Sunday, January 29, 2006

The Peak Oil Crisis: Iran

Falls Church-News Press

By Tom Whipple
January 26, 2006

The world moves quickly these days. Since the New Year, oil has risen by more than $7 per barrel and currently is in sight of the all-time high of $70 a barrel. Cold weather in Eastern Europe and threats of supply disruptions from Nigeria and Iran are raising the possibility of an economy-threatening spike in oil prices later this year.

How high would oil prices have to go to before serious economic consequences begin? From our experience in 2005, we know $3 a gallon gasoline won't do it. Gasoline consumption in the US actually increased a bit during the past year despite much higher prices and numerous lengthy supply interruptions caused by the various hurricanes.

Each of us has a personal gas price at which we start to curtail our non-essential driving and a higher price at which our non-emergency driving comes to close to stopping. Most of us have no idea just where these prices might be for we have never had to think about the issue before. Gasoline has always been so cheap, few have had to worry.

There are, of course, numerous variables that would go into a drive/no drive decision: the fuel efficiency of your vehicle, the length and frequency of your trips, the importance to you of your trips, how much disposable income or credit you have, and can you pass some or all of the fuel cost on to somebody else.

After adjusting the previous high of $1.80 a gallon for inflation, several observers have come up with the estimate that it will take somewhere around $6-7 per gallon to force major reductions gasoline consumption in the US and thereby cut into the economic activity that goes with discretionary driving.

At the minute, the most serious of the several threats facing the world's oil supply is clearly the Iranian situation. Iran 's leadership is determined to start a uranium enrichment program. Tehran claims it is for electric power, but the US and Europe say "nuclear weapons." To make matters worse, nearly every major world power (and numerous minor ones) has a finger in the Iran pie either as an actual or potential customer for Iranian oil, or as a friend or foe of Tehran . As with so many previous mid-east confrontations, this situation is rife with possibilities for miscalculation.

The important new factor in this crisis, however, is the lack of much spare oil production capacity anywhere in the world. There certainly is not enough to offset the 2.4 million barrels a day Iran is currently exporting. Thus, for the first time we are seeing the threat of a completely new kind of economic embargo called "who gets hurt the worst"— the world economy, or the one embargoed.

Both sides are aware of this situation with Tehran threatening to send world oil prices to over $100 per barrel if anyone interferes with their enrichment program. The US spokesmen seem to be saying that we must pay any economic price to keep the Iranians from nuclear weapons. At this point it is impossible to say how this multi-facetted situation will play out. Both sides seem determined.

From a peak oil point of view, however, stoppage of Iranian exports either by formal UN embargo (unlikely) or by Tehran 's retaliatory or preemptive cutting of exports (more likely) would be a seminal event.

Oil prices obviously would be driven higher. Whether they get to the "serious damage" level is hard to say because so many factors go into shaping the price of oil. A complete stoppage of the 2.4 million barrels a day would of course be a real problem, while a token stoppage would only provoke a short-lived spike.

The length of the stoppage would be important. A token stoppage would mean little, while a complete 2.4 million barrels a day stoppage lasting for years would trigger much unpleasantness.

Given that we are very close to peak oil, it is quite possible a major stoppage of Iranian exports could play a significant part in the actual event. Several years from now, when studying the history of world oil production, it just might be possible to point to the day when Iranian oil exports ceased to flow and say "Yes, that was the exact day of peak oil."

Osama's Secret Weapon

By Neal Brandvik
January 26, 2006

Several times a year Osama Bin Laden emerges from seclusion to taunt America. There is always a quiet confidence about him as he proclaims that victory for Islam and God over America is inevitable. In addition to promising more attacks on us, Osama says he is patient and willing to wait for our demise as long as it takes. Is he crazy? Where does he get the idea that a group of rag tag thugs who live in caves is going to defeat the greatest superpower nation in history? After all, as horrendous as the 9-11attacks were, our economy rebounded quickly.

