Da Peak Oil

Zarefsky Juniors: AMP

PEAK OIL

Anna /Andrew/Paul

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Peak Oil Index Peak Oil Index.................................................................................................................................................................................1 Shell..................................................................................................................................................................................................5 Shell..................................................................................................................................................................................................7 Oil Peaked-2006...............................................................................................................................................................................9 Oil Will Peak: 2008.......................................................................................................................................................................10 Oil Will Peak: 2010........................................................................................................................................................................11 Oil Will Peak: 2010.......................................................................................................................................................................12 Oil Will Peak: 2010.......................................................................................................................................................................13 Oil Will Peak: 2010.......................................................................................................................................................................14 Oil Will Peak: 10-15 Years............................................................................................................................................................15 Oil Peaking - Practical Peak........................................................................................................................................................16 Oil Peaking -Middle East.............................................................................................................................................................17 Oil Peaking – Russia.....................................................................................................................................................................18 Oil will Peak-Hubbert Curve Proves...........................................................................................................................................19 Oil will Peak: No More Oil Left...................................................................................................................................................21 Oil will Peak: No More Oil Left...................................................................................................................................................22 Oil will Peak: No more oil left......................................................................................................................................................23 Oil Will Peak: Demand Spike......................................................................................................................................................25 Alternative Energy Key to Transition.........................................................................................................................................26 Alternative Energy Key To Transition........................................................................................................................................27 Alternative Energy Key to Transition.........................................................................................................................................28 Alternative Energy Key to Transition.........................................................................................................................................29 AT: impacts inevitable..................................................................................................................................................................30 Impacts-Economy..........................................................................................................................................................................32 Impacts-Economy..........................................................................................................................................................................33 Impacts-Economy..........................................................................................................................................................................34 Impacts – Economy.......................................................................................................................................................................35 Impacts – Economy – soc security...............................................................................................................................................36 Impacts-Economy: Timeframe....................................................................................................................................................37 Impacts-Resource Wars................................................................................................................................................................38 Impact – Resource Wars...............................................................................................................................................................39 Impact- Extinction........................................................................................................................................................................40 Impacts-Terrorism........................................................................................................................................................................41

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Anna /Andrew/Paul Page 2 of 130 Impacts-Poverty............................................................................................................................................................................44 Impacts-Climate............................................................................................................................................................................45 Impacts-Agriculture......................................................................................................................................................................46 Impacts-Agriculture......................................................................................................................................................................47 Impacts- Sadness or “meaning to life”........................................................................................................................................48 Peak Oil Outweighs Warming......................................................................................................................................................49 Aviation Impact Module 1/3.........................................................................................................................................................50 Aviation Impact Module 2/3.........................................................................................................................................................51 Aviation Impact Module 3/3.........................................................................................................................................................52 Nigeria Impact Module 1/2...........................................................................................................................................................53 Nigeria Impact Module 2/2...........................................................................................................................................................54 AT: Tons of Oil Now......................................................................................................................................................................55 AT: Tons of Oil Now......................................................................................................................................................................56 AT: Tons of Oil Now- Russia........................................................................................................................................................57 AT: Tons of Oil Now-ANWR........................................................................................................................................................59 AT: Nonconventional Oils.............................................................................................................................................................60 AT: Nonconventional Oils.............................................................................................................................................................61 AT: Oil Shale..................................................................................................................................................................................62 AT: Oil Shale..................................................................................................................................................................................63 AT: Oil Shale .................................................................................................................................................................................64 AT: Oil Sands.................................................................................................................................................................................65 AT: Oil Sands.................................................................................................................................................................................66 AT: Oil Sands.................................................................................................................................................................................67 AT: Oil Sands.................................................................................................................................................................................68 AT: Offshore Oil Wells..................................................................................................................................................................69 AT: Coal.........................................................................................................................................................................................70 AT: Coal.........................................................................................................................................................................................71 AT: Coal.........................................................................................................................................................................................72 AT: Natural Gas............................................................................................................................................................................73 AT: Natural Gas............................................................................................................................................................................75 AT: Deepwater Oil.........................................................................................................................................................................76 AT: New Tech Solves.....................................................................................................................................................................77 AT: falling discovery costs............................................................................................................................................................78 AT: resources infinite....................................................................................................................................................................79 AT: market transition solves........................................................................................................................................................80 AT: Oil High Now : Their Cards Are Lies..................................................................................................................................81

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Anna /Andrew/Paul Page 3 of 130 AT: Oil High Now : Their Cards Are Lies..................................................................................................................................82 AT: Oil High Now : Their Cards Are Lies..................................................................................................................................83 AT: Hubbert Model is Flawed......................................................................................................................................................84 AT: Hubbert model is flawed.......................................................................................................................................................85 AT: Hubbert Model is Flawed......................................................................................................................................................86 AT: Reserves Growth....................................................................................................................................................................87 AT: Speculation.............................................................................................................................................................................88 AT: Perpetual Doomsayers...........................................................................................................................................................89 AT: Your authors crazy.................................................................................................................................................................90 AT: Your Authors crazy................................................................................................................................................................91 AT: Your authors crazy.................................................................................................................................................................92 AT: Low Prices Bad.......................................................................................................................................................................93 NEG: Peak Oil is Wrong..............................................................................................................................................................94 NEG: Peak Oil Is Wrong..............................................................................................................................................................95 NEG: Peak Oil is Wrong..............................................................................................................................................................96 NEG: Peak Oil is Wrong..............................................................................................................................................................97 NEG: Peak Oil is Wrong..............................................................................................................................................................98 NEG: Peak Oil is Wrong..............................................................................................................................................................99 NEG: Peak Oil is Wrong............................................................................................................................................................100 NEG: Peak Oil is Wrong............................................................................................................................................................102 NEG: Tons of Oil Now................................................................................................................................................................103 NEG: Tons of Oil Now................................................................................................................................................................104 NEG: Tons of Oil Now................................................................................................................................................................105 NEG: Tons of Oil Now................................................................................................................................................................106 NEG: Tons of Oil Now-Russia....................................................................................................................................................107 NEG: Tons of Oil Now-ANWR..................................................................................................................................................108 NEG: Tons of Oil Now: ANWR.................................................................................................................................................109 NEG: No Impact-Market Will Solve.........................................................................................................................................110 NEG: No Solvency.......................................................................................................................................................................111 NEG: Shale Solves Better...........................................................................................................................................................112 NEG: No Solvency.......................................................................................................................................................................113 NEG: Empirically Denied...........................................................................................................................................................114 NEG: Other Fossil Fuels ............................................................................................................................................................115 NEG: Tech Solves........................................................................................................................................................................116 NEG: Tech Solves........................................................................................................................................................................117 NEG: Tech Solves........................................................................................................................................................................118

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Anna /Andrew/Paul Page 4 of 130 NEG: Turn- Production Stability...............................................................................................................................................119 NEG:Turn- BACKSTOPPING..................................................................................................................................................120 NEG: Market Solves...................................................................................................................................................................122 Neg: Market Solves.....................................................................................................................................................................123 NEG: Market Solves...................................................................................................................................................................124 NEG: Speculation .......................................................................................................................................................................125 NEG: Speculation........................................................................................................................................................................126 NEG: Speculation .......................................................................................................................................................................127 Bonus: Backstopping answers....................................................................................................................................................129 Bonus: Backstopping answers....................................................................................................................................................130

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Shell An oil peak’s inevitable: a vertical decline in production will occur within the next 15 years Roberts, 04 (Paul Roberts, Author of eight books, dozens of articles and several screenplays, Dr. Paul Roberts has also been an awardwinning writer/producer for television. He has written for many magazines and newspapers, including The Toronto Star, Harper's, Toronto Life, The Globe and Mail and The Washington Post. His personal account of the 1991 Iraq war for Saturday Night won a National Magazine award, and he has received a Canadian Author's Award for fiction. His account of the 2003 Iraq war, A War Against Truth, was a finalist for the Charles Taylor Prize for best nonfiction book of the year. He is considered to be one of Canada's top experts on Middle Eastern affairs; “Last stop gas: Cheap oil, the only oil that matters, is just about gone,” Harpers Magazine, August 2004 < http://harpers.org/archive/2004/08/0080164 > ) As gas prices rise, oil policy, to no one's great surprise, has become a major fixation of the presidential candidates and their surrogates. At any given moment, they can be found debating how the United States should persuade OPEC to bring down the price of crude or which candidate favors increasing gasoline taxes least. In June the argument was over how much oil there ought to be in the Strategic Petroleum Reserve (SPR). George Bush said we should fill it to the brim. John Kerry thought that just below the brim would be fine. In all of this back-and-forthing, however, neither of the candidates has mentioned the real problem facing American consumers of petroleum and petroleum by-products. Like the Strategic Petroleum Reserve, the Earth itself has a limited storage capacity, and at some point in the not-too-distant future, the cheap oil that fueled 100 years of economic growth will cease to exist. The key here is a concept known as peak oil production. In 1956 the agro-physicist M. King Hubbert observed that the production of oil from any given field does not proceed smoothly until the last drop of oil has been sucked from the ground but instead follows a long peaking curve. Once roughly half the oil has been extracted, it becomes harder—and more expensive—to get at the remainder. Daily production begins to fall off, and eventually the field is abandoned. Hubbert believed that this peak phenomenon (known today as Hubbert's Curve) could be seen at any scale—from a single field in Texas to all the fields in a country. Less than two decades later, Hubbert's theory was vindicated. In 1971 oil production in the United States hit a peak and began a long, slow decline that oil companies, despite much effort, have not been able to reverse. Ultimately, such a peak must also occur globally. It doesn't mean that the oil will stop flowing overnight. But it does mean that oil producers will find it harder and harder, and, eventually, impossible, to raise their yearly production. And since demand will continue to rise (oil may be finite, but our energy appetites are not), the price of oil will head for the sky. The last time production fell seriously behind demand—the Iranian revolution of 1979—oil prices hit the modern-day equivalent of $80 a barrel and pushed the world into a deep recession. And keep in mind that this was a temporary disruption: a permanent decline in oil production (assuming we haven't found something new to burn) would be an economic catastrophe. It gets worse. The term “peak” is misleading: it suggests a symmetrical curve, as if since it took a century or so to reach the peak it ought to take another century for production to fall to zero. Sadly, this isn't so. Because oil demand still will be rising even as production peaks, prices will jump, to $100 a barrel and more. Those high prices will inspire the oil industry: producers will redouble efforts to find more oil and, for a while, may manage to keep world production from falling. The peak, in other words, will look more like a plateau, and panic may subside. Unfortunately, this rush of new production means only that remaining reserves will go even faster, so when production finally does fall, the downward slope will be almost vertical. Precisely when oil production will peak is a complex question. Pessimistic scientists say it already has. The optimists say perhaps we won't see a decline in production until 2035. Yet even the most optimistic forecasters agree on one thing: Within our lifetime, or the lifetime of our children, oil will cease to be the cheap, plentiful fuel that today provides 40 percent of the world's energy. If a peak in oil production truly is imminent, why don't we hear more about it? One reason is history. Pessimists have been predicting an oil peak and associated mayhem since the late 1880s, and thus far the industry has proven them spectacularly wrong. During the gloomy 1970s, for example, many experts and even oil companies believed production would peak by the late 1990s. Instead, the high prices from the 1970s and early 1980s proved a powerful incentive for oil companies not only to look for more oil but to become much smarter about how they did it. Indeed, in Hubbert's time, it was hard to know how much oil there was. Now, with seismic imaging, engineers can pinpoint the precise location of likely oil-bearing rocks. And with high-tech drills, they can reach ten miles underground, move in any direction—even horizontally—and electronically “smell” the presence of oil and gas. So good did oil companies get at finding and producing oil that, in the decade after the Arab oil embargo, discovery rates soared, markets glutted, and the price fell from a high of $40 a barrel to less than $10—so low that OPEC was nearly put out of business. It's a classic example of a self-correcting market: high prices bring their own cure. Not surprisingly, such steady successes have imbued the oil industry—and many governments as well—with a kind of permanent optimism. Not only do high oil prices make it profitable to extract previously “uneconomic” oil but, by funding the development of new technology and new methods, the high prices actually bring down the costs of getting that expensive oil. Case in point: Canada's vast deposits of oil-bearing tar sands, long regarded as too expensive to exploit, now can be refined economically into usable oil, and will only become more attractive as the price of oil rises. So, yes, oil may indeed be finite, oilmen will confess, but due

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Anna /Andrew/Paul Page 6 of 130 to the magic of the marketplace we can keep pushing that end point into the indefinite future. This optimism, however, seems to have reached a peak of its own. The industry has become startlingly proficient, but efficiency alone can't circumvent the most basic rule of the oil business—oil can't be produced unless it has been discovered. And here the optimists run into a real snag: despite all the new exploration gadgetry—and, in part, because of it—the industry is actually discovering less oil today than it was even ten years ago. In fact, although oil production has yet to hit its peak, oil discovery peaked in 1964. Since then the volume of newly discovered oil—that is, the number of barrels oil companies can find each year and put down on the books as “known” or “discovered” reserves —has on average steadily fallen each year. There have been exceptions—most recently the large finds in the Gulf of Mexico, offshore West Africa, and the Caspian Sea. But discoveries have again slumped and are now well below consumption: last year the world burned 25 billion barrels of oil, yet oil companies were able to discover just 8 billion barrels—less than one new barrel for every three consumed. Oil optimists argue that the technology for oil discovery will also continue to improve. This is undoubtedly correct, but it just means that production will peak all the sooner. In the past, oil discovery was a gamble in which wildcatters would follow hunches, dig expensive holes to nowhere, and only occasionally hit a payoff. Now, because oil companies are so good at “seeing” where the oil is, nearly every pull is a jackpot. For example, when oil companies began to look for oil along the coast of Angola in the 1990s, seismic technology was so accurate that nearly every well drilled hit oil. But the converse was that companies could essentially see all the oil that was there right away. And, in fact, discovery rates in Angola have dropped off precipitously—a pattern that is repeated in nearly every new oil frontier. The discovery dilemma helps explain why oil companies like Shell have been struggling to meet production goals. But it also helps explain a new trend in geopolitical anxiety. Despite billions of dollars of industry investment, oil fields in Alaska, the Western Sedimentary Basin of Canada, and Britain's North Sea—formerly prolific provinces that once shielded the global economy from the machinations of OPEC—are today in steep decline. North Sea production peaked in 2002, Mexico may peak by 2005, and Nigeria could peak by 2007. Even the Russian oil boom—which had persuaded the Bush Administration that America had a new and reliable non-Arab oil partner—now seems overstated. Russia may possess as many as 150 billion barrels, according to U.S. estimates, but that's still less than a fifth of the 850 billion barrels estimated to remain in the Middle East. Furthermore, most OPEC states are holding back their production in an effort to keep world supplies tight and prices high. But Russia, in an effort to maximize oil revenues today, has its taps wide open—a move that will have questionable effects on the nation's long-term economic health (some analysts believe Russia would be better off conserving production and selling its oil later, when prices are higher). Oil production outside OPEC will likely peak by no later than 2015, meaning that the United States, China, and other big importers will be forced to rely even more heavily on the one supplier they trust the least. That may seem like a worst-case scenario. But, in fact, OPEC faces a peak of its own—probably sometime in 2025, at which point prices will truly begin to rise. Again, the economy will adjust. Higher prices will reduce demand for oil. Prices will also make so-called unconventional oil much more appealing, though this, too, has limits. Canada's huge reserves of tar sand, for example, cannot be refined into oil without generating vast quantities of carbon dioxide—forcing the choice between maintaining an oil-based economy and doing something to slow climate change. In all probability, we will by then have found a way to remove CO2, but not without adding to the cost of using oil. In other words, while we may not ever run out of oil, we can already see the day when we will run out of cheap oil. And for an economy built on inexpensive crude, that is the only peak that matters. Policymakers seem unwilling even to hint that oil is a limited resource. Indeed, two of the proposals for “fixing” the current mess—releasing oil from the SPR or “jawboning” Arabs into pumping more oil—rest on the premise that today's oil problem is a temporary glitch in supply, when everyone knows not only that cheap oil is finite but that the longer we wait to find some new form of energy, the harder and more costly and disruptive the change will be. Yet such reluctance isn't surprising. To suggest that something is amiss would spook the markets and give massive political leverage to OPEC, and it would also run counter to the West's central organizing principle of nonstop economic growth. Those are all real problems. But simply pretending the oil will last forever is not a real solution.

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Shell B. The peak oil shift will be through alternatives or a shattering disaster. Only alternative energy can smooth the path to the inevitable transition. Linden, 2007 (Eugene, author of The Winds of Change: Climate, Weather, and the Destruction of Civilizations and environmental journalist, “From Peak Oil to Dark Age?” Lexis-Nexis/ak) With global oil production virtually stalled in recent years, controversial predictions that the world is fast approaching maximum petroleum output are looking a bit less controversial. At first blush, those concerned about global warming should be delighted. After all, what better way to prod the move toward carbon-free, climate-friendly alternative energy? But climate change activists have nothing to cheer about. The U.S. is completely unprepared for peak oil, as it's called, and the wrenching adjustments it would entail could easily accelerate global warming as nations turn to coal. Moreover, regardless of the implications for climate change, peak oil represents a mortal threat to the U.S. economy. Peak oil refers to the point at which world oil production plateaus before beginning to decline as depletion of the world's remaining reserves offsets ever-increased drilling. Some experts argue that we're already there, and that we won't exceed by much the daily production high of 84.5 million barrels first reached in 2005. If so, global production will bump along near these levels for years before beginning an inexorable decline. What would that mean? Alternatives are still a decade away from meeting incremental demand for oil. With nothing to fill the gap, global economic growth would slow, stop, and then reverse; international tensions would soar as nations seek access to diminishing supplies, enriching autocratic rulers in unstable oil states; and, unless other sources of energy could be ramped up with extreme haste, the world could plunge into a new Dark Age. Even as faltering economies burned less oil, carbon loading of the atmosphere might accelerate as countries turn to vastly dirtier coal. GIVEN SUCH UNPLEASANT possibilities, you'd think peak oil would be a national obsession. But policymakers can hide behind the possibility that vast troves will be available from unconventional sources, or that secretive oil-exporting nations really have the huge reserves they claim. Yet even if those who say that the peak has arrived are wrong, enough disturbing omens--for example, declining production in most of the world's great oil fields and no new superfields to take up the slack--exist for the issue to merit an intense international focus. The reality is that it will be here much sooner for the U.S.--in the form of peak oil exports. Since we import nearly two-thirds of the oil we consume, global oil available for export should be our bigger concern. Fast-growing domestic consumption in oil-exporting nations and increasing appetites by big importers such as China portend tighter supplies available to the U.S., unless world production rises rapidly. But output has stalled. Call it de facto peak oil or peak oil lite. It means the U.S. is entering an age when it will have to scramble to maintain existing import levels. We will know soon enough whether the capacity to raise production really exists. If not, basic math and the clock tell the story. All alternatives--geothermal, solar, wind, etc.--produce only 3% of the energy supplied by oil. If oil demand rises by 2% while output remains flat, generation of alternative energy would have to expand 60% a year. That's more than twice the rate of wind power, the fastest-growing alternative energy. And all this incremental energy would somehow have to be delivered to transportation (which consumes most of the oil produced each year) just to stay even with the growth in demand. Nuclear and hydropower together produce 10 times the power of wind, geothermal, and solar power. But even if nations ignore environmental concerns, it takes years to build nuclear plants or even identify suitable undammed rivers. There are many things we in the U.S. can do (and should have been doing) other than the present policy of crossing our fingers. If an oil tax makes sense from a climate change perspective, it seems doubly worthy if it extends supplies. Boosting efficiency and scaling up alternatives must also be a priority. And, recognizing that nations will turn to cheap coal (recently, 80% of growth in coal use has come from China), more work is needed to defang this fuel, which produces more carbon dioxide per ton than any other energy source. Even if the peakists are wrong, we would still be better off taking these actions. And if they're right, major efforts right now may be the only way to avert a new Dark Age in an overheated world.

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Peak oil causes global nuclear wars and human extinction Energy Bulletin 2004 ("Peak Oil is here," http://www.energybulletin.net/node/729) Energy Bulletin is a clearinghouse for information regarding the peak in global energy supply.

Beyond the current oil wars and the short term economic effects of unstable oil supply and prices over the next 5 years, peak oil threatens an irreversible global economic decline that will force a massive, radical and sustained change in our way of life as we transition to alternative energy sources and the economic/political order they support. The cost of everything will rise and rise with the poorest of us the first to start suffering. A terminal economic decline will begin with a recession in Australia the size of the one that occurred in WW2, and this possibility is already being discussed in our mainstream media. Think an end to public welfare across the board, food stamps and eventually food riots, massive rising unemployment, the collapse of Medicare and public hospitals, a severe crisis in the cost and delivery of water ... but at least the roads will be less congested, more room for the ultra wealthy and their gas guzzling limousines. At worst peak oil could mean a complete global economic collapse sometime after 2010, middle class poverty and the breakdown of law and order, truly gigantic starvation in the third world and the unrestrained outbreak of global warfare with the risk of numerous 'limited' nuclear conflagrations. It could ultimately mean the extinction of the human species through global nuclear war and its companions famine and pestilence.

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Oil Peaked-2006 Oil peaked in 2006; the peak’s rippling to every other kind of renewable Bakhtiari 2006 (Ali Samsam, a senior expert employed by the National Iranian Oil Company (NIOC). He held a number of senior positions with this organisation since 1971. He was also an advisor to the Oil Depletion Analysis Centre. He held a PhD in chemical engineering from the Swiss Federal Institute of Technology in Zurich, Switzerland. He had been a part-time lecturer for the Technical Faculty at Tehran University for many years. Bakhtiari wrote a number of short essays and is the author of Peaks and Troughs which is about the modern history of Iran. Dr Bakhtiari suggested that it would require an act of god for the world to avoid warring over depleting energy resources. He also believed that a peak in natural gas would be more shocking than peak oil because natural gas is less fluid and requires pipelines and LNG facilities to export overseas In 'Post Peak,' all of our systems of habits are in mortal danger. Due to the relative cheapness of crude oil (in relation to other, more expensive daily needs), people don't exactly realize the pivotal role played by its products in their daily routines -- as these products have invaded every nook and cranny of our modern life.; “Whiskey and Gunpowder,” by Byron King < http://www.lifeaftertheoilcrash.net/Archives2007/KingEvent.html >) After some 147 years of almost uninterrupted supply growth to a record output of some 81-82 million barrels/day [mb/d] in the summer of 2006, crude oil production has since entered its irreversible decline. This exceptional reversal alters the energy supply equation upon which life on our planet is based. It will come to place pressure upon the use of all othersources of energy -- be it natural gas, coal, nuclear power, and all types of sundry renewables, especially biofuels. It will eventually come.

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Oil Will Peak: 2008 The collapse and permanent shock will start in 8 Campbell, 99 (CJ, After being awarded a Ph.D at Oxford in 1957, Dr Campbell joined the oil industry as an exploration geologist. His career took him to Borneo, Trinidad, Colombia, Australia, Papua New Guinea, the USA, Ecuador, United Kingdom, Ireland, and Norway, “The Imminent Peak of World Oil Production,” < http://www.hubbertpeak.com/campbell/commons.htm >) I will now explain what I think is a reasonable scenario 1) Oil demand will grow at 1.5% a year – slightly below the IEA estimate of 1.8% – until Swing Share reaches about 35% in 2001. 2) The Middle East countries will then have the confidence to impose much higher prices, realising that they have no competition. They may even get such confidence sooner. For example, they might read an official report showing that Norway’s production is set to halve by 2006. Norway is the world’s second largest exporter. The impact on Swing Share is obvious.Look again at Scenarios 3) I think prices may briefly soar to very high levels due to the working of the market that sets prices on the marginal barrel. I believe that the market itself may be manipulated by hedge funds and similar insiders, who are in a position to talk price up and down. They must have made huge fortunes when prices recently rose 80% over a few weeks. Most forecasts now predict falling stocks by the last quarter as the insiders talk price up again. 4) I think that a price shock around 2001, if not before, from Middle East control is inevitable and will probably trigger a stockmarket crash 5) I think that demand does become elastic above about $30/b, reacting to normal market forces, so higher prices may curb demand. 6). Nevertheless, I think it will be a time of great political and economic tension as Europe, America and Japan vie for access to Middle East oil. More missiles can be expected. The third world will be badly hit, being unable to afford imports. Agriculture is very dependent on oil. 7). But I expect that somehow a plateau of production, however volatile, will unfold around $30 a barrel. But the end of the plateau will soon come into sight. 8) It may have a fundamental impact on investment. Up til now, the investment community has believed in perpetual growth on which cycles are superimposed. The bottom of each cycle has been higher than its predecessor making capital appreciation the primary goal of investment. But the tensions of the oil shock and related events, including the colossal financial transfers to the Middle East, may create a new view. After the many years of growth we may then experience a new downward trend, however cyclic. Share prices may sink to more realistic levels as the main focus will be on yield not growth. Capital will be destroyed. 9) The plateau has to come to an end by around 2008 when Swing Share will have passed 50% and the Swing countries in the Middle East will be approaching their depletion midpoint too. Production will then start its inevitable long term decline at about 3% a year. Increasing shortages will develop, and agriculture and transport will be seriously affected. The global market will come to an end because of high transport costs. That is a scenario. There are of course many alternatives, but the range of possibility is limited given the resource constraints. These constraints are facts not scenarios. If by some miracle we could add 500 Gb of reserves – more than half as much as produced so far – it would delay peak by only ten years. One indisputable fact stands out. Discovery peaked 30 years ago. It takes no feat of intellect to conclude that we now face the corresponding peak of production.

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Oil Will Peak: 2010 All the evidence points to an oil peak by 2010 – peaking major producers, declining giant fields, and other contributing factors. The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) Some analysts have predicted that world oil extraction will peak in this decade. In 1999 Walter Youngquist and Richard Duncan, using production data from the 42 largest producing countries, estimated that peak would occur in 2007. A. M. Samsam Bakhtiari, of the National Iranian Oil Company, says peak is likely by 2006 or 2007, and will occur no later than 2008. ASPO projects regular oil peaking in 2005, and all oil peaking in 2006.42 Given all the foregoing evidence, these forecasts seem quite believable. To recapitulate: Depletion has become substantial and widespread among major producers, most of whom are past peak. Many of the giant fields supplying almost half our oil are showing signs of age and exhaustion. The recent production surge leans heavily on just a few post-peak producers, who themselves lean heavily on elderly giant fields. Several more major producing countries are likely to peak soon. Russia is a mature producer with serious problems, making sustained Russian output growth problematic. Discovery has collapsed while extraction is driven upward by exploding demand, implying earlier exhaustion of existing fields. Emerging producers and deepwater oil are not adequate to replace declining Persian Gulf producers. It is quite likely, then, that oil extraction will indeed peak by 2010. Given all the factors involved, dating it precisely is somewhat risky. Recently extraction hit a bumpy plateau, and “peak” may turn out to be the highest bump in a plateau which could continue, say, three to five years. And only after recording several years of decline will we know that we have gone through the peak. Peak does not mean that “we are about to run out of oil.” Extraction will continue for decades post-peak. What it does mean is that post-peak extraction will be dominated by physical limits and will therefore necessarily keep falling. After peak, instead of supply adjusting upward to meet demand, as it has so far, demand will have to adjust – downward – to meet supply.

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Oil Will Peak: 2010 Peak oil is coming before 2010 COLIN J. CAMPBELL and JEAN H. LAHERRÈRE 1998 have each worked in the oil industry for more than 40 years. After completing his Ph.D. in geology at the University of Oxford, Campbell worked for Texaco as an exploration geologist and then at Amoco as chief geologist for Ecuador. His decade-long study of global oil-production trends has led to two books and numerous papers. Laherrère’s early work on seismic refraction surveys contributed to the discovery of Africa’s largest oil field. At Total, a French oil company, he supervised exploration techniques worldwide. Both Campbell and Laherrère are currently associated with Petroconsultants in Geneva. ("The End of Cheap Oil")

In 1973 and 1979 a pair of sudden price increases rudely awakened the industrial world to its dependence on cheap crude oil. Prices first tripled in response to an Arab embargo and then nearly doubled again when Iran dethroned its Shah, sending the major economies sputtering into recession. Many analysts warned that these crises proved that the world would soon run out of oil. Yet they were wrong. dire predictions were emotional and political reactions; even at the time, oil experts knew that they had no scientific basis. Just a few years earlier oil explorers had discovered enormous new oil provinces on the north slope of Alaska and below the North Sea off the coast of Europe. By 1973 the world had consumed, according to many experts’ best estimates, only about one eighth of its endowment of readily accessible crude oil (so-called conventional oil). The five Middle Eastern members of the Organization of Petroleum Exporting Countries (OPEC) were able to hike prices not because oil was growing scarce but because they had managed to corner 36 percent of the market. Later, when demand sagged, and the flow of fresh Alaskan and North Sea oil weakened OPEC’s economic stranglehold, prices collapsed. The next oil crunch will not be so temporary. Our analysis of the discovery and production of oil fields around the world suggests that within the next decade, the supply of conventional oil will be unable to keep up with demand. This conclusion contradicts the picture one gets from oil industry reports, which boasted of 1,020 billion barrels of oil (Gbo) in "Proved" reserves at the start of 1998. Dividing that figure by the current production rate of about 23.6 Gbo a year might suggest that crude oil could remain plentiful and cheap for 43 more years—probably longer, because official charts show reserves growing.Unfortunately, this appraisal makes three critical errors. First, it relies on distorted estimates of reserves. A second mistake is to pretend that production will remain constant. Third and most important, conventional wisdom erroneously assumes that the last bucket of oil can be pumped from the ground just as quickly as the barrels of oil gushing from wells today. In fact, the rate at which any well—or any country—can produce oil always rises to a maximum and then, when about half the oil is gone, begins falling gradually back to zero. From an economic perspective, when the world runs completely out of oil is thus not directly relevant: what matters is when production begins to taper off. Beyond that point, prices will rise unless demand declines commensurately. Using several different techniques to estimate the current reserves of conventional oil and the amount still left to be discovered, we conclude that the decline will begin before 2010.

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Oil Will Peak: 2010 2010 starts the peak Ivanhoe 97 (LF, Founder of the M. King Hubbert Center for Petroleum Supply Studies at the Colorado School of Mines whose mission is to assemble, study, and disseminate global petroleum supply data. He was president of Novum Corp., Ojai, California, a registered geologist, geophysicist, engineer and oceanographer with 50 years domestic and international experience in petroleum exploration with various private and government oil companies. He was associated with Occidental Petroleum from 1968 to 1980 where he was senior advisor of worldwide evaluations of petroleum basins from 1974-80. On leaving Oxy, he moved to Santa Barbara and formed Novum, an international energy exploration consulting firm. Mr. Ivanhoe authored numerous papers on various technical subjects, including some 50 on the evaluation of foreign prospective basins and projections of future global oil supplies., “Get ready for another Oil Shock!” The Futurist, < http://dieoff.com/page90.htm >) By the year 2000, global population will be 50% greater than in 1975, with a corresponding increase in demand for crude oil. The industrializing countries (China, India, etc.) will soon become hard competitors with Western nations for world crude exports. It is reluctantly concluded from the USGS's global discovery statistics (Figure A) that the world's total oil production might peak about the year 2010, after which the normal decline of the world's oil fields will take over. By 2050, oil production will be a small fraction of today's bounty. The critical date is when global public demand will substantially exceed the available supply from the few Persian Gulf Moslem oil exporters. The permanent global oil shortage will begin when the world's oil demand exceeds global production--i.e., about 2010 if normal oil-fields decline occurs, or as early as 2000 if the world's key oil producer, Saudi Arabia, has serious political problems that curtail its exports. World oil production will thereafter continue to decline at a dwindling rate. This foreseeable energy/oil crisis will affect everyone. Governments will have the highest priorities for transportation fuels during an emergency. A sudden global crude oil shortage of 5% could bring back the gasoline lines of the 1970s--to the American public's surprise and dismay. But this time the oil shortage will be permanent. Thus the question is not whether but when the foreseeable permanent oil crunch will occur. This next paralyzing and permanent oil shock will not be solved by any redistribution patterns or by economic cleverness, because it will be a consequence of pending and inexorable depletion of the world's conventional crude oil supply. Few economists can bring themselves to accept that the global oil supply is geologically finite. The global price of oil after the supply crunch should follow the simplest economic law of supply and demand: There will be a major increase in crude oil and all other fuels' prices, accompanied by global hyperinflation, rationing, etc. After the associated economic implosion, many of the world's developed societies may look like today's Russia. The United States may be competing with China for every tanker of oil, with the Persian Gulf oil exporters preferring Chinese rockets to American paper dollars for their oil. The economic and social ramifications of the coming oil shock will require serious planning worldwide. The global oil shortage we now can foresee will differ from the 1973 and 1979 oil-price surges, which were the result of political moves by the exporting countries. Then, global buyers began searching immediately for oil supplies during the Iran-Iraq War, which produced the world's greatest-ever oil exploration effort, from 1979 to 1985. Unfortunately, their discovery rate was much lower than earlier, and few giant fields were found. The oil field "whales" had all been fished out.

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Oil Will Peak: 2010 Consensus of data proves 2010 is the crunch Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Maugeri's first argument is that since as early as 1919 there have been many predictions of imminent oil shortage that turned out to be incorrect. In Maugeri's words: “these cycles of hysteria followed by new bonanzas have continued to the present.” His implication is that today's forecasts of near-term oil supply constraint based on oil peaking calculations will prove equally wrong. Examination of past oil forecasts shows a more complex picture, however, than a simple view that ‘all past oil forecasts were wrong’. Oil has long been important, so it is not surprising that as particular regions went into decline there were concerns about the future supply. In the 1970s, in particular, there were widespread fears, based on the contemporary estimate of proved reserves, that the world oil resource would be depleted within about 30 years. But it was also well known in the 1970s that such fears were unrealistic, see the oil forecasts given in Table 1 (and see [6] for details). Proved reserves were known to report only very conservative ‘market-ready’ quantities of oil, and that the quantity to use instead was the amount of oil actually discovered, given typically by the ‘proved plus probable’ reserves. To this must be added the expected ‘reserves growth’ (known oil in existing fields that better technology was expected to access) plus the anticipated amount of oil in new fields then yet-to-find. Calculations of this type in the 1970s and 1980s showed that the expected size of this total global ‘recoverable-resource’ base of conventional oil was in the region of 2000 billion barrels (Gb), of which only about 400 Gb had been consumed by that date. Thus the 2000 Gb total was known to be able to support the anticipated growth in global production up to around the year 2000 before it would reach its anticipated resource-limited ‘mid-point’ peak. The figure of interest is the date of peak production, rather than the date when the current proved reserves will have been produced. In the event, oil production growth was constrained by the high prices of the late 1970s and early 1980s, so that the same estimate today for the size of the recoverable conventional oil resource base puts the global production peak at around 2010. Moreover, oil industry data show that global discovery of oil in new fields has been in decline since the mid-1960s [7]. For this reason, most estimates of the size of the recoverable resource base of conventional oil have changed remarkably little since the 1970s. This is because once discovery started to slow by the early 1970s it was possible to estimate with reasonable accuracy the amount of oil likely to be found in future, and hence the total size of the recoverable resource base. Today, we now know where much of the oil anticipated back in the 1970s actually lies, but the recent history of discovery has only underlined the falling trend in the volume of oil from new discoveries that started in the 1960s. In summary, those oil forecasts from the 1970s to the present day that were based on the anticipated size of the total recoverable resource base of conventional oil have been remarkably consistent (see Table 1). Taking the 1980s demand reduction into account, these forecasts have all indicated that the resource-limited peak of global conventional oil production would occur at around 2010, give-or-take about 5 years.

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Oil Will Peak: 10-15 Years Oil will peak within a 10-15 year window Hindu Business Line, 2008 (S. Balakrishnan, “Peak Oil’s Scary Prospects,” July 22, 2008, < http://www.thehindubusinessline.com/2008/07/23/stories/2008072351820600.htm >) What goes up must come down, goes the saying. But the price of oil has defied the law of gravity, at least thus far. From single digits in the late nineties, oil has climbed to close to $150 a barrel in recent days. At around $70 about a year ago, it actually was cheap. Not that the price doubling was linear. It took place with a series of alternate up and down moves. But over time, the trend was unmistakeably much higher. So here we are, well into sustaining three digit prices. Is there any hope that oil will moderate and come down to more earthy affordable levels? Matthew Simmons, a US oil expert, thinks there is no chance. He is the author of an extraordinarily well-researched book Twilight in the Desert: The Coming Oil Shock and the World Economy, that caused shock waves in the energy world. He has meticulously gathered data on the world’s biggest oilfields and finds just over a hundred account for half the world’s production. These are being overexploited to maintain current production levels. Simmons sees production levelling off in the near future — he estimates a 10 to 15- year window. If consumption grows at the present rate, there just will not be anywhere near enough oil and the shortfall between potential demand and supply could be as high as 50 per cent with all the frightening implications it has for price. Simmons’ case for ‘peak oil’ — the phrase describing production reaching its limit and declining thereafter — has support from analysts in Goldman Sachs, who first predicted the price ‘super spike’ to $100 and then $150.

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Oil Peaking - Practical Peak Oil peaking now – even if they disprove geologic peak, a PRACTICAL peak will trigger impacts The LA Times 2008 (Elizabeth Douglass “Why the oil crunch may grow worse, “ < http://www.latimes.com/business/la-fi-peakoil222008jul22,0,3028615,print.story >) With gasoline and oil costing once-unthinkable barrels of cash, the notion that things in our petroleum-addicted world soon will get worse -- maybe much, much worse -- is spreading fast. Fear pushed oil to $131.04 a barrel in New York futures trading Monday, closing $2.16 higher after tumbling more than $16 last week. Supply concerns drove the increase as the market fretted about the potential for Tropical Storm Dolly to harm Gulf of Mexico oil operations. But behind today's oil mania lies a deeper dread: that the world has found all the easy-to-reach oil, and the daily supply of the essential black goo will fall further and further behind escalating global demand. "As much as you're uncomfortable with today's oil prices, these are going to be the good old days," oil expert Robert L. Hirsch told a recent Santa Barbara gathering of policymakers and environmentalists. "We're talking about pain here that is unimaginable." The day-to-day cost of oil reflects a sharply weaker dollar, market speculation and geopolitical events such as unrest in Nigeria and other oil-exporting countries. At the same time, producers are barely slaking the world's energy thirst, and the market increasingly is fixated on the long-term supply picture. Adding to the angst, several industry heavyweights caution that aboveground issues -- including instability among oil-producing nations and shortages of drilling rigs and engineers -- threaten to impose a "practical peak" on oil output that could be just as wrenching as the geologic peak envisioned by Hirsch and others. "There are more and more people who believe that oil supply prospects are not very optimistic," said Fatih Birol, chief economist at the Paris-based International Energy Agency, a watchdog for industrialized nations. Some argue that drilling in off-limits areas would buy the U.S. time in the race to develop oil substitutes, cut imports and ease economic pain. To that end, President Bush on July 14 lifted a White House ban on new offshore drilling for oil and natural gas and urged lawmakers to rescind the congressional ban. Still, Birol counts himself among those who believe the world has reached at least "a peak of easily accessible oil." That alone is cause for worry, because many economies are built around the assumption that oil would continue to be cheap and plentiful. Birol is leading a groundbreaking reassessment of the worldwide outlook for oil supplies, investment and production that many believe will deliver bad news when it is released in November. "We are very concerned about future oil supplies," he said. "We may have difficult days to come in the oil markets." In five years, demand for oil may exceed 94 million barrels a day and continue rising, spurred by growth in China and India, the International Energy Agency estimates.

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Oil Peaking -Middle East Middle East oil production will collapse – their ev’s based on massive overestimates from the Saudis Kuhlman 05 (Alex, received his Master's degree in Economics from the University of Amsterdam, as an Economist and a major fossil fuel consumer, he has taken a very active interest in Peak Oil and has written many articles, featured in a Peak Oil documentary and sporadically lectures at colleges & universities, < http://www.oildecline.com/>, accessed 7/22/08, [AZ]) With more than fifty oil-producing countries now in decline, focus on the oil-rich Middle East has sharpened dramatically. Countries of the Middle East have traditionally been able to relieve tight oil markets by increasing production, but, as the this region nears its own oil peak, any relief it can provide is limited and temporary. Saudi Arabia is a major oil producer with 73% of all incremental world demand being met by this country. The worrying fact is that 90% of their production comes from only 5 mega fields (one is the Ghawar field which is the biggest ever discovered), and are all at risk of unplanned production collapse. In 2004 there were warning signs of production falling into depletion. For years, Aramco, the Saudi national company, use secondary recovery techniques by injecting enormous amounts of seawater (7 million barrels daily) into their biggest field to boost production. These methods have only temporary effects, and lead to accelerated rates of depletion in the future. Matt Simmons, long time energy analyst who studied energy for 34 years, in his book “Twilight in the Desert” effectively confronts the complacent belief that there are ample oil reserves in Saudi Arabia and has created a compelling case that Saudi Arabia production will soon reach a peak, after which its production will decline and the world will be confronted with a catastrophic oil shortage. The factual basis of the book is over 200 technical papers published over the last 20 years which individually detail problems with particular wells or particular fields, but which collectively demonstrate that the entire Saudi oil system is “old and fraying” with reserves deliberately vastly overestimated.

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Oil Peaking – Russia Russian output’s crashing – it can’t pick up the slack from other peaks The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) Fourth, Russia is a main driver of the 2003-2004 output surge, but whether Russia*s output will keep growing this briskly is problematic. The energy analysis firm Wood Mackenzie forecasts that – given enough extraction and transportation investment – output could reach 12 mb/d by 2010. Russia apparently does have abundant oil, perhaps as much as 100-120 Gb, perhaps 60- 70 Gb of it proved reserves, mostly in Western Siberia.20 There are, however, serious difficulties. Russia is a mature region, and for most of the 20th Century was governed by the Soviets, who stressed maximizing short-term output to the detriment of reservoir management, drilling too many wells and flooding fields with water. Consequently, Russian fields are plagued with declining oil flows per well, falling reservoir pressure, and high water cuts and operating costs. Soviet reservoir mismanagement badly damaged several fields, including the Siberian giant Samotlor, which once yielded over 3,500 kb/d but as of 2001 produced just 319 kb/d. As of 2000, according to a study by Aton Capital Group, a Russian investment bank, Russia*s average daily well flow was just 55 barrels, and average water cut was 82 percent. Among major Russian oil companies, LUKoil, for example, had an oil flow per well of 64 barrels, and a 77 percent water cut; Yukos had a flow of 80 barrels per well and a 77 percent water cut; TNK a 70 barrel flow per well and a 91 percent water cut. Samotlor*s water cut in 2000 was 94 percent. Moreover, Russian average reserve recovery rates have fallen from almost 50 percent in 1965 to 35 percent in 2000.21 Recent developments have been mixed. Water cuts at some fields were higher by end-2002; Samotlor*s hit 94.2 percent. Russia*s oil companies are working hard, however, to improve output per well and reduce water cut by decommissioning some old, watery fields, enhancing recovery at others, and drilling new wells, which have higher well flows and low water cuts. LUKoil trimmed overall water cut from 76.9 percent in 2001 to 76.6 percent in 2003. Likewise, Sibneft raised its average daily flow at active production wells from 88 barrels in 2000 to 140 in 2002, and reduced water cut from 66.8percent to 61.1 percent. These encouraging results have, of course, required large investments in production technology.22 This is the crux of the matter. Wood Mackenzie*s 12 mb/d peak in 2010 assumes that all needed investment will be forthcoming. This means estimated capital expenditure of about $11-$13 billion a year in 2005-2013 for exploration and production, and total capital expenditure of $214 billion ($180 billion in 2003 dollars) in 2003-2020. Analysis of Russian firms* financial statements and published plans indicates that in the near term actual capital spending could be $4-6 billion less per year than the amount needed to push extraction to this level. Wood Mackenzie*s more realistic “base case” forecast, factoring in constraints on investment and other limitations, sees output peaking at 10.4 mb/d in 2010. This is quite near the 10.0 mb/d projected by ASPO, a supposedly pessimistic group. And it entails a projected increase from 2004*s projected 9.2 mb/d of +1.2 rnb/d over six years, which implies slower annual increases than those seen recently (see Table 3).23 Recently, prominent Russian officials have said that output will grow more slowly or even drop. Sergei Oganesyan, chairman of Russia*s Federal Energy Agency, said in October that daily output could hit about 10 million barrels in a year or two, “But I think that*s the maximum possible for at least a decade.” On November 9, Yuri Shafranik, head of the Russian Union of Oil and Gas Producers, said that Russia was now at maximum possible output, that only further oil price increases could increase it, and that since these are unlikely, production “will be automatically limited in two years* time.” And LUKoil has announced an output target for 2005 implying just four percent growth from 2004 levels, far below growth in recent years.24 It seems most likely, then, that Russian output will indeed grow for a few years, although more slowly, but then level off or perhaps decline. This implies that Russia will have trouble replacing output declines elsewhere, let alone keeping world output growing.

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Oil will Peak-Hubbert Curve Proves Oil production has peaked globally- Hubbert curve proves Campbell and Laherrere 1998 (Colin J. and Jean H, petroleum geologist and petroleum engineer, “The end of cheap oil,” Scientific American: Ebsco/ak) Predicting when oil production will stop rising is relatively straightforward once one has a good estimate of how much oil there is left to produce. We simply apply a refinement of a technique first published in 1956 by M. King Hubbert. Hubbert observed that in any large region, unrestrained extraction of a finite resource rises along a bell-shaped curve that peaks when about half the resource is gone. To demonstrate his theory, Hubbert fitted a bell curve to production statistics and projected that crude oil production in the lower 48 U.S. states would rise for 13 more years, then crest in 1969, give or take a year. He was right: production peaked in 1970 and has continued to follow Hubbert curves with only minor deviations. The flow of oil from several other regions, such as the former Soviet Union and the collection of all oil producers outside the Middle East, also follows Hubbert curves quite faithfully. The global picture is more complicated, because the Middle East members of OPEC deliberately reined back their oil exports in the 1970s, while other nations continued producing at full capacity. Our analysis reveals that a number of the largest producers, including Norway and the U.K., will reach their peaks around the turn of the millennium unless they sharply curtail production. By 2002 or so the world will rely on Middle East nations, particularly five near the Persian Gulf (Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates), to fill in the gap between dwindling supply and growing demand. But once approximately 900 Gbo have been consumed, production must soon begin to fall.

The Hubbert peak is inevitable and coming soon Goodstein 04 (David, physicist, educator, Vice-provost of the California Institute of Technology, and professor of physics and applied physics, Professor of Physics and Applied Physics at Caltech, where he has been on the faculty for more than 35 years, named the Frank J. Gilloon Distinguished Teaching and Service Professor, has served on and chaired numerous scientific and academic panels, including the National Advisory Committee to the Mathematical and Physical Sciences Directorate of the National Science Foundations a founding member of the Board of Directors of the California Council on Science and Technology, in articles, speeches and colloquia he has addressed conduct and misconduct in science, the end of exponential growth of the scientific enterprise, and issues related to fossil fuel and the climate of Planet Earth, Out of Gas: The End of the Age of Oil, p.17, 2004, [AZ]) Recently, a number of oil geologists have applied Hubbert’s techniques to the oil supply of the entire world. They have each used different data, different assumptions, and somewhat different methods, but their answers have been remarkably similar. The worldwide Hubbert peak, they say, will occur very soon—most probably within this decade. There are highly respected geologists who disagree with that assessment, and the data on which it is based are subject to dispute. Nevertheless, Hubbert’s followers have succeeded in making a crucial point: The worldwide supply of oil, as of any mineral resource, will rise from zero to a peak and after that will decline forever. Some say that the world has enough oil to last for another forty years or more, but that view is almost surely mistaken. The peak, which will occur when we’ve used half the oil nature made for us (see chapter 1), will come far sooner than that. When the peak occurs, increasing demand will meet decreasing supply, possibly with disastrous results. We had a foretaste of the consequences in 1973, when some Middle Eastern nations took advantage of declining U.S. supplies and created a temporary, artificial shortage. The immediate result was long lines at the gas stations, accompanied by panic and despair for the future of the American way of life. After the worldwide Hubbert’s peak, the shortage will not be artificial and it will not be temporary.

