[Congressional Record Volume 154, Number 118 (Thursday, July 17, 2008)]
[House]
[Pages H6717-H6724]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                PEAK OIL

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Maryland (Mr. Bartlett) is 
recognized for 60 minutes.
  Mr. BARTLETT of Maryland. Madam Speaker, I want to begin this 
evening's discussion by reading a little reminisce that was written by 
one of my staff members, Dr. John Darnell. He's imagining that he is 
talking to his granddaughter at some future date, and this little 
reminisce is called, ``Making It Through the Energy Crisis--Future 
Reminiscences with my Grandchildren.''
  ``Grandfather, tell us the story about the men who went to the Moon 
and barely made it back--and how that was like when the world 
discovered there wasn't enough oil.

[[Page H6718]]

  ``Oh, you mean Apollo 13. Yes, that story is very much like what 
happened back in the energy crisis of 2008, before you were born. What 
those astronauts had to do to survive was very much like what the world 
had to do.
  ``Tell us the story, Grandfather!
  ``Apollo 13 was one of many trips to the Moon and back, some 
returning without landing. This trip was planned to include a landing 
to explore the lunar surface. When they left Earth they were on a `safe 
return' trajectory so that if something went wrong, their craft would 
have automatically looped around the Moon and returned on the proper 
path for a safe landing. In order to land on the lunar surface, 
however, they had to adjust their trajectory for a better orbit for the 
landing. Once they had made that adjustment, they were no longer on the 
`safe return' trajectory.
  ``And, that's when the problem happened?
  ``Right! A sudden, loud bang announced the problem--there had been 
some warning signs that something was not right for some time before, 
but the controllers didn't know what to make of them--and in a similar 
way the early symptoms of the energy crisis were misunderstood and 
ignored.
  ``So, what was the loud bang?
  ``One of the liquid oxygen tanks that powered the command module's 
fuel cell and supplied oxygen to breathe had exploded! When they 
finally realized what had happened, they had to quickly shut off the 
oxygen to the fuel cell to save what was left. That meant there was no 
power for the command module. Fortunately, in planning the mission, 
they had rehearsed what they would do if the command module lost 
power--they would use the lunar lander as a `lifeboat'! That's like 
what we called 'contingency planning' in preparing for anticipatable 
disruptions of the world's energy supplies.
  ``So, that's how they got back safely?
  ``Well, yes, but that wasn't all there was to it--their problems were 
far from over.
  ``First, not only could they no longer land on the Moon, but the 
power and oxygen they had assumed would be available were now limited 
to what the lunar lander could supply--only intended for two people for 
a few days on the surface--which now had to be stretched out to supply 
three people for the trip all the way back to Earth.
  ``How could they get by on so little?
  ``By purposeful conservation! By that I mean that it was not enough 
to just use a little less energy; they had to use a lot less.
  ``The astronauts not only had to save enough to make it all the way 
back before their supplies ran out, they also had to have enough power 
to spare to operate the controls of the lunar lander during two course 
corrections.
  ``The world in 2008 faced a very similar problem: availability of 
fossil fuels had reached a peak and could not keep growing to match 
exploding demand, not to mention needs of business as usual. And, not 
only did the world have less energy available than it could have used, 
but, as with the astronauts, purposeful conservation was needed to save 
enough extra to have resources, including energy, to spare for 
investing in the shift to a more sustainable energy path.
  ``It sounds like the astronauts almost ran out of time if they hadn't 
changed course to speed up their return--which used up some of their 
reserves! How close did they come to running out?
  ``Very close. Every minute and every breath used up precious 
supplies--the time they bought by conserving made it possible to invest 
in the course corrections, with very little to spare! Not only that, 
but they had an unanticipated complication: carbon dioxide was building 
up in their atmosphere--they could have returned intact, but dead from 
asphyxiation!
  ``That's spooky--the world today has the same problem--how did they 
solve their problem?
  ``It wasn't easy! It took creative, out-of-the-box thinking and 
collaboration among the crew and backup crew on Earth, using a 
duplicate capsule on the ground. Eventually they were able to improvise 
a makeshift device, using materials on hand, including a sock, to adapt 
the command module's filter to the lunar lander.
  ``Of course, as you point out, there has been a parallel need to curb 
global carbon dioxide emissions that has limited choices of 
technologies as the world has shifted to a more sustainable energy 
economy. Conservation, itself, dramatic efficiency improvements and 
carbon-neutral and sustainable energy resources all have helped reduce 
greenhouse gas emissions far below 'business as usual' projections, 
while homegrown businesses and jobs have flourished far in excess of 
the losses in traditional industries.
  ``They were really lucky to have overcome all those problems to make 
it back safely when it looked like they didn't have a prayer!
  ``You're right; it was pretty amazing that they made it! Maybe more 
than you realize--when they made their course corrections, they had to 
use hand calculators and steer by hand to hit a reentry 'window' that 
was like the thickness of a sheet of paper four feet way. If they had 
missed it, their reentry vehicle would have either burned up or bounced 
off into space!
  ``But, it wasn't just luck. They had prepared and rehearsed 
contingency plans in case of anticipatable emergencies, so they didn't 
panic; instead they communicated, cooperated, collaborated creatively, 
and rose to the challenge with determination to do what was necessary 
to make it, even if it meant some hardship. And some prayer probably 
didn't hurt!
  ``It has taken a similar sense of determination, worldwide, for us to 
make it as far as we have in the transition to a sustainable energy 
economy. In the past 20 years we have come a long way toward that goal 
but there is still a long way to go. And it was by no means inevitable 
or easy. There were many points where it could have gone seriously 
awry. In the early years there was a lot of denial, anger and blame, 
and an impulse to fight over control of access to the remaining oil and 
gas.
  ``But, there is still oil and gas being used today--we didn't run 
out--why didn't they realize that we could switch to renewable energy 
sources like we use today?
  ``A lot of people thought we could do just that--along with a slew of 
other things that seemed reasonable . . . But, by the time the crisis 
hit, fossil fuel prices were killing the economy and everything cost so 
much that no one had any money to spare to invest in any of the 
alternatives . . . And, when the shortages hit, there was nothing ready 
to turn to as a substitute on the scale that was needed--time had 
become a scarce resource as well as money and energy itself! And, every 
proposed solution was competing for those same scarce resources!
  ``Reluctantly, people came to see that only one thing could 
accomplish what was needed: purposeful conservation! Even in the midst 
of the crisis, contingency plans could be implemented rapidly at almost 
no cost, buying time, saving money, extending the depleting resources 
and further reducing costs by falling demand resulting in lower prices.
  ``Conservation with the purpose of investing the conserved resources 
in greatly improved efficiency buys still more time and lowers the 
level of energy needed for a comfortable standard of living--a level 
that can be sustainably and affordably be supplied from a variety of 
sources.
  ``I see--since even efficiency takes time, money and energy, you have 
to start with purposeful conservation to buy time and be able to afford 
it and so on. But, today everyone seems to take that for granted--what 
made the difference?
  ``International cooperation instead of confrontation. Consuming 
Nations committed to reducing their consumption in concert with a 
calculated decline in production by producing countries--faster than 
natural depletion rates. This had the effect of making things 
predictable, creating reserves and extending the resource productivity, 
assuring that no one is tempted to seek an unfair advantage, and 
reducing competition for control of dwindling resources, that is wars.
  ``The second profound change has been the challenge of the 
'International Race to Sustainability.' Like the race to the Moon that 
spawned the Apollo missions, the Race to Sustainability has captured 
the imagination of innovators all over the world. Much of the resources 
that had been formerly dedicated to building military capability in 
anticipation of a struggle of control of fossil resources are now

