Well, well, well. What have we here? This story just keeps
getting better and better. And as it does, it becomes increasingly clear
why the Ruppert crowd doesn't want anyone taking too close a look at the
'Peak Oil' story. It appears that Ruppert may have given a less than full
accounting of the ties between the 'Peak Oil' experts and the oil industry.
And guess who is really behind the 'Peak Oil' scare? I would tell you, but
I hate to spoil the surprise.
The Coming Panic over the End of Oil - Coming to a Ballot
Box Near You
By scoop, Section News
Posted on Thu Dec 4th, 2003 at 12:17:58 PM EST
By Walt Contreras Sheasby
Psst! Hey, there. You believe that we are facing a crisis,
an Imminent Peak of World Oil Production, right? Well, the insiders in the
President's Energy Strategy Team would like you to join with them in solving
this new sudden crisis.
In fact, you may already have been inducted. You panic at
the idea of Western civilization collapsing as the engines and machines
grind to a halt, uh-huh? You agree with Ron Swenson of Ecosystems that "The
world is about to experience a real energy crisis, likely to be a calamity
unparalleled in human history" (Swenson, 1996).
You think, as oil geologist Colin J. Campbell says, that
"the very future of our subspecies 'Hydrocarbon Man' is at stake,"
right? You agree with Virginia Abernathy that there are too many immigrants
using up our resources, I'm sure.
You probably realize, as many do not, that the Era of Cheap
Oil and Gas is over. As Matthew E. Simmons, the CEO of the energy investment
bankers of Simmons and Co. International, recently said: "I think basically
that now, that peaking of oil will never be accurately predicted until after
the fact. But the event will occur, and my analysis is leaning me more by
the month, the worry that peaking is at hand; not years away. If it turns
out I'm wrong, then I'm wrong. But if I'm right, the unforeseen consequences
are devastating "
Well, guess what? Simmons is not only an oilionaire himself,
but he has been a key advisor to the Bush Administration and to Vice President
Cheney's 2001 Energy Task Force, as well as sitting on the Council on Foreign
Relations. Simmons is a board member of Kerr-McGee Corp., a major oil and
gas producer. He insists that the US government is very worried about oil
depletion. However, Cheney's secretive National Energy Policy Development
Group (NEPDG) refused to make its records of closed-door meetings with industry
executives public. The Industry has taken a beating in public opinion since
the Kyoto summit put the spotlight on global warming. And now Simmons apparently
wants to make the public's fear of The End of Cheap Oil the drum beat of
the 2004 Re-elect Bush and Cheney Campaign, although a more enlightened
energy policy, he worries, "is going to take a while."
On July 3, 2003, the same day that the World Meteorological Organization
warned that global warming was creating an unprecedented pattern of extreme
weather, Congress was considering a bill that would create a controversial
new national energy policy (Independent, 2003). The bill allows new oil
exploration all along the Outer Continental Shelf (OCS) using invasive technologies
that will damage sea life and ocean habitat in environmentally sensitive
areas. In addition, the bill would open our public lands to further destructive
drilling and mining operations. Two years ago President Bush demanded that
Congress pass an energy policy centered around more drilling for oil and
gas in the Arctic National Wildlife Refuge, but that red flag has been dropped
from the new energy bill, S. 14, the Energy Policy Act of 2003
Given the immediate concern with natural gas supplies, little
strategic planning is likely to come out of Congress this July, so attention
is focused on reviving the ideas of 2001 in 2004 to have a mandate for change
in the second term. Simmons said last year that "The [2001] plan devoted
almost as many pages to the need to increase alternative energy sources
like wind and fuel cells as it did for the need to protect the supply of
oil and gas. It called for a giant amount of new power plants.... The plan
called for America to begin addressing the need for a return to more nuclear
energy and clean coal. ...none of these new energy sources [wind and fuel
cells, etc.] can grow fast enough to be a real alternative to oil OR natural
gas even by 2020" (Simmons, 2002).
