Matt Savinar
10/20/2004
"Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global “Peak Oil.”
The ramifications of Peak Oil are so serious, one of George W. Bush’s energy advisors, investment banker Matthew Simmons has stated, “The situation is desperate. This is the world’s biggest serious question,” while comparing the crisis to the perfect storm: “If you read The Perfect Storm, where a freak storm materializes out of the convergence of three weather systems, our energy crisis results from the same phenomenon.”
Simmons’ investment bank, Simmons and Company International, is considered the most reputable and reliable energy investment bank in the world.
Given Simmons’ background and reputation, what he has to say about the situation is truly terrifying. For instance, in an August 2003 interview with From the Wilderness publisher Michael Ruppert, Simmons was asked if it was time for Peak Oil to become part of the public policy debate. He responded:
It is past time. As I have said, the experts and politicians have no
Plan B to fall back on. If energy peaks, particularly while 5 of the
world’s 6.5 billion people have little or no use of modern energy, it
will be a tremendous jolt to our economic well-being and to our
health — greater than anyone could ever imagine.
When asked if there is a solution to the impending natural gas crisis, Simmons responded:
I don’t think there is one. The solution is to pray. Under the best of
circumstances, if all prayers are answered there will be no crisis
for maybe two years. After that it’s a certainty.
In May 2004, Simmons explained that in order for demand to be appropriately controlled, the price of oil would have to reach $182 per barrel. With oil prices at $182 per barrel, gas prices would likely rise to $7.00 per gallon.
If you want to ponder just how devastating oil prices in the $180 range will be for the US economy, consider the fact that one of Osama Bin-Laden’s goals has been to force oil prices to $200 per barrel.
Simmons has been sounding the alarm for years. For a while, he was a lone "voice in the wilderness." In the past year or so, however, many experts have begun echoing his sentiments. Ali Samsam Bakhtiari, the vice-president of the Iranian National Oil Company has stated:
The crisis is very, very near. World War III has started. It has already
affected every single citizen of the Middle East. Soon it will spill over
to affect every single citizen of the world.
On a similar note, the respected Washington-based consulting firm PFC Energy Group recently released a report predicting a coming "energy doomsday."
Say what you will about George W. Bush, he has been very open with the American people about this particular issue. In May 2001, George W. Bush went on the record as saying, “What people need to hear loud and clear is that we’re running out of energy in America.”
Vice-President Dick Cheney publicly acknowledged the reality of Peak Oil in 1999 when he stated:
By some estimates, there will be an average two-percent annual
growth in global energy demand over the years ahead, along with,
conservatively, a three percent natural decline in production from
existing reserves.
That means that by 2010 we will need on the order of an additional
50 million barrels per day.
The oil-producing nations of the world are currently pumping at full capacity yet they are only producing 82.5 million barrels per day. Raising production by 50 million barrels per day is essentially impossible. Cheney's remarks were thus a tacit admission of the severity and imminence of the peak.
Executives from Big Oil have publicly acknowledged the scope of the coming crisis as well. In 2003, Exxon Mobil president Jon Thompson stated:
By 2015, we will need to find, develop, and produce a volume of
new oil and gas that is equivalent to eight out of every 10 barrels
being produced today. In addition, the cost associated with
providing this additional oil and gas is expected to be considerably
more than what the industry is now spending.
Equally daunting is the fact that many of the most promising
prospects are far from major markets - some in regions that lack
even basic infrastructure. Others are in extreme climates, such as
the Arctic, that present extraordinary technical challenges.
In October 2003, Michael Moore released the book, Dude, Where’s My Country? Chapter three of the book, “Oil’s Well that Ends Well,” was dedicated to the coming post-oil die-off.
The Saudi's have a saying about the situation,"My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."
Former UK Environmental Minister Michael Meacher was equally frank, when he stated, "It is hard to envisage the effects of a radically reduced oil supply on a modern economy or society."
Put simply, anytime investment bankers, consulting firms, executives from "Big Oil," Dick Cheney, George W. Bush, officials from OPEC nations, Osama Bin Laden, and the Saudi royal family are in complete agreement with leftist demagogues like Michael Moore and influential environmentalists like Michael Meacher, it's safe to say "the shit is about to hit the fan."
"Are We 'Running Out'? I Thought
There Was 40 Years of the Stuff Left"
The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.
