Another con-job, but more confusing than global warming
Up until around 2005 I believed some of the peak oil stuff myself. Many years ago I read “Small is Beautiful” by EF Schumacher (1973), and that book had influenced my thinking. But later I came to realise that “peak oil”, just like “global warming”, “the war on some drugs”, “healthy low-fat diets”, and many other things, is a huge con-job.
I once met a guy called Robert Atack, who had a webpage called www.oilcrash.com. He gave me some DVD’s. He seemed like a genuine and honest guy doing his best to do good things for the planet. It’s ironic that he was the final straw that caused me to start ripping into peak oil, I’m sure this viewpoint is the last thing he would want to encourage…
While I think global warming is a clear cut con-job, the peak oil stuff is harder to follow, and if someone thought I was clueless for saying it’s a con-job, I can understand why. I actually agree with many of the things peak oil people say – such as the prediction that oil may get very expensive – but not because it’s in short supply, instead because it’s production and supply is being deliberately held back to raise prices – the whole concept of “peak oil” is designed to raise prices and profits.
In some cases I don’t exactly like some of the company I find myself in agreement with expressing this opinion. I used to own a bicycle shop, and I do think it would be a good thing if people drove cars less, but as with global warming, spinning a load of lies for the perceived good of the planet is really no different to spinning a load of lies to increase the profits of Exxon Mobil or Al Gore. Bollocks is bollocks.
To get the ball rolling, I like the way Dave McGowen debunks the “oil comes from dinosaurs” myth in one of his newsletters: www.davesweb.cnchost.com/nwsltr52.html
Oil comes from dinosaurs – Dave McGowen
“As everyone knows, oil comes from dinosaurs. I remember as a kid seeing some kind of ‘public service’ spot explaining how dinosaurs “gave their all” so that we could one day have oil. It seemed a reasonable enough idea at the time — from the perspective of an eight year old. But if, as an adult, you really stop to give it some thought, doesn’t the idea seem a little, uhmm … what’s the word I’m looking for here? … oh yeah, I remember now … preposterous?
How could dinosaurs have possibly created the planet’s vast oil fields? Did millions, or even billions, of them die at the very same time and at the very same place? Were there dinosaur Jonestowns on a grand scale occurring at locations all across the planet? And how did they all get buried so quickly? Because if they weren’t buried right away, wouldn’t they have just decomposed and/or been consumed by scavengers? And how much oil can you really squeeze from a pile of parched dinosaur skeletons?
Maybe there was some type of cataclysmic event that caused the sudden extinction of the dinosaurs and also buried them — like the impact of an asteroid or a comet. But even so, you wouldn’t think that all the dinosaurs would have been huddled together waiting to become oil fields. And besides, scientists are now backing away from the mass extinction theory.
It would take a pretty big pile of dead dinosaurs to account for the estimated 660 billion barrels of oil in the Middle East. I don’t know what the precise dinosaur-carcass-to-barrel-of-oil conversion rate is, but it does seem like it would take a hell of a lot of dead dinosaurs. Even if we generously allow that a single dinosaur could yield 50 barrels of oil (an absurd notion, but let’s play along for now), more than 130 billion dinosaurs would have had to be simultaneously entombed in just one small region of the world. But were there really hundreds of billions of dinosaurs roaming the earth? If so, then one wonders why there is all this talk now of overpopulation and scarce resources, when all we are currently dealing with is a few billion humans populating the same earth.
And why the Middle East? Was that region some kind of Mecca for dinosaurs? Was it the climate, or the lack of water and vegetation, that drew them there? Of course, the region could have been much different in prehistoric times. Maybe it was like the Great Valley in the Land Before Time movies. Or maybe the dinosaurs had to cross the Middle East to get to the Great Valley, but they never made it, because they got bogged down in the desert and ultimately became cans of 10W-40 motor oil.
Another version of the ‘fossil fuel’ story holds that microscopic animal carcasses and other biological matter gathered on the world’s sea floors, with that organic matter then being covered over with sediment over the course of millions of years. You would think, however, that any biological matter would decompose long before being covered over by sediment. But I guess not. And I guess there were no bottom-feeders in those days to clear the ocean floors of organic debris. Fair enough. But I still don’t understand how those massive piles of biological debris, some consisting of hundreds of billions of tons of matter, could have just suddenly appeared, so that they could then sit, undisturbed, for millions of years as they were covered over with sediment. I can understand how biological detritus could accumulate over time, mixed in with the sediment, but that wouldn’t really create the conditions for the generation of vast reservoirs of crude oil. So I guess I must be missing something here.