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Oil Will Peak-No More Oil Left Peak oil is approaching. Oil company and Saudi behavior proves Technology Review 2k5 ("The End of Oil?" http://www.technologyreview.com/Energy/14178/?a=f) If the actions -- rather than the words -- of the oil business's major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built. If those clues weren't enough, here's a news item that came out of Saudi Arabia on March 6, 2003. Though it went largely unremarked, the kingdom's announcement that it could not produce more oil in response to the Iraq War was of historic importance. As Kenneth Deffeyes notes in Beyond Oil: The View from Hubbert's Peak, it meant that as of 2003, there was no major underutilized oil source left on the planet. Even as established oil fields have reached their maximum production capacity, there has been disappointing production from new fields. Globally, according to some geologists' estimates, we have discovered 94 percent of all available oil.

Oil will peak soon – analysis of each major potential source and oil company behavior proves The Social Contract 07 (Lindsey Grant, a writer on population and the environment and a former Deputy Assistant Secretary of State for Environment and Population Affairs, Fall, “Peak Oil Prospects - Are We There Yet?,” , accessed 7/20/08, [AZ]) The resource is finite, and production in any given field (and in the world at large) will peak when the readily available oil has been extracted. The petroleum geologists have studied the world pretty carefully by now and found no evidence that there is enough potentially exploitable oil to replace the fields now running down. The problem of course is the astonishing level of demand. If somebody discovered a one billion barrel field tomorrow, it would provide only 13 days’ consumption at the current rate, and less than that if demand keeps growing. And it might take a decade to bring the hypothetical field into full production. A look at the major oil producers underlies the threat to present oil output levels. Of the 21 major producers—those countries that have achieved an output of more than one mb/d—10 have already passed their peak, some of them a generation or more ago. Others may be close behind. Saudi Arabia is heavily dependent on the huge but old Ghawar field. That field is undergoing emergency resuscitation, but several experts have expressed doubts that it can sustain current production very long. The second largest field, and a major supplier to the United States, is Mexico’s Cantarell field. It is in sharp decline, following a worst-case scenario that could reduce its output by 75 percent from 2004 to 2008.6 Future production in Canada and Venezuela depends on success in extracting petroleum from oil sands and heavy tars. Those resources are huge but, at best, they have low net energy yields. Only the richest of them justify mining, because the rest would require more energy inputs than they would yield—even disregarding their demands for water and their serious impacts on climate and the environment. Optimists’ hopes are pinned on (1) Central Asia, but already the oil majors face serious technical and political problems in trying to develop the Kashagan field in the Caspian Sea and other fields in Kazakhstan; (2) the Atlantic off Africa, where political turmoil in Nigeria has held production down; or (3) the Arctic, where there are dreams of exploitable resources as global warming melts the pack ice. Those are slim hopes, compared to the declines I have cited. The big oil companies are behaving as if they expect a decline. They haven’t built a new refinery in the U.S. since the 1970s, presumably because they see no assurance of rising oil supplies over the several decades it takes to build and amortize a refinery. They are using current profits to buy back their own stocks, which means that they don’t see profitable investment opportunities for that money in the industry. Such behavior of course accelerates the decline of future production. To compound that problem, producers such as Mexico and Venezuela are using their oil profits to underwrite their national budgets, rather than reinvesting them in oil production. We have been living in an era when rising demand chased a rising supply. We are now entering the much more dangerous era of rising demand chasing declining supplies. If we do indeed manage another peak, it will be very soon, before the resource is further depleted. And it will be achieved only by pumping the existing fields faster, which will very soon lead to an even steeper decline. Economists were predicting $25 oil. Now some of them warn of oil at $100 per barrel. I have news for them: that is just the start of the problem.

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Oil will Peak: No More Oil Left Peak Oil is coming soon- we're consuming oil faster then we can retrieve more CNN Money 2005 ("Lawmakers: Will We Run Out of Oil," http://money.cnn.com/2005/12/07/markets/peak_oil/index.htm) The world's oil supply won't run out tomorrow, but lawmakers worry so much about the possibility that they're dealing with it today. A House energy subcommittee met Wednesday morning to learn more about the so-called peak oil movement, which claims that by 2008 humans will have extracted half the earth's oil. In other words, we're using oil faster than we can ever hope to retrieve it. "We have all been enjoying the greatest party the world has ever seen: the great oil party," said Kjell Aleklett, president of the Association for the Study of Peak Oil, or ASPO, and a physics professor at Uppsala University in Sweden. Aleklett appeared as a key witness at the hearing. The professor said in a paper last year, "After the climax comes the decline, when we have to sober up and face the fact that the party is coming to an end." The hangover would mean not only the end of low oil prices but also a slowdown in world economic growth. The morning after could also lead to social and political unrest as many countries try to keep the party going even as oil disappears. While there is debate over when this peak will occur, said Rep. Wayne Gilchrest, R-Md., everyone can agree on one thing. "At some point in this century, oil production will peak and then decline," Gilchrest testified. "But more uncertainty calls for more caution, not less. And in this case, caution means finding alternatives." Witnesses, including Robert Hirsch, senior energy program advisor at Science Applications International Corp., and Robert Esser, a director and senior consultant at Cambridge Energy Research Associates, also testified before the Subcommittee on Energy and Air Quality in an attempt to quantify the true threat of peak oil. Reason for concern People have predicted the end of the oil age since the first oil well was drilled in the mid-19th century, but as oil production increased in the 1960s the theory was ridiculed. But recent events -- especially light crude's recent jump to a record intraday high at $70.85 a barrel in the wake of Hurricane Katrina -- have brought ASPO's 24 geologists, physicists and former oil-sector employees into the spotlight.

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Oil will Peak: No More Oil Left We’ve peaked. We’re in a short term crisis from geologic limits The Independent 08 (John Murray, author of The Last Oil Shock, 5/25, “Oil: A global crisis,” < http://www.independent.co.uk/environment/green-living/oil-a-global-crisis-834023.html>, accessed 7/22/08, [AZ]) The invasion of Iraq by Britain and the US has trebled the price of oil, according to a leading expert, costing the world a staggering $6 trillion in higher energy prices alone. The oil economist Dr Mamdouh Salameh, who advises both the World Bank and the UN Industrial Development Organisation (Unido), told The Independent on Sunday that the price of oil would now be no more than $40 a barrel, less than a third of the record $135 a barrel reached last week, if it had not been for the Iraq war. He spoke after oil prices set a new record on 13 consecutive days over the past two weeks. They have now multiplied sixfold since 2002, compared with the fourfold increase of the 1973 and 1974 "oil shock" that ended the world's long postwar boom. Goldman Sachs predicted last week that the price could rise to an unprecedented $200 a barrel over the next year, and the world is coming to terms with the idea that the age of cheap oil has ended, with far-reaching repercussions on their activities. Dr Salameh, director of the UK-based Oil Market Consultancy Service, and an authority on Iraq's oil, said it is the only one of the world's biggest producing countries with enough reserves substantially to increase its flow. Production in eight of the others – the US, Canada, Iran, Indonesia, Russia, Britain, Norway and Mexico – has peaked, he says, while China and Saudia Arabia, the remaining two, are nearing the point at of decline. Before the war, Saddam Hussein's regime pumped some 3.5 million barrels of oil a day, but this had now fallen to just two million barrels. Dr Salameh told the all-party parliamentary group on peak oil last month that Iraq had offered the United States a deal, three years before the war, that would have opened up 10 new giant oil fields on "generous" terms in return for the lifting of sanctions. "This would certainly have prevented the steep rise of the oil price," he said. "But the US had a different idea. It planned to occupy Iraq and annex its oil." Chris Skrebowski, the editor of Petroleum Review, said: "There are many ifs in the world oil market. This is a very big one, but there are others. If there had been a civil war in Iraq, even less oil would have been produced." David Strahan: What happens next? The expert's view At just under 86 million barrels per day, global oil production has, essentially, stagnated since 2005, despite soaring demand, suggesting that production has already reached its geological limits, or "peak oil". Recession in the West may not provide relief on prices. There is increasing demand from countries such as China, Russia and the Opec countries, whose consumers are cushioned against rising prices by heavy subsidies. The future could unfold in a number of ways: Oil price collapses Fuel subsidies could suddenly be scrapped, dousing demand. Cost pressures have forced Malaysia, Indonesia and Taiwan to cut them, but China is hardly strapped for cash. Opec producers are under no pressure to abolish subsidies; as the oil price rises they get richer. Prospect: very unlikely. Peace could break out in Iraq, the long-disputed oil law agreed, and international oil companies start work on the world's largest collection of untapped oil fields. Prospect: vanishingly unlikely. Oil price stabilises or moderates Deep recession in the West might cut oil consumption enough to offset growth in the developing world and Opec, or even engulf them too, softening prices. Prospect: unlikely in the short term. Oil price soars Russian oil output has gone into decline; Saudi Arabia has shelved plans to expand production capacity, and advisers to the Nigerian government predict its output will fall by 30 per cent by 2015. More news like this, expect oil at $200 a barrel. Prospect: likely. Big oil producers will increasingly divert exports for home consumption. Opec, Russian and Mexican exports expected to fall, pushing oil to $200 by 2012. Prospect: highly likely.

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Oil will Peak: No more oil left World production depends on the giant oilfields and they’re already falling apart The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) Another important element in the case for an imminent oil peak is that the world’s oil supply leans heavily on a small number of very large oil fields, and that many of them are faltering. Drawing on months of research, Houston-based energy investment banker Matthew Simmons has shown that 116 oilfields – just three percent of the world’s roughly 4,000 producing fields – are socalled “giant” fields extracting 100,000 barrels or more per day, and that in 2000 these giants supplied 47.6 percent of the world crude oil output. The fourteen largest giants, each producing 500,000 or more barrels daily, supplied 20 percent of the world’s crude oil, and the four largest – in descending order: Ghawar (Saudi Arabia), Cantarell (Mexico), Burgan (Kuwait) and Daqing (China) – furnished about 12 percent. Persian Gulf nations obtain the overwhelming majority of their oil from giant fields. In 2000, giants accounted for 92 percent of Saudi Arabia*s oil, 51 percent of Iran*s, 96 percent of Iraq*s, 95 percent of the United Arab Emirates*, and 89 percent of Kuwait*s. Altogether, 36 giant fields in the Persian Gulf supplied about 83 percent of the region*s crude oil and 23.7 percent of the world*s.7 Most of the world*s giants are decades old, and the largest, producing the most oil, are usually the oldest, since larger fields tend to be found first. After being drained for decades, many giants are getting tired. Output in several has declined, and many are losing pressure in their reservoirs, making oil extraction harder and costlier (in energy terms as well as dollar terms). Many are now producing mostly water, either because underground water is seeping into them, or because the concerns developing them are employing an extraction technique known as waterflooding: injecting water into the reservoir to maintain pressure and force more oil toward the wellbores (drilled well shafts) so it can be extracted. This is necessary, because only a fraction of the original oil in place in a field is recoverable. As the field ages and reservoir pressure drops, “primary recovery” (using natural pressure or pumps) no longer works, and producers turn to “secondary recovery” – injecting water (waterflooding) or natural gas. Beyond these is “tertiary recovery” or “enhanced recovery,” in which steam, solvent, liquid gas (e.g., butane or propane), carbon dioxide, or even fire is put into the reservoir. Other improved recovery methods, which became prominent in recent years, are directional and horizontal drilling: well shafts are drilled at an angle from the vertical, or even horizontally, underground. All these techniques can substantially raise the share of oil recovered and are widely used in America, where they account for over 60 percent of daily output.8 Unfortunately, a high “water cut” (share of water in the extracted liquid), whether due to natural causes or secondary recovery, is often a serious problem. Unless a sufficiently high oil price and a sufficiently large daily oil flow make it economical to keep a watery field going, when the water cut is very high, further extraction is often pointless. Moreover, a watery field has high production costs. Water is heavy and costly to pump out, and once extracted must be separated from the oil and disposed of – either reinjected if being used for water flood, or dumped into special disposal wells drilled to hold it. This extra work implies very low net energy yields for very watery fields .9 Space permits only a survey of some of the biggest giants, but even this is disquieting. Discovered in 1948 and operating since 1951 (fifty-three years!), Saudi Arabia*s Ghawar field, the world*s largest, produces about 4,500 kb/d, over half of Saudi Arabia*s daily output, and about 5.5 percent of world output. To maintain pressure in Ghawar*s reservoir, the Saudis must inject seven million barrels of seawater daily. The water cut is at least 30 percent, some sources put it at 55 percent, and it may be even higher. A Saudi presentation in London in February 2004 indicates that Ghawar*s total output may be around 80 billion barrels (Gb) by 2010, and that by that time water cut will be 80 percent. According to an engineer who has worked at Ghawar, output peaked in 1998, and the field is depleting by 1.1-1.5 percent a year, while water cut is now about 60 percent and rising by three percentage points yearly. By about 2017, output may be down to about 1.9 million barrels a day, with maybe 900 kb/d of it from enhanced recovery – very worthwhile, but far less than Ghawar*s current yield.10 Given Ghawar*s importance for world supply, if Ghawar really is in trouble, world oil peak is likely. Saudi Arabia*s seven other major fields are also extremely old: Abqaiq (discovered in 1940), Safaniyah (1951), Bern (1964), Zuluf (1965), Marjan (1967), and Shayba (1975). All of Saudi Arabia*s five largest fields, which have produced over 90 percent of its oil, rely on water flood to maintain pressure. According to Simmons, Abqaiq peaked in 1973 with oil output exceeding one million barrels a day (mb/d) and Bern peaked in 1979 at 900 kb/d.11 Indeed, Simmons created an uproar this year when he publicly questioned Saudi Arabia*s ability to sustain high output levels indefinitely. [See the sidebar on page 146 referring to

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Simmons’ newest book.] He cited substantial water cut at Ghawar and Saudi Arabia*s dependence on a few very large, old fields for almost all its output. Moreover, he added, in 1975 the American geologists who were then running Aramco, Saudi*s national oil company, estimated Ghawar*s total reserves at 60 Gb, whereas the Saudis now claim 55 Gb already produced plus 125 Gb remaining reserves. If the old estimates are right, which they may well be, Simmons argues, then major declines in Saudi output are likely soon, perhaps in the next six months to three years. Aramco has, understandably, dismissed these claims, and even maintains that Saudi Arabia could produce as much as 15 mb/d for fifty years. However, Sadad al-Husseinyi, until recently Aramco*s head of exploration and production, warns that such high levels of output may be sustainable for only a few years and that Saudi Arabia*s “excess capacity is no longer there.” And oil economist Mamdouh Salameh, a consultant to the World Bank, points out that Saudi Arabia now drills only horizontal wells, adding about 200 horizontal wells a year, giving the appearance of a country “working hard just to maintain production,” rather than one which is capable of “simply opening the tap when more production is needed.”12 It looks like Simmons is on to something. Mexico*s Cantarell field, the world*s second largest, found in 1976, started producing in 1979. By 1996 Cantarell was declining due to pressure loss. The stateowned oil company, Petróleos Mexicanos (Pemex), decided to boost extraction by injecting nitrogen, and by 2002 output was at 1,851 kb/d, more than double 1995*s 906 kb/d. Pemex has disclosed that it had expected Cantarell*s output to start declining in 2003, and now expects it to begin dropping in 2006, by 14 percent a year, perhaps as much as a million barrels a day by 2008.13 The exponential function implies that five years decline at 14 percent will cut Cantarell*s annual output in half. China depends heavily on four aging giants – Daqing, Shengli. Liaohe, and Xinjiang. These accounted for 2,055 kb/d in 2000, or about 63 percent of China*s total crude oil extraction that year, and 1,975 kb/d, or about 58 percent of the total, in 2003. Discovered in 1961 and producing since 1964, Shengli has a 90 percent water cut and has been producing about 519 kb/d of oil for the past few years. Daqing, the world*s fourth largest field, was found in 1959, began producing in 1963, and was producing a million barrels a day by 1976. Its annual extraction fell from 1,133.9 kb/d in 1998 to 985.3 kb/d in 2003, while the share of its output from enhanced recovery rose from 13.7 percent to 25.1 percent, and its water cut is high and rising, from 86.2 percent in 2000 to 88.4 percent 2003: signs that the field is faltering. Liaohe*s water cut is over 72 percent, and Xinjiang*s rose from 68.5 percent in 2000 to 71.4 percent in 2003.14 Clearly, China*s giants are going downhill. Some 59 percent of Venezuela*s output in 2000 was from giant fields. Venezuela contains four of the world*s oldest giants – Laqunillas, its largest, found in 1925; Bachaquero, found in 1930; Tia Juana, discovered in 1962; and Cabimas, found in 1917 – which together produced over 850,000 barrels a day in 2000, almost a third of total output. In 1971 they yielded over two million barrels a day, so these four fields are declining. In 1999, a Venezuelan oil executive observed that Venezuela must increase extraction by 800,000 barrels a day merely to maintain it at 2.75-2.8 mb/d.15 Indeed, decline is widespread among the largest giants. Simmons*s giant fields study reveals that of the world*s 20 largest fields, each producing 300 kb/d or more in 2000, 11 were past peak as of that year. There may have been more, because Simmons did not have peak output estimates available for ten of them. These 20 giants extracted 16,526 kb/d, or about 24 percent of world crude oil extraction in 2000; those past peak extracted 11 ,578 kb/d, or 70 percent of these giants* output, and 16.9 percent of world supply. Of the world*s fourteen largest, nine were past peak.16 Since 2000, three more major producing countries have peaked (Table 2), and the magnitude and incidence of depletion among major producers has exploded (Table 4). Given these developments, and the prominent role giants play in supply, it is virtually certain that more giant fields have peaked and gone into decline. Put another way, the keystone of the oil supply arch is beginning to crumble.

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Oil Will Peak: Demand Spike Demand spike pushing up the peak oil timeframe The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) An equally crucial development is that demand for oil is both huge and soaring, driven by explosive growth in Asia. In 1993, according to BP, world oil consumption was 66.7 mb/d (24.3 Gb); by 2003 it had reached 78.1 mb/d (28.5 Gb). In that period America’s consumption, the world*s largest, rose from 17.2 rnb/d to 20.1 mb/d, while China*s more than doubled, from 2.9 mb/d to almost 6 mb/d, making China the world*s second largest oil consumer. India is now the sixth largest; its consumption rose from 1.3 mb/d to 2.4 rnb/d. Importantly, demand growth is accelerating. Per BP data, from 1993 to 2003 annual consumption grew an average of 1.1 nib/d. The International Energy Agency puts demand this year at 82.4 mb/d (30.1 Gb), up 2.7 mb/d (3.4 percent) from its 2003 figure. and forecasts 83.85 mb/d (30.6 Gb) for 2005, up 1.5 mb/d (1.8 percent) from 2004. Demand is likely to keep surging. Indeed, the World Markets Research Centre points out that if demand keeps rising at 1.8 percent a year, supply must rise to about 100 mb/d by 20l5.37 Where will all this additional oil come from? Taken together with a declining discovery trend, exploding demand means that the extraction-discovery gap will keep growing. This means that rapidly rising demand must be met mainly by accelerating drainage of fields which are already producing, driving them toward earlier peaks and faster depletion, while less and less new oil, from smaller and harder to extract sources, comes on stream to compensate. Now, common sense would suggest that the more rapidly the abundant, easily accessed share of a finite resource is removed, the sooner extraction will start dropping, because what*s left is both present in smaller lots and harder to get. This implies that the combination of accelerating demand growth and declining discovery will push extraction into peaking sooner rather than later.

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Alternative Energy Key to Transition Alternative fuels key to surviving the transition The Economist 08 (6/19, “The future of energy,” , accessed 7/22/08, [AZ]) Since the industrial revolution 200 years ago, mankind has depended on fossil fuel. The notion that this might change is hard to contemplate. Greens may hector. Consciences may nag. The central heating's thermostat may turn down a notch or two. A less thirsty car may sit in the drive. But actually stop using the stuff? Impossible to imagine: surely there isn't a serious alternative? Such a failure of imagination has been at the heart of the debate about climate change. The green message—use less energy—is not going to solve the problem unless economic growth stops at the same time. If it does not (and it won't), any efficiency saving will soon be eaten up by higher consumption per head. Even the hair-shirt option, then, will bring only short-term relief. And when a dire prophecy from environmentalism's jeremiad looks as if it is coming true, as the price of petroleum rises through the roof and the idea that oil might run out is no longer whispered in corners but openly discussed, there is a temptation to believe that the end of the world is, indeed, nigh. Not everyone, however, is so pessimistic. For, in the imaginations of a coterie of physicists, biologists and engineers, an alternative world is taking shape. As the special report in this issue describes, plans for the end of the fossil-fuel economy are now being laid and they do not involve much self-flagellation. Instead of bullying and scaring people, the prophets of energy technology are attempting to seduce them. They promise a world where, at one level, things will have changed beyond recognition, but at another will have stayed comfortably the same, and may even have got better. This time it's serious Alternative energy sounds like a cop-out. Windmills and solar cells hardly seem like ways of producing enough electricity to power a busy, self-interested world, as furnaces and steam-turbines now do. Battery-powered cars, meanwhile, are slightly comic: more like milk-floats than Maseratis. But the proponents of the new alternatives are serious. Though many are interested in environmental benefits, their main motive is money. They are investing their cash in ideas that they think will make them large amounts more. And for the alternatives to do that, they need to be both as cheap as (or cheaper than) and as easy to use as (or easier than) what they are replacing. For oil replacements, cheap suddenly looks less of a problem. The biofuels or batteries that will power cars in the alternative future should beat petrol at today's prices. Of course, today's prices are not tomorrow's. The price of oil may fall; but so will the price of biofuels, as innovation improves crops, manufacturing processes and fuels. Electrical energy, meanwhile, will remain cheaper than petrol energy in almost any foreseeable future, and tomorrow's electric cars will be as easy to fill with juice from a socket as today's are with petrol from a pump. Unlike cars powered by hydrogen fuel cells, of the sort launched by Honda this week, battery cars do not need new pipes to deliver their energy. The existing grid, tweaked and smartened to make better use of its power stations, should be infrastructure enough. What matters is the nature of those power stations. The price is right They, too, are more and more likely to be alternative. Wind power is taking on natural gas, which has risen in price in sympathy with oil. Wind is closing in on the price of coal, as well. Solar energy is a few years behind, but the most modern systems already promise wind-like prices. Indeed, both industries are so successful that manufacturers cannot keep up, and supply bottlenecks are forcing prices higher than they otherwise would be. It would help if coal—the cheapest fuel for making electricity—were taxed to pay for the climate-changing effects of the carbon dioxide produced when it burns, but even without such a tax, some ambitious entrepreneurs are already talking of alternatives that are cheaper than coal. Older, more cynical hands may find this disturbingly familiar. The last time such alternatives were widely discussed was during the early 1970s. Then, too, a spike in the price of oil coincided with a fear that natural limits to supply were close. The newspapers were full of articles on solar power, fusion and converting the economy to run on fuel cells and hydrogen. Of course, there was no geological shortage of oil, just a politically manipulated one. Nor is there a geological shortage this time round. But that does not matter, for there are two differences between then and now. The first is that this price rise is driven by demand. More energy is needed all round. That gives alternatives a real opening. The second is that 35 years have winnowed the technological wheat from the chaff. Few believe in fusion now, though uranium-powered fission reactors may be coming back into fashion. And, despite Honda's launch, the idea of a hydrogen economy is also fading fast. Thirty-five years of improvements have, however, made wind, solar power and high-tech batteries attractive. As these alternatives start to roll out in earnest, their rise, optimists hope, will become inexorable. Economies of scale will develop and armies of engineers will tweak them to make them better and cheaper still. Some, indeed, think alternative energy will be the basis of a boom bigger than information technology. Whether that boom will happen quickly enough to stop the concentration of carbon dioxide in the atmosphere reaching dangerous levels is moot. But without alternative energy sources such a rise is certain. The best thing that rich-world governments can do is to encourage the alternatives by taxing carbon (even knowing that places like China and India will not) and removing subsidies that favour fossil fuels. Competition should do the rest—for the fledgling firms of the alternative-energy industry are in competition with each other as much as they are with the incumbent fossil-fuel companies. Let a hundred flowers bloom. When they have, China, too, may find some it likes the look of. Therein lies the best hope for the energy business, and the planet.

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Alternative Energy Key To Transition Inventing new alternative energies could stop peak oil Matt Simmons 2K5 (“Twilight in the Desert the Coming Saudi Oil Shock and the World Economy”) chairman and CEO of Simmons & Company International, is a prominent oil-industry insider and one of the world's leading experts on the topic of peak oil. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. President George W. Bush. Matthew Simmons believes the Club of Rome predictions were correct. Simmons is an advisor to the Oil Depletion Analysis Centre. He is a member of the National Petroleum Council and the Council on Foreign Relations. He believes a careful assessment of Saudi Arabian oil reserves is the most significant issue shaping petroleum politics.Simmons is the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East oil reserves as the published reports have never been verified.)

As the world begins to create Plan C, it is imperative that an emerging new energy source, or a series of different sources, be developed that can genuinely begin to replace oil. Since oil demand is now so heavily driven by transportation and feedstock needs, it seems reasonable to focus Plan C efforts on energy sources and products that can replace oil in these uses, while also seeking ways to conserve oil in these uses. Since it will take decades to replace the world’s current fleets of automobiles, air-planes, trains and marine vessels that consume oil, perhaps the highest-value Plan C energy source needs to be usable by the world’s existing transportation fleet and in all new transportation units. It is critical, too, that any new form of energy not require processes or substances that end up being energy-intensive to operate or produce. This could aggravate the problem instead of becoming part of the solution.

Only alternative energy can bridge the transition, avoiding peak oil impacts Matt Simmons 2K5 (chairman and CEO of Simmons & Company International, is a prominent oil-industry insider and one of the world's leading experts on the topic of peak oil. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. President George W. Bush. Matthew Simmons believes the Club of Rome predictions were correct. Simmons is an advisor to the Oil Depletion Analysis Centre. He is a member of the National Petroleum Council and the Council on Foreign Relations. He believes a careful assessment of Saudi Arabian oil reserves is the most significant issue shaping petroleum politics.Simmons is the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East oil reserves as the published reports have never been verified. “Twilight in the Desert the Coming Saudi Oil Shock and the World Economy”)

The ultimate solution to the problems created by peaking oil supplies involves a transition to a new form or forms of energy that do not now exist. This does not mean hydrogen or solar or wind. They now work technically, if not economically. Moreover, hydrogen is a byproduct of energy use, not an energy source. An article on the outlook for automobiles powered by hydrogen fuel cells in March 2005 issue of Scientific American highlights the many challenges still remaining before this alternative energy technology can be commercialized. Several individuals should be involved in the development process that can put the date some 25 years into the future. Creating a genuine new form of energy is by no means a simple task. In the twentieth century, the only new form of energy to be developed was nuclear power, and it took years to commercialize the military applications into useable consumer energy. But crises have an amazing way of jump-starting human ingenuity, and the need for some new form of energy could soon be critical. Accomplishing a Plan C for global energy might be the most daunting task the world has ever tackled, but the prize for winning this race will exceed the rewards flowing from any triumph of invention or innovation of the twentieth century. Getting to plan C will take time. This is why Plan B, a series of bridges, to buy time is so important. A Plan B blueprint for a world beyond Peak Oil should embrace every known way to produce more oil and all other viable energy sources, while also using oil more efficiently. It should consider the possibilities of leveraging the surging twilight revenue stream flowing to oil producers to create the new forms of energy needed to replace oil. It needs to embrace any form of alternative energy that releases the pressure on global demand. No step is too small, but small steps barely begin to address the magnitude of the challenge. The sooner the creation of a Plan B blueprint begins, the faster that any workable solutions can be implemented.

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Alternative Energy Key to Transition Alternative energy development’s necessary for survival – EACH DELAY makes the INEVITABLE TRANSITON worse Vodra, 2007 (Richard, vice president of Legacy Advisors in McLean, Va, “Inconvenient Truths: The economic effects of climate change and oil shortages present a unique challenge for planners.” Financial Planning, May 1; Lexis-Nexis Academic) We've gotten used to paying $3 for a gallon of gasoline and come around to the idea that global warming is a real phenomenon. Helped by United Nations reports backed by thousands of scientists, and our own ability to observe reality, Americans are accepting the idea that global climate change is real. What consequences should we be preparing for? And as financial planners, what specific steps can we recommend to clients? In the October 2005 issue of this magazine, I wrote about the concept of Peak Oil-the idea that sometime soon, possibly even in this decade, the world will not be able to continue increasing its

production of petroleum, regardless of demand or price. Substitutes for oil such as biofuels (including ethanol), tar sands and coal derivatives may eventually come on line, but they are unlikely to appear quickly and plentifully enough to replace the declining production of gasoline, diesel and jet fuel. The impact of Peak Oil will be to make transportation and production much more expensive and difficult, affecting many aspects of material life that we have come to take for granted, such as plastics and other synthetic materials, and plentiful year-round fresh produce. Natural gas faces a similar shortage, especially in North America where peak production has already been reached. Since my previous article, nothing has happened to challenge the original forecast. American oil production has not yet recovered from Hurricanes Katrina and Rita, and it suffered yet another blow from pipeline problems in Alaska. Two of the world's three largest oil fields-in Kuwait and Mexico-tipped into decline. In 2006, for the fifth year in a row, no one announced new giant field discoveries, defined as those capable of producing more than 500 million barrels over their lifetime; and the world again discovered only one barrel of oil for every five or six barrels produced. Furthermore, world demand for oil continued to grow even as political and military unrest in Iraq, Iran, Nigeria, Venezuela and elsewhere kept additional production off the market. What has changed in the last year-and-a-half is awareness of the accelerating pace of global climate change. The Atlantic hurricane season of 2005; record wildfires in the western part of the U.S. in 2006; new information on the melting of glaciers, the Greenland Ice Cap and the ice in the Arctic Ocean; the death of coral reefs; record low rainfall across southern Australia; and drought in the Amazon Basin led to major magazine covers. Al Gore's documentary on global warming, An Inconvenient Truth, won an Oscar as well as hearts and minds. The world scientific community agrees that human activity, including deforestation and the burning of fossil fuels, is a major cause of climate change. Some cities and states are beginning to respond, and public opinion may be at a tipping point for making climate change a policy priority. Yet few people in public life are talking about Peak Oil. As it turns out, Peak Oil and global climate change are closely

connected. After all, we wouldn't be facing global climate change if people around the world didn't use so much fossil-fuel energy. What's more, some substitutes for conventional oil, such as tar sands and coal-based diesel, generate even more carbon dioxide and other greenhouse gases than regular oil. Furthermore, so-called alternative energy, such as solar, wind, water or geothermal power, is not yet available in large quantities in most places. The result is a feedback loop of misfortune: More energy spent leads to more pollution, which leads to more warming, which forces us to use more energy...and so on. As financial planners, we need to help our clients address the challenges that these developments pose in both their personal and investing lives. Scenario One: Business as Usual Traditional financial planning has operated within a framework I call "business as usual." It assumes that, for the simple reason that it's tough to make accurate predictions, life will remain basically the same. What that means: America's economy will continue to grow, but China's and India's will grow faster. People everywhere will continue to build suburbs, roads, airports, cars, factories and power plants. Resources in this model are not constrained, nor are there limits to growth. Under this scenario, planners use historic asset returns to plan our clients' 40-year-long retirements, beginning years or even decades from now. This conceptual framework informs the way much of the planning community works today. Unfortunately, the business-as-usual scenario is probably a fantasy. If we continue along our current

path, global warming will accelerate and become irreversible as we burn all the oil, coal and gas we can, and attempt to replace a declining oil supply with new fuels that are more polluting, cost more and are less convenient to use. Financial and environmental costs will increase until the system simply can't keep up. Fortunately, we can take steps now as individuals, corporations, communities and nations to prepare for Peak Oil and to reduce the carbon dioxide emissions that will lead to further global climate change. In fact, many of us are doing so. Developing new systems for energy production and conservation, transportation and other aspects of modern life will take plenty of effort and capital. But if we wait until shortages are obvious and prices for energy and goods have gone way, way up, the task will be much more difficult. The sooner we start, the lower the costs will be, both in terms of money and lifestyle. Scenario Two: The Coming Durable Society The coming durable society accepts the reality of Peak Oil and global climate change, but assumes that people will take the necessary steps to address these problems by creating sustainable and more localized economies. Under this scenario, some aspects of our lives, such as energy consumption, may eventually more closely resemble 1957 rather than 2007. But we will also harness human creativity to develop new technologies and efficiencies that reduce the impact these changes will have on how we live. This scenario is based on the idea that natural resources will continue to be scarce and expensive, making access to energy and transportation less reliable. Inflation may rise as new capital projects, such as mass transit, crowd out consumer activities, much as they do in times of war. Meanwhile, as climate change continues around the world (albeit, one hopes, at a slower pace), disasters and displacements will require major expenditures-whether through insurance premiums or public spending. As a result, economic production may slow somewhat. Of course, we cannot accurately predict all the ways people will respond to the challenges of Peak Oil and global climate change. After all, most of the major transitions of the twentieth century, including two world wars, the Great Depression, nuclear weapons and the collapse of the Soviet Union, were surprises at the time.

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Alternative Energy Key to Transition Try or die – multiple peak oil extinction risks make a renewable transition life or death Henderson, 2006 (Bill, environmental journalist, “Peak Oil: AIDS, Addiction, and Opportune Infections,” PEJ 1/25 < http://www.pej.org/html/modules.php?op=modload&name=News&file=article&sid=4116&mode=thread&order=0&thold=0 >) Americans (and citizens of developed countries) have a lifestyle problem.James Kunstler has articulated it in one sentence " It is a living arrangement which has no future. It represents the greatest misallocation of resources in the history of the world." It's not just oil. Read E .O. Wilson's Bottleneck chapter from THE FUTURE OF LIFE. Americans have a monstrously huge ecological footprint as the growing human population - a hundred times the biomass of any previous animal species - pushes against the constraints of a finite planet. The end of oil is just one serious resource depletion to be expected as everybody in the world attempts to live

an American lifestyle. The American lifestyle is an addiction. A costly, unhealthy addiction. "You're addicted to toys. You eat terribly; you consume mindlessly; you smoke and drink; you watch football or wrestling or celebrities pretending to fuck. You have to turn off the TV. Turn off all the advertising you can. And quit eating all the franchise food and learn to eat healthily. And get outa the car and ride a bike or walk. "And you gotta get outa debt. Debt is the equivalent of fat and your present obesity was a building problem even without peak oil." Well OK - NewNoah has gone overboard with the lousy lifestyle analogy, but ultimately surviving peak oil must mean a lifestyle change akin to kicking an addiction. A change of attitude, the conviction to beat the addiction is the vital first step. There is a high quality - low material impact, meaningful, fun and healthy lifestyle that is possible just as your IPOD replaces tons of costly vinyl. And we will have to get on a health regime if we want to survive. Managing dollars and consumption properly would have probably left us in much better shape for the treatment regime, for an accelerated conversion to a post-fossil fuel economy. Lester Brown's revised PLAN B - PLAN B 2.0 - is one example of a potentially successful treatment program. A wartime-style coalition government provides governance innovation to allow change of the scale necessary to mobilize American and global government and business resources to get to a lifestyle that has a future. But we have to watch out for those opportune infections. War in Iraq was the Bush Admin choosing the resource war path for everybody on the globe. Instead of providing leadership in a cooperative, scientific innovation, American ingenuity approach to peak oil, the neocons tried to grab all the oil, putting us all a hair trigger away from a final nuclear war. "(t)he people around him (Bush) are the most dangerous administration in American history. I think they're driving the world to destruction. There are two major threats that face the world, threats of the destruction of the species, and

they're not a joke. One of them is nuclear war, and the other is environmental catastrophe, and they are driving toward destruction in both domains. They're compelling competitors to escalate their own offensive military capacityRussia, China, now Iran. That means putting their offensive nuclear missiles on hair-trigger alert." Noam Chomsky. We need justice in Iraq - acknowledgement that war in Iraq was a criminal mistake - in order to get back off the resource war path so that a cooperative, peaceful solution to the end of cheap oil is possible. And peak oil promises famine and pestilence as well as war. The increasing price of oil is a rising tide drowning poor economies around the world. Post green revolution, a large percentage of the world's agriculture is totally dependent on oil. Famine and resulting societal breakdown and infectious disease can not be kept outside of a Fortress America. We have to be proactive in developing alternative, sustainable lifestyles as well as alternative energy sources for citizens of the Third World or we could die of a new virulent flu, terrorism or plague. But immediately we must take action to prevent the severe economic dislocation, this years potential Great Depression, that threatens chaos and paralysis. Sometime in 06 oil may spike over $100 a barrel and bubbles will start to burst.

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AT: impacts inevitable Even if we can’t stop Peak Oil, we can manage the transition Radcliffe, 2008 (Simon, chairperson of the Association for the Study of Peak Oil South Africa. He is also an independent energy and sustainability consultant., “The link between oil and xenophobia,” IOL < http://www.int.iol.co.za/index.php?set_id=1&click_id=3069&art_id=vn20080625113556131C313525 >) What have oil and xenophobia got to do with each other? What is the link between the finiteness of oil and South Africans driving Zimbabweans living in South Africa out of their homes? Much of what we are witnessing in real time on our television screens and in our newspapers seems unconnected and yet when we dig into it, we find that events taking place in one part of the world can lead to profound changes in other parts. I am reminded of a film I once saw by the great Indian director Satyajit Ray, called Distant Thunder....our dependence on oil has the ability to expose the cracks and fissures in our society The film is set in the rural Indian province of Bengal during World War 2, and examines the effects of war taking place in other parts of the world and contributing to the Great Famine of 1943, during which more than three million people died in the villages in that area. The film shows with masterful skill how traditional village norms break down under the pressure of hunger. So how does this relate to current events in South Africa? Over the past 100 or more years we have built a thriving global economy capable of fantastic feats and yet one that is incredibly vulnerable. It is vulnerable because of the high level of dependence we have on oil and other cheap sources of energy. Cheap, abundant oil has enabled the incredible growth we have seen. And yet it is a finite resource which we are consuming at a rate of 85million barrels a day. The issue we are now being confronted with is that oil depletion isn't a straight line, where we can use as much of it as we choose and then, suddenly, it is gone. Global oil production follows a roughly bell-shaped curve. We will be faced with choices which we will be called on by circumstances to make Production starts off small, increases until it reaches a maximum point and then begins to decline until reaches zero. This is an observable and empirically verifiable fact and is well documented. There are increasing signs that we may be close to the point of maximum global oil production. What is so significant about this point? From this point onward, there will be less oil available year on year. In other words, we will have to make do with less energy every year until we are able to replace it with alternative energy sources. The problem is that our global economy can't function in the way it does currently with significantly less energy. To keep on growing, it requires more and more energy. The phenomenal growth we are seeing in India and China is keeping demand high. Over the last three years production has flattened while demand has risen sharply. Prices have reached all-time highs and we haven't yet started the decline in production. The effects of rapidly rising oil prices have been varied and widespread. Oil permeates almost every sector and every country. What defines our ability to carry on as before is our ability to pay the going price for the oil we are consuming. Oil is embedded in some way into just about everything we take for granted in an industrialised country. We see generalised increases in price as the price of oil rises. The rising price affects the poorest communities first, requiring behavioural change as it moves up the income ladder. People increasingly feel the pressure of higher transport costs as well as generally higher food prices. The question is: what do they do under pressure? Around the world, we are witnessing protests, riots and other expressions of mass discontent. Last week we saw protests and blockades in Spain; earlier there were protests by fishermen in Brussels, and blockades by truck drivers in the UK. In Portugal, truck drivers go on strike; in Belgium, workers protest against the rising cost of living; protests are occurring in a number of Indian cities over the high price of fuel as well as increasing transportation costs; and in Indonesia there are protests over the lowering of fuel subsidies. Before that we had food riots in Egypt, Haiti and in other countries, while there have been fuel riots in Nepal and other countries in recent years. Clearly what we are seeing are people in vulnerable groups whose livelihoods are in some way affected by rising fuel and food costs and who want their voices to be heard. Rising prices put strains on the poorer groups in society. How they react depends on where the pressure is felt and on socio-cultural factors. In South Africa, we have had constantly rising fuel costs in response to the oil price rises. This has affected transportation costs and put pressure on people's mobility. Oil pushes up the prices of just about everything, including food. Rising prices put strains on everyone and create the conditions for social tensions and instability. It seems that our dependence on oil has the ability to expose the cracks and fissures in our society as the price rises. In South Africa we have many fault lines, including the divide between rich and poor, between different races, between different cultural groups, between employed and unemployed and between South Africans and non-South Africans. The issue of immigrants, refugees and economic migrants is complex. Some people have come here in search of a better life and better prospects for themselves and their children. Some have come from Europe and some from other parts of the world. Many have come here from other countries in Africa, including neighbouring countries. There are estimated to be some 3,5-million Zimbabweans who have left

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Anna /Andrew/Paul Page 31 of 130 their country in search of sanctuary and a better life here. Some have fled political persecution; some have seen their economic prospects disintegrate as the economy has collapsed. There could be up to five million or more foreigners from Africa in South Africa. How are people who have fled to South Africa surviving? Some have found jobs, some have created jobs, some have borrowed, some have begged and some have turned to crime. In a context where poor communities are having their livelihoods squeezed, it is possible that South Africans might believe they are threatened, are being displaced or are losing jobs to others, and therefore become resentful. Resentment offers illusionary sweet rewards, as it is then easy to regard others as less worthy than oneself and then to be able to justify doing anything to them, and feel self-righteous about it. It of course carries no reward, only huge cost. It is a quick way of losing our humanity by behaving in appalling ways towards other members of the human race. Going forward, as we get closer to the peak in global oil production, we are likely to see greater pressures, particularly on poorer communities but constantly moving up the income scale. The intensifying pressures are likely to open new fault lines in our society. We will be faced with choices which we will be called on by circumstances to make. While we have little, if any, control over the price of oil, the thunder in the distance, we do have control over our responses to what it presents us with. The choices will be to come closer together or to be torn further apart, to collaborate or to exacerbate divisions between us, to have compassion or to succumb to separation. Which will it be?

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Impacts-Economy Oil peak will cause an enormous global depression, resource wars and mass dieoffs Kuhlman 05 (Alex, received his Master's degree in Economics from the University of Amsterdam, he has taken a very active interest in Peak Oil and has written many articles, featured in a Peak Oil documentary and sporadically lectures at colleges & universities, , accessed 7/22/08, [AZ]) We have taken our lifestyles and the cheap & abundant supply of oil all for granted. We expect the pumps will run to supply us with fuel to drive our SUV’s to run around town, work and school and we cannot accept an alternate future. But when oil becomes more scarce, it is very likely that these pumps will be the first to run dry, because they are at the end of the supply chain. But implications will be much worse than that. It is not a question if but when the world economy will be confronted with a major shock that will stunt economic growth, increase inflation, and potentially destabilize the Middle East. It will make the Great Second Depression look like a dress rehearsal and may change the world as we know it today. It is a coming crisis that few understand but with far reaching implications. Nations will fight over the remaining oil. Without hydrocarbons, this planet can only produce enough food to sustain a population of 2.5 billion. The current world population is in excess of 6 billion and growing (UN projection: 7.3 billion by 2050). In the US, without industrial agriculture, it is estimated that only 2/3's of the current population can be fed (D. Preiffer). Fossil fuels effectively temporarily raised the carrying capacity of the earth (see page 3).

Peak oil will cause a Depression bigger than the 30s and associated resource wars Kuhlman 05 (Alex, received his Master's degree in Economics from the University of Amsterdam, he has taken a very active interest in Peak Oil and has written many articles, featured in a Peak Oil documentary and sporadically lectures at colleges & universities, < http://www.oildecline.com/page3.htm> accessed 7/22/08, [AZ]) Rising Oil Prices The inexorable tightening of supply is destabilizing oil markets, which now exhibit extreme price responses to the smallest of disturbances. Higher oil prices are hurting economies by increasing the cost of consumer goods while simultaneously reducing disposable income. Sharply rising oil prices have always preceded economic recession and plummeting stocks. Analysts predict that market-based panic will drive prices skyward. And as supplies can no longer slack daily world demand, the market will become paralysed at prices too high for the wheels of economy and even daily living in 'advanced’ societies”. No region in the world would be able to rely on distant energy supplies and they would have to fall back on their own resources. One economic aspect of oil is that its demand is very price inelastic in the short term, meaning that it would require a large price increase to cause a significant reduction in demand. Prices at the pumps in the USA have almost doubled in recent times, yet gas-guzzling Hummers and other SUV’s are still purchased like there is no tomorrow. Industry experts say massive effects on behaviour will only happen if supplies are disrupted or prices hit $5-a-gallon. Another complication is that in the more developed countries the services industry has replaced much of their traditional oil dependent industries. This is why I don’t believe that the oil prices will stop at $100 a barrel, like some financial experts predict. In the short term, they would probably have to increase in excess of 300% or so to have the desired effect. This uptrend would then eventually be (temporarily) interrupted by slowing economic growth and from efforts of conservation. Inflation Rising energy prices would spur overall price increases, causing inflation. Energy costs will then become an increasingly bigger part of the economy, and the same % increase in oil prices that once had a negligible economic effect will suddenly be significant. At the same time, higher prices will cause a fall in demand and a stagnating economy. This is called ‘stagflation’ and is exactly what happened during the 1973 oil crisis. Debt in many countries like the USA and the United Kingdom are at record levels, and strong economic growth then becomes essential. Falling home prices would threaten the foundations of those economies. Therefore, efforts to curb inflation by raising interest rates would hit house prices, which in a leveraged economy would cause a devastating downward spiral, pulling down businesses, consumers and banks. Policymakers will therefore be powerless to fight inflation that will then soon become widespread. Prices of food and manufactured goods will shoot up. Depression The world will first enter a recession followed by a very deep Depression that may well be greater than the 1930’s Great Depression. Stock markets may plunge, businesses will go bankrupt and huge job losses will follow. Eventually, economic growth will cease or continue only in a few places at the expense of other places. The economic stress among almost all nations, advanced and developing, rich and poor will be considerable and is certain to lead to increasingly desperate competition for diminishing supplies of oil.

