Nico Krehmeyer
Denial is a default condition, and I am writing today because I have been trying for about two years now, to lift my head enough to begin sharing with my family, friends, and colleagues, the relentless research that I have been doing regarding a perfect storm, a dilemma that lies at the root of existence itself, that has only begun to change the way we all live our lives. A new reality is setting in across the globe, and I am proud to say that I feel ready. While many people close to me have not given my research a chance, I have continued to read thoroughly, and now hope to contribute in writing the map that outlines the new political and economic landscape on which we all are now treading.
Fossil fuels (natural gas, coal, oil) are indispensable to our way of life. Crude oil pervades our civilization. Think about this moment. If you are reading this document via the Internet, you're likely doing it on a personal computer. The inner workings of that computer are some of the most fossil fuel dependent creations in the world. The energy used in creating nine or ten computers is enough to produce an automobile. For every gram of mass in a microchip, 630 grams of fossil fuels were used in its production. The computer is plugged into the wall and electrical current is flowing into the computer. There is a 90% chance that the current is being produced by a natural gas, oil, or coal power plant. Fossil Fuel energy. You are using fossil fuels even by viewing this document online. Persistence of Vision.doc is located on a hard drive at a server farm with hundreds, maybe thousands of hard drives, the backbone of the internet, all which are spinning around at 7200rpms. They too depend on electricity.
If by chance you are holding a paper document in your hand, the fossil fuel usage required to simply bring this finished document to you is still mind warping. To begin, a tree has to be cut down. This is most likely done with a gasl powered saw. Then the tree has to be taken to the mill, probably on an oil powered truck. A number of oil powered machines will remove the bark from the tree, and an oil powered chipper will grind the wood up into small pieces, which are then cooked with a natural gas or oil burning stove into a pulp, which then becomes sheets of paper. THEN, this paper had to be transported to a store with more oil powered machines, and the ink which has since been printed onto the paper is another oil based product.
The world population is rising, and demand for fossil fuel energy is exploding. About 1/3 of the population is completely reliant on this energy source. Without it, they would be helpless. In particular, Americans would be helpless. The most important way this dependence can be illustrated is through a description of modern farming. Before farmer Brown can plant any seeds, he has to plow the field. This is almost certainly done with an oil powered machine. Now, Brown can plant the seed. This is done with another oil powered machine. Brown then has to irrigate the crops by pumping water. These pumps require electricity. There is a 95% chance that Brown's use of electricity is derived from natural gas, coal, and oil power. Fossil fuel energy. Brown then has to spray the crops with pesticides that are made directly from oil. Brown has to fertilize the crops with a nitrogen based fertilizer. This is a natural gas product. Brown has to harvest the crop with another oil powered machine. Finally, Brown has to drive his produce to a food processing plant with an oil powered machine. The plant runs on electricity, and they infuse the food with more oil based chemicals. Then the food is shipped to a supermarket in another oil powered machine. Then you go to the supermarket in an oil powered machine, and pull out your credit card a piece of plastic, another oil product that you use to purchase to the food. You go home and put it in the microwave oven, which uses electricity, and then you eat it! As Americans, we rely on fossil fuel energy on a physiological level. Aside from personal gardening, all of the food that we consume in this country is grown, produced, and distributed with the direct, heavy assistance of crude oil. There are 10 calories of hydrocarbon energy on average in every calorie of food that is consumed on the planet. In the United States this number must be higher.
Fossil Fuels are a way of life. It is nearly impossible to break off of the fossil fuel energy grid. Everything is fossil fuel energy. They are the reason that I was born. They allowed for my creation and my existence, as they allowed for yours. The only reason the world population has been able to increase at such an alarming rate is because of the sheer efficiency of fossil fuel energy. 1 cubic mile of oil equals 22.7 billion barrels, or about the first nine months of what the world used last year. Yet, crude oil costs only 12 cents a cup. How amazing is that? There is not an alternative energy source, or combination of alternative energy sources that could provide mankind with anything close to the rate of energy efficiency, and direct usage that is provided by fossil fuel energy, particularly oil. In fact, most suggested alternatives to oil are not could never be feasibly independent from oil energy at all. Lawyer/energy researcher Matt Savinar puts it best, “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.”