To find out where Osama gets his mojo, go to your computer and Google “Peak Oil.” One of the websites that will come up is . This meticulously documented site is authored by Matt Savinar, a recent law school graduate. It begins with the statement: “Dear Reader, civilization as we know it is about to come to an end.” Mr. Savinar is not referring to Osama’s vision of civilization but our modern, petroleum based civilization that Dick Cheney refers to as “The American Way of Life” that is not negotiable according to Mr. Cheney.

I’m betting Osama has visited this site and read it thoroughly. He’s smug and confident about the demise of America because he knows you will dismiss Mr. Savinar as a “chicken little” or “environmentalist wacko.” If you decide to defy Osama and read Mr. Savinar’s website carefully, you’ll find out many of the folks warning us about Peak Oil are very rational and conservative. One is Republican Congressman Roscoe Bartlett who has quoted the ominous warnings from and read them into the congressional record during several Peak Oil speeches in Congress. Another is Mathew Simmons, an energy investment banker and member of Dick Cheney’s Energy Task Force. Need more reason to take Peak Oil seriously? How about the CEO of Chevron Texaco who started a marketing campaign to address the challenges of Peak Oil with their website .

Bin Laden’s strategy is clear. He learned from another Muslim – Muhammed Ali – in his fight with George Foreman. Remember the rope-a-dope? While we exhaust our resources “taking the fight to the terrorists” instead of massively investing in alternative energy, Osama’s army will grow because Arabs know our military presence in the Middle East is all about the oil. The world knows this except for Americans, especially Iraqis who chased the British out of Iraq during the 1920s for doing the same thing. As global oil depletion squeezes the American economy, Osama’s troops will continue to assault our “Way of Life” by bombing pipelines and killing oil workers. Unfortunately, in the long run there aren’t enough tax dollars and willing young Americans to protect the Middle East’s vast oil infrastructure. Since 60% of the oil remaining on the planet is in Muslim countries, Osama’s minions never have to go far to make increasingly scarce, expensive oil more scarce and more expensive.

Geography, geology and time are on Osama’s side not ours. The Peak Oil wolf is at our door and he knows it. Osama also knows we won’t confront our petroleum demon any time soon. No politician who is interested in keeping his or her job will stop the continual building, maintaining and accessorizing of suburban sprawl that makes us utterly dependent on cheap oil. The Bush Administration can’t talk about Peak Oil because acknowledging it makes America’s oil grab in Iraq look obvious to all. They know killing for a resource that will run out some day is not palatable to a Christian nation. So Bush and Bin Laden have one thing in common. They don’t want you to know about Osama’s secret weapon -- Peak Oil.

How can you wipe the smirk off Osama’s face? Send this link to every politician and community leader you can think of: . The Hirsch Report was commissioned by the U.S. Department of Energy. Its conclusion challenges the notion that the free market will solve Peak Oil.

“The world has never faced a problem like Peak Oil. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary”

Make sure you DEMAND action other than continual war in the Middle East!

World about to hit down-side of peak oil curve

Sarasota Herald-Tribune

Letter to the editor
January 29, 2006

Regarding drilling for oil in the Gulf:

Petroleum geologists tell us that 95 percent of the world's oil has been discovered. U.S. production peaked in 1970; world oil production will peak this year or maybe in five years, depending on one's source. With demand continuing to rise, we are well on our way to global inflation, which would be followed by a depression.

Drilling for the last dregs of a dwindling resource is not a solution.

We have access to an incredible energy supply that will never stop: wind power. This environmentally friendly source is in sufficient supply to provide electrical needs for the entire country. Surplus power can manufacture hydrogen for portable usage. Ethanol from corn, cane and other grains, along with soy biodiesel, can fuel autos. The biofuels all burn clean and do not make hydrocarbons like petroleum does.

Tax incentives and other governmental programs should be focused on weaning ourselves from the petroleum addiction. This would improve the air and water and stop greenhouse gas emissions. This would also lesson the need to meddle in the affairs of Mideastern countries. We should save the few untapped oil reserves for future generations.

