[Congressional Record (Bound Edition), Volume 153 (2007), Part 1]
[House]
[Pages 1532-1538]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          PEAK OIL PRODUCTION

  The SPEAKER pro tempore (Mr. Hall of New York). The gentleman from 
Maryland (Mr. Bartlett) is recognized for 60 minutes.
  Mr. BARTLETT of Maryland. Mr. Speaker, tomorrow we vote here in the 
House on an energy bill. And I thought it might be appropriate to spend 
a bit of time this evening looking at where we and the world are 
relative to energy. I have here a chart with some numbers on it that 
inspired 30 of our prominent Americans, Jim Woolsey, Boyden Gray, 
McFarland and 27 others, among them retired four star admirals and 
generals, to write to the President a letter which said, ``Mr. 
President, we have only 2 percent of the world's oil reserves. We 
consume 25 percent of the world's oil, almost two-thirds of which we 
import. And that presents a totally unacceptable national security 
risk. We really have to do something about that to free ourselves from 
the necessity of buying foreign oil.''
  The President recognizes that this is a problem. In his recent State 
of the Union message he said that we are hooked on oil.
  There are a couple of other interesting numbers here. We represent 
actually a bit less than 5 percent of the world's population. We 
represent about one person in 22 in the world. And with only 2 percent 
of the world's oil reserves, we are pumping 8 percent of the world's 
oil. What that means, of course, is that we are pumping our oil four 
times faster than the rest of the world. We have been pumping less oil 
each year now for several years, and with this high pumping rate that 
decline will accelerate.
  How did we get here? To find how we got here, you have really got to 
go back about 6 decades. I didn't know last year on the 14th day of 
March, when I gave the first speech here on the floor about peak oil, 
that I was just 6 days beyond the 50th anniversary of what I think will 
come to be seen as the most important speech given in the last century. 
This was a speech given by M. King Hubbert, a Shell Oil company 
geologist, to a group of oil people in San Antonio, Texas. At that 
time, if you look back in your history books, you will see that we were 
the largest producer of oil in the world. We were the largest consumer 
of oil in the world, and we were the largest exporter of oil in the 
world.
  And M. King Hubbert shocked his audience by telling them that in just 
about a decade and a half, roughly 1970, the United States would peak 
in oil production. And no matter what we did after that, our production 
of oil would decline.
  I have here a curve which shows his prediction. His prediction is the 
small green symbols here, and the actual data points are the larger 
green symbols. And you see they reasonably followed his predicted 
curve. By 1980, when Ronald Reagan took office, we were already well 
down the other side of Hubbert's peak, and we knew very well that M. 
King Hubbert had been right about the United States.
  Now, in 1969, M. King Hubbert predicted that the world would follow 
the United States in peaking in oil production about now. If he was 
right about the United States, why shouldn't he be right about the 
world?
  It has now been 27 years since we knew, in 1980. We are already 10 
years down the other side of what is called Hubbert's peak. And we knew 
that he was right about the United States and he had predicted that the 
world would be peaking about now.
  If he was right about the United States, why shouldn't he be right 
about

[[Page 1533]]