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Impacts-Economy Oil depletion devastates the economy: the resultant collapse brings us back to the Stone Age Deffeyes, 2006 (Kenneth, geologist and Professor Emeritus at Princeton University, “Beyond Oil: The View from Hubbert’s Peak, < http://www.princeton.edu/hubbert/current-events-06-02.html >) In the January 2004 Current Events on this web site, I predicted that world oil production would peak on Thanksgiving Day, November 24, 2005. In hindsight, that prediction was in error by three weeks. An update using the 2005 data shows that we passed the peak on December 16, 2005. "A decent respect to the opinions of mankind requires" that I present an update on the data sources and the interpretation. 1. The underlying methodology is Hubbert's postulate that the rate of new oil discoveries depends on the fraction of the oil that has not yet been discovered. Similarly, the rate of oil production depends on the fraction of oil that has not yet been produced. A test of Hubbert's hypothesis, using the long history of US oil production, is on pages 35—42 of my book Beyond Oil. An algebraic result from the Hubbert theory says that the production rate peaks when half of the oil has been produced. 2. The most accurate measure of the eventual total oil comes from the "hits" graph on page 48 of Beyond Oil. The input data for that graph are the dates of the first well in each oilfield. The February 2006 edition of Colin Campbell's ASPO newsletter contains his updated version of the ExxonMobil discovery dates. I enlarged Campbell's graph and scaled off data for 2004 and 2005. An update of the calculation reported on page 49 of Beyond Oil gives an unchanged estimate: 2.013 trillion barrels. (There is always a statistical nervousness when an estimate does not change. I make the estimates by stepwise trials, and the winning step was 2.013. What I know is that neither estimate was 2.012 or 2.014.) 3. The world peak would then happen when 1.0065 trillion barrels have been produced (half of 2.013). Following Hubbert, I used the Oil & Gas Journal end-of-year production numbers. It isn't that the Oil & Gas Journal reports are divinely inspired; their methodology is well explained and their reports constitute a relatively consistent data set. The cumulative world production at the end of 2004 was 0.9812 trillion barrels and at the end of 2005 it was 1.00748 trillion. During the year, we passed the halfway point. The graph shows the date of the crossover: December 16, 2005. During the year, we passed the halfway point. The graph shows the date of the crossover: December 16, 2005. There are some interesting additional bits in the end-of-year statistics. Compared to 2004, world oil production was up 0.8 percent in 2005, nowhere near enough to compensate for a demand rise of roughly 3 percent. The high prices did not bring much additional oil out of the ground. Most oil-producing countries are in decline. The rise in production was largely from Saudi Arabia, Russia, and Angola. The Saudi production for 2005 was 9.155 million barrels per day. On March 6, 2003 Saudi Aramco and the government of Saudi Arabia announced by way of the Dow Jones newswire that they were maxed out at 9.2 barrels per day. In retrospect, that statement seems to be accurate. Further details are in Matthew Simmons' book Twilight in the Desert. Could some new discovery come along and reverse the global oil decline? The world oil industry is a huge system: Annual production worth 1.7 trillion dollars. I don't see anything on the horizon large enough to turn it around. So what are the policy implications? Numerous critics are claiming that the present world economic situation is a house of cards: built on trade deficits, housing price bubbles, and barely-adequate natural gas supplies. Pulling any one card out from the bottom of the pile might collapse the whole structure. 1. There are calls for embargoing Iranian oil because of the nuclear weapons situation. Pulling four million barrels per day out from under the world energy supply might trigger a severe worldwide recession. In the post-peak era, we're playing a new ball game and we don't yet know the rules. 2. Ghawar, the supergiant Saudi oilfield, is producing increasing amounts of water along with the oil. When Simmons sent Twilight in the Desert to the printer, the water cut at Ghawar was around 30 percent. There are later reports on the Internet (home.entouch.net/dmd/ghawar.htm) of water cuts as high as 55 percent. Ghawar has been producing 4 million barrels per day; when the Ghawar field waters out, you can kiss your lifestyle goodbye. Since we have passed the peak without initiating major corrective measures, we now have to rely primarily on methods that we have already engineered. Long-term research and development projects, no matter how noble their objectives, have to take a back seat while we deal with the short-term problems. Long-term examples in the proposed 2007 US budget (Feb. 9, 2006 New York Times page A-18) include a 65 percent increase in the programs to produce ethanol from corn, a 25.8 percent increase for developing hydrogen fuel cell cars, and a 78.5 percent increase in spending on solar energy research. The Times reports that solar energy today supplies one percent of US electricity; the hope is to double that to 2 percent by the year 2025. By 2025, we're going to be back in the Stone Age.

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Impacts-Economy Oil Peak will cause a sudden sharp economic decline National Energy Technology Laboratory 05 (Robert L. Hirsch, former senior energy program adviser for Science Applications International Corporation and is a Senior Energy Advisor at MISI and a consultant in energy, technology, and management, has served on advisory committees related to energy development, was previously Senior Energy Program Advisor, SAIC, Senior Energy Analyst, RAND (Various energy studies), Vice President of the Electric Power Research Institute (EPRI)., Vice President and Manager of Research and Technical Services for Atlantic Richfield Co. (ARCO), Manager of Exxon’s synthetic fuels research laboratory, Manager of Petroleum Exploratory Research at Exxon, Assistant Administrator of the U.S. Energy Research and Development Administration, Director of fusion research at the U.S. Atomic Energy Commission and ERDA, Chairman of the Board on Energy and Environmental Systems of the National Research Council, Roger Bezdek, MISI, Robert Wendling, MISI, February, “Peaking of World Oil Production: Impacts, Mitigation, & Risk Management,” <www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf>, accessed 7/22/08, [AZ] World Oil Peaking is Going to Happen World production of conventional oil will reach a maximum and decline thereafter. That maximum is called the peak. A number of competent forecasters project peaking within a decade; others contend it will occur later. Prediction of the peaking is extremely difficult because of geological complexities, measurement problems, pricing variations, demand elasticity, and political influences. Peaking will happen, but the timing is uncertain. 2. Oil Peaking Could Cost the U.S. Economy Dearly Over the past century the development of the U.S. economy and lifestyle has been fundamentally shaped by the availability of abundant, low-cost oil. Oil scarcity and several-fold oil price increases due to world oil production peaking could have dramatic impacts. The decade after the onset of world oil peaking may resemble the period after the 1973-74 oil embargo, and the economic loss to the United States could be measured on a trillion-dollar scale. Aggressive, appropriately timed fuel efficiency and substitute fuel production could provide substantial mitigation. 3. Oil Peaking Presents a Unique Challenge The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.

Oil depletion will end the entire economy and brink in a new Dark Age London Times 2k5, (Bryan Appleyard for daily national newspaper published in the United Kingdom since 1785 when it was known as The Daily Universal Register; “Waiting for the lights to go out,” < http://www.lifeaftertheoilcrash.net/Index.html >.) Oil is running out; the climate is changing at a potentially catastrophic rate; wars over scarce resources are brewing; finally, most shocking of all, we don't seem to be having enough ideas about how to fix any of these things. Almost daily, new evidence is emerging that progress can no longer be taken for granted, that a new Dark Age is lying in wait for ourselves and our children . . . growth may be coming to an end. Since our entire financial order from interest rates, pension funds, insurance, to stock markets is predicated on growth, the social and economic consequences may be cataclysmic.

Unprepped transition causes global recession Hanlon and McCartney, 2008 (Phil and G., public health professors at the University of Glasgow, “Peak oil: Will it be public health's greatest challenge?,” Public Health, July 2008. < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B73H6-4SP4B191&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=6527484a1d40caddf324a80a9bff4597 >) Not only has demand been soaring, but the oil we’ve been finding is coming from places that are tough to reach. At the same time, more of this newly discovered oil is of the type that requires a greater investment to refine. And because demand for this precious resource will grow, according to some, by over 40% by 2025, fuelling the world's growing economic prosperity will take a lot more energy from every source’ (Chevron advertisement in The Economist 1/10/05). Therefore, there is evidence that a global peak in oil production is inevitable and imminent, and that economies around the world will go into recession if unprepared. What is in doubt is the timing and the rapidity of change. The permanence and scale of the scarcity in oil would be likely to have far more widespread effects than those seen during the 1970s, as the economies of most Western countries around the world have become orientated towards ‘globalization’.

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Impacts – Economy Economic collapse from peak oil downslope will cause depression, rise of fascist leaders, and a global tinderbox Macleans, 2006 (Jonathon Gatehouse, journalist for a Macleans, Canadian weekly news magazine, reporting on Canadian issues such as politics, pop culture, and current events.; “When the oil runs out,” Feb 9, 06. < http://www.macleans.ca/article.jsp?content=20060213_121197_121197> ) Big Oil and its government partners are covering up the depletion, says Leggett, while holding back alternative technologies. And when the truth can no longer be obscured, the price will spike, the economy nosedive, and the underpinnings of our civilization will start tumbling like dominos. "The price of houses will collapse. Stock markets will crash. Within a short period, human wealth -- little more than a pile of paper at the best of times, even with the confidence about the future high among traders -will shrivel." There will be emergency summits, diplomatic initiatives, urgent exploration efforts, but the turmoil will not subside. Thousands of companies will go bankrupt, and millions will be unemployed. "Once affluent cities with street cafés will have queues at soup kitchens and armies of beggars. The crime rate will soar. The earth has always been a dangerous place, but now it will become a tinderbox." By 2010, predicts Leggett, democracy will be on the run . . . economic hardship will bring out the worst in people. Fascists will rise, feeding on the anger of the newly poor and whipping up support. These new rulers will find the tools of repression -emergency laws, prison camps, a relaxed attitude toward torture -- already in place, courtesy of the war on terror. And if that scenario isn't nightmarish enough, Leggett predicts that "Big Oversight Number One" -- climate change -- will be simultaneously making its presence felt "with a vengeance." On the heels of their rapid financial ruin, people "will now watch aghast as their food and water supplies dwindle in the face of a climate going awry." Prolonged droughts will spread, decimating harvests.

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Impacts – Economy – soc security A perfect storm of peak oil and entitlements crisis will crush the economy The Social Contract 02 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., Summer, “The Coming End of Cheap Oil: To Hubbert’s Peak and Beyond,” <www.gunnarlindgren.com/comingendoil.pdf>, accessed 7/19/08, [AZ]) This collision will be painful. All economic activity requires energy, and roughly 40 percent of the world’s primary energy demand is met by oil.38 Petroleum underlies just about everything we do. No other energy source can match conventional oil for versatility, portability, ease of storage, net energy yield, and so on. Cheap conventional oil is one of the primary factors making our affluent, comfortable modern way of life possible. It follows that when oil is no longer cheap, our way of life will be disrupted to the point of unsustainability. The drying-up of cheap conventional oil will do for the modern economy what a long drought does for agriculture. One obvious consequence will be a persistent replication of the “stagflation” – simultaneous inflation and recession – which followed the 1973-1974 oil embargo. Real wages and labor productivity will stagnate or even decline. Since producing and transporting all production inputs takes energy, much of it fossil fuel, costlier oil will make them costlier too, meaning that an investment dollar will not buy as much productivity growth as it could before. Meanwhile, by a gruesome coincidence, right around the time oil peaks, the Baby Boomers will start flooding Social Security and Medicare beneficiary rolls. So just as the largest generation in American history begins retiring (the oldest Boomers will be 65 in 2010), the cheap oil bottom will start dropping out of the economy which will have to support them. The inflationary recession largely caused by the 1973-1974 oil crisis precipitated the first financial crisis in Social Security’s history, as higher-than anticipated inflation drove inflation-adjusted benefit outlays up and unemployment shrank Social Security’s tax base. This time the oil shock will be permanent. The Congressional Budget Office projects that spending for Social Security, Medicare, and Medicaid, which provide old-age and elderly health care benefits, will rise from 7.8 percent of GDP in 2001 to 14.7 percent by 2030. Assuming federal revenues remain roughly 20 percent of GDP, and entitlement programs are unchanged, the General Accounting Office forecasts that by 2030 federal outlays will be roughly 28 percent of GDP and Social Security, Medicare, Medicaid and interest on the debt will take 75 percent of revenues. By 2050, outlays will be almost 40 percent of GDP, and revenues will cover only half of them, making the budget deficit some 20 percent of GDP.39 These frightening calculations reflect only an aging population, and ignore cheap oil’s demise. Moreover, all forecasts by Social Security’s and Medicare’s actuaries, including the pessimistic ones, assume steady long-term growth in real wages, productivity, and GDP. Obviously, an economy crippled by higher inflation, soaring energy costs, rising unemployment, and stagnant productivity cannot carry these burdens. The oil crunch, then, will disastrously worsen the coming fiscal crisis of entitlements. It therefore greatly strengthens the case for rigorous means testing to cut entitlement costs. It also kills Social Security privatization, a severe, prolonged bear market in stocks being a likely consequence of a persistent and worsening energy squeeze.

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Impacts-Economy: Timeframe Our timeframe is MILLISECONDS. Info transmission will send absolutely instant shockwaves through the economy Deffeyes 03 (Kenneth S., a geologist who worked with M. King Hubbert of Hubbert's peak fame, at the Shell Oil Company research laboratory in Houston, Texas, teaches at Princeton University, where he is now Professor Emeritus, 8/11, Hubbert's Peak: The Impending World Oil Shortage, p.162, Google Books, [AZ]) Years ago, the New York Times Company bought enough Canadian forestland to grow pulpwood as fast as it prints newspapers. Heavy petroleum users among large corporation, like FedEx and UPS, could attempt a takeover of an oil company large enough to offset their consumption. In the past , a useful way of insuring major producers and consumers against the effect of a price changes was purchasing futures contracts. However, the ordinary futures contracts extend for a year or two. The oil extends for 10 years or more. Anyone who agrees to supply oil 10 years from now, for a price agreed on today, very likely will disappear into bankruptcy before the contract matures. The financial world has reorganized since 1980. Effects of oil price rises, during the late 1970s, took months to years to spread from industry to industry; from price increases to wage demands. In the new economy, the shock on an oil price will spread in milliseconds. Detailed computer models of the world economy will flash messages to buy or sell everything from AT&T to Xerox, from aluminum to zinc, from baths to zlotys

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Impacts-Resource Wars Peak oil leads to major power wars in the Persian Gulf and Caspian. Prefer our highly specific path to an extinction level war. Klare 05 (Michael T., Professor of Peace and World Security Studies at Hampshire College and the author, most recently, of Blood and Oil: The Dangers and Consequences of America's Growing Dependence on Imported Petroleum (Owl Books) as well as Resource Wars, The New Landscape of Global Conflict, 7/14, Blood and Oil: The Dangers and Consequences of America's Growing Dependency on Imported Petroleum, p.146-7, Google Books, [AZ]) But there is yet another, and possibly greater, threat looming over these troubled regions: that the intense competition among the major powers for control over the possession and the distribution of energy will lead to a larger conflict. This competition is already aggravating tensions in several areas, including the Persian Gulf and Caspian Sea basins. And although the great powers will no doubt seek to avoid clashing directly, their deepening entanglement in local disputes is bound to fan the flames of regional conflicts and increase the potential for major conflagrations. The great powers have always battled for control over important sources of wealth and advantage. European states fought over the resource-rich territories of the Americas and Africa; imperial Britain vied with Russia for control of Central Asia and the ottoman Turks for Egypt and the Levant. These rivalries often led to border skirmishes and local wars, usually at the outer edges of imperial expansion; but on occasion they led to epic conflicts, such as the Seven Years War, the Napoleonic wars, and World War I. Though the risk of such earth-shaking upheavals has subsided in recent decades, the imperial impulses behind them have by no means disappeared. And if there is a prize that could provoke greatpower warfare on a grand scale today, it is the vast untapped energy reserves of the Persian Gulf and the Caspian Sea areas. Right now, the United States, Russia, and China are competing for the energy riches of these areas. All three powers have a vital stake in the global flow of oil, and all three seek some degree of control over the political dynamics of the most important oil-producing regions. All three have deployed combat forces in these areas or established military ties with friendly local governments. And, as the global demand for petroleum rises and more countries begin to rely on these regions for their energy, we an expect all three to bolster their strategic positions and to try to curb the influence of their rivals.

Peak oil will cause resource scarcity wars Matt Simmons 2K5 (chairman and CEO of Simmons & Company International, is a prominent oil-industry insider and one of the world's leading experts on the topic of peak oil. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. President George W. Bush. Matthew Simmons believes the Club of Rome predictions were correct. Simmons is an advisor to the Oil Depletion Analysis Centre. He is a member of the National Petroleum Council and the Council on Foreign Relations. He believes a careful assessment of Saudi Arabian oil reserves is the most significant issue shaping petroleum politics.Simmons is the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East oil reserves as the published reports have never been verified. “Twilight in the Desert the Coming Saudi Oil Shock and the World Economy”)

Once oil supply peaks, the world will be forced to create ways to substantially conserve our oil and other energy sources. This shift should force a rapid rethinking of the notion that transporting people and products anywhere in the world is an almost incidental cost of doing business. “Transportation” turns out to be the biggest single user of oil, and we need to begin finding ways to minimize everyone’s transportation needs and make the use of transportation fuel as efficient as possible. Today, the most wasteful use of transportation fuel is probably traffic congestion. A world beyond Peak Oil will be forced to solve this problem, too. Whether its solution is living closer to one’s work or using more mass transportation, both become viable ways to address traffic congestion and use oil more efficiently as prices rise. Simply building additional miles of wider and wider roads no longer works. Even a new fleet of more fuel-efficient vehicles will take too long to implement and may still use too much oil. If we do not alter our transportation systems as a matter of policy and public planning, the inexorable operation of pricing mechanisms will do it for us. At some price for gasoline, traffic congestion will diminish. There is no question that a world of increasingly scare oil will foster a growing competition among energy-consuming countries. As the reality of declining oil supply becomes better understood, this country-by-country competition could evolve into either a manageable process (like the economic competition that has existed for decades among the various OECD countries) or an aggressive free-for-all that triggers new wars. If the problem is misunderstood or left unaddressed, war could easily prevail over peaceful competition. Securing adequate oil supplies was, after all, an important element in all the major wars of the twentieth century and in the United States’ two most recent interventions in the Middle East.

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Impact – Resource Wars Peak oil will trigger resource wars between China and the US, massive genocide, and disease epidemics Kuhlman 05 (Alex, received his Master's degree in Economics from the University of Amsterdam, he has taken a very active interest in Peak Oil and has written many articles, featured in a Peak Oil documentary and sporadically lectures at colleges & universities, < http://www.oildecline.com/page3.htm> accessed 7/22/08, [AZ]) The world will become a larger place again with less and less globalism. Resource Wars Many countries have become heavily reliant on Middle Eastern oil, and the geopolitical stakes of conflicts in this region have risen to all-time highs. Indeed, the worst case scenarios are terrifying: genocide on a scale never before seen, as control of the remaining oil divides along racial, ethnic and national boundaries. 4 Heinberg) So far, only the United States have ventured into the Middle East. But what is to stop China from continuing into Iran, Iraq and even Saudi Arabia as China will be energy starved in the foreseeable future. A military contest over oil could eventually spread war from the Middle East to Southeast Asia, and it could leave the oil production infrastructure of many countries severely damaged in the process. Such a conflict may be the Third World War. Some Latin American countries may find themselves combatants in their own oil wars. Australia and New Zealand may fall victim to desperate Chinese adventuring or to anarchy emanating from Southeast Asia. Social Chaos & Dark Ages The European fuel protests of 2000 were an excellent example of what will happen when we are deprived of our the fuel powering our artificial lives. The implications of just this minor shortage caused by blockades of fuel depots was tremendous. Naturally, there were huge lines at petrol stations to refuel, but there was also panic buying at the shops. Some ran out of bread and milk. Postal collections were suspended on Sundays to conserve fuel. Farm animals were threatened with starvation because the feed was unable to be delivered. Schools closed down and hospitals cancelled all but emergency operations. And all this from two and a half weeks. Similar events happened in the USA during the 1973 Oil Embargo. The impending fuel crisis will be permanent though and the trucks will no longer pull into the Wal-Marts or supermarkets. The freighters bringing cheap and disposable household products from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence, and chaos. For only a short time will the police and military be able to maintain order, if at all.'' When worldwide oil production starts to decline considerably, countries will be competing aggressively for fossil fuels as difficulties will start with even keeping electricity plants running. The blackouts that hit the eastern USA and Canada in August 2003, and the lesser failure that hit London’s Underground system shortly afterwards shows the how totally dependent we are on electricity power and the dramatic effects that its absence causes. Reduced food supplies will also comprise immune systems and set up refugee camps will lead to diseases. New strains of the age-old human enemies such as tuberculosis, malaria, cholera and others will be on hand while vaccines will be ineffective and out of reach.

Peak oil will cause World War III Goodstein 04 (David, physicist, educator, Vice-provost of the California Institute of Technology, and professor of physics and applied physics, Professor of Physics and Applied Physics at Caltech, where he has been on the faculty for more than 35 years, named the Frank J. Gilloon Distinguished Teaching and Service Professor, has served on and chaired numerous scientific and academic panels, including the National Advisory Committee to the Mathematical and Physical Sciences Directorate of the National Science Foundations a founding member of the Board of Directors of the California Council on Science and Technology, in articles, speeches and colloquia he has addressed conduct and misconduct in science, the end of exponential growth of the scientific enterprise, and issues related to fossil fuel and the climate of Planet Earth, Out of Gas: The End of the Age of Oil, p.31, 2004, [AZ]) In an orderly, rational world, it might be possible for the gradually increasing gap between supply and demand for oil to be filled by some substitute. But anyone who remembers the oil crisis of 1973 knows that we don’t live in such a world, especially when it comes to an irreversible shortage of oil. It’s impossible to predict exactly what will happen, but we can all too easily envision a dying civilization, the landscape littered with the rusting hulks of useless SUVs. Worse, desperate attempts by one country or region to maintain its standard of living at the expense of others could lead to Oil War III.

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Impact- Extinction Oil peak downslope causes resource wars and extinction Campbell 2k2 (Colin, Ph.D. Oxford, (born in Berlin, Germany in 1931) is a retired British petroleum geologist who predicts that oil production will peak by 2007; “Colin Campbell on Oil Perhaps the World's Foremost Expert on Oil and the Oil Business Confirms the Ever More Apparent Reality of the Post-9-11 World,” From The Wilderness, 2002. < http://www.fromthewilderness.com/free/ww3/102302_campbell.html >) FTW: What will be the likely effects of hitting the downslope of production? Campbell: Big question. Simply stated: war, starvation, economic recession, possibly even the extinction of homo sapiens, insofar as the evolution of life on earth has always been accomplished by the extinction of over-adapted species (when their environmental niche changed for geologic or climatic reasons) leaving simpler forms to continue, and eventually giving rise new more adapted species. If Homo sapiens figures out how to move back to simplicity, he will be the first to do so. FTW: How soon before we start to feel the effects of dwindling oil supplies? Campbell: We already are (feeling the effects of dwindling oil supplies) -- in the form of the threatened U.S. invasion of the Middle East. The U.S. would be importing 90 percent of its oil by 2020 to hold even current demand and access to foreign oil has long been officially declared a vital national interest justifying military intervention. Probable actual physical shortage of all liquid hydrocarbons worldwide won't appear for about 20 years, especially if deepening recession holds down demand. But people are coming to appreciate that peak is imminent and what it means. Some places like the U.S. will face shortage sooner than others. The price is likely to soar as shortage looms, which itself may delay peak. If the U.S. does invade there will likely be a repeat of Vietnam with many years of fruitless struggle in which the U.S. will be seen as a tyrant and an oppressor, killing all those Arabs. It can't hope to subjugate the place in perpetuity as the people don't surrender easily -- as the Palestinians have shown. So when the U.S. has finally gone, Russia and China will likely be welcomed there to produce whatever is left in the ruins.

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Impacts-Terrorism Oil Peak causes massive terrorism and escalatory wars Maavak 06 (Mathew, a Malaysian journalist and a recent visiting fellow at Jakarta's Centre for Strategic and International Studies, he was trained in psychological warfare, propaganda, crisis management, media crisis and security-related issues at the University of Leeds, United Kingdom, “Peak Oil And The Political Economy Of Terrorism,” , accessed 7/16/08, [AZ]) Crude oil has breached the $70 psychological barrier again. This time, however, it will not be a one-day seduction by the stormy Katrina. The causative culprits are aplenty. Terrorist have taken out 25 per cent of Nigeria's sweet crude since late February and the daily joust between Washington and Tehran is providing splendid returns to those who had invested in oil stocks. For these savvy investors, there will be enough gas in the tank during the peak summer driving season. Than there is that 10.2 per cent growth registered by China, announced very conveniently before President Hu Jintao's scheduled meeting with his US counterpart George W. Bush. China's booming growth can only be greased by a harder-to-pump oil. The alternatives are stark. If the Chinese bubble gets pricked, the global economy suffers, US corporations may need higher tax cuts - or even subsidies - and Americans will finally need to trim their bellies. That would be Hu's sales pitch but Bush may opt for a more risky oil prospecting venture. This time, the failed former Texan oilman may succeed, and ignite enough fires in an energy-strained world. It is high noon for those prospecting for maximum oil returns. Even the types not usually associated with Wall Street, rocket science and deficit spending are glued to Bloomberg's running crude oil tickers by the minute. The objective is the lucky strike. Peak Oil is forming a strategic fit with Peak Terrorism. For a synoptic glimpse into the future, read this excerpt from New York Times' April 16 article headlined "Blood and Oil": Just as things seemed to be calming down in the delta region of Nigeria after a spate of kidnappings and insurgent attacks, the militant group calling itself the Movement for the Emancipation of the Niger Delta — MEND — announced last week to all who would listen that it was planning new violence against oil facilities in the region. Apparently unconcerned about tipping its hand to the authorities, MEND even gave a date for the start of its new campaign: April 25. That date is perfect! These guys are more financially savvy than stuffed suits who have hedged their future in a world where oil never existed. D-Day in the Niger Delta is just 72-odd hours before the UN Security Council meets to unleash a little fission over Iran's nuclear enrichment program. Crude oil at $80 per barrel on April 28? Who knows? If a rag-tag bunch of militants in Nigeria are accurately reading the tea leaves in an oilbrimmed cup, imagine what Al Qaeda and the pan-global martyrs of terror have in store? There is a greater lead-filled premium now for oil-related and economic targets. In a business-speak twist, collateral damage can be applied to the unlucky rejects in a fire sale transaction. You can bet your every last dime that terrorists are ready to throw their explosive spanners into the machineries of global trade. They know the drill. There is tremendous potential here to cause pandemonium and cross-border tensions. Targeting energy infrastructures will be far more efficacious and less opprobrious than the indiscriminate slaughter of civilians. Why assassinate politicians or shoot a GI when mobs - deprived of their daily bread - can do more in aggregates and derivatives? In layman's terms, we are talking about riots, sit-downs, union strikes, looted stores and political mayhem. Economic targets offer the best returns with less risks. Stock markets will be depressed, inflation will set in, bankruptcies will proliferate, and people will starve. The concatenation of financially-induced social upheavals has been witnessed before - across continents - during the currency crisis of the late 90s. Unless checked, wars are the inevitable culmination. There are no IMF prescriptions for dwindling oil reserves, busted pipelines and electricity blackouts. Call this the political economy of terrorism, but apart from Iraq and Palestine, terrorists will increasingly focus on the conveyor belts of finance and trade. There is no shortage of targets for disgruntled elements worldwide. There are Maoist guerillas in Nepal, ethnic insurgents in Burma, Al Qaeda-inspired militants in Islamic nations and assorted purveyors of violence in every nook and corner where there are power plants, ports, retail stores, trading depots, factories, banks and transborder pipelines. Mundane industrial structures - particularly those connected to oil - have attained value-added targeting than shoppers at a marketplace. A suicide bomber might as well "walk the last walk" into a minor, provincial bank than into a crowded souk. Planting midnight bombs at ATMs in a major city entails little or no bloodshed, though, it may douse seasonal fire sales the next morning, not to mention the lack of change for lunch. Ever noticed the anticipatory or frustrated month-end file of workers at ATM kiosks short on notes? A little inconvenience can go a long way in disrupting normal routine, and no nation can provide complete protection for these mundane cogs of human activity.

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Terrorists switching to the political economy side of their trade can expect other windfalls. Destroying the perceived icons of (Western) imperialism elicit less disgust - and perhaps sympathy - than the televised butchering of individuals. Suicide bombings that shred innocent limbs at a discotheque and net relayed beheadings of infidels reek of bestiality. Why kill a Daniel Pearl when you can play Che Guevara? But is this happening? There were strong hints emerging since February. The Niger Delta attacks offlined production amounting to 550,000 barrels per day, rendering the affected Royal Dutch Shell installations immobile till today. What was untouched was probably left for April 25. Almost simultaneously, violent protests in the Ecuadorian province of Napo forced state oil firm Petroecuador to halt supplies through its Trans-Ecuadorean pipeline. Both incidents raised US crude oil futures by $1 overnight. It has since risen by more than $10 dollars - a safe median figure used by commentators without an MSNBC or Bloomberg ticker on their offline notebooks. In Iraq, while bombs routinely kill civilians, little has been noted of pipeline sabotages, stretching from Kirkuk to Bayji to the Turkish border. Restoring normal output may take up to a year. And that's a big hypothetical "if" with Iraq in a state of disintegration. Think of the hundreds of thousands of miles of exposed pipelines around the world, and the cumulative number of years needed to repair them? If Iraq's oil and its pipelines can energize the current sectarian war, couldn't that be replicated in places simmering with ethnic and social tensions? Expect authoritarian governments to manufacture terrorism for the perpetuation of power. If you regard the USA PATRIOT Act as draconian, you haven't seen the world yet! Any bomb anywhere can be pinned on "terrorists" and sifting the real from the manufactured would be next to impossible with censorship laws established to prevent the transmission of coded communications. Sounds familiar? It would pose no barrier to the Real McCoys, however. Terrorists - separated by ethnic, ideological and religious motivations but united by calculated anarchy - have learnt their economic primers on the go. It is the most potent weapon in this age of Peak Oil. Neither the brotherhoods of anarchy nor coded messages are needed to set action time. The daily business headlines will do. In Sync While oil traders were still risk managing the outage from Ecuador and the Niger Delta, militants in Saudi Arabia attempted to blow up the world's largest oil processing complex in Abqaiq on Feb 24. If they had succeeded, there would have been a double digit increase in the price of crude in 48 hours. It could have also precipitated social anarchy in a land seething with repressed anger against the Al Saud monarchy. Under such a scenario, repair works at Abqaiq would be next to impossible, oil would shoot to above $100 per barrel, and a vortex of violence would spiral to engulf much of the world. Remember, society is only three meals away from anarchy. As tensions rise by the day over Iran's nuclear enrichment program- and it's not only Iran - pipelines and economic targets are easier pickings vis a vis heavily-guarded political, military and constabulary bastions. Call this risk management on both sides. Governments will prioritize security for the levers of governance and power; terrorists will probe and prioritize valuable, less-guarded targets to trap security apparatuses in a game of musical chairs. This will leave a gap for political targets sooner or later. It's an old trick with new destructive possibilities in a world peaked of oil. Terrorists can also conflate ideological mileage with financial aggrandizement. This was demonstrated during the days leading up to the Sept 11 attacks. Unusually heavy transactions were noted on airline stocks in the hours and days leading up to the fateful incident. The yet-tobe-proven suspects were Osama bin Laden and Al Qaeda. This gives a new twist to the maligned practice of "insider trading," and it ingeniously raises capital for further terrorist ventures. Non-ideological players like organized criminal gangs and state actors would have taken note. Each day, violence permeates our airwaves, are regurgitated on news clips, and are headlined on our dailies. The real dangers of terrorism can be manipulated and faked by the religious devotees of Mammon. Blames can fly in all directions. Terrorists, after all, are the dernier cri bogeyman of our times. They can - advertently or not - create political and financial capital for powerful entities. The terrorism shill also provides a Trojan Horse for state actors to destabilize a hostile nation. In this high-octane world of dwindling mineral resources, "terrorism" might be the spark - and later a sideshow - for outright inter-state conflict. Wars are dictated by the primacy of economics while ideologies serve to rouse the masses. The most tindery powder keg right now is Iran. It's not just hedge fund managers and investment gurus who are bracing for the worst, or the best, depending on one's philosophy. There is money here for Armani-clad entrepreneurs and coups de grace for ski-masked individuals. If Iran burns, or if neighboring Iraq descends further into anarchy, expect scattered strikes against oil installations, ports and power plants the world over. There will be more trouble in Nigeria and Ecuador. Hotspots will get hotter with conflicts spreading far and wide. With so much happening, renewed conflict in little-known Chad - among the five poorest nations in the world but one with a billion in crude reserves - may not blip on our media radar. The Ides of March have passed and it has left us with bad omens for the coming months. The game of energy geopolitics is taking new turns and uncertainties, including the option of a tactical nuke attack on Iran's Natanz, Isfahan, and Bushehr complexes. If Iran gets hit, the anti-American Venezuelan President Hugo Chavez may deliberately divert oil supplies to nations like China, depriving the US of 15 per cent of its oil imports. Highly unlikely but there are other variants to this game. Al Qaeda may bomb targets within Iran, and blame it on the United States, or it could sink a few tankers in the Straits of Hormuz and blame it on the Persians. Neither the United States nor Iran need to fight in a best-case scenario - if an extraneous culprit can be identified and a standoff reached in time. A Straits of Hormuz blocked by sunken tankers either way will immediately reduce global oil supplies by 20-25 per cent per day. Perhaps more, depending on which estimates you have been reading.

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<<<Maavak Continues on Next Page – No Text Deleted>>> The United States, after all, has the largest strategic petroleum stockpile in the world, and its powers would be aggrandized through this energy buffer. Is that good news? Well, should US soldiers die in a Middle East artificially contrived and subverted by Britain? Cut a deal with Tehran! After all, Iran might have been a US partner today if not for Winston Churchill. The CIA only stepped in later, in 1953. The tussle started over the Anglo-Persian Oil Company, which no longer exists by that name, but the bone of contention has gone on to include tactical nukes. Like changed names, the United Kingdom's role in global subversion has been well-masked by Uncle Sam's schoolboy misadventures. Trust the Brits to ramp up their global terror machine again and expect Uncle Sam to receive the annual rogue superpower award. Expect a scramble for oil worldwide, providing targets of opportunities to militants, criminals, and state-sponsored terrorists. When this happens, the current national and international structures would be blown out of shape. Within this nightmare world, ordinary folks would gladly welcome some order, or a New World Order. That plan was readied long back - lock, stock and barrel. Long before the United States of America came into being! Welcome to the year when the artifice of civilization begins its slide into a natural state of barbarity.

Peak oil causes resource wars and terrorism Pressbox 2005 (pressbox has become one of the pre-eminent online media resource portals acting as an online hub between opt in journalists and PR organisation and business. PR professionals are able post unlimited press releases to the pressbox newswire and directory. "Peak Oil, Resource Wars, and the London Bombings," http://www.pressbox.co.uk/detailed/Society/Peak_Oil_Resource_Wars_and_the_London_Bombings_32443.html) Does anyone believe for one moment that we are in Iraq for any reason other then the oil? If it is about the oil, and 'Peak oil' pessimists like myself believe that we are facing a world of dwindling energy (i.e. oil) supplies….soon; then the actions of our political leaders become crystal clear and frightening logical. The implications are also becoming inescapable. Expect more terrorism on our streets, more foreign wars, and accept a constant eroding of our civil liberties in pursuit of the resources necessary to maintain our high energy, high consumption lifestyles. While to many a complete reassessment of our high consumption lifestyles is impossible, and to some "not negotiable", to me this represents a complete failure of political leadership and a lack of collective imagination. We have a stark choice, either find other ways of re-creating our lifestyle and all that means, or acquiesce to fighting ever worsening, never ending resource wars, and all that means.

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Impacts-Poverty Peak oil will perpetuate poverty. Reuters 08 (Alex Lawler, reporter for Reuters, 7/21, “RPT-Peak oil to hinder world development -UK lawmakers,” < http://in.reuters.com/article/oilRpt/idINL2187782220080721>, accessed 7/22/08, [AZ]) The looming peak in world oil production will set back international development and threatens to hinder efforts to make poverty history, a report by a group of UK lawmakers said. While oil's rally to a record high is causing economic pain in developed countries, its impact on international development is being overlooked, the report by the All Party Parliamentary Group on Peak Oil and development groups RESET and Practical Action said. "The deepening energy crisis has the potential to make poverty a permanent state for a growing number of people, undoing the development efforts of a generation," the report released on Monday said. "Communities across the globe are more vulnerable than ever, living in an unsustainable present and facing an uncertain future." A rally in oil prices, which hit a record $147.27 a barrel earlier this month, is leading to more interest in peak oil -- the controversial view that supply has reached, or will soon reach, a high point and then fall. The parliamentary group, chaired by lawmaker John Hemming, was formed in 2007 to consider the production outlook and the consequences of declining supply for the British and world economy. It has 20 members. Its report refers to warnings that peak oil is likely to occur "before 2015" and the current jump in oil prices is "a prelude to even more severe increases in the next decade," a statement issued with the report said. Among its recommendations are the formation of a working group on energy security and international development, and funding measures in the humanitarian sector that boost local food production and energy security.

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Impacts-Climate Peak oil destroys the climate – when the precipitous decline begins, countries will resort to polluting, unconventional sources of fossil fuels in a futile attempt to stave off imminent doom. People’s Weekly World 08 (Mark Hertsgaard, the environment correspondent for The Nation and the author of many books, including Earth Odyssey: Around the World In Search of Our Environmental Future, 5/5, “The end of cheap oil is now,” , accessed 7/22/08, [AZ]) The United States, with its two hour commutes, three car families, atrophied mass transit and petroleum-based food system, is most vulnerable to an oil shock. But similar vulnerabilities exist in most industrial societies, not to mention China and other emerging economies that are only now getting a taste of oil-fueled modernity. Ironically, peak oil could actually harm the environment, making climate change worse. One might think that less oil would mean less consumption and lower carbon dioxide emissions. But the modern world is addicted to oil. If peak oil arrives before the addiction is broken, societies will likely do whatever is necessary to keep their addictions fed. That is already happening in Canada, where Exxon-Mobil and others are mining so-called tar sands-a very dirty fuel that carries a much greater carbon footprint than conventional oil.

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Impacts-Agriculture Peak oil destroys agriculture – 4 billion die. Kuhlman 05 (Alex, received his Master's degree in Economics from the University of Amsterdam, he has taken a very active interest in Peak Oil and has written many articles, featured in a Peak Oil documentary and sporadically lectures at colleges & universities, < http://www.oildecline.com/page3.htm> accessed 7/22/08, [AZ]) It may come as a surprise to many that the world’s industrial food supply system is one of the biggest consumers of fossil fuels. Vast amounts of oil and gas are used as raw materials and energy in the manufacture of fertilizers, herbicides and pesticides and as cheap and readily available energy at all stages of food production. Fossil fuels are also essential in the construction and the repair of equipment and infrastructure needed to facilitate this industry, including farm machinery, processing facilities, storage, ships, trucks and roads. Just consider that currently agriculture accounts for 17% of the US annual energy budget. Industrial, green revolution-style agriculture is particularly energy intensive. Every calorie of food produced today requires between 10-16 calories of hydrocarbon energy (from planting, irrigation, feeding and harvesting, through to processing, distribution and packaging). This style of agriculture increased world grain production by 250%, and was almost entirely attributable to fossil fuel input. Food production will become a problem of extreme urgency Modern agriculture is merely a way of converting petroleum into food. Without energy, food supplies decrease and the current world population of 6+ billion has no hope whatsoever of sustaining itself at current levels. It has been estimated that, without hydrocarbons to provide energy, fertilizers and pesticides, agriculture could not support a population greater than two billion. This reduction would take us back to pre-20th century levels but the disruption to society and its infrastructure would probably mean a reversion to pre-industrial revolution. The example of North Korea shows us what happens to agriculture when oil products are removed. After the Korean war, it had developed a modern farming system depending on machinery and oil-based fertilizers. After the Soviet Union fell, Communist aid to the country stopped and they were unable to purchase oil and supplies. Without oil, farm machinery was sitting idle and large proportions of the people had to return to the agriculture. Unfortunately the soil had been drained of nutrients over the years and, without fertilizers, it was unable to produce the same output as before. Crop yields fell by 60% over the period 1989-1998. US congressmen and others who have visited North Korea tell stories of people eating grass and bark. Other reports talk of soldiers who are nothing more than skin and bones. Throughout the country, there is starvation to rival the worst found in Africa. Chronic malnutrition has reached the point where many of the effects are irreversible. Unless it can get access to oil and fertilizers again, the population will decline until it reaches a sustainable level and civilization will be faced with the delicate task of determining who survives. The history of North-Korea (DPRK) demonstrates how an energy crisis in an industrialized nation can lead to complete systemic breakdown

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Impacts-Agriculture Billions will die off Jay Hanson No Date Provided After a successful career in software design, his ongoing quest for knowledge about energy, evolution and the environment culminated in a massive internet reference hub for these topics called DIEOFF.ORG. In 1997 he predicted we would invade and occupy Iraq for their oil. (link). Jay has been intensely studying and researching topics central to energy and evolution nearly full time for 15 years, ("Five Fundamental Errors," http://www.dieoff.org/page241.htm) The sudden -- and surprising -- end of the fossil fuel age will stun everyone -- and kill billions. Once the truth is told about gas and oil (it's just a matter of time), your life will change forever Envision a world where freezing, starving people burn everything combustible -- everything from forests (releasing CO2; destroying topsoil and species); to garbage dumps (releasing dioxins, PCBs, and heavy metals); to people (by waging nuclear, biological, chemical, and conventional war); and you have seen the future. Envision a world utterly destroyed by a lethal education.

Oil scarcity will destroy agriculture – mass dieoffs ensue The Social Contract 02 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., Summer, “The Coming End of Cheap Oil: To Hubbert’s Peak and Beyond,” <www.gunnarlindgren.com/comingendoil.pdf>, accessed 7/19/08, [AZ]) The effects will be grimmest in agriculture. As cornucopians always brag, modern agriculture is fantastically more productive than traditional farming. What they overlook is that it gives hostages to hydrocarbons. As Bartlett aptly put it, “Modern agriculture is the use of land to convert petroleum into food.” In 1999, according to the U.S. Department of Agriculture’s Economic Research Service, energy costs accounted for 24-31 percent of the total variable cost for field crops (e.g., corn, wheat). Not only does modern agriculture use fossil fuels for machinery, transportation, groundwater pumping and irrigation, it depends heavily on fertilizers, which are made by reacting natural gas with nitrogen. Since natural gas accounts for 75-90 percent of the cost of nitrogen fertilizers, rising natural gas prices will devastate the fertilizer industry; fertilizer producers could not cover costs by the end of 2000 due to high gas prices.40 With natural gas substituting for oil, demand will be increasing for a supply which will be falling after about 2020. This means steadily rising gas, fertilizer, and food prices, and dwindling crop yields in nations which must import natural gas, fuels and fertilizers, and which cannot afford the squeeze. North Korea’s recent famine is a warning of modern petroleum-based agriculture’s vulnerability to breakdown if hydrocarbon inputs disappear; when fuel and fertilizer supplies collapsed, so did agriculture; three million North Koreans starved to death.41 Moreover, costlier energy will exacerbate our already-worsening water problems by making it costlier to purify and recycle contaminated water and to drill for, pump, and transport ground water.

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Impacts- Sadness or “meaning to life” Peak oil downslope will make people feel very sad Bakhtiari 2006 (Ali Samsam, a senior expert employed by the National Iranian Oil Company (NIOC). He held a number of senior positions with this organisation since 1971. He was also an advisor to the Oil Depletion Analysis Centre. He held a PhD in chemical engineering from the Swiss Federal Institute of Technology in Zurich, Switzerland. He had been a part-time lecturer for the Technical Faculty at Tehran University for many years. Bakhtiari wrote a number of short essays and is the author of Peaks and Troughs which is about the modern history of Iran. Dr Bakhtiari suggested that it would require an act of god for the world to avoid warring over depleting energy resources. He also believed that a peak in natural gas would be more shocking than peak oil because natural gas is less fluid and requires pipelines and LNG facilities to export overseas In 'Post Peak,' all of our systems of habits are in mortal danger. Due to the relative cheapness of crude oil (in relation to other, more expensive daily needs), people don't exactly realize the pivotal role played by its products in their daily routines -- as these products have invaded every nook and cranny of our modern life.; “Whiskey and Gunpowder,” by Byron King < http://www.lifeaftertheoilcrash.net/Archives2007/KingEvent.html >) It is only when the brakes will be pulled (as they inevitably will have to be) that the general public will come to gradually realize the critical importance of 'black gold' -- which currently provides no less than two-fifths of world energy -- and of 'energy' in general in their living habits. "Thus, at present, the global masses seem totally unprepared for the two shocks which will inevitably occur in 'Post Peak.' On the one hand, no major institution or medium is willing to inform them seriously on the not-so-palatable consequences of 'Post Peak'; and, on other hand, specialized institutions (such as the International Energy Agency [IEA], the Energy Information Administration [EIA] and OPEC) as well as some major energy consultancies (e.g., the Cambridge Energy Research Associates and the Edinburgh-based Wood Mackenzie research outfit) will go on denying 'Peak Oil' by issuing rosy future oil output predictions. So that the twin shocks are now inevitable on a global scale, as there is no time left to prepare public opinion for 'Post Peak' sequels. The shocks will first surprise, then jilt, and finally entangle swaths of people worldwide. Those better prepared will be less inclined to react in a disorderly way and panic when the shocking truth will be unveiled. In the large majority of countries, no one has prepared (or wanted to prepare) the general public to the historical 'Peak Oil' event and to itsmomentous consequence in their daily lives. Thus, most probably, the popular masses will be directly exposed to two main types of shock: A material shock and a psychological shock. "Due to the benign decline gradient in crude oil production during the early 'Post Peak' period -- only 3 mb/d over the first transition period spanning 2007-2010 -- the material shock will not pose insoluble problems and accommodation will prove possible with minimal gradual pain. Moreover, sizeable amounts of wastage in most developed societies will provide a welcome cushion for the initial cuts to be made. "Not so for the psychological shock. This shock, in stark contrast, will be electric and abrupt. Stress, fear, depression, despairs, and nightmares wil be the order of the day -- as people come to face the not-so-palatable facets of 'Post Peak.' When confronted with this series of unknowns, with the trauma of change, people will try to protect themselves by automatically reverting to their past, to the known, to what they believe to be "real and true" -- in a word, to their reassuring 'roots.

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Peak Oil Outweighs Warming Peak oil impacts will happen before warming impacts Christian Science Monitor, 2007 (David R. Francis, “Why peak oil may soon pique your interest,” August 6, 2007. < http://www.csmonitor.com/2007/0806/p15s01-wmgn.html> ) Do a Google search of the Web on "global warming" and it calls up more than 80 million references. Search for "peak oil" and the number exceeds 10 million. In two years or so, world concern over crude oils supplies should be so great that a Google search on that subject probably will top that of global warming, predicts Matthew Simmons, chairman of Houston-based Simmons & Company International, an investment banking firm for the energy industry. Peak oil refers to the time when production of crude oil in the world (or in a country or in an oil field) reaches its peak and starts to slide. It doesn't mean the world has run out of oil – only that the supply of oil isn't rising to meet growing demand. That change could be reflected in even higher prices, if the demand for oil doesn't stall or fall. Last Tuesday, the price of oil futures on the New York Mercantile Exchange set a record, rising as high as $78.40. That exceeded the previous high of $77.03 set in July 2006 at the onset of Israel's war in Lebanon. The world output of oil actually already peaked in May 2005 at 74.2 million barrels a day, says Mr. Simmons. Since then, production has fallen about 1 million barrels a day (MB/D). If that trend continues, the results for the world economy will be "so real, so devastating" that peak oil concerns will overwhelm slower-moving global warming in grabbing world attention. That's because today's civilization hangs heavily on an adequate supply of oil. It, for instance, fuels most vehicles, heats many homes and businesses, and is used in many chemicals and plastics. Oil and natural gas now meets some 60 percent of the world's primary energy needs. Oil shortages, warns Simmons, could lead to war.