In a similar sense, an oil-based economy such as ours doesn't have to deplete its entire reserves of oil before it begins to collapse. Once the shortfall between demand and supply gets beyond 10-15 percent, all hell is going to break lose.
To understand the nature of the coming crisis, you need to understand what geologists call "Hubbert's Peak," named for the Shell geologist Dr. Marion King Hubbert. In 1956, Hubbert accurately predicted that US domestic oil production would peak in 1970. He also predicted global production would peak in 1995, which it would have had the politically created oil shocks of the 1970s not delayed the peak for about 10-15 years.
Oil will not just "run out" because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole.
Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.
In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, economies will crumble, and resource wars will explode.
Graph: Dr. C.J Campbell (1996)
"What About Other or New Sources of Oil?"
Fortunately, we have a massive amount of oil located in the oil sands up in Canada and down in Venezuela. Unfortunately, these oil sands projects are projected to peak in 2020 at about 4-5 million barrels of oil per day. That's not much oil considering we currently need 82.5 million barrels per day and are already losing over 1 million barrels per day due to depletion.
Some people believe oil is actually a renewable resource continually produced by an "abiotic" process deep in the Earth. As emotionally appealing as this theory may be, it ignores most common sense and all scientific fact.
Even if this theory is true, it isn't doing us much good as production is declining in pretty much every nation outside the Middle East.
The oil companies don't give this theory the slightest bit of credence even though they are more motivated than anybody to find an unlimited source of oil as each company's shareholder value is based largely on how much oil it holds in reserve.
"Aren't There Alternatives to Oil?"
Many politicians and economists insist that there are alternatives to oil and that we can "invent our way out of this." Physicists and geologists tell us an entirely different story. The politicians and economists are selling us 30-year old economic and political fantasies, while the physicists and geologists are telling us scientific and mathematical truth. Rather than accept the high-tech myths proposed by the politicians and economists, its time for you to start asking critical questions about the so called "alternatives to oil" and facing some hard truths about energy.
Unfortunately, since most people see and hear only what they want to see and hear, the politicians and economists are lauded while the physicists and geologists are ignored.
While there are many technologically viable alternatives to oil, there are none (or combination thereof) that can supply us with anywhere near the amount of net-energy required by our modern monetary system and industrial infrastructure.
If we have have a few dozen technological miracles, unprecedented political will and bipartisan cooperation, massive amounts of investment capital, and about 25-50 years of peace and prosperity to retrofit the world's 40 trillion dollar per year industrial infrastructure, we might be able to get the energy equivalent of 3-5 billion barrels of oil per year from alternative sources.
That's a tremendous amount of oil - about as much as the entire world used per year during World War II, but it's not enough. Unfortunately, the world currently needs over 30 billion barrels of oil per year to support economic growth. That number will only increase as time goes on due to population growth, debt servicing, and the industrialization of countries like China and India.
Furthermore, people tend to think of alternatives to oil as somehow independent from oil. In reality, the alternatives to oil are more accurately described as "derivatives of oil." It takes massive amounts of oil and other scarce resources to locate and mine the raw materials (silver, copper, platinum, uranium, etc.) necessary to build solar panels, windmills, and nuclear power plants. It takes more oil to construct these alternatives and even more oil to distribute them, maintain them, and adapt current infrastructure to run on them.
Plant based alternatives like ethanol and biodiesel are also entirely dependent on an abundant supply of oil as modern agriculture is entirely oil-powered. All pesticides are derived from oil while all fertilizers are derived from natural gas, which is also running out. As oil production declines, so will our ability to produce food and agricultural-based alternatives to oil.
It's not just transportation and agriculture that are entirely dependent on abundant, cheap energy. Modern medicine, water distribution, and national defense are each entirely powered by oil and petroleum derived chemicals. Most consumer goods are made with plastic, which is derived from oil.
. . . usable energy is the world's most critical resource then obviously it
is an important issue. Without volume energy we have no sustainable
water, we have no sustainable food, we now have no sustainable
healthcare.
"What About Amazing New Technologies?"
Technologies such as thermal depolymerization are promising as solutions to our landfill problems, but since most of the feedstock (such as tires and turkey guts) requires high-grade oil to make in the first place, it is not a solution to a permanent oil shortage. Furthermore, there is only one thermal deploymerization plant online and it is producing less than 500 barrels of oil per day. While the technology certainly deserves investment, it is both reliant on oil and it is simply "far too little, way too late" for it to save you from the devastating economic effects of the coming energy famine.
