Chapter 89 Running out of oil?

On September 9, 2001, Prime Minister Blair's cabinet government received a very shocking memorandum with a simple title: "To the Cabinet Office of Energy Policy".The memo was carefully prepared by a group of leading geologists at the Center for Petroleum Consumption Analysis. The memorandum from the UK Cabinet Office focuses on the theme: "The world faces a serious hydrocarbon supply dilemma".The memorandum stated that “the status quo of global oil supply has risen to a political risk issue...If more investment in production in the Middle East region can increase production, but only in a very limited range. Only Iraq is a huge exception……".The Cabinet Office memorandum further predicted that "global oil production will soon decline. The time of peak oil production depends on the reserves in the Middle East... Optimistically, the global peak will appear in 5 to 10 years."The report also predicts that the peak of global natural gas will appear in 20 years.The authors recommend that the government undertake "relevant work to validate these calculations".But the memo was quietly tucked away.

Blair has some well-informed oil advisers.Among them was Sir Brown, the chief executive of BP and a close friend of the prime minister. In 1999, more than two years before the UK Memorandum, and a year before Bush was elected president, Mike Pauling, president of Atlantic Ridgefield Petroleum (a division of Sir Brown's BP), declared, "We've already Take the first train of the oil end century". What Pauling said meant a lot to George Bush, James Baker, and Dick Cheney.Curiously, such a profound point of view with implications for economic stability and security was never raised publicly during and after the 2000 election.

There have been many predictions over the past century, starting in the 1920s, that the world would run out of oil, but each time such doomsayers have been proven wrong.There are always people who are worrying.So why should this warning be more relevant than that of the 1970s? The short answer is, because this time there is more evidence to support the prophecy.At least, the stakes are high enough to spark a serious discussion.Oddly, unlike previous oil scares, this prophecy has not sparked public discussion.That's what's most shocking. Geologists do not predict that the world will run out of oil within 5-10 years.What they argue is something else, namely that at a time when world oil demand is exploding, especially from China and other economic growth regions such as India and Indonesia, the amount of readily available, cheap oil currently in use will be dramatically reduced.They also discussed various alternatives, including heavy oil, coal, and nuclear power, but none of them could replace oil.The economic implications of their analysis are staggering, given that for almost a century the world economy has been powered by cheap, plentiful oil.

Some serious and neutral geologists support the idea that world oil is approaching a decisive turning point, technically called a peak.Colin Campbell, a well-respected geologist, was one of the key figures in the 9 September 2001 Cabinet Government Report prepared by the UK Petroleum Loss Analysis Centre.His predictions are supported by some of the world's leading geologists, including the Colorado School of Mines, Princeton University's School of Geology, the French Institute of Petroleum, Sweden's Uppsala University, and private energy consultants such as Douglas West. Wood Ltd. and Petroleum Consulting Company in Switzerland.

These eminent geologists are objectively discussing the question that modest growth in global population and economy over the next decade or more will lead to continued growth in global oil demand, while oil production in many large oil fields is declining sharply, such as North Sea fields, Prudhoe Bay fields in Alaska, and fields in Mexico, Russia and Nigeria. At the oil summit in May 2003, Matthew Simmons, an American energy expert and adviser to Cheney and George Bush, issued a warning.Simmons was once a leading member of the Baker Institute of Energy Organizations and was one of the lead authors of the report to Cheney.He is no small man, but an authority on energy issues in the Bush administration.At the French Institute of Petroleum, Simmons told the International Organization of Geologists and Energy Experts: "Five years ago I hardly thought about the question of what the peak means and when exactly it will occur." Yes, the peak is coming, not for a few years ... If I'm right, the unforeseen consequences are devastating ... Unfortunately, if I'm right, the world is not ready to deal with it."

Simmons went on to describe what it would mean for the world economy if transport, food and industry were suddenly hit with even the most basic energy shortages at today's lower costs.He argues: "There are no good energy solutions to sustain the status quo. The current option is to austerity our economy." In short, he predicts that the world's only prospect is a deep recession and depression. In a July 2002 discussion on existing oil reserves, Colin Campbell noted that "with peak oil and gas five years from now, a shortage of oil will appear around 2010".He pointed out that 40% of the world's energy needs and 90% of transportation fuel needs come from oil.Campbell concludes: "Clearly, the world has to learn how to consume less, much less".

Geologists define peak oil as the point at which at least half of the oil reserves in a given area have been extracted.After the peak, more investment is required for each barrel of oil extracted. To extract oil, it is necessary to ensure that there is sufficient pressure downhole, and it is costly to inject gas or water into old oil fields.This means that when the world's major oil fields pass their peak, the cost of oil is likely to skyrocket.Well, the predicted peak this time is not just the peak of an oil field, or the peak of an oil-producing country, but an absolute peak, that is, the peak of oil worldwide.

