[Congressional Record (Bound Edition), Volume 153 (2007), Part 11]
[House]
[Pages 16055-16061]
[From the U.S. 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 as the designee of the minority leader.
  Mr. BARTLETT of Maryland. Mr. Speaker, I will submit for the Record 
two short articles, one from Business Week and the other from the 
Washington Post, at the end of my remarks.
  It's been roughly 2 years now since I have been coming to the well to 
talk about energy and, more specifically, about peak oil. When I first 
came here to do that, we had quite a discussion in our office what we 
would call it because it was a phenomenon that very few had any 
interest in or any knowledge of.
  And I had heard two descriptive terms. One was peak oil, which is the 
one we finally decided to use, and the other was the great rollover. 
When we talk about it this evening, you will understand what the great 
rollover is. It's the rollover from adequate production. You come to 
the peak and then you roll over the peak and start down the other side. 
We wisely, I think, chose to call it peak oil because that's apparently 
what everybody else is calling it.
  And I wanted to start this evening with two articles that a couple of 
years ago when I started coming here I would never have dreamed that I 
would be able to come to this well and one day find two articles like 
this in two of our major publications. One of them is from the 
Washington Post and the other is from Business Week, and I'd like to 
begin this evening by reading from these articles. It's the kind of 
thing that I have been saying for 2 years, and it's very satisfying to 
be able to read it now from somebody else's pen.
  This is the one from the Washington Post called, ``A Wind-Powered 
Town, an Energy Bill and a Lot of Hot Air.'' You might suspect by that 
title that the author is Dana Milbank.
  ``There's a certain irony in Washington's failure to devise a modern 
energy policy. This is, after all,'' he says, ``the one place on earth 
that is powered almost entirely by wind.
  ``Lawmakers are growing further apart on energy legislation, as 
Democrats demand alternative fuels and Republicans insist on more 
drilling. But for both sides, the ability to talk about energy is both 
plentiful and renewable.
  ``While the Senate held its fourth day of debate on an energy bill, 
three congressional committees held hearings on the subject yesterday, 
and the House and Senate Renewable Energy Caucuses held an all-day 
`expo and forum' in the Cannon Caucus Room. Democratic senators held 
two news conferences on the subject, Republican senators held a third, 
and bipartisan groups of lawmakers contributed a fourth and fifth.'' 
And this is all in one day.
  ``Not to be left out, the National Association for Business 
Economics, the

[[Page 16056]]

U.S.-China Economic and Security Review Commission,'' before whom I 
testified this afternoon, ``the Electric Power Supply Association, the 
Nuclear Energy Institute, and a coalition of environmentalists all 
hosted energy events of their own.
  ``Talk about a large carbon footprint. The amount of CO2 
emitted from the mouths of all these lawmakers, lobbyists and activists 
was enough to cause part of Greenland to melt into the sea.
  ```This bill's going to have a tough time,' said Senator Larry Craig 
. . . That's a safe guess, given that the Senate plans for about eight 
days of debate on the bill, and Republicans such as Craig are hinting 
at a filibuster that could derail the whole thing.''
  ``The Senate energy legislation is fairly modest. It stays away from 
radical policies, such as a carbon tax or a cap on carbon emissions. 
Its toughest provision, a plan to increase fuel-efficiency standards to 
35 miles per gallon by 2020, is under siege by a bipartisan group of 
lawmakers from car-manufacturing States.
  ```The Senate energy bill started out fairly weak, and we don't see 
the debate getting any better,' complained Eric Pica, who represented 
Friends of the Earth at a protest by environmentalists on the Senate 
grounds yesterday.
  ``Minutes later, Republican lawmakers assembled in the Senate 
television gallery to voice similarly bitter objections to the bill, 
for completely opposite reasons. `It doesn't do anything to lower the 
price of gasoline,' argued Senator Mitch McConnell, the Senate 
Republican leader.''
  ``Did that message get out? Not without some difficulty. The 
Republican event was squeezed in between a Senate hearing on `the 
impact of rising gas prices,' and a pair of House committee sessions on 
biofuels and `climate change mitigation.' Within minutes of the GOP's 
departure from the television studio, Democrats walked in with a 
rebuttal.
