Giving Thanks For Oil and OPEC

When you sit down for your Thanksgiving meal this week, don't forget to thank the oil. No, not the extra extra virgin olive oil or the polyunsaturated high omega 3 vegetable oil, but the crude -- the dead dino, fossilized pond scum, ancient sunlight, rock oil -- aka, petroleum.

Remember as you give thanks for the bountiful Earth, that back of the bread lies the oil. We should acknowledge that our food production system and every other aspect of our lives are utterly dependent on fossil fuels. We should also remember that before World War II, this was not the case. We may even have relatives who remember those days. We should take a look at the children sitting around the table. They will not live in a world of cheap, abundant oil. Give thanks for that too.

Why should we give thanks that the future holds no cheap oil? There are several reasons, but the first is that cheap oil has fueled a 50-year-long party in the industrialized West that has left us with an unsustainable economy that is wrecking the planet. The recent awareness of global warming is beginning to put a damper on our out-of-control binge, but not fast enough to slow the heating of the planet. Rising oil prices will force a cutback in consumption. Rising oil prices will also chill the fantasy of endless growth and force us to confront the reality of planetary limits.

For several years now, "voices from the wilderness" have been gathering with louder volume to warn about the coming peak in world oil production. In 2005, petroleum geologist Kenneth Deffeyes predicted that the world output of crude oil would peak on Thanksgiving Day 2005, but he and other petroleum industry "outsiders" have been dismissed as "fringe" elements.

Not any longer. Over the past month, a number of oil industry insiders have made statements confirming that the annual growth in oil production has stopped. On Monday, November 19, The Wall Street Journal ran a front page story titled "Oil Officials See Limit Looming on Production." While the article emphasized opinions that tied flat oil-production curves to what they call "above ground" limits having to do with available drilling rigs, security concerns and the like, there is plenty of evidence that the underlying geology of oil is imposing absolute limits on the amount that can be produced.

Some oil industry executives seem to concur. The article quoted ConocoPhillips CEO James Mulva on the likelihood of meeting the projected demand of 120 million barrels a day by 2030: "I don't think we are going to see the supply going over 100 million barrels a day. Where is all that going to come from?" In a Business Week article, Mulva said that his company was considering diversifying into renewable energy. "We may not be able to do in the next 100 years what we did in the past 100 years," Mulva said. "So we have to ask ourselves how we can transform from just an oil and gas company into an energy company."

Meanwhile, sustainability analyst Lester Brown released an update last week titled, "Is World Oil Production Peaking?" Brown ran through the figures: "After climbing from 82.90 million barrels per day (mb/d) in 2004 to 84.15 mb/d in 2005, output only increased to 84.80 mb/d in 2006 and then declined to 84.62 mb/d during the first 10 months of 2007." Absent a big production increase from OPEC, the numbers indicate that the peak in world oil production may have already occurred in 2006, not far off from Kenneth Deffeye's prediction.

OPEC met last weekend in a summit -- only the third summit involving heads of state since the group was founded in 1960. U.S. Energy Secretary Samuel Bodman called on OPEC to raise production to alleviate high oil prices, but OPEC Secretary General Abdalla Salem el-Badri's response was, " ... frankly we don't see that we should add more oil."