"After 2005, it will take more energy to find and extract a barrel of oil than the barrel itself provides," Campbell predicted, adding that despite spending more than a trillion dollars over the past 20 years, To discover new untapped oil fields to replace the old North Sea oil fields, Alaska and other oil fields, oil companies still can't meet the current oil consumption demand.Campbell estimates that four barrels of oil are consumed for every barrel of oil discovered, a worrying trend. In another study on the problem of peak oil, Matthew Simmons cites a sobering set of statistics to illustrate the pessimistic pace at which new oil fields are being discovered.The top 10 oil exploration and oil product companies spent $195 billion between 2000 and 2002, increasing daily oil production from 22.4 million barrels to 24.1 million barrels, and 93% of today's oil and natural gas production comes from this .Simmons went on to predict that oil and gas supplies will continue to decline, "within 10 to 15 years all the currently discovered reserves will be depleted", that is, in 2010 or 2015.As long as there is a peak in one of the big fields, it is only a matter of time before a sharp, vertical decline in production occurs.Campbell cites the example of an older oilfield in the North Sea, Brent, whose production has fallen by 90% in the four to five years since its peak.That is why the world failed to realize the hidden crisis.Resources in many of the major oil fields have reached or have been near peak in the past 30 years or so, yet the statistics of total reserves still give the illusion of abundance.Big corporations and governments have a vested interest in deliberately ignoring peak oil.The Bush administration's interest in peak oil is not short-lived.The American century, peace under American hegemony, is the future we are facing.

In fact, Campbell and other neutral geologists corroborated what Cheney said in London in 1999.Campbell once concluded that the only region in the world that has a large amount of untapped oil that can be developed at low cost is the Middle East. Both Campbell and Simmons noted the peculiar geological formation of the Triangle, which holds 65 percent of the world's existing oil reserves, or more.The triangle includes the following countries: Iraq, Iran, Saudi Arabia, Kuwait and the United Arab Emirates, as well as Qatar.Iraq is said to have the largest untapped oil reserves in the Middle East.Certain U.S. government studies estimate that Iraq may have undiscovered oil resources of 432 billion barrels, far more than Saudi Arabia.After the rest of the world's oil resources peaked, the strategic importance of Iraq and the entire Middle East would explode exponentially over the next few years.And that oil is still controlled by Arab governments.

In an ExxonMobil Exploration Company magazine in early 2003, company president Jon Thompson indirectly supported a fundamental analysis by geologists that a global oil crisis would occur between 2010 and 2015.Thompson wrote: We estimate that the world's existing oil and gas production is declining at an average rate of 4% to 6% per year.To meet projected demand in 2015, the equivalent of 100 million barrels of oil per day must be added, which is 80% of today's production.In other words, for every 10 barrels of oil and gas we produce today, we will need to discover, develop, and produce 8 additional barrels by then.In addition, the cost of producing this additional oil and gas is expected to be much higher than currently spent.

The comments were a bombshell for the world's largest energy companies, whose mission is to discover new sources of oil and natural gas.He pointed out that the world's demand for new oil and natural gas will increase dramatically in the next ten years, and the discovery of new oil fields is still unpredictable.The cost of meeting new energy needs will be "quite high".Thompson wrote, "A revolutionary change," very aptly. Already in the early stages of a crisis in the world's energy supply, this estimate is alarming.If this estimate is correct or very close, its impact on the world economy would be orders of magnitude greater than the oil shock of the 1970s.Kenneth Pollack, a former senior Middle East expert on the National Security Council of the Clinton administration, who supported the invasion of Iraq, put it bluntly: "The global economy has been built on the basis of cheap and plentiful oil for the past 50 years. If we dismantle this Without the foundation, the global economy will collapse." In short, by the end of the 2000s, sometime in 2010 or 2015, maybe sooner, most of the world's oil and natural gas may be exhausted, which is what the Bush administration is risking. Great risk unilateral motivation for marching into Iraq.This also illustrates the US government's considerations on domestic and foreign policies under the leadership of Bush. If the United States can maintain military control of Iraqi oil, Washington will have an absolute advantage in all possible economic competitions.Before the war, the Iraqi government had signed long-term oil exploration contracts with Russia, France and China.Pentagon strategists in Washington haven't lost sight of the fact that all three countries are oil competitors in any future crisis.Cheney is no exception.In 2001, Cheney refused to disclose the files of the Energy Issues Working Group, which drew detailed maps of Iraqi oil fields and recorded the list of foreign companies with cooperative projects in Iraq.The documents were only partially released at the time, and fully released after the occupation of Iraq was secured. In early 2004, after clearing the hurdles, Washington announced that oil drilling and reconstruction work in Iraq would go only to companies that had helped Iraq during its occupation.The first profitable oil companies were Chevron-Texaco, Rice's former company, BP in Britain, Shell, and Cheney's Halliburton. Just in time for the preparations for the Iraq war, Doha, Qatar, became the main US military base in the Gulf region, as reliance on Saudi Arabia's Prince Bandar Air Base decreased.Since early 2004, Iraq has faced a prolonged US military occupation, likely to last for decades.Robert Kagan, one of the authors of Cheney's Project for a New American Century, told the Atlanta Journal-Constitution in a talk about Iraq a few months after the war: "It is likely that for a long time, we will There needs to be a major concentration of military power in the Middle East ... if we have force in Iraq, then the oil supply will not be disrupted." After witnessing the results of Bush's war in Iraq, it is natural to conclude that US military power is designed to ensure direct control over the world's largest oil resource.This is also why, once Iraq was occupied, Washington cared little about WMD.