IF IT'S A "DONE DEAL," WHY DID IT TAKE UNTIL THE LAST MINUTE TO GET HERE?
"We can wish it, we can dream it, but it will never be, oil is not renewable, and therefore in time it must be realized that THERE WILL BE NO OIL." (ENO Petroleum Corporation, Peak Oil—The Global Oil Crisis). It is hard to conceive of an act or omission causing more pain to more people and creatures than the failure of "those in charge" to announce with reasonable forewarning that the oil supply was going to crash. But it is upon us with no forewarning to the general public at all.
The government planning agencies charged with helping the public survive the end of oil could not have performed worse than by recognizing peak oil only after it has happened. Like anthropogenic global warming (AGW), "peak oil" has been the subject of decades of denial. Notwithstanding Hubbert's famous coup in pinpointing the peak of US oil production through the simple observation that production naturally peaks when the supply is half gone, few would listen to the fact that because the worldwide supply of conventional oil would reach the halfway point in the first decade of this century, trouble was right around the corner. But coming to that point meant we were in trouble regardless, because the early stages of development of an oil field (like the early stages of growth of virtually anything else) follow an exponential growth curve, and the world's growth addicts love exponential curves, but once you get beyond the halfway point, it is a mathematical certainty that the longer you attempt to conform the field to a pattern of exponential growth, the more the end is going to be precipitous. If you don't decelerate rapidly, that is precisely what has to happen—the decline after the halfway point can only be more rapid than the rise beforehand.
What Hubbert observed with respect to the US oil reserves has an intuitive sense to it —as the amount of oil in the field drops, its pressure drops, so the flow begins to slow down—the gusher goes down to a trickle. But if the owner of the field doesn't make full disclosure of what's there, outsiders can only make educated guesses from general geological principles and what the owner is selling, as to what the future holds. And as we all know, full disclosure is not the name of the game in the oil business.
If the field is just allowed to release its liquid gold at its natural rate, that's not too bad, because observations like the Hubbert Peak can be applied. But as technology improves and well pressure can be jacked up to compensate for declining reserves, (for instance by pumping water into the wells) the outside observer loses certainty..There remains information about the company's reserves, but the accuracy of that information is seriously open to question. Within OPEC, which allows its members to market in accordance with the amount of their reserves. (Hart, Introduction to Peak Oil), there are great temptations to fudge. Outside observers can follow a country's reports on its reserves, but those reports are highly suspect. They will remain constant for years while the country is pumping great amounts of oil without reporting any new discoveries, and indeed they can take sudden leaps upward also without reports of new discoveries. Such "records" lead to the inevitable conclusion that many OPEC reserves reports are fictional. If you would like to see charts of OPEC oil reserves mysteriously contorting themselves, you are invited to take a look at Hart's essay. So if you thought the experts had it all in hand and would reliably warn us when trouble was a'brewin', think again. Not only do OPEC members have internal business reasons to exaggerate their reserves, but companies on the public stock market want to satisfy their stockholders of their long-term viability, and all oil producers want to make their customers confident that they can rely on oil for the long haul. By concealing their future from homeowners, oil companies have made trillions for the real estate business and the banks at the expense of those who chose urban sprawl over dense "near-in" housing, and the companies themselves will make trillions in the near future selling to consumers trapped into oil addiction, who might have sought alternatives more vigorously had they known how close the crash was.
Matt Simmons, the banker who has spent his post-Harvard-Business School career advising oil companies and serving as peak oil advisor to the last Presidential administration and specifically to President Bush, ought to know. And what he says is that Western oil companies like ExxonMobil would be strongly opposed to the idea of transparent data because it would reveal "how crappy and old their fields really are." According to AltEnergyStocks.com, Simmons has warned that "the failure of Saudi Arabia and other major oil producers to provide transparent production data has left the world in a lurch, unable to know whether it can maintain an adequate supply of oil in the face of burgeoning demand Such uncertainty has led to indecision about whether the world should invest the huge sums of money necessary to develop alternative transportation fuel sources."
Just how bad the published reserve figures for the major oil-producing nations are has long been understood. We like to say that what goes up, must come down, but not OPEC member-nation oil reserves. Their allowed production quotas depend upon their reserves, so there is a built-in temptation to overstate reserves and never reflect in reduced reserve figures, what they have pumped out. In 1988, the OPEC oil reserves "magically and miraculously increased twofold," without any corresponding discovery of new fields. The officially reported reserves follow graphs that would be comical were it not for the fact that 6.8 billion people, and counting, depend upon the real numbers. (See http://www.enopetroleum.com/opecoilreservers.html.)
