March 6, 2008 at 05:17:51

Peak Oil - True or False

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By Stephen Lendman (about the author) Page 3 of 4 page(s)

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In addition, it states that a preliminary USGS assessment "suggests the Arctic seabed may hold as much as 25 per cent of the world's undiscovered oil and natural gas reserves (or around 400 billion barrels of oil alone.)" It further says that Arctic oil source rocks may contain "untold billions of tons of organic sediments" and calls the 80 million acre Arctic Ocean Commons Prospect Claim "the world's largest (potential) material prize."

Here's what USGS, in fact, said in October 2007. It called the above claim "a reporter's mistake" but doesn't rule out that it's true. It explained that the 25% figure came from an assessment of seven oil and gas basins that weren't precisely in the Arctic. One of them in East Siberia lies entirely south of it. Exclude it and what's left is 14%. However, because a 2000 USGS assessment didn't include undiscovered resources from all north of the Arctic basins (numbering many more than seven), the area's potential is vast but undetermined.

USGS explained that it didn't fully assess the area in 2000 because it lacked enough data at the time. However, it's now investigating all Arctic regions, using available geologic information and "a methodology adapted to a general shortage of well and seismic data." USGS concludes that the region's potential is vast, it's largely unexplored, its resources are "poorly understood," and it can only produce a "broad view" of the region's potential "because the (area's) geologic uncertainties are very high and the technical uncertainties (of) oil and gas extraction (feasibility) even higher."

Two Notable Peak Oil Proponents

There's no shortage of peak oil proponents, many are prominent figures, two among them stand out, and one is a media regular on his views, right or wrong. He's Matthew Simmons, chairman and CEO of Simmons & Company, an industry-insider, close associate of Dick Cheney and advisor and possible secret member of Cheney's Energy Task Force representing Big Oil interests. He's also a major Republican donor and author of the 2005 book "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy."

In it, Simmons is alarmist about the world's largest producing country, and he's widely heard and believed. Right or wrong, he states that Saudi oil fields are "at or very near (their) peak sustainable volume (and they'll) likely....go into decline in the very foreseeable future." In addition, there's little chance of discovering new fields to make up the difference. These views make headlines and move markets. So with oil prices around $100 a barrel and Simmons an industry insider and prominent doomsayer, consider the possibility there's something rotten in the oil patch allowing Big Oil to profit hugely.

Further confirmation comes from a February 28 Arabian Business article. In it, Simmons calls $100 oil "cheap" because "the supply is showing some very troubling signs that we might well have already peaked and started (to slow) down....Demand on the other hand shows absolutely no sign of slowing down," so oil prices could top $300 a barrel within five years." Simmons repeats this view on US television.

Geologist Colin Campbell is another peak oil proponent and author of many papers on the subject. He's just as bleak in his outlook and states it in "The Coming Oil Crisis and Oil Depletion - The Heart of the Matter," that he wrote for The Association for the Study of Peak Oil and Gas (ASPO). He's their founder, former president and currently their honorary chairman.

Campbell believes world output peaked, and in another of his papers, "Peak Oil: an Outlook on Crude Oil Depletion," stated: Peak Oil "is a turning point for Mankind, which will affect everyone....its discovery peaked in the 1960s....gas....will likely peak around 2020....non-conventional oil delays peak only a few years....we're not facing a re-run of the (1970s) Oil Shocks. They were like....tremors....we now face (an) earthquake....It is not a temporary interruption but the onset of a permanent new condition."

Campbell also wrote "Understanding Peak Oil" on APSO's web site in which he further says that debating the precise date of peak oil "misses the point." What really matters is "the long remorseless decline (that's) on the other side of it. The transition to decline threatens to be a time of great international tension. Petroleum Man will be virtually extinct this Century, and Homo sapiens faces a major challenge in adapting to his loss. Peak Oil is by all means an important subject." These type comments and more from Campbell's 2005 book "Oil Crisis" can scare anyone. They also explain today's geopolitics, the strategic importance of oil, the reason its price is so high, and why the US is waging global wars "that won't end in our lifetime."

A Peak Oil Contrarian

F. William Engdahl once accepted peak oil analysis, but no longer does. He explains why in his writing, and this section summarizes his reasoning. It's based on the Russian-Ukrainian theory that oil originated from deep carbon deposits dating as far back as the earth's formation. It's not a fossil fuel or of biological origin, and its potential may be far greater than current hydrocarbon estimates.

According to Engdahl and others sharing this view, peak oil adherents believe oil is a fossil fuel, its origin is biological, its supply finite, and it's only found in areas where it was "geologically trapped millions of years ago....in underground reservoirs (around) 4-6000 feet below the surface of the earth." At times, large amounts may also be in shallow water offshore rock formations in places like the Gulf of Mexico, North Sea or Gulf of Guinea. In any event, prevailing reasoning is that it's running out, and it's a just a matter of deciding how much is left and when it no longer will be available in amounts needed to sustain world economies. Peak oil proponents believe the time is fast approaching.

Petroleum science dates from the year 1757 when Russian scholar Mikhailo Lomonosov hypothesized that oil's origin might be biological. In the early 19th century, two scientists disagreed - German naturalist and geologist Alexander von Humboldt and French chemist and thermodynamicist Louis Joseph Gay-Lussac. Together they proposed that oil is primordial matter, it erupted from deep within the earth, and it has no connection to biological material nearer the surface. Later in the century, others held similar views - most notably the Russian chemist Dmitri Mendeleev (the father of the Periodic Table of chemical elements) and French chemist Marcellin Berthelot. Mendeleev, in particular, believed that "petroleum was born in the depths of the earth (called "deep faults"), and it is only there that we must seek its origin."

Modern petroleum science dates from the end of WW II when the Cold War began and the former Soviet Union faced isolation from the West. At the time, its scientists believed the country was in trouble. It had limited reserves and was shut out of many parts of the world for supply. It thus became imperative to find new deposits inside the country.

So its scientists at the Institute of the Physics of the Earth of the Russian Academy of Sciences and the Institute of Geological Sciences of the Ukraine Academy of Sciences set out to do it. They studied oil's origin, how reserves are generated, and the most effective exploration methods to extract it.

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I am a 72 year old, retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

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