While there are some promising technological advancements in areas such as solar-nanotechnology, even the scientists at the forefront of these technologies admit we need a series of "miracles" to prevent a total collapse of industrial civilization.
In other words, the chances of technology saving you from the coming economic collapse are about the same as the chances of another virgin-birth taking place.
For you or any other "average" person to expect high-tech solutions to save you from the economic effects of Peak Oil is akin to a person living in sub-Saharan Africa to expect high-tech medical treatments to save their community from the effects of AIDS. These treatments are available to people like Magic Johnson, not the folks in Africa. Likewise, many of the recent technological advancements in energy production and efficiency may be available and affordable to people like George W. Bush and Warren Buffet or agencies like the Department of Defense, but they aren't going to be available or affordable to the average person.
The idea that technology is going to save you from this crisis is downright silly. Technology uses energy. It does not produce it. Here in the 21st century, we have no shortage of technology. We have a shortage of energy. As you are probably well aware, the price of technology has been plummeting while the price of oil has been skyrocketing.
Besides, most forms of technology require tremendous amounts of oil in the first place. The average desktop computer, for instance, consumes 10 times its weight in fossil fuels during its construction alone.
On a similar note, the average car consumes 120,000 gallons of fresh water just during its construction. Unfortunately, the world is in the midst of a severe water crisis that is only going to get worse in the years to come. Scientists are already warning us to get ready for massive "water wars."
Consequently, the only way for us to replace our current fleet of gas-guzzling SUVs with fuel-efficient hybrids is to kill 2-3 billion people, steal their fresh water, and use it to construct a new generation of high-tech cars.
The widespread use of technologies such as the internal combustion engine and the air conditioner is what got us into this situation. It is thus unlikely that even more technology will get us out of it.
"What's Going to Happen to the Economy?"
Even if you can currently afford these technologies, it won't help you much since the majority of the population can't. Got solar panels on your roof and a brand-new hybrid car? Great, but since most people can't afford those things, the economy is still going to collapse.
The US economy is particularly vulnerable to the coming oil shortages. As the most indebted nation in the world, the US is completely dependent on strong economic growth just to pay the interest on its debts. This is as true for individual citizens as it is for corporations and governments. A declining oil/energy supply means the economy can't grow which means individuals, corporations, and governments can't pay off their debts, which means economic anarchy is on the way.
Furthermore, unlike nations in Europe, the US has built it's entire infrastructure and way of life under the assumption oil would always be cheap and plentiful. Since that is no longer the case, the US economy is in even more trouble than the economies of nations like the UK, Germany, Spain, and France.
So even in the best-case scenario, we're looking at an international financial meltdown and a collapse of the value of US dollar so severe that the Great Depression will look like the "good ole days."
The financial dislocations wrought by the coming oil shocks will plunge the world into a series of resource wars and "currency insurgencies" unlike anything we can imagine.
"How Does the US Government
Plan to Deal With This?"
Before you get too worried, rest assured that the US government has been aware of Peak Oil since at least 1977 and has been actively planning for this crisis for over 30 years. Three decades of careful, plotting analysis has yielded the following 2-step plan:
Step 1: Go to war to get oil;
Step 2: Kill whoever gets in the way;
"Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global “Peak Oil.”
The ramifications of Peak Oil are so serious, one of George W. Bush’s energy advisors, investment banker Matthew Simmons has stated, “The situation is desperate. This is the world’s biggest serious question,” while comparing the crisis to the perfect storm: “If you read The Perfect Storm, where a freak storm materializes out of the convergence of three weather systems, our energy crisis results from the same phenomenon.”
Simmons’ investment bank, Simmons and Company International, is considered the most reputable and reliable energy investment bank in the world.
Given Simmons’ background and reputation, what he has to say about the situation is truly terrifying. For instance, in an August 2003 interview with From the Wilderness publisher Michael Ruppert, Simmons was asked if it was time for Peak Oil to become part of the public policy debate. He responded:
It is past time. As I have said, the experts and politicians have nonew oil and gas that is equivalent to eight out of every 10 barrelsEqually daunting is the fact that many of the most promisingwater, we have no sustainable food, we now have no sustainablehealthcare.