Centerblue.org

The Wall Street Journal is reporting this morning that the developed world used 0.6% less oil in 2006, marking the first decline in over 20 years. It was no doubt due to high oil prices and its attendant economic effects.

This is good news on a lot of fronts. America’s addiction to tightening supplies of foreign oil is a major economic and national security problem. Burning of petroleum also releases greenhouse gas. China and India are increasingly competing with the West for oil supplies. All these reasons work in favor of getting the world to use less of this resource.

There is so much waste in our society directly attributable to petroleum. Last night my significant other and I were shopping at Costco, and we couldn’t help noticing the wastefulness of the apples individually wrapped in plastic (a petrol product) and the bell peppers flown in from Israel. Is all this really necessary? We’re paying a terrible environmental and economic price for those apples and peppers that is not listed on the sales sticker. Those apples would be just as good in a single plastic bag, and I’m sure locally grown peppers taste just as good as Israel’s (probably better, actually, since they can probably get to your table sooner and are grown in season). If there’s anything encouraging about all this waste is that should oil production peak in the near future as some scientists predict there is a hell of a lot of waste we can cut out of our society before we start to suffer from oil deprivation.

Threatened by exploration of alternative energy sources in the wake of high fuel prices and the increasing consensus that global oil production may be getting ready to peak, Saudi Arabia, Exxon Mobil and other oil industry players are going on the offensive (subscription required.)

At an OPEC seminar yesterday, Saudi oil company Aramco’s CEO claimed that there is plenty of oil left to guzzle, and that we have only gone through 18% (1 trillion barrels) of the world’s total supply of 5.7 trillion barrels. The remaining 4.7 trillion should be enough to supply the Earth with oil for more than 140 years at current consumption rates, he said.

There are a lot of problems with Aramco’s assertions:

• If ARAMCO is so confident that it still has so much oil to provide, why won’t Saudi Arabia allow independent geologists to assess the true amount of reserves in the ground? In his book, “Twilight in the Desert,” oil insider Matt Simmons lays out a compelling case for why he believes that Saudi oil claims are preposterous and politically motivated. The fact that Saudi Arabia has been unable to increase its oil production in the last two years (and has in fact suffered a decline this year over last) really makes one wonder what’s going on. What Saudi Arabia says doesn’t match what it is doing, and it is extremely dangerous for the world to rely on its bold assertion of huge oil reserves remaining based on faith alone.
• 3.5 trillion out of the 4.7 trillion supposedly left: a) depend on assertions of “as yet undiscovered” oil fields (which by definition can’t be measured; b) depend on greater extraction from new and existing oil fields based on as-yet unavailable new technology that may or may not happen; and c) factor in 1.5 trillion from unconventional and difficult-to-produce sources like Canada’s tar sands. The first two conditions speak for themselves as for how foolish we are to depend on them. As for the last, it takes large amounts of energy and time to extract oil from unconventional sources, such that it is unreasonable to expect that they would substitute for the cheap, readily available oil we have today.
• The 140-year assumption is made based on existing production and demand levels, but the world will not stand still for 140 years. Demand continues to increase, especially with India and China guzzling ever more oil every year. There’s also the issue of practical limits to oil production given available technology, which many analysts peg at about 100 million barrels a day–a level that could be reached as soon as 2015.

Concerned about the possibility of peak oil (the theory that oil production will plateau and then begin an irreversible decline), the Department of Energy has asked the National Petroleum Council to conduct a study to investigate peak-oil claims. NPC turned around and appointed none other than Lee Raymond, retired Exxon CEO, as the study’s chairman.

Isn’t that kind of like putting the fox in charge of the henhouse? Here’s what he had to say about his “unbiased” position on the issue in the WSJ article:

“I think there’s a lot of misconceptions of what peak oil is,” Mr. Raymond, who is leading the U.S. oil study, said in an interview last week. “The resource base is continually changing, driven by economics and technology.” But he said his views won’t dictate the study’s results. “I may learn something.”