[[Page H6719]]

being directed toward the prestigious goal of leading the Race to 
Sustainability.
  ``Now, as you know, there are ongoing competitions that demonstrate 
self-powered, zero energy communities, both new and retrofitted. Self-
powered, net food and fuel producing farms that are now commonplace, as 
increasingly are self-powered manufacturing in the renewable sector. 
Even transportation is becoming self-powered with the increasing 
deployment of highly efficient, Personal Rapid Transit networks.
  ``Wow, Grandfather, the way you tell it, the story of the world's 
transition to sustainability is almost as exciting as the Apollo 13 
story! We're so lucky to be alive to be a part of it!
  ``Yes, it is an exciting time to be alive! With new, highly efficient 
technologies, the energy available whenever there is access to 
sunshine, blowing wind, running water, the energy of the ocean or the 
Earth's heat, can bring prosperity! The world has never seen such 
widespread prosperity! Increased democracy, better education of women, 
health care are following close behind.
  ``Thank you, Grandfather,'' very much for this story.
  I read this because I think it sets in perspective what we want to be 
talking about today, and I have a chart here that kind of tells us 
where we are and what's been happening recently.
  This chart could go back through the 8,000 years of recorded history, 
and it would look just the same as it does in these last 400 years of 
recorded history. The amount of energy being produced would be very 
low, not discernible from the baseline as a matter of fact, and now we 
start with the Industrial Revolution using wood here, and you see the 
increased energy production. And then we learn to use coal, and boy, it 
shot up. But then when we learned to use gas and oil, it really took 
off. And that curve is one that we're going to see several times in the 
charts that we're going to see just in a few moments, and this curve is 
on a very compressed abscissa. So it's a very sharp curve.
  It shows a couple of very dramatic things. First of all, it shows 
that the rate of increase in the use of gas and oil up through the 
Carter years was on such a trajectory that it would now be well off the 
top of the chart if something had not happened. That something that 
happened was the oil embargoes in the 1970s and the oil price spike 
hikes that inspired people to be more efficient. We actually had a 
recession.
  Here you see it as a drop in the demand for oil around the world, and 
it's not so plain on this chart because the abscissa is so compressed. 
We're going to see it on subsequent charts.
  The rate of increase in the use of oil is now on a very much lesser 
slope than it was at the beginning. It's interesting to note that the 
world's population essentially followed this curve. The world's 
population started out down here through about 8,000 years of recorded 
history at something like half a billion or so people around the world, 
and now it's increased to what, nearly 7 billion people. If we had a 
population on here, it would pretty much follow the rate of increase in 
the use of fossil fuels here, the release of energy. That's because our 
quality of life has been so much affected by this incredible amount and 
quality of energy that we've found under the ground.
  The next chart takes us back a few years to show us how we got here 
and the warnings that we have had, that we were going to be here. Oil 
at $140 a barrel was not unanticipated if you had looked at the warning 
signs. And incredibly, most of the world and most of the leaders in our 
country have chosen to ignore or not look at these warning signs.
  Back in 1956, it was on the 8th day of March, a very famous speech 
was given by M. King Hubbert to a group of oilmen in San Antonio, 
Texas.

