[A-List] Peak Oil

Tue Sep 21 18:27:49 MDT 2010

Jimmy Carter's Secretary of Energy Sounds the Alarm

Interview with Robert L Hirsch

by Matthieu Auzanneau

countercurrents.org (September 18 2010)

This post only contains excerpts from the interview with Robert Hirsch.
For the full text, see the original articles at the URLs sited at the
end.

James Schlesinger, President Carter's Energy Secretary, wrote the
foreword to a book written by Dr Robert Hirsch, a former US official
who predicts a fall of the oil production within five years.

Never before has a high-ranking political figure like Schlesinger gave
his support to such a prognosis.

The book will be published in the US on October the 1st. Here is an
exclusive interview with its author.

Dr Robert Hirsch has a unique place in the 'peak oil' issue. Back in
2005, he was the main author of the first pessimistic report ever
published by a public administration {1}, {2}.

Not any public administration: the Department of Energy of President
George Bush.

Robert Hirsch has been a manager of petroleum exploratory research at
Exxon, a senior staff member at the RAND Corporation, and director of
the US research program on nuclear fusion energy.

His 2005 conclusions did not get any attention from any the mainstream
or financial media.

Today, Robert Hirsch perseveres. According to him, it's now obvious: we
will soon face a decline of world black gold supplies.

In The Impending World Energy Mess {3}, Robert Hirsch tries to make
people listen to an alarm that he no longer is almost the only one to
sound, as was the case in 2005.

An important detail: the foreword of the book was written by James
Schlesinger, secretary of Defense under Richard Nixon et Gerald Ford,
who then became the first secretary of Energy of the US history, under
Jimmy Carter

Schlesinger and Hirsch are today the only government officials or
ex-goverment officials in the United States that take the
responsibility to cry wolf publicly.

Here is the first part of an interview with Robert Hirsch that we did
in August near Washington, DC.

Interview with Robert L Hirsch

In the book that you are about to publish, your case is that 'peak oil'
may happen very soon indeed. According to you, when might we be getting
into trouble? In ten years, in less than ten years?

Let me begin with this: the background is the production. World oil
production had been progressing and then it's been flat, fluctuating,
since the middle of 2004: it's been on a 'plateau'. The economic
recession led to a decline in demand, but not much.

The world demand is going up again. It's back to where it was before
the beginning of the crisis in 2008.

Correct. And the oil production fluctuates in a band of four or five
percent. It's not very big. I think that the world oil production
cannot go higher than that.

What is your hypothesis?

We will stay in this band, and within two to five years, world oil
production will go into decline.

So you have in mind the same terrible scenario which has recently been
put forward by the Pentagon {4}, the Lloyd's and Chatham House {5}, and
by the German army {6}.

Roughly, yes.

The Department of Energy too mentions a fluctuating, or "undulating"
plateau of the oil production. Are you talking about the same thing?

The difference is that they say we will get to that plateau somewhere
in the future. But we are already there! And if you look at the data,
there's no question we're there.

A decline of world oil production within two to five years ... What
would happen if you're right?

It's going to be a mess, and all of a sudden it'll be obvious.

According to you, what would be the pace of decline, once that decline
starts?

That's a crucial question, because the decline rate is going to
determine how much trouble we're in. In the book we look at two decline
rates: two percen and four percent a year. Clearly the smaller the
decline rate is, the less difficult it will be to deal with. Four
percent is really catastrophic. Two percent is going to be less
difficult but still very difficult.

Do you think that a developed country like the United States could face
more trouble than a Third World country (developed countries rely a lot
on oil, and no developed country relies more on oil than the US)?

Yes. We're in a lot of trouble, because we import so much oil, and
because almost everything that we do depends on oil.

Canada is in a much better shape. They're producing the oil sands, and
they have a lot of it. They refine that heavy oil, and export it too.

Today, the only two places where it seems that we can still produce a
lot of oil may be off the shores of Brazil, in very deep waters, and in
the Arctic ocean. Won't it make a difference to drill deeper and deeper
or in the North Pole?

Let's hope so. We don't know yet. We're just getting into those things.

But one thing is very clear, and that's how fast you can do it. And I'm
not even talking about having an accident like the one that happened in
the Gulf of Mexico. It takes a long time to find the oil, and then
build something that can bring it out, and then drill the holes which
you have to do.

