[R-G] CNN states the peak: "The End of Oil"

[Macdonald Stainsby]

The article here, rather poorly put together, nonetheless should be 
noted for a multitude of reasons & not least that this is on CNN and is 
a follow up on the GAO in the lower 48 actually discussing the problem. 
There is a slow but clear trend towards not just peak oil, but peak 
denial. We have hit the peak in reasonable denial; the costs of 
continuing any further such denial are simply too great for the "market 
of ideas" to bear.

--M


The end of oil
A small - but growing - group of experts think world oil production will 
peak in the next few years, to devastating effect.
By Steve Hargreaves, CNNMoney.com staff writer
September 14 2007: 2:50 PM EDT

NEW YORK (CNNMoney.com) -- At some point in the near future, worldwide 
oil production will peak, then decline rapidly, causing depression-like 
conditions or even the starvation of billions across the globe.

That's the worst-case scenario for subscribers to the "peak oil" theory, 
who generally believe oil production has either topped out or will do so 
in the next couple of years.

What follows depends on who one talks to, but predictions run the gamut 
from the disaster scenario described above to merely oil prices in the 
$200-a-barrel range while society transitions to other energy sources.

It's not a view held by most industry experts, including the oil 
companies, the government and most analysts at the financial houses.

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But its adherents are growing, and include some fairly well-known names.

In the coming week, a former chairman of oil giant Royal Dutch Shell 
(Charts) is speaking at a peak oil conference in Ireland, as is former 
U.S. Energy Secretary James Schlesinger.

Most peak-oil proponents simply don't believe the numbers put forward by 
industry and the government.

The world will produce 118 million barrels of oil a day, up from its 
current 85 million barrels per day, just to satisfy projected demand by 
2030, according to the Energy Information Agency.

"That's never going to happen," said Richard Heinberg, a research fellow 
at the Post Carbon Institute and author of three books on peak oil.

Heinberg says world production of regular crude oil actually peaked in 
May 2005. He also says production in 33 of the 48 largest oil producing 
countries is in decline, and that global oil discoveries peaked in 1964.

Most importantly, he says reserves in the Middle East, where EIA 
predicts the bulk of new supply will come from, have been 
"systematically overstated."

"Everyone just takes their figures at face value," Heinberg said. "But 
they are national oil companies, they can't be audited."

Instead of production ramping up to 118 million barrels per day, 
Heinberg sees a plateau over the next few years, then gradual declines 
beginning in 2010.

By 2015, he says the rate of decline will accelerate as field after 
field runs dry and few new supplies are found. By 2030, the world could 
be looking at powering its economy on 30 million barrels a day.

"It's going to be an enormous shock to the global system," said 
Heinberg. "We're talking something on the order of the Great Depression, 
perhaps much worse."

As for billions starving to death when crops dependent on fossil 
fuel-based fertilizers fail en masse, he said, "that's the worst case 
scenario, but it can't be ruled out."

Indeed, Web sites devoted to peak oil sell numerous survival-style books 
seemingly geared toward a society in which, at the very least, the basic 
economic infrastructure has broken down - if there's not total anarchy.

 From the Web site lifeaftertheoilcrash.net, titles include "Gardening 
When it Counts: Growing Food in Hard Times" and "Crisis Preparedness 
Handbook: A Comprehensive Guide to Home Storage and Physical Survival."

"It's fear mongering, sensationalist crap," said Fadel Gheit, a senior 
energy analyst at Oppenheimer.

Gheit says there's plenty of oil out there, it just needs to get to a 
price where it's profitable to extract.

"We have so far consumed one trillion barrels" in all of history, he 
said, pointing to a 2000 study from the U.S. Geological Survey that made 
predictions based on rising prices, technology advances and assumed new 
discoveries based on past finds. "There are three trillion more to go."

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He said proven oil reserves - the ones oil companies believe they can 
extract with today's technology at current prices - have increased every 
year for the last 30 years.

A lot of the new oil will come from existing fields, said Gheit.

He said oil companies have never extracted more than 30 or 40 percent of 
the oil in any given field. It just became too expensive to continue 
drilling there, so the companies moved on to new areas.

"The free market is working," he said. "With higher prices, there will 
be incentive for companies to develop new technology" to extract the 
remaining oil.

Industry executives also downplay the peak oil theory.

"Similar predictions were made in 1914, in 1939, in 1951, when post-war 
demand was on the rise, and again in the 1970s," Exxon Mobil (Charts, 
Fortune 500) head Rex Tillerson was quoted saying in the Calgary Sun in 
2005. "These predictions were always proven wrong."

But whether oil production peaks or not, by pushing crude prices up more 
than eightfold over the last 10 years, traders clearly believe supplies 
will strain to keep up with demand.

"Growth in the developing world is just too great," said Stephen Leeb, 
an investment manager who has authored two books on oil scarcity, the 
last one predicting $200-a-barrel oil in the next 5 to 10 years. "Demand 
for oil will outstrip supply."

http://money.cnn.com/2007/09/14/news/economy/peak_oil/?postversion=2007091414
-- 
Macdonald Stainsby
Coordinator, http://oilsandstruth.org
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In the contradiction lies the hope.
    --Bertholt Brecht.