[Congressional Record Volume 152, Number 76 (Wednesday, June 14, 2006)]
[House]
[Pages H3988-H3994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PEAK OIL
The SPEAKER pro tempore (Mr. Poe). Under the Speaker's announced
policy of January 4, 2005, the gentleman from Maryland (Mr. Bartlett)
is recognized for 60 minutes as the designee of the majority leader.
Mr. BARTLETT of Maryland. Mr. Speaker, today I had a very pleasant
visit with a very important person. Matt Simmons came by and we spent
about an hour and a half talking. Now, who is Matt Simmons and why
should we be interested in a discussion with Matt Simmons?
Matt Simmons is the President's personal energy adviser. He was the
primary architect of his energy policy for his first campaign,
continued with him through his second campaign. Matt Simmons is the
president and CEO of one of the largest energy investment banks in the
world, out of Houston, Texas, and he has written a book which I have
here, ``Twilight in the Desert.''
I would like to read just a little bit from the dust cover of the
book:
Saudi Arabia is the most important oil-producing nation in history.
The secretive Saudi Government repeatedly assures the world that its
oil fields are healthy beyond reproach, and that they can maintain and
even increase output at will to meet the skyrocketing global demand.
But what if they can't?
``Twilight in the Desert'' looks behind the curtain to reveal a Saudi
oil and production industry that could soon approach a serious,
irreversible decline.
In this exhaustively researched book, veteran oil industry analyst
Matthew Simmons draws on his own three-plus decades of insider
experience and more than 200 independently produced reports about Saudi
petroleum resources and production operations.
What he uncovers is a story about Saudi Arabia's troubled oil
industry, not to mention its political and societal instability which
differs sharply from the globally accepted Saudi version. It's a story
that is provocative and disturbing, based on undeniable facts but until
now never told in its entirety. ``Twilight in the Desert'' examines
numerous aspects of Saudi Arabia and its looming oil crisis.
Mr. Speaker, we had a discussion, as I mentioned, that was about an
hour and a half long. Matt Simmons shared
[[Page H3989]]
with me his concern that the world is reaching a very critical point in
its history, a point at which the oil production of the world will
reach a peak, after which it will inevitably decline.
This is a message that I first started talking about exactly 15
months from today. It was March 14 last year, and I have here the exact
charts that we used in our discussion, and I would like to go through a
few of those charts. These aren't all of them, but all of these charts
are charts from that first discussion.
We started with this chart. Recent headlines. This is Washington
Post, the third day of February 2005, just a few weeks before our March
14 first discussion of this subject, and the subject was Peak Oil.
You see that is pasted on because we were discussing what should we
call this discussion. The Great Rollover was one possibility, and the
Great Rollover refers to that time in which there will be a rollover
from a consumer's market to a producer's market when you have reached
the peak and roll over the top. We finally decided to call it Peak Oil,
and that is how most everybody who is talking about this phenomenon
refers to it now.
These are headlines, and they could be headlines from today's paper,
or yesterday's, because the Dow went up a little today.
This reads, ``The Dow dropped 174 points, driven by economic damage
from rising oil prices,'' and they were relatively low 15 months ago
compared to what they are today, ``the plunging dollar,'' and the
dollar is still plunging, ``and growing worries about consumer
spending.'' It could be today's headlines.
``Recent oil price rise of 20 percent is continues to crunch the
profits of struggling airlines and is believed to be a factor in
disappointing retail sales.''
``Dollar slides against the euro and the yen,'' and it is still
sliding.
``Consumer confidence slips in February.'' These were the headlines
of the paper.
What are they talking about? They are talking about some statistics
that resulted in 30 of our prominent citizens writing a letter to the
President, saying Mr. President, the fact that the United States has
only 2 percent of the world's oil reserve and we use 25 percent of the
world's oil and we import almost two-thirds of what we use is a totally
unacceptable national security risk. We have just got to do something
about that.
We represent a bit less than 5 percent of the world's population. We
are one person out of 22 in the world, and that one person uses 25
percent of the world's energy and we import almost two-thirds of what
we use.
Now we are really good at pumping oil. We have drilled about 530,000
wells in our country. There are on the order of magnitude, and I can't
get the exact number, a thousand, more or less, in Saudi Arabia. We
have 530,000, and I think there may be 3- or 400 in Iraq. Two percent
of oil reserves are producing 8 percent of the world's oil. I think
today we are still the world's third largest oil producer. We are far
and away the world's largest oil consumer. How did we get here?
To find out how we got here we have to go back about six decades. The
next chart shows us a prediction that was made by a scientist of the
Shell Oil Company by the name of the M. King Hubbert. He worked for the
Shell Oil Company. He observed a phenomenon in oil fields when they
were pumped and finally exhausted, that appeared to be a characteristic
of oil fields generally, and that was you reached a maximum after which
the production dropped off and finally tailed off to near nothing.
He rationalized if he could know how many oil fields there were total
in the United States and guess at how many more we would find, that he
could then predict when the United States would peak in oil production.
He made that prediction in 1956 and on the 8th day of March, just 50
years ago, this last March 8, he gave what would become a very famous
speech in San Antonio, Texas to an oil conference and it was published
as a paper. In that he predicted that the United States would reach its
maximum oil production in 1970. In those days he was talking only about
the lower 48.