  ```We do not believe in the President's theory, the Republican's 
theory: Drill, drill, drill, more of the same,' Harry Reid, the Senate 
majority leader, taunted. `It reminds me of Iraq.'''
  Over in the Cannon Caucus Room, where the Renewable Energy Caucus was 
caucusing among displays of pea pellets, switch grass and filament-free 
lightbulbs, exhibitors were on hand to talk about landfill gas and to 
hand out lollipops and bumper stickers saying I love wind energy.
  ``It was a festive gathering, but Representative Roscoe Bartlett, 
Republican from Maryland, a champion of renewable energy, delivered a 
somber message about progress in the capital. `We've been crawling at a 
snail's pace,' he said. `We've been doing little more than nibbling at 
the edges.
  Now, for the article from Business Week, and we will kind of be 
reading this together because I have seen it for the first time just a 
couple of moments before I came to the well.
  It's by Eugene Linden, and it's called, ``From Peak Oil to Dark 
Age?'' And this is what he says.
  ``Oil output has stalled, and it's not clear the capacity exists to 
raise production.
  ``With global oil production virtually stalled in recent years, 
controversial predictions that the world is fast approaching maximum 
petroleum output are looking a little bit less controversial.''
  I would note as an aside that a couple of years ago when I began to 
talk about this, I ran the risk of being relegated to the lunatic 
fringe. But in another life I was a scientist. I'd been concerned about 
this problem for 40 years, and I thought these statistics in reality 
were on my side.
  ``At first blush, those concerned about global warming should be 
delighted. After all, what better way to prod the move toward carbon-
free, climate-friendly alternative energy.
  ``But climate change activists have nothing to cheer about. The U.S. 
is completely unprepared for peak oil, as it's called, and the 
wrenching adjustments it would entail could easily accelerate global 
warming as Nations turn to coal. Moreover, regardless of the 
implications for climate change, peak oil represents a mortal threat to 
the U.S. economy.''
  This isn't some wild, left-wing publication. This is Business Week 
who is saying this.
  ``Peak oil refers to the point at which world oil production plateaus 
before beginning to decline as depletion of the world's remaining 
reserves offsets ever-increased drilling. Some experts argue that we're 
already there, and that we won't exceed by much the daily production 
high of 84.5 million barrels first reached in 2005. If so, global 
production will bump along near these levels for years before beginning 
an inexorable decline.
  ``What would that mean? Alternatives are still a decade away from 
meeting incremental demand for oil. With nothing to fill the gap, 
global economic growth would slow, stop, and then reverse; 
international tensions would sore as Nations seek access to diminishing 
supplies, enriching autocratic rulers in unstable oil States; and, 
unless other sources of energy could be ramped up with extreme haste, 
the world could plunge into a new Dark Age.

                              {time}  1730

  Even as faltering economies burned less oil, carbon loading of the 
atmosphere might accelerate as countries turn to vastly dirtier coal.
  When I read this, I was reminded of the observation of one of the 
giants in the area, one of the experts, Kenneth Deffeyes from Princeton 
University, who said that the least bad outcome from peak oil would be 
a deep worldwide recession that might make the 1930s look like good 
times.
  Sound familiar to what I just read? He says, if you don't like that, 
try the Four Horsemen of the Apocalypse or famine, pestilence and 
death.
  ``Given such unpleasant possibilities, you would think peak oil would 
be a national obsession. But policymakers can hide behind the 
possibility that vast troves will be available from unconventional 
sources, or that secretive oil-exporting nations really have the huge 
reserves they claim. Yet even if those who say that the peak arrived 
are wrong, enough disturbing omens--for example, declining production 
in most of the world's great oil fields, and no new super fields to 
take up the slack--exist for the issue to merit an intense 
international focus.''