These days Simmons is getting a lot of help from folks all
over the political spectrum, from some of the global moguls themselves,
like Schlumberger and Halliburton, to the environmentalist-lite Republicans
of REP America (Green Elephant, 2001), to some of the anarcho-primitivists
and Luddites who admire Ted Kaczynski (Xsilent, 2003), and from plenty of
middle-of-the-road enviros in between.
On May 27th, 2003 Simmons addressed the second international
conference of ASPO, the Association for the Study of Peak Oil [and Gas]
which was meeting at the French Petroleum Institute (IFP) via a satellite
teleconference video link from his Houston offices. His remarks were transcribed
by Michael Ruppert, the ex-cop who challenged the CIA for its role in the
drug trade. Since 9-11-01, according to his webpage (www.copvcia.com), Ruppert
has pioneered the effort to educate the world about the consequences of
Peak Oil, the fact that the world is running out of energy, and what this
might mean for human civilization (Ruppert, 2003).
Simmons gained a powerful ally this spring when the Paris-based
International Energy Agency (IEA) of the Organization for Economic Cooperation
and Development (OECD) reported for the first time that the peak of world
oil production is in sight.
Spencer Abraham, the US Energy Secretary, called an emergency
meeting of the National Petroleum Council's Natural Gas Summit on June 26,
2003, amid calls for the administration to deal urgently with the acute
shortage of natural gas this year: "It is a national concern that will
touch virtually every American," Abraham told the Summit of experts
and industry execs. "It is our hope that the energy bill will contain
provisions that help spur domestic production of natural gas and enhance
our importation facilities to boost supplies, while reducing our nation's
growing over-reliance on this one source of energy." Daniel Yergin,
author of the 1991 book about the oil industry, The Prize, and founder of
Cambridge Energy Research Associates, counseled that the fault was not with
markets: "Rather it is the result of disappointing geological experience
over the last few years plus restrictions on exploration, combined with
a shift to new uses of gas that will certainly grow consumption" (Picerno,
2003). Spurring domestic production of gas will also subsidize oil drilling,
and diversifying sources will entail more use of coal, so this energy bill
does not quite entail the immediate end of Hydrocarbon Man.
Without a doubt, despite the talk of alternative fuels, the
use of government to stimulate the exploration and discovery of new oil
and gas fields is at the top of the agenda. Simmons believes that the reason
oil reserves have fallen so far behind oil and gas consumption is that "we
drill far less wells. We also stopped doing most genuine exploration."
Higher oil prices are essential, since "The higher the cost, the more
you can extend, recovering more and more of the harder and harder to get
resources." Simmons funds the remaining wildcatters, handling an investment
portfolio of approximately $56 billion, so he should know (Simmons, 2003a).
In fact the coalition that is pushing for a radical new energy
policy is largely composed of those who stand to benefit from a revival,
not a phase out, of oil and gas development. The intellectual and activist
core of the coalition is made up of those veteran oil geologists and engineers
who use the method of modeling the ratio of reserves to production developed
by the maverick research geophysicist Marion King Hubbert, who died in 1989.
He believed that the peak of production is reached when half of the estimated
ultimately recoverable resource, determined by what has been discovered
and logged cumulatively as actual reserves, has been pumped. In 1956 at
the Shell Oil Lab in Houston, Hubbert startled his colleagues by predicting
that the fossil fuel era would be over very quickly. He correctly predicted
that US oil production would peak in the early 1970's.
In the 1970s Hubbert embraced solar power, saying "I'm
convinced we have the technology to handle it right now. We could make the
transition in a matter of decades if we begin now" (Hickerson, 1995).
Although his thinking was definitely in the ecotopian tradition, he has
often been mistaken for a cynical dystopian by those who swear by Hubbert
as the prophet of the Great Malthusian Die Off (Hanson, 2003).