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Aviation Impact Module 1/3 Peak Oil ultimately means the demise of Commercial Aviation, causing huge revenue loss and a lack of air travel demand Kuhlman, 2006 (Alex, MA, received a post­graduate degree in Economics from the University of Amsterdam, with experience in Strategy & Planning in  Logistics Management, and a strong background in the aviation industry, “Peak Oil­ and the Collapse of Commercial Aviation?” Airways, July 2006,  www.oildecline.com/ak)

Oil provides 40% of all primary energy, and more than 90% of energy for our transport systems. In the USA, airlines are the fourth largest consumer of oil, representing a modest 6% of total domestic consumption. Since the beginning of 2004, the cost of jet fuel has  more than doubled and, for many airlines, is now overtaking labor as the greatest operating expense (Airways, January 2005).  The profitability of airlines was already under extreme pressure through increased competition, over­capacity, and lower  yields. Furthermore, terrorist attacks have had temporary negative effects on demand in general and on specific routes, while the cost of security has also soared. Once again, the aviation industry is suffering. IATA (International Air Transport Association) has predicted total losses of $2.2 billion for 2006 because of high fuel costs. But only a few carriers, like Southwest Airlines, had the  foresight, courage, and resources to buy hedging contracts. Some other major airlines have hedged only a small proportion of their fuel  requirements, while the remainder is fully exposed to future price rises. The worlds of economics and business still routinely assume a  future with cheap oil that is in growing supply. At the time of writing, oil futures as far away as 2012 are still trading around the $65  per barrel mark, while investment bank Goldman Sachs predicts that after a temporary ‘super­ spike’, prices will return to the $30­$50  bracket after 2009. In other words, peak oil is still invisible on Wall Street for a variety of reasons. Early signs of a pending crisis are  already emerging, like the disappearance of spare capacity throughout the energy infrastructure, peaking of light sweet crude oil, refining capacity shortages, and dramatic rises in liquid fuel prices. When most financial analysts recognize our predicament, there will be a collapse of confidence. Once there is widespread market-based panic, oil prices will soar above $100 very quickly, further  hurting the airline industry. In addition, high prices will decrease consumer’s disposable income and dampen demand—the  last five recessions in the USA were all preceded by a rise in the price of oil. As a result, the number of cash­strapped airlines  will increase, while weaker airlines without hedging contracts­that somehow manage to survive in the short­term­face collapse.  The only way oil prices will not top triple-digit figures within the next few years is if there is a huge worldwide depression. This effect would only be temporary and limited (the price elasticity of oil is low), but equally damaging to the airline industry.  In addition,  higher fuel costs will dilute the competitive advantage of low­cost carriers. As the fuel share total costs increases,  the relative  share of all other operating expenses decreases, weakening the low­cost advantages upon which these airlines have traditionally based  their model. Another possible­ but temporary­ effect may be a relative increase in short­haul travel, at the expense of more fuel­ intensive long­haul trips.  Most likely, the more successful airlines will be flag carriers from OPEC (Organization of the Petroleum  Exporting Countries) nations in the Middle East as this region will benefit from higher oil prices, allowing these airlines to go from  strength to strength. For example, Emirates ahs already ordered 43 Airbus A380s (Airways, February 2006), which is a key element in  the company’s future growth. An advantage of this gigantic aircraft will be its lower fuel burn per seat mile.  The future outlook for  commercial aviation is dim. As oil prices continue to rise further, the world economy will be confronted with a major shock  that will stunt economic growth and increase inflation. The chief economist of Morgan Stanley has predicted that we have a 90%  chance of facing “economic Armageddon.” During the transition period to a post­oil era, insufficient affordable oil supplies  will be available to fuel today’s transport systems, and there will be massive disruptions as the global decline of oil is  accelerated. There will be social unrest, food shortages, a strong reduction of business and government activity, and very serious unemployment. Even if the airline industry can successfully source–– and adapt to––substitute (synthetic) fuels, a large  proportion of the demand for air travel will be almost completely erased. Once again, air travel will become the preserve of the  wealthy and government business, and the world will become a large place again. It is difficult to envision a future that is so drastically  dislocated from the present. 

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Aviation Impact Module 2/3 Airlines key to the economy. San Francisco Chronicle, 2008 (Tom Raum, AP staff writer, “Analysis: Wider Cost of Grounded Flights,” 4/10, http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/04/10/national/w144022D69.DTL&feed=rss.business ) It’s not just angry passengers who are suffering. The grounding of thousands of flights is disrupting cargo, mail and other crucial business for financially strapped airlines, and that means painful new strains on a US economy teetering on the edge of recession. Apologetic airlines suggest the cancellations won’t extend but there are indications the problems may just be beginning as federal regulators step up their scrutiny of carriers’ compliance with safety rules. Air traffic systems, computers and other crucial equipment are aging, as are many of the planes themselves. Critics of the industry say that cutbacks on maintenance and inadequate government safeguards are starting to take a toll. Meanwhile, record-high jet fuel prices have squeezed airlines and led to a new round of bankruptcies ó most recently ATA Airlines, Skybus and Aloha Airgroup ó in an industry whose finances have always been shaky. After the Sept 11, 2001, terror attacks, Congress authorized $5 billion in cash to help shore up the industry and followed up with $10 billion in loan guarantees. The industry now is suffering its hardest times since then. Delays already were costing the economy an estimated $9 billion a year, according to Democratic Sen Charles Schumer, chairman of the Joint Economic Committee of Congress. “The US economy can’t afford to have one of its major airlines just shut down for days,” he said Thursday. “The ripple effect is tremendous, it’s like putting a vise on commerce.” American Airlines canceled more than 3,000 flights in April when federal regulators warned that nearly half the airline’s planes might violate a safety regulation designed to prevent fires. That, plus safety-inspection cancellations recently by Delta, Midwest and other airlines left hundreds of thousands of passengers scrambling for alternatives and drew outbursts from Capitol Hill. “It’s catastrophic economically, and it’s an embarrassment to the nation,” said Democratic Sen Jay Rockefeller, chairman of a Senate Commerce subcommittee on aviation safety. That panel grilled officials from the Federal Aviation Administration and airline industry groups on Thursday. Nicholas Sabatini, associate FAA administrator for safety, said that, as disruptive as the cancellations might be, everybody should be grateful that “we’re not here post-accident, but at a time when the system is incredibly safe.” Rockefeller said, “The airline industry is living on borrowed time.” Democratic Sen Frank Lautenberg, said, “Some may argue it’s one of the safest periods. But it’s happened in spite of FAA policies. We’ve seen record flight delays, increases in near collisions on our runways, understaffing of controllers and safety inspectors.” He also claimed lax enforcement by the regulatory agency, an allegation Sabatini denied. Manufacturers rely on airlines to deliver tons of cargo a day, and any lengthy period of mass cancellations could prove costly. The groundings also are taking a financial toll on business travelers who lost a day or more of work, and on people in the airline industry such as flight crews idled by the groundings. “I really had no idea this thing could drag on as long as it has. A week and a half ago, I thought it was a one-time thing,” said Steven G. Cochrane, senior managing director of Moody’s Energy.com. He said the groundings could have a “moderate impact” on the overall economy and directly affect the balance sheets of the airlines involved. “Their margins are so thin right now. There’s no wiggle room for the airlines. Anything that provides any kind of a

speed bump is going to put them into a loss.” For one thing, Cochrane said airlines no longer are able to hedge successfully against rising fuel costs. In the past, they could enter into fixed-price contracts when prices were fluctuating that gave them some protection against increases. “No one out there now is willing to agree to provide them fuel in the future at today’s prices. The risks are all on the upside on price,” he said. Airline analyst Ray Neidl of Calyon Securities said the rise this week in oil prices to over a record $110 a barrel is potentially more damaging to airline finances than the FAA groundings. Still, he acknowledged that if the groundings go on for a “long time, it’s going to cause overall general economic problems.” He said he was optimistic that the problems would turn out to be short-term ones. US airlines transport more than 2.1 million passengers on a typical day, directly employ over a half million workers, provide extensive cargo services, link US cities with each other and with the rest of the world and “are the backbone of the travel and tourism industry,” said Basil Barimo, vice-president of the Air Transport Association of America, an industry trade group. “The US airline industry is not simply an important sector of our national economy. Its services fuel our entire economy,” Barimo said. “Air transportation is an indispensable element of America’s infrastructure and our nation’s economic well-being.” The intensified inspections that resulted in the wide-ranging groundings were ordered by the FAA after Southwest Airlines was found last month to have flown planes that missed inspections. Darryl Jenkins, an analyst who teaches airline management at Embry Riddle Aeronautical University in Daytona Beach, Fla., said he didn’t think it was necessary “to ground an entire fleet and inconvenience hundreds of thousands of people” when many of the inspections and maintenance jobs could have been done at night. He accused the FAA of swinging back and forth between being too cozy with the airline industry and being too rigid.

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Aviation Impact Module 3/3 U.S. key to global economy Fund Strategy, UK Finance Magazine Targeting High-End Investment, February 6, 2006 The emphasis on consumption explains the volume’s “Flying on One Engine” title. In the book the phrase is attibuted to Kenneth Rogoff, the Harvard economist who wrote the foreword. However, elsewhere it has been attributed to Larry Summers, a former US treasury secretary. Either way the assumption is that American consumption is the engine that drives the global economy. Or as Kathleen Stephansen, the director of global economics at Credit Suisse First Boston, puts it, changing the metaphor from planes to trains: “The US economy’s high propensity to consume and to import, combined with the country’s policy flexibility, has reaffirmed the United States as the locomotive to global growth. Economic Decline Causes Nuclear War Mead, 1992 (Walter Russell Mead, Senior Fellow for U.S. Foreign Policy at the Council on Foreign Relations, World Policy Institute, 1992) Hundreds of millions – billions – of people have pinned their hopes on the international market economy. They and their leaders have embraced market principles – and drawn closer to the west – because they believe that our system can work for them. But what if it can't? What if the global economy stagnates – or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia, China, India – these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the 30s.

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Nigeria Impact Module 1/2 Peak oil leads to regional wars in Nigeria as factions war over increasingly valuable oil, undermining stability in the region. Africa News 08 (AfricaFocus, 7/16, “Nigeria; Curse of the Black Gold,” Lexis-Nexis Academic, [AZ]) Whether or not we have fully arrived at peak oil can be left to the nitpickers and bean counters to decide. What we know for sure is that the cost of black gold has exponentially risen in just a few short years, and the global economy it is built upon is currently straddling a razor waiting for the inevitable slice. That final cut may come from Nigeria, where all the major oil companies have done business, dirty and otherwise, for the last five decades, degrading the environment and depressing the general population along the way. That disturbing feedback loop is the subject of the new book Curse of the Black Gold: 50 Years of Oil in the Niger Delta, which juxtaposes the arresting graphics of award-winning photojournalist Ed Kashi with the geopolitical insights of UC Berkeley professor Michael Watts to present Africa's most populous nation as a possible epicenter for the full-blown resource wars to come. ... They are wars that are already well under way. In mid-June, a Shell facility was attacked by local militants, disrupting production and sending the already sky-high price of oil to further heights before coming back online a week later. Attacks like those have increased in frequency, as Nigerian factions have fought for control of the nation's lucrative petroleum resources, which are the largest in Africa. The problem, especially as indigenous populations caught between Nigeria's prosperous rich and their oil industry's environmental devastation see it, is that viable land and resources have been wasted on a handful while the majority of the country falls into further disrepair and depression. From natural gas flares and oil spills to the destruction of native plants, animal species and other salable commodities, Nigeria's oil industry has wreaked havoc across the land and its people. And it's only getting worse. And if you think it doesn't affect America, think again. "The United States has been concerned with its own post-1945 global oil strategy, involving Saudi Arabia, Iran and Venezuela," Watts explains in our interview below. "But this strategy has fallen apart, and now Africa plays a key role at a time when oil is beyond $100 a barrel." It is a role that will only expand, as increasing demand, ass-backward environmental policy and diminishing resources send nations and multinationals scattering for control of what's left of Earth's black gold. America's disastrous war in Iraq is one example of this panic at work. President Bush's 2006 plan to establish the United States African Command (AFRICOM), an ominous Department of Defense program to network operations and combatant command across the African continent, is another such example, especially since not one African country has come forward to offer America permission to build a base on its territory. For now, AFRICOM is on the outside looking in on Africa from a base in Germany, an arrangement that can be seen both as a geopolitical reality and as a suitable metaphor for U.S.-African relations throughout history. But the United States won't be outside Africa for long, as climate crisis and peak oil take further hold. And when it comes calling, it will most likely call on Nigeria first.

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Nigeria Impact Module 2/2 Nigeria is key to African stability Akwei 04, (Adotei, Amnesty International, “Adotei Akwei gives an update on the current situation in Nigeria,” NPR, April 7, Lexis) Ms. AKWEI: Well, Nigeria is absolutely critical to West Africa. You have conflicts in Liberia. You have conflict now in Cote d'Ivoire, which was one of the most stable countries in Africa. You have a very fragile situation Sierre Leone and you have fighting on the border of Guinea. So that whole Manu River region of West Africa is just on the precipice. You have very weak democracies in Benin and in Ghana. The saying is 'That if Nigeria, you know, sneezes, the rest of West Africa catches a cold.' It also impacts all of Africa because it has this population that's massive. It has economic potential to really pull the region up-the West Africa region. You know, we're all kind of waiting and hoping for Nigeria to assume and lead the way it was meant to because of its size and its resources. And we're still waiting.

African conflict is the most probable scenario for global nuclear war Deutsch 01 (Dr. Jeffery, Founder – Rabid Tiger Project, Rabid Tiger Newsletter, Vol. 2, No. 7, 11-18, http://www.rabidtigers.com/rtn/newsletterv2n9.html) The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa. Civil wars in the Congo (the country formerly known as Zaire), Rwanda, Somalia and Sierra Leone, and domestic instability in Zimbabwe, Sudan and other countries, as well as occasional brushfire and other wars (thanks in part to "national" borders that cut across tribal ones) turn into a really nasty stew. We've got all too many rabid tigers and potential rabid tigers, who are willing to push the button rather than risk being seen as wishywashy in the face of a mortal threat and overthrown. Geopolitically speaking, Africa is open range. Very few countries in Africa are beholden to any particular power. South Africa is a major exception in this respect - not to mention in that she also probably already has the Bomb. Thus, outside powers can more easily find client states there than, say, in Europe where the political lines have long since been drawn, or Asia where many of the countries (China, India, Japan) are powers unto themselves and don't need any "help," thank you. Thus, an African war can attract outside involvement very quickly. Of course, a proxy war alone may not induce the Great Powers to fight each other. But an African nuclear strike can ignite a much broader conflagration, if the other powers are interested in a fight. Certainly, such a strike would in the first place have been facilitated by outside help - financial, scientific, engineering, etc. Africa is an ocean of troubled waters, and some people love to go fishing.

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AT: Tons of Oil Now Global oil supplies have been vastly overestimated Wall Street Journal, 2008 (international daily business and financial newspaper, “Energy Watchdog warns of Oil-Production Crunch” May 22, 2008 ) The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand. The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought. A pessimistic supply outlook from the IEA could further rattle an oil market that already has seen crude prices rocket over $130 a barrel, double what they were a year ago. U.S. benchmark crude broke a record for the fourth day in a row, rising 3.3% Wednesday to close at $133.17 a barrel on the New York Mercantile Exchange. For several years, the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently. Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades. The decision to rigorously survey supply -- instead of just demand, as in the past -- reflects an increasing fear within the agency and elsewhere that oil-producing regions aren't on track to meet future needs. "The oil investments required may be much, much higher than what people assume," said Fatih Birol, the IEA's chief economist and the leader of the study, in an interview with The Wall Street Journal. "This is a dangerous situation. The IEA monitors energy markets for the world's 26 most-advanced economies, including the U.S., Japan and all of Europe. It acts as a counterweight in the market to the views of the Organization of Petroleum Exporting Countries. The IEA's endorsement of a crimped supply scenario likely will be interpreted by the cartel as yet another call to pump more oil -- a call it will have a difficult time answering. Last week, the Saudis gave President Bush a lukewarm response to his plea for more oil, saying they were already adding 300,000 barrels a day to the market, an announcement that did nothing to cool prices.

Oil companies are spending massively for new oil without any success New York Times, 2004 (“Top oil groups fail to recoup exploration costs,” The New York Times, 10/10/04 < http://www.nytimes.com/financialtimes/business/FT20041010_7135_200375.html?_r=3&oref=login&oref=slogin&oref=slogin&oref =slogin> ) The world's biggest oil companies are failing to get value for money when they explore for new reserves, according to research by Wood Mackenzie, the energy consultant. The report shows the commercial value of oil and gas discovered over the past three years by the 10 largest listed energy groups is running well below the amount they have spent on exploration. The findings come at a time when international oil groups are considering how far to boost exploration budgets after years of falling investment. It also comes at a time when oil prices are reaching record highs as a result of soaring demand and limited surplus supplies. Companies are spending record levels on developing known fields in regions such as the US Gulf of Mexico, west Africa and the Caspian Sea, which should guarantee production growth until 2008. But Robert Plummer, corporate analyst at Wood Mackenzie, said: "After that they will need more discoveries to maintain growth . . . the problem is exploration has not been generating returns."

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AT: Tons of Oil Now Too many barriers prevent obtaining minimal supplies of oil worldwide United States Government Accountability Office, 2007 (the audit, evaluation, and investigation arm of the U.S. Congress, “CRUDE OIL: Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production,” US GAO, February 2007) Most studies estimate that oil production will peak sometime between now and 2040, although many of these projections cover a wide range of time, including two studies for which the range extends into the next century. The timing of the peak depends on multiple, uncertain factors that will influence how quickly the remaining oil is used, including the amount of oil still in the ground, how much of the remaining oil can be ultimately produced, and future oil demand. The amount of oil remaining in the ground is highly uncertain, in part because the Organization of Petroleum Exporting Countries (OPEC) controls most of the estimated world oil reserves, but its estimates of reserves are not verified by independent auditors. In addition, many parts of the world have not yet been fully explored for oil. There is also great uncertainty about the amount of oil that will ultimately be produced, given the technological, cost, and environmental challenges. For example, some of the oil remaining in the ground can be accessed only by using complex and costly technologies that present greater environmental challenges than the technologies used for most of the oil produced to date. Other important sources of uncertainty about future oil production are potentially unfavorable political and investment conditions in countries where oil is located. For example, more than 60 percent of world oil reserves, on the basis of Oil and Gas Journal estimates, are in countries where relatively unstable political conditions could constrain oil exploration and production. Finally, future world demand for oil also is uncertain because it depends on economic growth and government policies throughout the world. For example, continued rapid economic growth in China and India could significantly increase world demand for oil, while environmental concerns, including oil’s contribution to global warming, may spur conservation or adoption of alternative fuels that would reduce future demand for oil. In the United States, alternative transportation technologies face challenges that could impede their ability to mitigate the consequences of a peak and decline in oil production, unless sufficient time and effort are brought to bear. For example: • Ethanol from corn is more costly to produce than gasoline, in part because of the high cost of the corn feedstock. Even if ethanol were to become more cost-competitive with gasoline, it could not become widely available without costly investments in infrastructure, including pipelines, storage tanks, and filling stations. • Advanced vehicle technologies that could increase mileage or use different fuels are generally more costly than conventional technologies and have not been widely adopted. For example, hybrid electric vehicles can cost from $2,000 to $3,500 more to purchase than comparable conventional vehicles and currently constitute about 1 percent of new vehicle registrations in the United States. • Hydrogen fuel cell vehicles are significantly more costly than conventional vehicles to produce. Specifically, the hydrogen fuel cell stack needed to power a vehicle currently costs about $35,000 to produce, in comparison with a conventional gas engine, which costs $2,000 to $3,000.

Infrastructure difficulty will prevent any new oil discoveries from alleviating the impacts of oil peak Hirsch, 2005 (Robert, energy advisor and author of U.S. study on peak oil, “Energy Future: A Significant Period of Discomfort,” Allianz < http://knowledge.allianz.com/en/globalissues/safety_security/energy_security/hirsch_peak_oil_production.html >) What about new oil discoveries, like the recent ones in Brazil? Can they turn the tide? They definitely cannot (turn the tide). To bring those new oil fields into production will require something like five to ten years. The infrastructure needed to drill and produce that oil is very significant. Contributions like Brazil will be of value, but there is no conceivable discovery or discoveries that can possibly turn the tide.

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AT: Tons of Oil Now- Russia Arguments that Russia will reverse Peak Oil is false- Russia’s Oil Production vastly decreasing Weir, 2008 (Fred, a Canadian journalist who lives in Moscow and specializes in Russian affairs. He is Moscow correspondent for In These Times and regular contributor to the Christian Science Monitor, The Independent, and the South China Morning Post. He is also the Moscow correspondent of Hindustan Times, India's premier English daily. He is the co-author of Revolution from Above: The Demise of the Soviet System, “Has Russian Oil Output Peaked?” Christian Science-Monitor 5/28 < http://www.csmonitor.com/2008/0528/p01s04wosc.html > ) The Kremlin often touts Russia's image as an "energy superpower," but now the country's oil production is declining. Some say Russia may have already reached peak oil output. Underscoring the urgency of the issue, Prime Minister Vladimir Putin's new cabinet made its first order of business on Monday the approval of a package of measures to relieve the oil-production crisis. "It's a good first step," says Natalia Milchakova, an oil and gas analyst for Otkritiye, a Moscow-based brokerage firm. But she adds that "rapidly slowing" oil production, which was growing by more than 10 percent five years ago, isn't "something that can be quickly fixed with political declarations." As the world's second-largest oil exporter, Russia joins a growing number of top oil suppliers wrestling with how to address declining or peaking production. Like Venezuela and Mexico, Russia is heavily dependent on oil, which accounts for more than two-thirds of government revenue and 30 percent of the country's gross domestic product. Now, Moscow is trying to remedy a situation caused in part by outdated technology, heavy taxation of oil profits, and lack of investment in oil infrastructure. The Presidium of the Cabinet, as it is officially known, in its inaugural meeting Monday approved tax holidays of up to 15 years for Russian companies that open new oil fields and proposed raising the threshold at which taxation begins from the current $9 per barrel to $15. Oil companies welcomed the measures, but experts say that after almost two decades of post-Soviet neglect, which have seen little new exploration, it may be too little, too late. After rising steadily for several years to a post-

Soviet high of 9.9 million barrels per day (bpd) in October, Russian oil production fell by 0.3 percent in the first four months of this year, while exports fell 3.3 percent – the first Putin-era drop. Russia's proven oil reserves are a state secret, but the Oil & Gas Journal, a US-based industry publication, estimates it has about 60 billion barrels – the world's eighth largest – which would last for 17 years at current production rates. Energy Minister Viktor Khristenko recently admitted the decline, but suggested it might be overcome by fresh discoveries in underexplored eastern Siberia or in new Arctic territories recently claimed by Russia. "The output level we have today is a plateau, or stagnation," he said. But Leonid Fedun, vice president of Russia's largest private oil company LUKoil, went one step further in an interview with the Financial Times last month. "Russian oil production has peaked and may never return to current levels," he said. That poses problems for Russia, which has talked of expanding beyond its main oil market – Europe – to China, Japan, and the US. In 2006, then-President Putin approved construction of an $11 billion pipeline across Siberia to the Pacific Ocean to carry eastward exports. Putin and his successor, Dmitri Medvedev, have insisted Russia can meet demand by increasing output but oil analysts around the globe are pessimistic that oil supplies can meet rising consumption in the coming decade. No supply squeeze applies to Russia's natural gas industry, which has both vast reserves and a favorable tax regime. Gas prices have been rising on world markets in lockstep with oil, but in Russia only one company, the state-owned giant Gazprom, enjoys a monopoly on exports. "Gas producers are comparatively well off. The export tax for gas is fixed and does not rise when the price goes up," says Ms. Milchakova. Oil profits, on the other hand, are taxed at nearly 90 percent, which has filled the state's coffers as prices for crude oil have risen from $10 per barrel a decade ago to more than $130 last week. Petrowealth was a key factor enabling Mr. Putin to concentrate political power in the Kremlin, which he used to take over huge slices of the formerly private oil and gas industry. The looming production crunch, therefore, suggests a need for sweeping political reforms as well as economic adjustments, some experts say. "As long as energy prices keep going up and the easy money keeps rolling in, there is no incentive to liberalize," says Yevgeny Gavrilenkov, chief economist at Troika Dialog, a Moscow investment bank. "If the golden goose stops laying eggs, then they'll start to recognize the need for change." A sharp debate is breaking out among economists, some of whom argue that the crisis is an opportunity for Russia to develop a long-term strategy to husband its remaining energy resources and diversify its economy. They point to figures showing that gas and oil exports have risen since 2000 from under half to over 60 percent of Russia's gross

domestic product and say that to continue trading nonrenewable resources for rapidly devaluing dollars is a big mistake. "Russia should not be a colonial country that provides raw materials to more developed countries," says Nodari Simonia, director of the Center for World Energy Studies, an independent Moscow think tank. "We don't need to export more crude, we have to invest resources in our manufacturing base." Russian oil profits, taxed by the state, have been accumulating in a special 'stabilization fund' that now totals about $130 billion. Earlier this year the government put another $32 billion into a sovereign wealth fund that is expected to begin investing in Russian infrastructure and social welfare schemes. "Russia's economy so far can't absorb the oil cash that's coming in. That, not increasing oil output, is our biggest worry," says Sergei Glaziev, head of the National Institute for Development, a Moscow think tank. "We urgently need to diversify our economy away from this dependence on natural resources." Others say Russia's gasand-oil sector can continue to grow, but only if there are massive new investments and critical reforms to an industry that under Putin became dominated by two state-owned behemoths, Gazprom and Rosneft. Both companies have accumulated huge debt in an ongoing campaign to take over formerly private assets that have returned nearly half of Russian oil and gas reserves to state control in recent years. "Ten years ago the bulk of our oil resources were held by private companies, and growth rates were very high," says

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Anna /Andrew/Paul Page 58 of 130 Michalkova. "Growth rates have become sluggish for complex reasons lately, but political interference and battles over ownership have not been helpful." Major investments will be needed to eke out further production from the largely exhausted Soviet-era oil fields of western Siberia, experts say. "Production costs have more than doubled in the past six years, and the current tax regime makes additional output at older fields unviable," says Valery Nesterov, an energy expert with Troika Dialog. Even if new finds are made in Russia's uncharted east, they are likely to be much smaller, more remote, and difficult to access. "In the early '80s a typical new oil field held reserves of up to 50 million tons, but today a company celebrates if it finds a field with 3 million tons," says Mikhail Krutikhin, an analyst with Russian Energy, a Moscow-based consultancy. "Therefore we need more small oil companies, which are best for operating small fields. But Russia has a few giant companies, whose fixed costs and attitude are all wrong. Russia's new president, Mr. Medvedev, has talked about a need to encourage small business, but Krutikhin is skeptical given Medvedev's background as former chairman of Gazprom. "To reinvigorate our oil and gas industry, Russia needs dramatic tax reform, antitrust measures, and strong support for small enterprises," says Mr. Krutikhin. "But Medvedev comes from Gazprom, which is the biggest enemy of small business in Russia, so I really don't have any high expectations."

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AT: Tons of Oil Now-ANWR ANWR ain’t enough to check peak oil The Charlotte Observer 08 (Ed Williams, editor of the editorial pages at The Charlotte Observer, recipient of a Liberty Bell Award from the Mecklenburg County Bar [in the legal sense] Association in North Carolina, 7/13, “ The Charlotte Observer, N.C., Ed Williams column: On energy, politicians are Marxists,” < http://www.individual.com/story.php?story=85466163>, accessed 7/17/08, [AZ]) How much oil would ANWR supply? The EIA's estimate is 0.4 percent to 1.2 percent of total world oil consumption in 2030. Imports would still supply two-thirds of U.S. oil needs. America's oil problem isn't insufficient supply, it's voracious consumption. Unless that changes, finding a little more oil would be like putting another Twinkie on a glutton's plate. Remember 1973, when the Arab oil suppliers cut supply sharply to punish nations that backed Israel in the Yom Kippur war? That was an early warning about the danger of our addiction. Back then, about 24 percent of the oil our nation used was imported. In 1990, at the start of the first Gulf War, we imported 42 percent. Today, as another war in the Middle East drags on, we import almost 70 percent. Overall, the United States -- with 4 percent of the world's population and 3 percent of its oil reserves -- uses nearly a quarter of the world's oil. Think the price is steep now? Imagine how it will be when people in China and India decide they want to drive cars, too, and world demand for oil grows as predicted by 50 percent between now and 2030.

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AT: Nonconventional Oils No current substitutes can save us – there’s no way to continue a fossil fuel economy The Social Contract 02 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., Summer, “The Coming End of Cheap Oil: To Hubbert’s Peak and Beyond,” <www.gunnarlindgren.com/comingendoil.pdf>, accessed 7/19/08, [AZ]) But the cornucopian trump card is that we can substitute unconventional hydrocarbons (shale oil, heavy oil, tar sands, etc.) for conventional oil if oil price increases make it economically viable. We could even extract carbon and hydrogen from the air and fabricate hydrocarbons. “The only realistic limitation … is price,” argues Maurice Dessault of the University of Waterloo in Ontario.31 Uncannily, like the shipwrecked economist assuming a can opener in order to open the can of food, cornucopians assume that technology will make this feasible. This is just Micawber-like profession of faith: something will turn up. What if it doesn’t? More importantly, the price argument overlooks the physics. Processing unconventionals is energy-costly. If processing consumes more energy than it yields, it is a loser; price is relevant. Shale oil could yield trillions of barrels. But extraction is forbiddingly tough. Oil shale is kerogen-containing rock – source rock which has not been in the oil window. It requires not only mining, but processing: replicating, in telescoped time, what happens in the oil window, by crushing the rock and heating it to 900 degrees Fahrenheit, liquefying the kerogen – which must be processed into oil by adding hydrogen, then refined. Resultant waste requires disposal. Net energy yield is at best slightly positive. “It is doubtful that shale oil can ever play a significant role in replacing world oil supplies, if it can replace them at all,” geologist Walter Youngquist concludes. “Shale oil cannot possibly make the United States energy self-sufficient in terms of liquid fuel.”32 Extracting heavy oil requires heat (often steam or hot water) and solvents. On average, one oil barrel’s worth of energy must be expended to get two barrels of heavy oil. Extracting oil from tar sands is underway in Canada, but requires much heat, currently supplied by natural gas, an average of one thousand cubic feet of gas required per barrel of tar sand oil.33 With present extraction technologies, these alternatives are not promising. Heavy oil deposits along Venezuela’s Orinoco river have been processed into an oil-water emulsion (“orimulsion”) for powering electric generating plants. New methods are in use to extract the heavy oil and refine it into crude, and from crude into fuels. Canadian tar sands now yield 250,000 barrels as day, expected to double by 2007. Over 200,000 barrels flow daily from the Orinoco; this is expected to triple by 2006. “Gas-toliquids” conversion of natural gas to liquid fuels may yield a million barrels by 2020. Campbell estimates that combined Canadian and Venezuelan output of tar sands and heavy oil will be 2.8 mbd in 2005, 3.6 mbd in 20120, and 4.6 mbd in 2020 – or 1.0, 1.3, and 1.7 Gb/yr, respectively.34 These are drops in the bucket, given today’s consumption of 75 mbd, and higher demands in the future. Absent crash programs to boost output, and technological breakthroughs, these sources will not help much. As for making ethanol from corn, after examining the process and factoring in all its energy costs, including those entailed by growing corn, Cornell University agricultural science professor David Pimentel concluded that a gallon of corn-based ethanol costs about 71 percent more energy than it contains, making ethanol a loser.35 Ethanol partisans, including the National Corn Growers Association, retort that Pimentel recycles old data and ignores recent technical progress.36 But even if he is too pessimistic, significantly replacing oil with ethanol would require colossal expansion of corn cultivation, massively depleting water and topsoil, and competing with other land use, such as housing our immigration-swollen population. Natural gas is abundant, and can partly substitute for oil. But natural gas too is finite, and its output too will eventually peak and decline; Campbell and Laherrère project world output peaking in 2020.

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AT: Nonconventional Oils Non-conventional oils will not come quickly enough to offset the oil peak-models prove Meng and Bentley, 2007 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Maugeri's third main argument against a near-term peak is that the world contains large quantities of non-conventional oil, and that these are not usually considered in the ‘oil doomsters’ models. This is not correct. All the detailed models listed above explicitly include calculations on the rates that the various non-conventional oils will come on-stream. They find that these rates are not sufficient in total to offset the decline expected in global conventional oil production.

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AT: Oil Shale Oil shales won't work- they contain 1/3 of the energy density of cap'n crunch and extracting them is uneconomical Energy Bulletin 2005 ("Oil Shale May Be Fool's Gold," http://www.energybulletin.net/node/11779) Energy bulletin is a clearinghouse for information regarding the peak in global energy supply. We publish news, research and analysis But hyping oil shale is nothing new. As geologist Walter Youngquist once wrote, "Bankers won't invest a dime in 'organic marlstone,' the shale's proper name, but 'oil shale' is another matter." California Rep. Richard Pombo and Utah Sen. Orrin Hatch are spearheading efforts to jumpstart the industry. "I find it disturbing that Utah imports oil from Canadian tar sands, even though our oil shale resource remains undeveloped," says Hatch. In truth, oil shale presents a paradox. If these rocks are, as some claim, the richest fossil fuel resource on Earth, why has it been so difficult to unlock them? The primary explanation is that oil shale is a lousy fuel. Compared to the coal that launched the Industrial Revolution or the oil that sustains the world today, oil shale is the dregs. Coal seams a few feet thick are worth mining because coal contains lots of energy. If coal is good, oil is even better. And oil shale? Per pound, it contains one-tenth the energy of crude oil, one-sixth that of coal. Searching for appropriate analogies, we enter the realm of Weight Watchers. Oil shale is said to be "rich" when a ton yields 30 gallons of oil.

An equal weight of granola contains three times more energy. America's "vast," "immense" deposits of shale have the energy density of a baked potato. Oil shale has one-third the energy density of Cap'n Crunch, but no one is counting on the Quaker Oats Company to become a major energy producer soon. Historically, oil shale has been mined, crushed and roasted in large kilns, or "retorts." The slag, swollen in volume and contaminated with arsenic, must then be disposed. The process is so costly, laborious and polluting that global output has never exceeded 25,000 barrels a day, compared to 84 million barrels of conventional oil production. In the last 150 years, humans have used 1 trillion barrels of conventional oil. The second trillion will be consumed in the next 30 years. Given projected demand for fuel, Royal/ Dutch Shell has been experimenting with a new way to produce shale oil, a way that is, at first glance, more promising. Humor columnist Dave Barry once demonstrated that if you put a "strawberry Pop-Tart in a toaster for five minutes and 50 seconds, it will turn into a snack-pastry blowtorch, shooting flames up to 30 inches high." Putting a chunk of oil shale into your toaster would not offer similar excitement, but in a strange way, Shell's fascinating experiments near Rangely resemble something Barry might attempt if he had the money to build the world's largest underground toaster oven. The plan is audacious. Shell proposes to heat a 1,000-foot-thick section of shale to 700 degrees, then keep it that hot for three years. Beam me up, Scotty, but first share some details. Imagine a 100-acre production plot. Inside that area, the company would drill as many as 1,000 wells. Next, long electric heaters would be inserted in preparation for a multi-year bake. It's a high-stakes gamble, but if it works, a 6-mile-by- 6-mile area could, over the coming century, produce 20 billion barrels, roughly equal to remaining reserves in the lower 48 states. Although Shell's method avoids the need to mine shale, it requires a mind-boggling amount of electricity. To produce 100,000 barrels per day, the company would need to construct the largest power plant in Colorado history.

Costing about $3 billion, it would consume 5 million tons of coal each year, producing 10 million tons of greenhouse gases. (The company's annual electric bill would be about $500 million.) To double production, you'd need two power plants. One million barrels a day would require 10 new power plants, five new coal mines. And 10 million barrels a day, as proposed by some, would necessitate 100 power plants. How soon will we know whether Shell's technology is economic? The company plans to do more experiments, before making a final decision by 2010. If it pulls the trigger, it would be at least three or four years before the first oil would flow, perhaps at a rate of 10,000 barrels a day. That's less than one-tenth of 1 percent of current U.S. consumption. But if it turns out that Shell needs more energy to produce a barrel of oil than a barrel contains, bets are off. That's the equivalent of burning the furniture to keep the house warm. Energy is the original currency; electricity its most valuable form. Using coal-fired electricity to wring oil out of rocks is like feeding steak to the dog and eating his Alpo. In a ham-and-egg breakfast, the chicken is involved but the pig is committed. With half the world's oil shale resources located here, our region is committed. Another recent report by the RAND Corp. warned that if oil shale developers "overstress the environmental carrying capacity of the area, we may never see more than a few hundred thousand barrels per day of production." Amen. Large-scale development of the kind proposed by the U.S. Department of Energy and Pombo would be a disaster. The DOE casually dedicates all of western Colorado's surplus water to oil shale, proposes enormous open-pit mines 2,000 feet deep, and advocates retorting up to 6 billion tons of shale each year. That's twice the tonnage of all coal mined in the U.S. and China. This is not a vision, it is a nightmare. Americans love panaceas. We want thinner thighs in 30 days, a pill to cure baldness, an ultrasonic carburetor that will double our mileage. A magic wand would be nice, because the nation faces serious energy challenges. Since domestic oil production peaked 30 years ago, the need for energy efficiency, conservation and renewable energy has been obvious. Instead, like an addict on a binge, we continue to pursue a policy of "strength through exhaustion." Drilling the Arctic National Wildlife Refuge before improving our woeful vehicle efficiency is one example of this brain-dead approach. What contribution can oil shale make to energy security? Producing 100,000 barrels per day of shale oil does not violate the laws of physics. But the nation currently consumes that much oil every seven minutes. Improving the efficiency of our automobiles by 2 miles per gallon would save 10 times as much fuel, saving consumers $100 billion at the pump. The National Academy of Sciences has stated that cars, trucks and SUVs that get 30, 40 or 50 miles per gallon are doable. An aggressive national commitment to fuel efficiency is not optional, it's inevitable. In time, a more efficient fleet could save 20 times as much petroleum as oil shale is likely to ever provide. All hype aside, oil shale is the poorest of the fossil fuels, containing far less energy than crude oil, much less even than hog manure, peat moss or Cap'n Crunch. A meager amount of energy, tightly bound up in an enormous volume of rock, oil shale seems destined to remain an elusive bonanza, the petroleum equivalent of fool's gold.

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AT: Oil Shale Difficulty of extracting oil shale is far too intense for it to solve the oil crisis Brecha, 2008 (Robert J, Physics Department and Electro-optics Program, University of Dayton, “Emission scenarios in the face of fossil-fuel peaking,” Energy Policy July 9, 2008. < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2W-4SY6YJ11&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=fae4bc3c276c351f4dda9833b9dac453#sec2 >) Another large potential resource for liquid-fuel production exists in the western United States in the form of shale oil. As is the case with tar sands, although the size of the potential resource in place is believed to be extremely large, the economic viability of producing large amounts of oil from shale is not as clear. Shale oil is produced from solid bitumen trapped in sedimentary rock, which is then heated so that the resulting liquid can be captured. Heating the rock essentially completes the unfinished geologic processes begun millions of years ago. According to a report issued by the RAND Corporation under contract with the National Energy Technology Laboratory of the US Department of Energy, the size of the potentially recoverable resource is between 500 billion barrels and 1.1 trillion barrels, thereby dwarfing all estimates of conventional oil prospects (Bartis et al., 2005). In spite of the fact that this resource has been known for decades, and was even seriously pursued during the 1970s, the actual feasibility of industrial-scale extraction is not yet clear. According to the RAND report, in an optimistic case “at least 12 and possibly more years will elapse before oil shale development will reach the production growth phase. Under high growth assumptions, an oil shale production level of 1 million barrels per day is probably more than 20 years in the future, and 3 million barrels per day is probably more than 30 years into the future” (Bartis et al., 2005). Thus, although the resource base for shale oil production is even larger than that for tar sands, rates of extraction are more uncertain, and therefore the ability of this resource to make up for conventional oil production declines when they occur, is questionable.

Shales and sands won’t work – it’s a net energy loss Goodstein 04 (David, physicist, educator, Vice-provost of the California Institute of Technology, and professor of physics and applied physics, Professor of Physics and Applied Physics at Caltech, where he has been on the faculty for more than 35 years, named the Frank J. Gilloon Distinguished Teaching and Service Professor, has served on and chaired numerous scientific and academic panels, including the National Advisory Committee to the Mathematical and Physical Sciences Directorate of the National Science Foundations a founding member of the Board of Directors of the California Council on Science and Technology, in articles, speeches and colloquia he has addressed conduct and misconduct in science, the end of exponential growth of the scientific enterprise, and issues related to fossil fuel and the climate of Planet Earth, Out of Gas: The End of the Age of Oil, p.31-2 ,2004, [AZ]) To begin with, conventional oil is not the only oil. Once all the cheap oil is pumped, advanced methods can still squeeze a little more oil out of almost any field. These deposits are known as heavy oil: The more that is extracted, the heavier it gets. There are also deposits of what are known as of oil sands and tar sands. Like the remains of depleted oil fields, these deposits are more difficult and expensive to extract; in essence, they are mined and their oil is extracted from the ore rather than just pumped out of the ground. Then there is shale oil. As noted, conventional oil was created when source rock loaded with organic matter sank just deep enough in the earth for the organics to be cooked properly in the oil. Oil shale is source rock that never sank deep enough to make oil. In Colorado, Wyoming, and Utah there is more shale oil than all the conventional oil in the world. However, shale oil in situ is not really oil at all; it was so named in order to attract investment. Instead it is kerosene, a waxy substance that can be made into oil if the rock containing it is mined, crushed, and heated. Exploiting any of those resources will be more expensive, slower, and more environmentally damaging than pumping conventional oil. It will also require more energy input to get a given amount of energy out. Once the energy needed becomes equal to the energy produced, the game is lost. We are already using in our cars one fuel that may require more energy to produce than it provides: Ethanol made from corn is widely believed to be a net energy loser. As we progress down the fossil fuel list from light crude oil (the stuff we mostly use now) to heavy oil, oil sands, tar sands, and finally shale oil, the cost in energy progressively increases, as do other costs. Some experts believe that shale oil will always be a net energy loser.

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AT: Oil Shale Work with Oil Shale has been empirically tried and abandoned by Major Oil Corporations Youngquist, Ph. D in geology and oil consultant, 1998 (“Shale Oil-The Elusive Energy,” Hubbert Center Newsletter #98/4, October 1998. Pg 3-4) In the mid-20th Century the U. S. public was becoming aware of the huge western oil shale deposits.  World War II had shown  the critical importance of oil to both military and civilian operations.  Gasoline was strictly rationed in the U. S. at that time.  Immediately after the war in 1946, the U. S. Bureau of Mines began the Anvils Point oil shale demonstration project near Rifle,  Colorado.  The public for the first time saw the Government pursuing shale oil. Later, the peak of U. S. oil production was reached in 1970. For several years previously domestic oil supply had not met demand.  Oil had begun to be imported.  Long  gasoline lines during the oil crises of 1973 and 1979 rudely awakened the public to the fact the U. S. was no longer self­ sufficient in  oil.  What to do?  The reported vast quantities of oil in oil shale seemed a logical venture. Oil companies led the investigations. Leases were obtained and consolidated (some leases had been in effect for many years, and were merged into larger working  blocks).  Colony Development Corporation was formed to include Atlantic Richfield (now Arco), Ashland Oil Company, Shell Oil  Company, and The Oil Shale Corporation.  White River Shale Oil Corporation was formed by Phillips Petroleum Company, Sun Oil  Company, and Standard Oil of Ohio. Gulf Oil Corporation and Standard Oil of Indiana (now Amoco) formed Rio Blanco Oil  Shale Project.  Phillips Petroleum Company and Sun Oil Company formed White River Shale Oil Development.  Other players  choosing to go independently included Union Oil Company of California (Unocal) which had a long­ standing interest in oil shale, and  in 1957 had built a small experimental plant near the community of De Beque, Colorado.  Exxon and Occidental Petroleum also had  independent operations.  It was a premier group of companies, with excellent technical talent. And there was money to do the job. It remains the largest effort to commercially produce significant amounts of oil from shale the world has ever seen. Yet, one by one, these organizations gave up their oil shale interests.  (Gulliford, 1989, Symonds, 1990).  The last company to do so was  Unocal (Turner, 1991), and in the Parachute Creek Valley a short distance north of the town of Parachute  (earlier called Grand  Valley)    there   is a $650 million abandoned Unocal shale oil plant as a monument to this endeavor.   Why has shale oil been such an  elusive energy source?  A brief examination of geological and technological factors may reveal some answers. 

Oil shales are infeasible-lack of efficient methods to extract oil from the rocks Money Week 2006 ("Why Peak Oil Has No Effect on Oil Prices." http://www.moneyweek.com/file/14649/why-peak-oil-has-noeffect-on-oil-prices.html) Back to US oil shale. I've had a number of my Outstanding Investment subscribers write in after receiving a special report titled "The US Government's Secret Colorado Oil Discovery." It spoke of "the next American oil boom" and said the United States could become "the new Middle East." This led at least a few readers to ask reasonable questions like, "What does this mean for the energy bull market?" So how does this affect the Peak Oil scenario? Consider this recent quote from Bob Loucks, a former manager with Shell who oversaw its shale oil recovery operations: "Despite all the attempts to develop a shale oil industry in the United States over the past 100 years, the fact remains that no proven method exists for efficiently moving the oil from the rock. There are a number of candidate processes possible, but none has demonstrated a practical capability to produce oil."