  When I read about the decline in our big oil fields, I thought of 
another article about 3 weeks or so ago in the Post about the second 
largest oil field in the world, the largest one in Mexico, the Cantrell 
oil field, whose discovery was quite interesting. A Mexican fisherman 
by the name of Cantrell kept having oil-foiled nets. When oil foiled 
his net, he knew where to go, because there was only one oil company in 
Mexico, Pemex, so he went to Pemex, look what you did to my net, give 
me a new one.
  So they did, but he came in so many times they wondered, do we really 
spill that much oil? So they asked, where are you finding all that oil? 
He said, come, I will show you. He showed them oil bubbling up out of 
the ocean. They drilled there, and for a number of years that has been 
the second largest field in the world, producing 2 million barrels of 
oil per day, the Cantrell oil field. It has declined down to 20 
percent, down to 1.6 million barrels a day in the last 2 years.
  The reality is that it will be here much sooner for the U.S. in the 
form of peak oil imports. Since we import nearly two-thirds of the oil 
we consume, global oil for export should be our bigger concern.
  In that article about 3 weeks ago in the Post, they noted that in 8 
years they estimate that Mexico will be an oil importer. I think it was 
in that same article that noted in 10 years Iran may very well be an 
oil importer. Maybe it has something to do with the reason they are 
interested in nuclear energy.
  Fast-growing domestic consumption of oil-exporting nations and 
increasing appetites by big exporters such as China portend tighter 
supplies available to the U.S., China now the number two importer in 
the world, with an economy growing at 11.4 percent, the last quarter 
for which I saw data. With our economy barely 2 percent, how

[[Page 16057]]

soon might they be the biggest oil importer in the world?
  Unless world oil production rises rapidly, but output has stalled, 
call it de facto peak oil or peak oil light, it means that the United 
States is entering an age when it will have to scramble to maintain 
existing import levels.
  We will know soon enough whether the capacity to raise production 
really exists. If not, basic math and the clock will tell the story. 
All alternatives, geothermal, solar, wind and so forth, produce only 3 
percent of the energy supplied by oil.
  If oil demand rises by 2 percent, while upward remains flat, a 
generation of alternative energy would have to expand 60 percent a 
year. That's more than twice the rate of wind power, the fastest-
growing alternative energy.
  All this incremental energy would somehow have to be delivered to 
transportation, which consumes most of the oil produced each year just 
to stay even with the growth in demand.
  Nuclear and hydropower together produce 10 times the power of wind, 
geothermal and solar. But even if nations ignore environmental 
concerns, it takes years to build nuclear plants and even identify 
suitable, undammed rivers.
  There are many things we in the United States can do and should have 
been doing other than the present policy of crossing our fingers. If an 
oil tax makes sense from a climate change perspective, it seems doubly 
worthy of it if it extends supplies. Boosting efficiency and scaling up 
alternatives must also be a priority. Recognizing that nations will 
turn to cheap coal, recently 80 percent of growth in coal use has come 
from China. More work is needed to defang this fuel which produces more 
carbon dioxide per ton than any other energy source.
  Even if the peakists are wrong, and I will tell you each night I pray 
I am wrong, because if I am not wrong we are in for a pretty rough 
ride. Even if the peakists are wrong, we would still be better off 
taking these actions. If they are right, major actions right now may be 
the only way to avert a new dark age in an overheated world.
  Again, I would like to emphasize, these are not articles from some 
left-wing environment magazine. These are articles from Business Week 
and the Washington Post.
  Now I would like to turn to the first slide here on the easel, and 
this is a kind of an interesting slide, I think, that points to our 
problem. Here is a fellow looking at the gas pump and the $3 gasoline, 
he is in his huge SUV there. Demand, and looking at the supply in the 
pump, just why is gas so expensive?
  Mr. Motorist, it's expensive because of supply and demand.
  One of my colleagues asked me, what can I tell my constituents who 
are asking me what can we do to reduce the price of gas? I told him, 
tell them to drive less. It will certainly reduce their cost if they 
are driving less, and also, if collectively we drive less, then there 
will be more supply and less demand, and the price of gasoline and oil 
will drop. They are both exquisitely sensitive to supply and demand.
