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Why Dems and Republicans Are Afraid of Two Words: Peak Oil

By Kelpie Wilson, TruthOut.org. Posted May 22, 2008.


The pro-growth faction has reacted quickly and scathingly to the idea that there could be limits to growth.

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In 1956, M. King Hubbert, a petroleum geologist with Shell Oil, presented a paper to the American Petroleum Institute that predicted US oil production would peak in the early 1970s and then follow a declining curve, now known as Hubbert's curve. But Hubbert almost didn't get to give his paper. He got a call from his bosses at Shell, who asked him to "tone it down." His reply was that there was nothing to tone down. It was just straightforward analysis. He presented the paper, unedited. You can read the whole story here.

Since that time, the oil industry and its political supporters have done everything they can to tone down the message that oil is a finite resource and that we will run out of it some day. Why would they do that? To further the short-sighted, short-term pursuit of profit. In 2004, Shell finally got caught in a lie about the size of its oil reserves. The company had inflated the stated size of its oil reserves to keep stock share prices high because who wants to invest in a company -- or an industry -- that is going the way of the dinosaurs?

Since 1956, the world economy has proceeded under a sort of oil company spell that has woven the illusion all around us that oil depletion is so far into the future that we don't need to worry about it. That belief was essential to support the aim of an endlessly growing economy. There have been a few hitches in that strategy.

In 1972, just as oil production in the United States reached its all-time peak, a group of computer modelers from MIT released a study called "The Limits to Growth." They predicted a steep decline in natural resources of all kinds. Because reserve numbers for many minerals, including oil, were not accurately known back then, they looked at different scenarios. Some showed us running out of oil before 2000 and some showed the peak occurring toward the middle of the 21st century.

The pro-growth faction reacted quickly and scathingly to the idea that there could be limits to growth. The MIT scientists were treated like Cassandras in academia and in the press. This strategy of killing the messenger, the bearer of bad news, soon permeated American politics. Jimmy Carter tried to grapple with the energy crisis in the late 1970s with support for energy alternatives and conservation, but he was ridiculed by the media and American consumers were not able to hear the message. Ronald Reagan walked away with the presidency and promptly tore the solar panels off the roof of the White House. Ever since then, it has somehow been "not polite" to talk about limits to growth.

Today, despite skyrocketing oil prices, most politicians still avoid the term "peak oil." Most of the media still treat peak oil advocates with skepticism, using epithets like "fringe" and "so-called"to describe peak oil theory. To be clear, peak oil is often misunderstood. The date that the world reaches peak oil is not the date we actually run out, but the date that we stop increasing production. This is followed by a "plateau" where oil production is flat.

Eventually, oil production will decline. Even a plateau is a big problem for a world economy that is based on growth. In a world where 850 million are still going hungry and 3 billion out of 6.5 billion live on less than $2 a day, stagnant oil production means an end to development models based on economic growth. The statistics show that oil production has been flat for more than two years now. These facts are simple. As Hubbert said back in 1956: "Nothing sensational about it, just straightforward analysis."

And yet the most powerful institutions in our society continue to do everything they can to avoid confronting the truth. Fortunately, a vast network of independent citizens, academics and renegade oil company employees has kept probing at the truth and attempting to educate the public about peak oil. You can find their work online at sites like energybulletin.net and theoildrum.com.

These networks have not only exposed the real statistics about oil production constraints, but they have begun to grapple with how the world should respond to this unprecedented crisis. Anyone who is interested in a firsthand encounter with the intrepid "peakists" might check out an upcoming conference. The International Conference on Peak Oil and Climate Change: Paths to Sustainability takes place from May 30 to June 1 in Grand Rapids, Michigan.