It is common knowledge to oil companies and to the government that oil discoveries within the United States peaked in 1930, and that oil production within the United States, peaked in 1970. Since 1970 the United States went into an irreversible decline in oil production, and today, we now produce about as much oil as we did in 1940. Oil discovery and oil production function as two bell curves of similar size, resting 40 years apart from one another. The reality is that no amount of technology, no amount of science, no hoping and praying have been able to bring about a United States oil production increase after the peak in an even minuscule amount. Eventually, the United States will not be producing any oil at all.
If you're now wondering about oil production on a global scale, I invite you to question misleading OPEC quotas, government's inflated reserve statistics and accounting hodgepodge (cooked books), for the Energy Information Agency states itself that it “adjusts reserve estimates based on anticipated demand.” I invite you to disregard oil companies' inflated reserve estimates, which as of now are consistently downgraded (Shell downgraded their reserve estimates four times last year), and instead consider the matter of Hubbert's Peak. M. King Hubbert was a geoscientist working for Shell oil in the 1940s and 50s. In the year 1950, through analysis of oil production statistics of United States oil fields, he derived equations that stated oil production in the United States would peak in 1970. Skeptics thought that Hubbert had gone mad, and many believed that oil production could never peak in the US. But in 1970, the peak came and went. Hubbert was right. His analysis relied on studying individual oil wells within an oil field. By studying individual wells, Hubbert proved that accurate calculations can be made regarding the production rates of entire oil fields. Then, using the output statistics of those given fields, it is then assumed that one could calculate the production amounts of entire countries, or even of the whole world. Hubbert calculated the year the US oil production would peak exactly. Hubbert's predictions about world oil production are coming true also. Every year, more and more countries are moving from the list of oil exporters, to oil importers. Many of the largest oil exporting nations, Mexico, Norway, Iraq, and many others have recently passed their oil production peak. Nearly every country follows almost exactly the same bell curve trend of United States oil discovery and oil production. This is where things start to get scary.
If we apply Hubbert's Peak to world oil production, we can estimate that approximately half of all oil that humans have produced on this planet, has been produced, and that global oil production is currently peaking, or perhaps has already peaked. There is an abundance of scientific, and economic evidence that shows this is the case. In May of 2005, world crude oil production plateaued and still rests at around 80 million barrels of oil per day worldwide, as demand for oil continues to increase. The price of oil is increasing at alarming an rate. No OPEC country has offered to step in and increase their own production, hinting that most OPEC countries are already operating at maximum production capacity. In April 2006, a spokesperson from the largest oil producing company in the world, Saudi Aramco, admitted that its mature fields are now declining at a rate of 8% per year. This includes the largest oil field in the world, Ghawar of Saudi Arabia. As of now, this field produces about 5 million barrels of oil a day, and 2 billion cubic feet of natural gas per day, a tremendous amount. Ghawar accounts for nearly 50% of Saudi Arabia's oil production. Saudi Arabia accounts for about 24% of the world's oil production reserves. A few simple calculations will reveal that if Ghawar has peaked, than the world has peaked in oil production. There is no way around this devastating realization.
What does this realization mean? In an economic sense, Dr. Colin Campbell, an analyst from FINA, Texaco, and BP puts it best. If Growing Energy = Growing Economies, then Contracting Energy = Contracting Economies. All money in the United States prior to 1913, was backed by a gold standard, and dollars could be redeemed for gold bullion. However, in 1913, the Federal Reserve Bank of the United States was established, and this allowed banks to begin lending paper money at much higher rates compared with the gold or silver they had on deposit. Monetary policy was changed worldwide, and it allowed banks to essentially create money out of thin air, that was no longer backed by any gold or silver. This system proved to be efficient for bankers, governments, and businesses, because collateral existed in the confidence of future expansion, fueled by cheap, oil based energy. The economies of the world still function by this same principle, though the cheap energy to provide for economic growth is no longer there. The economy is in trouble, and your money is in trouble. Money represents the ability to do work. Energy is the ability do work. As energy becomes less abundant, your dollars retain less worth. This concept has not been manifesting in lower average salaries, or lower minimum wages. It functions through excessive inflation created by banks, to essentially cause a “Demand Destruction” for fossil fuel energy. A quote from www.safehaven.org brings this reality to the surface. “The Federal Reserve has confirmed our Stock Market Crash forecast by raising the Money Supply (M-3) by crisis proportions, up another 46.8 billion this past week. What awful calamity do they see? Something is up. This is unprecedented, unheard-of pre-catastrophe M-3 expansion. M-3 is up an amount that we've never seen before without a crisis - $155 billion over the past 4 weeks, a $2.0 trillion annualized pace, a 22.2 percent annualized rate of growth!!! There must be a crisis of historic proportions coming, and the Federal Reserve Bank of the United States is making sure that there is enough liquidity in place to protect our nation's fragile financial system. The amazing thing is, the Fed's actions mean they know what is about to happen. They are aware of a terrible, horrific imminent event. What could it be?” These actions taken by our central bank deflated the value of our monetary base by nearly 1/5! Why would the Federal Reserve Bank do something like this to the American dollar, to the American people? This bank must be aware of, and preparing for the domino effects that peak oil production could have. They must believe they are acting in the best interest of this country's future. Many economists have been saying that the solution to this oil calamity is to simply liberalize the markets, however they do not understand the irony that the more efficient we become at extracting, refining, and selling oil, the quicker it is gone. The Federal Reserve surely understands the limitations of economic growth that we now face, and that while declines in production may be gradual, the perception of the relentless path down the bell curve may come as a shock not only to financial markets, but to every American citizen who grew up in an age of true prosperity.
