die-off. Famine, disease and most probably war - a final, nuclear, world war? - will be the immediate cause of death for billions of innocents.

America's foremost scientist E.O. Wilson describes navigating this passage of expanding humanity constrained in a finite world in his Bottleneck metaphor for the 21st century. William Catton Jrs brilliant OVERSHOOT is now available in chapters all over the net because of its usefulness and clarity in applying ecological understanding of our present global predicament.

Unfortunately, this bigger picture, which should be the context for all our day to day decision making, is heresy in our predominant religion of expanding economies. We can't even really be allowed to think these thoughts.

For example, both global warming and imminent severe oil depletion require a rapid transition away from fossil fuels to more sustainable sources and use of energy, yet subsidies for the oil industry continue to dwarf investment in alternative energy development, and global oil demand relentlessly increases.

In the terminology of the system science concept path dependence *, so much has been invested in oil development and especially in oil dependent infrastructure in our developed world economies that because of these 'sunk costs' we are 'locked-in' to a fossil fuel economy. It is not just the trillions already sunk in the oil production and distribution networks, but, much more importantly, it is the incalculable investment over a century in a car dominated society, suburbia and sprawl, in "the greatest misallocation of resources in the history of the world" .

Service sector path dependence compounds the problem. Democratically elected governments of service sector economies are severely restricted to inherited policy paths because change that would negatively effect local economies by even minor percentage points will lead to politically dangerous business closures with depressed government revenues and societal pain requiring increasing governmental expenditure.

Service sector economies are so complex, interdependent and vulnerable that we are evolving governance as a protective inertial system within which the economy is the primary concern and is nurtured to grow in its own mysterious ways. Insidiously, business and government adopt versions of Fedspeak where the primary goal is not to say anything that could possibly be harmful to the economy.

Our economies are incredible human achievements producing the cornucopia of individual and societal wealth we are so very fortunate to enjoy. The market mechanism is central to the development of our rich economies and the needed transition away from a fossil fuel economy cannot be made without the utility of markets.

But only ideologues believe that unregulated markets will always lead to the optimal possible sustainable economy. Clearly with the powerful greenhouse gas methane now being released from melting tundra threatening potential runaway global warming it must be acknowledged that market mechanisms never quantified the negative greenhouse gas potential of fossil fuel use. If no regulatory action is taken and we continue down the fossil fuel path, there is a now well understood and predictable runaway global warming possibility where humanity and most forms of life on Earth are doomed, are toast in the not too distant future.

Path dependence is the largely unrecognized but primary impediment to needed change. It is crucial to understand the limitations of trying to make needed change incrementally, of muddling through. We can't, aren't getting to a post-fossil fuel economy in time by staying on the fossil fuel policy path.

Those concerned with both global warming and peak oil must be innovative to free up governance so that necessary change is possible, so that more futures are possible. Lester Brown's Plan B – a wartime-equivalent rational-comprehensive governmental framework - is one example of a governmental reconfiguration where there is a possibility of rapid change to a post-fossil fuel economy.

Freeing up our ability to make needed change is the first challenge and then - How do we rapidly evolve the governance framework to manage man and create a sustainable economy so that we don't destroy the natural systems humanity is ultimately completely dependent upon?

"EM (ecosystem management) technology will probably emerge as more important to people than either the technology of the communications revolution or biotechnology because of its potential usefulness in guaranteeing a livable environment."

Yale forestry professor John Gordon DEFINING SUSTAINABLE FORESTRY 1993

*"The evolutionary paradigm is different from the conventional optimization paradigm popular in economics in at least four important respects (Arthur 1988): 1) evolution is path dependent, meaning that the detailed history and dynamics of the system are important; 2) evolution can achieve multiple equilibria; 3) there is no guarantee that optimal efficiency or any other optimal performance will be achieved due in part to path dependence and sensitivity to perturbations; and 4) ‘lock-in’ (survival of the first rather than survival of the fittest) is possible under conditions of increasing returns. While, as Arthur (1988) notes "conventional economic theory is built largely on the assumption of diminishing returns on the margin (local negative feedbacks)" life itself can be characterized as a positive feedback, self-reinforcing, autocatalytic process (Kay 1991, G�nther and Folke 1993) and we should expect increasing returns, lock-in, path dependence, multiple equilibria and sub-optimal efficiency to be the rule rather than the exception in economic and ecological systems."