the world? And shouldn't we have been doing something about 
anticipating this world peaking oil production?
  The red symbols there, by the way, are a similar curve for the former 
Soviet Union, now today, Russia. And you see that when they fell apart 
they did not meet their expectation, so they are now having a second 
little peak, but they will follow the general downward trend.
  How was M. King Hubbert able to predict this? We had already been 
producing oil for quite a while in 1956, and M. King Hubbert had 
watched the exploitation and exhaustion of some individual oil fields, 
and he found that they always followed what we call a bell curve. Small 
production at first, and then increasing and finally reaching a 
maximum, and then falling off the other side.
  This bell curve is very familiar. If you weigh people, some will be 
very light and some will be very heavy, but most of them are somewhere 
in the middle and they follow a bell curve. If you measure the heights 
of people, they will follow a similar curve, or the number of mice in a 
mouse's litter. There are just a great many things that follow this 
kind of a curve.
  So he noted two things, one, that most of the fields tended to be 
exploited and exhausted in a bell curve, and when they had reached a 
maximum, for the average field, half of the oil had been pumped. And so 
he rationalized that if he knew how many fields the United States had, 
and how many more we would discover, if he added up all the little bell 
curves he would have one big bell curve which would indicate when the 
United States would peak in oil production.
  He did that. His math may be difficult to follow, but his reasoning 
is pretty simple. He did that, and he predicted it would be 1970. And 
right on schedule, we peaked in 1970.
  I have been joined on the floor by my good friend, also from 
Maryland, Wayne Gilchrest. And before I yield to him, I would just like 
to introduce what he is going to talk about by quoting here from the 
International Energy Agency. This is a recent press release. And what 
they say here, ``The energy future we are facing today, based on 
projections of current trends, is dirty, insecure and expensive. But it 
also shows how new government policies can create an alternative energy 
future which is clean, clever and competitive.''
  They go on to say that ``energy demand increases by 53 percent 
between now and 2030.'' Well, it may. The demand may increase by 53 
percent, but the use will not increase by 53 percent because, as you 
will see when we develop the subject this evening, the oil almost 
certainly will not be there to meet this demand.
  Over 70 percent of this increase comes from developing countries led 
by China and India. World oil demand reaches 116 million barrels per 
day in 2030, up from 84 million barrels today in 2005 and 2006 and 
2007. That number really hasn't changed. We have been on a plateau for 
the last 3 years of about 84, 85 million barrels of oil per day.
  By the way, we use about 21 million barrels a day, about exactly one-
fourth of that. Most of the increase in oil supply is met by a small 
number of major OPEC producers. Non-OPEC conventional crude oil output 
peaks, they say, by the middle of the next decade. Most observers 
believe that that has now peaked and, as a matter of fact, the world is 
about to peak. These trends would accentuate consuming nations' 
vulnerabilities to a severe supply disruption and resulting price 
shocks. They would also amplify the magnitude of global climate change.
  Mr. Gilchrest, I am pleased to yield to you. They introduce the 
subject that I know you are very much concerned about, and that is what 
our increased use of fossil fuels is doing to our climate and how it is 
affecting global climate change and global warming.
  Mr. GILCHREST. I have sort of a summary, I guess you could say, a 
Global Warming 101 Introductory, which will take about 10 minutes, so I 
am not sure how you want to proceed. Do you want me to just give this 
sort of a 10-minute introduction to global warming, or break it up with 
your dialogue?
  Mr. BARTLETT of Maryland. I think that would be very instructive for 
our audience. Please do.
  Mr. GILCHREST. Congressman Bartlett is talking about peak oil, the 
idea that our energy from oil is a finite resource, it is limited. And 
what I would like to do, in conjunction with that, is to give a 
perspective on one of the legacies of the age of oil, and that is 
global warming, heating the planet, upsetting that delicate balance 
between what the Earth has been used to for thousands of years, and the 
natural range of fluctuation in the climate, to what we have done in 
less than 100 years as a result of burning fossil fuel, oil in 
particular.
  So here is how I would like to proceed. Number one, the Earth has a 
livable climate. The biosphere, which is the area of the planet that 
contains life forms that we have become familiar with is possible 
because of something called the greenhouse effect.
  Now, in our atmosphere, we have oxygen, water vapor, methane, carbon 
dioxide, a number of different chemical mixes which provide us with the 
air we breathe and the type of atmosphere that produces, in part, the 
climate that we have, hence the greenhouse effect. It is warm enough 
and cool enough for life, as we know it, to exist.
  Now, one of the most important greenhouse gases, other than water 
vapor, other than oxygen, other than methane--all of these contribute 
to the greenhouse effect--is carbon dioxide, or CO2.
  Now, even though carbon dioxide is less than 1 percent of the makeup 
of our atmosphere, it is critical in the heat balance of our planet. 
Now, that sort of gives us an idea of the importance of these 
greenhouse gases and the importance of carbon dioxide.
  Now, is the Earth warming? There is no question, everybody would say 
yes, the Earth is warming, and it has been warming for the last 10,000 
years. It has been warming for the last 10,000 years because that was 
the end of the Ice Age 10,000 years ago, and sea level has been rising, 
and the planet has been warming all of that time.

                              {time}  2100

  It is warming, in part, because there is an increase in carbon 
dioxide in the atmosphere. Ten thousand years ago, and you can evaluate 
this by looking at ice cores and checking the bubbles out, and see what 
the content in our atmosphere of CO2 was by looking at those 
bubbles in ice cores from Greenland or the Antarctic, and 
CO2 was about 180 parts per million in the atmosphere 10,000 
years ago. CO2, a greenhouse effect, or a greenhouse gas, 
was at 180 parts per million 10,000 years ago.
  If we move forward almost 10,000 years to the year 1890, in 1890, 
CO2 in the atmosphere was 280 parts per million. It took 
just about 10,000 years for CO2, a greenhouse gas, which 
helps the balance of Earth's climate, it took almost 10,000 years for 
it to increase almost 100 parts per million.
  Now, let us look at the year 2000. In the year 2000, CO2 
was 380 parts per million. In effect, the natural causes before the 
Industrial Age were really in full swing. The natural causes gradually 
warmed the planet over 10,000 years very slowly.
  What we have seen in the last 100 years, actually, about the last 50 
years, is a dramatic increase in the amount of carbon dioxide in the 
atmosphere, something like we have not seen for hundreds of thousands 
of years and perhaps millions of years. So CO2 in the 
atmosphere right now is 380 parts per million. We haven't seen that 
much CO2 in the atmosphere for 800,000 years. Now, as a 
result of this, we are going to see some changes in our climate.
  Let me make this last comment, though, about CO2 in the 
atmosphere, about the heat balance, about how the greenhouse gases 
intermix with the atmosphere. Human activity, burning fossil fuel, has 
put into the atmosphere in a little more than 50 years what the natural 
processes took out of the atmosphere, and it took more than millions of 
years to effect. In less than 100 years we have changed the atmosphere 
more than the natural processes of the Earth have changed the 
atmosphere in millions of years.