                              {time}  1645

  And what he predicted was that by 1970 the United States would reach 
its maximum oil production. Now, that was preposterous when he made 
that prophesy because we were then king of oil, I think producing more 
oil, consuming more oil and exporting more oil than any other country 
in the world. And to suggest that in just 14 years no matter what we 
did we would reach our maximum capacity for producing oil was just 
silly to those who listened to it. But right on schedule, in the 1970s, 
you can see from the chart here, we reached our maximum oil production, 
just as M. King Hubbard had predicted. He became a legend, an icon in 
his own lifetime.
  This chart shows us another thing, and that is the attempt by one of 
the groups out there who are still kind of in denial about whether or 
not we're reaching that point where the world has no more ability to 
produce an increased amount of oil. CERA, Cambridge Energy Research 
Associates, they use this chart to try and convince you that M. King 
Hubbard really didn't know what he was talking about.
  The ``Hubbard curve'' was the lower 48 prediction here, and the 
actual oil production from the lower 48 are the green squares. And 
maybe a statistician could convince you that those are different 
curves, but I think to the average layman, gee, M. King Hubbard had it 
pretty right, this is what he predicted would happen, and this is what 
happened.
  Now, if you take the total U.S. production, because we found a lot of 
oil in Alaska and we found a lot of oil--we have about 8,000 wells in 
the Gulf of Mexico--and if you add those two production sites to the 
lower 48, which he predicted, you see we get just a blip in the slope 
down the other side of Hubbard's peak.
  Now, I want you to take a look at where we were in 1980. That's about 
here. And you're looking back and you can see, gee, M. King Hubbard was 
really right, wasn't he? The world did reach its maximum oil production 
in 1970.
  And I'm going to use this time period, 28 years, because I think that 
we had known, of an absolute certainty, for 28 years that we were going 
to be here today. M. King Hubbard was right about the United States; we 
peaked right on schedule. I think it was in 1979 that he predicted the 
world would be peaking about now.
  Now, if he was right about the United States--and the United States 
is certainly a microcosm of the world--why shouldn't he be right about 
the world? Essentially no attention was paid to this. Essentially no 
preparation was made for the inevitability that the world would reach 
this maximum production.
  The next chart looks at where the world has been and where the world 
is going relative to oil production.
  There are a number of bars here which show when oil was discovered 
and how much of it was discovered. Notice that the first discoveries 
were in the forties, and then, boy, some really big fields found here 
in the fifties. And then most of it found in the sixties and peaking 
about '80. But ever since the sixties it's been down, down, down. And 
that's in spite of ever-more incentives to find oil, in spite of ever-
better techniques to discover oil, like computer modeling and 3-D 
seismic. And we now have a pretty good notion of the Earth's geology, 
and it's known that oil can exist only in certain unique geologic 
formations.
  The solid black line here indicates the consumption, the worldwide 
consumption. Now, we saw that curve on the first chart we showed you. 
There we had really compressed the abscissa here because we have 400 
years instead of 100 years on it. And remember that curve was going up 
very sharply and then there was the recession during the seventies? And 
then a much slower rate of increase because today we have much more 
efficient air conditioners and refrigerators and freezers and so forth. 
We better insulated our homes. We used to do a lot of things to 
conserve energy. Note where this curve would be now if this rate of 
increase had continued. It would be off the top of the chart, wouldn't 
it? So the embargoes of the seventies and the oil price hikes then were 
really a blessing in disguise because it encouraged us to do what we 
ought to have been doing even before that, and that was to become more 
efficient.
  Now, what will the future look like? Now, that depends upon how much 
more oil you think we're going to find. But I would just caution that 
one needs to keep in mind this chart that shows what we have found. 
With ever-increasing incentives to find oil, it's been down, down, 
down.
  Now, the creators of this curve kind of predict what they think the 
future

[[Page H6720]]

looks like, and they have oil peaking in production about now, which is 
about when M. King Hubbard said it would peak in production. Notice 
that since the eighties we have not been finding as much oil as we've 
been using, so we've filled in that difference between what we found 
and what we use by borrowing from the reserves back here. Everything 
above this line is a reserve. So we've been borrowing from these 
reserves.
  We have a lot of these reserves left. And their projection for future 
discoveries--and I would have drawn the curve a little lower--but their 
projection for future discoveries is this curve. It's not going to be 
smooth like that, it's going to be up and down, but on the average, 
probably about that. So you've got to fill in the difference between 
what we discover and what we use by borrowing from the reserves back 
here.
  Now, you can't pump what you haven't found. So if you think the 
future is going to be much different from what they project, then you 
have to believe that we're going to find a whole lot more oil than they 
believe.
  The next chart. I mentioned the speech by M. King Hubbard that I 
thought was probably the most important speech of the last century. And 
I think that this one is the most insightful speech of the last 
century. This was a speech given by Hyman Rickover, the father of our 
nuclear submarine, to a group of physicians in St. Paul, Minnesota on 
the 4th day of May, 1957, just a bit, a year after M. King Hubbard had 
given his speech. Now, I don't know if Hyman Rickover knew of M. King 
Hubbard, I don't know if he had read that speech. But these are a 
couple of things that he said, which I think are so obvious.
  ``There is nothing that man can do to rebuild exhausted fossil fuel 
reserves. They were created by solar energy,'' he said, ``500 million 
years ago and took eons to grow to their present volume.
  ``In the face of the basic fact that fossil fuel reserves are finite, 
the exact length of time these reserves will last is important in only 
one respect: The longer they last, the more time do we have to invent 
ways of living off renewable or substitute energy sources and to adjust 
our economy to the vast changes which we can expect from such a 
shift.'' Wow, this was 51 years ago. We were then about 100 years into 
the age of oil, which he called this ``Golden Age.''
  I really love this paragraph because I think it is such an apt 
description of where we are and who we are and what we're doing, which 
he felt, and I feel, is immoral.
  ``Fossil fuels resemble capital in the bank. A prudent and 
responsible parent will use his capital sparingly''--I haven't noticed 
that the world has been doing that with fossil fuel--``in order to pass 
on to his children as much as possible of his inheritance. A selfish 
and irresponsible parent will squander it in riotous living and care 
not one whit how his offspring will fare.''
  I think of this statement when I hear the pleas of those who say, 
``Drill now, drill more, pay less.'' And the unfinished part of that 
sentence is, ``We don't really care about what happens to our kids and 
our grand kids, we want it now.''
  Another counsel in Hyman Rickover's speech--and he says this 51 years 
ago, I don't hear our leaders saying this today--``I suggest that this 
is a good time to think soberly about our responsibilities to our 
descendants--those who will ring out the Fossil Fuel Age.''
  Hyman Rickover knew we were 100 years into the Fossil Fuel Age; he 
didn't know then how long it would last. Remember he said that no 
matter how long it lasted, the only important thing was that the longer 
it lasted, the more time that we have to plan an orderly transition to 
renewable fuels.
  We might give a break to these youngsters by cutting fuel and metal 
consumption so as to provide a safe margin for the necessary 
adjustments which eventually must be made in a world without fossil 
fuels. How much better off would we have been as a country and as a 
world if 51 years ago we had listened to Hyman Rickover, who said this 
is a good time to think soberly about our responsibilities to our 
descendants. I have 10 kids, 16 grand kids and two great-grand kids, 
and I am genuinely concerned about what I'm going to leave to my kids.

