Oil has been the topic of discussion in American news since the 1920s, but have circumstances really changed? With the Deep Horizon spill in 2010 causing unprecedented pollution, the leak in the Alaskan pipeline and the new energy deal between China and Scotland, we are witnessing an increasing struggle for fossil fuel resources and a constant search for new energy sources. An excerpt from disinformation‘s The Little Earth Book by James Bruges gives us a retrospective look of how the oil situation of today was seen 6 years ago.
The Future of Oil: Who’s Fooling Whom? – and Why?
Draw a line five miles long to represent the millions of years during which solar energy has been captured and laid down in the earth’s crust in the form of coal, gas and oil. Then put a blip in it. That blip represents the time we have taken to extract and use this embodied energy. We are half way through the blip.
These fuels have given us a material standard of living that precious generations could not have imagined in their wildest dreams. Scientific progress would have been stultified without them. But we treat them as a permanent part of the economy. They are not. Our grandchildren will have to manage without them.
M. King Hubbert said, in 1956, that oil extraction in the US would peak after 15 years and then decline, never to revive. At the time extraction was relentlessly increasing and oil companies said he was mad. In 1971 US oil production duly peaked and has declined ever since in spite of a desperate hunt supported by the most sophisticated equipment in the world. The US is now dependent on imports for two-thirds of its oil. World oil is following the same pattern – the peak will be reached within the next few years.
We know the history of discovery and, obviously, more oil cannot be produced than is discovered. US mainland (48 states) oil discoveries peaked in 1930, 40 years before production peaked. World oil discoveries peaked in the 1960s and new discoveries are gradually getting fewer and smaller. New fields will, of course, be found and each will grab the headlines for a time. But they will not change the overall pattern.
The total amount of conventional oil in the world (used, reserves and yet-to-find) is about 2,000 Gb (billion barrels) and about half has been extracted. If the amount of production falls and the demand for oil increases, particularly due to the growing Indian and Chinese economies, the price is going to rise – remorselessly.
We are now on a plateau where the amount of oil that can be produced is not much more than the amount in demand. When the world is in recession there is adequate production and the price of oil stays relatively low. This enables the world to climb out of recession. But then production cannot keep up with growing demand. The price rises adn the world slips back in to recession. The seesaw may last a few years but, in due course, the amount of oil we are able to produce will start to drop, never to recover, and recession will deepen. But instability in the Middle East may upset all predictions.
Saudi Arabia, with the biggest reserves, has a US army presence on its sacred land, a US trained defense force for its rulers, and a US fleet in the Gulf. The Caspian has significant reserves, so the US now has a military presence there, too. Iraq controls the second biggest reserves and is threatened with invasion. Iran is being closely watched as it could close the Straight of Hormuz, cutting off the Gulf. Venezuela has the largest reserves outside the Middle East, so no threat to its supplies will be tolerated. Angola has the largest reserves in Africa – watch this space.
Industrial farming is hugely subsidized and totally dependent on oil. Air travel is subsidized (aviation fuel is not taxed, air tickets do not attract VAT, and major new airports are being planned). Railways have been under-funded for 50 years and are now collapsing. The government has a huge programme for building roads. Excessive use of fossil fuels is causing climate chaos.
If we were sensible our top priority would be to reduce demand. If we wait until oil prices create deep recession we will not be able to afford the huge investment required for renewables.
For the US to be dependent on Russia for pipping oil out of the Caspian region was anathema. Iran was “evil.” The only other route was through Afghanistan. In 1998 the oil company Unocol appealed to a Congressional sub-committee for “the development of appropriate investment climates in the region”. “The construction of a pipeline proposed across Afghanistan could not begin until a recognised government is in place that has the confidence of governments, lenders and our company”. Dick Cheney was oil-pipeline consultant to several Central Asian republics as well as one of hte three deal-makers for Unocol. He is now Vice President of the US.
In July 2001 Pakistan’s foreign minister was told by the US that military action would go ahead against Afghanistan by mid October. By February 2002, following the Afghan war, the US had established permanent military bases in all Central Asian republics. Secretary of State Colin Powell said “America will have a continuing interest and presence in Central Asia of a kind that we could not have dreamed of before [11 September].” Cheney indicated that the US was planning action against “40 to 50 countries”, even the take-over of Saudi Arabia’s oilfields is being discussed. The Bush administration calculates that political upheaval will enable the US to establish direct military control over global oil resources.