[[Page 1534]]

  Now, what are the ramifications of this? Well, warmer seas and warmer 
temperatures. If we want to associate that with hurricanes, we have 
more frequent, stronger hurricanes as a result of that. Warm seas are 
fuels for hurricanes.
  What is that doing to our economy? What is that doing to our coastal 
communities? What are some of the other implications?
  Well, one other significant implication is sea level rise. If you 
went to Ocean City 10,000 years ago, and we know Ocean City in Maryland 
was not there 10,000 years ago, if you went to Ocean City, where Ocean 
City was supposed to be 10,000 years ago, you would have 75 more miles 
to go before you got to the ocean; 10,000 years ago you would walk from 
Alaska to Russia, easily, there was a land bridge, a wide land bridge.
  Today we know that you can't. That is because sea level has been 
rising, and it has been rising because of the natural consequence of 
global warming, but now there is a significant change. For example, the 
temperature has increased, sea level temperatures have increased. In 
the last 20 years we have lost 40 percent of the volume of the Arctic 
ice. The Arctic ice cap, we have lost 40 percent of the volume of that.
  Let us take a look at Greenland. In Greenland, it has 630,000 cubic 
miles of ice, Greenland, 630,000 cubic miles of ice. If that were all 
to melt, sea level around the globe would rise 23 feet.
  Now, we know that Greenland's ice shelf is melting. Recently it was 
discovered that it is melting 10 times faster than anybody could have 
ever anticipated. A few years ago, it was losing about 80 cubic miles 
of ice a year, a few years ago. Today, just a matter of a few years 
later, it is losing now, and it is accelerating, 80 cubic miles of ice 
are melting every year.
  When I say melting, it is not dripping. This is running off. In fact, 
the greatest contributor to fresh water to the world's oceans is not 
the Nile River, it is not the Amazon River, it is ice melting, pouring 
off the ice shelf of Greenland.
  What is that going to do to our coastal communities, our coastal 
economies? What happened in Katrina, in Louisiana and Mississippi and 
Alabama? What is happening in a fairly more frequent occurrence to 
States like Florida or South Carolina, or even States like ours, the 
State of Maryland? What other changes might there be?
  CO2, carbon dioxide, is being absorbed at an increasing 
rate by the world's oceans. How will the oceans change as a result of 
this absorption of CO2? It will become more acidic. The 
ocean chemistry will actually change in the ocean, and it will become 
more corrosive.
  What is the problem with an acidic ocean that is more corrosive? Some 
of the best habitats in the world for the world's most abundant 
fisheries are coral reefs. Coral reefs cannot survive in an acidic 
ocean. A whole host of ocean creatures will be disrupted in their 
process to reproduce or in their process to exist at all. There will be 
warmer temperatures in the atmosphere, increased forest fires, 
increased infestation, increased invasive species, changing in 
agriculture practices, changing in weather patterns. There would be 
more significant rain storms, more significant snow storms.
  Storm cycles would be difficult to predict, shifting in vegetation 
zones, habitat lost for a whole range of flora and fauna species and 40 
percent of ice lost in the Arctic ice shelf right now, and 
accelerating, may be gone by this midcentury, a whole range, including 
polar bears or endangered species.
  The coastal economy, the coastal economy in the United States is 50 
percent of our GDP, 50 percent of our GDP. The likelihood of sea level 
rise as a result of all of this is going to be between 1, and more 
likely, at least 3 feet, that will clean out, wipe out, disturb, 
destroy most of the coastal cities in the United States on the Atlantic 
and gulf coast.
  We are looking at New York City, Boston, Wilmington, Baltimore, 
Philadelphia, coastal areas from Maryland down to Florida, including 
Miami. Much of the peninsula of the State of Florida will be under 