  The next chart is one of my favorites, and this was referred to by 
Hyman Rickover who gave a speech 50 years ago, the 14th day of last 
month, to a group of physicians in Saint Paul, Minnesota, and I would 
encourage a reread of this article several times over, very, very 
perceptive article.
  He talked about 8,000 years of recorded history, and on our chart 
here we have only about 400 years, the last 400 years of that 8,000 
years of recorded history. If we extended it this way, the others, 7.6 
thousand years, it would be the same thing, very little energy being 
used. You could hardly see that energy was used here. It looks like 
zero because of this scale, it's hard to differentiate the tiny amount 
of energy that prehistoric man used that's compared to the energy we 
use today.
  Then we began the industrial revolution. We see it here with brown, 
which was wood, and that industrial revolution was sputtering when we 
found coal. Then we found gas and oil. It took off. That's the red 
curve there. Look how sharply that is rising.
  Now, this is a compressed abscissa because we have 400 years, and we 
will see that curve again, and it will be very flat, but that's because 
we will have stretched out abscissa and made the curve look flatter.
  But notice what happened up about the 1970s up there. Had that curve 
kept going, we will be through the ceiling right now. Notice what 
happened in the 1970s where we had a drop in use, a world wide 
recession as a result of the oil price shocks, and much increased 
deficiency. The efficiency of your refrigerator today is probably three 
times of the 1970s, and your air conditioner the same thing.
  Hyman Rickover pointed out, when he gave his speech 50 years ago, 
that we were 100 years into the age of oil, and he wondered how long 
the age of oil would be. We have, today, a much better understanding of 
that, because in the last 50 years, we have seen the peaking of oil in 
our country. It occurred in 1970. The peaking of oil, and I think 35 of 
the 48 top oil producing countries in the world, he noted that the age 
of oil would occupy but a relatively brief moment in the stretch of 
human history, and 8,000 years of recorded history, the age of oil will 
occupy about 300 years.
  We are not running out of oil. There is a lot of oil left. But it's 
going to be very difficult to get. That's going to make it very 
expensive, and each year we will get less and less. That happened in 
the United States.
  Now, we work very hard to prove that M. King Hubbert was a liar. He 
was mentioned in one of the articles. M. King Hubbert predicted in 1956 
that we would peak in 1970.
  Now, we knew by 1980 that he was right, because we were already 10 
years down the other side of Hubbert's speech. Our response to that was 
exactly the wrong response. Our response was let's see if we can't find 
more. So we gave tax incentives to see if we couldn't get the oil 
people to drill more, and it worked. They drilled more, but they didn't 
find more.
  Now, in spite of having drilled more oil wells in our country than 
all the rest of the world put together, we're producing about half the 
oil today that we produced in 1970s, in spite of the fact that we found 
enormous amounts of oil in Alaska and in the Gulf of Mexico.
  The next slide is a very interesting slide. This is the world 
according to oil.
  This imagines that the size of the country would be relevant, 
consistent with the amount of oil that they have. So, if you are 
thinking about oil, who are the biggies in oil?
  Obviously, Saudi Arabia dominates the landscape. They have about 22 
percent, not quite a fourth of all of the oil reserves in the world.
  Then there is Iran and Iraq and Kuwait. Kuwait, it looks like a 
little province. That's what Saddam Hussein thought, a little province 
that ought to belong to Iraq, so he went to take it. Tiny little 
country. Look at the amount of oil that it has. Here we are in the 
United States, pretty anemic, 2 percent of the known reserves of oil in 
the world.
  But I want to point to something even more alarming than that. If I 
lived in China, look at it over there, 1.3 billion people. Today they 
are getting about 70 percent of all of their energy from dirty coal. 
They are near suffocating under it. Even worse in China, with 1 billion 
people and growing, soon to surpass China's 1.3 billion is India, which 
has only half the energy of China, and China has less oil than we do. 
So the world is poised if we are approaching peak oil. The world is 
poised for some very serious times.
  The next chart is one that inspired 30 of our leading Americans, and 
I had the privilege of testifying with one of them yesterday, Jim 
Woolsey, and McFarland and Boyden Gray and 27 others, several of them, 
very senior four-star admirals who wrote a letter the President saying 
Mr. President, the fact that we have only 2 percent of the world's 
reserves of oil and use 25 percent of the world's oil and import almost 
two-thirds of what we use is a totally unacceptable national security 
risk. We really have to do something about that.