Shell Oil Company asked him not to give that talk and publish that
paper because it would embarrass him and them. He went ahead and did
it; and, of course, we did peak in oil production in 1970 and so M.
King Hubbert became an institution in his own time.
The smooth green curve here is his prediction. The more ragged green
curve is the actual date and you see, right on schedule, it peaked in
1970, and then began falling off.
The red curve here is the former Soviet Union. They have more oil
than we. They peaked a bit after us, and then the Soviet Union fell
apart and their production capacity did not meet expectations so they
are now having a second small peak.
Of the 48 major countries that produce oil, 33 of them have already
reached their peak.
The next chart shows us where we have gotten the oil in our country.
M. King Hubbert was predicting the production of oil in only the lower
48 and that would be this curve here that I am tracing, because he did
not look at Alaska and did not include oil from that source.
Notice that we did peak in 1970 and then it starts downhill. And the
very large discoveries in Prudhoe Bay and Dead Horse, Alaska just
caused a little blip in the slide down the other side in Hubbert's
peak. It did not reverse that. I have been to Dead Horse and Prudhoe
Bay. I have seen the beginning of that 4-foot pipeline through which,
for a number of years now, a full fourth of our oil production has
flowed.
{time} 2000
In spite of enormous production from Prudoe Bay, and in spite of a
lot of production from the Gulf of Mexico, that is the yellow there.
And you may remember, Mr. Speaker, the fabled Gulf of Mexico oil
discoveries. They were so large that it would put any worries about oil
far, far behind us. That is all the contribution they have made.
And by the way, we really are exploiting those fields because we have
4,000 oil wells out there in the Gulf of Mexico. We had reason to
reflect on that last year when the hurricanes went through.
Now, these are the charts, Mr. Speaker, that I used. I had some
additional ones too, but these are the charts that I used exactly 15
months ago today. It was the 14th of March. Two very significant things
have happened since then. Two major reports paid for by the government
have been published. One of those is the Hirsch report. It actually is
dated February of 2005. That is just a month before I gave my first
floor speech here on this subject. Neither I nor anyone else in the
public knew that that research had been done and that report was
available because it did not become available for several months after
that. This is frequently called the Hirsch report. It is called Peaking
of World Oil Production, Impacts, Mitigation and Risk Management. And
in just a moment, I will show you a few quotes from that very important
study. Then a little later than that, dated last September but not
available publicly until just a few months ago, was another major study
paid for by the Army, done by the Corps of Engineers, called Energy
Trends and Their Implications for U.S. Army Installations. M. King
Hubbert predicted that the world would be peaking in oil production
about now. And the point I made 15 months ago, Mr. Speaker, was that if
M. King Hubbert was right about the United States, and he was right on
target, certainly, we are a microcosm of the world. And if he was right
about the United States, shouldn't there have been some concern that he
might be right about the world? And if in fact he was right about the
world, shouldn't we have anticipated that and done something about it?
We did not.
Let me show you, now, one of the quotes from the Hirsch report. That
is from page 24. We cannot conceive of any affordable government
sponsored crash program to accelerate normal replacement schedules.
What they are saying is that if the world has peaked in oil production,
and they said that it certainly would peak. It wasn't if, it was when.
And they weren't really certain when it would peak because you wouldn't
know that it had peaked until you were a bit past the peak and looked
back. And that is very true. And they looked at all of the things that
the government might do to mitigate the consequences of a shortage of
liquid fuels. This is not so much an energy crisis as it is a liquid
fuels crisis.
[[Page H3990]]
And they said they could not conceive of any affordable government
sponsored crash program to accelerate normal replacement schedules.
The next chart has some very interesting and disturbing words in it.
World oil production is going to peak, they said. It will reach a
maximum and decline thereafter. That maximum is called the peak. They
said that it is not if, it is when. It is going to peak.
Oil peaking presents a unique challenge. And I have highlighted it
here. The world has never faced a problem like this. There is no
precedent. We cannot look back in history and find any time when the
world has faced a problem like this. This is a unique challenge. The
world has never faced a problem like this.
And as a consequence of that, the next chart says that the peaking of
world oil production presents the United States and the world with an
unprecedented risk management problem. As peaking is approached, liquid
fuel prices and price volatility will increase dramatically. Just a few
years ago it was $10 a barrel. Now it is $70 a barrel and has been as
high as $75 a barrel, will increase dramatically and without timely
mitigation. The economic, social and political costs will be
unprecedented.
These, Mr. Speaker, are quite strong words, unprecedented risk
management problem and economic, social and political costs will be
unprecedented.
The second report that I mentioned by the Corps of Engineers and the
next chart has a quote from their study, reaches the same conclusion;
that oil production will peak, that peak is either now present or
imminent. And they say oil is the most important form of energy in the
world today.
Just a moment's reflection on how important that source of energy is.
70 percent of all of the oil that we use in our country is used in
transportation. There is no realistic alternative to liquid fuels for
transportation.
Now, we can take oil and make other liquid fuels like ethanol, but
for every gallon of ethanol that we burn, we have used at least \3/4\
of a gallon of liquid fuels, gasoline and diesel, oil to produce that
energy.