water, not to mention, if you look at the State of Maryland, much of 
the peninsula, the Delmarva peninsula.
  The natural range of fluctuation has been disrupted by the burning of 
fossil fuel, by oil, a limited resource, the end of the Oil Age and 
what are the consequences, the last 100 years of the Industrial Age, 
the age of fossil fuel, the natural range of fluctuation for 
CO2, methane gas.
  The temperature range in the last 10,000 years has been fairly close 
and predictable. Now, imagine a straight line, and what does a hockey 
stick look like? We have corresponded the increase in CO2 
with the increase in atmospheric temperature, the increase in land 
temperature, and the increase in sea level temperature. All of this 
corresponding to the increase in burning fossil fuel, and as a result, 
the increase of methane carbon dioxide.
  I want to end with a quote from a gentleman called Norman Cousins, 
who had an illustrious career in journalism and in politics. Norman 
Cousins says, ``Knowledge is the solvent of danger.'' And the key to 
the successful understanding and opportunities for a brighter outcome 
with what Congressman Bartlett is talking about as ``peak oil,'' the 
end of the age of oil, and its consequences in global warming, the key 
to understanding and finding a solution is knowledge.
  Mr. Bartlett, thank you very much for the time.
  Mr. BARTLETT of Maryland. What the gentleman has been talking about 
is more than valid reason for pursuing the development of alternatives, 
if no other. Why would we want to increase CO2 more? Why 
would we want to threaten more the quality of life in this world?
  The Congressman and I have been to Antarctica twice; one of those 
trips we went together. Down in Antarctica, 90 percent of all the fresh 
water in the world is locked up in the ice there. It is nearly 2 miles 
high, and 70 percent of all the world's ice is locked up in Antarctica. 
Now that hasn't really started to melt yet, although it has threatened. 
I am told that calculations indicate that if the polarized caps in the 
Greenland ice shelf, if they were all to melt, the ocean levels would 
rise 200 feet.
  Now, if you look around the world you will note that a big percent of 
the world's population lives within 200 feet of sea level. This would 
be a monstrous, monstrous change.
  There are three very good reasons for pursuing alternatives, which is 
what the bill tomorrow is going to be talking about. One of those is 
certainly a climate change, because what we are doing now is releasing 
CO2 that was bound up in these plants and organisms that 
grew aeons ago, and it took many, many years to tie up the 
CO2. Now we are releasing it very quickly as we burn these 
fossil fuels.
  A second reason, of course, is I just don't think that the oil is 
going to be there, which is what we are talking about tonight as ``peak 
oil.''
  The third really good reason for doing it is the reason the President 
advanced, and that is, it really is a big national security risk to be 
so dependent on foreign oil.
  What I have here on this chart is another depiction of Hubbert's 
peak, and this is by the Cambridge Energy Research Associates, commonly 
referred to as CERA, and they are trying to indicate that one should 
not have confidence in the predictions of Hubbert because his curve 
didn't exactly actually follow his prediction.
  Well, by golly, it is pretty close to actually following his 
prediction. Here is the U.S. actual production in red. You will see 
there is a little second peak here, and the next chart will show that 
is because of Prudhoe Bay. We found a lot of oil there, but that was 
not in M. King Hubbert's prediction. He hadn't imagined that we would 
be going to the North Slope of Alaska to drill.
  So the little yellow ones here are his prediction. Notice that the 
actual Lower 48 has followed very closely, very closely, his 
prediction. We are now down to, even with Prudhoe Bay, we are now down 
to about half, about 5 million barrels a day. That is the red one over 
there, as compared to roughly 10 million barrels a day at our peak.