David Emmerling


Wednesday, January 18, 2006

Bracing the world for the day when the oil runs out

The Independent (UK)

By Michael Harrison
January 18, 2006

As the oil price nudged above $64 a barrel yesterday on heightened concerns about disruption to supplies from Iran and Nigeria, a small group of geologists, economists and commodity traders was meeting in London to consider a more fundamental question: when will the world begin to run out of oil?

That moment is known as "peak oil" - the point at which production stops increasing and goes into inexorable decline. Some commentators believe that moment may be as little as two years away, some reckon we do not need to worry for another 20 years and some think the peak of production is so far in the distance that it is pointless to even try to put a timescale on it.

But one thing that all shades of opinion are agreed on is that when peak oil does happen, its impact on the world economy - and the consumer lifestyles so many of us take for granted - will be profound. Chris Skrebowski, the editor of the Energy Institute's Petroleum Review, believes peak oil will occur in 2008, at which point the world will move into "a land without maps where we are all likely to be poorer".

For oil is essential to almost everything we do - 90 per cent of world transport is oil-dependent; all petrochemicals are produced from oil; 99 per cent of our food relies on oil in some way, either to grow it or get the produce to market; and 95 per cent of lubricants are oil-based. And, in many cases, oil is not easily replaceable. There are no realistic alternatives to oil for fuelling aircraft and ships, producing petrochemicals or powering cars, without massive investments in technology such as hydrogen.

Given that world oil consumption has doubled since 1970 from 42 million barrels a day to 84 million, that poses a stark challenge. At present rates of depletion, 5 million barrels a day of new production will need to be brought on stream for the next 10 years just to keep world output rising.

The peak oil debate tends to divide into two camps. On the one hand there are geologists who argue it is almost upon us or shortly will be, based on analysing past production and discovery rates and field exhaustion and extrapolating into the future. On the other there are economists, political scientists and the oil majors who believe that oil producers - be they governments or companies - will always find a way to meet demand, whether through cleverer ways of finding and extracting oil or greater fiscal incentives to discover and produce more.

Yesterday's conference in London, organised by the Dutch investment bank Insinger de Beaufort, represented both strands of opinion. Mr Skrebowski says that the world's big five oil majors all produced less in 2005 than they did in 2004, while North Sea oil production is declining so rapidly that it will halve in the next seven years.

According to the University of Reading's Dr Roger Bentley, the secretary of the Association for the Study of Peak Oil & Gas, the evidence is irrefutable. He points out that 64 of the world's 100 or so oil-producing countries are already past the point of peak production and on the downward slope. Although there may be a "mini-glut" as output is stepped up from Russia, the Caspian and Iraq and new sources come on stream such as deepwater oil and oilsands, the trend, he says is unmistakable. Dr Bentley believes that non-Opec production will reach a peak within the next 30 months while global output will start to decline between 2010 and 2015 or 2020 at the latest depending on the contribution from non-conventional sources such as oilsands. "Alongside global warming, this is one of the two extraordinary challenges facing mankind," he says. "The numbers may slip a little but the fundamental underlying direction does not change."

Dr Jeremy Leggett, an oil industry geologist turned environmental campaigner turned chief executive of a solar energy company, paints an even more apocalyptic scene. He believes that peak oil will occur some time this decade. That will not only produce "horrible economic pain" as oil prices rise to choke off demand but it will also precipitate environmental disaster as oil-consuming countries switch to coal and hasten global warming. "The shortfall between current expectations of oil supply and actual availability will be such that neither gas, nor renewables, nor liquids from gas and coal, nor nuclear, nor any combination thereof will be able to plug the gap in time to head off economic trauma," he warns.

What is his evidence? Dr Leggett points to the lessons of history. In 1956, a world-renowned geologist, M K Hubbert, predicted that US oil production would peak in 1971, much to the disbelief of almost everyone, including his employer Shell. He turned out to be wrong - peak production occurred a year earlier in 1970. Using the same methodology, the "Hubbert curve" falls smoothly to this day, pointing to a peak sometime between 2005 and 2010. Despite the ingenuity of the oil industry in extracting oil from ever more hostile environments, it is, adds Dr Leggett, a quarter of a century since the world discovered more oil in one year than it produced. In 2000 there were 16 discoveries of giant fields containing 500 million barrels or more - in 2003 there were none.