The dean of the older Hubbertians is Kenneth Deffeyes, Professor
Emeritus at Princeton and author of Hubbert's Peak: the Impending World
Oil Shortage (2001). Deffeyes, who worked with Hubbert in Houston for Shell
Oil, says _I never came to identify with management." Convinced of
Hubbert's theory, "I realized that a contracting oil industry was not
a good career prospect," he says, "so I decided to get out and
go into academia" (Guterl, 2002). Besides, he thinks that "crude
oil is much too valuable to be burned as a fuel." (Dunn, 2002).
Support for a remedial program of oil exploration and development
versus switching to research and development of alternative energy sources
tends to be found among oil experts who are consultants to the industry.
While accepting some of the values of the New Age, they largely remain loyal
to their calling as oil geologists and wildcatters. The leading trio of
Jean H. Laherrere, Colin J. Campbell, and L.F. (Buz) Ivanhoe have worked
for, or with, the leading firm modeling oil fields, Petroconsultants of
Geneva. Since the 1950s, they have been fed data on oil exploration and
production by just about all the major oil companies, as well as by a network
of about 2000 oil industry consultants around the world. They use this data
to produce reports on various matters pertinent to the oil industry, which
they sell back to the industry. "This much is known, Kenneth Deffeyes
writes, "the loudest warnings about the predicted peak of world oil
production came from Petroconsultants" (Deffeyes, 2001: p. 7).
In a late 1998 merger Petroconsultants became IHS Energy
Group, a subsidiary of Information Handling Services Group (IHS Group),
a diversified conglomerate owned by Holland America Investment Corp., IHS
Group's immediate parent company, for the Thyssen-Bornemisza Group (TBG,
Inc.). In the 1920s George Herbert Walker and his son-in- law, Prescott
Bush, had helped the Thyssen dynasty finance its acquisitions through Union
Banking Corp. and Holland-American Trading Corp. (Wikipedia, 2003). Until
his death last year, Hans Heinrich Thyssen-Bornemisza, the nephew of the
Nazi steel and coal magnate, was one of the world's richest men. Some of
the old Hubbertians would probably flinch at such an association.
In 1995 a report by Campbell and Laherre on world oil resources,
World Oil Supply 1930-2050 (Petroconsultants Pty. Ltd., 1995), written for
oil industry insiders and priced at $32,000 per copy, concluded that world
oil production and supply probably would peak as soon as the year 2000 and
decline to half the peak level by 2025. Large and permanent increases in
oil prices were predicted after the year 2000.
Alternatives to fossil fuels got a mixed review from the
petroleum consultants gathered at the ASPO Meeting in Paris May 26-27, 2003,
who maintained that hydrogen, solar, wind, and other alternative energy
sources will not be able to fill the looming demand-supply gap that faces
the planet (Baker, 2003).
Colin J. Campbell, the leader of the Neo-Hubbertians, is
a petroleum geologist from Ballydehob, Ireland, and author of The Coming
Oil Crisis (1997). He worked for Texaco as an exploration geologist and
then at Amoco as chief geologist for Ecuador. He is a Trustee of the Oil
Depletion Analysis Centre (ODAC) and the founder of the Association for
the Study of Peak Oil and Gas (ASPO), originally a network of 24 oil scientists.
ASPO has Associate members like Halliburton and financial sponsors like
Schlumberger, but Campbell is critical of the Bush-Cheney Administration
for "collectively having personal investments of as much as $150 M
in oil companies" (ASPO, 2002).
Campbell has laid out his prescription for various consumer
governments, for example: "Germany should resist Green pressure to
give up nuclear power at precisely the moment it needs more energy, as oil
peaks and declines.
Germany has coal and possibilities for coalbed methane. This
industry needs to be rediscovered. It may become economic again. Germany
should encourage its motor manufacturers to move to more efficient engines
and hydrogen fuels, especially those made by solar means. It should provide
whatever fiscal incentives are needed." (Campbell, 2000).