The notion that oil is a ‘fossil fuel’ was first proposed by Russian scholar Mikhailo Lomonosov in 1757. Lomonosov’s rudimentary hypothesis, based on the limited base of scientific knowledge that existed at the time, and on his own simple observations, was that “Rock oil originates as tiny bodies of animals buried in the sediments which, under the influence of increased temperature and pressure acting during an unimaginably long period of time, transform into rock oil.”
Two and a half centuries later, Lomonosov’s theory remains as it was in 1757 – an unproven, and almost entirely speculative, hypothesis. “Although the world has been drilling for oil for generations, little is known about the nature of the resource or the underground activities that led to its creation.” The Wall Street Journal, “In spite of the great amount of scientific research … there remain many unresolved questions regarding its origins.” – Encyclopedia Britannica
Does that not seem a little odd? We are talking here, after all, about a resource that, by all accounts, plays a crucial role in a vast array of human endeavors (by one published account, petroleum is a raw ingredient in some 70,000 manufactured products, including medicines, synthetic fabrics, fertilizers, paints and varnishes, acrylics, plastics, and cosmetics). By many accounts, the very survival of the human race is entirely dependent on the availability of petroleum. And yet we know almost nothing about this most life-sustaining of the earth’s resources. And even though, by some shrill accounts, the well is about to run dry, no one seems to be overly concerned with understanding the nature and origins of so-called ‘fossil fuels.’ We are, rather, content with continuing to embrace an unproved 18th century theory that, if subjected to any sort of logical analysis, seems ludicrous.”
Russian Oil – Joe Vialls
In 1970 the Russians started drilling Kola SG-3, an exploration well which finally reached a staggering world record depth of 40,230 feet. Since then, Russian oil companies have quietly drilled more than 310 successful super-deep oil wells, and put them into production. In 2003 Russia overtook Saudi Arabia as the world’s biggest single oil producer, and is now set to completely dominate global oil production and sales for the next century.
If this report started by claiming that completely unlimited crude oil reserves exist inside planet earth, readers might be tempted to regard the entire text as preposterous ghostwriting for a novelist like Frederick Forsyth. If the report then went on to claim that the Russians have exploited this stunning reality for nearly thirty years, right under the largely unwitting noses of western intelligence, readers could be excused for mistaking the author for a lunatic, or perhaps as a front for spy novelist John le Carré. The problem here is that unlimited oil reserves do exist inside planet earth, and the Russians long ago developed the advanced technology necessary to recover these unlimited oil reserves in an efficient and timely manner.
Profoundly disturbing hard intelligence like this does not sit well with the frantic cries of western academic shills and lobbyists, determined to convince you all that the end of the oil world is nigh, or, more accurately, that America faces an imminent catastrophe when global production capacity “Peaks”, i.e. when world demand for crude oil finally exceeds the rate at which we can physically pump the required product out of the ground.
In order to understand how Russia has left the rest of the world standing in its wake, it is essential to know a little bit about where oil is located, and how it is extracted from the ground for refining and commercial use. The theory underlying how oil is formed at such enormous depths in the mantle of the earth is not central to this report, because the Russians have already proved its point of origin in absolute drilling terms more than 300 times. Those interested in the exact process should research the archives, where there are more than two hundred Russian papers on the subject. Probably a good place to start would be “The Role of Methane in the Formation of Mineral Fuels”, written by by A.D. Bondar in 1967. What is central to this report is the massive advantage that Russia’s ultra-deep drilling discoveries and technical achievements give it over the western nations.
Let’s just be clear about this:
Russia is officially the world’s largest exporter of natural gas, and the world’s second largest oil exporter.
In 2006, Russia’s GDP grew by 6.7 percent, surpassing average growth rates in all other G8 countries – the country’s seventh consecutive year of economic expansion.
Russia’s economic growth has been driven primarily by energy exports.
In 2007, Russia generated 64% of its export revenues from oil and gas exports.