[[Page 1535]]

  The next chart shows better where their oil comes from. Hubbert's 
prediction covered the Lower 48, and that is this gray area here. Now 
we need to add to that gas liquids. The big find in Alaska here, and 
that is what causes this little blip here in the downward slope. I 
remember a number of years ago, these fabulous discoveries of oil in 
the Gulf of Mexico, which is supposed to solve our problem for the 
foreseeable future, that is the yellow there. Notice it hardly makes a 
shadow on the downward slope of Hubbert's peak.
  The next chart is really a chart that we could spend a long while 
talking about because it has a great deal of information on it. The 
bars there represent the discoveries, and you notice that we were 
discovering oil way back in the 1930s, big discoveries in the 1940s, 
and then lots of discoveries which peaked about 1970, and since then it 
has been going down, down, down.
  The solid black line here indicates the amount of oil that we have 
been using. Notice that for a long while we were accumulating big 
reserves of oil; everything about this solid black curve is reserves 
that we have in store that we can use later.

                              {time}  2115

  But then in about 1980 there, you can see these two curves cross. I 
say two curves, because obviously you could draw a smooth curve through 
the peaks here, and these two curves crossed about 1980. Ever since 
1980 we have been burning more oil than we found. Today we burn two or 
three barrels of oil for every barrel of oil that we find. So for this 
period, between 1980 to the present, we have been using up some of the 
reserves that we have back here, but still a lot of those reserves 
remain.
  Now, what will the future look like? Well, there is a big difference 
of opinion in what the future will look like. The persons that put this 
chart together believe that by about 2010, about 3 years or so, the 
world will peak in oil consumption. Some believe that it has already 
peaked, others believe it may peak a little after 2010, and then it 
will go down.
  Now, they have made some guesses as to how much oil we are going to 
find. I am not sure I would have drawn that curve exactly that high, 
because a smooth curve might bring you down about here. I think they 
have been very generous in the amount of oil that is yet to be 
discovered.
  By the way, the world's experts on oil believe that we have, most of 
them, we have probably found about 95 percent of all the oil that we 
will ever find. You notice that when we find oil now, we find it in 
very difficult places to get to. The last big find was in the Gulf of 
Mexico, through 7,000 feet of water, and then about 30,000 feet of rock 
and dirt until you get down to the oil. We aren't now developing that 
field, and I am told, you can be told a lot of things that aren't true 
and I don't know the veracity of this, but I am told we will be 
developing that field when oil reaches $211 a barrel, because that is 
what it will cost to get the oil out of that field.
  I just want to spend a moment looking at this before we go to the 
next one. If you draw a smooth curve through these bars, the area under 
that curve represents the total amount of oil that we have found, and 
the area under the consumption curve will represent the total amount of 
oil that we have consumed.
  Now, it is very obvious that you can't consume oil that you haven't 
found, and you can make the future, within reason, look anyway you 
like. But what you can't do is pump oil that you haven't found. Unless 
you believe that we are going to find a whole lot more oil than 
indicated by their projection, then you have some choices as to what 
that downslope is going to look like.
  You can be very aggressive and use enhanced recovery techniques, you 
can pump steam down there, you can pump CO2 down there, you 
can flood it with sea water as the Saudis do to get their oil out. You 
get it more quickly. But if you get it more quickly, you have less to 
get later on.
  So we have choices facing us as to what that downslope will look 
like. But, remember, you can't pump oil you haven't found, and the area 
under the consumption curve cannot be larger than the area under the 
discovery curve. They have to be the same area ultimately, the same 
volume.
  Here is a prediction by our Energy Information Agency, and it is a 
very interesting one, and they use some unusual statistical approaches. 
But this is a curve through the discovery peaks. Let me put the other 
one up just quickly so you can see the similarities here.
  Notice the big peak here in the late 1940s and 1950s and another peak 
here. They have kind of smoothed that out here. You can see this is the 
early peak here and then the later peak and then down, down, down.
  We get to the point we are at now, and they make some very unusual 
predictions. The yellow line there, they say, is the 95 percent 
probability, and the green line is the 50 percent probability, and the 
blue line is the 5 percent probability. And they say that the 50 
percent probability is the average, the mean, and, of course, 
probabilities and means don't mean the same thing, so therefore, that 
is what our production is more likely to be.
  Surprisingly, this curve that has been going down for a number of 
years they thought was going to turn around and go up. But notice for 
the roughly 5 to 10 years after they drew this first curve, notice the 
red symbols there. They have been following what you would expect they 
would follow, and that is the 95 percent probability. Ninety-five 
percent probably is a whole lot more probable than 50 percent probable, 
and that is what it has been following.
  Here is another chart from CERA, and it shows something very 
interesting. First, I want to look at the left here. This is the low, 
they say, is the 95 percent probability. Now, the 95 percent 
probability is the most probable, so it is not the low, it is the most 
likely.
  Then they say the high probability is almost 4,000 gigabarrels. The 
mean is right in the middle. Most of the experts in the world believe 
that we have found about a little over 2,000 gigabarrels of oil. I use 
the term ``giga,'' because a billion in England is a million million, 
and in our country a billion is a thousand million. So everybody 
understands giga. A giga is a thousand million. We have consumed about 
half of that and about 1,000 gigabarrels, maybe a little bit more, but 
roughly a thousand gigabarrels remains.
  Several Congresses ago I was privileged to share the Energy 
Subcommittee on Science, and I wanted to get some idea of the 
dimensions of the problem we face, so we had the world's experts come 
in for a hearing. And I was surprised at the unanimity. It was like 
from 970 to 1,040 gigabarrels of oil remaining in the world, not a big 
spread.
  Now, what they are showing here is that if in fact we find as much 
more oil as all the oil that now remains discovered, if we find as much 
more as all the oil that remains discovered, we will still peak at 
2016, 9 years from now, if we find as much more oil as all the oil that 
now exists, that we know exists in the world. If you don't find that, 
then we peaked about now and it is going to start down this way.
  Another thing they have shown here is if you aggressively develop 
these fields and pump life steam down there or put CO2 down 
there or pump sea water down there, you can get it more quickly. But 
then look what happens. It falls off more quickly too.
  Again, the area under this curve has to be the same thing as the area 
under this curve. You can't pump more because you are pumping it 
faster. Now, with enhanced oil discovery, you might get a little more, 
because you might get some oil that you wouldn't have gotten with 
conventional techniques.
  Here is another more recent chart from the Oil Information Agency. 
They have been pooh-poohing the idea of peak oil. They said it was 
going to be an undulating plateau. I agree, it is going to be an 
undulating plateau. So they show here with what I think are wildly 
optimistic estimates of how much oil we are going to find, they believe 
that we are going to find twice as much more oil as all the oil we now

[[Page 1536]]