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AT: Oil Sands Tar sands can’t solve peak oil: natural gas production, lack of water input, tech difficulty, and net negative energy return Douthwaite 03, (Richard, studied at Leeds and Essex universities, worked as a government economist in the West Indies before moving to Ireland to become an economist and writer with a special interest in climate and energy issues and local economic development, co-founder of Feasta: The Foundation for the Economics of Sustainability, an Irish based economic think tank, he is a council member of Comhar, the Irish government's national sustainability council and a Fellow of the Post Carbon Institute, 10/30, “When will the world's oil and gas production peak?” < http://www.feasta.org/documents/wells/contents.html?one/panel1.html> [online version of the book Before the Wells Run Dry], accessed 7/20/08, [AZ]) Colin Campbell's projections of a declining oil supply are based on production from conventional wells. Can unconventional sources such as tar sands and oil shales prevent a serious liquid fuel scarcity? Early in 2003, the Oil and Gas Journal increased its estimate of the size of Canada's oil reserves from 4.9 billion barrels to 180 billion. As a result, Canada now has the second-largest oil reserves in the world, ahead of Iraq, and OPEC's share of the world's oil reserves has fallen by more than 10 percent. The explanation for this sudden, massive rise was that the journal had included Alberta's vast tar sands as part of the reserves for the first time. In order for an oil resource to be termed a reserve, it must be possible to extract oil profitably with existing technologies and under present economic conditions. "The tar sands had been economic for some time" Colin Campbell commented. "The change in reporting practice was probably made for a political reason - perhaps to undermine OPEC." The U.S. Geological Survey estimates that by 2005, 10 percent of North America's oil production will come from Alberta's sands. Speaking at the Thurles conference, David Frowd of Shell, which has invested heavily in extracting oil from the Albertan sands, put the Canadian reserves even higher than the O&GJ, at 300 billion barrels, and the world reserves of oil extractable oil from tar sands and shales at 800 billion. He added that if current research into methods of using moderate temperatures to extract heavy oils from oil shales and some types of coal while they were still underground were successful, the world's oil reserves would be vastly increased. Not everyone is convinced that extracting oil from tar sands makes sense in energy terms although it clearly does financially. The Canadian environmentalist Gary Gallon wrote in The Gallon Environmental Newsletter in October 2002: Much of the energy used to extract tar sands oil comes from using natural gas. The natural gas price is closely tied to the price of conventional oil, on a BTU basis. So when the price of oil zooms up, the price of natural gas rises accordingly. In fact, today, it is possible that the price of natural gas could increase more than conventional oil due to its environmental benefits over burning coal for generating electricity. This would leave tar sands production in an even worse economic situation. Campbell also expects the price of gas to the producers to rise sharply, but for a different reason. At the moment, he says, the companies are using 'stranded' gas - that is, gas from fields near the tar sands that have too little in them to warrant building a pipeline to take it to the cities. This gas can be bought very cheaply by the companies because there are no other potential customers for it. "But it is running out fast" he says, "and no one is going to use ordinary oil and gas to produce from the tar sands because they are too valuable." Gallon believes that it takes so much energy to extract the sand from the bitumen that it almost isn't worth it. "If they were to do a net energy analysis, they would find that it almost takes as much energy to mine, process, refine, and upgrade the bitumen oil they get from the tar sands as the energy in the light oil they are producing. There is a small net energy gain. But it is estimated that 5 to 10 times the amount of greenhouse gases are released processing tar sands as released when processing conventional oil." Accordingly, several investment analysts have warned that if carbon taxes or tradable emissions permits are introduced to restrict greenhouse gas emissions under the Kyoto Protocol, which Canada has signed, the extraction process could become financially unattractive. Koch Industries, a U.S. energy company, recently withdrew from a C$3.5-billion Alberta oil sands project giving Kyoto as the cause even though the cost of producing a barrel of oil is, by some estimates, only around $8. Gallon lists the problems with tar sand extraction as follows: * Misuse of resources: tar sands oil is hard to unstick from the grains of sand and it costs a lot of money and energy to do so. As the net energy gain is small, it can never escape the oilenergy cost cycle. * Climate change: the greenhouse gas emissions from uncovering, extracting, refining, upgrading and transporting tar sands oil are many times more than those associated with extracting refining and processing either conventional oil and gas, or even coal. * Environmental destruction: Shell's tar sands process requires the stripping of the soil and rock from hundreds of thousands of acres of land to get at the bitumen 200 feet or more under the surface. Forests, wildlife habitat and water sources are ruined. * Water pollution: tar sands extraction and processing requires the use of massive amounts of water. When the used water is discharged it can cause oil and phenol contamination far beyond the stripmine site * Air pollution: discharges from the processing and refinery upgrade facilities can spread large amounts of toxic and carcinogenic compounds over a wide area. Campbell thinks that a lack of water will limit tar sand processing. "The supply is already so tight that the Alberta government wants to charge the companies for it".

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AT: Oil Sands Oil sands can’t be developed in time Hirsch, 2005 (Robert, energy advisor and author of U.S. study on peak oil, “Energy Future: A Significant Period of Discomfort,” Allianz < http://knowledge.allianz.com/en/globalissues/safety_security/energy_security/hirsch_peak_oil_production.html >) What about the people that say, once the oil price is high enough, new and unconventional sources like tar sands in Canada can be used to produce oil? The point is directionally correct. The problem is that it takes a very long time to build the machinery that is necessary to exploit oil shale, oil sands, coal-to-liquids or heavy oil. In our 2005 analysis we looked at a worldwide crash program to bring these things into being as fast as possible. We made a number of aggressive assumptions, because a crash program is different from business as usual But the problem is that the magnitude of oil production loss each year will be so large and the time required to implement these alternatives is so long that the problem runs away from you if we wait too long. And we have waited too long to seriously start. Eventually, these otions and energy efficiency will catch up. It is not as if the world is going to die. But right now, we are looking at a global recession that deepens each year for more than a decade because we are not prepared.

Oil from sand is infeasible it takes way too much money in investment Econbrowser 2005 authors for econbrowser: James D. Hamilton is Professor of Economics at the University of California, San Diego Menzie Chinn is Professor of Public Affairs and Economics at the University of Wisconsin, Madison ("Oil Sands," http://www.econbrowser.com/archives/2005/12/oil_sands.html) So what's the catch? Huge capital requirements, for one. $34 billion (Canadian) have been invested so far in Canadian oil sands just to get to current levels, and an additional $36 billion (US) might bring Canadian bitumen production up to 2.7 mbd by 2015. To put that number in perspective, significantly more than 2.7 mbd in new capacity has to be added every year in order to replace the production that is lost from each year's depletion of existing conventional oil fields. Moreover, a large amount of energy input is required in order to produce each barrel of bitumen. There are also significant capital requirements in order to use this synthetic crude on a larger scale. Green Car Congress had a very interesting summary last week of a report from Natural Resources Canada about Canadian oil sands: These crude oils, whether shipped as unprocessed bitumen or in upgraded form as synthetic crude have different characteristics from conventional light and heavy crudes, and their introduction as a major proportion of the refinery crude diet will present challenges. Most conventional refineries are limited to using about 10-15% of synthetic oil sands crude in their diets before fuels quality limitations begin to appear, according to the report. The challenges to utilizing these crudes include the need for more "severe" processes to refine the heavy synthetic crude to duplicate fuel characteristics to which engines have become accustomed. The technology to overcome these differences is largely known, but requires significant lead-time to install.

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AT: Oil Sands Oil sand produces a negative energy return Brecha, 2008 (Robert J, Physics Department and Electro-optics Program, University of Dayton, “Emission scenarios in the face of fossil-fuel peaking,” Energy Policy July 9, 2008. < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2W-4SY6YJ11&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=fae4bc3c276c351f4dda9833b9dac453#sec2 >) Alberta's tar sands have received a great deal of attention as a large new resource for petroleum extraction and liquid-fuel production. As of 2003, 175 Gb of reserves were added to Canada's officially reported totals, all from tar sands (BP Statistical Review of World Energy, 2007). Estimated resources in place are roughly 10 times this amount, which potentially makes Canada the biggest future source of petroleum products in the world. Even the officially declared reserves of 175 Gb are second only to those of Saudi Arabia. In a recent paper, Söderbergh et al. (2007) analyze projections for production from tar sands over the next 45 years. While acknowledging the presence of large reserves and an even larger resource base, the authors of Söderbergh et al. (2007) conclude that, “A short-term crash program from the Canadian oil sands industry achieves about 3.6 MMbd by 2018. A long-term crash program results in a production of approximately 5 MMbd by 2030.” The Canadian Association of Petroleum Producers, 2006 Canadian Association of Petroleum Producers, 2006. Canadian crude oil production and supply forecast 2006–2020 left angle brackethttp://www.capp.ca/raw.asp?x=1&dt=NTV&e=PDF&dn=103586right-pointing angle bracket, last accessed December 2006.Canadian Association of Petroleum Producers (2006) has issued a recent report with a slightly updated estimate for production in 2020 of 4.0 MMbd, a broadly similar conclusion to that of Söderbergh et al. Current tar sand oil production is approximately 1 MMbd, as compared to a world total liquid-fuel production of slightly less than 85 MMbd. According to the EIA (2007a) International Energy Outlook, world liquid-fuel consumption is projected to be 104 MMbd in 2020 and 118 MMbd in 2030. Thus, as a percentage of world production, tar sands will certainly contribute a growing share, rising from 1% currently to 4% in 25 years. However, as pointed out by Söderbergh et al. (2007), a comparison between these estimates and projections for the future continuing decline in production of North Sea oil shows that the two taken together essentially balance one another, leaving no net gain in liquid fuel for world consumption. In fact, given the relatively poor net energy gain for synthetic crude oil derived from tar sands, there will certainly be less net energy with respect to today's production.

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AT: Oil Sands Canadian Oil Sands can’t solve peak oil Soderbergh et al , 2006 (Bengt Söderbergh, Fredrik Robelius and Kjell Aleklett: members of The Uppsala Hydrocarbon Depletion Study Group, Uppsala University, Sweden; “Canada’s Oil Sands will not prevent Peak Oil,” Energy Bulletin June 7 < http://www.energybulletin.net/node/16949 >) The report Peaking of World Oil Production: Impacts, Mitigation and Risk Management [PDF], by Robert L. Hirsch et al., concludes that Peak Oil is going to happen and that worldwide large-scale mitigation efforts are necessary to avoid its possible devastating effects for the world economy. These efforts include accelerated production, referred to as crash program production, from Canada’s oil sands. The objective of this article is to investigate and analyse what production levels that might be reasonable to expect from a crash program for the Canadian oil sands industry, within the time frame 2006-2018 and 2006-2050. The implementation of a crash program for the Canadian oil sands industry is associated with serious difficulties. There is not a large enough supply of natural gas to support a future Canadian oil sands industry with today’s dependence on natural gas. It is possible to use bitumen as fuel and for upgrading, although it seems to be incompatible with Canada’s obligations under the Kyoto treaty. For practical long-term high production, Canada must construct nuclear facilities to generate energy for the in situ projects. Even in a very optimistic scenario Canada’s oil sands will not prevent Peak Oil. A short-term crash program from the Canadian oil sands industry achieves about 3.6 mb/d by 2018. A long-term Crash program results in a production of approximately 5 mb/d by 2030. Unfortunately, while the theoretical future oil supply from the oil sands is huge, the potential ability for the Canadian oil sands industry to meet expectations of bridging a future oil supply gap is not based on reality. Even if a Canadian crash program were immediately implemented it may only barely offset the combined declining conventional crude oil production in Canada and the North Sea. The more long-term oil sands production scenario outlined in this report, does not even manage to compensate for the decline by 2030. Today, world wide, there are many oil producing areas in decline whose productions have to be offset by new production. With the exception of ultra-deep off shore fields, of the world’s 65 oil-producing countries, 54 have passed their peak production and are in a state of continuous decline. There are some areas that need the immediate attention by the world’s energy planners. Firstly, the future for the Canadian in situ oil sands production. How much can these activities grow without serious fuel costs problems as well as accelerating CO2E-emissions arise? Secondly, how effective will large scale SAGD in situ projects be for reservoirs of lower quality? Thirdly, is it realistic to include the construction of nuclear facilities for input energy for oil sands projects when making production forecasts? If not, how is the energy going to be provided and how much additional energy supply will be needed in order to extract the bitumen at the required high production levels? The Hirsch report has shown that the Canadian oil sands resources play a vital role for future energy planning, thus it is of outmost importance that these questions are thoroughly investigated as soon as possible. Finally it may be of interest to recapitulate that the International Energy Agency claims that 37 mb/d of unconventional oil must be produced by 2030. Canada has by far the largest unconventional oil reserves. By 2030, in a very optimistic scenario, Canada may produce 5 mb/d. Venezuela may perhaps achieve a production of 6 mb/d. Who will be the producers of the remaining 26 mb/d? It is obvious that the forecast presented by the IEA has no basis in reality.

Tar Sand is not a viable source- process exhausts too many resources Richard Heinberg 2008 Senior Fellow of Post Carbon Institute and the author of The Oil Depletion Protocol (http://globalpublicmedia.com/want_cheap_oil_reduce_demand) If you prefer, there is lots of stuff that's not really oil (tar sands) that can be turned into a synthetic liquid fuel, but it takes heaps of other resources to help the process along. So of course the dollar cost for the finished product is high—and it just keeps getting higher as the price of regular oil climbs, because some of the resources required to make this synthetic fuel are effectively tied to the price of oil. No answer there.

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AT: Offshore Oil Wells Offshore srills can’t solve for 20 years at best San Francisco Chronicle 08 (David R. Baker, Chronicle Staff Writer, 7/22, “The lowdown on offshore oil reserves,” , accessed 7/22/08, [AZ]) U.S. offshore oil fields could hold enough crude to supply all of the country's needs for more than 11 years. Or they might not. No one knows for certain because, with new offshore oil drilling banned on the East and West coasts, no one has gone looking for oil there in years. Now congressional Republicans are pushing hard to make offshore drilling a key issue in the presidential campaign, hoping to channel the anger Americans feel over historically high oil and gasoline prices. More oil, they argue, will bring lower prices. The federal government estimates the nation's outer continental shelf might hold 85.9 billion barrels of crude, including 10.13 billion barrels off California. For comparison, the United States consumes about 7.56 billion barrels of oil per year. The nation's sea floor also could hold 419.9 trillion cubic feet of natural gas, equal to U.S. consumption for 14 1/2 years. But the federal estimates are just that estimates. "You don't really know what's there until you go out and drill a well," said Ken Medlock, an energy research fellow at Rice University's James A. Baker III Institute for Public Policy. "And even then, you're not 100 percent sure of what you're going to get." In addition, offshore oil exploration is slow and costly. If the federal government opened California's coast to drilling tomorrow, the first exploratory wells probably wouldn't be drilled for at least six years, Medlock said. Bringing newly discovered oil fields into full production would take longer. That means any new oil wouldn't arrive on the market until midway through the next decade, at the earliest. The process is slow enough that the Energy Information Administration, the statistics branch of the U.S. Department of Energy, estimated last year that opening the coasts to offshore drilling would have no significant impact on oil prices before 2030. "It's a crock to say that's any kind of near-term solution for the pain drivers are feeling at the pump," said Bill Corcoran, senior regional representative for the Sierra Club.

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AT: Coal Not nearly enough interest in CTL means that there won’t be enough energy available when oil peaks Brecha, 2008 (Robert J, Physics Department and Electro-optics Program, University of Dayton, “Emission scenarios in the face of fossil-fuel peaking,” Energy Policy July 9, 2008. < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2W-4SY6YJ11&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=fae4bc3c276c351f4dda9833b9dac453#sec2 >) Of current interest, both in the United States and in China, is the potential for converting a part of those countries’ domestic coal reserves into liquid fuels. Given relatively large coal reserves (more on this below), and the fact that the Fischer-Tropsch process for obtaining fuel from coal is well-understood (Wikipedia), it would seem that CTL would be a natural choice as a backstop liquidfuel technology when oil products become more expensive and scarce. At present, the only significant production of liquid fuel from coal is in South Africa, at 170,000 barrels/day (bpd) (SASOL Annual Report, 2006). Chinese companies, supported by government subsidies, are making large investments in CTL plants with the aim of increasing production capacity to approximately 770,000 bpd by 2020. In the US, a first commercial CTL plant is to begin operation by 2010, producing slightly more than 1000 bpd; proposals for federal subsidies to encourage industry investment in capital-intensive CTL projects have thus far not succeeded. Overall, and in spite of relatively large coal reserves and the fact that production of liquid fuels from coal likely has a significantly better energy return ratio than either tar sands or shale oil, plans for near-future expansion of this energy sector look very weak, and therefore unlikely to supply a noticeable fraction of world oil demand. In the most recent edition of the International Energy Outlook, the EIA (2007a) projects, in a baseline scenario, production of approximately 2.5 MMbpd of CTL fuel by 2030.

Coal can’t substitute – it’s dirty, inefficient and geographically concentrated Kuhlman 05 (Alex, received his Master's degree in Economics from the University of Amsterdam, he has taken a very active interest in Peak Oil and has written many articles, featured in a Peak Oil documentary and sporadically lectures at colleges & universities, accessed 7/22/08, [AZ]) Coal is abundant, but its net energy profile is poor compared to oil and its conversion process to synthetic fuels is very efficient. Coal would have to be mined at much higher rates to replace declining oil field. In addition, coal production is extremely harmful to the environment. One large coal burning electric plant releases enough radioactive material in a year to build two atomic bombs, apart from emitting more greenhouse gases than any other fuels. Coal is implicated in mercury pollution that causes 60.000 cases of brain damage in newborn children every year in the USA. Resorting to coal would be a very big step backwards and what we may face then may be more like the Dim Ages. More importantly, coal is distributed very unevenly with the top three countries (China, USA, USSR) possessing almost 70% of total. Much of the current oil and gas supply is in low-population countries, such as Saudi Arabia, that cannot possibly use all of the production for themselves. They are hence quite willing, indeed eager, to sell it to other countries. When oil and gas are gone, and only coal remains, and the few (large-population) countries that possess it need all of it for their own populations, it will be interesting to see how much is offered for sale to other countries.

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AT: Coal Coal estimates are inaccurate; reserves have constantly been estimated down and its production is nearing its peak. The Oil Drum 07 (Shaun Chamberlain, TEQ’s Development Director of The Lean Economy Connection, the research centre founded by David Fleming to apply the principles of Lean Thinking to strategies for the future, The Oil Drum itself is a website whose goal is to facilitate civil, evidence-based discussions about energy and its impact on our future, its editors are Kyle Saunders, associate professor of political science at Colorado State University, managing editor of The Oil Drum, Dave Summers, Curators' Professor of Mining Engineering at Missouri University of Science and Technology, directed the Rock Mechanics and Explosives Research Center at MO S&T off and on since 1976, Stuart Staniford, a Physics Ph.D., and now a researcher and entrepreneur in computer security, does modeling and data analysis, Nate Hagens, has a master's degree in finance and is completing a Ph.D. in Natural Resources at the University of Vermont, 6/25, “The Coal Question and Climate Change,” accessed 7/20/08, [AZ]) The report highlights that the "proved reserves at year end" published in the most recent BP Statistical Review of World Energy in June 2006 are stated as being for year end 2005, but are actually based on the latest World Energy Council (WEC) assessments, which contain data for the end of 2002. So our best figures on this are actually over four years old. And our worst figures? Well, some haven’t been updated in 15 years (China) and some in up to 40 years (Vietnam, Afghanistan). But really the key message in the global data lies in the rate at which reserves estimates have been revised downwards. As Peak Oilers well know, conventional wisdom has it that reserves will increase as more exploration takes place and prices rise. Yet, in truth, estimates for global coal resources have been consistently revised down, and by 55% over the past 25 years, from 10 trillion tons hce (hard coal equivalent) in 1980 to around 4.5 trillion tons hce in 2005 [1]. Certain countries (including Germany and the UK) have been revised down by over 90% in this period. The UK reported proved recoverable reserves of 45bn tons in WEC 1980 [2], but these were continually revised downwards to reach only 0.22bn tons by the latest report. Cumulative UK production in this period amounted to only approx 1.8bn tons. Even Poland, the biggest coal producer in the EU, reports reserves revised down by 50% over the last 10 years. Since production alone cannot explain such revisions, they are deemed likely to be due to improvements in data. The chief exceptions to this rule are India and Australia, both showing significant upward revisions, but as we have seen the global trend is firmly downward. Only South Africa shows continuously shrinking reserves roughly in line with cumulative production. Globally, the report concludes that data quality is very poor and that these downward revisions must be expected to continue. China So back to China, the world’s largest producer, with the fourth largest reported reserves globally. The 2006 Statistical Review of World Energy credits China with 55 years of remaining reserves at current production rates (depleting its reserves at almost 2% per annum). But as previously mentioned, the Statistical Review faithfully reproduces proved reserves figures which were last changed in 1992 (note that China’s cumulative production in the 15 years since comes to about 20% of those stated reserves), so we can knock 15 years off that number straight away, reducing the remaining total reserves to 40 years’ worth. The Energy Watch Group report gives projected production profiles showing that China is likely to experience peak coal production in the next 10-15 years, followed by a steep decline. It should also be noted that these production profiles do not take into account uncontrolled coal fires which – according to satellite based estimates – add around 5-10% [3] to regular consumption. Since China’s production dwarfs that of any other country (being almost double that of the second largest producer, the USA) the global coal production peak will be heavily influenced by China’s production profile.

A coal shift isn’t sustainable – it’d peak rapidly under the pressure Mine Regulation Reporter 00 (5/1, “EPRI proposes gradual path to hit emission targets,” Lexis-Nexis Academic, [AZ]) What would take its place? EPRI assumes no new nuclear plants (they are not currently economically competitive) but acknowledges that with technological advances and public acceptance, low-cost nukes "could play a significant role in meeting future carbon restrictions." A review of hydro, solar and other renewable technologies suggests renewables will gain ground but that only coal could fill the gap, according to EPRI. But the problem EPRI foresees is that a reduction in coal output from 1.1 billion to just over 300 million tons/yr would dismantle much of the coal industry. "After 2020, the U.S. coal supply infrastructure would have to be resurrected. Even if this could be accomplished, restoring a largely abandoned coal supply system to today's production levels would be costly and inefficient." Moreover, EPRI suggested, the CPD would result in a "forced" energy supply system that would: ** Increase electricity prices by 50% by 2020 and boost inflation by over 2% between 2005 and 2020. ** Strand coal investments in the 2000-2020 time frame and gas investments after 2025, as gas begins to become uneconomic. ** Lock in use of existing generating technology at the expense of advanced future technologies that could lower CO2 emissions. ** Rapidly consume finite natural gas resources. The study also analyzes impacts if no new environmental initiatives are launched ("Business As Usual" scenario) and if the CPD is altered somewhat.

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AT: Coal Coal production has also peaked: US low-qualify coal proves their data’s wrong The Oil Drum 07 (Shaun Chamberlain, TEQ’s Development Director of The Lean Economy Connection, the research centre founded by David Fleming to apply the principles of Lean Thinking to strategies for the future, The Oil Drum itself is a website whose goal is to facilitate civil, evidence-based discussions about energy and its impact on our future, its editors are Kyle Saunders, associate professor of political science at Colorado State University, managing editor of The Oil Drum, Dave Summers, Curators' Professor of Mining Engineering at Missouri University of Science and Technology, directed the Rock Mechanics and Explosives Research Center at MO S&T off and on since 1976, Stuart Staniford, a Physics Ph.D., and now a researcher and entrepreneur in computer security, does modeling and data analysis, Nate Hagens, has a master's degree in finance and is completing a Ph.D. in Natural Resources at the University of Vermont, 6/25, “The Coal Question and Climate Change,” accessed 7/20/08, [AZ]) Types of Coal Now, before I outline the situation in the USA, which comfortably holds the world’s largest reserves of coal, it may be instructive to distinguish the different types of coal. There are four basic types, starting with the most energy-rich – anthracite (about 30 MJ/kg), bituminous coal (18.8-29.3 MJ/kg), sub-bituminous coal (8.3-25 MJ/kg) and lignite (5.5-14.3 MJ/kg). Those towards the anthracite end of the scale are often termed ‘hard coal’, and those towards the lignite end of the scale as ‘soft coal’, although the exact definition of these terms varies. The softest coals are sometimes termed ‘brown coal’. USA The USA, then, as we have all heard, has reported proven coal reserves that would allow continued production at current rates for more than 200 years. Three federal states (Wyoming, Montana, Illinois) hold about 60% [4] of US coal reserves, but the low production rates relative to reported reserves in Montana and Illinois cast some doubt on the reliability or suitability of those reported reserves. As many of these reserves are of low quality, with high sulphur content and/or other drawbacks, it may be considered doubtful that they will ever be produced. Measured in terms of produced tons per miner, US productivity steadily increased until 2000, but has declined since, which also implies that ‘easy coal’ is running short. The USA had passed peak production of anthracite (by far the rarest form) by 1950 and peaked in bituminous coal in 1990, but sub-bituminous coal more than made up for this decline in terms of tonnage. However, due to the lower energy content of softer coals, the total energy content of annual US coal production peaked in 1998. Global Picture So, having looked at the world’s biggest coal producer and the holder of the world’s biggest reserves, we may perhaps turn our attention to the global picture. Six countries (USA, Russia, India, China, Australia, South Africa) hold about 85% [5] of world coal reserves, when this is measured in terms of energy content. According to the latest assessment by the WEC, total world reserves at the end of 2002 stood at 479bn tons of anthracite and bituminous coal, 272bn tons of sub-bituminous coal and 158bn tons of lignite. According to the Energy Watch Group, global coal production can increase for 10-15 years (mainly driven by China), but then production of anthracite and bituminous coal will peak around 2020 at a production rate around 30% higher than at present. Lignite production is predicted to peak somewhere between 2050 and 2060. However, as the quality of coal produced will be declining continuously the world coal energy peak is projected to come around 2025. It is also important to note that ‘peak coal exports’ should come even earlier, as lower-energy-density coals are not worth transporting long distances. When we compare this with the scenarios (represented by the dashed and the solid line) from the IEA’s 2006 World Energy Outlook (WEO) we get the following graph: As we can see, according to this report the WEO reference scenario is unrealistic, and only the production in the WEO alternative policy scenario (which assumed political measures constraining coal due to fears over greenhouse gas emissions) is actually feasible. The Energy Watch Group’s report, however, is not considering potential policy constraints, and is describing only what production may be physically possible. I must stress that one of the key findings of this report is that data quality is very poor globally, and so all of the findings should be taken with that caveat, but the trends do seem clear. Indeed, we sent a copy of this report to Richard Heinberg and he has revealed that a Dutch study-in-progress using different criteria has reached preliminary results confirming this report’s findings. And the poor data quality is itself hardly reassuring for an energy source which is becoming increasingly central to our global future.

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AT: Natural Gas Natural Gas will not be an energy substitute once oil peaks—it is finite and will peak soon too Brecha, 2008 (Robert J, Physics Department and Electro-optics Program, University of Dayton, “Emission scenarios in the face of fossil-fuel peaking,” Energy Policy July 9, 2008. < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2W-4SY6YJ11&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=fae4bc3c276c351f4dda9833b9dac453#sec2 >) Natural gas and coal are often seen as the obvious partial substitutes for petroleum, the former a cleaner-burning alternative and potentially available for liquid-fuel production, while the latter represents the largest conventional fossil-fuel resource, and as we have discussed, can also be turned into liquid fuel as well. As finite resources, however, it is clear that both natural gas and coal will show a similar behavior to oil in terms of an eventual peaking in production. The crucial projection is then the date of peak production. We discuss in this section some of the data leading to a plausible scenario in which both natural gas and coal reach production peaks before the middle of this century. Natural gas production in the US has been flat or slightly declining for two decades. In spite of this, the Energy Information Administration (1998–2006) yearly predicts future increases in discoveries, reserve additions, and production for 25 years into the future. EIA data also show that, due to steadily higher prices over the last few years, drilling activity has increased to record levels. In addition, technological progress has borne fruit in that the percentage of successful wells drilled has also increased, to nearly 90%. These issues will be revisited briefly below when economic issues are addressed explicitly. The US is not alone in struggling to maintain production of natural gas. Canada has had virtually no growth in production for the past six years, and as was mentioned above, will be requiring significantly more natural gas in the future as an input to the tar sands production process. The tight connection between unconventional oil production and the availability of other fossil fuels demonstrates all too well one of the main contentions of this paper, namely, that a simple switching from conventional resources to non-conventional resources may not be accomplished as easily as many would like to believe. To complete the tour of North America, Mexico produces only 1–2% of world natural gas supplies, and given that natural gas is not easily transported except through pipelines, and to a smaller extent, as liquified natural gas (LNG), large reserves in distant countries will likely not change the situation in North America greatly.

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A natural gas decline is imminent – prices are soaring and supply is declining New York Times 05 (Simon Romero, an American journalist who has been the Andean bureau chief for The New York Times since 2006, graduated with honors from Harvard College with a degree in History and Literature, worked in Brazil for Bloomberg News, having launched the company's news bureaus in Brasilia and Rio de Janeiro, former senior correspondent based in Rio de Janeiro for pan-regional business magazine America Economia, 11/15, “Natural Gas: Big Worry This Winter,” , accessed 7/20/08, [AZ]) Unexpectedly warm weather has bathed much of the United States in recent weeks, but fears persist that a classic energy shock may be unfolding as the nation heads into winter. This time, though, the coming squeeze is in natural gas rather than oil. Executives at companies that consume large amounts of natural gas are warning - almost screaming - about the costs they expect to face over the coming months. "Our monthly natural gas bill has doubled since August, from $700,000 to $1.4 million," said Fletcher Steele, president of Pine Hall Brick in Winston-Salem, N.C. Mr. Steele said he planned to shut half of his production in January, when natural gas prices are expected to resume climbing again because of cold weather. It is a problem that has been building for several years. Thanks to a huge buildup of natural-gas-fired electricity plants in the 1990's even as exploration has slowed, demand has outstripped supply; the nation now depends on natural gas for 24 percent of its energy requirements, compared with 23 percent for coal and 40 percent for oil. The threat of higher prices and potential shortages has led to a showdown over the most ambitious push to expand domestic drilling since the 1970's. The energy industry and major consumers of natural gas have been aggressively pushing Congress to open areas for exploration. While they have been rebuffed so far - Republican leaders in the House were forced to pull back on a budget bill that would have opened the Arctic National Wildlife Refuge in Alaska and coastal waters off several other states to drilling - energy suppliers are expected to keep pounding at the door. The dispute over expanding drilling is related to the fierce opposition from environmentalists, real estate investors and residents of areas where the industry would like to put operations intended to increase imports of natural gas. In the meantime, higher prices for the fuel are rippling through the economy. And with more than half of the nation's homes heated by natural gas, millions of Americans are already bracing for big price increases this winter. The Energy Information Administration recently predicted that the cost of heating a typical home with natural gas could rise by more than 40 percent in coming months, or an average of $306 a household. At the same time, officials are warning businesses that they face possible disruptions in the natural gas supply in some states this winter. Under long-established rules, utilities will give the highest priority to supplying natural gas to homes, possibly cutting off some companies and forcing some manufacturers to turn to other energy sources. Beyond the fear of supply disruptions, higher natural gas prices have stoked concern of price increases cascading through the economy, with the most recent monthly inflation gauge at 1.2 percent in September, the largest increase in a quartercentury. The United States now has the highest natural gas prices of any industrial country, surpassing those in Germany, the Netherlands and China. The prices have been pulling back from a post-hurricane spike in October that sent them above $14 per thousand cubic feet, but they remain at unusually high levels, with the futures contract for December closing at $11.61 on Monday. Only three years ago, during a glut, natural gas was selling for as little as $2 per thousand cubic feet. High prices are inflicting pain across the country, hitting hard at utilities in the mountain states, grain elevators in the Midwest and chemical manufacturers along the Gulf Coast. Announcements of job losses in energy-intensive industries are mounting. For instance, Lyondell Chemical of Houston said last month that it was shutting a foam chemicals plant in Lake Charles, La., cutting about 280 jobs. The reason was higher energy costs, the company said, though Lyondell also cited damage from Hurricane Rita. Other companies unable to pass all their higher natural gas costs to customers are starting to announce big losses. For example, CMS Energy, Michigan's largest natural gas utility, reported a $263 million loss this month. The hurricanes made a bad situation worse. The American Chemistry Council estimates that 100,000 jobs at companies that rely largely on natural gas have been lost since prices for the fuel began climbing in 2000. Chemical companies have been particularly outspoken in calls for the Bush administration and Congress to focus on curbing consumption and repairing energy infrastructure in the Gulf of Mexico. "We need to declare a national crisis," Andrew N. Liveris, the chief executive of the Dow Chemical Company, said in recent testimony before the Senate.

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AT: Natural Gas Any shift to greater use of natural gas would be infeasible, as it would be both expensive and provide limited utility. Mine Regulation Reporter 00 (5/1, “EPRI proposes gradual path to hit emission targets,” Lexis-Nexis Academic, [AZ]) A national investment of some $160 billion would be required. Gas production would have to increase by 50% by 2010 and by 70% through 2030. With a 90% rig utilization rate, many new drilling rigs would need to be built. "Since 1949," EPRI notes, "annual gas deliverability has increased by over 1 Tcf (trillion cubic feet) per year on only five occasions." Under CPD, however, "growth in some years would have to exceed 1.5 Tcf per year and would have to average 1 Tcf per year during a 5-year span." "Our study revealed that even if this initial shift from coal to gas could be accomplished, reliance on natural gas for electricity generation could not be maintained at such a high level for an extended period of time," said Gordon Hester, who managed the study. EPRI says that the high demand for natural gas leading up to 2020 would compromise gas supplies, boost gas prices and "prompt shifts to electricity generating technologies that use less costly fuels while producing lower emissions. As a result, natural gas used for electricity generation would decline significantly after 2025."

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AT: Deepwater Oil Deepwater oil can’t solve – it peaks early, is nearly impossible to pump, and there’s very little of it. The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) The story is similar for deepwater oil – oil under the sea floor, in at least 500 meters of water. For one thing, deepwater wells peak and decline just like their landlubber cousins, and apparently very quickly. A report on Gulf of Mexico deepwater oil by the Department of the Interior*s Minerals Management Service shows that newer wells in the Gulf have much higher outputs than older ones, but their extraction almost invariably shoots up at first, peaks very early, and then falls off rapidly, in fact faster than the older wells.39 Also, deepwater poses extreme challenges. It involves drilling in water which may be a mile or more deep, to total depths of up to 30,000 feet or more. Developing deepwater oil takes incredibly advanced technology, sometimes including equipment that rests on the ocean floor itself. A deepwater well can easily cost $50 million or more. Moreover, deepwater operations in the Gulf are vulnerable to disruption by hurricanes. Colin Campbell*s observation is apt: “no one would be looking for oil far offshore beneath 6,000 feet of water if there was anything else left that was easier.40 Finally, and most importantly, deepwater’s potential is limited. Deepwater oil exists in only a few locations. As Merrill Lynch oil analyst Ivan Sandrea points out, most deepwater discovery and extraction is occurring in four provinces: Angola, Nigeria, Brazil, and the Gulf of Mexico. Total deepwater discovery in these “Big Four” areas was 47 Gb as of end-2002. Cumulative extraction from the Big Four was about 4.4 Gb as of end-2003, and in that year global deepwater extraction accounted for 3.6 percent of total world oil production. Moreover, discovery in the Big Four may have already peaked at 5.8 Gb in 1996, with Brazil*s discovery peaking in 1987, the Gulf*s in 1999, Angola*s in 1998, and Nigeria*s in 1996. Sandrea projects that Big Four deepwater extraction could peak in 2010-2013. A more optimistic study by the Wood Mackenzie and Fugro-Robertson firms puts deepwater extraction so far at 6 Gb, remaining proved deepwater reserves at 44 Gb, and yet-to-find deepwater oil at 114 Gb. Even so, the total, 164 Gb, is less than Salameh*s estimate for Saudi Arabia*s reserves alone. And the study*s production forecast graph shows each of the Big Four peaking in 2008-20l0.41 Combining Asian and African proved reserves and the Wood Mackenzie/Fugro-Robertson proved deepwater reserves gives 193.5 Gb, not much above Salameh*s estimate for Saudi Arabia, and far less than his 519 Gb for OPEC*s total reserves. Development of these new frontiers will help, of course. But on current evidence, they cannot replace declines elsewhere.

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AT: New Tech Solves Tech can’t solve – it’s already been perfected and massive new finds can’t keep up with demand The Social Contract 02 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., Summer, “The Coming End of Cheap Oil: To Hubbert’s Peak and Beyond,” <www.gunnarlindgren.com/comingendoil.pdf>, accessed 7/19/08, [AZ]) Moreover, there are no easy escapes. Exploration and enhanced recovery technologies have already improved greatly, Deffeyes notes, and “there is little expectation” of a dramatic breakthrough. The South China Sea is the only potential province still unexplored. Whereas annual world oil discovery averaged 43.8 Gb in the 1960s, it is down to perhaps 10 Gb now. As of 2000, Campbell observed, we were consuming oil four times as fast as we were finding it. Even if, which is unlikely, more large oil fields are found, Bartlett noted – and his math is irrefutable – that given exponential consumption growth, “a doubling of the remaining resource results in only a small increase” in its life expectancy.

Tech’s maxxed out Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Maugeri's final argument is that “in countries closed to foreign investments, the technologies and techniques used are, in most cases, obsolete”. Though some of the major countries have been closed to upstream oil investment, few have been closed to technological improvement. Saudi Arabia, for example, has applied some of the world's best oil-extraction technologies. It is true that some of these countries could increase production if better technology was used, but mainly at the expense of faster depletion after peak. To expect improved technology to access much extra oil in the short or medium term is mistaken.

Investment peaks – peak oil proves limits to innovation Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Maugeri's sixth argument is the standard economic view that oil supply is ultimately just a matter of investment. In a section that starts out by recognising some of the points made above, Maugeri writes: “However, the real issue is that neither major producing countries nor publicly traded oil companies are keen to invest money in substantial exploration campaigns.” It is certainly true that more money will find more oil, but we must return to the 150-year history of global oil discovery where 2P discovery decline set in the 1960s, and ask how much extra oil will be found in time to impact peak. The answer is very little. In part, this is because public oil companies found oil with tax-deductible money; the US finding its greatest quantity of oil in the 1930s in the midst of the Depression. It is true, however, that since nationalisation the national oil companies have had to spend ‘real’ money on exploration (money that could go elsewhere in their budgets); and in terms of the need for such a spend Maugeri notes that: “countries such as Saudi Arabia or Iraq … produce petroleum from a few old fields, although they have discovered but not developed more than 50 new fields each”. But the Middle East is an exceptional place; these ‘few old fields’ include the super-giants of Ghawar, Burgan, Abqaiq, Kirkuk, East Baghdad and so on. The new fields are mostly all relatively small, and are already reflected in the downward trend in the industry 2P discovery data for these countries. More money will find more oil, but relatively little, and the date of peak will not change substantially.

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AT: falling discovery costs Falling discovery costs based on flawed statistics Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Maugeri's fifth argument relates to the falling discovery and development costs of new oil. Here we have little expertise, and will not comment beyond noting that the cost of oil extraction has historically been closely tied to the price of oil, in part simply through direct energy costs, but also through demand for rigs and other equipment. Such oil-price-related factors need to be excluded from past extraction costs if a useful data trend is to be deduced. In the same section of his paper Maugeri refers to the growth over time in the world's oil R/P ratio (proved reserves divided by annual production), from a ratio of 20 years in 1948 to 35 in 1972 to 40 years in 2003. The implication is that this has resulted in increased security of supply. The R/P ratio has long been known to be a very misleading statistic. Firstly, proved reserves, as Maugeri himself points out, are recognised as very conservative figures. (For example, in 1948 when the proved R/P ratio was 20 years, Ghawar had just come in and the world's ‘proved-and-probable R/P ratio’ stood at well over 100 years.) Today, proved reserves data are even more unreliable; being variously not only conservatively reported but in some cases over-reported, and in the majority of countries not regularly reported at all. The over-reporting took place in certain Middle East countries where sudden ‘quota wars’ increases led to the R/P gain from 35 to 40 years that Maugeri mentions, see [4]. But more importantly, the global R/P ratio—at an apparently secure 40 years—takes no account at all of the mechanism that drives conventional oil peaking. The 40 years’ oil reserves certainly exist (and possibly also the USGS’ URR of 3 trillion barrels) but, as depletion calculations make clear, this oil can only come in at a declining rate due simply to pressure loss in existing reservoirs. To use R/P ratios as an argument in a paper that sets out to address oil peaking is just extraordinary.

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AT: resources infinite Oil proves that cornucopians are morons – prefer hard science to their ignorance The Social Contract 02 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., Summer, “The Coming End of Cheap Oil: To Hubbert’s Peak and Beyond,” <www.gunnarlindgren.com/comingendoil.pdf>, accessed 7/19/08, [AZ]) All this is devastating for the cornucopian school. Julian Simon argued that natural resources are “not finite in any economic sense,” and are infinitely substitutable. Our ultimate resource is human ingenuity. An infinite number of points can fit on a oneinch line segment, “because they have no defined size.” Therefore their number is not finite. “Similarly, the quantity of copper that will ever be available to us is not finite, because there is no method (even in principle) of making an appropriate count of it,” due to, for example, the possibility of making copper out of other materials. “Hence resources are not ‘finite’ in any meaningful sense.”15 This is a farrago of absurdities. Points have no size, but copper and oil molecules do; drawing quantitative parallels between them is nonsense. And just because we cannot definitively measure something, that it is non-finite is a non sequitur. I cannot feasiblely count how often the letter “e” appears in the books on my desktop shelves, but the number of books, and their contents, are fixed; therefore “e” necessarily appears in finite quantity. Analogously, since only a finite quantity of source rock is or has been in the oil window, conventional oil must be finite. Making meaningful amounts of one element into another with atom smashers would be fantastically costly. Simon breezily asserted that “our energy supply is non-finite, and oil is an important example.” A given well’s productive potential may be measured and limited, balloons into oranges. As if science is magic. Moreover, Simon egregiously telescoped into the present all possible substitutions for conventional oil, from the currently feasible to the remotely possible to the wildly fanciful (apparently with no awareness of the difference), some of which cannot be achieved in relevant quantities for decades or centuries, if at all. At any given time, feasible substitution is limited, so is the quantity of substitutes, so is their yield of oil. Tellingly, Simon’s famous books – The Ultimate Resource (1981), The Resourceful Earth (1985), The State of Humanity (1995) – ignored Hubbert. Much of what cornucopians did say about oil is embarrassingly counterfactual. Interviewed by William F. Buckley, Simon asserted that “we in fact grow oil in Illinois,” and “copper and oil come out of our minds. That’s really where they are.”18 No, Mr. Simon, they’re in the ground, and oil doesn’t come out of our minds, it comes out of source rocks, and therefore can’t be “grown” like wheat. William Brown’s “The Outlook for Future Petroleum Supplies,” in The Resourceful Earth, asserted that new technologies were “opening up vast new regions with great potential,” such as jungles, polar regions, and offshore areas.19 In fact, worldwide discovery has collapsed. “Another promising region,” Brown added, is deeper depths of existing petroleum areas. “That is, for economic reasons over 95 percent of the existing basins have not been explored below 15,000 feet.” Higher prices give incentives to drill deeper, and while it is too soon to say what the potential of deeper deposits is, “[t]here is little doubt that they will be significant. There is a reasonable chance that they will prove to be astonishingly productive” due to new technology. By 2100, Brown believed, almost all petroleum resources up to 40,000 feet down, perhaps deeper, would be explored. Similarly, in 1991 Simon trumpeted that we will “dig deeper and pump faster” and get more oil.20 But going deeper would overshoot the “oil window.” Drilling stopped at 15,000 feet for geological reasons, not economic ones: going deeper didn’t make sense, because deeper down there generally wasn’t any oil. Petroleum geologists already knew this. Hunt’s textbook, to repeat, appeared in 1979. That Brown, and Simon himself, were so crassly ignorant of well-established facts readily available even in a previously published college textbook is damning. The cornucopians did not know what they were talking about. Geologists would not have made these howlers, but Brown was Director of Energy and Technological Studies at the Hudson Institute; Simon was an economics professor and Heritage Foundation adjunct scholar. Cornucopians tend to be dwellers in a realm of words, theories, and abstractions – not people in contact with the realities of a limited world. The latter, such as Campbell, Deffeyes, and Ivanhoe, do not parrot Simonesque platitudes. They know better. That the closer one gets to reality and hard science the fewer cornucopians one finds is telling.

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AT: market transition solves Peak oil will lead to a global economic collapse that destroys the possibility of a transition Goodstein 04 (David, physicist, educator, Vice-provost of the California Institute of Technology, and professor of physics and applied physics, Professor of Physics and Applied Physics at Caltech, where he has been on the faculty for more than 35 years, named the Frank J. Gilloon Distinguished Teaching and Service Professor, has served on and chaired numerous scientific and academic panels, including the National Advisory Committee to the Mathematical and Physical Sciences Directorate of the National Science Foundations a founding member of the Board of Directors of the California Council on Science and Technology, in articles, speeches and colloquia he has addressed conduct and misconduct in science, the end of exponential growth of the scientific enterprise, and issues related to fossil fuel and the climate of Planet Earth, Out of Gas: The End of the Age of Oil, p.18, 2004, [AZ]) But as we learned in 1973, the effects of an oil shortage can be immediate and drastic, while it may take years, perhaps decades, to replaced the vast infrastructure that supports the manufacture, distribution, and consumption of the products of the twenty million barrels of oil we Americans alone gobble up each day. One certain effect will be steep inflation, because gasoline, along with everything made from petrochemicals and everything that has to be transported, will suddenly cost more. Such an inflationary episode will surely cause severe economic damage—perhaps so severe that we will be unable to replace the world’s vast oil infrastructure with something else. That’s a prospect we would rather not think about.

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AT: Oil High Now : Their Cards Are Lies Countries overestimate their oil reserves to increase production Lloyd, 2005 (Bob, Associate Professor in the Department of Physics and Director of Energy Studies at University of Otago, New Zealand,"The End of Oil," http://www.physics.otago.ac.nz/eman/The%20End%20of%20Oil%20essay%201.pdf) There are further problems in estimating how much oil may exist because new deposits are continually being discovered, and oil is being used by the world economy. Thus the estimated reserves that are left are constantly changing. There are big dollars in oil (understatement) so countries/companies have political and financial interests in obscuring the real national figures For instance OPEC: production quotas are set by the size of the country's reserves so it is in national interests to overestimate the reserves - so production can proceed full tilt. This is the origin of the so called political reserves and a source of considerable confusion and unreliability in estimating deposits for OPEC countries.

empirical evidence proves that oil companies, such as Shell, exaggerate their reserves. New York Times 04 (Jonathan Fuerbringer, financial journalist for The New York Times, 1/10, “INTERNATIONAL BUSINESS; Shell Cuts 20% Off Estimates Of Oil and Gas In Its Reserves,”< http://query.nytimes.com/gst/fullpage.html?res=9A0CEEDF1730F933A25752C0A9629C8B63>, accessed 7/19/08, [AZ]) Royal Dutch/Shell said yesterday that it was reducing its proven oil and gas reserves by 20 percent, a surprising announcement that raised questions about the company and about the tabulation of oil and gas reserves throughout the industry. The morning disclosure sent the stocks of the two companies that control Shell, Europe's second-largest oil company, down more than 7 percent and left some analysts with doubts about the outlook for the company. Shell officials, in a statement and a telephone conference call, said that a review begun in the fourth quarter of last year led to movement within the categories of the company's oil and gas reserves, cutting the amount classified as proven reserves by 3.9 billion barrels, to the equivalent of 15.4 billion barrels of crude oil, gas liquids and natural gas. Almost 50 percent of the reduction came from projects in Nigeria and Australia. The statement said that the change followed a review of previously booked reserves against an updated companywide standard. Acknowledging that proven reserves must be reported to the Securities and Exchange Commission, Shell executives said they had supplied the new information to the public as quickly as possible.