Oil is the most important form of energy in the world today, and the
energy density in oil is just incredible. One barrel of oil, 42
gallons, the energy in that represents the work output of 12 people
working all year. So for just a little over $100, $3 a gallon, 42
gallons, a little over $100, you can buy the workout of 12 people
working all year for you.
To get some idea that that is probably a realistic number, reflect on
how far a gallon of gasoline or a gallon of diesel, by the way, still
cheaper than water in the grocery store if you buy it in those little
bottles that you drink from, how far that will carry your SUV or your
car. You may get 10 miles from a heavy SUV, but try pulling that SUV
those 10 miles and see how long it will take you. You can do that with
a come-along and trees and guardrail beside the road, but it would take
you quite some time to pull it the 10 miles.
I drive a Prius. It gets 52 miles per gallon. And how long would it
take me to pull my Prius 52 miles?
Another indication, Mr. Speaker, of the incredible energy density in
these fossil fuels is the energy density in electricity. You can work
very hard in your yard all day long this weekend, and I will get more
work out of an electric motor, more mechanical work out of an electric
motor with less than 25 cents worth of electricity. Now, it may be kind
of humbling to recognize that we are worth less than 25 cents a day in
terms of fossil fuels. But that incredible energy density and the
really large supply of this energy source resulted in this statement by
the Corps of Engineers. Oil is the most important form of energy in the
world today.
Historically, no other energy source equals oil's intrinsic qualities
of extractability, transportability, versatility and cost. The
qualities that enabled oil to take over from coal as a front line
energy source for the industrial world in the middle of the 20th
century are as relevant today as they were then. Oil is absolutely
essential to our way of life.
The next chart notes some very prominent people. Colin Campbell, more
than any other person, he probably inherited the mantle from M. King
Hubbert, Jean LaHerrere, Brian Fleay, Roger Blanchard, Richard Duncan,
Walter Youngquist and Albert Bartlett. Not a relative of mine, but if
you go to the web and pull up Albert Bartlett you can get his speech
that he has given more than 1,600 times. I will tell you, Mr. Speaker,
that I think you will agree with me it is the most interesting 1-hour
lecture you will ever hear.
All of these people have estimated that a peak in conventional oil
production will occur around 2005. And then they quote some
corporations that have reached a similar conclusion.
The next chart is another quote from this very important study by the
Corps of Engineers. In general, all nonrenewable resources follow a
natural supply curve, just as M. King Hubbert said 50 years ago.
Production increases rapidly, slows, reaches a peak and then declines
at a rapid pace, similar to its initial increase.
The major question for petroleum is not whether production will peak,
but when. There are many estimates. Most of the authorities agree that
it is either now or imminent. Very few push it off more than a decade
into the future.
The next chart is really interesting. Now, this is dated just last
September. The current price of oil is in the $45 to $57 per barrel
range. Now it is $70 to $75, a little under $70 today. But it has been
in the $70 to $75 range. And it is expected to stay in that range for
several years. It is less than a year later and it is now $70 a barrel.
They expected it to stay in the range of $45 to $57 a barrel for 7
years. So even the experts have underestimated the relationship between
production and consumption.
Oil prices may go significantly higher. Indeed, they have gone up to
$75 just a few weeks ago. And some have predicted prices ranging up to
$180 a barrel in a few years.
Now, the next chart shows that not everybody agrees with this. And
this is a very interesting chart. This is a chart from our Energy
Information Agency, and we have had the two top officials of that
agency in our office to talk about these subjects. And this is a chart
which shows historically what production has been, and it shows what
they think the future looks like.
Now, they use a very interesting and, one might say, bizarre use of
statistics. In statistics there is a 95 percent probability; that is,
you are 95 percent certain about what is going to happen in the future,
and then there is a 50 percent probability, which is obviously less
certainty about what is going to happen into the future. And then
finally, a 5 percent probability. And boy, that is really uncertain.
There is just a big, big envelope out there. Could be anything in a
broad field.
Well, what they have done in this chart is really very interesting.
They have taken the 95 percent probability, which is the yellow line
here, and then they have taken the 50 percent probability, which is the
green line. But they took the 50 percent probability only on the plus
side of the 95 percent probability. You need to draw another green line
that is just as far on the other side of the yellow line. Then they
draw the blue line there, which is the 5 percent probability, but they
should have drawn another one, which is just as far on this side of the
yellow. In other words, the 5 percent probability says you are very
uncertain about the future. There could be a whole lot more oil in the
future, or there could be a whole lot less oil in the future. But they
look at only the whole lot more oil in the future.
And then they make a very interesting designation. They say that the
50 percent probability is the mean. The 50 percent probability, Mr.
Speaker, has nothing to do with the mean. And I wanted to make certain,
and I did have a course in statistics many years ago. I wanted to make
certain that I had not forgotten and was misinterpreting this, so we
had experts from the Congressional Research Service come over and
discuss this with them. And they said that they agreed that this was a
very unusual, one might say bizarre, use of statistics.