know exists. That just isn't very probable.
  But even if we find that much oil, they have a peak. Notice it. They 
say it is an undulating plateau. I agree. With the world's economies 
and demands and warmer temperatures, which is why oil is down a bit 
now, because we have warmer temperatures in our country, I agree it is 
going to be undulating plateau. They are pooh-poohing the idea of peak 
oil, and they show in this curve peak oil. They show it I think a good 
many years beyond when it will actually occur.
  This little curve down here is closer what I think is reality. They 
have 1.92 trillion, and it is just a bit over 2 trillion, I think, so 
maybe it would extend a little beyond this. But notice they are showing 
this peak about now, aren't they? So if we don't find this enormous 
amount of additional oil, it will be peaking about now. What they are 
saying is if we have only 2.93 trillion, we will be peaking at this 
point.
  I have a quote here from one of the world's experts on oil, Dr. 
Laherrere, and this is what he says, and I think that it is kind of 
difficult to argue with his logic. Jean Laherrere made an assessment of 
the USGS report.
  Now, it is the USGS report that provides the data that permits CERA 
to make their prognostications. He concludes that the USGS estimate 
implies a five-fold increase in discovery rate and reserve addition for 
which no evidence is presented. Such an improvement in performance is 
in fact utterly implausible, he says, given the great technological 
achievements of the industry over the past 20 years, the worldwide 
search and the deliberate effort to find the largest remaining 
prospects. Today we have 3-D modeling and seismic use, and so we know 
pretty much what the world's geology looks like.
  I might take just a moment to talk a little bit about this geology, 
because it is very important in understanding how much more oil we are 
likely to find.
  How did the gas and oil get there? Well, nobody was there when it got 
there, so we really don't know, but one of the best guess its is that a 
very long time ago the Earth was very much warmer than it is now. As a 
matter of fact, there were subtropical seas at the North Shore of 
Alaska. In the North Sea, there were subtropical seas. And every cycle 
the vegetation grew, and then when it matured or if there was a fall, 
and it may have been warm enough there was no true fall, but still 
there was a cycle of life, and it grew and sank to the bottom as algae 
does now in the ponds and so forth. And then waters washed erosive 
materials off the surrounding hills and it mixed with the organic 
material. This continued for an a large number of years until there was 
a lot of mixture of organic material and inorganic material there.
  Then the tectonic plates of the world moved, and we know that 
happened, and it opened up and sank and went down to a depth where the 
temperature was appropriate, closer to the molten core of the Earth, 
and where the pressure was appropriate, and then cooked there under 
this pressure for who knows how long, and this organic material, mostly 
plants, maybe a few small animals, gradually became what we know as 
oil.
  Now, the oil is made up of molecules of varying lengths. Some are 
very short and they are in fact gasses, if you let them escape from the 
oil. Some of them are very long, and that makes the waxes and so forth 
that we find in oil.
  Now, if there happened to be a rock dome over top of this deposit way 
down there that is now being cooked and pressurized for a long while, 
if there is a rock dome over that, the gas that escapes will be trapped 
under that rock dome. So when you come along and drill a well through 
that, and you get down to the oil, the oil is going to be under 
pressure because of that gas above it. So you have what you call a 
gusher. The gas pressure above pushes the oil down and up the drill 
pipe and it continues to gush until that gas pressure has been 
relieved.
  Now, this may not be the way that oil and gas were formed, but there 
isn't any better guess as to how it was formed. And if that is in fact 
the way it was formed, then we can make some guesses as to how much 
more oil and gas we are likely to find, because we have done a pretty 
good job of matching the geology of the Earth.
  What you need to find is some of this organic material buried deeply 
for a long while with a rock dome over it so it captures the gas. By 
the way, if it doesn't capture that gas, you end up with something like 
the tar pits of California, and you end up with the tar sands, they 
call them oil sands, they are tar sands, thank you. They flow about as 
readily as the blacktop driveway out here, unless you heat them up, 
which is what they do, and combine them with some shorter chain 
molecules so that when they cool they will still flow.
  The loss of these gasses has produced what we call our oil shales in 
the west. By the way, there are huge, huge deposits of these tar sands 
and oil shales.
  As a matter of fact, the deposits of each of those represents way 
more than all the fossil fuels that we now know exist in the world, and 
the Canadians are making some heroic efforts because their big fields 
are up in Alberta, Canada, and they have a shovel up there that lifts 
100 tons and they dump it into a truck that carries 400 tons and then 
they carry it and cook it. When it is cooked, why, the oil flows and 
then they mix it, as I said, with something with shorter molecules, a 
solvent, so when it cools it will flow and they move it out through 
pipes. With this heroic effort, they are getting about 1 million 
barrels a day. That sounds like a lot, 1 million barrels a day, but we 
use 21 million barrels a day. That is about 5 percent of what we use, 
and just a bit over 1 percent of what the world uses, because the world 
uses about 84-85 million barrels a day.
  And what they are doing is not sustainable, because they are cooking 
this with natural gas that is what we call stranded. By ``stranded'' we 
mean there are not very many people there to use it, and natural gas is 
hard to transport unless you liquefy it and are near a port, so it is 
cheap. So I understand they may be using more energy from natural gas 
to produce the oil than they are getting out of the oil. But from a 
dollar and cents perspective, it makes sense, because the gas is really 
cheap and they are producing that oily understand for $12 to $25 a 
barrel, again, you get various estimates of this, and they are getting 
$50 to $60 barrel for it. So dollars and cents-wise, that makes good 
sense.

                              {time}  2130

  From an energy profit ratio, it does not make any sense at all. 
Natural gas is a high quality feed stock for an enormous petrochemical 
industry.
  One of the things that we use it for, by the way, is making nitrogen 
fertilizer, and without our ability to make nitrogen fertilizer, we 
could not begin to feed the world. It is not just the plant breeder, 
and he has done marvelous with developing new plants. It is all of the 
fossil fuel energy we use in agriculture, and a great deal of that is 
used in making nitrogen fertilizer from natural gas.
  I have next a little schematic here, and this kind of smoothes out 
these curves. By the way, the world has been increasing its use of oil 
about 2 percent. That does not sound like much, does it, 2 percent? But 
2 percent exponential growth doubles in about 35 years. It is four 
times bigger in 70 years, and it is eight times bigger in 140 years.
  Albert Einstein was asked after the discovery of nuclear energy and 
the detonation of the nuclear bomb, Dr. Einstein, what will be the next 
great energy force in the world? And he said the most powerful force in 
the universe is the power of compound interest. Exponential growth.
  I have a namesake, no relative. I wish I had some of his genes. He is 
really very brilliant. Dr. Albert Bartlett, professor emeritus at the 
University of Colorado, he gives the most interesting 1-hour lecture I 
have ever heard on the failure of our industrialized society to 
understand exponential growth. Just do a Google search for Albert 
Bartlett

[[Page 1537]]