  Have we reached peak oil worldwide? This is in dispute by many 
people, but I just want to give you the data compiled by the two 
entities in the world that most effectively follow the production and 
consumption of oil. This is the IEA, the International Energy 
Association, and the EIA, the Energy Information Administration; the 
prior a European entity, and the latter a creature of our Department of 
Energy.
  Here is their data, and they have pretty good concurrence. For about 
the last 3 years they show oil production worldwide as being flat. And 
what has happened in that 36 months? That oil production has been 
constant. Try as we might, the world has not been able to increase oil 
production for 3 years.
  Three years ago, oil was about $52 a barrel. Today, it's $130, $140 a 
barrel. This is exactly what one would predict would happen with the 
constant supply and increasing demand. This kind of is, energy-wise, 
the perfect storm, because just at the time that the world has probably 
reached its maximum capacity to produce oil is just the time that the 
third world, led by India and China, are industrializing and demanding 
more and more oil.
  Our rate of increase in the use of fossil fuels is only about 2 
percent in our country, it's only been about 2 percent worldwide, but 
that is now increasing. The growth rate in India and China, they're not 
at all happy with 2 percent. The last data I saw, China's economy was 
growing at 11.7 percent a year, and their demand for oil was even 
greater than that because in this rapidly growing economy they haven't 
taken the time to make sure they're using these energy sources 
efficiently.
  And it's not that we haven't been warned. We certainly knew from M. 
King Hubbard and what happened in 1970 in our country, and by 1980 we 
knew of an absolute certainty that M. King Hubbard was right about our 
country peaking in 1970. And by the way, we have drilled more oil wells 
than all the rest of the world put together. In spite of that fact, we 
produce only about 8 percent of the world's oil and that's because we 
have only about 2 percent of the world's reserves.
  Your government has paid for four major studies--they've resulted in 
five reports because one of the studies resulted in two reports--on 
this issue, and two of those were in '05. This was the first big report 
called the Hirsch Report, for the senior investigator on it, by SC IC, 
a very large, prestigious international engineering science 
organization. The second was a report later on in '05 by the Army Corps 
of Engineers. Then we had two reports in '07, just last year. The 
Government Accountability Office did a study, and at the request of the 
President and the Secretary of Energy, the National Petroleum Council 
did a study. And all four of these studies, in different words, said 
that the peaking of oil is a certainty. It's not if, it's when. The 
peaking of oil is a certainty. And it's either present or imminent, 
with potentially devastating consequences.
  There are some really interesting and important geopolitical 
considerations, and this next chart looks at those. This is really an 
interesting chart. This is the ``World According to Oil.'' And this is 
what our globe would look like if the size of the country was relative 
to how much oil reserves it had. And we see some very interesting 
things here. Saudi Arabia dominates the planet. That's because Saudi 
Arabia has about 22 percent of all the oil reserves in the world. We 
think that's what they have. You see, most of the oil reserves are held 
by countries like Kuwait and Iran and Saudi Arabia and Iraq. We know a 
little bit more about Iraq because we're there, but these other 
countries hold their data very close. The world community cannot look 
at their data. We know what they're producing because we buy it. We 
really don't know what the reserves are. So these are estimates as a 
result of what they tell us they have in reserve. We hope there is that 
much there.
  Some interesting things about this ``World According to Oil.'' Look 
at the United States over here. We have 2 percent of the world's oil. 
We're 50 percent of the land mass of the globe in the ``World According 
to Oil.'' And a very interesting thing is that the country from which 
we get our biggest supply of oil, Canada, has about half the oil

[[Page H6721]]

that we have in the lower 48 and Alaska.
  The country from which we get our third largest--it used to be the 
second until a few months ago--Mexico, has considerably less oil than 
the United States. Now, Canada can export oil because there are not 
very many Canadians. The Mexicans can export oil. Although there are a 
lot of them, they're so poor they can't afford to use it, and so 
they're exporting.