Well, Mr. Speaker, you see what has happened since they made this
prediction. Here they predicted these three different scenarios, the 95
percent probability, the 50 percent probability, which they said was
the mean, the most probable. 95 percent probability is
[[Page H3991]]
far more probable than 50 percent probability.
But look what reality has been. Look what the red line, look what the
actual data points have been. They have been following, as you would
suspect they would, the 95 percent probability.
{time} 2015
The next chart shows a somewhat expanded application of this use of
statistics. A couple of Congresses ago, I was privileged to chair the
Energy Subcommittee on Science, and I wanted to determine the
dimensions of the problem. So we had the world's experts come in. And
they just about all agreed fairly unanimously that we probably had
about a thousand gigabarrels of oil remaining in the world, 940 to
1,030, something in that range. Now, we use gigabarrels because,
surprisingly, a billion in our country is different than a billion in
England. Apparently, a billion in England is a million million. One
billion in our country is a thousand million. But everybody knows what
a giga is; so we talk about gigabarrels. They now, using what they call
the mean, and 50 percent probability, Mr. Speaker, is not the mean, but
they say that if that is the mean, then they expect to find roughly
another thousand gigabarrels of oil.
Mr. Speaker, even if that is true, this chart shows us a very
interesting thing. The black curve here shows the actual production,
and we are about at a peak here, and most of the experts believe that
it will level off and then fall down, following a curve very much like
the upslope here. They believe that there is another thousand
gigabarrels of oil out there, roughly, that we are going to find. Eight
hundred, roughly, gigabarrels of oil that we are going to find. If that
is true, that pushes the peak only to 2016. That is only 10 years from
now, Mr. Speaker, even if they are right. And the odds that they are
right are very, very small. There is almost nobody else who agrees that
this is a proper use of statistics. Even if they are true, it pushes
the peak out only 10 years.
In the Hirsch Report, they said that if you did not plan for this
peaking at least 20 years ahead that you were going to have rather
serious economic consequences of that. Obviously, even if they are
right, it is only 10 years ahead; so we do not have 20 years to plan.
This curve shows another very interesting thing, and that is what
would happen if you really were very clever and worked very hard and
had some breakthroughs so that you could pump the oil more quickly? And
what they show there is that that might push the peak out to 2037,
roughly another 20 years. But look at the consequences of that, Mr.
Speaker. Notice the drop-off. It drops off almost like you have fallen
off a cliff. You obviously cannot pump oil that you have not found. And
if you pump it now, you cannot pump it later.
Let us read on the next chart what one of the world's experts on
energy says about the assumptions that they make here. Now, that was a
chart from the Energy Information Agency, but they get their basic data
from USGS. And this is what Gene Laherrere says about that: ``The USGS
estimate implies a fivefold increase in discovery,'' to give you that,
roughly, extra 800, 1,000 gigabarrels of oil, ``and reserve addition
for which no evidence is presented. Such an improvement in performance
is, in fact, utterly implausible given the great technology
achievements of the industry over the past 20 years, the worldwide
search and the deliberate effort to find the largest remaining
prospects.''
We now are very good. We have computer modeling. We have 3-D seismic,
and there is not much quarrel among the world's experts as to how much
oil remains and where it will be. The people actually out there looking
for oil do not have the wild disagreements that those who are back
modeling with computers have who are using what I think is an unusual
application of statistics.
The next chart shows us something that Albert Einstein would
encourage you to reflect on. He was asked, after he discovered nuclear
energy, ``Dr. Einstein, what will be the next great energy force in the
world after nuclear energy?'' And his response was that the most
powerful force in the universe was the power of compound interest. And
that is exponential growth, and these several curves here look at
exponential growth. The lower straight line there is not exponential
growth. It is 2 percent growth, and you extrapolate that out. In other
words, it is like putting your money in the bank and it gets some
interest, and every time you get some interest, you take the interest
out. That is this growth.
This curve line that starts out at the same place is what happens if
you leave your money in the bank and you are getting interest on
interest. It gets ever steeper and steeper and steeper because the
principal on which you are collecting interest grows and grows and
grows.
This is a 4 percent curve. This is a 5 percent curve. And, Mr.
Speaker, this is a 10 percent curve. It doubles in 7 years.
A good rule of thumb, by the way, is if you take the rate of growth
and divide it into 70, that will give you the doubling time. So 2
percent growth into 70 gives you 35 years doubling time. This, by the
way, is almost exactly the rate at which China and India are
growing. And they are going to need oil, Mr. Speaker, for that growth.
The next chart is a simple schematic which presents us with several
realities that we really need to reflect on. This is the 2 percent
growth curve. Now, I can make that growth very steep by compressing the
abscissa and expanding the ordinate here. But this is a 2 percent
growth curve. That yellow area represents the difference between what
you will have if we peak here and what you would like to have because
this is demand. That is that 2 percent demand curve from the previous
chart. And you see that you actually start to have a deficiency some
time before peaking. By the way, that yellow area covers 35 years. We
know that because this point is half as high as that point, and that is
a 35-year period. It doubles in 35 years.
So most of the world's experts believe that we are at or near
peaking. Now, this presents us with a couple of real challenges, Mr.
