Twilight For
The Age Of Oil
By Jeff Berg
22 August, 2005
Countercurrents.org
Oil
is like a gun, ones perception of it is very much dependent on
which end of the barrel one finds oneself.-Juan G. Carbonel
Of all the points
that swirl around the peak oil debate perhaps two of the most telling
are made by Matt Simmons author of Twilight in the Desert: The
Coming Oil Shock and the World Economy and CEO of Simmons International,
one of the world's largest investment banks in the energy sector.
First: In December
of 1970 the U.S. produced a then world record 10.2 mb/d (million barrels
per day). If you look today at the productivity of the fields that created
that 10.2 mb/d you find that they are producing just over 2 mb/d. [1]
This is an 80% reduction
and if you add in every other producing field in the U.S. the reduction
in production is still 30%. This despite the fact that the U.S. now
has 4.5 times the number of wells that it took to produce the 10.2 mb/d
in 1970. [2] This despite the fact that the U.S. was hit with an OPEC
oil embargo in 1973-74 and an Iranian oil shock in 1979 and so had every
incentive to use every possible means available to increase domestic
production. This despite the fact that the U.S. has the most technologically
mature and advanced economy and oil industry in the world and has available
to it every oil extraction advance that has occurred over the last thirty
years.
In other words,
the U.S. has had every economic, political and technological incentive
and ability imaginable for increasing their production in the fields
that had made them the 'world-champion' producers of oil and still they
experienced an 80% reduction in the fields that had brought so much
wealth. The reason for this is very simple: oil is a non-renewable resource
- it runs out.
Second: In 1979,
the last year that Texaco, Chevron & Exxon/Mobil ran Aramco (Arabian
American Oil Company)the U.S. Senate subpoenaed the oil industry. Their
testimony indicated that the Saudis had 110 billion barrels of proven
reserves (P1), 177 billion of proven and probable reserves (P2) and
245 billion proven, probable and possible reserves (P3).* They further
stated that not only would the Saudis not be able to pump 20 to 25 mb/d
out of these key fields as had been previously stated but that if they
continued to pump at their maximum, 9.8 mb/d, these fields would go
into irreversible decline by the early 1990s. [3]
*(As this example
shows when looking at reserve estimates it is important to determine
whether the study is referring to P1, P2 or P3 estimates as they will
differ greatly in terms of total amount and in terms of their margin
for error. The SEC only allows oil companies to book P1 estimates though
there is talk of this changing likely motivated by a desire to benefit
tar sand plays.)
These findings go
a long way to explaining why in 1982 the Saudis undertook a massive
conservation effort - ramping production down from 10 mb/d to just over
2 mb/d in order to let these fields rest while they attempted to wrestle
with their major technical problems. To do otherwise could well have
led to irreparable damage to the integrity of these fields and thereby
substantially lowering their ultimate yield. Subsequent to these findings
in the late 1980s despite no major finds of any kind the Saudis reclassified
their proven reserves [P1] upwards to 260 billion barrels. When you
take into account the absence of major finds and put this fact together
with the fact that at that very same time OPEC adopted new quota rules
which were based on the size of a members stated proven reserves
then it becomes obvious that it was political and economic not geological
reasons that led to this reclassification.
It is critically
important to note that Mr. Simmons is very much not alone in making
the case for an immanent peak: "Mr. Rodgers, the PFC senior director,
says he is convinced that Dr. Campbell's criticism is valid. He says
oil production is either reaching a plateau or declining in 33 of 48
major oil-producing countries, including six of the 11 OPEC countries."[4]
A conclusion that has made its way on to Chevrons newly launched
web-site. http://www.willyoujoinus.com/issues/alternatives/
As to the many other
projections that have been made over the decades by experts in the field
of geophysics the following link provides a retrospective table of the
number of peak projections analyses have been done in the last thirty
odd years. http://www.oildepletion.org/roger/Key_topics/
Past_forecasts/past_forecasts1.htm There you will find contrary
to the common myth that geologists have not in fact been crying
wolf for decades claiming that we were about to run out of oil
any day now. In fact the general consensus among them has been that
the data shows that the peak for global oil production is most likely
to occur sometime around the first decade of this century.
In any case, regardless
of whether these conclusions turn out to be pinpoint accurate
or just ballpark accurate nothing changes the fact that
oil is finite. In the end this phenomena is a reflection of a very simple
geological reality: there is only so much oil in any particular oil
producing field, region or planet for that matter and when it is gone
it is gone forever. Why such an easy to ascertain verity has been kept
so far from common understanding is also very simple to understand:
wealth, extraordinary wealth, historically unprecedented amounts of
wealth, concentrated in the hands of so very, very few of the citizens
of our world.