I’m not getting warm fuzzies about Raymond’s ability to look at the issue fairly. He, like Saudi Arabia, insists that technology will save the day by making existing oil wells more productive and allowing discovery of new fields. Unfortunately, 36 years’ worth of technology has done nothing to slow the US’s inexorable slide in oil production since its peak in 1970–despite the large find in Prudhoe Bay. Why should we believe “new technology” will help us now?

When we live in a world where new oil finds rely on five-mile-deep wells in ocean water and where nations’ stated oil reserves are nothing but a political game with no independent verification, we are taking a big risk of a huge shock to our energy infrastructure should these claims dissolve under the harsh light of reality.

These countries and oil companies have a strongly vested interest in letting the world believe there’s plenty of petroleum left. We shouldn’t take their word for it.

A test of new oil reserves in the Gulf of Mexico has struck paydirt, with Chevron and other companies announcing the discovery of new fields that could yield between 3 and 15 billion barrels of new recoverable oil.

“Peak Oil” detractors should not be too quick to rejoice. While the find is the largest in the US in a generation, it is still nowhere near the size of oil fields in the Middle East. It is not a long-term solution to our energy problems, although it will lessen our foreign dependence and perhaps depress prices a bit for a while (but it will take six years for these companies to ramp up to produce sizable amounts of oil.) Nor does the field make up for the complete lack of substantial new oil finds in the last several years to compensate for skyrocketing demand. That this find is more than 27,000 feet below the water’s surface shows just how desperate the oil companies are to keep up with demand.

It is at best a band-aid, not a cure–and we would be foolish to treat it otherwise. Our resolution to break our dependence on foreign oil and exploit alternative renewable sources of energy must not waver.

A couple of recent articles highlight the fact that the ideas of preserving our environment and of moving our culture from a wasteful to a sustainable one are gaining currency across the entire political spectrum.

This article in Newsweek discusses how both individuals and corporations are taking environmentalism in their own hands when confronted with overwhelming evidence of global warming and environmental degradation. In addition to highlighting some individual efforts, it discusses some changes going on in conservative Corporate America:

*Architects are beginning to incorporate eco-friendly considerations into their skyscraper designs. The best current example is the Hurst Corp. headquarters in Manhattan, which is totally infused with sunlight and which employs hyper-efficient use of energy. A new Bank of America tower planned for Manhattan will capture and use every drop of rainwater that falls on it, and will use methane from cafeteria scraps to help power the building.

*Wal-mart, condemned by many for its corporate practices, is going green. After bringing in Al Gore to consult for its executives, Wal-mart is pledging to reduce its carbon footprint by 20% in seven years. It will do so, for example through use of far more efficient packaging–the article states that reducing the packaging on just one line of toys will save $3.5 million in trucking costs and spare 5000 trees. It will also make far greater use of materials like organic cotton for clothing. If every business followed Wal-mart’s lead of reducing emissions by 20% the United States would meet the Kyoto Protocol despite the inexcusable dereliction of duty in Washington for failing to sign the treaty.

*Green technology has become the darling of venture capitalists, who are eager to get in on new technologies on the ground floor.

These changes are happening because they simply make common sense, and not just to liberals. Evangelicals are signing on because more and more are realizing that cherishing and preserving the environment is the good and Christian thing to do. The incontrovertible nature of the data on the global climate crisis is also winning over reasonable conservatives. “Al Gore can’t convince me, but his data can convince me,” mused one Republican in the Newsweek article.

The article notes that the US has a chance to become a leader in developing green technology and exporting it to the rest of the world. We could become that by spending $100 billion a year on it, the amount equal to what we’re throwing at Iraq right now. In doing so we would generate jobs, improve our standard of living, reduce our dependence on foreign oil, and greatly improve the dangerous trade deficits we’re running against the rest of the world. This is the kind of initiative that requires bold leadership from both Left and Right.

Separately, another article in today’s Washington Post discusses how environmentalists are allying themselves with hunters to protect natural preserves against the predations of drilling and oil companies. These two camps may come to blows on gun control, but they both understand the need to protect these fragile ecosystems and their ability to sustain themselves.