Speaker. We now have no surplus energy to invest in alternatives. Every
bit of the oil that we are producing is needed by the world's
economies. As a matter of fact, they would like to have more. Because
there is hardly enough oil to meet the demands, the price has gone from
$10 a barrel just a few years ago to $70 a barrel now. So if we are
going to have any energy to invest in alternatives, we are either going
to have to find a lot more energy somewhere else, and the next chart
will show how unlikely that is, or we are going to have to free up some
energy by not using all the energy we are using now. In other words, an
aggressive conservation program to push this peak down so that we have
a little bit of energy here to invest in alternatives. By the way, that
maybe is not a little bit.
Let me give you just one example of this investment. If you build a
nuclear power plant, it may take you 10 years to permit and build it.
Maybe we can shrink that, and I hope we can, to 5 years. That would be
pretty quick, Mr. Speaker, to shrink that to 5 years. Our present
nuclear power plants, you must operate them 20 years before you get
back the energy that you have put into them. Lots of fossil fuel energy
is used in making these nuclear power plants. What that means is that
with today's permitting and with today's nuclear power plant
efficiencies, it would be 30 years, if you started today, before you
would get any net energy. Now, maybe we can do better and shrink the
permitting and construction to 5 years, and maybe we can have more
efficient nuclear power plants so that it only takes 15 years for
payback. But even that, Mr. Speaker, 5 plus 15 is 20 years. What that
means is if you started today to build nuclear power plants, it would
be 20 years, best case, before you had net energy, and in the meantime
you are going to have to get the energy to produce the nuclear power
plants by depressing the present use of energy because we do not have
any spare energy. There is no surplus energy if, in fact, we are at
peak oil. That is what it means. That is peak. There is not going to be
any more.
The next chart is a really interesting one and shows essentially the
same things here. The bar graphs here show the discovery. And you
notice that we made some pretty big discoveries way back in the 1940s,
some really big ones in about 1950. And, boy, we really learned how to
find oil in the 1960s and
[[Page H3992]]
the 1970s. But at about 1980 our discovery of oil became less than our
use of oil. The heavy black line here represents the consumption of
oil, how much oil we have used. So for all of these years up until we
get to about 1980, we are always finding more oil than we use. We use
this much of it under the curve, but all this above the curve is now
surplus oil. It is reserve oil that we have to use in the future. We
have been eating into that reserve since about 1980 because, you see
here, we have found just this amount of oil, but we have consumed this
amount of oil; so this shaded area in between them represents the
amount of the reserves back here that we have used.
Now, you can within limits make the future look about any way you
wish, within some very realistic limits. First of all, you have to
decide how much more oil you are probably going to find. The world's
experts believe that we have probably found about 95 percent of the oil
that we are going to find. As a matter of fact, if I was extrapolating
and smoothing this curve, I would come out at a lower curve than they
would come out at. But that shaded area there, it is not going to be
that smooth, obviously. It has never been smooth. It is up and down.
But on average they believe that is the kind of oil that we are going
to find in the future.
There is one thing that is an absolute certainty. The area under the
consumption curve will not be greater than the area under the discovery
curve. That is the quantity that you consumed. If you take the area
under that curve, that is the total amount that you have consumed. It
is like adding up a whole bunch of little bar graphs. That is what we
have here is a bunch of bar graphs. And the area under the discovery
curve represents the oil that has been discovered. It is obvious, Mr.
Speaker, that you cannot pump what you have not discovered. So if you
are going to make the future look much difference than this, you are
going to have to make some different assumptions about how much oil you
are going to find in the future.
Now, you can get the oil a little more quickly by using some
aggressive techniques, enhance the oil recovery by injecting COG,
pumping seawater in it. And, by the way, the Saudis are now pumping
about almost two-thirds seawater, and they have always pumped some.
They flood the periphery of the fields with seawater to push the oil
into the center, and then they pump it out, and now they are getting
about two-thirds seawater. But never mind. Oil is different from water
and separates from water, usually lighter than water; although the
heavy crude may not be lighter than water, as the name implies. But it
is easily separated from water. So you now, Mr. Speaker, can kind of
predict what you think the future will be by looking at this curve,
remembering that you cannot pump what you have not found.
I would like to go back for just a moment to the previous chart I
showed that shows a challenge that we have, and that is the challenge
of the gap. The gap is the difference between what is available and
what you would like to use. Now, people have been focusing on filling
the gap. I would like to suggest, Mr. Speaker, that for a couple of
reasons that ought not be our focus. First of all, I am not sure that
we can fill the gap. And, secondly, since there is a finite amount of
fossil fuels in the world, if we fill the gap now, there will be less
to use later.
I am beginning, Mr. Speaker, to be more and more concerned about a
moral element to this discussion. We now are passing on to our children
and our grandchildren, not with my vote, but we are now passing on to
our children and our grandchildren the largest intergenerational debt
transfer in the history of the world. We cannot run our government on
current revenues. And we are now going to not only require our children
and grandchildren to run their government on current revenues, they are
going to have to pay back all of the money that we have borrowed from
their generation. Now, Mr. Speaker, should we compound the problems
that we are bequeathing to them by pumping now the oil and the gas that
they would need to sustain their economy? There is only so much there,
Mr. Speaker. If you pump it today, it will not be there tomorrow.