The very few who
profit from the enormous wealth that the control of oil and gas reserves
have generated have a vested interest in minimizing just how essential
this extraordinarily important one time gift from Mother Nature is to
our societies. E.g. A single barrel of oil contains the equivalent of
23,200 hours of human work [5] For if the collective we that have no
oil stocks, no control over the profit derived from this hydrocarbon
gift from Nature, were to understand to what degree our standard of
living is dependent on oil and gas then like the residents of Cochabamba
did with their water we would flex the might of public opinion to demand
that the distribution and allocation of this irreplaceable resource
be done through the public not the private sphere. That it be husbanded
and rationally and equitably allocated, something that the market has
so demonstrably failed to do. That it be saved for use on essential
purposes and not for example for NASCAR and Formula One races. And most
certainly not for SUVs and traffic jams. Even the airline industry despite
our species virtually universal love for travel might well not be immune
from the changes that this awareness would/will bring especially once
it is more widely known just how much CO2 is created by the world's
commercial airline companies and air forces. E.g. One years worth
of cross-Atlantic jet crossings by a single commercial jet creates three
times more CO2 than the massive planned Whinash wind farm in the U.K.
is capable of saving in a year: 520,000 tonnes to 178,000 tonnes. [6]
The hydrocarbon
molecule is not only capable of enormous work in a physical sense it
is also extraordinarily malleable. Without it we would not recognize
our pharmaceutical, technology and agricultural sectors. As such it
is far more important that it be used for example to create computers
for the classrooms of the third world than plastic gewgaws for the Wal-Mart
shoppers of the first. It is far more important that it be used to power
the seismic changes that ever decreasing oil supplies will necessitate
in our agricultural, industrial, energy, technology and information
sectors as they adapt to the reality of virtually oil-less centuries
than it be used to power the war machines that threaten the very existence
of our species simply so that we can continue a few more decades of
business as usual for less than a billion of us. It is far more important
that its enormous capacity to do work be used to bring water to the
ever increasing number of nations that are falling below the essential
ration of 1000 cubic meters per person per year. A problem that already
affects a great number of the nations of our world and is guaranteed
to happen to an ever increasing number of them unless enormous amounts
of energy are expended on the infrastructure creation necessary to alter
the facts underlying this potentially greatest of all humanitarian disasters:
the absence of water. [7]
The Hirsch or SAIC
Report: Peaking of World Oil Production: Impacts, Mitigations
and Risk Management was prepared by the Science Applications International
Corporation and authored principally by Robert L. Hirsch and it makes
very clear what the stakes are and just how much lead time is needed
if we are to avoid a being end gamed.
http://www.projectcensored.org/
newsflash/The_Hirsch_Report_Proj_Cens.pdf
As any chess player will tell you it is critically important to plan
as many moves ahead as possible if you wish to avoid ending in a position
where the only moves left are losing ones. We had a wake-up call when
the U.S. hit its peak in terms of oil production. We had a wake-up call
thanks to those who participated in the creation of the 'Spirit of 72'
and who researched and wrote about the natural limits that exist on
this small world of ours. We had the oil shocks of 73 and 79
and President Carter's famous 'Cardigan Speech' fireside chat and Had
Congress acted on, and subsequent administrations heeded, the Carter
initiatives on energy, it is likely that the United States would be
much less dependent on foreign petroleum resources than in 1978. (rather
than more) [8] We have wasted very valuable time over the last
35 years and one can only hope, not know, that it is not too late. One
can only hope, not know, that we can change the pattern that led to
our failing to take advantage of the very best information that our
species had to offer and accepted instead a business as usual approach
that even further concentrated wealth and our economic dependence on
fossil fuels.
Dr. M. King Hubbert
(1903-1989) http://www.hubbertpeak.com/,
the grand-daddy of American geology and the father of the study of oil
depletion, penned words that are just as valuable today as when he first
penned them decades ago, "Our ignorance is not so vast as our inability
to use what we know." We do have a choice as to what we reap from
what we know, what we do not have a choice about is how much hydrocarbon
energy that knowledge will have at its disposal. How we deal with this
not so little fact will determine if our fate is to be written by the
greatest minds and spirits among us for the betterment of us all or
whether it is to be written by those men of mean spirit who would jeopardize
all by daring to sow the whirlwind merely so that they can maintain
privilege.
[1] Matt Simmons
on The Current, CBC Radio, August 2, 2005
http://www.cbc.ca/thecurrent/2005/200508/20050802.html
[2] Ibid
[3] Ibid
[4] Jeffrey Ball,
'Dire Prophecy', Wall Street Journal, September 21, 2004,
[5] George Monbiot,
'A different kind of revolution', Monbiot.com, 26/4/2005
[6] LATOC website,
link: http://www.lifeaftertheoilcrash.net/Research.html#anchor_71
[7] Thomas Homer-Dixon,
'The Ingenuity Gap', (Vintage Canda:2000), page 345.
[8] The Literary
Encyclopedia, Carter, Jimmy (1924-) http://www.litencyc.com/php/speople.php?rec=true&UID=5827