Not all those attending yesterday's conference are sold on the idea of peak oil. Mike Lynch, an adviser to the US government who runs his own energy and economic research consultancy, is one of the biggest sceptics. He says that the study of peak oil is not a science and that those who advocate it are guilty of naiveté, ignorance and plain manipulation of the data. "There are a lot of zealots out there and a lot of claims are made which are not tested," he says. "It is true that oil is finite but since 1989 people have repeatedly predicted the peak too soon and have had to keep on increasing their estimate of reserves. Just because a country's output has peaked and gone into decline, it doesn't mean that production can't rise again." He cites the example of the fall in North Sea production in the 1980s which supporters of peak oil attributed to geological factors but which was, in fact, due to more stringent safety measures after the Piper Alpha fire.

Mr Lynch is one of the few pundits who forecasts that oil prices will begin to ease, but as even he jokes: "I have predicted nine of the last two price decreases."

Tuesday, January 10, 2006

Will We Have Enough Oil and Natural Gas?

Energy Pulse (CO)

By Ronald R. Cooke
January 10, 2005

Saturday, January 07, 2006

The Peak Oil Crisis: New Years 2006

Falls Church News-Press

January 5, 2006

It's a good time to review -- looking backwards at what we learned in 2005 and forward at what might be in store for 2006.

During the past year, the average price of oil increased 33 percent almost matching the 34 percent increase of 2004. If one wants to think of peak oil just as steadily increasing prices, then we are clearly on our way. Since 2001, oil prices have nearly tripled.

The most memorable feature of 2005 from the peak oil perspective was the pair of powerful hurricanes that smashed into the Gulf oil facilities, momentarily sending oil to over $70 per barrel, and causing extensive damage to Gulf oil production and refining facilities that has still not been fully repaired

Among the noteworthy features of the storms however was how little they seemed to have harmed the US economy. Obviously a lot of people were directly affected by the destruction of one major and numerous smaller cities and towns. However, by moving quickly, the government was able to import, and withdraw from the national reserves, enough crude and refined products to forestall shortages. For now, the US economy gives every appearance of continuing to grow and most observers are forecasting further growth in 2006. From the peak oil perspective, however, this "good news" means more demand for oil in the year ahead and still higher prices coming sooner rather than later.

America , however, is slowly coming to the realization that high energy prices are here to stay. In their annual end-of-year-review, the general consensus among Wall Street analysts was the energy situation has indeed tightened and $30-40 oil is unlikely to be seen again. Even governments are starting to perceive a problem is ahead. A peak oil caucus has been formed in the US House of Representatives and the administration has asked the National Petroleum Council to look into the future availability of "affordable" oil. In December, the Swedish government, in a bold step, publicly acknowledged that peak oil is indeed imminent and formed a commission to study how the country can eliminate the use of fossil fuels by 2020.

In retrospect, those following the peak oil situation are coming to appreciate that 2004 was the watershed year in the history of petroleum production. That was the year worldwide demand grew by 2.8 million barrels a day (3.5%), nearly double the usual annual growth of 1.8 percent. This unprecedented surge, largely occasioned by increased demand from China , nearly eliminated any spare capacity in worldwide oil production. From then on, supply and demand has been precariously balanced so that sudden increases in demand or supply interruptions are likely to result in significantly higher prices.

Understanding of the peak oil phenomenon and the forces governing what is about to about to happen also improved during the past year. The idea that "proven reserves," shale oil, tar sands, or arctic oil, has much, if anything, to do with the peaking of world oil production is now rejected by objective analysts.

The reason is simple. World oil production is now so massive —84 million barrels a day (30 billion barrels a year)— that new sources of oil simply are not being discovered and brought into production fast and cheaply enough to make any difference. The ability to maintain the size of the current flow, and the availability of the resources to do so, is all that counts.