I am opposed to drilling in ANWR, not because of environmental
concerns necessarily. I think they do a very good job. They build roads
in the winter out of crushed ice. When spring comes, you cannot see
where the road was. They have a very small footprint. But, Mr. Speaker,
I am having a lot of trouble understanding how it is in our national
security interest. If we have only 2 percent of the world's oil and use
25 percent of the world's oil and import two-thirds of what we use, I
am having a lot of trouble understanding how it is in our long-term
national security interest to pump that little bit of oil we have got
as soon as we can. If we could pump ANWR tomorrow, what would we do the
day after tomorrow? And the day after tomorrow is when our kids and our
grandkids are going to be faced with the necessity of supporting the
economy and paying back the enormous amounts of money that we have
borrowed from their generation. So I am having a problem, Mr. Speaker,
with trying to fill that gap.
The next chart shows us what the SAIC study, the Hirsch Report,
suggested as a way to fill the gap.
{time} 2030
But notice that if you start now, and zero is now, that you don't
have hardly anything for at least 5 years. And then it slowly grows.
They are going to fill it with enhanced oil recovery. If we pump it,
our kids can't pump it. They are going to fill it with coal liquids. If
we use the coal, our kids won't have the coal. They are going to fill
it with heavy oil--oil is like the tar sands in Canada and the oil
shales in our country--and gas to liquids. If we use those things, our
kids aren't going to have those things.
You notice they don't have wind here. They don't have solar there.
That is because these now, although they in the future will be
enormously important, they provide minuscule contributions now. To ramp
those up is going to take more time than they thought was available.
And so you could get there quicker in filling the gap with exploiting
these finite resources that when they are gone, they are gone.
The only one which is sustainable is efficient vehicles. The average
car and light truck is in the fleet about 16 years, the average 18-
wheeler for 28 years. And so if you start using more fuel-efficient
cars, it takes a long time to turn over that fleet. You notice, they
didn't see a thing for about 5 years nearly, and then slowly increasing
the contribution that it made.
The next chart, Mr. Speaker, looks at what the options are that we
have. Obviously we are going to get our energy from somewhere. As we
slide down the other side of Hubbert's Peak, the world will be looking
for energy from other sources.
What will they be? Well, we have listed here, at least generically I
think, all of the potential sources. We have some finite resources: the
tar sands, the oil shales, coal, nuclear, two kinds of fission and
fusion.
Just a word about the tar sands. Canada calls them oil sands. It is
really tar. Its quality is little better than the asphalt parking lot
out here which, by the way, if you put a blowtorch on it will flow.
They now are mining that with shovels that have 100 tons in one shovel,
dump it in a truck that hauls 400 tons and then they cook it, heat it
up, to get the oil out.
You are told a lot of things, Mr. Speaker, and what we really need is
an honest broker so that we can have facts that we agree on. I don't
know whether this is true or not, but I am told that they are using
more energy from stranded gas; stranded gas is gas where there is
nobody nearby to use it and it is hard to ship so it is very cheap when
it is stranded. They are using more energy from natural gas than they
are getting out of the oil that they produce.
Dollarwise, it's a good bet. Eighteen dollars a barrel to produce it.
They're getting $70. That is really a moneymaker. But in terms of
energy-profit ratio, it obviously wouldn't be something that you would
want to do indefinitely. The oil shales in our country are very
difficult to exploit. Shell Oil Company has been there. It will be
2013, they tell us, before they will even decide whether it is
economically feasible to get that oil. There is an incredible amount of
oil there, more reserves there than all of the Middle East. But there
is probably also more energy in
[[Page H3993]]
the tides than all the oil energy in the Middle East, but because it is
so diffuse, it is difficult to get out and that is kind of the problem
with these tar sands and oil shales. Ultimately we will get them out,
but we are not going to get them out in large enough quantities quick
enough to fill that gap.
Coal. Let's put the next one up, then I will come back to this. I
just want to talk about coal for just a moment, because many people
will tell you not to worry about the future because we have got 250
years of coal out there. That is true; 250 years at current use rates.
But, Mr. Speaker, you remember those exponential curves we showed and
what happens with exponential growth. Albert Einstein says it's the
most powerful force in the universe. If you increase your use of coal
only 2 percent, and I will submit that when oil starts running down, we
are going to increase the use of coal far more than 2 percent to make
up that difference. By the way, it is pretty easy to liquefy it with a
Fischer-Tropsch technique. Hitler used it. We denied him access to oil,
which is, by the way, one of the reasons that he went to a second front
in Russia that lost him the war, because he was running out of coal. He
needed Russian oil, so he went to that second front in Russia.
With a 2 percent growth, that 250 years now shrinks to about 85
years. But you can't fill the trunk of your car with coal, so if you
are going to make a liquid of it or a gas of it, you are going to have
to use some energy to do that. So now that shrinks to 50 years. So we
have got 50 years of coal left, with only a 2 percent increase in
growth if you are going to convert it to a gas or a liquid. By the way,
with either a big economic penalty for cleaning it up or a big
environmental penalty if you don't clean it up, because almost all the
coal we have left in our country and in the world, for that matter, is
pretty dirty coal with high sulfur. The good clean stuff we have pretty
much used.
