From pages 108-114 of Armed Madhouse
by Greg Palast (all emphasis original):
...we really should take a look at the theory that we went into Iraq to get its oil. A ride up “Hubbert’s Peak” will allow a clearer view of the real topic of this chapter: the geo-politics of petroleum. No Peaking: The Hubbert Humbug
On March 7, 1956, geologist M. King Hubbert presented a research paper that would, a half century later, become the New Gospel of Internet Economics, the Missing Link that would Explain It All from the September 11 attack to the invasion of Iraq.
In his 1956 paper, Hubbert wrote:
On the basis of the present estimates of the ultimate reserves of world petroleum and natural gas, it appears that the culmination of world production of these products should occur within a half a century (i.e., by 2006).
So get in your Hummer and take your last drive, Clive. Sometime during 2006, we will have used up every last drop of crude oil on the planet. We’re not talking “decline” in oil from a production “peak,” we’re talking “culmination,” completely
gone, kaput, dead out of crude--and not enough natural gas left to roast a weenie.
In his 1956 treatise, Hubbert wrote that Planet Earth could produce not a drop more than one and a quarter trillion barrels of crude.
We obtain a figure of about 1,250 billion barrels for the ultimate potential reserves of crude oil of the whole world.
That’s the entire supply of crude that stingy Mother Nature bequeathed for human use from Adam to the end of civilization. Indeed, our oil-lusting world will have consumed, by the end of 2006, about 1.2 trillion barrels of oil. Therefore, by Hubbert’s calculation, we’re finished; maybe in the very week you read this book we’ll suck the planet dry. Then, as Porky Pig says, “That’s all, folks!”
But the pig ain’t sung yet. Planes still fly, lovers still cry and smog-o-saurus SUVs still choke the LA freeway. Why aren’t our gas tanks dry? Hubbert insisted Arabia could produce no more than 375 billion barrels of oil. Yet, Middle Eastern oil reserves remaining
today total 734 billion barrels. And those are “proven” reserves--known and measured, not including the possibility of a single new oil strike or field extension. Worldwide, ready-to-go reserves total 1.189 trillion
barrels--and that excludes the world’s two biggest untapped fields, which could easily double the world reserve. (One is in Iraq, the other we'll get to in Chapter 4.)
In all fairness to the Hubbert Heads, there’s a more sophisticated, updated version of Hubbert’s theory. This is where the “peak” concept comes in. In this version of the Hubbert scripture, we ignore his dead wrong prediction of total crude available and look only at the up and down shape of his curve, the “peak.” The amount of oil discovered each year, Hubbert posited, will stop rising by 2000, then will crash rapidly toward zero when we will have used up our allotted 1.25 trillion barrels.
We haven’t crashed or even peaked. Oil production has risen year after year after year and discoveries have more than kept pace. Nevertheless, like believers undaunted by the failure of alien spaceships to take them to Mars on the date predicted, Peak enthusiasts keep moving the date of the oil apocalypse further into the future. In the new, revisionist models of Hubbert’s prediction, the high point in the curve of discoverable oil on our planet will come in a decade or so. Though we have a reprieve, goes the new theory, still, we’re running out of crude, dude
! There’s only another twenty years left in proven reserves! Oh, my!
“It’s true that there’s only twenty years’ supply left-and that’s been true for the last hundred years,” Lewis Lapham told me over a decent sauterne at Five Points....Lapham of Harper’s magazine is the only editor in the hemisphere with hard knowledge of the petroleum market, insight he inherited legitimately: His family helped found Mobil Oil, the back half of what is now ExxonMobil.
He asked, “Why in the world would oil companies, or any company, announce that there’s lots of its product out there? You’d bust your own market. It’s better to say the cupboard’s bare.” As Lapham noted, we have been “running out of oil” since the days we drained it from whales.
OPEC’s big headache before the war shut down Iraq’s fields was that there was way too much
oil. We were swimming in it and oil prices stayed low. The last thing oil companies want is more oil from Iraq, any more than soybean farmers want more soybeans from Iraq. Increasing supply means decreasing price.