As my good friend Tony Buckowitz would say, “It doesn't matter the shape, size, or color of the envelope, the letter is always the same.” Peak Oil has begun to manifest itself into every corner of the our existence. Basically, the US has built its entire infrastructure and way of life under the assumption that oil would always be cheap and abundant. The economy relies on this beginning. Our lives rely on this beginning. Cheap, abundant energy is sadly no longer at hand. “A stagnant or shrinking economy will have a major effect on society’s expectations. With few exceptions, each generation in the United States has become materially better off than the preceding one. This pattern of increasing wealth has become an indelible part of the American Dream; a higher standard of living than our parents is practically a birthright. These expectations are the standard against which actual performance is judged.” The authors of Beyond Oil: The Threat to Fuel and Food in the Coming Decades wrote in 1985 about the drastic effects of peak oil that are now taking hold. This is where the true magnitude of this situation can begin to set in. We all have become used to a reality that is not sustainable to our children, or to our children's children. The American way of life cannot continue past peak oil. Overcoming the expectation of expansion, reacting to the inherent problems posed by peak oil will be the biggest challenge my generation will face. Infinite growth can no longer be our standard for defining future success. Higher standards of living, higher global populations require more net energy. If the 20th century was marked by the stimulation of industry, population, oil based agriculture, trade and transport, and financial capital, the 21st century will be marked with the opposite, with a decline in all that depends on fossil fuel energy to provide its stimulation, to provide its growth.
So, what's next? Sadly, the current Bush administration has chosen this nation's alarming direction without the consent of Congress, or the American people. It was made quite apparent through Vice-President Cheney's National Energy Policy Development Group report in May 2001, that this administration understands the energy calamity we have at stake, stating “America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s. . . . A fundamental imbalance between supply and demand defines our nation's energy crisis.” This imbalance between supply and demand lies at the heart of the peak oil dilemma. Instead of convening a world summit to address the arrival of peak oil/fossil fuel production, and to discuss our individual and collective futures, the Bush Administration has instead done the opposite. They have chosen to “Cross the Rubicon,” to engage our military in a final war, to seize and control the distribution of what are essentially the last remaining oil reserves on this planet, hoping that the United States may truly be “the last man standing.” 60% of the remaining recoverable oil in the world lies in the middle east, in a proximity of land that is no bigger than Texas. And this is exactly where we have been deploying our troops, exactly where we have built a series of military bases, one which is larger than the Vatican. War is just a continuation of politics by other means. Politics is just a continuation of economics by other means. And economics is just a continuation of energy by other means. It has been made blatantly obvious that this administration is not only aware of peak oil, but that they have been acting as they see fit to allow the American way of life to continue on borrowed time.