                              {time}  1700

  But this shows that the first and third suppliers of oil in our 
country are very small reserves. They have between them about the same 
amount of reserves that we have, that is, about 2 percent of the 
world's reserves.
  Another very interesting thing to look at is the size of China and 
India. More than a third of the world's population, about 2.4 billion 
people out of a little bit less than the 7 billion people we have. And 
look at their size. You can hardly find Japan here because Japan is 
almost totally dependent on outside sources of energy. But these two 
huge countries demanding more and more energy and they are dwarfed by 
Russia. Russia has maybe three or four times, three times the energy 
that we have. They don't have all that much compared to giants like 
Saudi Arabia, but they, I think, may be the world's largest exporter 
because they are very aggressively pumping the oil that they have.
  The next chart shows us a logical consequence of this. I mentioned 
how small the reserves in China are; so what is China doing about that? 
And this chart shows what they're doing about it. This is a map of the 
world, and it shows where the Europeans have invested, where the 
Russians have invested, where we have invested, and where China has 
invested. Where you see a dollar sign, and I don't see very many of 
them, is where we have invested. This symbol you see where China has 
invested, and you see it all over the world. They even tried to buy 
Unocal in our country. But China is now buying oil all over the world, 
and they aren't just buying oil, they're buying goodwill. Do you need a 
soccer stadium, a hospital, roads? Why is China doing this? Because in 
today's world, it doesn't make any difference who owns the oil. It is a 
global commodity. He who comes with the dollars gets the oil. I hope it 
continues to be dollars. If it's euros or something else, our economy 
is even in more trouble. So why are they buying oil all around the 
world? Of course, you can't get inside the heads of the leaders there, 
but you can only guess why they are doing it from some other things 
that they're doing.
  One of the other things they're doing is very aggressively building a 
blue-water navy. They're building their navy much more aggressively 
than we are and much faster than we. They launched--the exact number 
I'm not sure of, but maybe ten or so submarines last year; we launched 
one. Their navy will soon be bigger than ours, nowhere what our Navy 
is.
  China this year will graduate six times as many engineers as the 
United States graduates, and about half of our engineers are going to 
be Chinese and Indian students. The Chinese will graduate more English-
speaking engineers in China than we graduate the total number of 
engineers in our country. It is impossible for a country that is so 
aggressively pursuing education in these technical areas, with a huge 
population and a great work ethic, to not be a serious challenge to us, 
by and by, economically and militarily.
  Is this huge navy that they're building necessary because they want 
to be able in the future to use their oil and not share it with the 
world, as now you must? In order to use their oil, they are going to 
have to have a navy big enough to protect the sea lanes so that they 
can have access to their oil.
  The next chart, this chart shows the 10 companies on the basis of oil 
production and reserve holdings. Now, we have giants in our country, 
oil companies, ExxonMobil and Chevron and Royal Dutch Shell and so 
forth, and many people believe the price of oil is high because somehow 
they're gouging us. The bar on the right here shows the reserves of 
oil, and these are the top 10 companies or countries that hold oil 
reserves. And you see that 98 percent of all of the top 10 are oil 
countries, where oil is owned by the country. Now, that was pretty 
obvious from that chart we had that showed the world according to oil, 
but this puts it in bar chart form.
  Luke Oil, which is kind of independent of Russia, has only 2 percent 
of the 100 percent of the oil that's owned by the largest 10.
  The bar on the left here shows production. This is not who owns it 
but who is producing it. Now, even though these people own the oil, our 
oil companies might be producing it for them. But that's not true 
because, you see, if you take the top 10 in the production of oil, 78 
percent are these companies in North Africa and the Middle East, and 
only 22 percent is represented by the giants: ExxonMobil, Royal Dutch 
Shell, BP. Only 22 percent represented by these giants.
  The next chart shows some numbers that shocked a number of our 
people. And the President has a letter from at least 3 years ago now by 
30 prominent Americans: Boyden Gray and McFarlane and Jim Woolsey and 
27 others, including several retired four star admirals and generals, 
really concerned, telling the President: Mr. President, the fact that 
we have only 2 percent of the world's oil and use 25 percent of the 
world's oil and import about two-thirds of what we use is a totally 
unacceptable national security risk. What if we didn't have access to 
that oil? They said this is a problem we have really got to fix.
  Now, we are really good at pumping oil. You see our little 2 percent 
of the oil reserves results in 8 percent of the world's production. So 
our oil wells are going to be pumped down quicker than the average oil 
well in the world, and we have actually less than 5 percent of the 
world's population. We have about 1 person out of 22, and this 1 person 
out of 22 uses a fourth of all of the oil in the world. This is not 
lost on other nations. They understand this, and they are watching us 
to see what we do.
  The next chart is a chart from the first study that I mentioned, the 
Hirsch Report, which resulted in two publications. And this is a chart 
which shows us very explicitly what T. Boone Pickens is telling us in 
his ads, that you're not going to drill your way out of this one.
  Now, this chart makes what I think and what others think is a grossly 
unrealistic projection, and that is that we're going to find as much 
more oil as all the reserves yet to be pumped in the world. Now, as 
LaHerrere says, this is an absolutely implausible projection. Remember 
that big chart showing the down, down, down, and they are suggesting 
that's going to turn around and produce as much more oil as all the 
known reserves in the world today. And even if that happened, even if 
that happened, it would push the peaking of oil out to only 2016, it 
says here. This is one of the reasons T. Boone Pickens says you're not 
going to drill your way out of this.
  Oil consumption up through the Carter years was so great that every 
decade--and think about this. This is a stunning statistic. Every 
decade we used as much oil as had been used in all of previous history. 
Had that curve continued, when you've used the half the oil, which is 
where I think we are now, you would have 10 years of oil left. And 
that's not 10 years at this rate because in the future it's going to be 
harder and harder to get. That's what has happened in the United 
States, harder and harder to get, less and less of it, and because of 
the world's supply and demand, ever higher and higher prices.
  Look what happens if you find ways to get more of it out. Then you 
really fall off. If you're concerned about your kids and your 
grandkids, you would like to leave a little something for them. But 
even if you did that, it pushes the peak out only to 2037, this chart 
says.
  Now let's look at energy and how much we use and where it comes from 
because this will tell us what our options are for the future and what 
our challenges are for the future. I would like to use an analogy 
relative to this chart which I think is easy to understand. A young 
couple whose grandparents have died and left them a considerable 
fortune, and they have established a life-style where 86 percent of the 
money they spend comes from their grandparents' inheritance and only 14 
percent of it comes from what they're

