Re: Palast Debunks "Peak Oil": Dave McGowan Was First, How About Some Credit.
NEWSLETTER #55 - Who Is Really Behind the 'Peak Oil' Scare?
March 19, 2004
Who Is Really Behind the 'Peak Oil' Scare?
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  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.
Association for the Study Of Peak Oil, Newsletter No 24 _ Dec. 2002. http://www.asponews.org/ASPO.newsletter.024.php
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Shortage, Princeton and Oxford: Princeton University Press.
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Simmons, Matthew E. (2003a), Revealing Statements from a Bush Insider about Peak Oil and Natural Gas Depletion http://www.peakoil.net/iwood2003/MatSim.html
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Xsilent, XSilent's Collection of Philosophical Digressions http://www3.telus.net/arktos/xsilent/
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