Now we are facing the consequences of the major oil producers "leaving the world in a lurch": almost complete inability to cope with the severe difficulties we face in transporting, feeding, housing, and keeping warm the burgeoning billions of our numbers. It is hard to conceive of how any private entity could impose so much pain on so many. It didn't need to be that way. The US Government and its cohorts around the world could have imposed transparency on the oil companies as to their true reserves, and we would have had fair warning and the possibility of coping. Yes, and the moon could be made of green cheese.
Of course, as noted, it is possible to produce a graph roughly like the one above with nothing more than production data and reserves data. The former are public, and the latter are known to a limited extent. It has been the consensus of decision-makers for many years that the world had a total (both produced and still in the ground) of approximately 2 trillion barrels of conventional oil, and as pointed out by Campbell, four decades of dwindling discoveries have left us with an absolute inability to increase available reserves in a timely manner to mitigate the looming shortfall. The two trillion barrel figure was absolutely critical for doing what planning could be done, but at the beginning of the last decade, the US broke ranks with the consensus of the rest of the world, declared through the historically-reliable US Geological Survey (USGS) that world reserves of conventional oil (both consumed and yet-to-be-consumed) were in fact in the neighborhood of three trillion barrels rather than two, a claim which if true immediately provided the world by sleight of hand with an extra thirty years' supply at present consumption rates. To be sure, USGS former employees disputed its estimates as relying "heavily on guesses to calculate new oil discoveries," and on doubling the usual 30 percent recovery rate from reserves "with no technology in mind capable of doing that." (Gordon, "Worries Swelling Over Oil Shortage," Energy Bulletin, March 20-, 2005). The concerns about overestimation of discoveries proved correct: they continued on their downward track. This alone created a discrepancy between the USGS projections and reality of approximately 900 billion barrels. At the same time, the production data appeared to peak in 2005, prominent Princeton University petroleum geologist Kenneth Deffeyes predicted that 2005 was the year, and Simmons suggested similar concerns. (See http://www.energybulletin.net/node/4835 and http://www.simmonsco-intl.com/files/Northern%20Trust%20Bank.pdf (p. 31). Nonetheless, based upon the USGS wishful thinking, during the Bush Administration, the Department of Energy was forecasting a "production peak somewhere between 2021 and the start of the next century, with 2037 the most likely date." Not to worry.
With the peak imminent in reality, like the global warming "scientific skeptics," industry in 2006 came up with a "theory" published in a non-peer-reviewed report, that "peak oil" was in its totality a false concept, and that the true behavior of an oil field or conglomeration thereof was a peak followed by an "undulating plateau" and then a gentle decline by around 2% per year, years, perhaps decades later. According to Cambridge Energy Research Associates (CERA), ""It is likely that the situation will unfold in slow motion and that there are a number of decades to prepare for the start of the undulating plateau. This means that there is time to consider the best way to develop viable energy alternatives that would eventually provide the bulk of our transport energy needs." (See www.cera.com/aspx/cda/public1/about/about.aspx). Not to worry.
CERA faulted the "peak oil" proponents with failure to take into account the facts that reserve estimates evolve with time and that so does the technology used in extracting oil. The criticism is disingenuous given that the industry refuses to disclose either the technology it is using at any one time or its true reserves, and the reserve estimates evolve with time more for political reasons than geological one.. The facts the proponents of "peak oil" fail to take into account are facts that the industry will not disclose. As Simmons has pointed out, "With solid global field-by-field production data, Peak Oil timing could be 'proved.'" And, or course, if the "undulating plateau" theory is correct, all the industry has to do is to disclose their true facts to prove it, but they won't. Regardless, average decline rates of an oil supply are dictated by only two numbers: how fast we are now using the oil, and how much is left. Lower decline rates now mean higher decline rates later. Those are immutable facts even if the "undulating plateau" is correct. So to avoid a rapid decline in available oil, we must discover and bring to production staggeringly large new supplies, right now today. Nonetheless, the CERA "theory" has sufficiently intimidated the bureaucrats that DOE's official position at the moment, as expressed to Le Monde, notwithstanding the graph, is that we are "entering a plateau." (See petrole.blog.lemonde.fr:80/2010/03/25/washington-considers-a-decline-of-world-oil-production-as-of-2011/.)