This war is about the oil, but what
about the oil? The Hubbert Peaksters think they know. They are convinced that Dick Cheney in his bunker is panicked that the world’s supply of oil is about to run out, and so to Iraq we go, to seize the last of it. Here’s the flaw in that argument: To believe that George Bush and Dick Cheney hustled us into Iraq to open up that nation’s untapped bounty of petroleum is to believe that these two oil Texans in the White House are deeply troubled that the price of oil will rise unless they get us more crude. But Dick and George get a rise out of the rise.
Have we peaked? The planet is producing today twice as much as the maximum predicted in 1956 by the “Peaking Man.” But the political uses of holy-sh*t-we’re-running-out-of-oil!
has yet to peak.
Indeed, Bush and Cheney are more than happy to allow others to promote Hubbert Peak hysteria in the public. “We need Iraq’s oil” is used as a good bogeyman to get the public behind an invasion that promises to get Americans a fill-up for the family gas guzzler for less than a hundred dollars. Anti-war progressives seized on the Hubbert humbug as proof that Bush’s invasion was a war of “Blood for Oil.” Nuns, professors and rock stars were outraged. But the average American thinks, Blood for oil? That’s a BARGAIN
. The Shell Game
Hubbert’s predictions may have been astonishingly wrong but his little forty-page research report is, nevertheless, astonishingly important in understanding the mindset of Big Oil.
Almost everything you need to know about Hubbert and the agenda behind his crucial 1956 study is contained on its cover page. The oil doomsday pronouncement is “Publication No. 95, Shell Development Company, Houston, Texas.” Hubbert was the chief Consultant on general geology for Shell Oil and his “end of oil” paper was presented to the Texas meeting of the American Petroleum Institute. All else flows therefrom.
Every once in a while the landlords of the planet have to remind us to be grateful for their services. In 1956 it was Shell Oil’s turn and Hubbert was their man for the job. It was not a happy time for the oilmen of Texas. Shell and the other Seven Sisters, as Big Oil was then known, faced a heck of a problem: crude was cheaper than dirt--$2.77 a barrel, that is, a nickel a gallon-and sinking. Worse, they were finding more of the stuff all over the planet, meaning prices would fall further.
In March of that year, Hubbert presented the solution to his fellow oilmen at the API in Houston. He unveiled this magical chart. [viewable here
Look closely. When Hubbert spoke, oil reserves worldwide were zooming heavenward. Despite the tide of petroleum rising around us, Hubbert declared that oil discoveries in the USA had begun to peak “as recently as 1951 or 1952" and that the world’s reserves would follow not long thereafter. He didn’t need to wink. His oil industry audience understood what oil giant Shell wanted America to believe: Oil isn’t abundant, it’s a scarce commodity
1. It’s too cheap--so oil companies should, for the public’s own good, raise the price
to conserve this precious resource.
2. We need to find an abundant alternative
to fossil fuel.
3. We need to protect our access
to dwindling sources of crude, by force if necessary.
Shell Oil, through Hubbert, sought, successfully, to change the way America thought of oil’s price, alternatives to oil and access to oil. PRICE:
The problem of falling oil prices was solved for Shell, brilliantly, in four years, in 1960, by the creation of OPEC. On paper, OPEC was created by national governments. If oil companies
had created this cartel to fix prices, that would have made it a criminal conspiracy--cartels are illegal. But when governments
conspire for the same purpose, the illegal conspiracy turns into a legitimate “alliance” of sovereign states. OPEC’s government cover makes the price-fixing perfectly legal, and Big Oil reaps the rewards....
Have we peaked? Worldwide oil reserves continue to rise even faster than America and China can burn it. Since 1980, reserves, despite our binge-guzzling, have risen from 648 billion to 1.2 trillion barrels. Yet, weirdly, despite the rising flood of discovered crude, its price quadrupled between 2001 and 2005. Supply choked, yet there’s no peak in sight....
So please don’t slander Mother Earth
and say she’s run out of oil when it’s man-made mischief to blame. Evil, not geology, has a chokehold on energy; nature is ready to give us crude at $12 a barrel where it was just a few short years ago.
(Alex Jones In Studio With Greg Palast: Big Oil & The Armed Madhouse)