Michigan Congressman Vernon Ehler will launch the conference. Ehler is a member of the House Peak Oil Caucus, which was founded by another Republican, Roscoe Bartlett of Maryland. The Peak Oil Caucus is co-chaired by Democrat Tom Udall, but it has only 15 members in all. There is no similar group in the Senate and very few other politicians will use the term peak oil. None of the current presidential candidates have made peak oil an issue. Bartlett's press secretary, Lisa Wright, said that Bartlett has talked about peak oil with John McCain but not with Obama or Clinton. When I asked if McCain would take on the peak oil issue, Wright said, "I would not describe Senator McCain as being nearly as knowledgeable or committed as Representative Bartlett on the issue."


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Kelpie Wilson is Truthout's environment editor. Trained as a mechanical engineer, she embarked on a career as a forest protection activist, then returned to engineering as a technical writer for the solar power industry.

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Peak Oil Means Bankruptcy ...
Posted by: mmckinl on May 22, 2008 9:21 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Anyone who has studied Peak Oil knows that Peak Oil means Peak Credit and therefore Peak Money.

Because we use fractional reserve banking peak money necessarily means that there will not be enough money creation to sustain, let alone grow the economy. Fractional Reserve Banking creates money through loans (debt) monetized through checking accounts. When they create this debt the money for the interest that the debt will accumulate has not been created. To bridge this gap more loans (debt) must be monetized each and every year to create enough money in circulation to pay both the principle and interest. This is what we call geometric debt accumulation.

Without geometric debt accumulation the whole economic system crashes a la 1929. Politicians, businessmen, labor leaders and the media are all on board the debt accumulation bandwagon because they believe it is the only way to keep the economy going. The Bankers have everyone by the short hairs.

But Fractional Reserve Banking is NOT the only way to monetize an economy. Our Constitution actually gives the power of credit and money creation to the government, that is the right of the government to print money without interest bearing notes sent to the privately owned and operated Federal Reserve. Money without interest means there need not be geometric debt accumulation to keep the economy going. Money without interest means lower taxes for citizens. But money without interest means bankers lose their usurped monopoly on the credit granted to us by our Constitution.

The bankers monopoly on credit is the biggest subsidy in the history of the United States. The bankers can create money at 10 times the amount of assets they hold, and indeed many banks and hedge funds today are controlling 20 to 30 or more times their real assets in credit.

Instead of subsidizing bankers and brokers why not use the power of credit to help pay for government services by charging for the use of credit, instead of subsidizing even guaranteeing the credit of private banks at expense to the tax payer.

At any rate Peak Oil will destroy our present system and leave a smoldering ruin where our economy once was. The only real answer is a public central bank that creates money and credit and charges the private sector interest for the privilege of its use. In this way money stays in circulation without being destroyed by unpayable debt and tax payers get a break from the rent bankers must pay for their credit.

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Crisis
Posted by: QQOblivion on May 22, 2008 9:30 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I have conversations with my brother about this. (He has studied this issue to a degree, and he says that, yes, Peak Oil is very real.)
I told him that the media should use the term "Energy Crisis" to describe today's situation, like the words were used back in the 70's. (The use of that phrase helped end Jimmy Carter's presidency, and ushered in the conservative reign that continues in America until this day.)
He told me that, if we called the shortage today an "energy crisis", then what would we call it when things get REALLY bad, or when things get even far worse (as they inevitably will)?

He also made an excellent point. What if we had spent the TRILLIONS of dollars being spent on the Iraq war instead on researching new sources of energy, such as solar, wind, etc.?
Ah, think what might have been!

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A List of Obama's Economic & Domestic Policy Advisors
Posted by: ClearEye on May 22, 2008 4:42 PM   
Current rating: 3    [1 = poor; 5 = excellent]
From the Chicago Tribune:
linked text

all italicized words are mine--ClearEye

The following makes it clear why Obama won't be coming out with any new, creative economic proposals. While he has dozens of foreign policy advisors, the following handful are the sum total of his economic and domestic policy advisors:


Michael Froman - Citigroup bank exec., pro-free trade & "business-friendly", former Pres. Clinton advisor
Austan Goolsbee - professor of business at U. of Chicago
David Cutler - Pres. Clinton health economist, opposes single-payer
David Blumenthal - Director, Institute for Health Policy, Harvard Medical School
Jeffrey Liebman - Economist, Harvard professor and member of Clinton White House Council of Economic Advisers. Research has focused on role of earned income tax credit in moving people from welfare to work
Dan Tarullo - International trade expert, Georgetown law professor and former Bill Clinton economic adviser i.e. GATT & NAFTA proponent
Eric Holder - Clinton deputy attorney general
Cass Sunstein - University of Chicago law professor
Laurence Tribe - Harvard law professor
Cassandra Butts - Senior policy adviser to House Democratic leader Richard Gephardt

I've made around 300 online phone bank calls for Obama, and after reading this, I'm heartsick. Note the total dearth of labor economists, economic development experts, experts in "green" economics, environmental advisors, anyone to educate him on the opposition viewpoint to the current trade agreements. No wonder the economy/jobs section of his website is so minimal.

JFK used to have experts from both sides of an important controversial issue verbally duke it out during cabinet meetings so he could be sure he got the whole picture before making a decision. He knew he was weak on practical economics so he met with John Kenneth Galbraith almost daily. HE took his responsibility seriously.

Thanks to Bush & Co. we're facing possible economic meltdown (and all the suffering that would accompany it) if the next administration doesn't implement creative means to grow the U.S. economy, and restore some manufacturing (preferably green) in order to boost the demand side (purchasing power). Why couldn't John Edwards have had more charisma, or one of the charasmatic Ohio populists, Gov. Ted Strickland or Sen. Sherrod Brown be the newbie with the chutzpah to run as the "outsider". Foolish me for assuming that Obama, who made such a point of taking no PAC money, avoiding lobbyists on his campaign staff, and is clearly brilliant would use his independence to enact domestic and economic policies that restore balance by favoring the people over the power elite.

To be honest, I'm beginning to think the Pennsylvanians and W. Virginians might have got him right--a fellow so full of himself, so above everyone else, that he doesn't even know what it is he doesn't know.

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Finite planet
Posted by: AsteroidMiner on May 22, 2008 10:56 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Finite oil.

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Ever heard of the Transition Towns Movement?
Posted by: SagaciousD on May 23, 2008 9:36 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The solutions to the problems posed by Peak Oil will not be initiated by the top tiers of our governments. Change must begin at the local level. The end of our age of cheap transportation and shipping will necessitate a revival of local food and renewable energy production, regional manufacturing of basic goods (clothing, common medicines, etc), and a serious commitment to retrofitting municipal traffic systems around bicycles, public transit, and possibly horses in the more rural areas.

Hundreds of communities across the globe -- including Boulder, Colorado in the US -- have taken up the challenge of rebuilding their local economic structures in anticipation of the coming decline of global business-as-usual. If you're interested in starting such a movement in your own community (and you should be!), then check out these links:

Transition Culture
Transition Towns Wiki

Keep your hopes up! The future will not be as high-powered as the present, but we can regain the meaning in our lives as we power down. We can have REAL INTEGRATED COMMUNITIES instead of our fractured suburban landscape. We need no longer exist as mere consumers.

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Peak Oil Is Not A "Problem"
Posted by: Jeff Hoffman on May 25, 2008 12:26 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
At least not for the Earth, its ecosystems, and non-human species. The sooner we run out of oil, the better. Good riddance!

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Peak Oil is the pits
Posted by: immigrationman on May 26, 2008 8:26 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I think Peak Oil is the pits- We need to get more people into real renewable energy sources as soon as possible. I am really interested in trying to find new ways to get society moving forward and off this big oil juggernaut to destruction.

I recently put a solar installation on my house to heat hot water, and getting it rhough the homeowner's association was a nightmare. Still, I have heard of new things being tried. For example, I used a recent law favoring sustainable energy use to take on my evil homeowner's assocation. Also one of my friends contacted Adam Edward Rothwell, an attorney and sustainable energy expert, to offer solar power as an incentive to selling his house through the website www.solarpowerandrealestate.com

Together we can beat oil, because even peak oil is the pits!