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AT: Oil High Now : Their Cards Are Lies Current reserves are lies The Times, 2008, (Robin Pagnamenta, Energy and Environment Editor, “Former President Bush energy adviser says oil is running out,” June 30 < http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4237886.ece >) The era of globalisation is over and rocketing energy prices mean the world is poised for the re-emergence of regional economies based on locally produced goods and services, according to a former energy adviser to President Bush and the pioneer of

the “peak oil” theory. Matt Simmons, chief executive of Simmons & Company, a Houston energy consultancy, said that global oil production had peaked in 2005 and was set for a steep decline from present levels of about 85 million barrels per day. “By 2015, I think we would be lucky to be producing 60 million barrels and we should worry about producing only 40 million,” he told The Times. His controversial views, rejected by many mainstream experts, suggest that some of the world's biggest oilfields, particularly in Kuwait and those of Saudi Arabia, the world's leading producer, are in decline. “It's just the law of numbers,” he said. “A lot of these oilfields are 40 years old. Once they roll over, they roll over very fast.” Mr Simmons asserted that this, coupled with soaring global energy demand, meant that world oil prices were likely to continue rising. He said that even at present record highs of more than $140 a barrel, oil remained relatively inexpensive, especially in the US, the world's biggest market. “We are just spoiled rotten in the US,” he said. “It's still cheap.” Rising prices will force a tectonic shift in the structure of the global economy by destroying the rationale for shipping many goods, such as food, over long distances, he said. “This is already happening. In the US, our local farms, ranches and dairies are booming. They are having a huge comeback.” Mr Simmons set out a radical vision of the future, envisaging a society in which food and many other essentials are sourced and consumed locally and increasing numbers of people work from home. He claimed that the alternative was increasing political instability and conflict over the planet's diminishing resources. “We are living in an unsustainable society,” he said. “If we don't change we are just going to start fighting one another...So let's just start assuming the worst and plan for it.” However, only this month, BP disclosed figures which indicated that the world had 1.24 trillion proven barrels of oil left in the ground - more than 40 years' worth at current rates of production. BP said that known global reserves had actually increased by 168.5 billion barrels, or 14 per cent, over the past decade. Tony Hayward, the chief executive of BP, said: “The good news is the world is not running out of oil.” BP blamed a lack of investment and access to reserves, rather than geology, for why global oil production was sputtering. Mr Simmons claimed that many countries had overstated their reserves for political purposes and that so-called flow rates were a better indicator of recoverable volumes. He said that the quality of oil produced by Saudi Arabia and other big exporters was declining.

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AT: Oil High Now : Their Cards Are Lies Current reserves claims are lies, magnifying the unexpected transition impacts The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) Finally, because several years elapse between finding fields and getting them into production, any output increase in the near future must come from oil already known to exist – which takes us to the vexing issue of proved reserves, i.e., oil which can be extracted from known reservoirs under current economic and technological conditions. Some companies* reserve claims may be questionable. Shell Oil, for example, reduced its reserves four times in 2004, for a total reduction of 4.47 Gb.27 Great controversy surrounds reserve claims by OPEC members. After OPEC decided in the 1980s to base production quotas partly on reserves, many members abruptly increased their reserves substantially. As of the end of 2003, OPEC members claimed a total of 882 Gb in proved reserves (up from 475.3 Gb at end-1983), with, for example, Saudi Arabia reporting proved reserves of 262.7 Gb (up from 168.8 Gb at end-1983), Iran 130.7 Gb (versus 55.3 in 1983), and the United Arab Emirates (U.A.E.) 97.8 Gb (versus 32.3 in 1983). Some oil analysts, such as ASPO*s founder, geologist Colin Campbell, dismiss the increases as politically driven. Recently, oil economist Mamdouh Salameh, a consultant to the World Bank, took a hard look at the matter. Based on his own calculations from OPEC discovery, extraction and consumption data, he argued that a “more reasonable estimate” would be not the 819 Gb claimed at end-2002 but 519 Gb, 300 Gb less. Salarneh*s revised end-2002 proved reserves for Saudi Arabia, Iran, and the U.A.E. were 181.85, 63.69, and 37.36 Gb, respectively. The 519 Gb figure, he noted, cuts ultimate world reserves from 2,100 to 1,800 Gb.28 If OPEC*s reserves are indeed substantially lower than their official claims, then there will be a considerably smaller amount of recoverable oil to draw upon, meaning that the output surge will be hard to maintain. Moreover, a smaller recoverable oil endowment obviously implies an earlier peak than a larger one. Energy analyst Richard Duncan recently generated oil peak forecasts with different estimated ultimate recoveries (EURs), and found that an EUR of 2 trillion barrels generates a peak in 2007, while a 3.3 trillion barrel EUR yields peak in 2010.

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AT: Hubbert Model is Flawed Critiques of Hubbert miss the real point of peak oil The Social Contract 02 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., Summer, “The Coming End of Cheap Oil: To Hubbert’s Peak and Beyond,” <www.gunnarlindgren.com/comingendoil.pdf>, accessed 7/19/08, [AZ]) When cornucopians do engage Hubbert, they often misrepresent him or raise false issues. Witness the following examples. Trying to make Hubbert look gloomy, Adelman and Lynch cite him selectively. They present his 1974 estimate of the U.S. oil supply of 170Gb – then note that as of 1997 production was already 170 Gb, with proved reserves of another 20 million barrels, with 2 Gb added annually, and that the USGS’s current estimate was 250 Gb. But his prediction of the 1970 peak assumed a 200 Gb supply, which they ignore. Likewise, they present only his 1,250 Gb estimate of world supply and cite the USGS estimate of 2,400 Gb – ignoring Hubbert’s other estimates of 2,000 Gb.26 This is too dishonest to take seriously. McCabe characterizes Hubbert as believing that “resources are finite,” as if this is a defect – but admitted that “in the long run the supply of fossil fuel is finite,” and “The amount of fossil fuel … of course, is finite.” He misrepresents Hubbert as “regard[ing] Ohio’s oil resources as virtually exhausted,” when his 1956 paper said no such thing.27 Cornucopians belabor the bell-shaped curve. “There is no inherent reason” why a given fossil fuel’s production plot “should have a symmetrical bell-shaped curve,” McCabe intones. The University of Oklahoma’s David Deming adds that “there is no unique Hubbert curve,” but that Hubbert himself apparently exclusively used symmetrical curves.28 Much ado about nothing, since, as these writers admit, Hubbert said production plots could have more than one maximum and an infinity of possible shapes. Worse, this is a red herring, conveying an impression that Hubbert stands or falls on production plots following a bell-shaped curve. Hubbert’s essential points were that a fossil fuel’s supply is fixed and finite, therefore exponential growth in extraction is unsustainable, extraction must eventually decline and cease, and total extraction cannot exceed initial quantity. The curve’s shape is unimportant. Deming claims that Hubbert’s 1956 paper “made what he considered to be a ‘best’ estimate” of total U.S. crude oil supply – 150 Gb. As for predicted peak dates, “The actual peak occurred in 1970. Hubbert’s best estimate (1956) of peak production in 1965 was in error by five years, with the actual production peak occurring at the outer limit of his uncertainty range.” The claim of Hubbert’s adherents that he was right “is only true if Hubbert’s (1956) upper curve … is used, and Hubbert’s actual prediction of 1965 is ignored.”29 This is flat dishonesty. I have read Hubbert’s paper, and nowhere did he describe the 150 Gb estimate as his “best,” or call 1965 his “actual” prediction or “best estimate,” or give it more weight than 1970. Deming notes that Hubbert “was intimately involved with technocracy,” which envisioned a “highly authoritarian” ideal society, and that authoritarian governments – Nazi Germany, the Soviet Union, Communist China – were mass murderers. Hubbert’s politics “appear to have been dangerously wrong.” Deming wonders if they “may have influenced his scientific conclusions” regarding oil.30 A shameful smear by association.

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AT: Hubbert model is flawed Peak oil theorists have updated their models, but skeptics haven’t kept up Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) The second argument that Maugeri cites is that current ‘oil doomsters’ (Maugeri's term) use the Hubbert model, but that this makes a number of assumptions which are not valid. To answer this, several ideas need to be unravelled. The first point to make is that none of the current detailed models that predict a near-term resource-limited peak in global oil production use the Hubbert model. Some, like the models of Petroconsultants (1995), Germany's BGR, and Campbell/Uppsala [8], [9] The German Federal Institute for Natuaral Resources (Bundesanstalt für Geowissenschaften und Rohstoffe, BGR), Stilleweg 2, Hanover, Germany. Reserves, resources and availability of energy minerals (Reserven, ressourcen und verfügbarkeit von energierohstoffen), 2002 (in German).[9] and [10] do use the concept of mid-point peaking, but do not use a symmetric logistic ‘Hubbert curve’ profile. But most current detailed models simply calculate future production from current and expected fields, and make no use at all of any of Hubbert's methods. This ‘direct calculation’ approach is possible because the date of peak is so close. Such calculations include those by Energyfiles Ltd., Miller at BP, and PFC Energy [11], [12] and [13].1

Hubbert’s accurate – Egypt proves. Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Nevertheless, it is important to look at Maugeri's criticisms of the Hubbert model, as these show a lack of understanding of the mechanism that drives peak. (a) Maugeri's first criticism is that Hubbert's model assumes that “the geological structure of our planet is well known and thoroughly explored, so that discovery of unknown fields is highly improbable”. This statement is quite incorrect, as the discovery of new unknown fields is virtually certain. The key question is: at what rate? As mentioned above, the industry global oil discovery data show that this rate of discovery of oil in new fields has been in decline for 40 years. It is this long-term discovery-rate decline, coupled with declining production in most existing fields, which makes the near-term decline in the production of conventional oil now a certainty. (b) Maugeri's second criticism of Hubbert's model is that it says that oil production from a region follows a bell curve, both on the up-side and the decline, but that real data—he quotes that of Egypt—show no such trend. The shape of a typical resource-limited oil production curve for a region has long been known, and was correctly drawn early on by Hubbert. This does not have a symmetric bell shape; but has typically a bell shape on the upside, and a roughly exponential decline once past peak. The shape is explained mathematically by combining exponential pressure loss in the individual reservoirs with the fact that large fields in a region tend to get into production first (see a simple model for this in [14]). Today about 64 countries are past their resource-limited peak of conventional oil production.3 This is apparent when the industry historical proved plus probable (‘2P’) discovery data for the countries concerned are combined with geological knowledge. Most countries past peak are fairly small oil producers, but some are large, including the US, UK, Norway and Indonesia. Russia is past its mid-point, if not technically past peak. Maugeri's example of Egypt to disprove the Hubbert curve is badly chosen. This is because Egypt is both a country past peak and also one that shows a typical ‘Hubbert’ production profile (see Fig. 1). That this peak is resource-limited is indicated by the falling industry discovery data, also shown, supported by geological assessment.4 That Maugeri appeared unaware—despite his company almost certainly holding the relevant data—that Egypt was past peak, and that it is a good example of the Hubbert curve, may seem surprising. But this simply mirrors a lack of understanding across much of the petroleum industry of the mechanism that drives oil peaking.

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AT: Hubbert Model is Flawed Application of multiple Hubbert curves work – their ev’s criticizes the worst kind of modelling Laherrere, 2k (J.H., former head deputy of exploration in France, “The Hubbert Curve: It’s strengths and weaknesses,” Oil and Gas Journal < http://dieoff.org/page191.htm >.) Hubbert’s modelling technique has been variously applauded and criticised, but the constraints to its application have not been widely appreciated. It works well only where applied to a natural domain, unaffected by political or significant economic interference; to areas having a large number of fields; and to areas of unfettered activity. Hubbert himself worked primarily on the US-48, which had the necessary characteristics to be well modelled by a single cycle. We may note in passing that many other natural phenomena follow a bell-shaped curve as illustrated for example by the number of mad cows in the United Kingdom. But the application of multiple Hubbert curves, which was not developed by Hubbert, has much wider application, and has proved to be an exceedingly valuable modelling tool not confined to the oil industry, as population studies confirm. Hubbert modelling gives fair results only when the past data series has not been disturbed by economic and political factors and when the inflection point has been passed. Good results are achieved only when the past data series has passed the peak and when there is one single cycle for discovery. The procedure of relating the discovery curve with the subsequent production curve after a time shift of a certain number of years is an indispensable tool to obtain a reliable forecast on production. The discovery curve itself, which is commonly volatile, needs to be smoothed. The time-lag is of varying duration. It is 33 years for the USA; 11 years for the United Kingdom; 17 years for the Former Soviet Union; and about 30 years for the world as a whole, although affected by the impact of the Middle East swing producers. This shift gives a reliable trend for coming production except in the unlikely event that a major new cycle of discovery arises. There is no doubt that Hubbert modelling is a valuable tool but like all tools, it needs to be used properly for the right job. It is important to understand its strengths and weaknesses and to know when to apply single or multi-curve approaches. Knowing backdated annual discovery is a must, but it has to be the annual discovery based mean not proved reserves. Hubbert’s model only from production data is an insufficient tool.

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AT: Reserves Growth Reserve growth represent an accounting error, not a supply increase Meng and Bentley, 2008 (Q.Y. and R.W, State Key Laboratory of Petroleum Resource and Prospecting and Department of Cybernetics, The University of Reading; “Global oil peaking: Responding to the case for ‘abundant supplies of oil’,” Energy Volume 33, Issue 8, August 2008, Pages 1179-1184, < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S4SP49TB1&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=7526439bec78753ffd45cca227d5ef4a> ) Maugeri's fourth main argument focuses on ‘reserves growth’ (which, as explained above, is the winning of more oil from existing reservoirs). Much of such reported reserves growth results simply from watching the evolution of fields’ proved reserves over time, where of course reserves growth is to be expected. The IEA, for example, fell into this trap when considering North Sea fields. And even when 2P reserves are considered caution is needed for large fields, as production engineers tend to start by issuing rather conservative figures—as this determines the initial expenditure on infrastructure, and raising these as later developments are put in place; Prudhoe Bay is one well-known example of this phenomenon. The Klett and Schmoker data that Maugeri cites, of a 26% increase from 1981 to 1996 in the reported total size of giant fields found pre-1981, will at least partly reflect this process. Nevertheless, reserves growth driven by better recovery technology, or a higher oil price making economic an existing but previously uneconomic recovery technique, are real factors, and need to be modelled explicitly, as the PFC model mentioned above does.

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AT: Speculation Today’s oil market is not due to speculation; telltale signs of financial speculation are missing from the market. New York Times 08 (Paul Krugman, joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University, received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics, he is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, his professional reputation rests largely on work in international trade and finance; he is one of the founders of the "new trade theory," a major rethinking of the theory of international trade, in recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to "that economist under forty who is adjudged to have made a significant contribution to economic knowledge," his current academic research is focused on economic and currency crises, 5/12, “The Oil Nonbubble,” Lexis-Nexis Academic, [AZ]) “The Oil Bubble: Set to Burst?” That was the headline of an October 2004 article in National Review, which argued that oil prices, then $50 a barrel, would soon collapse. Ten months later, oil was selling for $70 a barrel. “It’s a huge bubble,” declared Steve Forbes, the publisher, who warned that the coming crash in oil prices would make the popping of the technology bubble “look like a picnic.” All through oil’s five-year price surge, which has taken it from $25 a barrel to last week’s close above $125, there have been many voices declaring that it’s all a bubble, unsupported by the fundamentals of supply and demand. So here are two questions: Are speculators mainly, or even largely, responsible for high oil prices? And if they aren’t, why have so many commentators insisted, year after year, that there’s an oil bubble? Now, speculators do sometimes push commodity prices far above the level justified by fundamentals. But when that happens, there are telltale signs that just aren’t there in today’s oil market. Imagine what would happen if the oil market were humming along, with supply and demand balanced at a price of $25 a barrel, and a bunch of speculators came in and drove the price up to $100. Even if this were purely a financial play on the part of the speculators, it would have major consequences in the material world. Faced with higher prices, drivers would cut back on their driving; homeowners would turn down their thermostats; owners of marginal oil wells would put them back into production. As a result, the initial balance between supply and demand would be broken, replaced with a situation in which supply exceeded demand. This excess supply would, in turn, drive prices back down again — unless someone were willing to buy up the excess and take it off the market. The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding — an increase in private inventories of black gunk. This actually happened in the late 1970s, when the effects of disrupted Iranian supply were amplified by widespread panic stockpiling. But it hasn’t happened this time: all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China. The rise in oil prices these past few years had to happen to keep demand growth from exceeding supply growth. Saying that high-priced oil isn’t a bubble doesn’t mean that oil prices will never decline. I wouldn’t be shocked if a pullback in demand, driven by delayed effects of high prices, sends the price of crude back below $100 for a while. But it does mean that speculators aren’t at the heart of the story. Why, then, do we keep hearing assertions that they are? Part of the answer may be the undoubted fact that many people are now investing in oil futures — which feeds suspicion that speculators are running the show, even though there’s no good evidence that prices have gotten out of line. But there’s also a political component. Traditionally, denunciations of speculators come from the left of the political spectrum. In the case of oil prices, however, the most vociferous proponents of the view that it’s all the speculators’ fault have been conservatives — people whom you wouldn’t normally expect to see warning about the nefarious activities of investment banks and hedge funds. The explanation of this seeming paradox is that wishful thinking has trumped pro-market ideology. After all, a realistic view of what’s happened over the past few years suggests that we’re heading into an era of increasingly scarce, costly oil. The consequences of that scarcity probably won’t be apocalyptic: France consumes only half as much oil per capita as America, yet the last time I looked, Paris wasn’t a howling wasteland. But the odds are that we’re looking at a future in which energy conservation becomes increasingly important, in which many people may even — gasp — take public transit to work. I don’t find that vision particularly abhorrent, but a lot of people, especially on the right, do. And so they want to believe that if only Goldman Sachs would stop having such a negative attitude, we’d quickly return to the good old days of abundant oil. Again, I wouldn’t be shocked if oil prices dip in the near future — although I also take seriously Goldman’s recent warning that the price could go to $200. But let’s drop all the talk about an oil bubble.

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AT: Perpetual Doomsayers The “Doomsayers” argument is false—even the oil industry recognizes the clear evidence Hanlon and McCartney, 2008 (Phil and G., public health professors at the University of Glasgow, “Peak oil: Will it be public health's greatest challenge?,” Public Health, July 2008. < http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B73H6-4SP4B191&_user=1458830&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000052790&_version=1&_urlVersion=0&_userid=1 458830&md5=6527484a1d40caddf324a80a9bff4597 >) It is clear that oil cannot be replaced as a cheap form of energy, but it is equally indispensable as the substrate for many industrial processes, most significantly fertilizers and plastics. There does not seem to be any obvious alternative raw material available for these needs. Sceptics also make the point that, since as early as 1913, there have been a number of projections that oil production will peak, all of which have proved to be incorrect.16 However, the evidence for an oil production peak is more robust now than in the past, as peak discovery is recognized to have occurred some 40 years ago. This is a crucial point, as previous ‘scare stories’ surrounding an oil production peak were never supported by evidence of an oil discovery peak. This evidence is now available and validates concerns surrounding a production peak. The amount of oil ultimately recoverable from the earth is closely linked to the level of investment in drilling and refining technologies.17 This variability inhibits accurate comparisons of future oil reserves, but even the oil industry has started to acknowledge the problem: ‘The fact is, the world has been finding less oil than it's been using for 20 years now.

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AT: Your authors crazy Consensus has shifted – skeptics have been proved wrong. Klare, 2008 (Michael T, professor of peace and world security studies at Hampshire College in Amherst, Mass., and the author of "Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency.", “Permanent Energy Crisis” Jully 22 < http://www.alternet.org/module/printversion/32077 >) As far back as the mid-1990s, peak-oil theorists like Kenneth Deffeyes of Princeton University and Colin Campbell of the Association for the Study of Peak Oil (ASPO) insisted that the world was heading for a peak-oil moment and would soon face declining petroleum output. At first, most mainstream experts dismissed these claims as simplistic and erroneous, while government officials and representatives of the big oil companies derided them. Recently, however, a sea-change in elite opinion has been evident. First Matthew Simmons, the chairman of Simmons and Company International of Houston, America's leading energy-industry investment bank, and then David O'Reilly, CEO of Chevron, the country's second largest oil firm, broke ranks with their fellow oil magnates and embraced the peak-oil thesis. O'Reilly has been particularly outspoken, taking full-page ads in the New York Times and other papers to declare, "One thing is clear: The era of easy oil is over." The exact moment of peak oil's arrival is not as important as the fact that world oil output will almost certainly fall short of global demand, given the fossil-fuel voraciousness of the older industrialized nations, especially the United States, and soaring demand from China, India and other rapidly growing countries. The U.S. Department of Energy (DoE) projects global oil demand to grow by 35 percent between 2004 and 2025 -- from 82 million to 111 million barrels per day. The DoE predicts that daily oil output will rise by a conveniently similar amount -- from 83 million to 111 million barrels. Voila -- the problem of oil sufficiency disappears. But even a cursory glance at the calculations made by the DoE's experts is enough to raise suspicions: Behind such estimates lies the assumption that key oil producers like Iran, Iraq, Nigeria and Saudi Arabia can double or triple their oil production -- unlikely in the extreme, according to most sober analysts. On top of this, the DoE has been lowering its own oil-production estimates: In 2003, it predicted that global oil output would reach 123 million barrels per day by 2025; by the end of 2005, that number had already dropped by12 million barrels, reflecting a growing pessimism even among the globe's great oil optimists. This is not to say that oil will disappear in the years ahead: There will still be adequate supplies for well-heeled consumers who can afford higher fuel bills. But much of the world's easy-toacquire petroleum has already been extracted and significant portions of what remains can only be found in places that present significant drilling challenges like the hurricane-prone Gulf of Mexico or the iceberg-infested waters of the North Atlantic -- or in perennially conflict-ridden and sabotage-vulnerable areas of Africa, Central Asia and the Middle East.

The oil insiders who fought so vehemently against the idea of peak oil are now jumping on the bandwagon as scientific consensus begins to shift to Hubbert’s theory – peak oil is right. People’s Weekly World 08 (Mark Hertsgaard, the environment correspondent for The Nation and the author of many books, including Earth Odyssey: Around the World In Search of Our Environmental Future, 5/5, “The end of cheap oil is now,” , accessed 7/22/08, [AZ]) Conventional wisdom says the market will solve the problem: higher prices will call forth more supply. But a growing number of oil industry insiders are disputing that and instead backing the peak oil thesis. Though largely unnoticed by the media, a decisive moment in the debate came last September, when James Schlesinger declared that the "peakists" were right. You don't get closer to the American establishment than Schlesinger, who served as head of the CIA, Secretary of Energy, and adviser to oil companies. In a speech to a conference sponsored by the Association for the Study of Peak Oil, Schlesinger said, "It's no longer the case that we have a few voices crying in the wilderness. The battle is over. The peakists have won." Schlesinger added that many oil company CEOs privately agree that peak oil is imminent, but don't say so publicly. One who does is Royal Dutch Shell CEO Jeroen van der Veer. Without using the term peak oil, he warned this year that, "After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand."

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AT: Your Authors crazy Those who say Peak Oil is farfetched and a conspiracy are false and mirror those who denied Global warming ten years ago International Herald Tribune, 2006 (Deepak Gopinath, senior writer at Institutional Investor magazine. He covers globalization issues, international economics and trade, international financial institutions and emerging markets, particularly Latin America. Previously, he was a staff writer at Infrastructure Finance where he covered privatization in developing countries and the global power, oil and gas industries. His work has also appeared in Foreign Policy magazine. He has won several journalism awards including the Overseas Press Club's Citation for Excellence for his 1999 article on vulture investors, "The Man who Broke Ecuador," and multiple SAJA Journalism Awards. Gopinath holds a B.A. in political science from Swarthmore College and a Masters in International Affairs from Columbia University's School of International and Public Affairs; “'Peak-oil' doomsayers catch Wall St.'s attention; MARKETPLACE by Bloomberg” 9/1, Lexis-Nexis Academic)

On a sweltering midsummer Tuesday in the fields outside Pisa, Willem Kadijk scribbled notes as a ragtag troupe of doomsayers predicted the end of the Oil Age. With his shaved head, jeans and sandals, Kadijk, 48, blended into a crowd gathered under a white tent to hear of the coming calamity. The death of cheap, abundant crude oil, the forecasters warned, might unleash war and plunge the world into a second Great Depression. That is not the prophecy of some apocalyptic cult. Kadijk, a hedge fund adviser, had flown from Amsterdam to attend a conference on a geologic theory known as peak oil. Proponents of this controversial idea say that global oil production is now at or near its zenith. Once the flow crests and starts to decline and some geologists say that it already has oil will no longer be able to slake the world's growing thirst for energy. The result will be the oil shock to end all oil shocks. The price of a barrel of crude will spiral to $200 and keep rising. To the ''peaksters,'' today's energy crunch is nothing next to the pain that is to come. ''Peak oil is a reality,'' said Kadijk, a senior equity salesman at Kepler Equities, a brokerage in Amsterdam. He plans to start a fund to capitalize on what he sees as a looming crisis for the world's fossil-fuel-based economy and the ultimate bull market in oil. As energy prices soar and violence convulses the Middle East, the peak-oil movement an unlikely alliance of geologists, physicists, oil industry consultants and environmental activists is winning converts. Peak-oil ideas are bubbling up from scientific journals and offbeat Web sites, much the way warnings of global warming did a decade ago. For the first time, the peaksters have begun to grab the attention of Washington and Wall Street. The U.S. secretary of energy, Samuel Bodman, the former head of Cabot, an oil and chemicals company based in Boston, has asked the National Petroleum Council, which advises him, to investigate whether oil supplies can keep pace with demand. The U.S. Government Accountability Office, the nonpartisan congressional watchdog, is due to release a study on peak oil this November. Representative Roscoe Bartlett, a Maryland Republican, has formed the Congressional Peak Oil Caucus to sound the alarm. ''The world has never faced a problem like this,'' Bartlett said. Everyone agrees that the world will run out of crude eventually. Oil, after all, is a finite resource: The Earth holds only so much of it. The debate centers on when a global peak will occur and what will happen afterward. Colin Campbell, a British geologist who popularized the peak-oil theory in his 1997 book ''The Coming Oil Crisis,'' said that world production of conventional oil, the kind that comes from gushing wells, is reaching its apex. Society is not prepared for the consequences, Campbell said. It is too late to develop alternative sources of power like solar cells, nuclear reactors and windmills to fill the oil gap before energy prices soar, said Campbell, who has a doctorate in geology from the University of Oxford and more than 40 years of experience in the oil industry. ''We have come to the end of the first half of the Oil Age,'' Campbell said. Nonsense, said Russ Roberts, a spokesman for Exxon Mobil, among the world's largest oil companies. Exxon Mobil, which has reaped record profits as the price of oil has surged, has taken out ads dismissing the peak-oil theory in U.S. newspapers. The oil company said that the peaksters are being alarmist. In all, the world probably has 4 trillion barrels of oil left, four times the amount we have used so far, the ad stated. ''The world is nowhere near running out of oil,'' Roberts said. Exxon Mobil geologists predict that oil production will keep rising through 2030, he said. Predictions of an imminent oil famine are as old as the industry itself. When production at the first U.S. wells, located in western Pennsylvania, began to decline in the late 19th century, some people predicted that the country would soon run out of oil. Then crude was discovered in east Texas, whose oil fields yielded so much black gold that the Texas Railroad Commission capped production to support prices. In the past, Campbell or his disciples have forecast the oil peak down to the year or even the day only to push back the fateful moment. In 1997, Campbell said that it would occur in 2001. Today, he says that total production, which includes oil from deep-water wells and fuel derived from natural gases, will reach its height sometime after 2010. Campbell says the exact day or year is not important. What matters is that peak oil is coming, and soon. Almost a century and a half after the first U.S. wells were drilled in Titusville, Pennsylvania, production has begun to decline in more than a dozen countries, including the United States, according to the BP Statistical Review of World Energy. Production at the giant Cantarell oil field in Mexico is likely to decline 8 percent this year, according to the Mexican state oil monopoly Petroleos Mexicanos. Investors have started to listen to the peaksters. T. Boone Pickens, the hedge fund manager, says that he is a peak-oil believer. So is Peter Thiel, who co-founded PayPal and now runs Clarium Capital Management, a $2.1 billion hedge fund firm. Pickens, Thiel and other investors are positioning themselves to profit from what they say will be the biggest oil squeeze of all time.

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AT: Your authors crazy Peak oil’s based on best data. Resolve Peak Oil debates on the basis of scientific warrants - it’s the only sound policy approach Aleklett 2007 (Ajell, Uppsala University, Sweden, President, The Association for the Study of Peak Oil and Gas, < http://www.spe.org/spe-app/spe/jpt/2007/06/DissReply.htm >.) The February 2007 issue of JPT included a Guest Editorial by Peter M. Jackson of CERA. He discussed “peak oil theory” and concluded that “the peak oil lobby”—a group of professionals that forecasts world conventional oil peaking within a decade —“allows fear to replace careful analysis.” Jackson asserts that only CERA has performed a “careful analysis,” and he urges that the world adopt its “market view” forecast. We challenge that position because we believe CERA has failed to explicitly justify its very optimistic conclusions. Too much rides on oil production forecasts to accept an approach of “trust me, not others.” As a professor in physics at Uppsala University, Sweden, I approach peak oil as a scientist. My interest in energy resources started decades ago and led to the formation of the “Uppsala Hydrocarbon Depletions Study Group” (UHDSG). Recently, we published a peer-reviewed paper titled “Crash Management Program for the Canadian Oil Sands,” and we just released a thesis by Fredrik Robelius based on a 4-year study of giant oil fields and their importance for future oil production. We are also in the process of analyzing other components of the global production of liquid hydrocarbons. Our assumptions, references, and data are explicitly provided, and our work is carefully reviewed before release (i.e., we believe that we produce “careful analysis”). Peak oil already has occurred in a large number of countries and regions, and the question is when it will happen for the world as a whole. Peak oil for the US Lower 48 states was forecast by M. King Hubbert, using a model that he developed that involved no constraints on extrapolation and future production and assumed oil field production patterns, starting with discovery followed by production rising to a maximum and then a long period of decline. In his original 1956 analysis, Hubbert made two predictions based on 150 and 200 billion bbl of ultimate oil recovery. At the time, few ventured forecasts for ultimate recovery. His 200 billion bbl scenario, which is close to what we believe today, predicted a peak in 1970, which is what occurred. For 2000, Hubbert’s prediction was for production in the Lower 48 states to be 4 million BOPD, which was very close to what it actually was, excluding deep water. Those who believe that peak oil could occur within a decade use an array of tools, including individual oilfield analyses, current project forecasts, differing estimates for declines in existing oil fields, and adaptations of the Hubbert approach. The results of many of these studies indicate a likelihood of peaking within a decade, but precision is not possible because of the large number of unknowns. UHDSG sees many of the important driving forces very differently from CERA. Recent studies at UHDSG provide additional “careful analysis,” which Jackson has demanded. As the readers of this journal know, a giant oil field contains at least 500 million bbl of recoverable oil. Only 507, or 1% of the total numbers of fields, are giants, but in 2005, these relatively few fields contributed approximately 60% of global production and represented about 65% of global ultimately recoverable reserves. The discovery of giant fields peaked during the 1960s, and many are in decline. Production from these fields was separately studied using four scenarios. For the time frame considered, we excluded increased production from the arctic and from oil shale, which we consider problematic for quite some time. New discoveries from 2007 on will not affect the time for the peak, but they can make the downward slope less steep. The case shown in Fig. 2 has a peak in the production around 2010 and can handle a demand growth of 1.7%. A decline in demand growth would move the peak forward in time. If somehow global production were to be frozen at today’s level, the world might experience a plateau in production for 10 to 15 years. Fig. 1 in the Jackson article shows conventional oil production for 2006 at approximately 74 million BOPD, with a forecast increase to a maximum of 96 million BOPD in 2030, plateau production until 2045, and a decline to 68 million BOPD in 2070. Integration under the CERA forecast plot gives total conventional oil production of 205 billion bbl. This is almost twice as much conventional oil reserves as we have today, according to CERA. I hope that CERA will publish a detailed analysis of its prediction, as we are doing. Misjudging the peak of global conventional oil production likely will have dire consequences. We must openly discuss these matters in order to identify strengths and weaknesses in our various approaches and to provide the most robust forecast possible to policymakers.

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AT: Low Prices Bad Oscillations capture this: Peak oil makes oil value swing between spikes and collapse The Oil Drum 07 (Ugo Bardi, teaches chemistry at the University of Florence, Italy, is a member of ASPO international and the president of the Italian section of ASPO (ASPO-Italia), engaged in modelling resource depletion and he is also active in materials science applied to energy systems, The Oil Drum itself is a website whose goal is to facilitate civil, evidence-based discussions about energy and its impact on our future, its editors are Kyle Saunders, associate professor of political science at Colorado State University, managing editor of The Oil Drum, Dave Summers, Curators' Professor of Mining Engineering at Missouri University of Science and Technology, directed the Rock Mechanics and Explosives Research Center at MO S&T off and on since 1976, Stuart Staniford, a Physics Ph.D., and now a researcher and entrepreneur in computer security, does modeling and data analysis, Nate Hagens, has a master's degree in finance and is completing a Ph.D. in Natural Resources at the University of Vermont, 6/25, “The Coal Question and Climate Change,” accessed 7/22/08, [AZ]) It seems that what we are seeing now for crude oil parallels the historical data for whale oil and whale bone. There are also differences; for instance the prices of whale oil didn't rise so much as crude oil has been doing lately. On the average, for whale oil we see a doubling of the price, followed by a plateau. For whale bone, we see a much larger increase, more than a factor of 10 from the beginning to the end of the whaling cycle. This increase is comparable to what we are seeing today for crude oil. There is a reasonable explanation for these differences. First of all, neither whale oil nor whale bone were so crucial for life in 19th century as crude oil is today for us. There were alternative fuels for lamps: animal fat or vegetable oil, a little more expensive and considered as inferior products; but usable. Then, starting in the 1870s, crude oil started to be commonly available as lamp fuel. It probably had an effect in keeping down the price of whale oil. For whale bone, instead, a replacement didn't really exist except for steel, which was probably much more expensive during the period that we are considering. But stiffeners for ladies' clothes were hardly something that people couldn't live without. In comparison, crude oil is such a basic commodity in our world that it is not surprising that prices have risen so steeply. Airlines, for instance, have no choice in between collapsing and buying oil at any price. For other activities, the conditions of the choice may not be so stark, but still we can't survive without oil. If the exponential rise of oil prices were to continue unabated for a few more years, we would be seeing some kind of demand destruction, indeed. But the historical data for whaling tell us that an exponential rise of the prices is not the only feature of the post-peak market. The prominent feature is, rather, the presence of very strong price oscillations. We can attribute these oscillations to a general characteristic of systems dominated by feedback and time delays. Prices are supposed to mediate between offer and demand, but tend to overcorrect on one side or another. The result is an alternance of demand destruction (high prices) and offer destruction (low prices). What we are seeing at present with crude oil is, most likely, one of these price spikes. Eventually, it will overdo its job of curbing demand and turn into a price collapse. We can imagine how, in the collapsing phase, everyone will start screaming that the "oil crisis" of the first decades of 21st century was just a hoax, just as it was said for the crisis of the 1970s. Then, a new upward spike will start. Here, too, the history of whaling can teach us something in terms of the difficulty that people have in understanding depletion. In Starbuck's book, we never find mention that whales had become scarce. On the contrary, the decline of the catch was attributed to such factors as the whales' "shyness" and the declining "character of the men engaged". Starbuck seems to think that the crisis of the whaling industry of his times can be solved by means of governmental subsidies. Some things never change. In the end, the history of whaling tells us that what is happening now to crude oil shouldn't have taken us by surprise. The future can never be exactly predicted but, at least, it can be understood from the lessons of the past. One of these lessons, however, seems to be that we never seem to be able to learn from the past.

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NEG: Peak Oil is Wrong Peak Oil Theory is Completely False; Trillions of remaining barrels of oil disprove the fear-inducing theory CERA, 2006 (Cambridge Energy Research Associates, leading advisor to international energy companies, governments, financial institutions, and technology providers, “Peak Oil Theory – “World Running Out of Oil Soon” – Is Faulty; Could Distort Policy & Energy Debate,” 11/14/06 < http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444 >) In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by Cambridge Energy Research Associates (CERA) finds that the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponents -- and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future. “The global resource base of conventional and unconventional oils, including historical production of 1.08 trillion barrels and yet-to-be-produced resources, is 4.82 trillion barrels and likely to grow,” CERA Director of Oil Industry Activity Peter M. Jackson writes in Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources. The CERA projection is based on the firm’s analysis of fields currently in production and those yet-to-be produced or discovered.“The ‘peak oil’ theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues,” Jackson observes. “Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges with delivering liquid fuels to meet the needs of growing economies. This is a very important debate, and as such it deserves a rational and measured discourse.” “This is the fifth time that the world is said to be running out of oil,” says CERA Chairman Daniel Yergin. “Each time -- whether it was the ‘gasoline famine’ at the end of WWI or the ‘permanent shortage’ of the 1970s -- technology and the opening of new frontier areas has banished the specter of decline. There’s no reason to think that technology is finished this time.” The report emphasizes the importance of focusing on the critical issues. “It is not helpful to couch the debate in terms of a superficial analysis of reservoir constraints. It will be aboveground factors such as geopolitics, conflict, economics and technology that will dictate the outcome.” The report also points to such aboveground questions as timing and openness to investment, infrastructure development, and the impact of technological change on demand for oil.

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NEG: Peak Oil Is Wrong Peak oil’s wrong – politics, not geology, slows discovery and production. The Irish Times 08, (Dr. Michael Casey, a former senior official with the Central Bank and a former member of the board of the International Monetary Fund, 7/14, “SCRAPING THE BARREL,” Lexis-Nexis Academic, [AZ]) At present, the world consumes 81.5 million barrels of oil every day. Proven reserves of oil are estimated at 1,238 billion barrels. At this rate, those reserves should be able to keep the world going for about 40 years. The equivalent figure for gas is about 70 years and our old friend coal, which is making a comeback, is good for approximately 150 years. Geologists and engineers claim there are good chances of significant discoveries in the Arctic, Russia (mainly natural gas) and Brazil. At the congress, they said that refining technology could be improved so that we can get up to 15 per cent more refined product out of the same volume of crude. There wasn't much discussion of "peak" oil, which is, apparently, a fuzzy concept. There might be a "plateau" for a few years at a fairly comfortable level of 95 million barrels a day. Moreover, a lot of natural gas should be coming on stream. And, as well as transporting it by pipeline, it can now be liquefied and shipped by tanker. So where is the problem? If reserves are comfortable, why are prices rising at such an alarming rate? It was summarised succinctly, but elliptically, by the chief executive of BP. "The problem is not speculative or geological, but political." Another insider was even more coy, saying that most of the problems were "above ground". We got a bit closer to the truth when another oil chief referred to "rising resource nationalism". What all these euphemisms mean is that big companies just can't go into sovereign countries any more, grab the oil and gas, and leave. In the past, there were plenty of examples of large oil giants damaging the environment of countries like Nigeria - and leaving a whiff of neo-colonialism in the already-polluted air. More recently, we had a case in this country where six men were jailed for several months. At present, the countries that won't play ball with the oil giants include Venezuela (under Hugo Chavez), Nigeria and Iran. Even the Russians are backing out of some of their earlier deals with the oil giants. Hardly anyone mentioned Iraq, or the fact that the US could be using high oil prices to pay their war debt as a more politically expedient method than raising the taxes of American citizens. Every time we put fuel in our cars, we are probably paying for the war in Iraq - a disturbing thought. The fact is, oil output from Iraq fell to one-third of what it was before the invasion and one-fifth of what it could now be. Fortunately, some Iraqi oil wells are currently being brought back into more regular production and there is talk of the discovery of a new field in the western desert of Iraq. There is also the issue of OPEC countries wishing to keep the oil in the ground. They reject this and claim they are happy to pump more oil - at the existing high prices of course and certainly not so much that prices would fall. They do have massive reserves - especially Saudi Arabia. But if they want to leave most of it in the ground for their children, as is widely rumoured, what can the oil companies do about it except make them an offer they can't refuse? And all that will do is serve to push costs up. Then, continuing our global tour, we come to Russia, which, as far as natural gas is concerned, has the whip hand and is not going to give it away.

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NEG: Peak Oil is Wrong The predictions of peak oil skeptics are all false – their claims are based on fallacious assumptions such as assuming that peak oil occurs when ALL the oil is gone and severely underestimating our rate of oil consumption. Goodstein 04 (David, physicist, educator, Vice-provost of the California Institute of Technology, and professor of physics and applied physics, Professor of Physics and Applied Physics at Caltech, where he has been on the faculty for more than 35 years, named the Frank J. Gilloon Distinguished Teaching and Service Professor, has served on and chaired numerous scientific and academic panels, including the National Advisory Committee to the Mathematical and Physical Sciences Directorate of the National Science Foundations a founding member of the Board of Directors of the California Council on Science and Technology, in articles, speeches and colloquia he has addressed conduct and misconduct in science, the end of exponential growth of the scientific enterprise, and issues related to fossil fuel and the climate of Planet Earth, Out of Gas: The End of the Age of Oil, p.45-6, 2004, ) As we saw earlier, many experts think there is enough oil in the ground to last for decades and enough coal for hundreds of years, at the present rate of consumption. Among other fallacies, that view rests on the unstated assumption that the oil crisis will occur when the last drop of oil is pumped and likewise for coal and the other fossil fuels. The more sophisticated Hubbert analysis tells us that we get into trouble when we reach the halfway point. That’s when the rate at which we can extract oil or other fuels starts to decline. But that isn’t the only fallacy in that rosy picture. The present rate of consumption is the biggest myth of all. For one thing, we Americans consume fuel at five times the average per capita rate of the rest of the world, and the rest of the world wants in. For another, there is a powerful inverse correlation between per capita energy consumption and female fertility. The richer the nation, the higher the rate of fuel consumption and the fewer the number of children born. If the whole world is brought up to first-world status as quickly as possible, then sometime later in the century there might be ten billion people on Earth living in relative comfort and burning lots of fuel. If, instead, the third world remains in poverty, there might be a hundred billion people on Earth living in misery, and consuming the same total amount of energy. Either way, all the fossil fuel will run out a lot faster than predicted by the present rate of consumption.

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NEG: Peak Oil is Wrong As technology develops and oil prices rise, oil companies are able to make use of increased funds and improved extraction methods to be able to extract “heavy oil” profitably, disproving the peak oil theory. The New York Times 07 (Jad Mouawad, staff reporter for the New York Times covering the energy industry and former reporter for the Bloomberg News, graduated from Brown University in 1995 and later gained a masters degree in political science from the Institut d’Etudes Politiques de Paris, 3/5, “Oil Innovations Pump New Life Into Old Wells,” Lexis-Nexis Academic, [AZ]) The oil industry is well known for seeking out new sources of fossil fuel in far-flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to the world's energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors. At Bakersfield, for example, Chevron is using steam-flooding technology and computerized three-dimensional models to boost the output of the field's heavy oil reserves. Even after a century of production, engineers say there is plenty of oil left to be pumped from Kern River. ''We're still finding new opportunities here,'' said Steve Garrett, a geophysicist with Chevron. ''It's not over until you abandon the last well, and even then it's not over.'' Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak -- if it has not already -- and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline. ''I am very, very seriously worried about the future we are facing,'' said Kjell Aleklett, the president of the Association for the Study of Peak Oil and Gas. ''It is clear that oil is in limited supplies.'' Many oil executives say that these so-called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening up opportunities to develop supplies. As the industry improves its ability to draw new life from old wells and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long-running debate over when the world might run out of oil. Typically, oil companies can only produce one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity. ''Ironically, most of the oil we will discover is from oil we've already found,'' said Lawrence Goldstein, an energy analyst at the Energy Policy Research Foundation, an industry-funded group. ''What has been missing is the technology and the threshold price that will lead to a revolution in lifting that oil.'' Nansen G. Saleri, the head of reservoir management at the stateowned Saudi Aramco, said that new seismic tools giving geologists a better view of oil fields, real-time imaging software and the ability to drill horizontal wells could boost global reserves.

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NEG: Peak Oil is Wrong The peak oil theory is based on false statistics that world oil output stopped increasing; however, these figures are artificially low due to OPEC cutting oil output and other countries producing below their potential. The Sunday Times 07 (David Smith, Economics Editor of the Sunday Times (London), an assistant editor and policy adviser, writes monthly columns for Professional Investor, British Industry and The Manufacturer, and is also a regular contributor to the CBI's Business Voice and other publications, also writes a leading UK economics blog, 12/16, “Plenty of oil left in the global tank,” LexisNexis Academic, [AZ]) There will be more of this on Tuesday in the latest figures for retail and consumer price inflation. Oil did not quite make it to $100 a barrel and, for a few days dropped below $90. But last week's co-ordinated action by central banks pushed prices back above $90. So the surge in prices in recent months has revived a familiar question. Is it because oil is starting to run out? Have we reached, or passed, the peak in world oil production? A new film just out in Britain, A Crude Awakening: The Oil Crash, begins with a sombre Philip Glass soundtrack. Its opening line, "Oil is the excrement of the devil", tells you where it is coming from. It outlines a vision of a world beyond oil and "how our civilis- ation's addiction to oil puts it on a collision course with geology". Peak oil is a broad church. To be fair to A Crude Awakening, it is hard to argue too much with the definition on its website. "Peak oil doesn't mean 'running out of oil', but rather 'running out of cheap and plentiful oil'," it says. The film is directed mainly at an American audience, profligate in its oil use. But what about the peak-oil "ultras", who claim world oil pro-duction has reached or passed the summit? It has such a widespread following on the internet that surely it must be true. Actually, it is wrong. The "peak oil has already happened" argument was partly based on the fact that global oil production, on International Energy Agency figures, had never been higher than the 86.13m barrels a day of July 2006. That, however, is no longer true. World oil output in October was 86.5m barrels a day, 1m more than in October last year and 3m more than in October 2005. It edged up to 86.55m last month. Even if it was the case that global oil production had been flat over the past couple of years, however, it would prove very little. Why? During this time the Organisation of Petroleum Exporting Countries (Opec) cut output and only recently started to increase exports again. Less than five years ago Opec was happy with an oil price in the $22-$28 a barrel range. Now it is content with $90. Opec increased output quotas by 500,000 barrels a day this autumn but refused to do so again earlier this month. Production in many oil-producing countries is constrained, not by geology but by politics. Iraq is producing only two-thirds what it did on the eve of the first Gulf war in 1990. That was no golden age, production running below potential because of weak investment during the Saddam era. Iran is producing well below potential.

Forecasts for the oil industry are usually incorrect; peak oil theory is just that: a theory Christian Science Monitor, 2007 (David R. Francis, “Why peak oil may soon pique your interest,” August 6, 2007. < http://www.csmonitor.com/2007/0806/p15s01-wmgn.html> ) Dr. Fadhil Chalabi, executive director of the Centre for Global Energy Studies in London, isn't so pessimistic. He notes that with higher prices, the demand for oil has started to fall, at least in the 30 industrial nations belonging to the Paris-based Organization for Economic Cooperation and Development. Since 2006, their demand has dropped by about 400,000 barrels a day. And the demand for crude in bustling and populous China and India rose only 0.7 percent last year. His research institute forecasts world demand will rise "not more than 1 percent a year." Other researchers predict 1.4 to 1.5 percent a year, a significant difference. Mr. Chalabi says forecasts for the world oil industry cannot be relied on, having proved wrong in the past. Today's forecasts do not fully take into account the impact higher prices have in reducing demand and encouraging alternative energy sources, he adds.