Costanza et al. Modeling Complex Ecological Economic Systems. BioScience 1993


Sunday, October 23, 2005

It's the End of Oil / Oil Is Here to Stay

TIME.com

By KENNETH DEFFEYES, PETER HUBER

It's the End of Oil

World oil production is� about to reach a peak and� go into its final decline. For years, a handful of petroleum geologists, including me, have been predicting peak oil before 2007, but in an era of cheap oil, few people listened. Lately, several major oil companies seem to have got the message. One of Chevron's ads says the world is currently burning 2 bbl. of oil for every barrel of new oil discovered. ExxonMobil says 1987 was the last year that we found more oil worldwide than we burned. Shell reports that it will expand its Canadian oil-sands operations but elsewhere will focus on finding natural gas and not oil. It sounds as though Shell is kissing the oil business goodbye. M. King Hubbert, a geophysicist, correctly predicted in 1956 that oil production in the U.S. would peak in the early 1970s--the moment now known as "Hubbert's Peak." I believe world oil production is about to reach a similar peak.

Finding oil is like fishing in a pond. After several months, you notice that you are not catching as many fish. You could buy an expensive fly rod--new technology. Or you could decide that you have already caught most of the fish in the pond. Although increased oil prices (which ought to spur investment in oil production) and new technology help, they can't work magic. Recent discoveries are modest at best. The oil sands in Canada and Venezuela are extensive, but the Canadian operations to convert the deposits into transportable oil consume large amounts of natural gas, which is in short supply.

And technology cannot eliminate the difficulty Hubbert identified: the rate of producing oil depends on the fraction of oil that has not yet been produced. In other words, the fewer the fish in the pond, the harder it is to catch one. Peak production occurs at the halfway point. Based on the available data about new oil fields, there are 2,013 billion bbl. of total producible oil. Adding up the oil produced from the birth of the industry until today, we will reach the dreaded 1,006.5-billion-bbl. halfway mark late this year. For two years, I've been predicting that world oil production would reach its peak on Thanksgiving Day 2005. Today, with high oil prices pushing virtually all oil producers to pull up every barrel they can sweat out of the ground, I think it might happen even earlier.

Kenneth Deffeyes is the author of Beyond Oil (Farrar, Straus & Giroux; 224 pages)

Oil Is Here to Stay

The "Peak Oil" theory fits nicely� on a cocktail napkin. Its curve looks like this: Colonel Edwin Drake starts pumping crude in Pennsylvania in 1859. We've been pumping faster and faster ever since. Sooner or later, on this finite planet of ours, it just has to run out. U.S. production peaked in the 1970s. Global production will soon be on the downside of the same dismal curve.

Nonsense. Technology and politics--not geology--determine how much we pump and what it costs.

America currently consumes about 7 billion bbl. of oil a year. When production in Persian Gulf fields was ramped up by 12 billion bbl. a year in the 1960s, global prices collapsed. That made it politically painless for the U.S. to ban almost all new drilling off the Florida and California coasts and then in much of Alaska. With oil, as with textiles, domestic production peaked because others began producing the same stuff cheaper, while we contrived to make our production more expensive. Today Alaska contains 18 billion bbl. of off-limits crude. We've embargoed at least an additional 30 billion bbl. beneath our coastal waters. And we could fuel many of our heavy trucks and delivery vehicles for a decade with the 20 billion bbl. worth of natural gas we've placed off limits in federal Rocky Mountain lands.