A US$1 per barrel increase in oil prices for a year is estimated to raise Russia’s federal budget revenues by US$3.4 billion.
This is not a “theory”, nor is it a “conspiracy” – Russia drills deep wells and finds plenty of oil, which it exports.
The oil that Russia exports is not “fossil fuel” – it’s abiotic oil.
Fossil Fuel vs. Abiotic Oil
It appears that, unbeknownst to Westerners, there have actually been, for quite some time now, two competing theories concerning the origins of petroleum.
One theory claims that oil is an organic ‘fossil fuel’ deposited in finite quantities near the planet’s surface. The other theory claims that oil is continuously generated by natural processes in the Earth’s magma. One theory is backed by a massive body of research representing fifty years of intense scientific inquiry. The other theory is an unproven relic of the eighteenth century. One theory anticipates deep oil reserves, refillable oil fields, migratory oil systems, deep sources of generation, and the spontaneous venting of gas and oil. The other theory has a difficult time explaining any such documented phenomena.
So which theory have we in the West, in our infinite wisdom, chosen to embrace? Why, the fundamentally absurd ‘Fossil Fuel’ theory, of course – the same theory that the ‘Peak Oil’ doomsday warnings are based on.
This mass embracing of the fossil fuel myth is so fruitloops it’s enough to make anyone freak out….
It’s strange how no one ever says “fossil fuel THEORY”, but Abiotic oil is ALWAYS referred to as a theory. What ever made fossil fuel the reality and abiotic oil the theory? Certainly not facts, evidence, or even plausability….
Vietnamese Oil – Joe Vialls
Oil can be produced virtually anywhere on earth, provided the host country can afford the expensive technology, and the massive cost of drilling a well to extreme depth through extremely hard rock formations. But just think what even 20 or 30 deep producing oil wells can mean for the people of a country that has no natural resources of its own, or worse still, for people who have been told by western lobbyists that they have no natural resources of their own. Anyone who can prove that the western nations were lying or simply wrong, will become a trusted friend forever. Vietnam is a classic example.
After more than 60 years of being enslaved, pillaged, and raped by the French and then by the Americans, the poor Vietnamese were told officially by American oil multinationals that their country was barren; that western ‘cutting edge’ technology had failed to find anything to help them recover financially from the mess left behind by American bombs, Agent Orange, and a host of other delightful gifts from Uncle Sam. This of course was exactly where America wanted the Vietnamese to be: desperately poor and unable to take action against their former invaders.
The Russians had other ideas and a very different approach. After telling the Vietnamese that the Americans had lied to them, oil experts were flown in from Moscow to prove this startling claim in a no-risk joint venture, meaning the Russians would provide all of the equipment and expertise free of charge, and only then take a percentage of the profits if oil was actually found and put into production. Vietnam had absolutely nothing to lose, and swiftly gave Russia the green light.
The White Tiger project was the first outside Russia to openly exploit and showcase this ultra-deep technology and oil production from basalt rock to the world.
White Tiger Oilfield – Vietnam
And let’s be clear about this as well:
Despite US oil companies previously telling the Vietnamese that they had no oil, the US Government now readily admits that Vietnam is a producer and exporter of oil – in fact they now buy oil from them!
Vietnam held 600 million barrels of proven oil reserves as of January 2007.
Vietnam’s oil production has increased steadily over the last two decades.
In 2006, Vietnam produced an estimated 362,000 bbl/d (barrels per day) of oil. EIA forecasts that the country’s oil production will rise above 400,000 bbl/d in 2008.
Vietnam exported about 125,000 bbl/d of crude oil to Australia, 40,000 bbl/d to the United States, and 30,000 bbl/d to Japan in 2006. Industry sources report that Vietnam also exports oil to Singapore and Thailand.
Cars can run fine on alcohol too
Most people are not aware that Henry Ford’s Model T came in a variation
that allowed the driver to switch the carburetor to run the engine on
farm-made ethyl alcohol. This allowed the operator to stop at local farms
(equipped with stills) to refuel his car during long trips through the
backcountry. After all- the gas station wasn’t exactly as ubiquitous in
those days, as it is now. The Standard Oil Company and its
industrialist-founder John D. Rockefeller wasn’t too happy with this
arrangement. After all, Rockefeller’s company had a virtual monopoly on
gasoline at this time in our nation’s development.
