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A Peak Under the Covers
by Jay Hanson, 11/11/97

I'm sure of this much, though: If you're looking for a straight word on global warming, the last people to ask are oil companies, auto manufacturers, electric companies or the politicians they hire. They would pump carbon monoxide into maternity wards if they could make a buck at it without getting sued.
-- Donald Kaul, Tribune Media Services
in the 10/27 Orlando Sentinel

IF the corporations only can be stopped by human die off, THEN the corporations will be stopped by human die off.
-- Jay's Theorem


It is said that politics makes strange bedfellows. This is never so apparent as when President Clinton -- the president of the most environmentally destructive government on Earth -- expresses concern over global warming:

Make no mistake, the [threat of global warming] is real. If we do not change our course now, the consequences sooner or later will be destructive for America and the world.

Experience in American politics teaches us that government NEVER acts for publicly stated reasons. Instead, EVERY political action is motivated by hidden agendas,[1] and is designed to reward political friends or punish enemies. Then, once the plan is ready to go, plausible, approval-winning reasons are cooked-up and fed to the public. Let's speculate a bit on what might be really going on "under the covers".

AMERICAN POLITICAL FUNDAMENTALS

I see the White House is like a subway -- you have to put in coins to open the gates.
-- Johnny Chung (1997)

America's so-called political system is based on money. BIG CORPORATE MONEY now owns the best government that money can buy. Presidents are NOT elected because they give a damn about either environment or posterity; they are elected because BIG MONEY wants them elected so BIG MONEY can make even more BIG MONEY.

The obvious question is "Which BIG MONEY interests want President Clinton to curtail our present energy orgy because of concern over global warming?"

If that's the right question, then aside from the BIG INSURANCE COMPANIES, it seems unbelievable that ANY individual BIG MONEY interests would WANT to end our present energy orgy. (Remember that this would abruptly curtail the economists' shop-till-you-drop theory of salvation.)

So the obvious question is obviously not the right one. The next possibility is an energy issue that ALL BIG MONEY interests are deeply concerned about -- so concerned, that they are even raising the possibility of reducing energy consumption.

I think I spotted it. I think BIG MONEY sees an apparition so terrible that neither governments nor oil companies are allowed to even breathe the word: PEAK.

GLOBAL OIL PRODUCTION IS GOING TO PEAK!

40 years ago, geologist M. King Hubbert developed a method for projecting future oil production and predicted that oil production in the lower-48 states would peak about 1970. This prediction has proved to be remarkably accurate. Both total and peak yields have risen slightly compared to Hubbert's original estimate, but the timing of the peak and the general downward trend of production were correct.

Global oil production will begin to "peak" when approximately half of the "Estimated Ultimately Recoverable" oil has been recovered:

For many years geologists and oil companies have published estimates of the total amount of crude oil that will ultimately be recovered from the earth over all time. Remarkably, these assessments of Estimated Ultimately Recoverable (EUR) oil have varied little over the past half century. [MacKenzie, http://www.wri.org/wri/climate/finitoil/eur-oil.html ]

In his new book, THE COMING OIL CRISIS,[2] C. J. Campbell makes two points very convincingly:

#1: That global conventional oil production is going to "peak" within very few years: "At the time of writing in late 1996, there are still three more years to go until the end of the transition." [p. 59]

#2: That energy experts have known it for a long time: "Already by 1908, the world's largest petroleum system, the Middle East, with about forty percent of the world's ultimate endowment, had been found". [p. 77]

Of course, Americans won't be surprised at the cover-up because, well, it's just another "gate". I am calling this one FOSSILEGATE.

The coming PEAK remains a heavily guarded secret because if it became widely known, the stock market would hit the cellar -- permanently:

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. [Ivanhoe, http://dieoff.com/page90.htm ]

So BIG MONEY's big question becomes "How do you convince Joe Sixpack to accept drastic energy cuts -- and a drastic cut in our all-time favorite euphemism: 'standard of living' -- without scaring him out of the stock market and into a depression?"

Guess what?

GLOBAL WARMING TO THE RESCUE!

Don't get me wrong! I believe that global warming is actually occurring, and that we should do something about it. But corporations won't, indeed, can not cut profits over concern for humanity's future. If they did, the stockholders would sue the corporate officers. In fact, corporations are specifically designed to convert the entire planet -- and its inhabitants -- into industrial garbage.