Outside our borders, Alberta's tar sands contain 180 billion bbl. recoverable with current technology, and Calgarians are pumping that oil today. A total of several trillion barrels of oil soak the sands of Canada and Venezuela alone--a century's worth at the current global rate of consumption. Then there are methane hydrates. The U.S contains some 30 trillion bbl. worth of those frozen hydrocarbons off the shores of Alaska, the continental coasts and under the Rockies. There's little doubt they too can be extracted economically. If we try, we'll certainly find cheap ways to transform North America's 1 trillion bbl. worth of coal into crude as well. General Patton's Third Army completed its roll across Europe on coal liquefied with German technology.

The price of oil has always fluctuated. In inflation-adjusted dollars, it was higher in the early '80s than it is today. Extraction technologies continue to improve much faster than supply horizons recede. We've got the right know-how and the right planet. What we lack is the political will.

Peter Huber is the co-author, with Mark Mills, of The Bottomless Well (Basic Books; 214 pages)


The Five-Minute Guide: Oil

Smartmoney.com

By Robert Thompson

It can be fashioned into a Chewbacca action figure or the fuel that propels a stealth B-2 Spirit. One sixth of the world's economy is devoted to exploiting it. Boiled by refineries into a phalanx of hydrocarbon products — gasoline, diesel, kerosene, you-burn-it-they'll-make-it — crude oil has set us free. We've employed it to unlock the atom, explore outer space, map the human genome. It's the most potent, important resource ever gifted to mankind. And it's pretty much gone.

7 Critical Questions

1. What's "peak oil"?
Formulated by Shell Oil geophysicist M. King Hubbert, "peak oil" is the recognition that oil and gas are finite resources subject to depletion. All oil production will peak according to a bell curve, with increasingly negative repercussions after the peak, when supply plummets and demand increases. Hubbert, who died in 1989, was mostly ignored in 1956 when he predicted continental U.S. oil production would crest between 1965 and 1970. But when domestic production peaked in 1970, experts applied his suddenly portentous theory to world supplies. Various Hubbertites now predict that global oil production will peak within twenty years.

2. But we have reserves. Right?
Created in the 1970s and housed in massive underground salt caverns along the Texas and Louisiana coasts, America's Strategic Petroleum Reserves' 727 million barrels would keep the U. S. operating at normal capacity for about forty-five days, figured at the current U.S. consumption rate of sixteen million barrels a day.

3. Can we get our oil from someplace outside the Middle East?
Venezuela, Mexico, Russia, and various African nations will provide temporary relief, but their reserves will likely be played out by 2025. As a further worry, discovery of major new oil fields hit zero for the first time ever in 2003.

4. Whatever happened to ANWR?
Depending on which side of the debate over drilling in Alaska's Arctic National Wildlife Refuge numbers come from, estimates of reserves there range from mammoth to moderate. But a 2004 study by the Department of Energy concluded ANWR resources would only slightly reduce dependence on foreign oil. The mean estimate of ANWR's reserves, 10.4 billion barrels, is the amount the U.S. burns through in about twenty-two months. "It's the addict wanting to sell the family jewels for another fix," says Bart Anderson, coeditor of the online Energy Bulletin. "The problem is addiction."

5. Should we be scared?
Yes. And it's not just Rapture nuts who say so. When asked about the coming energy shortage in 2003, Matt Simmons, Bush advisor and CEO of the energy investment bank Simmons & Company International, replied, "I don't think there is [a solution]. The solution is to pray." Even the oil-glutted Saudis have a saying: "My father rode a camel. I drive a car. My son rides in a jet. His son will ride a camel."

6. When do we start waiting in line for gas?
If peak oil is valid, your car will soon be the least of your worries. (Collapse of the dollar, unemployment, and your ineptitude with hand tools might be of greater concern.) Nevertheless, with the "peak" comes a supply-and-demand crisis.