Now back to the first chart we were looking at, which goes through
the other things that we might use. These are the finite resources.
They are there. You need to husband them and use them wisely. We could
go to nuclear lightwater reactors, the kind we have now. There is a big
argument, by the way, as to whether we ought to go to more nuclear or
not. Twenty percent of all of our electricity, 8 percent of our total
energy but 20 percent of our electricity is produced by nuclear. In
France, that is about 85 percent produced by nuclear. You can either
have the lightwater reactors, but there is a finite amount of
fissionable uranium in the world, so by and by we will go to breeder
reactors, of which we have none. And in transporting that stuff and
enriching it, you produce some bomb-grade materials and so you have to
be very careful with that. You buy some problems with it. But breeder
reactors are what the name implies, breeder reactors, and they make
more fuel than they may use.
Then there is fusion. Mr. Speaker, if we get there, we're home free.
The analogy I use is if you think you're going to solve your personal
economic problems by winning the lottery, then we are probably going to
solve our energy problems with fusion. I think the odds are about the
same. That doesn't keep me from supporting that. We put about $250
million a year in it. I would vote more if there were more capability
out there, because it is the only energy source for the future where we
are really home free. So we need to explore it, but I wouldn't bet the
ranch that we're going to get there.
Then we have the truly renewable resources. They now are pretty much
in the noise level. Solar. Today, 1 percent. That is up. It is growing.
It grew 60 percent last year.
Wind. I think that grew about 35 percent last year.
Geothermal. That is real geothermal, tapping down into the molten
core of the Earth and getting water that is close enough to there that
it is hot. There is not a chimney in Iceland, I think, because they
have enough geothermal power.
Ocean energy. A lot of energy there. The tides, the waves, ocean
thermal gradients. But it is very diffuse. Very hard to harness. We are
trying. We need to do more there.
Agricultural resources. Soy diesel, biodiesel, ethanol, methanol,
biomass. In a couple of moments we will come back to talk a little more
about those and what confidence you ought to have that they are going
to make a really big contribution to our energy supply.
Waste energy is a really good one. That is burning trash instead of
burying it out there. There are places doing that. We have a great
facility up here in Montgomery County at Dickerson. They will be happy
to show you that. It really is very current state of the art.
Hydrogen from renewables. Just a quick word about hydrogen. Hydrogen,
Mr. Speaker, is not an energy source. We will always use more energy
producing hydrogen than we get out of hydrogen. Else, we will have to
suspend the second law of thermodynamics and if we can do that, we can
suspend gravity, and then we have lots of opportunities. Always we will
use more energy producing the hydrogen than we get out of it.
So why should we even bother? For two reasons. One is when you
finally burn it, you get only water. That is really not a pollutant.
The second reason is that if we are ever able to perfect economically
supportable fuel cells, hydrogen is very convenient to use in a fuel
cell.
I drove a fuel cell car the other day. We had an energy-efficient car
showcase out in Frederick, Maryland. The major manufacturers came out
there and brought their cars. I drove a fuel cell car. It cost a
million dollars. The fuel cell will last a couple of hundred hours. We
are working on fuel cells, but it will be a while before we get there.
But if we get there, and I think we will, then they have at least twice
the efficiency of the reciprocating engine. That is why we look at
hydrogen. It is not a savior. It will help.
The next chart looks at ethanol. This is an interesting chart. It
shows on the top that you need about 1.23 million Btus of fossil fuel
energy to get 1 million Btus in the tank of your car. Obviously it
takes energy to drill a hole and pump it out and refine it and
transport it and so forth.
This slide looks at energy from corn, from ethanol. This is about as
good as we will ever get. Many people tell me this is wildly
optimistic, but I think we can get there. What this says is that to get
1 million Btus of ethanol energy, you have got to put in .74, three-
fourths as many Btus as you get out. What that means, Mr. Speaker, is
that every gallon of ethanol that you burn in your car represents
three-fourths of a gallon of fossil fuel that it took to make the
ethanol. So a gallon of ethanol doesn't offset a gallon of gasoline. If
you make ethanol from corn, 13 percent of our corn crop will produce
enough ethanol to displace 2 percent of our gasoline. But you have used
a lot of fossil fuel energy producing, growing the corn.
This little chart at the bottom shows the energy input in producing a
bushel of corn. The big purple slice here, 40-odd percent, is nitrogen
fertilizer which today is made from natural gas. Mr. Speaker, I suspect
there is almost nobody off the farm who knows that when they are eating
broccoli that they are eating recycled natural gas, because that is
where the nitrogen came from to grow the broccoli.
These are all the other energy inputs from oil. Planting it,
harvesting, building the tractor, making the tires for the tractor.
If we were going to grow corn with the energy from corn, using that,
13 percent of the corn crop would replace 2 percent of our gasoline. We
would have to double our corn crop and use all of it for ethanol if we
were going to replace just 10 percent of our gasoline.
Mr. Speaker, this gives you something of the dimensions of the
problem that we face. There is a lot of talk about ethanol. Brazil
makes a lot of it from sugar cane. It is more efficient than corn. You
use the whole stock rather than just the kernel and they don't use much
fossil fuel energy. You see people down there planting it by hand,
harvesting it by hand, and so forth. So they do not have anywhere near
the fossil fuel energy input into their ethanol that we have.