  The President mentioned this at one of his State of the Unions, and 
he noted

[[Page 16058]]

that we get this oil from countries which, as he said, which don't even 
like us.
  Two more facts on this chart. We represent, it says here, 5 percent. 
We are less than that. We are one person out of 22 in the world, less 
than 5 percent of the world's population. We use 25 percent of the 
world's oil and import almost two-thirds of what we use.
  The other figure on here really is an interesting one. We have only 2 
percent of the world's oil reserves, but we are producing 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. It's not hard to understand that 
when you realize we have drilled, as I said, more oil wells than all 
the rest of the world put together.
  The next chart here, this isn't really a very good one, because you 
have to read the numbers and don't pay much attention to the symbols, 
because they make it look kind of even, but these are some data from 
Hyman Rickover's speech. He went through a development of civilization 
and, particularly, our industrial civilization, and the role that 
energy played, and if in fact that is going to be a bell curve kind of 
experience, as we go down the other side will we retrace in reverse the 
steps that he so well defined in the contribution of energy to the 
development of our civilization.
  He noted that each person, I generally use about 75 watts, but 
that's, I guess, sitting here, and he had them sleeping, and he said 
that we are about 35 watts of electricity, or \1/20\ of a horsepower.

                              {time}  1745

  That's how much energy we represent, \1/20\th of a horsepower. In 
modest activity, you're something like a 70-watt bulb. That's all the 
energy that you are producing.
  The household appliances he said that were available to the housewife 
of 50 years ago, it would be more than that today, wouldn't it, he said 
that represented the work of 33 faithful household servants is the way 
he expressed it. This energy has been such a cheap servant.
  We had some factories then. We don't have many now. We had some 
factories then, and he said that the energy available to assist that 
factory worker in his productivity was the equivalent of being 
supported by 244 men. The automobile, and they got roughly the same 
mileage then as now. The automobile, he said, when going down the road, 
represented the work output of 2,000 men, and the locomotive that 
pulled the cars, 100,000 men, and the jet plane, 700,000 men.
  Each barrel of oil has an energy equivalent, and you can see it here 
from these numbers. Each barrel of oil has the energy equivalent of 12 
men working all year. And you will pay $125 roughly at the pump. So you 
can buy yourself the work equivalent of 12 men working all year with a 
barrel of oil.
  When I first read that number, I said, that can't be. And then I 
thought about it, and I drive a Prius, and we've been averaging, for 
the past several thousand miles, it's 49 miles per gallon. And I asked 
myself, how long would it take me to pull my Prius 49 miles? That 
little gallon of gasoline, still cheaper at $3, by the way, still 
cheaper than water in the grocery store, pulls my car 79 miles. How 
long would it take me to pull the car that far?
  Another statistic that really helped me understand that that's 
probably right is that if a man works really hard in his yard all day, 
his wife could get more work out of an electric motor for less than 25 
cents' worth of electricity. Now, that may be humbling to recognize 
that we're worth less than 25 cents a day, but that's the reality of 
this incredibly dense, cheap, so far ubiquitously available fossil fuel 
energy. It's just been everywhere. We assume it's there just like we 
assume that water and air are there.
  The next chart, and if we could have only one chart to speak to, so 
that we can understand where we are and where we've come from and where 
we're going, this would be the chart. This shows the discoveries of 
oil. And you can see them there. Way back in the 1930s we found them, a 
bunch in the 1940s, and, boy, did we start finding it in the 1950s and 
1960s and 1970s.
  And then starting from 1980, down, it just has been going down, down, 
down. And that's in spite of the fact that we're drilling more and more 
wells. We have computer modeling and three-D seismic technologies we 
didn't know back when we were finding most of this oil. We pretty much 
have mapped the Earth geologically. We know the kinds of the formations 
oil is found in.