7. Can't we just make oil?
Synthetic oil is made from coal and other products through a process known as gasification. Already, South Africa liquefies coal to produce much of its diesel fuel. But the process is expensive and, according to one estimate, replacing conventional oil with synthetic oil at current rates of consumption would bring about the peak of U.S. coal supplies within two decades.

The History

WAY BACK: Although it would take eons for the energy-dense residue of fossil deposits to be fully appreciated, the ancients were well aware of the magical properties of the strange goo oozing from primeval seeps. Early mystics around the Tigris and Euphrates rivers foretold the future from shapes oil made when cast upon the water. Greek navies used it to make potent incendiary bombs.

1859 The world's first oil well is tapped near Titusville, Pennsylvania, and crude soon replaces whale oil as the illuminant of choice, setting off a fortune-hunting spree across the world.

1870 John D. Rockefeller establishes the Standard Oil Company. Rock's monopoly control and ruthless tactics establish an enduring business model for "Big Oil."

1876 First practical gas-powered engine is built by Nikolaus Otto.

1914 to 1918 World War I is decided in large part by the use of oil-fueled machines.

1941 Pearl Harbor may have precipitated U.S. entry into World War II in American eyes, but a U. S. embargo on oil to Japan makes it imminent.

1944 Near war's end, Roosevelt and Churchill partition Middle Eastern reserves: Persia for Britain, Iraq and Kuwait to be shared, and Saudi Arabia to the U.S.

1960 OPEC (the Organization of the Petroleum Exporting Countries) is formed by Middle Eastern nationals to protect their prized resource.

1973 Decreased Western ability to control its own oil supply is exposed during the Yom Kippur War, when OPEC nations punish American support of Israel by embargoing oil shipments to the United States, igniting an oil crisis.

1980 The OPEC embargo, along with the Soviet invasion of Afghanistan, leads to the Carter Doctrine, making it official U.S. policy to employ "any means necessary" to protect the flow of oil from the Middle East.

1991 to Right Now The first significant test of the Carter Doctrine comes with the Gulf war, when U.S. troops force Iraqi invaders out of Kuwait. The Western coalition prevails, but the war sets an ominous tone for the future, as increasingly influential peak-oil theorists begin forecasting the "end of oil," an event perhaps heralded by today's rising gas prices and battle for Iraq.

Where's the Oil? A Global Breakdown of Proven Remaining Oil Reserves

The Alternatives
"The stone age did not end for a lack of stones." Industry advocates often invoke this famed quote from former Saudi oil minister Sheik Zaki Yamani to soothe troubled investors. The message: Don't worry, we've always come up with new technologies, and we will again. But scientists are skeptical that a fuel substitute packing anything close to oil's punch will be developed. Wind, coal, Canadian tar sands, nuclear, biodiesel, ethanol, synthetic oil, hydrogen, fusion, thermal depolymerization, vast solar arrays in space — after decades of research, every "magic bullet" has failed to deliver due to either fiscal, environmental, or technological problems. Exacerbating the issue is the fact that alternate sources can't be developed independent of fossil fuels.

The "basket" approach — a combination of alternate energy sources — seems the only way out of our oil-deprived wilderness, but even that requires a multibillion-dollar infrastructure overhaul and hordes of oil-burning machines to do the work. Despite relatively meager success stories (hydrogen-fuel-cell cars, solar and wind power), America's coming energy calamity will likely be solved only by a vast government program.

Today, for example, U.S. researchers studying solar power get by on about $50 million to $75 million annually. Meanwhile, oil and gas R&D scientists play with more than $2 billion a year. That ratio will simply have to be reversed by law in a centralized effort employing universities whose research departments have not (as have the University of Texas at Austin, Stanford, and others) already accepted irresistible corporate oil grants that have turned significant parts of them into giant laboratories for petroleum companies. Until that happens, the miracle breakthroughs we're hoping for will likely remain just that.