Olympia Fellowship of Reconciliation

Growing number of reports suggest that world oil production likely reached its peak in 2006, and that less oil will be extracted this year and in each year henceforth. Meanwhile, global demand for oil keeps growing every year. The law of supply and demand dictates that oil prices will rise ever-higher.

Environmental sustainability analyst Lester Brown thinks we likely extracted as much oil from Mother Nature in 2006 as we are ever likely to. More and more experts agree. Although Saudi Arabia had claimed that it can produce more oil, Saudi output so far in 2007 is down six over the next 14 years, prpercent from 2006.

On April 24, 2007, Dr. Ali Samsam Bakhtiari, an oil expert reported:

“… My World Oil Production Capacity model has predicted that over the next 14 years, present global extraction of 82 million barrels per day will decrease by roughly 32%, down to around 55 million barrels per day by the year 2020.”

Not long ago oil cost less than $20 a barrel, and just a few years ago oil people worried that oil might rise as high as $50 a barrel. Lately it has been more than $80 a barrel and climbing. In 2006, in an address to Australia’s senate, Bakhtiari stated, “I can see a range of $100-150 [per barrel of oil] not very far into the future.” (www.energybulletin.net/29162.html)

Andrew Gould, CEO of Schlumberger, a major oil-related corporation, said that it would not be unreasonable to estimate an average decline of 8% per year. Oil expert Matthew Simmons also believes that an 8% rate of decline is possible. He notes that Saudi Arabia’s fields were mismanaged in ways that damaged their long-term use and will cause their productivity to decline more sharply after those wells peak. As a result, he estimates that Saudi Arabia’s oil reserves are probably half of what is reported.

Lester Brown has reported that the German Energy Watch Group expects oil extraction to decline 7% per year and fall from more than 80 million barrels a day now to only 58 million barrels a day by 2020. The U.S.’s whole economy, urban and suburban design, and lifestyles are based on the automobile and cheap gas. About 88% of U.S. workers travel to work by car. Peak oil will hit the U.S. very hard.

Even a small drop in oil supply can have serious effects.

If – after peaking – oil extraction declines 8% per year, this means that world oil extraction would decline by almost half in just eight years. If the world currently consumes 82 million barrels per day, what would happen if only 41 million barrels per day were available? What would happen to the price? Who would be priced out of the market? What would happen to inflation?

Some analysts suggest that a shortfall between demand and supply as little as 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty (www.energybulletin.net/19131.html#sdendnote48sym).

The U.S. already conquered Afghanistan, installed U.S. oil company executives in charge, and arranged for an oil pipeline across it owned by U.S. companies instead of the foreign companies with whom the Taliban had been doing business. The U.S. conquered oil-rich Iraq, installed U.S. oil company executives in charge, and plans to militarily occupy it for the foreseeable future. The Bush regime is currently threatening war against oil-rich Iran. The Bush regime has been waging a propaganda war against oil-rich Venezuela and has already tried to overthrow its government. (See our January TCTV program for more information.)

The Bush regime fooled Congress, the mainstream media and the American people into thinking that the war against Iraq was to protect the U.S. from Iraq (and more recently about terrorism), but it is very clear that it’s about keeping the oil flowing.

The U.S.’s foreign policy elite is afraid that the chaos in Iraq will spread to nearby oil-rich countries. Bigwigs in both big political parties are calling for more U.S. militarism to protect the flow of oil from the Persian Gulf region. Many prominent Democrats and Republicans support an independent task force report titled, “National Security Consequences of U.S. Oil Dependency.” The report was released in October 2006 by the bipartisan Council on Foreign Relations (CFR), which is co-chaired by John Deutch, deputy secretary of defense in the Clinton Administration, and James Schlesinger, defense secretary in the Nixon and Ford administrations. The report urges the U.S. military to keep oil flowing from the Persian Gulf region.

Mainstream Democrats accept that. For example, both Hillary Clinton and Barack Obama have called for the U.S. to keep a strong military presence in the region. Even while mainstream Democrats waffle over “redeploying” the U.S. military to be slightly outside of Iraq, they still want the U.S. military to use violence when needed in the region to keep oil flowing to us.

The industrial West – especially the U.S. – has been drunk on an oil binge for more than half a century. Like all drunken binges, it is not sustainable. Endless economic “growth” is not sustainable.

Another area of conflict is that – although the U.S. dollar has been the prescribed currency for conducting oil transactions since about 1974 – the U.S. is making itself so unpopular, the U.S. deficits are so out-of-control, and the U.S. dollar is weakening so much that many countries don’t want to hold dollars. Now OPEC is considering whether to stop using the U.S. dollar for the global oil trade. If that happens, there will be less demand for U.S. dollars, and the dollar’s value will plummet further.

For information about the Peak Oil crisis, contact the Olympia FOR at (360) 491-9093 Comments are closed.