If one needs an example of a corporate concern for humanity, tobacco companies provide the best. Cigarette smoking causes about 435,000 American deaths each year. During the last 40 years, roughly 17 million Americans have been killed by tobacco smoke while tobacco companies have pocketed something like a thousand billion dollars:

Realistically, if our Company is to survive and prosper, over the long term we must get our share of the youth market. In my opinion, this will require new brands tailored to the youth market. -- R.J. Reynolds [ http://www.tobacco-litigation.com/states/statfile/Utah.htm ]

And in 1938, Ford had a better idea:

Ford was also active in Nazi Germany's prewar preparations. In 1938, for instance, it opened a truck assembly plant in Berlin whose 'real purpose,' according to U.S. Army Intelligence, was producing 'troop transport-type' vehicles for the Wehrmacht. That year Ford's chief executive received the Nazi German Eagle (first class).... [ http://www.corpwatch.org/trac/greenwash/ford_nazi.html ]

Corporations are designed so they can't be concerned about humanity, but they are certainly concerned about their own financial survival -- they need to remain viable long enough to see it through to the very end. In other words, the corporations have to hold the economic system together long enough to kill the last of the endangered species, dam the last river, chop down the last tree, addict the last human to booze and cigarettes, catch the last fish, pump the last drop of oil out of the ground, pollute the last bit of the groundwater, and so on ...

So that's a PEAK under the covers: FOSSILEGATE. It's true, politics DOES make strange bedfellows.


DEMAND and SUPPLY
by Jay Hanson, 12/01/97

"The days of the oil shortages are over," said economist William Wilson of Comerica Bank in Detroit, adding that's welcome news for truck owners. "Trucks are here to stay because Americans like them."
-- Detroit Free Press, 12/13/97

How many times have we been told that alternative energy is simply not "cost effective" compared to oil yet?

At the same time, economists -- the simple folk -- think that since oil prices are not rising, we must not be running out of oil.

Recently, a group of oil experts have stated that global oil production is going to "peak" in a couple of years. And yet a couple days ago, OPEC (led by the Saudis) raised oil quotas.

What the story?

The story is that the Saudis raised quotas because they are our friends, and the optimum oil price for the US economy is about $20 a barrel!

According to Peter Schweizer [1], the Saudis cooperate with the US in exchange for intel on dissidents [p. 31], satellite pics, AWACS [p. 51], Stinger missiles [p. 190], advanced fighters, direct military protection, and were even "leaked" information when Treasury Department planned to devalue the dollar so they could shift investments into nondollar assets. [p. 233]

During the Cold War, the Saudis worked in the black with the CIA to lower global oil prices and thereby deprive the USSR of the much-needed hard currency it needed to operate.  Each $1 drop in oil price cost the USSR about one billion dollars in revenue.

A $5 drop in the price of a barrel of oil would increase the U.S. GDP by about 1.4 percent. Poindexter: "It was in our interest to drive the price of oil as low as we could." [p. 218]

Weinberger: "One of the reasons we were selling all those arms to the Saudis was for lower oil prices." [p. 203]

Alan Fiers: The Saudis were also providing financial aid to the mujahedin and the contras. [p. 202]

In the first few weeks of the Saudi push, daily production jumped from less than 2 million barrels to almost 6 million. By late fall of 1985, crude production would climb to almost 9 million barrels a day. [p. 242]

Shortly after Saudi oil production rose, the international price of oil sank like a stone in a pond.  In November 1985, crude oil sold at $30 a barrel; barely five months later it stood at $12. [p. 243]

In the spring of 1986, the downward plunge in international oil prices was causing serious worries around the world but also among some quarters in the Reagan administration.  Vice President George Bush was preparing for a highly visible ten-day tour of the Persian Gulf area.  A product of the Texas oil country, Bush saw danger, not hope, in the dramatic and recent decline in oil prices. [p. 259]

Bush was acting on his own against the Reagan administration! While Reagan, Casey and Weinberger were trying to talk oil prices lower, Bush was meeting with Yamani and Fahd trying to talk oil prices higher! [p. 260]

In 1983, the Treasury Department had done a secret study that found the optimum oil price for the US economy was about $20 a barrel. [p. 141]

That's why we have oil prices close to $20 a barrel! (In 1981, constant-dollar oil prices were more than triple today's $18 per barrel.)

