By Lisa Rayner
Tea Party Publisher

"My father rode a camel. I drive a car. My son rides in a jet airplane. His son will ride a camel."
— Saudi saying

Just as the Native tribes of the Midwest called themselves "The People of the Buffalo," Americans - and residents of other industrialized nations - can be described as being members of the "Hydrocarbon Tribe." Cheap fossil fuels, particularly crude oil, power our factories and encourage auto-dependent sprawl. Rapidly expanding economic globalization has made the U.S. increasingly dependent upon oil-fueled, long-distance transportation. Petrochemicals are also the source materials of a great many products including plastics, pesticides, fertilizers, medicines, computers, asphalt, glues, paints, solvents, inks and detergents.

Economists and politicians assure us that the flow of cheap oil will continue for decades to come. The Bush administration assures us that our oil-dependent way of life will be protected at all costs.

However, a growing number of petroleum geologists are issuing warnings in prestigious scientific journals like Science, Nature and Scientific American that the 100-year oil era is quickly coming to a close. They also say that "the market" will not warn us of the impending oil shortage in time to fully prepare for it.

A 2001 book by Princeton Professor Emeritus of Geology, Kenneth Deffeyes explains why we need to start planning for the post-oil era now. Titled Hubbert's Peak: The Impending World Oil Shortage (www.HubbertPeak.com), his book is a short course in petroleum geology. Deffeyes' aim is to explain how the predictions of declining oil production are made.

In new oil fields, production increases rapidly. After the cheaper, easier to recover oil has been pumped, recovery expenses go up. Production slows down, peaks, and then begins to decline.

Shell Oil petroleum geologist M. King Hubbert realized decades ago that production peaks when roughly half of the ultimately recoverable oil has been removed. In 1956, Hubbert plotted a bell curve that showed U.S. oil production would peak around 1970. He recalculated in 1962, using updated production statistics from U.S. oil wells and new oil reserve discovery data, and ended up with the same results. Hubbert also discovered that the production curve followed the discovery curve by about 11 years.

Petrogeologists debated Hubbert's predictions until 1970, when production in fact did peak. The U.S. has since made up the ever-increasing disparity between supply and demand with a growing dependence on Middle Eastern oil.

In the 1990s, geologists began to calculate a global curve for oil, using Hubbert's methods.

Just as the domestic oil production curve follows the domestic oil discovery curve, global production trails global discoveries. Global discoveries peaked in 1962 and have been declining ever since. Presently, four barrels of oil are consumed for every new barrel found.

Approximately 850 billion barrels of oil (Gbo) were extracted by 1996. Petroleum geologists Colin Campbell and Jean Laherrére calculated at that time that there was 1 trillion Gbo of ultimately recoverable oil remaining, for a total of 1.8 trillion Gbo (See their March 1998 Scientific American article, "The end of cheap oil" at www.dieoff.org/page140.htm). Other geologists estimate that the total of ultimately recoverable oil may be as much as 2.1 Gbo.

Campbell and Laherrére's Hubbert curve indicates that global oil production will peak by 2008, barring an extended global recession. Deffeyes says that, based on a number of geologists' estimations, the global oil peak will occur sometime between 2003 and 2009.

One USGS geologist has dubbed the impending peak the "Big Rollover."

Many people erroneously believe that the "second half" of the oil supply can be recovered as easily, and cheaply, as the first half. Most economists assume the rise in oil prices will be gradual, allowing plenty of time for increased investments in oil recovery technology and oil alternatives. But, the price of oil has no relation to how near we are to the peak in production. Price is determined only by the relation between supply - the flow of oil from today's wells - and demand.

Oil demand has been growing exponentially for over 100 years and is expanding more than 2 percent annually. Production would have to increase five times for everyone on Earth to consume oil at the current  U.S. per capita rate.

Campbell and Laherrére wrote, "It is important to realize that spending more money on oil exploration will not change this situation. After the price of crude hit all-time highs in the early 1980s, explorers developed new technology for finding and recovering oil, and they scoured the world for new fields. They found few: the discovery rate continued its decline uninterrupted. There is only so much crude oil in the world, and the industry has found about 90 percent of it."

If we wait until oil production peaks there may not be enough time to make a smooth transition to renewable energy. Today's global energy system required major investments in time, money and energy to install the wells, mines, pipelines, roads, tankers, refineries, power plants, engines and factories needed to burn oil and other fossil fuels. The transition to renewable energy sources will require another massive investment in infrastructure. Deffeyes warns that after the oil peak, oil prices will jump, making such investments costly. A rise in the price of oil will also lead to increased costs for everything dependent upon oil for manufacturing or transportation. For example, each calorie of food grown by modern agricultural methods requires 4-10 calories of fossil fuel. Oil is part of the food production process at almost every step, beginning with the production of synthetic pesticides and continuing to powering your freezer.