So even going as fast as you can, you're talking about seven to ten 10
years to get a 100,000 barrels per day, which is the average production
of a new oil field. That's the coal-to-liquid plants in South Africa,
or putting a significant number of more efficient cars on the road: it
all takes time.

If we're are correct in our book, and oil production goes into decline
within two to five years, the world is going to lose. But there are
going to be winners. And the winners will be the oil companies, because
they'll be drilling those deep holes, they'll almost certainly be
building all the coal-to-liquids, gas-to-liquid plants, and so forth.
Because we have to have liquid fuels.

Some winners, but the world will lose?

Will the US be in trouble? Yes. Will Russia be in trouble? No. Russia
has exports, it will get stronger. Will Russia want to continue to
export? If you were the tsar of Russia, and you see the price of oil
going up because the production declines, you know that even if you
reduce your exports, you will make as much money or maybe even more.
You may want to save your oil.

The king of Saudi Arabia said something that sounded like this earlier
this year {7}.

Yes he said that a couple of times. And some people doubt that he's
serious ... And not only that, but the Saudis have been lying about
their oil reserves for a very long time.

What about the official figures on oil reserves of Saudi Arabia?

Every year for over fifteen years, they have been saying that they have
258,262 billions barrels. That is NOT plausible.

Why is it not?

Because they're producing something like 3.5 billion barrels per year.
That would mean that they've been finding roughly 3.5 billion barrels
each year for fifteen years. It's statistically impossible.

You're talking about finding something that is very elusive, and also
the way discoveries take place is that you find the big fields first
and then you find smaller ones.

So to say that you find exactly as much as you're producing, is ... the
probability of that for two years may be fifty, sixty percent. The
probability of that over fifteen years is zero. It just cannot work
that way.

What about the other oil producing countries, according to you?

Well in OPEC they play games with each other on their official figures.

Look at Kuwait for instance. Back in the 1980s they went from fifty
billion barrels of reserves up to a 100 billion barrels, and then they
stayed on a 100 billion barrels. They've producing on a regular basis,
and they are not finding much more oil. And then a couple of years ago
some of their people said {8}: "Well maybe it's fifty billion barrels
after all". But the government shut everybody up {9}.

What happened after you published your 2005 report on 'peak oil' for
the US Department of Energy (DoE)?

The people that I was dealing with said: No more work on peak oil, no
more talk about it.

People that were high in the administration hierarchy?

The people that I was dealing with were high in the laboratory level.
They were getting their instructions from people on the political side
of the DoE, at high levels.

After the work we did on the 2005 study and the follow-up of 2006, the
Department of Energy headquarters completely cut off all support for
oil peaking and decline analysis. The people that I was working with at
the National Energy Technology Laboratory were good people, they saw
the problem, they saw how difficult the consequences would be - you
know, the potential for huge damage - yet they were told: No more work,
no more discussion.

That was in 2006, under Bush administration. Has anything changed with
the Obama administration?

It has not changed. I have friends who simply won't talk about it now.
So I have to assume that they are receiving the same kind of
instructions.

Yet in an interview he gave me in March 2010, Glen Sweetnam, who was
heading the publication of DoE's annual Energy Outlook at that time,
admitted that a chance exists that we may experience a decline of world
liquid fuels production between 2011 and 2015. Less than a month later,
he was transfered to the National Security Council, where he is now
under direct authority of the White House. Were you surprised by his
statement?

Yes, I was very surprised by what Glen (Sweetnam) said, because
everything in the DoE is very controlled. Glen must have gone ahead and
done it, and nobody reviewed his remarks.

When I asked Secretary Steven Chu and the political staff of the DoE to
comment on Glen Sweetnam's statement, they replied with a no comment.

I think it would be very difficult to get any more information on this.
Now that Glen Sweetnam is at the National Security Council, it's like
he's not in the circulation, he's not going to give any public
presentation anymore.

What about the Department of Defense (DoD)? Two recent reports show
that some people in the US army are willing to give very bold warnings.

You're right. Things may be different there. The DoD is headed by
Robert Gates, a brilliant guy and a good friend of James Schlesinger,
the first US Secretary of Energy, who wrote the foreword of our book.
Schlesinger is continuously used as an adviser by the DoD.

In 2005, Robert Gates took part in a war game named Oil Shockwaves,
with a number of other very high senior people involved in the
administration, both Democrats and Republicans. What they did is they
looked at a severe cut off of world oil production, something like five
percent.

Like in 1973?