[[Page H6722]]

earning. And they look at how old they are and how long they're likely 
to live, and they say, ``This is going to run out before we retire. We 
have got to do something.'' There are only two things they can do, one 
or both of these. Either they can use less, spend less, or make more. 
And that's precisely where we are in terms of energy, that 86 percent 
of all of the energy we use is our grandparents' inheritance. It's 
fossil fuels that were placed in the ground a very long time ago over a 
very long time span. And we now are removing them from the ground in a 
very short time period. And, of course, one of the consequences of this 
is we are now dumping into the atmosphere CO2 that had been 
sequestered from the atmosphere over a very long time period in the 
past. We're now releasing that into the atmosphere in a very short time 
period. And many people are concerned about this increase in 
CO2 and what it's doing for global warming and climate 
change and so forth.

  Only 14 percent of the energy we use comes from sources other than 
coal, natural gas, and oil. But eventually as we run down, and oil and 
gas and coal are not forever--that's obvious that they are finite, that 
they will run out. The only question is when we are going to reach the 
peak and how long it will take before we run down the other side of the 
curve of the age of oil. So ultimately we are going to be living 
entirely on renewable energy and nuclear energy. Now, we may add some 
additional renewable energies here. We're the most creative, innovative 
society in the world, and what we can do when we have to is just 
absolutely incredible.
  Note that a bit more than half of all of the energy we use that's not 
fossil fuels comes from nuclear. It's 8 percent of our total energy 
used. It's about 20 percent of our electricity. If you were in France, 
it would be about 80 percent of your electricity. So, clearly, that 
could grow. I know some people that have been really opposed to 
nuclear, but these are bright people, and when they look at a probable 
alternative to not producing more nuclear, which is shivering in the 
dark because of lack of energy, more nuclear doesn't look like a bad 
alternative to shivering in the dark; so they now are more focused on 
the potential of renewables and nuclear.
  And here we look at the present renewables, and you see 
hydroelectric, and that's probably not going to grow in our country. We 
have dammed about every river we should and maybe a few that we 
shouldn't have. The biomass, that can grow a little bit. That's 
primarily energy produced by the timber industry and the paper 
industry, wisely, using a byproduct that would otherwise go to the 
landfill.
  Solar and wind here are just trifling. They are a tiny part of the 6 
percent here. And they are growing. They are growing like 30 percent a 
year. But when you start out so small, even 30-percent-a-year growth 
represents a tiny, tiny percentage of our total energy.
  Geothermal here is true geothermal. It's not hooking your air 
conditioner to ground temperature, which you really ought to do. If you 
don't do that, what you are trying to do in the summertime to cool your 
house is to heat up the outside air. If what you're trying to do is 
heat up the ground, which is 56 degrees, that's a whole lot easier than 
heating outside air, which is 100 degrees. And the reverse is true in 
winter, of course.
  The next chart shows the U.S. energy consumption by sector. And this 
is important because where are we going to have our real challenges in 
energy production? About 40 percent of our energy is electric power, 
about 28 percent of our energy is transportation, 21 percent 
industrial, and residential and commercial is about 11 percent.
  The next chart looks at where we get the energy from for electricity. 
Mostly we are talking about liquid fuels, but electricity is also a 
challenge.