Economists say that as the price of oil rises, it will become profitable to recover poorer deposits of oil, and to produce oil from oil shale and tar sands. This is true only from a monetary point of view.

Since it takes energy to get energy, as the easier-to-recover oil and other fossil fuels have been removed, the energy needed to recover remaining supplies has steadily increased. And an energy "source" that requires more energy to produce than it provides is really an unprofitable "energy sink."

Stuart Rodman, the director of communications for the Ecological Life Systems Institute, says in the Spring 2001 issue of Auto-Free Times (now called Culture Change) "Net-energy analysis first reached public attention in 1974. At that time, Business Week reported that oil scientist Howard Odum had developed a 'New Math for Figuring Energy Costs.' To the surprise of many, Odum's new math indicated that stripper oil well operations were energy sinks. ... These operations could only be profitable when 'subsidized' by cheap, regulated oil, which was used to produce deregulated oil."

Jay Hanson writes about oil analyst Richard Duncan's work on U.S. oil fields in the March 8, 2001 article, "Synopsis" at www.dieoff.com: "In the 1950s, oil producers discovered about 50 barrels of oil for every barrel invested in drilling and pumping. Today, the figure is only about 5 for 1. Sometime around 2005, that figure will become 1 for 1. Under that latter scenario, even if the price of oil reaches $500 a barrel, it wouldn't make 'energy sense' to look for new oil in the USA."

Energy suppliers are investing in natural gas power plants and gas-fueled motor vehicles. Hanson points out, "North American natural gas has no excess capacity. It disappeared several years ago. What we do have is extremely aggressive decline rates in almost every key production basin, making it harder each season to keep current production flat. ... Forecasts show gas demand could outstrip supplies from traditional sources by as much as 4 billion cubic feet a day within a decade!"

Meanwhile, the global natural gas production peak may come as soon as 2020.

To complicate matters even more, one-third to one-half of the natural gas produced in the lower-48 states is contaminated with nitrogen, carbon dioxide and hydrogen sulfide. These compounds must be removed or the gas must be blended with less contaminated gas. Such processing reduces the net energy value of natural gas.

The construction of a gas pipeline to Alaska and Canada, where there are large untapped deposits of gas, could temporarily mitigate a North American gas shortage, says Hanson.

For gas to be shipped across oceans, it must be liquefied. There is a shortage of liquefied natural gas facilities, shipping tankers and specially equipped ports. In addition, the liquefication process causes a 15 to 30 percent net energy loss.

Natural gas pipelines, filling stations, motor vehicles, airplanes and other infrastructure would also have to be built to support the widespread use of natural gas.

At the current rate of depletion, coal production would not peak until the 22nd or 23rd centuries. However, coal is bulkier and heavier than the energy-equivalent volume of oil. It also burns at a lower temperature than oil and cannot be used in internal combustion engines.

In addition, coal deposit quality is declining. Contaminants like sulfur and arsenic must be removed, leaving ever less net energy available. Furthermore, the average heat content of coal is dropping. From an energy-profit ratio of 177:1 in 1954 to 98:1 in 1977 it is projected to drop to 0.5:1 by 2040.

Coal is also the dirtiest fossil fuel, causing acid rain, particulate pollution, smog and climate change. Mining methods like "mountaintop removal" are as environmentally destructive and energy-intensive as they sound.

The U.S. does have a huge oil shale deposit stretching across parts of Wyoming, Utah and Colorado. The Green River Formation contains as much oil as all the world's conventional oil reserves.

But oil shale deposits are "unborn" oil fields. Oil fields form when geo-thermal heat "cracks" the organic material in oil shale, causing oil to ooze out and collect in reservoir rocks over millions of years. Therefore, oil shale must be crushed and heated to high temperatures to recover the oil, greatly reducing its net energy value.

Tar sands are "dead" oilfields that have eroded away, leaving behind highly viscous oil or tar (bitumen). Tar sands provide less than half the net energy as the same volume of oil and deposits are heavily contaminated with sulfur.

The harder-to-reach oil shale and tar sand deposits are energy sinks.

Moreover, mining operations for oil shale and tar sands produce prodigious amounts of rock slag and oily wastewater that is dumped into huge holding ponds. Neither oil source is economically profitable when all expenses are considered.

There is a 100-year supply of uranium. To create more fissionable material, spent fuel rods would have to be reprocessed in breeder reactors to concentrate the remaining uranium and plutonium for reuse.

Hanson says, "A significant expansion of nuclear power - even the five-fold expansion widely canvassed before the incidents at Three Mile Island and ... Chernobyl - would out-run readily accessible supplies. These supplies include both deposits previously exploited but moth-balled due to lack of current demand, and known high concentration pockets that could be opened up quite quickly. Therefore, the expansion of nuclear (energy) would highlight the need to bring rapidly back on course the development of fast-breeder reactors."

