Per this article from Zerohedge, it appears we ‘Muricans have done something that was previously thought impossible. We’ve peaked twice in oil production. US Oil production hit its first peak around 1970, when we were getting 10 million barrels a day of our beloved dead dinosaur juice out of the ground and ocean drilling platforms. Production then began to curve downward as predicted by M King Hubbert back in 1958. At the same time, US domestic use of oil went past 10 million barrels of oil a day and we never looked back. The only president to mention there might be a future problem if oil use exceeded oil production was Jimmy Carter, who was shown the electoral door at the first opportunity. By the mid-oughts, we were producing around six million barrels a day (while using around 20 million).
Then HUZZAH! Fracking, Shale oil and Tar sands oil extraction come along and we go to 9.7 million barrels of new oil a day! Unconventional oil extraction brings us back to the glory days of 1971! Huzzah!
Now the Energy Information Agency (the folks who brought you the 2005 Hirsch report, which predicted peak oil within a few years) has been tabulating, and based on their figures, we’ve peaked on unconventional oil as well. We’ve actually come down a bit in terms of our domestic usage (from 20 million to 19.05 million barrels). Some people have made a big deal out of this reduction, and a lot of it came from reduced recreational use (unemployed people tend not to vacation, for example). But most of that ‘reduction’ is in the increase of oil use in places like China. Essentially, the US has off-shored some of its oil use by off-shoring its manufacturing. If you tabulate all the world’s oil use in terms of final customer, the US, with not quite five percent of world’s human population, still uses over 25% of the world’s fossil fuel on any given day. That’s only possible through the US maintaining an empire with carrier groups and two airborne divisions on call 24/7 should any hiccup occur in the world oil supply. And (as I’ve written before) a nation of Walmart greeters and waitresses can’t pay enough in taxes to keep that empire going.
And some of the fall-off in demand is evidence that we’re about to hit another recession. Falling worldwide oil consumption is consistent with falling demand for steel and copper and a host of other industrial bellwether commodities. Also, since the stock market has a lot of junk bonds tied up with oil stocks (and since unconventional oil costs more to get out of the ground than the current price of oil), there’s a risk to investors as the bonds needed to finance oil projects begin to go south.
Last March, I was at a get-together of a group affiliated with the People’s Climate March, and a representative of 350.org scoffed at the idea of Peak Oil and said there was no such thing. I don’t want to imply he was stupid, but he had no facts or figures to back up his claims that there was no such thing. It was announced (triumphally) that he was leaving our meeting early in order to head for DC to ‘celebrate’ Obama’s change of heart on the various pipelines. For the record, Obama had NOT had a change of heart on building the pipelines–he’d decided they shouldn’t be fast tracked. But with the passage of the Fast Track for the Trans Pacific Partnership (something Obama supported) the decision about the pipeline may be out of POTUS hands at this point anyway. Obama (and his successors) can say ‘sorry, but we’ve signed a treaty’, and allow the oil companies to continue to rape the one planet we know of that can support human life.
The fly in the ointment is peak oil, and especially the end of truly cheap conventional oil. There isn’t enough cheap oil to keep everything running, and we’re depleting oil far faster than we’re finding it. Peak Oil should have been the warning that the ‘way of life ‘ we have (based on an infinite growth paradigm for a finite planet) is unsustainable and we’d better find a plan B. We squandered the opportunity we had to make a change-over resulting from peak oil, and now we’re on a slow death march to whatever climate catastrophe awaits us (kicking off as early as this October). It’s cold comfort for those in the know to have “we told you so” as our epitaph.