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NEG: Peak Oil is Wrong The peak oil theory is flawed – peak oil conspiracy theorists are often wrong, large areas with untapped potential have not been explored, and the high price of oil is due to alternative causes. The Sunday Times 07 (David Smith, Economics Editor of the Sunday Times (London), an assistant editor and policy adviser, writes monthly columns for Professional Investor, British Industry and The Manufacturer, and is also a regular contributor to the CBI's Business Voice and other publications, also writes a leading UK economics blog, 12/16, “Plenty of oil left in the global tank,” LexisNexis Academic, [AZ]) The most important reason for rejecting the "peak oil is here" argument, however, is that current production reflects investment decisions taken years ago, when prices were much lower. It was only just over three years ago that oil rose above $40 a barrel. A few years earlier it was $10-$11. Higher prices will bring more output on stream. A new study by Germany's Energy Watch Group, which said the peak was in 2006, makes the astonishing admission that it took no account of prices. There is a long history of crying wolf on peak oil, dating back to the 1920s. The patron saint of peak oil, the geophysicist MKing Hubbert, predicted in 1956 that oil output from the lower 48 states in America would peak around 1970 and he was right. He also predicted global production would peak in about 1990 and he was wrong. Colin Campbell, founder of the Association for the Study of Peak Oil and Gas, first called the oil peak in 1990 and then at regular intervals. His view today is that a peak remains imminent. Peak-oil people get excited about the giant Ghawar field in Saudi Arabia because it is apparently producing water rather than oil. The Ghawar "water cut" has reached 30% and bestselling books have been written on its imminent eclipse. But, as Michael Lynch, peak-oil sceptic and president of the consultancy Strategic Energy & Economic Research, points out in a paper, Crop Circles in the Desert, this is a low figure. The average water cut throughout the industry is much higher, at 75%. The Ghawar cut rises and falls but the field still churns out 5m barrels a day, even at the age of 50. Lynch is dismissive of another argument, that no big oilfields are being discovered. That, he said, is the nature of the industry -big fields are easier to find and smaller satellite fields around them come later. Large areas with the oil potential of, for example, Saudi, have not yet been fully explored. There is, then, plenty of oil in the tank. Opec says additions to recoverable reserves since the early 1980s have been three times cumulative output over the period. So why are prices so high? I have been taken by surprise and so have the oil bulls. A couple of years ago Goldman Sachs came out with a bullish forecast that the price would average $60 over five years. Today that looks conservative. Oil is expensive because of geopolitical uncertainty, strong demand from the global economic boom of the past few years and speculative investment. Opec, which has most of the reserves, is happy to extract money from consumers to fund spending programmes. Most oil is in places we would not want it to be. Demand has responded to higher prices, but not enough. The International Energy Agency's worry is not that oil has reached a peak -it expects a 50% rise by 2030 -but that demand will rise faster than supply. We will see how much impact next year's economic slowdown has.

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NEG: Peak Oil is Wrong Hubbert's theory is flawed-many reasons Michael C. Lynch is President and Director of Global Petroleum Service, Strategic Energy & Economic Consulting, Inc No Date Provided ("The New Pessimism about Petroleum Resources: Debunking The Hubbert Model (and Hubert Modelers)," The initial theory behind what is now known as the Hubbert curve was very simplistic. Hubbert was simply trying to estimate approximate resource levels, and for the lower-48 US, he thought a bell-curve would be the most appropriate form. It was only later that the Hubbert curve came to be seen as explanatory in and of itself, that is, geology requires that production should follow such a curve. Indeed, for many years, Hubbert himself published no equations for deriving the curve, and it appears that he only used a rough estimation initially. In his 1956 paper, in fact, he noted that production often did not follow a bell curve. In later years, however, he seems to have accepted the curve as explanatory. This particular example demonstrates a major theoretical flaw underlying the curve: for a closed system, such as the US gas market, demand determines production, not geology. (High gas transportation costs mean that overseas gas plays a trivial role in the US market.) Globally, the recent slowdown in demand has suggested to some that the peak has already occurred. The primary error for Hubbert modelers is the assumption of geology as the sole motivator of discovery, depletion and production. In the work of Campbell, Deffeyes, and Laherrere, they go further, equating causality with correlation. This is one of the most basic errors in (physical or social) scientific analysis. “Oil is ultimately controlled by events in the Jurassic which are immune to politics” (Campbell 2000) and “…discovery and depletion are set respectively by what Nature has to offer and the immutable physics of the

The idea that production is influenced by oil prices (which determine the amount of capital available for drilling) and by policy choices in producing governments, which decide when exploration will be allowed, and/or set production ceilings, is considered foolish.[13] And yet, they do acknowledge restrictions on operations, particularly in the Middle East. The argument that the drop in global discoveries proves scarcity of the resource is the best example of the importance of understanding causality. While it is true that global oil discoveries dropped in the 1970s from the previous rate, this was largely due to a drop in exploration in the Middle East. Governments nationalized foreign operations and cut back drilling as demand for their oil fell by half, leaving them with an enormous surplus of unexploited reserves. It is noteworthy that none of those pessimistic about oil resources show discovery over time by region, which would support this. And two recent discoveries, Kashagan in Kazakhstan and Azedagan in Iran, reportedly would together equal over ten percent of Campbell and Laherrere’s estimated remaining undiscovered oil. Statistically speaking, this is unlikely. Laherrere’s argument that the Middle East is near the end of its undiscovered oil is entirely based on the assumption that the observed fall-off in discoveries was due to a lack of geological opportunities, rather than government decision-making. (Laherrere 2001b) To an economist, the drop in exploration reflects optimal behavior: they do not waste money exploring for something they will not use for decades. A more technical example is telling. Laherrere notes that the first 1920 new field wildcats in the Middle East discovered 723 billion barrels by 1980, while by the year 2000, a subsequent 1760 had found a mere 32 billion barrels. From this he concludes that the Middle East is essentially played out, extrapolating the falling returns to drilling and stating that “This graph shows clearly that the belief by some economists that the Middle East has a great potential left is wrong” (Laherrere 2002, p. 10). He achieves similar results for OPEC as a whole. There are three primary errors here. First, the assumption that the discoveries in 2000 will not be revised upwards (an error as discussed above), but more important, the presumption that geology is driving the trend and thus, it is immutable. But finally, the third error is more basic: equating all wells in the Middle East, regardless of location. In fact, analysis of country drilling activity shows what should be obvious: drilling in Iran and Iraq dropped sharply in 1980, following the Iran/Iraq War, and sanctions have kept Iraqi drilling at a minimum in the past decade. At the same time, lesser provinces like Oman, Syria and Yemen have seen increased amounts of drilling. Thus, by lumping them together with Saudi Arabia, Kuwait, etc., as “Middle Eastern,” treating all wildcats as equal and extrapolating the success rate of pre-1980 and post-1980 wells yields f fallacious results.[14] And Deffeyes, relying on global production and the declining growth in production as evidence of resource scarcity is falling into a similar trap. National or regional production may reflect resource scarcity, but global production is driven by demand, and the declining demand growth since the price shocks in the early 1970s is evidence of greater efficiency and fuel switching, not scarcity. He is confusing geology as the driving factor, not demand. Production Profile to Estimate Field Size Finally, Campbell and Laherrere use production data to estimate field size, ‘improving’ on the IHS Energy data. By graphing production against cumulative production, as in Figure 3, they claim that a clear asymptote can be seen, allowing for a more accurate estimate of ultimate recovery from the field. The first problem with this is that there is no explanation for how often the method is employed. Laherrere (2001a) has many reservoirs.” (Campbell 2002)

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Anna /Andrew/Paul Page 101 of 130 examples from around the world, but only a few per country. And some of the figures he used in Laherrere (1999), such as East Texas, which didn’t seem to conform to his argument, have not been published in later works, unlike Forties, which is. Again, field production data is not publicly available in most instances, so the method’s reliability is difficult to test. But also, there is an astonishing presumption of causality, that the production profile was determined by the geology and nothing can alter it, and that the historical curve is exactly as anticipated from the discovery of the field. Because the line appears straight, they extrapolate it to the zero point. However, this is an assumption, and as shall be seen, an incorrect one. Fortunately, the UK publishes historical production for all fields, allowing it to serve as a test case. (UK Department of Trade and Industry) Examining this data does confirm that some fields display a clear-cut asymptote. However, out of 21 fields whose peak production was above 2 mt/yr (or 40 tb/d), only 7 show such behavior. The rest do not show a clear asymptote (as in Figure 4), or worse, show a false one, as Figure 5 indicates. Clearly, this method is not reliable for estimating field size. Particularly damning is the failure of Campbell and Laherrere to admit that some fields do not generate stable production curves, or to address the implications of this. If the behavior only shows a correlation in a fraction of the instances, then how can it be based on universal physical factors? If not, then why have the authors not explained how and when it works or doesn't’ and what they have done to avoid misinterpretation? What assurances are there that Forties will not plateau, as N. Comorant did? In any large, complex problem, there is typically a lot of conflicting evidence, and it is the proper role of a scientist to consider all of it, acknowledging that which doesn’t support the theory and attempting to explain it. The repeated failure of these authors to do so implies that their work in general cannot be considered reliable. Effect of these Errors on the Research Results The various problems have a clear impact on the results of the forecasts generated by these modelers, particularly Campbell and Laherrere. (The former has been prolific in publishing production forecasts for regions and countries.) In a classic instance, Campbell (1991) projected UK production to decline at a rate of 10% per year, the same as the Forties field (Figure 6). This implies that there would be no additional supplies from reserve growth, new large discoveries, or small and medium fields. Yet as Figure 6 shows, this was not the case despite a lack of large discoveries. Indeed, as much as 400 tb/d of 1995 production was from small fields that were discovered before 1980, but not put on production until subsea technology made them recoverable a clear example of technology enhancing supply. (Adelman and Lynch 1997) Although Campbell claims to have updated his estimates from the 1991 book using more precise field size data from Petroconsultants, it is clear that his work is still lacking. In his 1997 book, he projected that W. European production would peak in 1999, then drop by over 7% per year. In fact, production did decline by 2.4% in 2001 from 2000, but 2002 saw a drop of less than 1%. (The IEA projects an increase for this year, but that is not necessarily reliable.)

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NEG: Peak Oil is Wrong The peak oil theory is misleading and based on fear-mongering tactics – a new report has shown that global oil production will rise until 2030, plateau for 20 years, and then undergo a gradual decline, avoiding the precipitous slope predicted by peak oil advocates. The Philadelphia Inquirer 06 (Joe Carroll, Reporter for Bloomberg and author of Ethanol Frenzy, 11/15, “Firm: Peak-oil theory is bogus,” Lexis-Nexis Academic, [AZ]) Global oil production will increase for at least the next 25 years as new drilling and refining techniques make it possible to tap heretofore untouchable reserves, according to the consulting firm Cambridge Energy Research Associates. The world probably has 3.7 trillion barrels of oil left, more than twice the estimates of geologists and analysts who argue global output is close to a peak, said Peter Jackson, director of oil-industry research for the Cambridge, Mass., firm. "The peak-oil theory causes confusion and can lead to inappropriate actions and [can] turn attention away from the real issues," Jackson said in remarks prepared for a conference call yesterday with analysts, investors and reporters. "Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges."The late geologist M. King Hubbert, working for a unit of Royal Dutch Shell P.L.C., first put forward in 1956 the theory that output from a specific oil deposit or region would peak and then start to decline following a predictable curve. His ideas have gained currency as oil prices tripled in the last five years and producers struggled to keep pace with rising demand in China. The theory is "misleading" and based on incomplete data, according to yesterday's report from Cambridge Energy. Worldwide oil production will rise more than 50 percent to about 130 million barrels a day about 2030 before output plateaus, the report said. Daniel Yergin, the firm's founder, wrote The Prize, a 1992 Pulitzer Prize-winning history of the oil industry. When global crude output begins to fall about 2050, the decline probably will be gradual, giving policymakers, industry and energy producers time to develop alternatives to petroleum-based fuels, the report said. The Association for the Study of Peak Oil estimates that the world has 1.46 trillion barrels of oil left and that production will peak in 2010, according to the group's November newsletter. The group's leaders include British geologist Colin Campbell, who helped popularize the peak-oil theory with his 1997 book, The Coming Oil Crisis. An August report from Cambridge Energy that took issue with the peak-oil theory was criticized by the president of the peak-oil association, Kjell Aleklett, as a moneymaking vehicle based on proprietary data that the firm was unwilling to submit to impartial scientific review. Aleklett said Cambridge Energy analysts were too optimistic about the ability of big producers including Saudi Arabia to increase output. Jackson said "bursts of growth are about to happen" in oil production in Angola, Brazil, the Gulf of Mexico and the Saudi kingdom. Undiscovered fields probably hold 758 billion barrels, followed by 704 billion trapped inside a very hard type of rock known as shale, and 662 billion in the Middle East, according to the report. The rest of the firm's 3.7-trillion-barrel total comes from untapped reserves in the deepest seas, the Arctic, and places such as Canada's tar sands and Venezuela's Orinoco basin. "This is the fifth time that the world is said to be running out of oil," Yergin said in an e-mailed statement. "Each time - whether it was the 'gasoline famine' at the end of World War I or the 'permanent shortage' of the 1970s - technology and the opening of new frontier areas has banished the specter of decline." Hubbert’s estimates of ultimate recoverable reserves rely on flawed, jeopardizing the reliability of peak oil theory.

U.S. Department of Energy 04 (March, “Strategic Significance of America’s Oil Shale Resource Volume I: Assessment of Strategic Issues,” , accessed 7/19/08, [AZ]) A comprehensive analysis of Hubbert’s works (Ref. 26) shows that the Hubbert oil production methodology provides consistently low cumulative production results. The primary problem with the Hubbert analyses is reliance on Ultimate Recoverable Resources (URR) as a single, fixed value. URR is the amount of oil that has already been produced plus the oil that will be produced in the future. In practice, URR continues to increase as oil fields are defined by drilling and as higher prices encourage the application of new recovery technology.

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NEG: Tons of Oil Now Large supplies of unreached oil exist in the status quo Wall Street Journal, international daily business and financial newspaper, 2008 (“Energy Watchdog warns of Oil-Production Crunch” May 22, 2008 ) Some analysts, however, contend that scarcity isn't the issue -- only access to reserves and investment in tapping them. "We know there is plenty of oil and gas resource in the world," says Pete Stark, vice president for industry relations at IHS. He says the difficulties of supply aren't buried in oil fields, but are "above ground." Mr. Morse at Lehman Brothers notes that there are plenty of questions about supply yet to be answered. "However confident the IEA may be about the data it has, they know nothing about the resources we've yet to discover in the deep waters or in the arctic," he says.

Peak oil will never happen-tons of oil remains CNBC 2008 ("The 'Peak Oil' Theory: Will Reserves Run Dry," http://www.cnbc.com/id/23728987) Although Saudi Arabia is a dominant player, the Shell executive said focusing solely on Saudi Arabia leaves out the all other places around the globe where Big Oil — ExxonMobil Chevron BP and the like — and national oil companies are busy exploring for untapped oil reservoirs. Those reservoirs could include the vast — but currently restricted — reserves of the US Outer Continental Shelf, which holds an estimated 100 billion barrels of oil and natural gas. Tapping into such a large supply would slash the $500 billion US sends overseas for each year for oil imports. As things stands, however, only 15 percent of those reserves are currently exploitable, a good part of that off the coasts of Louisiana, Alabama, Mississippi and Texas. Simmons is also off the mark, Hofmeister contends, because he excludes unconventional sources of oil such as the oil sands of Canada, where Shell is already active. The Canadian oil sands — a natural combination of sand, water and oil found largely in Alberta — is believed to contain 1 trillion barrels of oil. Another 1 trillion barrels are also trapped in rocks in Colorado, Utah and Wyoming.

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NEG: Tons of Oil Now Oil is still plentiful -the supply is merely artificially constrained by political turmoil. The Sunday Times 08 (Irwin Stelzer, a senior fellow and director of Hudson Institute’s Center for Economic Policy, Stelzer was resident scholar and director of regulatory policy studies at the American Enterprise Institute, is the U.S. economic and political columnist for The Sunday Times (London) and The Courier Mail (Australia), a contributing editor of The Weekly Standard, a member of the Publication Committee of The Public Interest, and a member of the board of the Regulatory Policy Institute (Oxford), founded National Economic Research Associates, Inc. (NERA) in 1961 and served as its president until a few years after its sale in 1983 to Marsh & McLennan, has served as a managing director of the investment banking firm of Rothschild Inc. and a director of the Energy and Environmental Policy Center at Harvard University, as a consultant to several U.S. and United Kingdom industries with a variety of commercial and policy problems, Stelzer oversaw market strategy, pricing and antitrust issues, and regulatory matters, academic career includes teaching appointments at Cornell University, the University of Connecticut, and New York University, and an associate membership of Nuffield College, Oxford, former member of the Litigation and Administrative Practice Faculty of the Practicing Law Institute, served on the Massachusetts Institute of Technology Visiting Committee for the Department of Economics, and has been a teaching member of Columbia University's Continuing Legal Education Programs, received his bachelor and master-of-arts degrees from New York University and his doctorate in economics from Cornell University, 4/27, “It's a myth that the world's oil is running out,” Lexis-Nexis Academic, [AZ]) Another myth: we are running out of oil. Production of oil is being constrained by several forces, none of them due to God's failure to put enough of the black gold under our feet. Several countries that are important sources of supply are in political turmoil and unable to bring to market the oil they are currently capable of producing. Think Nigeria, where security problems have shut down about 20 per cent of the nation's 2.5 million barrels of capacity, and discouraged new investment, and Iraq, where political paralysis and terrorists have kept production at less than half of its potential and prevented new exploration. Russia has made it clear that foreigners who invest in its oil industry might be playing a game with Vladimir Putin known as heads I win, tails you lose. Find nothing and you lose your money; find substantial reserves and the state squeezes you until your shareholders' pips squeak. Mexico's President Felipe Calderon wants to revive Petroleos de Mexico (Pemex ), the world's third-largest oil producer by contracting with foreign companies to introduce modern methods of extracting more from existing fields and finding new ones. But legislation is stalled by left-wingers who have seized and are sleeping at podiums in both houses of congress. Saudi Arabia's royal family has announced that it will not expand capacity. Abdullah Jum'ah, CEO of the kingdom's oil company, says that high prices don't mean the world needs more oil because such market signals are ``imperfect''. Venezuela's oil industry can only be described as a mess. In America, Congress alternates between calls for ``energy independence'' and refusals to allow drilling in what it considers environmentally sensitive areas in Alaska and offshore California and Florida. There's more, but you get the idea. There is a lot of oil out there to be found and produced, not even including the vast reserves in Canada's tar sands. We might have reached the age of peak panic about oil supplies, but not of peak oil. One thing we think we know about the oil business is correct. High oil prices and the greenhouse gases produced by using oil have important geopolitical consequences. These $US100-plus prices have led to a massive flow of wealth, and hence power, from consuming to producing countries. If oil was still priced at $US20 or even $US40 a barrel, Russia would not have the wherewithal to revert to its bullying foreign policy and America's banks would not be going hats-inhand to Arab capitals in search of new capital. If US petrol prices had not rocketed upwards, thousands of 4WDs and small trucks would not be sitting, unsold and unloved, on dealers' lots. If oil had not pierced the $US100 a barrel level, the current enthusiasm for super-expensive nuclear power would not have reached a fever pitch. So oil indeed matters. But not in the ways we most often think.

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NEG: Tons of Oil Now World oil reserves are sufficient to last for 40 more years Financial Times 07 (Ed Crooks, Energy Editor for the Financial Times, was a research economist at the Institute for Fiscal Studies, graduated from Oxford University with a degree in politics, philosophy, and economics, 6/13, “World still has 40 years of oil, says BP,” Lexis-Nexis Academic, [AZ]) The world still has enough proven oil reserves to provide 40 years of consumption at current rates, in spite of a small fall last year, according to the BP Statistical Review of World Energy. The BP publication, one of the industry's standard reference sources, also shows that global energy use has grown much faster and created more carbon dioxide emissions in the past five years than in the second half of the 1990s, despite the steep rise in the prices of oil and natural gas. BP's assessment of world oil reserves, based on officially reported figures, has again pushed back the estimate of when the world will run out. Since the 1980s, proven reserves have been sufficient to cover four decades of production at then-current rates. Over that period the expected end of oil has been put back from the 2020s to the late 2040s. Peter Davies, BP's chief economist, dismissed the arguments of the "peak oil" theorists who believe that oil production is already at or near its peak. "We don't believe there is an absolute resource constraint," he said. "When peak oil comes, it is just as likely to come from consumption peaking, perhaps because of climate change policies or for some other reason, as from production peaking." However, he acknowledged there were challenges for the world and for large companies such as BP in getting access to the oil that remains. Almost two-thirds of the proven reserves are in the Middle East. The BP review also shows that the world's proven reserves of natural gas rose slightly, and are enough to provide more than 60 years of current consumption.

The peak oil theory is false – possible technological breakthroughs for the extraction of oil and political limitations on the regions that can be explored mean we have far more oil than the conspiracy theorists estimate. Financial Times 07 (Lex Column Editorial, 5/5, “Offshore thing LEX COLUMN,” Lexis-Nexis Academic, [AZ]) Might PetroChina's giant oil discovery this week ease pressure on Warren Buffett? He has come under fire for investing in the Chinese oil group because its parent company is involved in the controversial scramble for resources in Sudan. PetroChina's find off the coast of China could hold 7.5bn barrels of oil equivalent - the biggest discovery in the region in decades. But the reality is that such large finds have become worryingly few and far between, so Beijing is likely to keep all its exploration options, including Sudan, open. Still, PetroChina's offshore find is likely to reopen the debate on how quickly the world is running out of oil and gas. Pessimists predict output is within years of peaking. In some respects, the data are on their side. "Giant" fields such as that in Bohai Bay are becoming smaller. A recent study by geologist Myron Horn shows 220 such fields were discovered in the 1970s compared with 72 so far this decade. The Centre for Global Energy Studies calculates that average output from giant oil fields found in the 1990s is about half that of 1970s fields. These numbers tell only half the story. Politics is a bigger barrier to oil discoveries than geology. Large areas of the globe are underexplored, such as deepwater offshore Mexico and, as Thursday's announcement demonstrated, offshore China. Oil and gas are finite resources but the energy industry has repeatedly overcome the challenge of "peak oil", often through unexpected technological breakthroughs. Offshore output, in particular, has grown rapidly since the 1960s and presents one of the biggest opportunities for new barrels in the future. Companies such as Statoil of Norway and Brazil's Petrobras present a good way of gaining exposure to that trend. One caveat is that, given the scale and complexity of deepwater projects, investors will have to take a long-term view. That, at least, is something of which Mr Buffett would surely approve.

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NEG: Tons of Oil Now Billions of barrels of oil have just been recently discovered in the U.S. USGS Newsroom 4/28/08 ("3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana's Bakken Formation—25 Times More Than 1995 Estimate,"http://www.usgs.gov/newsroom/article.asp?ID=1911) Reston, VA - North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency's 1995 estimate of 151 million barrels of oil.Technically recoverable oil resources are those producible using currently available technology and industry practices. USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources. New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007. The USGS Bakken study was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol as required by the Energy Policy and Conservation Act of 2000.The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. A "continuous" oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest "continuous" oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.

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NEG: Tons of Oil Now-Russia Oil reserves in Russia don’t even scratch the surface on the amount of all oil in the country-big increases are present now Bush, 2004 (Jason, chief of BusinessWeek's Moscow bureau, where he is responsible for coverage of business and politics in Russia and the former Soviet Union. Previously, he was a correspondent for BusinessWeek in Moscow, a position he assumed in 2003. Before that, Bush was a freelance journalist in Moscow. Prior to that, he was a staff writer at Business Central Europe magazine and Central European magazine. Bush holds a bachelor's degree from Corpus Christi College and a master's from Tufts University, “Oil: What’s Russia Really Sitting On,” Business Week < http://www.energybulletin.net/node/3228>) With oil still hovering near $50 a barrel, the last thing people want to hear is that there's even less of the stuff out there than previously thought. This year investors in the oil industry have been shaken by the revelation that Royal Dutch/Shell Group overstated its proven reserves by at least 23%, some 4.5 billion barrels, with more possible downgrades to come. There's growing disquiet that other major oil companies may also have inflated reserves. But there's one place -- Russia -- where reserve estimates just seem to go up and up. In its annual statistical survey of world energy, BP PLC (BP ) has recently revised its estimates of Russia's total proven oil reserves to 69.1 billion barrels, 6% of the world's total, up from 45 billion bbl. in 2001. But according to auditors with a worm's-eye view of what's actually going on in the depths of Siberia, such estimates may just scratch the surface of Russia's real potential. According to a recent study by Dallas-based energy reserve auditors DeGolyer & MacNaughton, whose clients include leading Russian energy companies such as Gazprom and Yukos, Russia's true recoverable reserves are between 150 billion bbl. and 200 billion bbl. That's up from industry estimates of 100 billion bbl. a few years ago. Why such a big gap in the estimates? Because it's one thing to be sitting on oil reserves, another to be able to exploit them commercially. In Russia's main oil-producing region in western Siberia, proven reserves represent just 18% to 24% of all oil in the ground, in contrast to about 45% in Western oil-producing regions such as Alaska and the North Sea. But as Russian oil companies adopt technologies, such as horizontal wells and computerized reservoir management systems, the estimated recovery rates are being revised. Thanks to new techniques, which make it possible to obtain oil even from apparently depleted fields, Russian oil companies already have managed to boost their output by 50% since 1998. "The biggest thing is the [new] technology being deployed in western Siberia. The results are beginning to show," says Martin Wiewiorowski, senior vicepresident of DeGolyer & MacNaughton in Moscow. This increasing recoverability, and not dramatic new discoveries of oil, explains why Russia's proven reserves keep shooting up. The leading Russian oil companies have all announced big increases this year, following independent international audits. Lukoil (LUKOY ), Russia's largest oil outfit, saw a boost of 4.7% in proven reserves both this year and last, according to Society of Petroleum Engineers SPE standards. No. 2 producer Yukos, meanwhile, jumped 13.2% this year, according to stringent standards set by the U.S. Securities & Exchange Commission. The growth in Russia's proven reserves is mainly happening at existing fields in western Siberia, a supposedly "mature" region where production had been declining until recently. DeGolyer & MacNaughton predicts that western Siberia could boost its output to 10 million bbl. a day by 2012, up from less than 6 million at present, and keep production at that level for at least 10 years. The use of even newer technologies available by then means that western Siberian oil production may not decline for decades to come. Russia's reserve potential is vaster still when undeveloped regions, such as the Arctic, the Caspian, and in particular eastern Siberia, are factored in. And then there's Russia's plentiful supply of natural gas. It is already acknowledged as having the world's largest gas reserves, with 47 trillion cubic meters, or 26.7% of global reserves. But tapping Russia's vast oil pool will require billions in investment, especially in export pipelines. Although on course for 8% growth this year, production gains could slow as export bottlenecks appear. But infrastructure investment is likely to go up in tandem with reserve estimates. If Russia finds a way to get all that lovely oil to needy international consumers, its days as a global energy powerhouse could be just beginning.

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NEG: Tons of Oil Now-ANWR ANWR, along with other American sources of oil, creates massive new supplies Big Sky Business Journal 03 (Andrew Bernstein, a Visiting Professor of Philosophy at Marist College; he also teaches at SUNY Purchase (which selected him Outstanding Teacher for 2004) and formerly at Pace University, and Marymount College (which selected him Outstanding Teacher for 1995), lectures regularly at American universities and appears frequently on the radio talk shows, his op-eds have been published in such newspapers as The San Francisco Chronicle, The Chicago Tribune, The Baltimore Sun, The Atlanta Journal-Constitution, The Washington Times, The Los Angeles Daily News, and The Houston Chronicle, 3/15, “Senate Should Allow Drilling in ANWR,” , accessed 7/17/08, [AZ]) If the Senate carries through on this, it will be a great boon to American consumers. Geologists claim that ANWR holds seven billion barrels, enabling it to add significantly to American energy production. Senator Frank Murkowski of Alaska, chairman of the Senate Committee on Energy and Natural Resources, states that "ANWR could produce oil for decades, adding as much as $325 billion to the U.S. economy and reducing imports by well over one million barrels per day." If Congress finally approves the President's plan, the government's go-ahead to domestic producers will result in an increased supply of oil-based products to American consumers. But the administration should not stop there. The United States also possesses large deposits of oil offshore on the Outer Continental Shelf (OCS). The OCS is an area that stretches 200 miles out from the Atlantic, Pacific and Gulf coasts. Half the oil in the OCS, particularly off the California coast, is in areas that are currently closed by environmental restrictions. Opening these areas to development will also result in increases of domestic oil and lower consumer prices.

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NEG: Tons of Oil Now: ANWR ANWR has more then 10 billion barrels of oil Foster Natural Gas Report 2008 ("The Coastal Plain of Alaska has about 10.4 Billion Barrels of Technically Recoverable Crude Oil, The EIA Says," Report No. 2696; Pg 11. Accessed at Lexis The total volume of technically recoverable crude oil projected to be found within the coastal plain of northern Alaska still is about 10.4 billion barrels, the Department of Energy's Energy Information Administration (EIA) said in a 5/2/08 report, Analysis of Crude Oil Production in the Arctic National Wildlife Refuge. The report was prepared pursuant to a 12/6/07 request by Sen. Ted Stevens (R-Alaska) for an updated assessment of the Federal oil leasing potential in ANWR, including "plausible scenarios for development of the Coastal Plain consistent with the most recent USGS resource assessments and oil price situation." "The largest projected field in ANWR is nearly 1.4 billion barrels," the EIA said. "While considerably smaller than the 13.5 billion bbl Prudhoe Bay field, this would be larger than any new domestic onshore field brought into production in decades.

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NEG: No Impact-Market Will Solve No Impact- Alternative forms of energy are being developed in the status quo that will completely prevent any type of post-oil shock Tinker, 2005 (Dr. Scott W, Texas state geologist and director of the Bureau of Economic Geology at the University of Texas at Austin's Jackson School of Geosciences, “Of peaks and valleys: Doomsday energy scenarios burn away under scrutiny” Dallas Morning News, June 25, 2005. http://www.jsg.utexas.edu/news/rels/062505a.html) As senators debate the national energy policy, many are aware of the hype surrounding "peak oil." A Web search of the phrase turns up an array of experts who believe that a pending peak in world oil production will soon lead to global economic collapse. The sun is setting on the oil era, but that doesn't mean we're doomed. In their rosier scenarios, experts predict sky-high gasoline prices that will crush oil-dependent economies, such as the U.S. In their darker forecasts, they say people won't be able to obtain food, heat their homes or live securely during a period of global famine and resource wars. All of this might be entertaining were it another Hollywood film, but it has become almost a subculture (and cottage industry). For those who wonder whether the global production of oil will peak and begin to decline someday, the answer is yes. The greater question: Should you care? Although talk of peak oil has rightfully focused global attention on the need to find alternatives to oil, the absolute peak of world oil production is an issue of supply and, in many ways, irrelevant. Unlike the 1973 oil embargo, when high prices were the result of an OPEC-orchestrated supply cut, high prices today largely reflect demandsupply imbalance. The global demand for conventional oil has outstripped, or soon will, the global capacity to supply conventional oil. Does that mean we are all doomed? While the shock value of doomsday peak oil predictions is entertaining, it is far more important to recognize the reality of high global energy demand and begin to seek solutions – such as the energy policy being debated in the Senate – that could help mitigate the supply-demand imbalance. Solutions abound but will take planning and coordinated investment. In 1956, geophysicist M. King Hubbert correctly predicted that U.S. oil production would peak in the early 1970s. He incorrectly predicted that world oil would peak in 1995. What he missed was that advances in technology would allow producers to extract oil from known fields far beyond the technology capacity of his day. Because of these advances, the shape of the oil production curve is not really a peak at all, but more of a bumpy mesa. If there is an important "peak" of oil, it actually occurred in the early 1980s, when oil consumption as a percentage of total global energy topped out just shy of 50 percent. That has declined today to about 40 percent, a trend that has been remarkably consistent and un-shockingly boring. Dr. Hubbert can be excused for incorrectly forecasting the impact of technology, but today's forecasters should know better. They often claim that oil supply is made worse by modern enhanced oil recovery techniques that drain reservoirs faster. In fact, the reverse is true. The combination of higher energy prices and advanced technology will continue to extend the life of conventional oil supplies via enhanced oil recovery processes. So what are the realistic near-term alternatives to conventional oil? Most experts recognize that the age of conventional oil will fade during the 21st century. Energy demand in Asia and other developing regions will continue to outpace supply and keep oil prices high and volatile. Fortunately, price and technology will allow for production of heavy oil, tar sands and shale oil, whose combined global reserves far exceed those of conventional oil, as well as coal liquefaction and gasification, improved gas-to-liquids technology and alternatives to oil led initially by conventional and unconventional natural gas. The challenge of natural gas is not resources, but deliverability. As liquefied natural gas ports are permitted and built, natural gas will become a global commodity and help reduce issues of deliverability that have caused price volatility. Natural gas, combined with other non-coal sources of fuel, will likely surpass oil as a percentage of total global energy consumption between 2015 and 2020. This crossover already happened in the U.S. around 1994. If no substitute for oil existed, the world would indeed be in for an energy shock, and possibly an economic collapse. Fortunately, that is not the case, but investment must start today. U.S. energy policies must be aggressive, focus on efficiency and conservation measures and lead the world in a smooth transition to an unconventional-oil, clean-coal, natural-gas, nuclear and emerging-energy-supply future. Our economy and environment will be the prime beneficiary. This is not a shocking prognosis, but rather a boringly achievable one.

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NEG: No Solvency The aff can’t solve – a transition to alternative oil simply would not be able to replace oil – it’s too small. Peak oil authors concede we can’t solve the dieoff The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) Even so, nuclear power furnished just 6.4 percent of primary energy in 2000, and hydroelectric dams 6.9 percent. All other sources, including all renewables (wind, solar, etc.), accounted for just 1.3 percent of energy output in 2000 (see Table 7).43 America is in the same predicament. Since we import much energy, it is appropriate to look at the sources of the energy we consume rather than those of the energy we generate. In 2000, America consumed 98.94 quadrillion British thermal units (Quads) of energy. Fossil fuels provided 85.0 Quads (85.8 percent), with 38.4 Quads (38.8 percent), the largest single share of America*s energy use, coming from oil. Natural gas accounted for 23.95 Quads (24.2 percent), and coal another 22.58 Quads (22.8 percent). Nuclear power furnished 7.86 Quads (7.9 percent); hydroelectric dams, 2.81 Quads (2.8 percent); waste, wood, and alcohol, 2.91 Quads (2.9 percent); geothermal energy, 0.32 Quads (0.3 percent); solar, 0.066 Quads (0.07 percent); and wind, 0.057 Quads (0.06 percent).44 The implications are grim. We are overwhel-mingly dependent on finite and rapidly depleting fossil fuels, especially oil, and will continue to be for decades, and a collapse in the oil supply means the collapse of our way of life, because the bleak truth is that other energy sources are not remotely capable of replacing oil. There are only so many places where building dams makes sense, and most are in use. Uranium, like the fossil fuels, is a finite mineral resource, and a scarce one at that. Chapter 15 of Garrett Hardin*s Living Within Limits is a sobering survey of the difficulties with nuclear power. (Also, nuclear plants will be prime targets for terrorists.) Leaning on wood, waste, and alcohol would deforest America and exhaust millions of acres of topsoil growing corn for ethanol. As for solar and wind, everybody*s favorite, environmentally-friendly alternatives, even enormous crash programs to develop them cannot possibly replace oil, let alone all fossil fuels. A little simple arithmetic suffices to drive the point home. Subtracting 0.123 Quads (energy consumption from wind plus solar) from 38.40 Quads (energy consumption from oil) leaves 38.277 Quads. Dividing this by 0.123 Quads, we get 311.20. That is, the amount by which U.S. consumption of energy from oil exceeded consumption of wind and solar energy was 311.20 times as large as our consumption of wind and solar energy. To convert this to a percentage figure, we multiply by 100, and learn that fully replacing oil as an energy source would require a 31,120 percent increase in the amount of energy obtained from wind and solar. Totally replacing America*s fossil fuel energy consumption with wind and solar is even more daunting: 85.0 Quads0 versus 0.123 Quads. It works out to a 69,006 percent increase. Perhaps we can pull it off, but it means building tens of thousands of windmills and thousands of square miles of solar collectors, which would take decades and cost trillions. But where will the energy needed to build and install all these windmills, solar panels, and other necessary hardware come from? Fossil fuels, of course. There is nowhere else to go for the huge energy inputs needed to reconfigure our energy sector. And these fuels will be increasingly scarce and expensive. An obvious implication of these figures is that biomass, wind and solar energy cannot possibly support anything remotely like today*s populations at anything like modern living standards. Biomass, wind and solar can s upport only much smaller populations, living far more modestly than we do now. That, in fact, is exactly what these energy sources did for millennia. Modern industrial civilization and affluence require gargantuan quantities of cheap and utterly reliable energy.

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NEG: Shale Solves Better Unconventional oil exploration sovles much better than alternative energy Oil & Gas Journal 04 (James W. Bunger, a principal investigator for value-enhancement processing of US and Estonian kerogen oils. He is one of three principal authors of "Strategic Potential of America's Oil Shale Resources, has developed the Z-BaSIC technology for evaluating petroleum by its molecular composition (www.jwba.com), he holds a BS in chemistry, a PhD in fuels engineering, and has authored 40 technical papers and 11 patents, Peter M. Crawford, consults in energy technology, policy, and strategic communications in Washington, DC. As a senior manager for Intek Inc., he is one of three principal authors of "Strategic Potential of America's Oil Shale Resources,” Crawford has crafted numerous studies, plans, and articles related to energy technology, policy, economics, and technology transfer for public and private clients, he holds a BS from Georgetown University, Harry R. Johnson, a principal petroleum engineer with Intek Inc, he is one of three principal authors of "Strategic Potential of America's Oil Shale Resources." Johnson was a key member of the Department of Interior's Prototype Oil Shale Leasing Program and is the former director of the US Department of Energy's Bartlesville Energy Technology Center at Bartlesville, Okla, he is a petroleum engineer from the University of Pittsburgh, is a member of the Society of Petroleum Engineers, and has authored over 40 technical papers, 8/9, “Is oil shale America's answer to peak-oil challenge?” Lexis-Nexis Academic, [AZ]) This is the fifth in a series of six articles revisiting the topic of peak oil production. Recent discussions regarding the advent of a peak in global crude oil production generally fail to address the potential of America's rich, massive oil shale resources to augment petroleum supplies. While hope is often expressed for continued reserves growth and a smooth transition to future sources of energy, a realistic assessment of the full range of alternatives will reveal that only unconventional hydrocarbon resources, i.e., oil shale, tar sand, extra-heavy oil, and possibly coal liquids, are large enough to supplement petroleum supply with meaningful quantities of liquid fuels in the long term. Interestingly, most of the world's known unconventional hydrocarbon resources are found in the Western Hemisphere -- in the US, Canada, and Latin America -- which geopolitically is relatively secure. Increased production from unconventional Western Hemisphere hydrocarbon resources could substantially shift the center of gravity of America's petroleum supply. Canada and Latin America already supply at least half of current US oil imports. About one quarter, or 2.5 million b/d, is imported from Persian Gulf countries, with the remainder from numerous other sources. While achieving total US energy independence is an unrealistic objective, it is conceivable that large-scale production of domestic oil shale, combined with continuing growth in tar sand and extra-heavy oil production, could make the US effectively independent of Persian Gulf oil supply sources. Achieving such a goal would have enormous economic, strategic, and national security benefits for the US. Tar sand resources are now successfully competing for investment capital with conventional petroleum exploration and production. Tar sand resources are well-characterized and readily accessible. They feature high recovery efficiencies and dependable production rates and produce uniform, high-quality products. Suncor Energy Inc. CEO and Pres. Rick George says of Alberta's tar sand development: "A large part of the rest of this [petroleum] industry is chasing the world for reserves. . . We have reserves. . . We have no exploration risk and also have no decline curve, so we have a completely different business model from the conventional crude oil producer."n1 Moreover, the commercial success of these ventures has resulted in the recent addition of 174 billion bbl of tar sand to Canada's proved oil reserves.n2 US oil shale resources possess the same characteristics of accessibility, richness, production assurance, and high product quality as Alberta tar sand resources. Perhaps the surest way for America to add large quantities of proved US reserves is to demonstrate the commercial viability of oil shale. A recent report by the US Department of Energy's Office of Naval Petroleum and Oil Shale Reserves (NPOSR) details the strategic significance of America's oil shale for military and domestic needs.n3 n4 The report suggests that the richness and magnitude of America's oil shale resources warrants management as a long-term strategic resource, complementing the shorter-term response capability offered by the Strategic Petroleum Reserve. Development of US oil shale resources could take a decade or more after start-up to mature fully. As with the Canadian tar sand, it may need to weather start-up technology performance issues and occasional, lower petroleum-price cycles. With the advent of a peak in oil production, crude oil prices almost certainly will remain elevated, however, reducing the historic investment risk of low oil prices. The payoff for sticking to an oil shale industry development plan that overcomes the first-generation economic issues may be substantial if dependence on crude oil remains anywhere close to estimated levels and the risks of a substantial supply shortfall are as high as many analysts predict. As NPOSR Director Anton Dammer stated: "Developing oil shale in the face of today's geopolitical risk and world production uncertainty is a practical and relatively inexpensive insurance policy -- a policy that may provide high dividends at a future time when a new policy would be prohibitively expensive to purchase."

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NEG: No Solvency Alt energy won’t displace petroleum – oil producers will just shift to use petroleum for manufactured export goods Oil & Gas Journal 07 (Gavin Longmuir, a Stanley, NM-based consulting petroleum engineer, affiliated with International Petroleum Consultants Association Inc. of Evergreen, Colo., with over 25 years of worldwide experience in the upstream oil and gas industry, worked in the appraisal and development of onshore and offshore oil and gas fields, economic evaluation of exploration and acquisition opportunities, assessment of new technologies, and the resolution of contractual and regulatory disputes. Prior to his association with IPCA, he worked in a variety of technical and commercial functions with BP, Sohio Petroleum, and Occidental Petroleum, he earned BS (First Class Honors) and PhD degrees at the University of Strathclyde in Scotland, and an MBA at the University of New Mexico, 2/12, “West should consider ramifications of its off-oil rhetoric,” Lexis-Nexis Academic, [AZ]) If oil-consuming countries do begin to reduce their dependence on oil, major oil exporters could seek to use their now lessvaluable oil within their own borders as cheap fuel with which to expand heavy industries. Instead of exporting oil directly, they could export the energy from that oil embedded in metals, chemicals, and manufactured products at prices that far undercut Western products, constrained as Western manufacturers would be by having to use higher-cost alternative energy sources. The net result would be a loss of jobs and economic strength by the West without having any impact on the overall global consumption of fossil fuels. Even if Western countries successfully replaced imported oil with indigenous alternative energy sources, they would still have to live on the same planet as oil-exporting countries, whose fragile societies would then face the loss of their main source of revenue. Energy independence for current oil importers, if somehow achieved, would aggravate political instability in oil-exporting countries. In addition, it is unclear what will happen to the world monetary system without trade in oil and the associated recycling of petrodollars. A change to a world where most industrial countries depend on their own domestic energy resources would require a major change in the global financial system. Such a change would create its own difficulties, impacting even the industrial countries.

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NEG: Empirically Denied Even as global oil production records are being broken, peak oil conspiracy theorists consistently warn that the end is near despite having to revise their predictions constantly as their ominous doomsday scenarios fail to occur. The Globe and Mail 07 (Neil Reynolds, former editor-in-chief of The Vancouver Sun and the Ottawa Citizen and currently writer for The Globe and Mail, 4/11, “'Peak oil' doomsayers fall silent as reserves grow ever larger,” Lexis-Nexis Academic, [AZ]) You will have noticed the marked decline these days in the number of "peak oil" people making cataclysmic pronouncements. Global oil production set records throughout 2006 - for all-time highest production day, month, quarter and year. For the singleyear record, production reached 31.3 Gb (billion barrels), an average of 85.2 million barrels a day. Affirming the trend, production set a new global single-day record before the end of January, 2007. Along with record-setting production came record-setting increases in reserves - moving "peak oil" deeper into the century and ultimately beyond. The "peak oil" hypothesis, relentlessly propounded for decades, holds that the world has passed (or will momentarily pass) the highest point it can ever reach in oil production - at the halfway mark in the depletion of global oil resources. It holds that this imminent peak necessarily marks the start of an irreversible decline in production. It holds, in other words, that the end of oil is nigh. The principal problem is that the hypothesis is demonstrably wrong - and is vigorously proven wrong year after year. In 1979, the "life-index" of global oil reserves was calculated as 35 years - suggesting, superficially, that known oil reserves could support the current level of production only through 2007. In 2003, after decades of accelerated production, this index had risen to 40 years. It has now risen further to 45 years - moving us safely through mid-century. Indeed, the record-setting oil production last year marked the umpteenth consecutive year that "peak oil" theorists have found it necessary once again to run the numbers and once again to postpone the end time of oil. It was in 1989 that Colin Campbell, the prominent Irish champion of "peak oil," proclaimed that the global peak had already occurred - a declaration he found it expedient, almost immediately, to amend; "peak oil," he said, would instead occur in 1995. He now opts for 2010. Yet global oil production, since 1989, has risen by 20 per cent (13.8 million barrels a day), global oil supply by 28 per cent (18.9 million barrels a day). The production records set last year were significant for a number of other "peak oil" prophets, including Marion King Hubbert himself, the American geophysicist who devised "peak oil" analysis in the mid-fifties and who accurately predicted that U.S. oil production would peak in 1979. In 1956, he determined that global oil would peak "in about 50 years" - in other words, 2006. At the pinnacle, he said, the world would consume 12 Gb of oil a year. In 2004, Mr. Campbell increased this number, almost doubling it, to 23 Gb. For his part, Texas oilman T. Boone Pickens has held that oil would peak at 30 Gb - a level exceeded last year. Yet the world's most comprehensive measure of oil resources keeps right on growing - higher, yes, but at a faster pace as well. TrendLines, the Canadian statistical research company, confirms this assertion in its February report on URR - "ultimate recoverable reserves." In an analysis of optimum reserves, TrendLines concludes that the world's URR is now increasing, depending on the period you select for comparison, at twice or thrice its historical pace. From 1957 through 2006, it says, URR grew at an average annual rate of 2.4 per cent. From 1979, it grew at an average annual rate of 4.2 per cent. From 2000, it grew at an average annual rate of 6 per cent. "Peak oil" prophet Mr. Campbell, TrendLines says, has underestimated the actual rise in URR by tenfold. In 2000, the U.S. Geological Service (USGS) calculated that global URR would increase by 2.4 per cent a year for the foreseeable future - rising from 1,669 billion barrels in 1995 to 3,345 billion barrels in 2025. (A billion barrels - one Gb - is roughly the amount of oil that the U.S. keeps in its Strategic Petroleum Reserve.) "Peak oil" proponents dismissed the USGS analysis as impossibly optimistic. As with all apocalyptic manifestations, peaks must necessarily be imminent. Yet the forecast has proven significantly understated. Driven by smart technology, global URR now increases each year at unprecedented rates. It has now (December, 2006) reached 3,288 Gb, not far off the USGS calculation for 2025. It increased last year by 114 Gb, compared with a historical annual average increase of 47 Gb. Sustained at this rate for another 20 years, the world's ultimately recoverable oil could increase by another two-thirds to 5,568 Gb, or three times the resource when "peak oil" proclamations began. Assuming consumption of 30 Gb a year, this URR could sustain production for something approaching 200 years. Once again, the end is not nigh.