The concept of "accessible" oil reserves is coming into the literature. Accessible reserves are those that can be brought into production soon enough so they can increase or help stem declines in current production, and cheap enough so users can afford them. Discussions about significantly increasing world production by spending trillions of dollars on new exploration and production efforts are sounding less and less realistic in a situation in which we may be only months away from peak production.

What, then, is likely to happen in 2006?

It is clear that if we have not already arrived at peak oil, then we have at least entered the run-up to the final peak. This year is certain to start with increasing demand for oil. Current world daily consumption of circa 84 million barrels a day (the exact number is always murky) is forecast to increase by about 1.7 million barrels during 2006. Nearly every detached analyst who has looked at the balance between production from new projects and the likely rate that production from existing fields will decline has concluded, at best, the worldwide oil production can grow for another four or five years.

When you throw in the idea that we live in a turbulent world —hurricanes, wars, political instability, etc.— the odds of worldwide oil production being able to meet any annual increase in worldwide demand of 1.8 percent much beyond the next 2-3 years are not very good.

As demand must drop to meet available supply, we will have rationing by price, unless government steps in to ration or cap prices— then we will have shortages. There is little doubt oil prices in coming years will be marked by unprecedented volatility. In the last six months we have seen the price of gasoline in the US spike to over $3 per gallon, retreat to around $2, and then start climbing again. It seems likely that swings of this magnitude and frequency will become the norm as the world undergoes the most important paradigm shift in the last 500 years.

Because of the many uncertainties involved, forecasts as to the future price of oil and gas are all over the map. Eternally optimistic Wall Street and government analysts see prices pretty much the same for the next year or so. Other serious observers are talking of oil being over $200 per barrel within a few years, either because Saudi Arabia has gone into depletion or serious disruptions to our supplies have occurred.

One thing we have leaned in the last year is that $60-65 per barrel oil is still deemed affordable by most American consumers. In retrospect, the September spike to $65-70 didn't really curb demand for gasoline and diesel fuel in America although, as Detroit has learned, it didn't do much for sales of large gas-guzzling cars. Many observers believe the demand for gasoline will hold firm until we hit $6-7 per gallon and then we might see a significant modification in driving habits. Beyond that, traffic jams and the economic activity that goes with them will be reduced dramatically.

When will we see $6-7 dollar gasoline? In the unlikely situation nothing untoward happens, than it could be around the end of the decade. However, given the likelihood something really bad will happen —an assassination, coup, a civil war, hurricane, major cold snap— then the real troubles could start at any time.

Wednesday, January 04, 2006

Peak Oil and the End of Empire

By Charles Sullivan
January 3, 2006

Peak oil is most likely a term most readers have not heard before. That is about to change. The concept is slowly making its way onto the mainstream stage. It is intruding into the fringes of the public conscience and soon it may occupy the greater part. When that time comes, as it inevitably will, and probably sooner than you think, the world as we know it will end.

Oil is the lifeblood not only of the U.S. economy—especially its terrible military capability—it is in a very literal sense what drives the global economy. Even small declines in oil extraction (oil is not produced—it is extracted), have created major ripples in the global economy. Remember the gas shortages and rationing that occurred during the Carter Administration during the late 1970s?

All of the oil that exists is the product of complex ecological processes: the decomposition of prehistoric plants and animals over eons of time. There will never be any more oil than there is now. There will only be less; and eventually there will be none. Peak oil refers to the time when the rate of extraction from a specific location (or the whole world) is at a maximum. Beyond the peak of extraction follows a steady and continuous decline. In the U.S. peak oil was reached in the early seventies of the last century. Since that time extraction of all U.S. oil reserves has been steadily declining, while demand has gradually increased. As more of the world becomes industrialized and taps into the world’s oil pipeline, the more rapidly it is depleted. Once it’s gone, it’s gone. There will never be any more.

The world’s largest known oil reserves are in the Middle East--specifically, beneath the desert sands of Saudi Arabia. Other significant reserves exist in Africa, Venezuela, Asia, and Siberia and in lesser amounts scattered across the planet. According to the world’s most highly regarded geologists, physicists and investment bankers, those reserves are much smaller than originally thought. Much of what remains is of poor quality, difficult to extract and very expensive to refine. Globally, world peak oil may have occurred as early as the year 2000. By the year 2020 global population will have nearly doubled; and ever more underdeveloped countries will come online. It should be obvious to any sane person that worldwide demand for oil is severely outpacing supply. For every ten barrels of oil used, only four barrels are being extracted and refined to replace them.