Since the late 1800’s there had been a growing Alcohol Temperance Movement
developing among reformers. Rockefeller saw an opportunity in this. It is
well-documented that local efforts to curb alcohol consumption were
expanded to the national level when high-profile figures like Rockefeller
joined in the anti-alcohol efforts. Was he so concerned with the social
problems that abuse of alcohol was said to cause?
No… John D. Rockefeller was not concerned with family dynamics in the
working classes. But he was influential in changing the goals of the
movement from temperance to prohibition. He gave the equivalent of $60
million in today’s dollars to an obscure group pushing for prohibition
called the Women’s Christian Temperance Union. As we know, his
contribution to the outlawing of the production and sale of alcohol was
successful. Of course, Rockefeller and the oil companies reaped tremendous
profits as a result. Remember that the period covered by the 18th
Amendment (1919-1933) coincided with the huge rise in the sale and
operation of automobiles. America was on the move, and all of these cars
were now operated solely on gasoline. By the time that the 21st Amendment
was passed, ending the prohibition of alcohol, the standard was already
set and worked completely in the favor of the Rockefeller family.
The difference between scarcity and abundance is price – Greg Palast
The number one theorem of economics is that we are running out of everything and yet we can have as much as we want of anything. There’s no contradiction. All commodities are scarce and abundant at the same time. The difference between scarcity and abundance is price. You can get anything, in any amount, if you are willing to pay any price.
On its face, Hubbert’s Peak Oil Study was stone cold manipulative nonsense, measurably so. But we are running out of a certain kind of oil nevertheless: cheap oil. That is, we are coming to the end of the stuff we can pump at a low cost, the easy oil that practically jumps out of the ground. When we bring price into the equation, Hubbert was correct – technically. Oil production did peak in the 1970s – for a certain type of oil. Re-read Hubbert. When he wrote his analysis, oil was selling below $3 a barrel, just over $20 in today’s dollars, and falling. Therefore, as prices declined further, we’d run out. We did. We’ve pretty much run out of new oil fields we can “lift” for $20 a barrel. Even the cheapest untapped fields in the world – not coincidentally in Iraq – will cost more than the “Hubbert price” to suck up and pipe out.
At low prices, there’s not much oil. As prices rise, so does supply.
It’s not magic. At $30 a barrel, Oklahoma stripper wells are worth reopening, drilling in the Gulf of Mexico becomes profitable in 3,000 feet of water, Kazakhstan’s crude is worth piping out even with the high cost of transportation and bribes.
To simplify: World oil reserves, officially measured at 1.189 trillion barrels, are probably, as one of Mr. Hubbert’s protégés stated a few years back, grossly overstated – if you assume oil selling at $10 a barrel. But kick the price up to a post-invasion $50 a barrel, and the world reserves are wildly understated.
Reserves are the measure of oil recoverable at a certain price. Raise the price, raise the reserve. Cut the price and the amount of oil in the ground drops. In other words, it’s a fool’s errand to measure the “amount of oil we have left.” It depends on the price. At $9 a barrel (the price in 1998), we’ve peaked. It’s over. All gone. But at $70 a barrel (reached in the third year of the Iraq occupation), miracles happen. Oil gushes forth like manna. How much more? If you are willing to pay $70 a barrel – and apparently you are – it’s worth it to melt sand and drain out the petroleum.
Indeed, the “tar sands” of Alberta, Canada, hold 280 billion barrels of oil-for enough high octane to run our Humvees for a century. Canada’s tar oil reserves are, notably, about 15% higher than the oil reserves of Saudi Arabia. It’s not pie-in-the-sky stuff. America is dependent on foreign oil – but not from Arabia. Our biggest source of oil is Canada and half of the Canadian supply today comes from tar sands. And that will grow. How could Hubbert have missed all this oil? Answer: He didn’t. On page 20 of his famous “Peak Oil” study, he accepts that the planet can yield up 800 billion barrels of oil from tar sands equal to all the “crude” (i.e., liquid) oil we are using up.