                              {time}  1715

  And the take-away from this discussion is that the future for 
transitioning to renewable alternatives for electricity is a very much 
brighter future than transitioning to fossil fuels.
  And here we look at what we're producing electricity from today. 
Almost half of it is from coal, natural gas, nuclear and hydroelectric. 
And that can't go a whole lot. Microhydro might be as big as this by 
the way without the impacts on the environment that this big macrohydro 
does by damming up rivers. Petroleum, very little petroleum produced 
here. Other gases and other forms of energy, pump storage and so forth 
you see there. Now in a fossil fuel deficient world, coal is going to 
go away eventually. Natural gas is going to go away eventually. And the 
petroleum, liquid fuels and coke will go away eventually.
  The next chart is a blowup of a tiny part of that chart. And this 
shows renewables. Only 2\1/2\ percent of our electricity is produced by 
renewables. It is really small. One-thirtieth of our electricity is 
produced by renewables, and much of that by wood. And if we want to 
sustain our forests and still build houses--and we're having trouble 
stabilizing that now--we probably can't grow that a whole lot. Wind, 
boy, that can really grow. I look around and I see almost no wind 
machines, and I see leaves on the trees blowing everywhere. And so we 
could have a whole lot more wind machines and a whole lot more energy 
from that. Waste. That could and should grow. But I will caution that 
that is self-limiting. That waste stream you see go to the county 
landfill--and watch what is dumped in the county landfill. Almost 
everything dumped there is going to be the result of profligate use of 
fossil fuels. And in a fossil fuel deficient world, that waste stream 
is going to be very small. We ought to be burning it. I think that is a 
better alternative than putting it in a landfill. What is even better 
is we ought to be recycling where that is appropriate. But burning is a 
good idea. But that is not a solution to our problem. And it's not a 
true renewable. It's a sensible thing to do. But it's not a true 
renewable, although it's listed here because it's dependent on the use 
of fossil fuels for using most of it. And they're going to wind down. 
There will be less and less of that.
  Geothermal, that could grow probably a lot because there are several 
places in our country where we're near enough to the molten core of the 
Earth, and we can tap into the heat of the Earth. And that is 
essentially an inexhaustible source of energy. In Iceland, I saw not a 
chimney in Iceland because all of their energy comes from geothermal.
  Solar PV. Wow, I'm a big fan of that. China and Japan have the six 
largest companies in the world. We used to lead in that area. We have 
lost that lead. Now six of the largest producers in the world are in 
China and Japan. That is growing at about 30 percent a year. And wind 
is growing. Wind is bigger and growing very fast. But we're talking 
here about percentages of 2\1/2\ percent. This is 1 percent up here. 
Notice down there that our solar today is a tiny, tiny part of 1 
percent, like 1/100th of 1 percent.
  The amount of energy that we get from fossil fuels is just 
incredible. The world uses about 85 million barrels a day. We use a 
little over 21 million barrels a day, about one-fourth of that. And 
each barrel represents the work equivalent of 12 people working all 
year. It has been so cheap, such a high quality and so easy to get. 
When oil was $12 a barrel, in terms of life improvement by using 
energy, you could buy the work equivalent of one man all year long for 
$1. This is why Hyman Rickover referred to this as a ``Golden Age.''
  About a year and a half ago, I had the privilege of leading a codel 
of nine of our Members to China. And I was shocked. My colleagues were 
shocked when we started talking about energy with China. They talked 
about post oil. Post oil. We have trouble in our country thinking 
beyond the next election or thinking beyond the next quarterly report. 
In China, they seem to think in terms of generations and centuries. 
There will be a post oil world. And they're looking at what needs to be 
done to get there in an orderly fashion. They have a five-point plan. 
And everybody we talked to there knew it. Everybody knew. No matter 
what sector of government we were in, they talked about the five-point 
plan.
  Number one is conservation. Do you remember the little story I read 
about the grandfather telling his grandchildren the story of Apollo 13 
and the analogy of that to our transition from fossil fuels to 
renewables, or at least 20 years of it? It all began with purposeful

[[Page H6723]]

conservation. That is the number one thing we have to do. That is not 
just riding in a Prius rather than an SUV. Coming to work the other 
day, I noticed in front of me was an SUV in one lane with one person in 
it, and a Prius in the other lane next to it with two people in it. I 
thought to myself, the people in that Prius are getting six times the 
miles per gallon per person as compared to the person riding in the 
SUV.
  We have enormous opportunities for conservation. Enormous 
opportunities for conservation. Then, domestic sources of energy 
alternatives and diversify, get them from home if you can, and the 
fourth one may surprise you. They're concerned about the environment. 
Although they are the world's biggest polluter, they have 900 million 
people, three times our population in rural areas, and through the 
miracle of communications, they know the benefits of industrialization, 
and they're demanding them. They are demanding them. And I think China 
sees their empire unraveling like the Soviet empire unraveled if they 
can't meet the needs of these people. And so they have a huge, huge 
challenge in pollution and environmental impact.
  The fifth point is one that is very interesting. Even though they are 
buying up oil all over the world, because they think we may have 
confrontation, they are building a big blue water Navy, and they are 
going to own their own oil. They are pleading for international 
cooperation. Do you remember in the little story we read about the 
grandfather and his grandchildren? It was international cooperation, 
spending our money on the race to sustainability rather than on weapons 
that could destroy each so other so that we could have more of the oil 
that finally got us through this huge challenge that we face.
  What America needs to do, I think we need to have a program that has 
the total commitment of World War II. I lived through war. I was born 
in 1926. If you're doing the arithmetic, yeah, that makes me 82 years 
old. But I remember that war. We had victory gardens. We had daylight 
savings time. Everybody grew a victory garden who could. They cleared 
vacant lots in New York City. And you could see the pictures of the 
rubble in the middle and the vegetable gardens growing between the rows 
of rubble. No new cars were made in 1943, 1944 and 1945. The cars back 
then were either 1942 or 1946 cars. Everybody saved their household 
grease and took it to a central repository. Everybody was involved. It 
was the last time our country was at war. Our military has been at war 
since then, our military families have been at war since then. But our 
country was at war then. Everybody was involved. That is what is going 
to have to happen if we're going to make it in an orderly fashion 
through the exciting challenges that we face. We need to have the 
technology intensity and focus of the Apollo program. Huge technology. 
I remember the cartoon of the little red-headed freckle-faced boy who 
said ``6 months I couldn't even spell `engineer' and now I are one.'' 
And everybody wanted to be involved in engineering. And we were focused 
on that program. How it riveted America. We need the urgency of the 
Manhattan project. And this is not going to be cheap. But living 
without oil is not going to be cheap either.