Peak oil is a concept that is well understood by most governments. The end of cheap oil means the collapse not only of the U.S. economy but also the global economy. Alarm over peak oil is almost certainly the hidden reason that the U.S. invaded Iraq. It is the reason we are building fourteen permanent military bases in that country. The U.S. has no intentions of ever leaving Iraq as long as one drop of our precious oil lies beneath their sand. How our oil got beneath their sand must have some cryptogamous connection to the ideology of manifest destiny that has driven this nation to unthinkable crimes against nature and humanity. It is the basis for World War Three, which we may already have initiated with the U.S. occupation of Iraq. Widespread resource wars will be the very predictable result of the rush to extract the world’s last remaining and dwindling oil reserves.

Peak oil is almost certainly the underlying cause for the events of 9/11. The American people are not being told the truth. There is a high probability that Oil men in high places of the U.S. government orchestrated those events in order to get the American People behind the invasion of first Afghanistan, then Iraq; and probably Iran, Syria or North Korea will be next. Dick Cheney appears to be a likely suspect, perhaps with the aid of Poppy Bush and his CIA connections. They intend to get average American’s used to the idea of war that will not end in our lifetimes. The age of cheap oil is nearing an end and the financiers of war and empire are scared stiff. They will do anything to have access to the last dregs of oil that can be sucked out of the earth, no matter which nations sit atop them. The second largest reserves of oil happen to lie beneath Iraq. The U.S. connections to the House of Saud are too well documented to warrant discussion here.

Those who run America’s shadow government, a coalition of the world’s wealthiest and most powerful people; including the Carlyle Group and the Bilderbergers, know that we are addicted to oil, especially cheap oil. The entire financial infrastructure of the U.S. Empire and its global holdings, including its satellite terrorist state, Israel, is on the verge of collapse. Those in power are secretly panic stricken. America’s unequalled military firepower is utterly dependent on the life blood of cheap oil to keep the machinery of run amok capitalism running. Given the atrocities that the U.S. is inflicting with impunity around the world, there will be hell to pay when that advantage is lost. Like an addict hooked on Cocaine, those in power will do anything to get one more fix, cost what it will. We are in for a rude awakening.

We must wake up to what kind of people we are dealing with. This government is not only more criminal and corrupt than we imagine—it is more criminal and illicit than we can imagine. Bush and company make the mafia look like boy scouts. Let me try to convey some idea of what I mean. The collection of thugs and criminals now running the country are the greatest and most dangerous organized crime syndicate in the world. And they possess the greatest arsenal of weapons, many of them nuclear, that the world has ever seen. They have an unparalleled propensity for violence. They are not who you think they are; and they are not doing what you think they are doing.

As world citizens we must come to our senses and cast off the intoxicating lies we have been told about America’s domestic and foreign policies. We have built a self delusional culture of mindless consumption of goods and services based upon the exploitation of working class people and raw materials by the ruling elite. It is in their interest, not ours’, that the myths of America as a democracy, as world emancipator of the oppressed were created. They are mere folklore and powerful delusions that are based upon lies and deceit in order to serve the purposes of empire; to keep the poor in servitude to the rich and powerful. They were created so that we can bear to live with ourselves. We are the slaves of modern capitalism in all its horrible incarnations. Like Frankenstein, we helped to create this monster and unleashed it upon the world. We therefore bear the responsibility for bringing it under control and making it accountable to the world.

It has been said that the truth will set us free. If so, and I believe it will, it would behoove us to come to an honest reckoning with the history we have chosen as a nation to create. Any truth is better than make believe.