Writer Ted Trainer wrote in "The Death of the Oil Economy," in the Spring 1997 Earth Island Journal, "Relying on nuclear energy to provide (a projected world population of) 11 billion people with First World living standards would require a system of 250,000 giant breeder reactors using around 1 million tons of plutonium" per year.

Uranium has a radioactive half-life of 10,000 years. Plutonium is the most toxic substance on Earth. It has a half-life of 240,000 years, is dangerous for several half-lives, and is the main ingredient in nuclear warheads.

Expecting waste depositories and abandoned reactor sites to be geologically stable for tens and hundreds of thousands of years is a gamble. There is also the dangerous prospect of transporting nuclear materials around the world. In addition, no human civilization has lasted longer than 1,000 years without a military invasion.

Furthermore, with the energy needed to mine and process uranium, build, maintain and decommission nuclear power plants, and steward long-term storage of nuclear waste, nuclear energy is an energy sink. It is also financially unprofitable for nuclear energy companies, unless many of the risks and expenses are "externalized" onto taxpayers, the human population, and the environment, with subsidies and exemptions from safety precautions.

Scholar Richard Heinberg, who is researching petroleum-related scientific, historical, social and political issues for his book The Party's Over, writes in his Oct. 2001 MuseLetter, "Competition for the world's remaining oil will determine the political and economic outlines of the coming century. The Caspian Sea region, as one of the last untapped oil and natural gas reservoirs, will be of extreme strategic significance. For the past few years, nations and oil companies have been vying for pipeline access routes to that reservoir. The route favored by the U.S. - and by Unocal and Halliburton (the drilling services company of which Dick Cheney was formerly CEO) - happens to run through Afghanistan. The company that will likely be tapped to build the pipeline is a Saudi Arabian construction firm owned by the bin Laden family."

Also in the region, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan contain around 15 billion barrels of oil and 9 trillion cubic meters of natural gas. U.S. strategies to take control of the region have been around since before the Carter Administration.

In 1997, Unocal led an international consortium seeking to build a natural-gas pipeline from Turkmenistan to Pakistan via Afghanistan. The Clinton administration and the Pakistani Inter Services Agency facilitated negotiations with the Taliban. However, the civil war in Afghanistan forced Unocal to pull out.

 In 1998, Unocal testified before the Congressional House Subcommittee on Asia and the Pacific that an oil pipeline through Afghanistan was necessary to transport Caspian oil to the Indian Ocean.

In May 2001, U.S. State Department, Iranian, German and Italian officials met in Geneva, Switzerland to discuss removing the Taliban and installing a "broad-based government" in its place. The topic was discussed again at the Group of Eight summit in Genoa, Italy in July 2001. The BBC reported Sept. 18 that senior American officials told former Pakistani Foreign Secretary Niaz Naik in July that the U.S. would pursue military action against Afghanistan by mid-October 2001.

From February to August 2001, the Bush administration negotiated directly with the Taliban over a pipeline route. In August the negotiations broke down after the U.S. threatened military action.

Michael T. Klare reported in the Nov. 5, 2001 issue of The Nation that Osama bin Laden's "ultimate objectives" in a war with the U.S., in addition to control of the Caspian Basin, "include the imposition of a new Saudi government, which in turn would control the single most valuable geopolitical prize on the face of the earth: Saudi Arabia's vast oil deposits, representing one-fourth of the world's known petroleum reserves."

The only region with unknown and possibly significant oil and gas reserves is the South China Sea. Nations ringing the Sea are currently arguing over who owns what part of the ocean bottom.

However much political leaders may hope that Saudi, Caspian and South China Sea oil and gas will power industrial civilization for decades to come, Deffeyes says that "No initiative put in place starting today can have a substantial effect on the peak (oil) production year. No Caspian Sea exploration, no drilling in the South China Sea, no SUV replacements, no renewable energy projects, can be brought on at a sufficient rate to avoid a bidding war for the remaining oil."

Economist James K. Galbraith says in a book review of Hubbert's Peak that "If we (had to) pay a rising dollar  price (for oil), it could mean an essentially endless depression" in the U.S.

He goes on to say, "But there is another possibility. We could control the dollar price, so that the oil shortfall remains largely invisible to the American consumer. One has to believe that this idea has occurred to the oilmen in charge. The problem then is that conditions elsewhere have to be much worse. For this strategy implies pricing developing countries out of the oil market by driving their currencies down. This can be done by driving a hard bargain on their debts. Eventually, irrigation pumps will run dry, and the Green Revolution will start running backwards. From the standpoint of the developing world, the game is zero-sum; our success in a war for control is their descent into famine."

One only has to look at the current situation in Argentina to see what debt-pressure leading to a devaluation of a nation's currency does to increase human suffering and social unrest.