Where do we go from here? Learning to accept and thrive within conflict is the common thread of our lives. This reality has never been more true. When a person realizes that they are a necessary part of processes that are so huge, that understanding the value of their own impact would be impossible is an interesting and amazing awakening. Everyone matters. Everything matters. We are all participants in evolution, and without the conflicting forces exerted by nature, evolution would cease to exist. We cannot separate ourselves from the energy that fuels our lives, that provides the catalyst for everything that we do. Until our society, until my generation begins to grasp to reality of peak oil, and peak hydrocarbon energy, and claim it as a potential turning point of our species, little progress can be made in reforming a more perfect union. We must begin by examining accurate information. If public data, published by OPEC, published by publicly traded oil companies was not grossly distorted, we might not be in this predicament today. We must begin looking at our country's history, at our own lives from the context of energy, from the context of peak oil. If we can develop the map, the history that allows us to predict our future, a new economic and political landscape can come into view. And it is this view, this new vista that reveals the unprecedented nature of the challenge we are about to face. If there is anything that I feel you should understand, its that as a nation, as a society, as a planet, and as a species, we have realized a self-imposed crisis that cannot be evaded, or postponed any longer. Responding to this crisis must be of your own intention and determination. I know that the mind and spirit that I possess will be devoted to the cause of understanding our new position, of our new potential. Great things can come from humble beginnings, and unlike oil, our collective imagination, our courage is limitless, and it is always renewable. a wise man once said, “ An error doesn't become a mistake, until you refuse to correct it.” The coming years could be marked with confusion, uncertainty, and mortal combat for ever diminishing resources, or they could be a time of revival, community building, of cultural renewal. We have to make the choice. Left or right?
The relationship between human happiness, and energy consumption is not what many seem to perceive. Studies from a new field of psychology, Happiness Studies, reveal that once people have their physiological needs taken care of, the relationship between energy consumption and happiness ceases to exist. What an amazing awakening this could be. Let's look at the developing economy of China from a new perspective. According to the Journal of Happiness Studies, “In 1990 28% of Chinese people described themselves as very happy, but by 2000 this figure had dropped to 12%. When asked about their satisfaction with life, the story was the same: in 1990 the average was 7.3 (out of 10), but by 2000 it had dropped to 6.5. This drop was seen across rural and urban China and in almost every income bracket.” What a striking paradox this is. As Mike Ruppert concludes Crossing the Rubicon he makes quite a profound statement which reveals a conclusion of this research. “Distilled, all our pursuits essentially ask just two simple questions. Who are we really? And why are we here? We have been looking in the wrong places for our answers” The immensity of this statement is beyond comprehension. What is the purpose of this world of growth, of this world of seemingly endless expansion in which are now living? Does this world, does our culture assist each and everyone of us in attracting happiness, creativity, abundance, receptivity, and love? Could it? Where are the “right” places to look for the answers of these questions. For generations, countless people have attempted to answer these questions. But again, the choice of interpretation is up to each one of us. I invite you to contemplate this scenario. Imagine a huge junkyard. A junkyard full of every piece of junk that you can imagine. Hundreds of tons of trash. Broken glass, wiring everywhere, useless transformers, capacitors, toilet seats, computers, rusted engine parts, everything. Now imagine a huge tornado beginning to form coming towards this junkyard. It slowly passes over the junkyard, around all of this seemingly disconnected trash. Parts and pieces flying and spiraling all around you. And as the wind subsides, as the dust settles, out of that storm comes a brand new Boeing 747, sitting there in the vacant land. What are the chances? Don't you think that behind that 747 with 3 million parts, that there is some kind of intelligence far beyond anything that any one of us could possibly imagine. This simply goes to show the capability of our own collective existence, the capacity of our collective dream. Everything great that has ever happened to humanity, had its beginning as a single thought in someone's mind. If we can begin looking at energy not as an economic and cultural limitation, but as a blessing of opportunity, we will have only scratched the surface of the ingenuity of the human mind. Accepting all we've done and said, only one realization seems to remain. When we change the way you look at things, the things we look at change.
Bibliography :
Heinberg, Richard. Peak Everything. Gabriola Island, BC: New Society Publishers, 2007-09-01
Heinberg Richard. The Oil Depletion Protocol . Gabriola Idland, BC: New Society Publishers, 2006-09-01.
Ruppert, Michael. Crossing The Rubicon. Gabriola Island, BC: New Society Publishers, 2004-09-15.
Additional Sources
ASPO International – The Association for the Study of Peak Oil and Gas
Post Carbon Institue
Others that are essential
Government Documents
-The Hirsh Report. Peaking of World Oil Production: Impacts, Mitigation, and Risk Management – presented by The US Department of Energy
-Vice President Cheney's -National Energy Policy Development Group- report. This is a classified report, however 7 pages of this report have been made available to the public due to a supreme court ruling. These pages could be the foundation of any peak oil researchers work.