Charles Sullivan is a furniture maker, photographer, and free lance writer residing in the eastern panhandle of West Virgina. He welcomes your comments at

Tuesday, January 03, 2006

Udall, Congressmen call for energy transition

Los Alamos Monitor

By Roger Snodgrass
January 3, 2006

Eight congressmen, including Rep. Tom Udall, D-NM, formed a bi-partisan caucus in the House of Representatives to call attention to what they and many others believe is a looming global problem, known as Peak Oil. Udall said the group grew out of talks he was having with a colleague, Rep. Roscoe Bartlett, R-Md, when they decided to team up and see what they could accomplish.

Udall spoke by phone from a cloakroom in the House, between roll call votes at the end of the first session of congress. "Los Alamos and Sandia and the other national laboratories have a key role and are playing it now," he said. "If we made the decision to really galvanize and commit resources, there would be a much larger role."In testimony before the House Energy and Air Quality Subcommittee on Dec. 7, Udall participated in a panel organized by the caucus. In his prepared statement he emphasized the importance of taking "a bold new approach to our energy supplies," inspired by major feats of the past.

"In response to great challenges and inevitable threats, we pooled our resources and ingenuity to build an atomic bomb in just a few years and put a man on the moon in a decade," he said. "We must do this again."Last spring, in one of those speeches on the House floor that is carried live on late-night C-SPAN, Bartlett laid out the elements of the Peak Oil scenario and planted the seed for the new caucus.

The term Peak Oil, he recalled, was coined by M. King Hubbert, a scientist who worked for Shell Oil, and who had studied trends in oil field supplies during the 1940s and 50s. Hubbert noticed that oil field supplies followed a reliable curve. When they reached their maximum volume, about half the oil had been extracted from a given field.Applying this formula, Hubbert accurately predicted in 1956 that the U.S. would reach its Peak Oil point in 1970, according to his proponents.With many books and articles now published on the subject, Peak Oil has become a catchphrase that encompasses a host of oil-related issues, including tight energy supplies, rising gas prices, fuel efficiency strategies, foreign oil dependency and alternative energy sources.

Energy efficiencies are making their way into the national agenda and Udall said he found pluses and minuses in the national energy policy act that was finally signed into law in early August 2005, after repeated failures."You could make an argument that there are a few things in there that would help us move toward a cleaner energy economy," he said.

"But the largesse was about $80 billion, that went mostly to the established energy conglomerates that run our energy show now."In a recent report on long-term energy outlook, "A View to 2030," the oil giant ExxonMobile acknowledged that North America has exceeded the half-way point of its oil supply. But the company estimates total discovered and undiscovered, conventional and unconventional oil resources at 4 trillion barrels, and contended that nearly every other region in the world retains more oil in the ground than it has produced.The Energy Information Agency in the Department of Energy, like ExxonMobile, expressed confidence in December that the oil supplies would be adequate.In an energy outlook projection for 2006 that looks forward to 2030, the EIA reported that it has revised last year's estimates upward by 37 percent. World prices, they said, have risen because of strong growth in developing countries and China and then, later in the year, because of "disruptions and inadequate investment to meet demand growth.

"After reviewing the new landscape, EIA increased its estimate by $21 a barrel for 2030 to an average cost per barrel of $56.97.Current oil costs are hovering around $60 per barrel, slightly above that on Thursday and slightly below on Friday for a barrel of benchmark crude for February delivery. That's about $3 more than the government's estimated price for 25 years from now.Another expert witness at the Peak Oil hearing was Robert Esser, director of Global Oil and Gas Resources, a private research and consulting firm that provides continuing assessment of future oil supplies.In a text of his remarks, he warned that the planet is consuming 30 billion barrels of oil a year of its finite resources."It is true that total annual global production has not been replaced by exploration success in recent years," he testified, but noted that exploration together with production upgrades more than compensated for oil produced during the eight years from 1995-2003.

"We still do not have an exact estimate of total reserves," he said, which makes it hard to accurately time Peak Oil. "Rather than an imminent peak, we see an undulating plateau, two to four decades away.""A global problem has to be dealt with by a global approach, whether it's 5, 10, 15 years in the future, or already upon us," said Udall. "I see the issue as being one of political will. I don't know that we have the will today to tackle this."

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