  What are we doing about it? The next chart shows what I have been 
personally doing about it. I have a bill that is a companion bill to a 
Senate bill S. 2821 which passed 88-8, and our bill is 5984. What it 
does is to extend the alternative energy tax credits. With oil at $140 
a barrel, it still isn't high enough for the business world to make 
investments. And so they have got to be encouraged to do that. And this 
is one of the things that government can do with tax credits is 
encourage the right thing there. We really need to do that.
  Renewable domestic sources, H.R. 6107. Peak Oil Caucus and 
resolution. We have a resolution and a Peak Oil Caucus with about equal 
numbers of Republicans and Democrats. These are members that recognize 
that peak oil as an inevitability and a huge challenge. I'm really 
enthusiastic about ARPA-E. DARPA has been enormously effective for our 
military. I think we need a similar thing for our energy. ARPA-E, 
deciding where to invest the precious time and dollars in energy that 
we have. What is likely to pay the biggest benefit?
  I am a big fan of improving CAFE standards. H.R. 80 is self-powered 
farms. If our farms can't be energy independent and produce a little 
bit of energy for those in the city, we're in trouble, aren't we, for 
the future? Tax credit for hybrids. We really need to do that. It's 
still cheaper not to buy the hybrid even with gas at $4 a gallon. But 
you really need to do that because we need to conserve the oil because 
we need it for other purposes. So we need tax incentives to buy more 
hybrids.
  Fuel flexibility, neutrality, plug-ins. It costs only about $100 more 
to make a car that can burn any fuel, any reasonable fuel. They do 
that. Every car made in Brazil is that kind of a car. Well, can we do 
this and live happily? The next chart is an interesting chart. This 
looks at some quantitative measures of quality of life, such as how 
long you live, your education level and relative income. And that is on 
the ordinate. Here on the abscissa is how much energy you use. Of 
course, we are all alone, way out there at the right. We use more 
energy per capita than anybody else in the world. But on these 
quantitative things, are we that much better off than other countries 
in the world? No, not at all. There are a number of countries using 
essentially the same amount of energy that we use that live as long, 
have as high an education level and have the same relative income that 
we have. A number of countries here.
  The next chart shows a subjective look at this. And this is even more 
compelling. What we're doing here is simply asking people, how good do 
you feel about your quality of life? Here we are. We feel pretty good 
about quality of life. But notice there are 22 countries I think who 
feel better about their quality of life than we do. The former chart 
was qualitative. This one is quantitative. They feel better about their 
quality of life than we do and use very much less energy. They use half 
as much energy as we do. Yes, we can consume much less energy and still 
live a very high quality of life. Lots of other people are doing it.
  The next chart shows what can happen in our country when there is an 
incentive. The people in California--I don't even know if they know 
this. But people in California use only 65 percent as much electricity 
as the rest of us. That is because they were told 3 years ago that you 
are going to have rolling blackouts and brownouts unless you use less 
electricity. So they voluntarily use less electricity. Who will argue 
that Californians don't live as well as the rest of us? They use 65 
percent as much energy as we.
  The next chart shows something else. Inefficiency. This chart shows 
at what speed you should be driving your car to get the highest 
efficiency. And that depends on when your car was built. If you have an 
older car, it is much less efficient. CAFE standards really helped, 
didn't they? But the 1984 cars, it peaks down here, the 1997 cars, you 
see two peaks here, but the big peak, you should be driving around 55, 
60 miles per hour. And do notice how rapidly the efficiency falls off 
if you drive faster than that? If you are concerned about $4 gas, slow 
down. It will go a whole lot further. It will cost you a whole lot less 
and be safer too.
  The next chart is another look at efficiency. And there are a number 
of things like this. And this shows efficiency of lighting. The 
incandescent bulb is primarily a heat source. I brewed chickens with 
it. You get that much light and that much heat. Fluorescent is very 
much better. But they pale in efficiency compared to light-emitting 
diodes. I have a little LED flashlight that I carry in the pocket of my 
work clothes. I forget when I put batteries in it. It is so efficient.
  The next chart is a look at the alternatives that we have and the 
finite resources that we can turn to, and we need to come to the floor 
and spend a lot of time talking about these, because I think one of the 
biggest challenges today is realistic expectations of what we can get 
out of these sources. They're all there, like tar sands and oil shale 
and coal and nuclear and so forth. Those are transition sources. The 
nuclear could be there for a long time if we can go to breeder 
reactors. And then the renewable sources. But these are finite sources. 
They will run out. Alan Greenspan, when he was talking about the dot 
com

[[Page H6724]]

market and how that bubble broke, he said that it rose because of 
``irrational exuberance'' was the term he used. Well, a lot of people 
today have irrational exuberance.

                              {time}  1730

  Two bubbles have already broke. One was the hydrogen bubble. You 
hardly ever hear anybody talk about hydrogen any more. The corn ethanol 
bubble has broken with disastrous results, people hungry in the world 
because of this program.
  And the next bubble--and remember that you heard it here--we will get 
nothing like a lot of people believe we will get out of cellulosic 
ethanol. And next time we will have a chance to talk in more detail 
about that.
  Well, I am excited about this. There is no exhilaration like the 
exhilaration of meeting and overcoming a big challenge. This is a huge 
challenge. The American people are up to it if they know what the 
challenge is and if they know what they need to do.
  I think we can again become the major exporting country in the world. 
I think we can again be filled with manufacturing, making the 
technologies and the equipments necessary to transition to these 
renewables. I am excited about the future. I am excited about where my 
children and grandchildren will be living.

                          ____________________