CONSPIRACY THEORY

Campbell [2] doesn't know whether to believe the Gulf War conspiracy theory or not, but it goes something like this:

After the Cold War was over, low oil prices made it difficult for the Saudis -- and oilman President George Bush's friends -- to make ends meet because OPEC members were cheating on quotas.

The obvious solution to OPEC cheating was to sequester an entire country: Iraq.  In order for our scheme to work, Saddam would have to remain in power and the UN would have to embargo his oil. That's exactly what we did.

We only need to keep Saddam in power for a few years -- till the rest of the world's oil production "peaks".

World oil consumption rose by 2.4 percent in 1996 to 69.55 million barrels a day (BP America, June 19, 1997). Thus, we seem to be on the Petroconsultants' high scenario, with OPEC output hitting an 18-year high of 27.39 mbpd in August of 1997 (Reuters, Sept. 7, 1997). It seems reasonable to assume that global production will soon be unable to keep up with surging worldwide demand, and that global oil production must peak by the year 2005.

SPECULATION

Once global oil peaks, and we NEED to start pumping Saddam's oil, I expect Americans to invade and OCCUPY Iraq. Moreover, profits will flow to friends of George Bush -- not some wild-eyed, gun-waving crackpot like Saddam.

Obviously, once oil production peaks in a couple of years, the public will throw their total support behind an invasion of Iraq. There is simply no other way we can guarantee access to the oil patch.

Most Americans don't know we have an "energy policy" in this country.  It turns out that we do: keep oil prices close to $20 a barrel.


BACK TO THE FUTURE
TIME
January 14, 1974

It looked like a hand grenade, so the Albany, N.Y., station operator played it safe and assumed that it was a hand grenade. He gave the man who was toting it all the gas he wanted. Attendants elsewhere last week faced curses and threats of violence, sometimes backed by suspicious bulges in the pockets of jackets. When a huge bear of a man warned a Springfield, Mass., dealer, "You are going to give me gas or I will kill you," the dealer squeezed his parched pumps to find some. "Better a live coward than a dead hero," he said.

Such incidents were not exactly common last week, but they occurred often enough, especially in the Northeast, to indicate an outbreak of a kind of gasoline madness. The New Year's weekend was the first time that many drivers became really desperate for gas. Many stations ran out of their monthly allotments as the weekend started and closed until they could get new deliveries after the holiday. Those that stayed open backed up long lines of drivers whose tempers sometimes exploded -- especially if they found the pumps dry when they finally got to them.

The gas shortage is sparking other types of deviant behavior. Flouting of the law is on the rise. In New York City, two gasoline tanks trucks, each loaded with 3,000 gallons, were hijacked within a week. Price gouging by station owners has become distressingly common. Miamians complain of having to pay $1 a gallon or being charged a $2 "service fee" before a station attendant will wait on them.

At best, many gas station owners and attendants have become unapproachable to strangers; they will wait only on longtime customers. Some issue window stickers to the regulars; others sell by appointment only. Oregon Governor Tom McCall last week rolled into a Union 76 station only to be told by the manager: "Sorry, Governor, we're only selling to our regular customers." So the Governor meekly drove to the end of the line at a nearby station that was taking all comers.


References:

[1] For a fascinating account of how American government operates in the black, read VICTORY: The Reagan Administration's Secret Strategy That Hastened the Collapse of the Soviet Union,
by Peter Schweizer; Grove/Atlantic, 1996; ISBN 0871136333 http://www.amazon.com/exec/obidos/ISBN=0871136333

[2] Campbell's is the best book BY FAR on oil depletion, read THE COMING OIL CRISIS, by C. J. Campbell; Multi-Science Publishing Company & Petroconsultants, 1997
ISBN 0906522110. See a review and order it now from Amazon books: http://www.amazon.com/exec/obidos/ISBN=0906522110

Also visit these sites:
OIL AS A FINITE RESOURCE: When Is Global Production Likely to Peak?, by James J. MacKenzie This great web site has been moved and reformatted! http://www.wri.org/wri/climate/finitoil/

The M. King Hubbert Center for Petroleum Supply Studies publishes a regular newsletter about the depletion of fossil fuel. See: http://hubbert.mines.edu/

And especially see my FOSSILGATE at http://dieoff.com/page122.htm