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NEG: Other Fossil Fuels Alternative fossil fuels will replace oil Financial Times 06, (Martin Wolf, associate editor and chief Economics commentator at the Financial Times, a Forum Fellow at the World Economic Forum in Davos, Switzerland, where he has served as a panel moderator, a senior economist for ten years at the World Bank’s division of international trade, director of Studies at the Trade Policy Research Centre, London, and has advised governments and international organizations on trade and economic integration, author of several books and numerous articles on global economics and political economy, including, most recently, Why Globalization Works, received the CBE (Commander of the British Empire) in 2000 “for services to financial journalism” and the Decade of Excellence Award at the 2003 Business Journalists of the Year Awards, 7/5, “Coal and open markets are the best hope for energy security,” Lexis-Nexis Academic, [AZ]) Malthus was wrong: the world's population has risen six-fold since his day, while life expectancy has doubled. So will contemporary Malthusians prove right about energy? The answer is: no. Moreover, without extraordinary action, the future lies with oil, gas and, above all, "old king coal", the fuel with which the industrial revolution began. This must concern another group of Malthusians - those concerned with global warming. That, however, is a subject for next week. The theme of today is how humanity might meet its demand for commercial energy. A recent survey from the Organisation for Economic Co-operation and Development suggests that demand for commercial energy might double by 2050.* If anything, this is a conservative assumption. If global demand per head were to reach today's UK levels, the quantity consumed would rise almost four-fold. Now consider whence - and at what prices - this additional energy might come. In 2003 the breakdown of primary commercial energy worldwide was: oil 35.4 per cent, natural gas 23.7 per cent and liquid products from gas 2.7 per cent, coal 23.9 per cent, hydro-electricity 6.5 per cent, nuclear electricity 6.4 per cent and renewables 1.4 per cent. Taken together, fossil fuels now provide 86 per cent of the world's commercial energy. Is the world about to run out of these fuels? "No" is the answer or at least not in the next half century and almost certainly far longer (see chart). Published oil reserves do, it is true, cover only about 40 years of current consumption. If consumption rises, as seems inevitable, that does not seem to provide much of a cushion. Moreover, believers in the theory of "peak oil" argue that the world has already reached peak production. "Peakists" are doomsayers, declaiming, to quote the title of one book, The Party's Over.** Their analysis is based on estimates of total recoverable oil generated from the pattern of discovery. Peakists argue that the world has used up about half the available supply and global production is in irreversible decline. Against this, most analysts argue that reserves tell one little about available supplies, that higher prices and innovation generate greater extraction from existing fields, that discovery of new (if smaller) fields is continuing and, most important, that unconventional oil resources are still to be exploited (see chart). So even if production of conventional oil were to peak, the oil era would not be over. The question is rather one of price. The potential at a price of Dollars 70 a barrel seems huge. Many argue that the price needed to bring forward additional supply is much lower. Nor does the end of oil mean the end of fossil fuels. Gas and, above all, coal are even more plentiful. Some would counter that petroleum is a unique source of high quality energy for transportation (which itself accounts for one-fifth of commercial energy use). But it is possible to convert coal and natural gas into "syngas" (synthesis gas) and then into liquid fuels. The question is one of cost. The answer is that this would be more expensive than conventional oil, but not prohibitively so.

Shale solves Inside Energy 08 (Derek, UPI Correspondent, 5/19, “Democrats urge Interior to go slow on oil-shale development in Western US,” Lexis-Nexis Academic, [AZ]) "It is essential that commercialization regulations be released so that companies interested in oil shale development know the rules of the road," Allard said. "It cannot be stressed enough that the release of commercialization regulations does not equal offering commercial leases." Commercial production of oil shale could dramatically increase the amount of fossil fuels in the US. The oil shale in the Green River Basin in Colorado, Wyoming and Utah may contain up to 2.1 trillion barrels of oil, according Allred, and industry shares the hope that oil shale could provide tremendous amounts of oil. "The Saudi Arabia of oil shale happens to be in those three states," James Hansen of the Oil Shale Exploration Company told the Senate panel. BLM announced a plan in December that would open 1.9 million acres in Colorado, Utah and Wyoming to oil-shale leasing. Oil-shale production in the US has not been developed commercially because its cost about $60 a barrel was once thought to be too high. But with a barrel of conventional oil now hovering around $120, the tide for oil shale may be turning.

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NEG: Tech Solves The global oil supply is in no danger of running out – new technology allows oil companies to extract more oil from the same sources. The New York Times 07 (Jad Mouawad, staff reporter for the New York Times covering the energy industry and former reporter for the Bloomberg News, 3/5, “Oil Innovations Pump New Life Into Old Wells,” Lexis-Nexis Academic) The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels. In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s. And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use threedimensional imaging of the underground field and the injection of a gas -- in this case, carbon dioxide -- to flush out the oil. Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world's reserves are drying out have given way to predictions that more oil can be found than ever before. In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has already been produced. More recently, Cambridge Energy Research Associates, an energy consultant, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate -- which Cambridge Energy says is likely to grow -- reflects how new technology can tap into more resources. ''It's the fifth time to my count that we've gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources,'' said Daniel Yergin, the chairman of Cambridge Energy and author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. ''Back then we were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100.'' There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading.

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NEG: Tech Solves Peak oil will never happen because of new technology Dr. Scott W. Tinker 2005 Dr. Scott Tinker is Texas state geologist and director of the Bureau of Economic Geology at the University of Texas at Austin's Jackson School of Geosciences, where he holds the Allday Endowed Chair. ("Of Peaks and Valleys: Doomsday Energy Scenarios Burn Away Under Scrutiny," http://www.jsg.utexas.edu/news/rels/062505a.html) The greater question: Should you care? Although talk of peak oil has rightfully focused global attention on the need to find alternatives to oil, the absolute peak of world oil production is an issue of supply and, in many ways, irrelevant. Unlike the 1973 oil embargo, when high prices were the result of an OPEC-orchestrated supply cut, high prices today largely reflect demand-supply imbalance. The global demand for conventional oil has outstripped, or soon will, the global capacity to supply conventional oil. Does that mean we are all doomed? While the shock value of doomsday peak oil predictions is entertaining, it is far more important to recognize the reality of high global energy demand and begin to seek solutions – such as the energy policy being debated in the Senate – that could help mitigate the supply-demand imbalance. Solutions abound but will take planning and coordinated investment. In 1956, geophysicist M. King Hubbert correctly predicted that U.S. oil production would peak in the early 1970s. He incorrectly predicted that world oil would peak in 1995. What he missed was that advances in technology would allow producers to extract oil from known fields far beyond the technology capacity of his day. Because of these advances, the shape of the oil production curve is not really a peak at all, but more of a bumpy mesa. If there is an important "peak" of oil, it actually occurred in the early 1980s, when oil consumption as a percentage of total global energy topped out just shy of 50 percent. That has declined today to about 40 percent, a trend that has been remarkably consistent and un-shockingly boring.

Peak oil will be solved by other technologies Dr. Scott W. Tinker 2005 Dr. Scott Tinker is Texas state geologist and director of the Bureau of Economic Geology at the University of Texas at Austin's Jackson School of Geosciences, where he holds the Allday Endowed Chair. ("Of Peaks and Valleys: Doomsday Energy Scenarios Burn Away Under Scrutiny," http://www.jsg.utexas.edu/news/rels/062505a.html) Most experts recognize that the age of conventional oil will fade during the 21st century. Energy demand in Asia and other developing regions will continue to outpace supply and keep oil prices high and volatile. Fortunately, price and technology will allow for production of heavy oil, tar sands and shale oil, whose combined global reserves far exceed those of conventional oil, as well as coal liquefaction and gasification, improved gas-to-liquids technology and alternatives to oil led initially by conventional and unconventional natural gas. The challenge of natural gas is not resources, but deliverability. As liquefied natural gas ports are permitted and built, natural gas will become a global commodity and help reduce issues of deliverability that have caused price volatility. Natural gas, combined with other non-coal sources of fuel, will likely surpass oil as a percentage of total global energy consumption between 2015 and 2020. This crossover already happened in the U.S. around 1994. If no substitute for oil existed, the world would indeed be in for an energy shock, and possibly an economic collapse. Fortunately, that is not the case, but investment must start today. U.S. energy policies must be aggressive, focus on efficiency and conservation measures and lead the world in a smooth transition to an unconventional-oil, clean-coal, natural-gas, nuclear and emerging-energy-supply future.

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NEG: Tech Solves The peak oil theory relies on flawed data – new secondary and tertiary recovery methods to recover oil that is difficult to extract have boosted and will further boost estimated global oil reserves drastically. The New York Times 07 (Jad Mouawad, staff reporter for the New York Times covering the energy industry and former reporter for the Bloomberg News, graduated from Brown University in 1995 and later gained a masters degree in political science from the Institut d’Etudes Politiques de Paris, 3/5, “Oil Innovations Pump New Life Into Old Wells,” Lexis-Nexis Academic, [AZ]) Mr. Saleri said that Saudi Arabia's total reserves were almost three times higher that the kingdom's officially published figure of 260 million barrels, or about a quarter of the world's proven total. He estimated the kingdom's resources at 716 billion barrels, including oil that has already been produced as well as more uncertain reserves. And thanks to more sophisticated technology, Mr. Saleri said he ''wouldn't be surprised'' if ultimate reserves in Saudi Arabia eventually reached 1 trillion barrels. Even if the Saudi estimates are impossible to verify, they underline the fact that oil companies are constantly looking for new ways to unlock more oil from the ground. At the Kern River field just outside of Bakersfield, millions of gallons of steam are injected into the field to melt the oil, which has the unusually dense consistency of very thick molasses. The steamed liquid is then drained through underground reservoirs and pumped out by about 8,500 production wells scattered around the field, which covers 20 square miles. Initially, engineers expected to recover only 10 percent of the field's oil. Now, thanks to decades of trial and error, Chevron believes it will be able to recover up to 80 percent of the oil from the field, more than twice the industry's average recovery rate, which is typically around 35 percent. Each well produces about 10 barrels a day at a cost of $16 each. That compares with production costs of only $1 or $2 a barrel in the Persian Gulf, home to the world's lowest-cost producers. Chevron hopes to use the knowledge it has obtained from this vast open-air, and underground, laboratory and apply it to similar heavy oil fields around the world. It is also planning a large pilot program to test the technology in an area between Saudi Arabia and Kuwait, for example. Oil companies have been perfecting so-called secondary and tertiary recovery methods -- injecting all sorts of exotic gases and liquids into oil fields, including water and soap, natural gas, carbon dioxide and even hydrogen sulfide, a foul-smelling and poisonous gas. Since the dawn of the Petroleum Age more than a century ago, the world has consumed more than 1 trillion barrels of oil. Most of that was of the light, liquid kind that was easy to find, easy to pump and easy to refine. But as these light sources are depleted, a growing share of the world's oil reserves are made out of heavier oil. Analysts estimate there are about 1 trillion barrels of heavy oil, tar sands, and shale-oil deposits in places like Canada, Venezuela and the United States that can be turned into liquid fuel by enhanced recovery methods like steam-flooding. ''This is an industry that moves in cycles, and right now, enormous amounts of innovation, technology and investments are being unleashed,'' said Mr. Yergin, the author and energy consultant. After years of underinvestment, oil companies are now in a global race to increase supplies to catch the growth of consumption. The world consumed about 31 billion barrels of oil last year. Because of population and economic growth, especially in Asian and developing countries, oil demand is forecast to rise 40 percent by 2030 to 43 billion barrels, according to the Energy Information Administration. Back in California, the Kern River field itself seems little changed from what it must have looked like 100 years ago. The same dusty hills are now littered with a forest of wells, with gleaming pipes running along dusty roads. Seismic technology and satellites are now used to monitor operations while sensors inside the wells record slight changes in temperature or pressure. Each year, the company drills some 850 new wells there. Amazingly, there are very few workers in the field. Engineers in air-conditioned control rooms can get an accurate picture of the field's underground reservoir and pinpoint with accuracy the areas they want to explore. None of that technology was available just a decade ago. ''Yes, there are finite resources in the ground, but you never get to that point,'' Jeff Hatlen, an engineer with Chevron, said on a recent tour of the field. In 1978, when he started his career here, operators believed the field would be abandoned within 15 years. ''That's why peak oil is a moving target,'' Mr. Hatlen said. ''Oil is always a function of price and technology.''

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NEG: Turn- Production Stability Peak Oil Theory is flawed and largely speculative; Large amounts of oil in other countries allows the U.S. to better respond to Political Instability Gholz and Press, 2007 (Eugene, assistant professor of public affairs at the LBJ School of Public Affairs at the University of Texas at Austin, Daryl G., associate professor of government at Dartmouth University, 4/5 “Energy Alarmism: The Myths That Make Americans Worry About Oil,” Cato Institute < http://www.cato.org/pub_display.php?pub_id=8161>) Many Americans have lost confidence in their country's "energy security" over the past several years. Because the United States is a  net oil importer, and a substantial one at that, concerns about energy security naturally raise foreign policy questions. Some foreign  policy analysts fear that dwindling global oil reserves are increasingly concentrated in politically unstable regions, and they call for  increased U.S. efforts to stabilize—or, alternatively, democratize—the politically tumultuous oil­producing regions. Others allege that  China is pursuing a strategy to "lock up" the world's remaining oil supplies through long­term purchase agreements and aggressive  diplomacy, so they counsel that the United States outmaneuver Beijing in the "geopolitics of oil." Finally, many analysts suggest that  even the "normal" political disruptions that occasionally occur in oil­producing regions (e.g., occasional wars and revolutions) hurt  Americans by disrupting supply and creating price spikes. U.S. military forces, those analysts claim, are needed to enhance peace and  stability in crucial oil­producing regions, particularly the Persian Gulf.  Each of those fears about oil supplies is exaggerated, and none should be a focus of U.S. foreign or military policy. "Peak oil"   predictions about the     impending decline in global rates of oil production are based on scant evidence and dubious models of    how the oil market responds to scarcity. In fact,    even though oil supplies will increasingly come from unstable regions,    investment to reduce the costs of finding and extracting oil is a better response to    that political instability than trying to fix the   political problems of faraway countries. Furthermore, Chinese efforts to lock up supplies with long­term contracts will at worst be  economically neutral for the United States and may even be advantageous. The main danger stemming from China's energy policy is  that current U.S. fears may become a self­fulfilling prophecy of Sino­U.S. conflict. Finally, political instability in the Persian Gulf  poses surprisingly few energy security dangers, and U.S. military presence there actually exacerbates problems rather than helps to  solve them.  Our overarching message is simply that market forces, modified by the cartel behavior of OPEC, determine most of the key factors that  affect oil supply and prices. The United States does not need to be militarily active or confrontational to allow the oil market to  function, to allow oil to get to consumers, or to ensure access in coming decades.

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NEG:Turn- BACKSTOPPING A transition to alternative energy would result in increased Western dependence on oil and higher energy prices as oil exporters would flood the market with cheap oil, turning case. Oil & Gas Journal 07 (Gavin Longmuir, a Stanley, NM-based consulting petroleum engineer, affiliated with International Petroleum Consultants Association Inc. of Evergreen, Colo., with over 25 years of worldwide experience in the upstream oil and gas industry, worked in the appraisal and development of onshore and offshore oil and gas fields, economic evaluation of exploration and acquisition opportunities, assessment of new technologies, and the resolution of contractual and regulatory disputes. Prior to his association with IPCA, he worked in a variety of technical and commercial functions with BP, Sohio Petroleum, and Occidental Petroleum, he earned BS (First Class Honors) and PhD degrees at the University of Strathclyde in Scotland, and an MBA at the University of New Mexico, 2/12, “West should consider ramifications of its off-oil rhetoric,” Lexis-Nexis Academic, [AZ]) Environmental and political enthusiasm in the West for getting rid of oil as an energy source may have major unintended consequences through its impact on decisions by a handful of key oil exporters. Such consequences could paradoxically include increased Western dependence on oil and higher energy prices. An energy crisis is imminent if oil-exporting countries believe Western rhetoric and decide to reduce their investment in capacity expansions at a time when the West is failing to find a suitable substitute. In this case, consumers will pay a dear price for the ill-considered statements of their leaders. If, by contrast, oil producers attempt to counter a policy-induced decline in demand and kill oil substitutes by raising production to lower crude oil prices, or if demand actually declines, a different set of problems might emerge. Either scenario could wreak havoc on the economies in the Middle East, supposedly one of the least stable areas in the world. The cost of such political instability in terms of lives, money, and pollution will render all the positive results from weaning consuming countries off oil negligible. If oil-consuming countries wish to lead the world safely to a future without fossil fuels, they will have to consider energy-market realities and how to meet the revenue needs of current oil exporters, as well as how to ensure adequate oil supplies during the transition and investment sufficient to develop new energy-supply technologies. The new energy vision must adhere to market realities. Otherwise, market forces will soon defeat these efforts. Market realities The main threat to sustainability of energy supplies is not a terrorist attack on energy facilities or the imposition of an oil embargo by an oil producing country. These threats are short-term events that can be dealt with quickly and effectively through various measures that include the use of the Strategic Petroleum Reserve, increased production, and diversion of oil shipments. The main threat to sustainability of energy supplies in the medium term is the mismatch between investment in production capacity and energy infrastructure, on one hand, and growth in demand for energy, on the other. One of the most plausible scenarios is a relative decline in investment supporting additional production capacity in the oil-producing countries in response to calls around the world to reduce or even eliminate dependence on oil. An energy crisis in this case is imminent if those who are calling for eliminating dependence on oil fail to provide the ultimate replacement in a timely manner. Most likely, these efforts will fail to replace oil within a reasonable time. Most of the efforts to replace oil are not market-driven and are heavily subsidized. They cannot sustain the pressure of markets in the long run. Oil is still abundant. But much remaining conventional oil is in the hands of a very small number of governments, primarily in the Middle East. Will all the talk about reducing dependence on oil have an impact on the behavior of those governments? Major oil exporters have tended to view their remaining oil in the ground as an appreciating asset, one which should be exploited at a measured pace so that some is left for future generations. To them, the call for security of demand becomes very attractive when the other side is exerting pressure on the producing countries to insure security of supply. Talk about moving away from oil through coercive policies seriously challenges the sustainability of oil producers' societies. To add insult to injury (or injury to insult), much of this kind of talk comes from European governments that take a high share of the economic rent on the exporters' oil through extremely high taxes on end-consumers. Those consumer-country governments are thus claiming much of the current revenue stream from the oil producers' major asset while simultaneously planning to eliminate the demand for it. Even hopes for a peaceful, democratic Iraq cannot come to fruition without oil revenues. Major oil exporters treat talk of eliminating dependence on fossil fuels as an existential threat to their societies, especially when the talk is based on hostile ideological agendas rather than market principles. Possible responses To these apparently hostile statements from across the political spectrum in oil-consuming countries, oil producers might react in a number of ways: * Their simplest response would be to ignore escalating Western claims about weaning themselves off oil as some bizarre form of liar's poker among Western political classes. Oil exporters might look at the actual continuing growth in oil demand and conclude that oil consumers do not intend to follow through with the necessary hard choices. Additionally, oil exporters could sit and watch Western developments, comfortable in the knowledge that currently popular carbon capture and storage is very energy-intensive and, if implemented, will substantially increase the demand for fossil fuels, thus rendering their oil resources even more valuable. * Oil exporters could take Western

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Anna /Andrew/Paul Page 121 of 130 commentators seriously and assume that oil importers will indeed reduce their demand for oil, leaving them with thenunmarketable oil in the ground. Their logical response to this threat would be to accelerate production of oil while their resources still have value. This would of course drive down the price of oil and undermine the economic feasibility of alternative energies. A collapse in the price of oil would kill several new energy technologies and ultimately increase demand for oil. In fact, the oil-producing countries might view increasing oil production and lowering prices as a logical policy to counter the antioil policies of the governments of consuming countries. Historical data from periods of oil price collapses support this point: Low oil prices increase oil demand, decrease efficiency improvements, choke alternative energy resources, and increase waste.

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NEG: Market Solves Market adaptation will drive an energy shift as oil peaks Lea, 2008 (R, Arbuthnot Banking Group and London School of Economics, London, UK., “The days of cheap oil have gone, but the peak oil theory is far too bleak,” Public Health, June 4, 2008). The peak oil theory, discussed by Hanlon and McCartney,[1], [2] and [3] states that peak oil production for a region, country or even the globe will be reached at some specified point in time. A relatively rapid period of terminal decline will then follow. The theory was originally associated with US geologist M. King Hubbert, who predicted in the mid 1950s that US oil production would peak between 1965 and 1970.4 The peak oil theory also implies that if global consumption is not mitigated before the peak, an energy crisis is likely to develop. Falling supply coupled with unmitigated demand will lead to dramatically rising prices which will lead to a crisis. Imminent, apocalyptic scenarios tend to feature strongly in ‘peakist’ literature.[5] and [6] Few analysts, if any, would disagree with the ‘peakists’ that, at some point, naturally occurring oil reserves will decline substantially. Such oil reserves are a finite resource. Indeed, much of the relatively cheap and easy to extract oil has already been extracted. However, there are good reasons for challenging the most apocalyptic and gloomy peak oil scenarios. The first is that oil is but one source of energy, albeit an extremely important one. There are obvious alternatives, or substitutes, for electricity generation and heating in particular. Nuclear power, which is undergoing something of a renaissance, natural gas (itself a finite resource), coal (of which there are abundant reserves) and renewables are all viable alternatives. Transportation is the one area where substitution is much more of a technological challenge, and is therefore understandably of particular concern to ‘peakists’. The second is that informed markets, not least of all the oil market, are remarkably flexible in responding to changes in supply and demand. If demand rises without an equivalent supply response, or there is a significant reduction in supply with no corresponding decrease in demand, prices will, of course, rise. Soaring global demand, especially from China, has driven oil prices sharply upwards in recent years, whilst output has been relatively flat. Oil prices were $20 per barrel in 2002; they are now $100 per barrel. Even though some of the increase in the dollar price reflects dollar weakness, there is no doubt that the underlying price of oil has risen significantly. In addition, it must be remembered that in the wake of the 1973 and the 1979 oil crises, interrupted oil supplies resulted in sharp spikes in oil prices. Prices then act as signals for both consumers and producers of oil to change their behaviour. Higher prices will stimulate a demand response. Consumers would adapt to higher prices, and consumption, whether by industry or households, would fall. Moreover, more increased energy-saving technologies would become economically viable. The ‘peakist’ hypothesis that consumption would not be mitigated before the post-peak terminal fall in oil production simply fails to accommodate a very fundamental truth about consumers in market economies. Assuming that the growth in demand would exceed the growth in supply in the lead up to the peak (an expanding world economy would guarantee this), prices would rise and consumers would adapt. Higher prices will also stimulate production, whether short term by exploiting spare capacity or long term by expanding capacity, possibly employing new technologies. Oil that was considered too expensive to extract at, say, $20 per barrel could become extremely attractive to extract at $100 per barrel. Concerning ‘conventional’ crude oil reserves, where oil is extracted from a traditional well, higher prices would mean that it becomes commercially attractive to extract oil from more costly and generally less attractive sources, whether politically, geographically or geologically. Similarly, ‘unconventional’ crude oil sources, where the liquid oil is extracted from tar sands (oil sands) or oil shales, or extracted through gas-to-liquid processes or coal-to-liquid processes, become more economically viable even though these sources are costly and energy intensive. The ‘peakists’ hypothesis that a run-down in oil production would be apocalyptic and economically devastating simply fails to accommodate a very fundamental truth about producers in market economies. They would adapt to changing commercial circumstances in order to supply the demand for oil, albeit, probably, at a higher price. Consumers would then adapt to these high prices.

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Neg: Market Solves Harms from Peak Oil will be easily eliminated by inevitable alternative energy and sources of oil Wilkinson, 2008 (P. , Reader in Environmental Epidemiology at the London School of Hygiene and Tropical Medicine, University of London, Disciplines: Epidemiology, GIS/Spatial analysis, Medicine. Research areas: Climate change, Environment. member of the Centre for Global Change and Health. Organizer of Environmental Epidemiology Study Unit, and lecturer and Chairman of Examiners for the Environmental Epidemiology & Policy MSc. also a course tutor for the Public Health MSc.; “Peak oil: threat, opportunity, or phantom?” Public Health, June 4 2008) However, opinion about the imminence and consequences of peak oil remains divided. Indeed, there are many who question whether it will occur in the way the ‘Hubbertists’ predict.6 What is not in doubt is that we are steadily using up the world's low-cost energy reserves. In consequence, over time, the price of oil will rise and its consumption will fall in favour of alternative energy sources. Not that oil will soon run out. There remain large geological resources of oil,a especially if unconventional resources (oil sands, shales) are counted.7

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NEG: Market Solves We will find sources of alternative energy before we “crash” Wilkinson, 2008 (P. , Reader in Environmental Epidemiology at the London School of Hygiene and Tropical Medicine, University of London, Disciplines: Epidemiology, GIS/Spatial analysis, Medicine. Research areas: Climate change, Environment. member of the Centre for Global Change and Health. Organizer of Environmental Epidemiology Study Unit, and lecturer and Chairman of Examiners for the Environmental Epidemiology & Policy MSc. also a course tutor for the Public Health MSc.; “Peak oil: threat, opportunity, or phantom?” Public Health, June 4 2008) On the other hand, higher costs will also doubtless spawn the development of cleaner renewable energy sources as viable and attractive alternatives. There is an oft-repeated quotation attributed to Sheikh Zaki Yamani, Saudi Arabian oil minister from 1962 to 1986, that ‘The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil’8—a memorable phrase and analogy emphasizing that the move away from oil will occur not when it is starting to run out but when its advantages begin to be overtaken by those of the alternatives. The factors likely to drive that transition, and which dominate current thinking about energy, are global fuel prices, energy security and climate change9—probably in that order. Health has not yet been a significant consideration, but it seems probable that the increasingly recognized links between energy and health will, in time, be seen as important.10 What, then, are the possible dividends for health of an accelerated decline in dependence on fossil fuels, and can public health hope to influence the pace of change? Although the connections are complex and uncertain, a major global economic downturn would be likely to have important effects on health.[11] and [12] What is little more than speculation, however, is the degree to which peak oil will contribute to future downturns, and how much the acceleration of sustainable development might help to avoid its impacts. The economic realities of life are sobering with regard to the power of markets, economic cycles and the fundamentals of supply and demand. Nonetheless, in principle, a more diversified energy economy with more renewable technology is likely to be more resilient to oil shocks, as well as being a step towards tackling the challenging emissions reduction targets required to limit climate change.13 The central argument against forcing the pace of change from oil and other fossil fuels is one of cost. Most alternative technologies are still more expensive, and thus, it is often argued, their adoption has the potential to harm economic competitiveness; the market can and will find its own solutions. However, this is clearly not adequate to address the pace and scale of change required to meet the climate challenge,[13] and [14] in large part because markets are imperfect and do not generally take account of the current and future costs to the environment and human health. The Stern report made the case that the costs of climate change are likely to exceed those of effective mitigation,15 which of course includes strategies to reduce oil consumption. The report did not address health directly, but to the extent that economic growth can be viewed as broadly positive for health, Stern's findings also argue in favour of strengthening mitigation efforts on health grounds. The case appears stronger still if consideration is given to the immediate and near-term co-effects of mitigation on health.16 There are large public health burdens associated with the use of fossil fuels, much of which arise from exposure to outdoor air pollution and other byproducts of the fuel cycle, and others which relate to unhealthy lifestyles, patterns of behaviour and poor nutrition17 stemming from overdependence on mainly fossil–fuel-based energy.10 It is very probable, therefore, that measures to encourage sustainable development will not only help to reduce the degree of climate change over this century, but will also have a net positive dividend for health. How great that dividend will be is hard to quantify, but among the relevant burdens of disease, many—including those attributable to outdoor and indoor air pollution, physical inactivity, road injuries and poor nutrition—are among the leading causes of death and disability globally.[18] and [19] Some of the heaviest burdens in these categories occur in the lower- and middle-income countries of Asia.[18] and [20] A complicating issue is that some of the required technological shifts of ‘sustainability’ will entail costs that could, in theory, be spent to benefit health in more direct ways. Such considerations may be particularly important in low- and middle-income settings, where even small per-capita increases in healthcare budgets could be very beneficial. It is inappropriate therefore to press the case for accelerated sustainable development without consideration of the consequences and trade-offs that it may entail. However, it is equally inappropriate to leave all to the markets, even with the addition of the still inchoate emissions trading mechanisms. Even if peak oil is not the threat that many believe it to be, it is increasingly clear that there are many ways in which current lifestyles, based so heavily on fossil fuels, are detrimental to health. Tackling that dependence is likely to lead to very worthwhile net benefits for health. This is an important message for public health to make, and ensuring it is fully recognized in the development of public policy will require the type of vision and leadership that McCartney and Hanlon describe.

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NEG: Speculation High oil prices are caused by speculation rather than the issue of supply and demand addressed by the affirmative; the affirmative cannot solve for rampant speculation artificially driving up prices. China Daily 08 (7/11, “A World Damned By Speculation,” Lexis-Nexis Academic, [AZ]) "I have switched to commodities," Uncle 1 declared solemnly. "Me too, stocks are getting far too risky," concurred Uncle 2. Attending family gatherings on my vacations in India, I often find myself sandwiched between these two characters, who first lure me to their corner with interesting questions about my work, then drift into their jargon-filled world of stocks and mutual funds. Stranded in their midst, I suffer their animated exchange of stock tips and top-secret "inside information" on companies. Both my uncles are retired engineers. The instruments they dealt with all their working lives were anything but financial. They are a kind of financial converts who, like millions in India and China, baptized into stocks to enliven their twilight years. So I have reconciled myself to enduring their zealous discussions centered on such dead bores as price-earnings ratios and rights issues. But it was somewhat different last year. They didn't seem that interested in stocks anymore. With the subprime crisis bleeding the bourses, that didn't seem out of the ordinary. What was striking was their newfound passion for commodity futures. It was almost like they had found a new religion. "The real money is in oil and gold," pronounced Uncle 2 as Uncle 1 nodded in agreement. Oil hadn't touched $100 a barrel at the time. Today, as it flirts with $150 and the roar against commodities speculation gets louder across the world, my uncles' wise words ring in my ears. Malaysia's prime minister wants the world to consider suspending oil futures trading to prevent speculation. German leaders are calling for an outright ban on oil speculation. And a US congressional investigation into the price surge may be tilting toward nailing speculation as the main culprit. When the Organization of Petroleum Exporting Countries (OPEC) says the high oil price is not the product of any demand-supply imbalance, it's absolutely right. The runaway prices have little to do with actual demand and supply. It's speculation based on the anticipation of a supply crunch that's pushing up the prices. And, oil has emerged as a great hedge against a weakening dollar, global economic slowdown and the resultant stock meltdown. Hence, as share declines have erased almost $11 trillion from equity markets worldwide this year, oil has risen over 50 percent. In June 2006, when oil futures were hovering around $60 a barrel, a US Senate probe estimated that some $25 of it was the product of pure speculation. Going by that, as much as 60 percent of oil prices today could be speculation-driven, according to F. William Engdahl, author of A Century of War: Anglo-American Oil Politics and the New World Order. Oil futures today can be bought by anybody who can't find anything else that's secure enough to bet on. Thus commodity index funds, financial institutions, hedge funds, pension funds and myriad other investors big and small have been pouring billions of dollars into commodities in general and oil in particular. Investments in commodity futures are estimated to have risen from $13 billion at the end of 2003 to $260 billion in March 2008, a 20-fold growth in less than five years. A futures contract is an agreement to take or make delivery of a specific quantity of a commodity on a particular date at a particular price, essentially to guard against price swings. But most of those buying into oil these days will never make or take any delivery of the real oil. They have nothing to do with physical oil, but their bets on "paper oil" is wreaking havoc on those who do. Rising oil prices and the resultant inflation are making life harder for billions, pushing more people into poverty, straining the resources of governments and raising the risks of social unrest. It's time to ask ourselves if we can really afford speculation in critical commodities like oil. Allowing the market to decide oil prices is fine, but let that market be composed only of people who are actually buying and selling oil. Sorry, uncles, you don't belong there, so stop making my life miserable.

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NEG: Speculation High oil prices are largely due to speculation and not supply and demand as suggested by the affirmative, nullifying their claims of peak oil impacts and rendering them incapable of solving. National Post’s Financial Post & FP Investing 08 (Edmund Conway, Economics Editor of The Daily Telegraph, 5/26, “Soros sees oil price bubble; Parabolic Shape; 'Speculation increasingly affecting price,'” Lexis-Nexis Academic, [AZ]) Speculators are largely responsible for driving crude prices to their peaks in recent weeks and the record oil price now looks like a bubble, George Soros has warned. The billionaire investor's comments came only days after the oil price soared to a record high of $135US a barrel amid speculation that crude could soon be catapulted toward the $200US mark. In an interview with The Daily Telegraph, Mr Soros said that although the weak U. S. dollar, ebbing Middle Eastern supply and record Chinese demand could explain some of the increase in energy prices, the crude oil market had been significantly affected by speculation. "Speculation ... is increasingly affecting the price," he said. "The price has this parabolic shape which is characteristic of bubbles," he said. The comments are significant, not only because Mr Soros is the world's most prominent hedge fund investor but also because many experts have claimed speculation is only a minor factor affecting crude prices. Oil prices stalled on Friday after their biggest one-day jump since the first Gulf War earlier in the week. At just over $130US a barrel, the price has doubled in about a year, causing misery for motorists and businesses.

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NEG: Speculation Though the Administration vehemently denies it, the driving factor behind rising prices is not due to supply and demand fundamentals but rather to risky speculation. BusinessWeek 08 (Ed Wallace, holds a Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA, his column heads the Sunday Drive section of the Fort Worth Star-Telegram, and he is a member of the American Historical Society, 6/27, “Oil Prices Are All Speculation: The Administration says oil's runup is due to shortages, but the evidence points to manipulation,” , accessed 7/18/08, [AZ]) "The problem you had in California was caused by a combination of things: an unwise regulatory scheme, because they didn't really deregulate. Now they're trapped from unwise regulatory schemes, plus not having addressed the supply side of issues. They've [Californians] obviously created major problems for themselves." —Vice-President Dick Cheney, May 17, 2001, on PBS's Frontline "Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices. There is no evidence that we can find that speculators are driving futures prices for oil." —Secretary of Energy Sam Bodman, June 21, 2008, on MSNBC Today, while energy prices are crushing American families, I think we'd all benefit by reflecting on what happened with energy in 2001. Seven years ago, Enron was fleecing California, extorting its people for electricity to the tune of billions of dollars. As is true today, some voices in the Administration claimed that supply shortages, not manipulation, formed the core of California's soaring electricity prices. Yet, now that we know the whole story of Enron's criminal manipulations, many menbers of the media have forgotten how in 2001 the White House deflected any blame for California's suddenly stratospheric electrical costs away from their Houston friends. Likewise, our Energy Secretary has a real problem discussing issues with facts. Like a broken record, he continues to maintain that in no way has speculation had anything to do with today's high oil prices. No, to hear Sam Bodman tell it, they are now and always have been caused by too many buyers chasing too few barrels of oil. But, while that might have been true in 2004, things have changed. And so I give you just one week of news from the oil market. To be more exact, it's the oil news from the seven days preceding our Energy Secretary's comments about supply and demand. It Was Printed in English "[U.S.] demand for oil over the first five months of the year was off 2.5%* from last year." —American Petroleum Institute, June 18, 2008, Associated Press Online (*Translation: We are using approximately 525,000 fewer barrels of oil per day.) "Iran has 15 [oil] supertankers idling in the Persian Gulf capable of storing more than 30 million barrels of crude." —Bloomberg, June 16, 2008 "Thunder Horse started pumping from a single well on Saturday…and on schedule to have the field online by yearend. Thunder Horse alone will increase overall U.S. oil and gas production by 3.6%. Add British Petroleum's Atlantis platform that started up last year, and the boost grows to 6.4%." —Houston Chronicle, June 16, 2008 "Asian refiners cut West African crude oil imports in June. Asian imports will fall 36%* to 830,000 barrels a day this month from May's 1.3 million barrels per day." —Bloomberg, June 17, 2008 (*Translation: Another 470,000 barrels a day of mostly light sweet crude rejected by the market.) Saudi Arabia's Role "Refiners across Asia said on Monday they were not likely to buy more Saudi crude at current prices, highlighting the kingdom's challenge in attempting to contain soaring markets by promising extra barrels. The world's top exporter is set to increase output to 9.7 million barrels per day in July. The extra 200,000 bpd, if confirmed, would come on top of the 300,000 bpd it promised to pump this month." —Livemint (part of the Wall Street Journal Digital Network), June 16, 2008 (That's another 500,000 barrels of oil apparently not purchased.) "Daily shipments of North Sea Brent crude…will rise 8.6% in July. Tankers are set to load 175,097 barrels a day of Brent crude next month, up from 161,300 barrels a day scheduled for June." — Bloomberg June 9, 2008 "'[U.S.] Drivers Cut Back by 30 Billion Miles:' Americans drove 22 billion fewer miles from November through April than during the same period in 2006-07, the biggest such drop since the Iranian revolution led to gasoline supply shortages in 1979-1980." —USA Today, June 22, 2008 "South Korea's May Oil Consumption Falls on High Price" —Bloomberg, June 20, 2008 "Faced with increasingly severe fuel shortages and the prospect of power failures during the summer air conditioning season, the Chinese government unexpectedly announced a sharp increase* late Thursday night in regulated prices for gasoline, diesel, and electricity." —The New York Times, June 20, 2008 (*Translation: Gasoline and diesel prices in China increased by 18% immediately to cool demand.) Excess Oil on the Market Now, just for fun, let's add up all of the excess oil on the market, resulting either from cutbacks in demand, as in the U.S., Asia, or Korea, or from surplus production from oil producers such as Saudi Arabia and in the Gulf of Mexico. Just in the articles I cited, it comes to 1,989,000 barrels of oil a day. That does not include the upcoming Saudi Khursaniyah field that will open in August with another 500,000 barrels per day in production. Some shortage, huh? And that's just one week of articles. And, to be fair to the oil market and the spirit of this column, the world did lose some production out of Mexico, more out of Nigeria; Russian production is down slightly; and the Thunder Horse platform in the Gulf of Mexico, three years late thanks to hurricanes, is not fully operational as of this writing. But, then again, the surplus 1,989,000 barrels of oil per day

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we counted did not include what's potentially in those 15 oil supertankers leased by Iran and parked in the Persian Gulf. Now is also a good time to note that on June 20, Saudi Arabia announced that its Khurais oil field would be online by this time next year, and that would contribute another 1.2 million barrels of oil per day to the world market. "Oil Market Hype" as News Over the past two months in this column, we've discussed how speculation is distorting the oil market (and that of any commodity with an inelastic price, such as foods). I discussed how the "dark, unregulated" futures look-alike markets allowed overbidding of oil contracts with little if any oversight from regulators. Within a few weeks the Commodities Futures Trading Commission (CFTC) said it would move to bring those "dark, unregulated" markets under its oversight in an attempt to bring order to speculation and bring prices within the guidelines of legitimate supply and demand. And by the way: "Dark and unregulated" was how both the Senate and the House referred to ICE Futures OTC. Those adjectives weren't mine. (ICE Futures OTC refer to the trades made by Intercontinental Exchange and its subsidiaries in futures and over-the-counter (OTC) commodities, and derivative financial products in the U.S. and around the world.) Once the cat was out of the bag, internationally the media started discussing speculation as the real reason behind today's high oil prices; major articles ran in the Houston Chronicle and Der Spiegel in Germany. On hearing about the CFTC's intent to rein in speculators in these unregulated markets, a vice-president with a Dallas energy firm wrote me to ask: "Do you feel like the two guys at The Washington Post on the day Nixon resigned?" The most surprising e-mail came from Chris Cook, a former director of the London Petroleum Exchange—now ICE Futures Europe. Cook wrote: "I am convinced there has been manipulation of the Brent Complex [the term that defines North Sea Brent crude prices] by ICE members for the last 10 years at least. I think it is quite likely that the Brent forward price is being kept artificially high—which does require deep pockets and accounts for the continuing barrage of Goldman [Sachs] forecasts and much of the other oil market hype that passes for news." Think about what Mr. Cook said: "Oil market hype that passes for news." That sums up what you hear and read daily about oil. Can't Touch This! Since the publication of those columns, however, four senators have introduced legislation to "close the London Loophole Act," which in fact validates the reporting. Also worth noting is that, according to the London Financial Times, ICE Futures Europe "bowed last week to pressure to introduce position limits for speculative traders." Jeffrey Sprecher, CEO of Intercontinental Exchange (ICE), was quoted in that article as saying: "At some point, some of the extreme proposals in the Congress would drive the business out of the U.S. There's no question in my mind that the capital flows and trading behavior will move quickly offshore." Let me translate that, too: If we move to bring sanity to the commodity markets, then those markets will simply go do business where our federal regulators can't touch them. And so, while our Energy Secretary continues to blame America's oil crisis solely on supply and demand instead of speculators, much as Dick Cheney blamed California instead of Enron in 2001, it takes little research to verify that no one yet has been denied an oil contract—and in fact, refiners around the world are today turning down oil they're being offered. One last thought on speculation in the oil market. In 2006, 100% of those who purchased oil contracts lost money because of the market's contango (meaning spot oil prices were less than the contracted price on the date of delivery). In the fall of that year, when banks started demanding that margins be paid on those losing contracts, oil collapsed back to nearly $50 a barrel. In only 18 months, we've forgotten that lesson, too.

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Bonus: Backstopping answers OPEC can’t flood the market – it doesn’t have the capacity. The Social Contract 05 (Colin Campbell, has over 40 years of experience in the oil industry, was educated at Wadham College, Oxford (BA geology, MA and PhD), has been employed by Oxford University, Texaco, British Petroleum, Amoco, Shenandoah Oil, Norsk Hydro, and Fina, and has worked with the Bulgarian and Swedish governments, writing credits include two books and more than 150 papers, he founded the Association for the Study of Peak Oil and Gas, also conducts research on the oil peak, Spring, “Peak Oil – A Turning Point for Mankind,” , accessed 7/20/08, [AZ]) A combination of circumstances led to a dramatic fall in the price of oil in 1998. These included unseasonably warm weather; an Asian recession that reduced the demand for swing Middle East production; the collapse of the ruble; encouraging exports; overestimation of supply by the International Energy Agency (IEA), which misled OPEC; and further turns in Iraq. Furthermore, there were motives to talk down the long-term price of oil as oil companies and their financial advisers planned acquisitions. Major companies, plainly seeing that exploration could no longer underpin their future, took the opportunity of the price crisis to merge, successfully concealing their real predicament from the stock market. Budgets were slashed and staffs purged in a climate of uncertainty leading to an improvident draw on stocks. The OPEC countries themselves did everything possible to foster the notion that they could flood the world with cheap oil at the flick of a switch. It was a strategy aimed to inhibit investments in natural gas, non-conventional oil, renewable energy or energy saving that they feared might undermine the market for their oil, on which they utterly depend. But it was a short-lived price collapse. Before long, the underlying resource and depletion pressures manifested themselves again with prices rebounding in a staggering 300 percent increase in 12 months, when another anomalous fall occurred at the end of 2000. It was partly triggered by profit taking for year-end financial reporting and partly by the hope of a brief reprieve as spring demand traditionally falls. The underlying trend is due to reassert itself, leading to the resumption of soaring oil prices. The Middle East is working flat out to try to offset the decline of its old fields. In large measure, new production in Venezuela can come only from in-fill drilling in old heavy oil fields, which is dependent on the amount of effort and investment. It does not sound as if it has many shut-in wells either. Its oilmen speak of reduced capacity. The market may hope that some important recent discoveries tell a different story with a happier ending. The long-known Azadegan prospect on the Iraq-Iran border was at last tested, delivering some 5 Gb of reserves to Iran. Kashagan East in the north Caspian found about 7 Gb of high sulfur oil at great depth, demonstrating that the prospect was not one huge structure as hoped, but several independent reefs. The disappointment caused two major companies to withdraw from the venture. Promising deepwater finds continue to be made off West Africa, but it is becoming clear from the experience of the Gulf of Mexico that deepwater operations do test technology and management to the absolute limit. Small accidents or setbacks can have devastating consequences in this extreme environment. Petroconsultants recently announced the total oil discovery for 2000 at 11.2 Gb, less than half consumption, and of that much was in the former Soviet Union and in deep water off West Africa. The reality is that there is no real reprieve. Gradually the market and not just the oil market will come to realize that OPEC can no longer single-handedly manage depletion. It will be a dreadful realization because it means that there is no ceiling to oil price other than from falling demand. That in turn spells economic recession and a crumbling stock market, the first signs of which are already being felt.

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Bonus: Backstopping answers OPEC’s maxxed out now The Social Contract 04 (John Attarian, a writer in Ann Arbor, Michigan, with a Ph.D. in economics, wrote the book Social Security: False Consciousness and Crisis, published essays, articles and book reviews in Modern Age, Crisis, National Review, Reason, The Social Critic, The Freeman, Chronicles, The Human Life Review, Culture Wars, The University Bookman, The Wall Street Journal, The Detroit News, The Chicago Tribune, The Lincoln Review, The St. Croix Review, The World & I, Religion & Liberty, Academic Questions, Fidelit - V and other publications, an editorial advisor of Modern Age, an associate editor of The Social Critic and a contributing editor for Religion & Liberty., “Winter, Oil Depletion Revisited: Why the peak is probably near,” < http://www.thesocialcontract.com/pdf/fifteen-two/xv-2-129.pdf>, accessed 7/19/08, [AZ]) Third, many major contributors to the output surge are members of the Organization of Petroleum Exporting Countries (OPEC), and continued large increases from OPEC are uncertain. Conventional wisdom has it that OPEC has spare capacity of 1-2 million barrels a day, mostly in Saudi Arabia, but in recent months OPEC has intermittently signaled that it is at full stretch. On August 3, OPEC*s president, Indonesia*s oil minister Purnomo Yusgiantoro, said that “There is no more supply.” The next day he reversed himself and said that not only did OPEC have spare capacity of 1-1.5 mb/d, but members plan to raise capacity further by another million barrels a day. Just a few days later, however, Venezuela*s Energy Minister, Rafael Ramirez, said that OPEC was producing at capacity, and could not immediately respond to higher demand. On September 22, Yusgiantoro told reporters that “1 called on non-OPEC producers to [boost output to help supply” – something which would have been unnecessary if OPEC had abundant spare capacity. That OPEC was essentially maxed out in the late summer and early fall was confirmed by the International Energy Agency*s October Monthly Oil Market Report, which noted that OPEC*s crude extraction rose 710 kb/d from its August level to 29.9 mb/d, and that 540 kb/d of this increase came from Iraq as it recovered from wartime disruption. Not counting Iraq, OPEC extracted 27.58 mb/d, versus sustainable capacity (i.e., production levels which can be reached in thirty days and maintained for ninety days) of 27.94 mb/d, leaving spare capacity of just 410 kb/d. With Iraq added, OPEC*s total spare capacity in September was just 580 kb/d. The IEA added that “OPEC may still be able to call on an additional 1.5-2.0 mb/d of surge capacity over and above strictly sustainable levels.”19 If what Matthew Simmons has revealed about giant fields, especially Ghawar, is true, this claim is dubious, which means that sustaining the extraction surge will be difficult at best.

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