The International Monetary Fund and the World Bank, controlled by the economically elite G-8 nations, have been "driving a hard bargain" on developing countries' debts since the early '80s.

Story Update July 2003:
The best book on the peak of global oil production for the layperson  is The Party's Over, by Richard Heinberg.

Colin Campbell and his organization the Association for the Study of Peak Oil & Gas held the first International Workshop on Oil Depletion in May 2002 and the second conference in May 2003. The conference Web site is www.peakoil.net.

Oil & Gas Journal reports that global oil production peaked in 2000. Production levels in 2001, 2002 and so far in 2003 were below that of 2000. If the bell-shaped world oil production curve is mathematically smoothed out a little, the actual peak year will be 2004. On March 6, 2003, the Dow-Jones news service reported that Saudi Arabia had notified Western oil companies that collectively, Saudi oil fields have reached maximum production. This means that Saudi Arabia, which possesses the largest volume of unrecovered oil in the world, is passing its own peak of production. Princeton geolist Kenneth Deffeyes discusses these ominous developments at http://globalpublicmedia.com/TRANSCRIPTS/index.php?name=KENNETH%20DEFFEYES
&origin=/INTERVIEWS/KENNETH.DEFFEYES/index.php&transcript=2003/04/KennethDeffeyes.Interview.2003-04-04

The race to renewables (SIDEBAR)

A transition to renewable energy sources is inevitable. However, renewables cannot fully substitute for the concentrated energy of fossil fuels. Renewable sources provide a limited flow of energy at a time. When renewable energy systems installers work with homeowners and businesses to properly "size" a system, they recommend that the buyer "power down" his or her use of energy.

Permaculture co-founder David Holmgren says, "The most productive sustainable systems imaginable may be able to provide for the needs of 5 or even 10 billion people. However, they would never sustain large-scale cities, a global economy, and Western material affluence."

Here is a a partial list of steps we need to take:

Our first task is to maximize efficiency - the "soft energy path" of Amory Lovins. Additionally, we must consume less, share more, reuse and recycle everything, and stop the growth of the human population and the physical size of the economy.

"Biomimicry," design mimicking the ecological principles of nature, has great potential: "Industrial ecology" improves the operating efficiencies of factories and industrial parks. Permaculture maximizes the agriculture efficiency and productivity of the landscape.

Green tax reform would switch local and national taxes away from payroll, income and sales taxes, and onto fossil fuel use, thereby encouraging alternative energy use.

Clustered, mixed-use pedestrian-centered communities designed for efficient bicycling and mass transit will replace sprawl.

Globalized trade as we know it will end. Transporting "cheap" food and goods long distances makes no energy sense.

Currently, solar electric photovoltaic cells require twice as much energy to manufacture as they provide. Further research will reduce PV embodied energy to the point that PV systems provide net energy. Mass-producing PV systems would make  PV cost competitive with fossil fuels. Even at the present level of PV efficiency, using some of our remaining oil to produce PV systems that will last decades after the oil peak would be useful.

Passive solar architecture and thermal heating technologies (such as hot water heaters) are already cost and energy efficient.

Wind energy is also cost competitive with fossil fuels. About 13 percent of the U.S. has sufficient wind speeds. The Great Plains and coastal regions could supply 20 percent of U.S. electricity using current technology. Wind-powered sailing ships could be revived for sustainable international trading.

Hydroelectric power supplies 2.3 percent of global energy needs. The destructive environmental effects of large dams are increasingly recognized. Microhydropower for homes and businesses is feasible in some areas.

Geothermal energy is also feasible. However, geothermal energy is only practical in certain regions. And the life-expectancy of some geothermal fields may be short. (See related story, "Creating Green Electricity from Sewage," January FTP.)

Biodiesel is a biodegradable fuel made from vegetable oils. John B. Campbell of Ag Processing, Inc. says that current soybean production, the most likely candidate for large-scale biodiesel production, could produce only 130 million gallons of biodiesel per year. However, the U.S. uses 40 billion gallons of diesel per year. Further expanding oilseed production would require planting land now left fallow as part of federal conservation programs and transferring land from export grain production to biodiesel production. These steps might replace 10 percent of conventional diesel with biodiesel. However, if less land is devoted to producing grain for export, the decreased grain supply would lead to higher grain prices, exacerbating world hunger. 

Hydrogen will likely be a key part of the post-fossil fuel world, especially hydrogen fuel cells. Liquid hydrogen can power vehicles and factories. Currently, most hydrogen is manufactured from natural gas at a net energy loss. The future is in solar hydrogen systems that create hydrogen from water.

A 13-year resident of Flagstaff, Lisa Rayner holds an Interpretation of Natural Resources degree from Northern Arizona University. She is also the author of Growing Food in the Southwest Mountains.