and energy, and it will come up and you will be fascinated with this 1-
hour lecture.
  Here we show this little schematic curve. It is a 1 percent growth 
rate. Remember, that doubles in 35-years. This point is twice as high 
as this point, and that represents 35 years. Notice that the shortage 
occurs before we reach the peak.
  The shape of the bell curve and the exponential growth curve indicate 
that you are going to have shortfalls in supply, price is going to go 
up before you might reach the peak, and maybe, just maybe, we are in 
this time right here. A lot of the evidence indicates that is true.
  The next chart is one that really gives you some pause when you look 
at it. Let us just look at the upper one because the bottom one is an 
expansion of the upper one, separating the gas from the oil here in the 
red curve. But this shows only what 400 years, a little less than 400 
years of more than 5,000 years of recorded history. The use of energy 
in our world was so small back in 1750 that that brown there which is 
wood is just about the baseline, is it not?
  The industrial revolution started with wood. The hills of England 
were denuded to make charcoal to make steel. Catoctin Furnace, a little 
historic site up in Frederick County, they denuded the Catoctin 
Mountains where Camp David now is, thankfully the trees grew back, they 
denuded that making charcoal for that furnace.
  The industrial revolution really took off when they discovered coal, 
and it was stuttering when they finally discovered gas and oil. Then 
look what happened.
  The hockey stick, that is the hockey stick that Congressman Gilchrest 
was talking about, look what it did. It just goes straight up. Notice 
here what happened in 1970. There was a real oil price shock there, and 
the world used somewhat less oil. We are now very efficient in the way 
we use oil in this country. Air conditioners probably are twice as 
efficient at least as the ones you used in 1970. If it were not for our 
increased efficiency we would be in even more trouble with energy 
today.
  But what I want to point out is that we are about 100, 150 years into 
the age of oil. That is this. If Hubbert was right, and he was exactly 
right about the United States, why should he not be right about the 
world, this is going to be a bell curve. By the way, you can make this 
thing look steeper or shallower depending upon the dimensions and the 
ordinates, the absinthe ordinate and abscissa. Here, of course, we have 
400 years on the abscissa so it is very compressed so it makes the 
curve look higher, but that is exactly the same kind of curve we have 
here. We just spread out the abscissa here so that we spread it out. If 
you really push these two things, that is going to peak up high in the 
middle.
  Out of 5,000 years of recorded history, the age of oil will represent 
about 200 to 300 years, remaining about 100, 150 years. What will our 
world look like post age of oil?
  The next chart shows us something that is alarming a number of 
people, and this is a little drawing of the world. It has a number of 
symbols on it, and one of those symbols shows where China is securing 
rights to buy oil, and they are all over the world. This symbol here 
was Unocal. They almost bought Unocal, one of our oil companies. They 
are buying oil all over the world. They are scouring the world for oil.
  I just came back from a trip to China, and we went there to talk 
about energy by the way. I was pleasantly surprised when they began 
their discussion of energy by saying post-oil. They get it. I wish we 
did. They talk about post-oil. They recognize that they are big 
polluters. As a matter of fact, I have a reference here that says by 
2010, just 3 years from now, they will be a bigger CO2 
producer than we are, in just 3 years. Their economy is growing, the 
last 2 quarters, at more than 10 percent a year. That doubles in 7 
years. It is four times bigger in 14 years. It is eight times bigger in 
21 years, 1.3 billion people. I saw essentially no bicycles on the 
street and traffic jams like we have at rush hour here in Washington.
  Well, the fact that they are scouring the world for oil indicates 
their understanding that this is going to be a resource in short supply 
for the future. We can spend a long time talking about China and what 
they are doing. They are aggressively building a blue water navy.
  A blue water navy is different than the brown water navy, brown from 
the silt that comes out the rivers near shore, little navies that 
protect you from somebody coming from afar. They are rapidly developing 
a blue water navy. Last year, for instance, we launched one submarine. 
They launched 14. Now, their submarines are not ours but 14 submarines 
is 14 submarines.
  I have here a very interesting statement from our Secretary of State 
Condoleeza Rice: ``We do have to do something about the energy 
problem.'' I am thankful you recognize that. ``I can tell you that 
nothing has really taken me aback more as Secretary of State than the 
way the politics of energy is I will use the word `warping' diplomacy 
around the world. We have simply got to do something now about the 
warping now of diplomatic efforts by the all-out rush for energy 
supply.''
  It would be nice if everybody in the administration understood that 
and we were doing something meaningful about it.
  So what do we do? Well, I think that any rational person would 
understand that you need to get busy developing some alternatives if 
you are going to run out of these fossil fuels. By the way, these 
fossil fuel are just incredible. The energy in these fossil fuels is 
just unreal.
  I have an article, really not an article. It was a speech given by 
Hyman Rickover in 1957, 50 years ago this year, and I want to read 
something that he says here which is really interesting. He understood 
50 years ago, ``With high energy consumption goes a high standard of 
living. Thus the enormous fossil fuel energy which we in this country 
control feeds machines which make each of us master of an army of 
mechanical slaves. Man's muscle power is rated at 35 watts 
continuously,'' little more than you are working, but you have got to 
sleep, ``or one-twentieth horsepower. Machines therefore furnish every 
American industrial worker with energy equivalent to that of 244 men, 
while at least 2,000 men push his automobile along the road, and his 
family is supplied with 33 faithful household helpers. Each locomotive 
engineer controls energy equivalent to that of 100,000 men; each jet 
pilot of 700,000 men. Truly, the humblest American enjoys the services 
of more slaves than were once owned by the richest nobles, and lives 
better than most ancient kings. In retrospect, and despite wars, 
revolutions, and disasters, the hundred years just gone by may well 
seem like a Golden Age.''
  And it has gotten even more golden in these last 50 years, has it 
not?
  Hyman Rickover understood very well our dependence on fossil fuels. 
One barrel of oil controls the energy of 12 men working all year for 
you. If you figure out what that costs, it is less than $10 to purchase 
the equivalent work of a person all year long.
  Now, if you have some trouble getting your minds around that, imagine 
how far that gallon of gasoline or diesel fuel carries your car. And by 
the way, it is considerably cheaper, a little over $2 a gallon, than 
water in the grocery store.
  Now, how long would it take you to pull your SUV or your car or push 
it as far as that little gallon of gasoline or diesel fuel take it? I 
own a Prius. We get under normal road driving conditions 51 miles a 
gallon. It would take me a long time to pull my Prius 51 miles.
  Another indication of the incredible energy benefit from fossil 
fuels, if you work really hard all day long, I will get more work out 
of an electric motor for less than 25 cents worth of electricity. It 
may be humbling to recognize in terms of fossil fuel that we are worth 
less than 25 cents a day, but that is the reality, and that is why we 
live so well.
  As Hyman Rickover understood 50 years ago, if that was true what he 
said