Jean H. Laherrere is a petroleum consultant residing in Paris,
France. Laherrere's early work on seismic refraction surveys contributed
to the discovery of Africa's largest oil field. He retired in 1992 after
37 years with Total CFI and its subsidiaries in exploration activities in
the Sahara, Australia, Canada and Paris. Since retiring from TOTAL, Laherrere
has consulted worldwide on oil and gas potential and production as a Petroconsultants
Associate, and he serves on boards of the Society of Petroleum Engineers/World
Petroleum Congress.
Like Campbell, Laherrere sees a key role for nuclear energy
in the coming transition, but he also envisions a new role for the petrol
pump: "If new nuclear plants with high temperature reactors are widely
used in the long-term future to supply electricity, they can also provide
hydrogen in their off-peak time, which could be carbonised to supply synthetic
oil. It could easily replace declining oil supply for transport without
any change in the distribution" (Laherrere, 2003). The Big Five could
thus survive the end of oil.
L. F. (Buz) Ivanhoe discovered oil for Occidental for 12
of his 50 years in oil exploration, and he continues to consult as president
of Novum Corp., Ojai, California. He founded the M. King Hubbert Center
for Petroleum Supply Studies at the Colorado School of Mines to study supply
data. Ivanhoe is pessimistic about alternative energy sources: "Natural
gas/methanol ... should not be counted on to quickly replace all or most
of crude oil. Building gas pipelines takes decades. The other alternative
fuels (solar, wind, geothermal, wood, waste) combined produce less than
1% of US electricity!" (Ivanhoe, 1997).
Walter Lewellyn Youngquist is a retired field geologist,
and now a geological consultant who teaches at the University of Oregon
in Eugene, and author of GeoDestinies: The Inevitable Control of Earth Resources
over Nations and Individuals (1997). He concludes that "...coal and
uranium are the only two alternative sources of energy which can be developed
in large amounts, and provide a dependable base load in the reasonably near
future" (Youngquist, 2000).
Matt Simmons has to sell whatever Bush-Cheney Energy Policy
is projected in 2004, but he personally believes "There really aren't
any good energy solutions for bridges, to buy some time, from oil and gas
to the alternatives." Neither the ASPO geologists nor the USGS geologists
will ever admit to the indeterminacy principle that Matthew Simmons shyly
confessed: "It turns out that total energy resources, uh, is still
a mystery" (Simmons, 2003b).
Over 200 organizations around the world launched a campaign
against new oil exploration in December 1997 in Kyoto, Japan. As documented
in the Rainforest Action Network and Project Underground report Drilling
to the Ends of the Earth, ongoing exploration threatens old growth frontier
forests in 22 countries, coral reefs in 38 countries, and mangroves in 46
countries. A Greenpeace technical analysis, based on the conclusions of
the United Nations Intergovernmental Panel on Climate Change, has found
that only a quarter of global economic reserves of fossil fuels - coal,
oil and gas - can be burned before dangerous rates of temperature increase
and climate change occurs, to which many species of plants and animals will
not be able to adapt (Greenpeace, 1998).
If the question becomes which cataclysm is the gravest threat,
global warming or oil and gas shortages, the greens will go in one direction
while most voters choose the path most traveled. In Milton's words, "Why
is the greatest of free communities reduced to Hobson's choice?"
There is no reason for radical ecologists to join debates
over the esoteric timetables for the decline of world oil production, which
should be bracketed as irrelevant to the socio-political imperative of democratizing
the economy and creating a new energy infrastructure that is based on post-capitalist
norms of sustainability, sharing and community democracy. We must find ways
of making the urgency of that transformation a motivation in people's lives
and in their self-conscious anti-ideological politics. The dangers posed
by global capitalism to human life and nature itself are all too real. We
need to reject the posing of imminent danger as panic, as Chicken Little's
alarm over the Falling Sky.
All information posted on this web site is
the opinion of the author and is provided for educational purposes only.
It is not to be construed as medical advice. Only a licensed medical doctor
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