[Congressional Record Volume 151, Number 75 (Wednesday, June 8, 2005)]
[House]
[Page H4276]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                PEAK OIL

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Maryland (Mr. Bartlett) is recognized for 5 minutes.
  Mr. BARTLETT of Maryland. Mr. Speaker, several times during the past 
few weeks, I have stood on this floor to talk about peak oil. The chart 
I have here symbolically shows what we are talking about. The blue 
curve here represents the amount of oil that the world produces and 
uses. Of course, over a period of time, the world will use as much oil 
as it has been producing and that has been going on now for 100 years. 
Currently, the increase in use rate of oil is about 2 percent. That is 
what this curve represents. Knowing that, we can put some time on the 
abscissa of this curve because a 2 percent compound growth will double 
in 35 years. This use curve, which goes up from here to here, has 
doubled in that amount of time, so that is a 35-year period.
  What this chart shows is that at some point in time, and the only 
argument is when, the world will peak in its oil production. But before 
the world peaks in oil production, it is noted from this curve that the 
demand will be exceeding for several years, it is like a decade, if 
this is the curve which is followed, the demand will be exceeding 
supply.
  What this has given rise to, of course, is a look for oil around the 
world. The second largest importer of oil in the world, which is China, 
has been scouring the world for oil. This chart shows the places where 
China has secured leases for oil. It is in Canada, it is in Colombia, 
Venezuela, Brazil, Argentina, negotiating in Russia, in Africa and all 
over the Middle East, of course; and we have a symbol here showing that 
they were negotiating for an oil company in our country, Unocal.
  When I spoke on the floor the last time about this, I noted that 
Chevron had bought this oil company, had bought Unocal; but now just in 
the June 6 issue, this year, just this week, Time magazine, there is an 
article called ``The Great Grab.'' It says: ``In quest of oil, China is 
on a collision course with U.S. firms and U.S. policy. Chevron, one of 
the world's oil giants, announced in early April that it was buying 
Unocal, a smaller rival, for about $17 billion. The Chinese National 
Offshore Oil Corporation, CNOOC, may make a counteroffer for Unocal, 
the world's ninth largest oil company. If it does, it would mark the 
first major takeover fight between a U.S. company and a Chinese 
competitor.''
  Think about it, Mr. Speaker. The Chinese have now secured rights for 
oil north of us in Canada, to our neighbors to the south, and now they 
are about to buy a major oil company, the ninth largest oil company in 
the world, right on our soil. Competitors are worried, the article 
says, that China is so eager to do deals that it will warp the market. 
Western oil majors are concerned that they won't be able to compete, 
according to Gary Ross, CEO of Petroleum Industry Research Associates, 
because the Chinese companies, most still state-owned, are willing to 
accept a lower rate of return. To acquire Unocal, CNOOC would have to 
offer more than the $17 billion that Chevron said they would pay for 
it, plus the $500 million breakup fee that Chevron booby-trapped to its 
Unocal bid.
  This is not the only place in the world that China is doing the great 
oil grab. It says: ``But Beijing is completing a long-term $70 billion 
oil and gas deal with the Iranian regime.'' I would like to note, Mr. 
Speaker, that this crisis is not just noted now, because almost a year 
ago, Jane Bryant Quinn, in an article in Newsweek, it was August 16, 
2004, called ``Gas Guzzlers' Shock Therapy,'' had this to say:

       My fellow Americans, drop the fantasy that we'll return to 
     cheap gasoline, that was a year ago, it was a lot cheaper, 
     and pump it for as long as our withered hands can steer an 
     SUV. As the prophet saith, the end is nigh. Demand for oil is 
     running high. In fact, we're gobbling up the stuff. But world 
     production grew by only 0.6 percent a year for the past 5 
     years. At some point, supplies will shrink, not grow.

  Mr. Speaker, this is really quite alarming, that in our country the 
second largest importer of oil in the world is now buying a major 
company.

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