So where did Hubbert get the idea that we are running out of oil? He didn’t. He made no such prediction. Quite the opposite, he said, after predicting “the culmination of world production” by 2006, he noted, “This does not necessarily imply that the United States or other parts of the industrial world will soon become destitute of liquid and gaseous fuels…”
Peak oil is a major problem for Exxon Mobil
Exxon Mobil Posted the Biggest Annual and Quarterly Profits Ever by a U.S. Company, on February 1 2008
Exxon posted the largest annual profit by a U.S. company – $40.6 billion – as the world’s largest publicly traded oil company profited from record crude prices at year’s end.
Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007.
In 2006, Exxon Mobil reported a profit of $39.5 billion, at that time the largest annual profit ever for an American company, and its revenue of $377.6 billion exceeded the gross domestic product of all but 25 countries, but despite the massive problem of “peak oil”, they have managed to set a new record again.
Exxon chairman and CEO Lee Raymond is totally bummed out about peak oil….
How the US Government uses tax benefits to encourage higher fuel consumption
Under the United States income tax code, the cost of vehicles over 6,000 pounds (2722 kg) can be deducted from taxable income.
The actual value of this deduction averages 30% of the price of the vehicle in question.
The 2002 Tax Act increased this “Section 179 depreciation deduction” to US$75,000, and it rose again to US$102,000 for the 2004 tax year.
The GM Humvee is one of the many sub 10 miles per gallon vehicles the US gov has promoted with massive tax benefits.
Strangly enough General Motors marketed the Humvee straight after discontunuing the EV-1 electric car, which they not only refused to market or sell, but also later confiscated from all lease holders and crushed.
Whether or not the EV-1 was as good as it was made out to be in the movie “Who Killed the Electric Car?” is another story, but crushing them all and bringing out the Humvee is just a little strange.
The biggest selling car in the world is the Toyota Corolla (average fuel consumption well over 30mpg)
But the number one selling vehicle in America is the Ford F-150. (av fuel consumption under 12mpg) – and yes amazingly enough it weighs in at over 6000 pounds – it’s 6250 pounds!! (“why would that be?” – many rocket scientists ask each day)
As American waistlines have expanded since 1960, so has their consumption of gasoline, researchers at the University of Illinois say – in 2006 Americans were pumping 938 million gallons of fuel more annually than they were in 1960 as a result of extra weight in vehicles.
(mmmm, I wonder if they really do mean extra weight “IN” vehicles, or was that supposed to be “OF” vehicles?)
Of course back in 1960 the cars in America were more economical than today – OK, I am exaggerating, but they really weren’t much different
The average mpg of US passenger cars in 1960 was 14 mpg, and although this did climb to 20 mpg by 1990, since then it hasn’t changed much at all – as of 2005 it was still only 23 mpg.
But this covers up another dirty little secret – all those heavy (over 6000 lbs) SUV’s, are defined as “trucks”, so the really thirsty passenger cars in the US are not even counted as cars – and that 23 mpg figure only includes the more “economical” cars !!!
Given that up to half the American passenger fleet is defined as a “truck” – that economical 23 mpg figure may be a PR fantasy !!!!!
A government that does everything in their power to encourage greater petrol consumption, could be said to be less concerned with “oil dependency”, than oil profits.
The 1960 Cadillac was a guzzler – just like a Humvee – but at least it looked cool – not like a Humvee…
“Oil is not a fossil fuel. In fact, oil is abiotic, not the product of long decayed biological matter. For better or for worse, is not a non-renewable resource. Oil, like coal, and natural gas, replenishes from sources within the mantle of earth. This is the real and true science of oil.”
“Peak oil is a scam to create artificial scarcity and drive prices up. Meanwhile, alternative fuel technologies which have been around for decades are intentionally suppressed. The peak oil myth is peddled by the establishment-run fake left activist groups and the IMF.”
Marion King Hubbert was a geophysicist for Shell Oil Company in Houston
oddly, the significance of this fact seems to be lost on peak oil theorists…
This is a big story. It’s an attempt to create the illusion that the world is rapidly running out of oil and within a few short years, we will experience unemployment, wars, famine, and all manner of horrendous strife as a result of the fallout from the now “rapidly vanishing” oil supplies. It’s a scam from top to bottom.
Everyone knows oil is a fossil fuel that came from dinosaurs – there is no doubt about this, it’s perfectly reasonable
Dinosaurs were so massive they had over 50 barrels of oil in them each