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who wins elections in Hard Times...
Posted by: BlueBerry PickN on May 27, 2008 2:33 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
by telling people what they were accustomed to enjoying... was aberrant?

...or that they need to **change** to create Change?

People don't want to take responsibility, they want to be 'take care of', to put someone in charge who will absolve them of responsibility.


To tell people: "gee, looks like you ate a bigger slice of Global prosperity than you were entitled to have & everybody is suffering because you were selfish slobs who never cleaned up after yourselves... you didn't create anything SUSTAINABLE from the greatest, nastiest resource known to Mankind..."

...doesn't win elections.

the only way to win elections in the face of Hard Times?
its telling people that 'they're gonna get what's coming to them' & make it sounds POSITIVE...

...or make it sounds plaintively 'poor little misunderstood You.



Hitler was really good at both.



┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄
BlueBerry Pick'n
can be found @
ThisCanadian
┄┄┄
"We, two, form a Multitude" ~ Ovid.
┄┄┄
"Silent Freedom is Freedom Silenced"
┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄┄

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Squeezing the last dollar from the last barrel of oil
Posted by: herbal on May 29, 2008 9:33 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
There is only one rationale for denial of depletability of oil on the part of its industry. Profit, of course; but that is not a reason for the panic sticken refusal to invest in the redesign of the old tool tradition that is oil based. If this reinvestment of a small part of oil profits were made, oil would soon be obsolete. Well, of course, we have no choice but to redesign human life around new technology and social inivative adaptation.

However, embrace of solutions discomfort the ruling class because oil is a control point, part and parcel of the international banking and finance system that is at the root of the idea of perpetual growth. It is beyond greed. It is the compulsive desire to control the lives of others in the pursuit of the highest social status. Fascist and corporatists. How else are we to understand sociopaths like David Rockefeller and Dick Cheney? The very idea of perpetual growth needs to be abandoned. Do more with less (ephemeralization), said Buckminster Fuller.

The good news is that when we, as individuals, take responsibility and the task of designing and eveolving our own new technologies and innovative lifestyles, they will be human appropriate scale and humane and accessible. We are soon to be a nation of alternative designers; designers of steady state systems.

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"Peak Oil" a construct of greed
Posted by: ray burchard on May 29, 2008 9:55 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Unless, those who advocate “peak oil” can supply an accurate accounting of all the earth’s petroleum reservoirs and the rate at which the Earth replenishes, then the concept of “peak oil” will remain an animated hypothetical used to create market fear and thereby rationalize Wall Street's market manipulation through speculation.

If we the people allow the same principles (those that manipulate the current oil price gouging and those that officially sanction it), with their customer supplied 'deep pockets', to then dominate the developement of "Alternate Energy sources", the end results will remain as a public gouging.

The cycle of America's politicians themselves benefiting from corporate lobbying while the current governance also benefiting by paying the cost of todays war in todays lives but tomorrows dollars is why gasoline went from $1.69 to $3.87 during the Republician's reign of terror.

It is long past time to consider nationalizing America's Energy sources and further developement, prosperity for all and not just the select few.

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"Growth" is not synonymous with "oil"
Posted by: westomoon on May 30, 2008 1:27 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Just the retooling we'll need to do to shift to renewable power will, in GDP terms, register as a boom. Rehabbing and restoring decayed or removed railroad track, ditto. With any luck, some bright person will set up manufacturing capability here for the new generation of excellent electric vehicles, or the geothermal heat pumps that are currently standard in Scandinavian house construction.

We really don't have to go back to the 19th century just because oil is a finite resource -- in fact, we can't go back, because we've used up the resources that sustained us then (whale oil), or the planet can't support their use (coal). No reason trains shouldn't have solar and wind collectors on every car, eg, and ditto ships.

There's lots of growth inherent in all this -- if we can just get our minds, and our economists' minds, switched off this oil = growth fallacy.

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» For example Posted by: westomoon