Something even worse than that. So they looked at the impact, and they
saw severe problems for the economy. And they looked at the options
that existed, and of course there are no options. There are no valves
to turn on someplace.

They even considered military interventions in the Middle East as a
means to change things. And they basically concluded that this was an
impossible situation.

What about James Schlesinger: for how long has he been concerned about
a possible decline of world oil supplies?

He has been concerned about peak oil since he read the seminal paper by
King Hubbert in the 1960s. That was before he became the Secretary of
Defense under Richard Nixon and Gerald Ford.

And then, there were those famous talks that Jimmy Carter gave about
the US dependence on foreign oil ... {10}

Yes, James Schlesinger was behind this, as Carter's Energy Secretary.
And Admiral Rickover, the father of the US nuclear navy, was involved
in those talks too.

Here's where I'm going with this: I think that the DoD is independent
enough from the White House. They can say things like they said in the
reports that you mentioned on your blog.

Also, many people say that the US invasion of Iraq was basically about
oil.

I don't think that was the case. But it remains a good question.

The Pentagon, Chatham House, even the German army: now that we have
this kind of sources saying that we are perhaps close to a decline of
world oil production, what is your opinion about the level of awareness
of our governments regarding the peak oil issue? The US oil supplies
have been declining for forty years, China is very aggressive in the
way it tries to build up its oil supplies abroad, et cetera.

I think in the case of the United States, that there are people inside
the government that understand the problem. I don't think it's a huge
number of people. And one might say that there is a conspiracy to keep
it quiet.

But were you disappointed, appalled, or I don't know, scared maybe?

I was not surprised, because if you spend some time looking at peak
oil, if you're a reasonably intelligent person, you see that
catastrophic things are going to happen to the world. We're talking
about major damage, major change in our civilization. Chaos, economic
disaster, wars, all kinds of things that are, as I say, very
complicated, non-linear.

Really bad things. People don't like to talk about bad things.

_____

In 2004, Shell admitted that it had exaggerated its oil and gas
reserves by twenty percent {11}.

Between 1985 and 1991, the main oil producing countries around the
Persian gulf have on average increased by 1.9% the amount of their
"proven" reserves, even though no significant fresh oil discoveries
would justify this (as many oil experts consider).

Links/Notes:

{1} http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf

{2} http://en.wikipedia.org/wiki/Hirsch_report

{3} The Impending World Energy Mess, by Robert L Hirsch, Roger H Bezdek
& Robert M Wendling. The three authors are associates in a small
compagny dealing with energy information, MISI, Inc, based in
Alexandria, Virginia. Foreword by Dr James R. Schlesinger, first U.S
Secretary of Energy. Publication scheduled on October the 1st. Apogee
Prime. 256 pages, $29.95.

{4} http://www.energybulletin.net/node/52334

{5}
http://petrole.blog.lemonde.fr/2010/06/16/la-lloyds-et-chatham-house-une-penurie-de-petrole-menace-le-monde/

{6}
http://petrole.blog.lemonde.fr/2010/09/02/peak-oil-rapport-cinglant-de-larmee-allemande-revele-par-der-spiegel/

{7}
http://petrole.blog.lemonde.fr/2010/07/07/le-roi-abdallah-annonce-larret-de-lexploration-petroliere-en-arabie-saoudite/

{8} http://www.arabianbusiness.com/522109?tmpl=print&page=

{9} http://news.xinhuanet.com/english/2007-07/12/content_6366187.htm

{10} http://www.youtube.com/watch?v=injqO8nzCK0

{11} http://news.bbc.co.uk/2/hi/business/6544057.stm

Note to journalists: You are welcome to use this information, but
PLEASE credit the author Matthieu Auzanneau and give the URLs of the
original articles (below) on his blog at Le Monde.

This interview with Robert Hirsch appears in two parts on Matthieu's
site.

In English:

Part 1
http://petrole.blog.lemonde.fr/2010/09/16/interview-with-robert-l-hirsch-12

Part 2
http://petrole.blog.lemonde.fr/2010/09/16/interview-with-robert-l-hirsch-22/

In French:

Part 1
http://petrole.blog.lemonde.fr/2010/09/15/entretien-avec-robert-l-hirsch-12/

Part 2
http://petrole.blog.lemonde.fr/2010/09/16/entretien-avec-robert-l-hirsch-22/

http://www.countercurrents.org/auzanneau180910.htm

http://www.billtotten.blogspot.com
http://www.ashisuto.co.jp