By the way, we will never make ethanol from sugar cane in our country
because sugar is so high. I don't know how expensive gasoline would
have to be before we could afford to make ethanol from sugar, and that
is what it is made from. It is made by fermenting sugar.
[[Page H3994]]
I have a really interesting analogy that helps us understand this
chart. We are very much in our country like a young couple that has
gotten married and their grandparents have died and they have a big
inheritance and they have now established a lavish life-style, where 85
percent of the money they spend comes from their grandparents'
inheritance and only 15 percent from their income; but their income is
going to give out before they retire so they have obviously got to do
something. They have got to make more or spend less. That is exactly
where we are. Eighty-five percent of our energy, some people say 86, 85
percent of our energy comes from natural gas, petroleum, and coal and
only 15 percent from other sources.
{time} 2045
A bit more than half of that comes from nuclear. That could and maybe
should grow. We need to talk about the pros. By the way, I have friends
who were devoutly anti-nuclear. These were bright people.
But when they considered the alternative, which may be shivering in
the dark, nuclear is beginning to look better. Seven percent of the
total, and this is year 2000, we are a little better than that today,
but only 1 percent of 7 percent, that is .07 percent. That is a
trifling amount that came from solar. That has been growing.
Last year it was maybe 60, so now it is not up to .07 percent, but
maybe it is 1 percent. But it is still a very small amount. Wood, that
is the paper industry and timber industry wisely using a waste product
that probably is not available to the rest of us and probably can't
grow much to maintain our woodlands. Waste energy that ought to go and
could go.
Wind again, 1 percent, that has grown some. That is 1 percent of 7
percent, by the way. It has to get seven times bigger, to be 1 percent
of a whole thing. Congressional hydroelectric, that is not going to
grow in our country. Micro-hydro might.
China is really exploding in their use of micro-hydro. That is using
little streams where you probably don't have the environmental impact
that you probably do in the large streams. That could grow in our
country. We have not even begun to exploit that here.
Down here is agriculture, alcohol, fuel. That was about 20.07
percent. That is more now. That is growing, but still is very small
compared to the total amount of energy used.
Then geothermal. The next chart shows something really challenging.
The next chart shows the challenge we have of being more efficient.
Most energy you get out of an incandescent bulb is heat. That is the
blue here, the dark blue. The light is this little bit on top. Now to
get the same amount of light from a fluorescent, you produce only this
much heat. But look what happens when you go to a light emitting diode.
This is the light that is the heat.
If you think, that is why if you buy an LED flashlight you will
forget when you put the batteries in it, because they will last so long
compared to the length of time they last, where with the conventional
incandescent bulb, what, 90 percent of the energy goes to heat.
The next chart shows an interesting one. I wanted to show this,
because many people say not to worry, the market will take care of it.
There are many market worshippers out there who believe that the market
is both omniscient and omnipotent.
This is a little example of what has happened in this market. This
was the oil price by hike that didn't produce any commensurate increase
in production of oil. It is because it just wasn't there.
The market will work if there are infinite resources. Mr. Speaker,
there are not infinite resources here. The next chart shows that you
can live on less and live well. The average Californian only uses about
65 percent of the energy of the rest of us. That is because of the many
regulations they have out there with more demand, efficiency.
The next chart shows a very interesting one. This shows a
satisfaction with life. This shows satisfaction with life relative to a
GDP. Here we are. We have the highest GDP. But we don't have the
highest satisfaction with life.
There are a dozen countries that have a much smaller GDP per capita,
who are happier with life than we are. It is obvious that you can be
happy using less energy than we use.
The next chart is one that just is stunning when you first see it.
This is a history of the world. Only of 5,000 years recorded, this is
the last 400. We entered industrial age, wood, coal, appropriately
black, and then gas and oil.
Look what happened with gas and oil. It just explodes. It is standing
on its end. By the way, the population followed that. Half a billion to
a billion people here, nearly 7 billion people there.
Now, it will come down the other side as fast as it has gone up that
side. What will we do? The age of oil will be about another 100, 150
years, and then we will be through the age of oil.
The next and last chart shows what we have got to do. We have got to
buy time. We must depress our use of energy efficiency conservation so
we have some energy to invest in alternatives and some time in which to
do it. Then we must use it wisely. We need something equivalent of
DARPA. ARPA-E is a suggestion, some organization that looks at that
time energy we have got and the resources we have got. What is the best
bet. Where could we use it to get the most good.
There will be a number of benefits in that. America could again
become the industrial capital of the world. We could be exporting this
technology. Whether we like it or not, we are a role model. We are one
person out of 22. We use 25 percent of the world's energy. I genuinely
believe that if Americans understood the problem they face today they
would rise to the challenge.
I lived through World War II. Everybody was involved. I believe we
are creative and innovative, and we can solve this problem. I think you
could sleep really good when you went to bed tonight, recognizing you
used less energy today than you were yesterday, and you were happier
today than you were yesterday.
We need to face this challenge. We will face it. I think the earlier
we face it, the better off we will be.
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