It’s easy to look to more drilling as a way of easing the nation’s energy problems, but such drilling will not significantly impact the overall imminent decline in petroleum availability nor will it resolve our energy problems in the long run. Insisting on drilling ever-more-expensive locations for smaller petroleum returns is like feeding a crack addict some more crack; it postpones but does not eliminate the day of reckoning. Sooner or later we have to move off petroleum. Until we do we will be held hostage by our addiction to foreign oil, because no amount of domestic production will ever eliminate that dependence. That’s all quite apart from the environmental incentives to stop burning fossil fuels. The logic of reducing our oil addiction becomes ever more evident to the entire political spectrum every time there is an increase in the price of gas at the pump.

Articles like these demonstrate that environmentalism has begun to rise above petty partisan bickering. It’s a problem that everyone faces, as Katrina attests, and is a problem that all must resolve. Environmentalism need not be in opposition to a strong economy, and can instead produce jobs and improve our lives. That’s a goal worth fighting for whether you’re on the Left or Right.

In the wake of ever-rising petroleum prices, people are casting about for explanations and wondering what the future holds. While some say we can just increase production, the truth is that more and more of the remaining reserves of oil are in places where it is increasingly expensive to extract–such as the deep ocean or in countries that have suddenly discovered the use of oil as a political weapon.

Additionally, a new idea is gaining traction in mainstream consciousness: the concept of “peak oil.” Peak oil, roughly defined, is the idea that worldwide oil production will increase only up to the point at which we have extracted half of the Earth’s oil reserves. After that point arrives, production will begin to decline at an increasingly sharp rate despite our best efforts to maintain it, with potentially very serious consequences for a population with an ever-growing thirst for oil. The theory was first developed by Shell geologist Marion King Hubbert for predicting peak US oil production. It was later expanded to include world production as explained by Kenneth Deffeyes’ book, “Beyond Oil: The View From Hubbert’s Peak.” Other publications have fueled the fire and have essentially validated the theory, including Matthew Simmons’ “Twlight in the Desert: The Coming Saudi Oil Shock And The World Economy;” The Department of Energy’s Hirsch Report urging the US to begin now in moving to alternative fuels to minimize the economic shocks of peak oil; and even the US Army Corps of Engineers’ report titled “Energy Trends And Implications for U.S. Army Installations.”

The big problems are that nobody can quite agree on when peak oil will occur, or on just how serious consequences will be when it does. Some experts like Deffeyes believe peak oil already occurred in late 2005, which they believe explains the current extreme oil price volatility and which makes it very late for beginning mitigation strategies. Other experts estimate its occurrence five, ten, twenty or more years in the future.

On the issue of consequences, the Hirsch Report and websites like Life After The Oil Crash (LATOC) and dieoff.org ring some very serious alarm bells. Republican Congressman Roscoe Bartlett has given presentations to Congress and others on peak oil, and has used information from the LATOC site. The websites essentially predict the collapse of modern civilization as it is quickly and increasingly cut off from its most precious resource, given that everything in our civilization from food growth and transport to plastics rely on petroleum. They believe we are already too late to save ourselves by switching to alternative energy sources that would in any event be inadequate to replace oil.

I’ve often wondered whether so-called peak oil “alarmists” were being overly pessimistic. The pessimism seems especially obvious in light of how amazingly quickly we are moving closer to an ethanol infrastructure as a result of higher oil prices. Other rays of hope are out there too, such as companies moving entirely to wind-powered energy.

The Peak Oil Debunked blog has published an excellent counter-argument to the peak oil pessimists that is well worth a read. While not denying the inevitability of peak oil, the main arguments are essentially that a) using less energy than we do now would not be catastrophic, given the huge amount of waste currently built into the system; b) we use oil for so much now only because its cheap and convenient, and when that is no longer true we will re-prioritize our energy use and make do with alternatives; c) the energy used to switch to alternative energy can be in the alternative of what we would use energy for, instead of on top of it (for example, we could build an electric train instead of a fuel-guzzling airport rather than creating both); and d) we need not find a single alternative to oil when multiple technologies together can fill the void.

The article is a great read, and I always appreciate challenges to established dogma.