At the same time all of this was happening, the UN, the US Congress, the Obama Administration and the oil industry were negotiating over goals for global warming legislation. Miraculously, although arguably coincidentally, the percentage-reduction goals agreed to fit quite precisely the percentage reductions in oil consumption that will be physically forced upon us all if you believe the above graph: an 18% drop from 2005 by 2020, and an 85% drop from 2005 by 2050. (It is possible to extrapolate the graph, which assumes exponentially dropping levels of existing reserves at a 4% per year rate.) This compares to reductions of CO2 emissions 17% from 2005 in 2020 and 80% from 2005 in 2050 in the bill. So it would appear that the legislative goals have been set, for whatever reason, so that the oil industry will have to do little if anything it won't have to do in any event because of dwindling reserves. (See http://ecoglobe.ch/energy/e/peak9423.htm). It is hard to see how the negotiators could have come up with such correspondence if they had not all been aware of the impending crash of production and the expected decline rate.. Coincidence? Maybe, but somehow it seems unlikely. Whether or not by intent, the goals fit the needs of the oil companies rather than the needs calculated by the scientists.
In short, with all the evidence available, it is hard to see how the industry and the Department of Energy could have failed to see this coming. Their failure to warn the public, given the consequences, verges on the criminal. And if somehow they can claim innocence, then we still have to ask why they did not heed the warning of Matt Simmons, advisor on peak oil to the Bush administration, as to the importance of transparency. But they did not, and here we are.
CONCLUSIONS
We are on our own. We are rapidly going to have to deal with less and less oil, since there has been no forewarning and no planning. It is a time for communities to prepare for community energy independence, because only that way will be safe. This means relying on the sun and wind and water that have always been with us. It means cooperation with each other to get through seriously difficult times. It means finding alternatives to oil throughout our lives as quickly as possible—the oil that runs our cars, the oil that heats our houses, the oil that runs generators for our electricity, the oil from which chemical fertilizers and insecticides and plastics and polyester are made, the oil that brings countless manufactured goods to us from overseas, the oil on which farmers depend for irrigation pumps, for transporting produce to market, for working the soil to bring us food. If you believe the graph, it will almost all be gone in 20 years. And the progressives and Tea-Partyers must remember that the people who brought this calamity to us are not our friends but are people we trusted and they trusted, so we must work together to cope with the mess that is upon us, and "to throw the rascals out."
Nick Arguimbau is a lawyer with a BA in physics from Harvard, who spent 35 years defending California air and water, the Constitution, and denizens of California's Death Row. He now presides over 49 acres, two dogs and a cat in western Massachusetts, and serves on the select board of one of the purest democracies in the United States. He can be contacted at narguimbau@earthlink.net.
Comments (closed)
doug eaves
2010-05-29 05:46:23
Does this mean that polyester leisure suits will not be making a comeback? If so, could one surmise that those who have held on to those monstrosities of attire could be sitting on a goldmine? Sure, just like a Van Gogh or a Gauguin, there will be no more paintings by those painters, so the current supply will not grow. So, no more oil, no more polyester fabric and no more newly-made leisure suit (if it's not polyester, it's not a leisure suit).
Should demand increase, the prices for those powder blue jackets with huge lapels and high-waisted pants could bring bundles of bucks to those whose taste in clothing took a wrong turn about 35 years ago. And because of some deep character flaw, they held on to them all these years. But who would have the last laugh then?
I can just see some of those old guys in their bermuda shorts argyle socks to the knees and black loafers laughing over there Pabst Blue Ribbons down in Sarasota about those knuckleheads who are givng them 400 or 500 dollars for those suits. Yeah, the ones they bought for $59.99 back in '77, right before they had hair implants, bought blow dryers, and lost small fortunes in silver because of those retarded Hunt brothers.
Oooohoooo. Boy those young people sure have a funny way of spending their money don't they? Why don't we go to The Neon Palm tonight fellas, hell, with this cash, we can all get Veronica to give us lap dances. All righty boys, let's go. Hey, whose turn is it to bring the Vaigra? Lester, goddammnit did you forget again. You know how pissed Leo gets when it's his turn for the lap dance and Veronica just gives him that sad little smile. Go get it now, or we'll take all your leisure suits and there won't be any more fun money for you, you here?