[[Page 1538]]

50 years ago, it is true in spades today, is it not, because we have 
even more helpers to make our life quality higher as a result of our 
use of energy.
  Well, what do we do if we are going to run short of fossil fuels? 
Obviously, we have no surplus oil to invest in the development of 
renewables. If we did, oil would not be $50, $60 a barrel, but we can 
free up some oil and buy some time with a very aggressive conservation 
program.
  Matt Simmons, who has written a really good book on Saudi Arabia 
called ``Twilight in the Desert,'' and he makes the case that Saudi 
Arabia has probably peaked in oil production. They will not tell you 
that, but you notice they cannot make good on any promise to increase 
oil production so he may very well be right. Then after having freed up 
this energy and bought some time, we must use it very wisely. We would 
get a lot of benefits from that.
  Life is just so easy in this country that we are bored. We are 
watching awful movies. We are doing drugs because we are bored. There 
is no exhilaration like facing a big challenge and besting that 
challenge. There is nothing that puts flavor in pie so much as work, 
and I can imagine Americans, when they understand the problem we face, 
going to bed at night saying, gee, today, I used less energy than I did 
yesterday and I lived just fine, and tomorrow I am going to do better.
  But we need leadership that is not here yet so that we will do that. 
By the way, big benefits. We could once again become a major exporter. 
We are the most creative, innovative society in the world. Properly 
challenged, we will figure ways to get this alternative energy. We 
could again be a major exporter. Today, we are a big, big importer, as 
you know, $800 billion trade deficit this year.
  We are a role model whether we like it or not. When you use 25 
percent of the world's energy, you are a role model. Not a very good 
one today. We profligately use energy, way more energy than the average 
person in the world. It really is possible to be much more efficient.
  This is a fascinating chart, such a simple one, but what it shows is 
the heat that you get out of an incandescent bulb and the light you get 
out of it. Ninety percent of it is heat which is why I use an electric 
bulb for brooding little chickens. I am not so much interested in the 
light as I am the heat from it. Now fluorescents are much better, and I 
saw there was a Time magazine cover page that had a pile of coal there. 
I think it was on the cover page, and they have one of these screw-in 
fluorescent bulbs beside it. Five hundred pounds of coal, that is the 
amount of coal you save in the life of that one fluorescent bulb, that 
is here.
  But notice what you get out of light omitting diodes. I have a little 
light omitting diode flashlight that I carry. I put two little 
batteries in it, and I have forgotten when I put them in.

                              {time}  2145

  It just lasts so long. We have the same amount of light out of each 
one of these, but notice the enormous amount of heat you are getting 
out of the incandescent bulb and the tiny amount of heat that you are 
getting out of the light emitting diode.
  There are lots of opportunities in our society to live well and 
comfortably using a lot less energy. I don't have the chart here, but 
the average Californian uses only about 65 percent as much electricity 
as the rest of America, and it would be hard to argue that Californians 
don't live well.
  This next chart is a really interesting one, and what it shows here 
on the abscissa is the amount of energy that we are using per person 
and what it shows on the ordinate here is how good you feel about life. 
You couldn't feel any better than 100 percent, and notice where we are. 
We are the biggest users of energy in the whole world and we feel 
pretty good about it; but notice how many countries that use less 
energy than we feel even better than their quality of life. Let's go 
way back here to Colombia. They use a fifth as much energy as we; they 
feel almost as good about their quality of life as we feel.
  If you drew a curve through this, you need some minimum energy to 
feel good about life, but once you go up that steep part of the curve, 
the minimum energy is pretty flat. We can move way back here on the 
curve and feel just as good as we do now about life. You don't have to 
use the amount of energy that we use to feel as good about life as we 
do.
  The average European, the countries are scattered through there, but 
the average European uses half the energy we use and, by the way, pays 
more than twice as much per gallon of gasoline and they have been doing 
that for a very long time.
  We are shortly going to run out of our 60 minutes this evening and we 
will need to come back to finish this, but obviously we have got some 
finite resources here that we can use. When we come back, we are going 
to talk about the resources available to us to meet the challenge of 
transitioning from fossil fuels to renewables. And, by the way, we will 
transition either on a time scale that we have chosen or on a time 
scale chosen by geology.
  As we run down the other side of Hubbard's Peak and the world has 
less and less supply of fossil fuels, we will transition. It can be a 
bumpy ride, or it can be a really bumpy ride. But Americans are up to 
it. We need leadership and knowledge. And we will be back again to talk 
about the finite resources available to us and all those fascinating 
opportunities in renewables.

                          ____________________