Now that the high price of gasoline has become a political issue, what has the ever courageous, forward-looking Democratic leadership decided to do? Run against the oil companies and promise lower prices.
Michael Ruppert is an unclassifiable hybrid between a genius and a nut. For many years, he has been screaming about the imminence of the global oil peak and its consequences for human civilization. His writings on this subject are well-researched, lucid, and entirely credible. His web site, From the Wilderness, has a wealth of resources and useful links on the subject of fossil fuel supplies and the geopolitical implications. Alas, he has marginalized himself by also being among the farthest out 9-11 theorists, and that's saying something. I'm essentially a 9-11 agnostic, although I do lean toward the LIHOP (Let It Happen On Purpose) class of theories in the general sense. Last I checked, Ruppert was convinced that the CIA carried out the entire plot, including controlled demolition of WTC 1, 2 and 7, and that no plane of any kind hit the Pentagon. Whatever.
Anyhow, you don't have to take Ruppert's word for it about Peak Oil. How about the Army Corps of Engineers? (PDF) Here is a bit of what the U.S. Army has to say:
Petroleum experts Colin Campbell, Jean Laherrere, Brian Fleay, Roger Blanchard, Richard Duncan, Walter Youngquist, and Albert Bartlett (using various methodologies) have all estimated that a peak in conventional oil production will occur around 2005. The corporate executive officers (CEOs) of Agip, ENI SpA (Italian oil companies), and Arco have also published estimates of a peak in 2005. These reliable estimates all project that conventional oil peak production will occur within the next few years (Campbell and Laherrere 1998; Youngquist 1997; Campbell 2004). Reduced demands caused by high prices may delay the peak slightly, but the peak is certainly within sight. Note that the peaking of conventional oil should not be confused with total oil production. Total oil production includes such commodities as natural gas liquids, deep water oil, and polar oil. Inclusion of these will delay the peak to 2008 (Aleklett 2004). Estimates of peak production are not without controversy. . . .
A 2000 U.S. Geological Survey report estimates a much higher availability for the future of petroleum based on three things—reserves growth, higher recoverable fractions, and greater amounts new discoveries (Ahlbrandt, Pierce et al. 2000). The USGS report presents an optimistic picture for the next 20 years or so. Even if there predictions are true, the overwhelming majority of this oil is projected to be in the former Soviet Union, the Middle East, and in North Africa. North American potentials are predominately in the arctic, including National Petroleum Research Alaska (NPRA) and Arctic National Wildlife Refuge (ANWR). Jean Laherrere made an assessment of the USGS report and concludes that:
"The USGS estimate implies a five-fold increase in discovery rate and reserve addition, for which no evidence is presented. Such an improvement in performance is in fact utterly implausible, given the great technological achievements of the industry over the past twenty years, the worldwide search, and the deliberate effort to find the largest remaining prospects."
Laherrere also concludes that reserve growth numbers are not realistic as this only occurs in the United States where the SEC requires a different reporting scheme for petroleum finds than the rest of the world uses (Laherrere 2000). Reserves will not grow as predicted. In fact, some oil companies such as Shell have significantly downgraded their reserve estimates in the recent past (Shell Oil Co. 2005).
It's pretty clear who the Army believes. And 2005 was, uhh, last year. So the Republicans want to drill in ANWR and give us all $100 -- or rather, borrow a hundred dollars for us from the Chinese and let our kids pay it back. The Democrats want to tax the oil companies, eliminate the federal excise tax on gasoline, and uhh, err, uhh, well, hmmm. The Army, while conceding that global oil production has peaked and will now inexorably decline, still proclaims that world-wide consumption of energy will increase 60 percent by 2030 and may triple by 2050. They seem to have a bit of an arithmetic problem there. Yeah, yeah, natural gas production is supposed to increase to make up part of the shortfall but natural gas will peak by 2020 and has already peaked in the U.S. The rest can only come from coal and that means more CO2 pumped into the atmosphere along with all the other harms from coal mining and burning. And you can't put coal in your Escalade, that is for sure.
So what does genius/nutcase Ruppert have to say? Quite a lot, but here a few choice bits:
The US government continues an unwinnable war in Iraq while building massive permanent bases and the largest embassy compound ever built. Not only does the US have no intention of leaving Iraq , it has committed—whether under Republican or Democratic leadership—to staying forever—whatever that means. The Empire’s position is clear, not as a result of what it says, but as a result of what it has done. America ’s primary plan to deal with Peak Oil is to fight or intimidate for energy supplies wherever it deems necessary. That, of course, has forced the rest of the world—with a few notable exceptions like Norway and Brazil —to dance to the same sheet music. As a result, I would estimate that of every ten units of energy (or money) expended preparing for Peak Oil today, nine are spent preparing for war while only one is spent building lifeboats and teaching people how to survive. This is sheer insanity.
The US has stepped up deliveries of weapons systems and military advisors to oil-producing regions around the world. This has been matched by similar deliveries to the same regions by Russia , China , Pakistan , Saudi Arabia , Venezuela , France, Britain, India and many other countries. A best-selling novel in China, The Battle in Protecting Key Oil Routes, has the Chinese navy destroying a US carrier battle group. The popular book documents a bloody contest over control of the Straits of Malacca, that narrow channel through which most of China ’s, Japan ’s, and Korea ’s energy passes.
China’s Hu Jintao, clearly one of the world’s only major leaders with both plans and choices, is making direct calls on Saudi Arabia and Nigeria as George W. Bush haplessly points to hydrogen fuel cell cars as a solution. Don’t worry about how many American people will buy into such Bush nonsense. Worry about how many world leaders are watching these same clips and asking, “Is that the best he can do? America is in deep shit.”
All of Africa, especially West Africa—exactly as I predicted in 2003, in Crossing the Rubicon and in last year’s lecture series which became our newest DVD Denial Stops Here—is exploding with armed insurrections from the Western Sahara region to Angola. It is West Africa where I believe we will see proxy wars likely intensifying this year, which could trigger a global nuclear exchange in very short order.
But murder, far more callous, is about to be perpetrated by the Democratic Party as it enters the 2006 midterm campaigns with what is surely—barring a miracle—going to be one of its major planks in 2008: “Don’t worry,” they will promise, “the Democrats will restore cheap gasoline for all and find a no-pain answer to all of our energy woes. High prices are the fault of greedy oil companies and price gougers, not a lack of supply.”
Climate Change and hurricanes not only continue apace but have accelerated. Now that we are just weeks away from a new hurricane season, fully 23% of Gulf of Mexico production remains shut-in after last year’s hurricanes. Recently the Department of Energy acknowledged that most of that would never be rebuilt due to high investment costs at mature and post-mature reservoirs. Aside from the fact that it’s not cost effective, this is also because of rig shortages. This is what FTW warned you about almost a year ago. When and if we ever have a chance to look back we will historically mark Katrina and Rita as the singular moment in time when a true US economic and military resurgence became impossible; the moment when the Empire began it’s collapse. In other words, that was the moment when the Empire passed from decline to terminal status.
On April 4th, Dow Jones’ MarketWatch reported that $6 to $7 gasoline might be coming this summer. Is there anyone in this room tonight who does not believe that $6-$7 gasoline would be an unmistakable sign of collapse?
And by the way, even as the price of oil climbs, producing countries are moving away from pricing petroleum in dollars. As the dollar has now begun its long, inexorable decline, the pain for American consumers will just grow worse.
I want to keep writing about health insurance, and medical advances (and retreats), and eating right and being well and all of that useful and interesting stuff. But it just doesn't seem very important if we are really this screwed.