Not "Peak Oil", But Lots More Oil

There was an interesting news item out of Moscow in late September to which most people probably paid little heed. "Russia is one of several countries that have rushed to lay claims to the area where a U.S. study suggests as much as 25 percent of the world's undiscovered oil and gas could be hidden."

Earlier the Russians sent two small submarines to plant a tiny national flag under the North Pole. In response, Canada vowed to increase its icebreaker fleet and build two new military facilities in the Arctic and Denmark sent a team of scientists to seek evidence that the ridge in question was attached to its territory of Greenland.

When it comes to oil and natural gas, nations have no sense of humor, even if in the case of the United States they often display an astonishing lack of good sense. You are no doubt familiar with the long fight over permitting drilling in Alaska's Natural Wildlife Reserve where it's estimated there are billions of barrels of untapped oil, but you are surely going to be surprised to learn that the oil industry is excluded from exploring 85 percent of all American territorial waters.

President Bush is fond of saying that America is "addicted" to oil, but he might as well say that Americans are addicted to water or food. It's not an addiction. It is a perfectly rational requirement of not only our own, but every other nation's need for energy to power its industry, its homes, and its transportation needs. Before Bush, former President Jimmy Carter became convinced in the 1970s that all the proven reserves of oil would shortly be used up.

As Duncan Clark, Chairman and CEO of Global Pacific & Partners, the author of a new book, The Battle for Barrels (Profile Books, UK) points out regarding America's continental shelf, "The undiscovered oil potential in the areas demarcated for possible offshore in the Pacific, Atlantic and Gulf of Mexico could allow the tapping of up to 85 billion barrels of oil that technically could be recoverable awaits the political passage of bills through the legislature", i.e., Congress.

With the price of oil hitting more than $80 per barrel, one would think that Congress would be inclined to opening access to those billions of barrels, but the current Democrat-controlled Congress is more concerned about a bogus global warming than it is about insuring Americans can drive their cars and trucks, heat their homes, and process oil for the countless products it produces. And this doesn't even include the vast reserves of natural gas that are estimated to exist.

The fact is that there are billions more barrels to be found in the world, whether it's in the Middle East, Africa, Russia, Venezuela, and much of the yet to be geologically researched map of the world.

That bit of knowledge, however, rarely makes it into the mainstream media that can be depended upon to give lots of coverage to the "Peak Oil" crowd that has been predicting we will run out of oil any day now. A former chairman of Shell made news in late September when he warned the price of oil could hit $150 a barrel "with oil production peaking within the next 20 years." You had to read further on in the article, published in London's The Independent on September 16 to learn that he also said "I don't know whether there is going to be a peak in world production...."

That's why Clarke's book is subtitled "Peak Oil Myths & World Oil Reserves." The notion of Peak Oil is a point at which the world's oil reserves begin to fall off and chaos follows. It is based on the notion that there is a finite amount of oil, no new oil will be discovered and extracted, and, well, we are doomed. This is fine for pessimists, but there is a real world out there and the indications are there's plenty of oil. The Russians obviously think there's some under the Arctic and are taking steps to lay claim to it.

"Thanks to vivid media coverage," writes Clarke, "and prodigious output of publications, Peak Oil has begun to capture the public imagination...It has only rarely been subjected to rigorous analysis, although much evidence to contradict its thesis is found." And just how often is the media wrong about events and trends? Every day.

I doubt that Clarke's book will leap onto the bestseller lists. It will be read by anyone who is in the energy industry and those of us who keep an eye on energy events and trends. Fact by fact, Clarke's analysis requires one to bring a great deal of concentration and effort to read his book, but it is well worth the effort because he dissects the Peak Oil myth and its advocates with surgical skill and patience.

Anyone who has followed the trajectory of the environmental movement for the last three or four decades knows that much of it is based on ludicrous claims that the Earth is doomed and mankind is to blame. Peak Oil and its "end of civilization" message got its impetus from a study by M. King Hubbert, an American geoscientist with a long career in the oil industry who, in 1956, predicted that the world would begin to run out of oil within a few decades.

Hubbert's prediction was picked up and amplified by others to the point where there is now an Association for the Study of Peak Oil that has had to revise its estimates of when the world runs out of oil several times. The reason for the revisions is simple. New reserves of oil, new technology to revive existing fields, find new ones, and to drill in the ocean's depths keeps pushing the date further and further off. To put it another way, Peak Oil predictions exist mostly to maintain the waning credibility of those who keep making the predictions.

Like environmentalism, it is less a science and more a new form of religion in which one takes its "facts" on faith. Selective computer models keep producing these "facts," but events like the September 2006 discovery by Chevron of a huge deep water new field in the Gulf of Mexico keep contradicting them.

"Overall," writes Clarke, "it is clear that conventional proven oil reserves estimates considerably exceed those used by Peak Oil in Africa, Latin America, Russia, the Middle East, and elsewhere."

Why has the price of oil hit a new high? Well, there's a war going on in Iraq to insure Osama bin Laden who wants to take over all the nations in that region doesn't get his wish. Add to that the ambitions of the Persian mullahs running Iran. There's a communist dictator in Venezuela who has nationalized its oil industry. There are Russia's ambitions in the Arctic. There are hurricanes that impact oil extraction in the Gulf of Mexico.

The world is not running out of oil, but neither is it running out of religious fanatics, dictators, and communist thugs who want to line their own pockets, while holding us hostage and enslaving vast portions of the world's population.