  It is unlikely, very unlikely we will find any more large reservoirs 
of oil. The solid black line here represents the rate at which we've 
been consuming oil. Well, actually the production and consumption has 
been the same. There are no big lakes of oil anywhere so we've been 
using all we've produced. So this is the consumption curve. It's also 
been the production curve because up till now we have consumed 
everything we produced, or we've produced everything we would like to 
consume.
  But look what happened to this curve. This was an exponential curve. 
And up through the Carter years, the Carter years about here, up 
through the Carter years we used as much oil in each decade as we had 
used in all of previous history. That is a stunning statistic. That 
means that when you've used half the world's oil, there would remain 
only 10 years of oil at present use rates because we would have used as 
much oil as in all of previous history.
  Well, things really change. If they hadn't changed, extrapolate this. 
It would be above this graph, well above this chart. So really good 
things happened as a result of the shocks we had at the Arab oil 
embargo. We're very much more efficient than we were.
  And by the way, our citizens in California use maybe two-thirds the 
energy that we use here. Do you think they're less happy than we are? I 
have a lot of colleagues in California. They would really debate that 
if you suggested that.
  Well, since about 1980, as these curves show, we have not found as 
much oil as we've been using. Today we're pumping what, 4 or 5 barrels 
for every barrel we find. So now we've been dipping into the past 
reserves. This chart says that peaking should be occurring, what, about 
now, or 2010, something like that.
  Now, we can make the future look different within limits, depending 
on how aggressive we are with enhanced oil recovery, sending live steam 
down there, flooding it with the CO2 for CO2 
sequestration, flooding it with seawater as the Saudis do. They pump 3 
or 4 barrels of seawater for every barrel of oil that they pump.
  They have suggested here in the lightly shaded areas to the right 
what future discoveries will be like. They certainly won't be that 
smooth curve. They'll be up and down. But I'll tell you, if you were 
smoothing a curve out you wouldn't have come that high, would you, if 
you just look at this chart. So they're being generous, I think, in how 
much oil we might find.
  Well, unless you think we're going to find enormously new reservoirs 
of oil, and I know of no responsible experts who believe that, it's 
clear that you cannot pump what you have not found. And unless we find 
a great deal more, the area under our consumption curve cannot be 
larger than the area if you put a smooth curve around this, the area 
under the discovery curve.
  And so these two articles I read were reflecting the reality that 
we're probably at peak oil and face a very challenging future.
  The next chart shows one depiction of what's called Hubbert's peak. 
This is U.S. oil production. This is the whole country's production. He 
predicted only the lower 48, by the way. But you see we've reached a 
peak. In about 1970 we reached a peak, and now we're about half the oil 
production in spite of having more oil wells than all the rest of the 
world.
  The next chart is really an interesting one, because this chart is 
used by one of the few groups that I think are in denial. This is the 
Cambridge Energy Research Associates. They are predicting that peak 
oil, if it occurs, is going to be an undulating plateau somewhere well 
out into the future, not to worry about it today. And they

[[Page 16059]]

need to discredit M. King Hubbert, because M. King Hubbert predicted 
that the United States would peak in 1970 and we did peak in 1970. And 
in 1979, I think, or 1969, I forget which date, he predicted the United 
States would be peaking, I'm sorry, the world would be peaking about 
now.
  Well, a very obvious question, if he was right about the United 
States, which is clearly a microcosm of the world, why shouldn't he be 
right about the world?
  And knowing he was right about the United States by 1980, because we 
peaked in 1970, we've now lost 27 years when we should have been 
addressing this problem.
  Well, they use these curves to try to convince you and me that you 
shouldn't have any confidence in M. King Hubbert; therefore, don't 
worry about the future. Hubbert peak for the lower 48 was the red going 
up this side and the yellow coming down over there.
  Now, the actual lower 48 was the green, and they think that deviates 
a great deal from the yellow. Gee, I think they're pretty close. From 
my perspective, I think that they confirm the predictions of M. King 
Hubbert.
  And then the red, now, the red is off a little bit. That's because he 
didn't include Canada and the Gulf of Mexico. And this little bump on 
the way down is the oil from Alaska, from Prudhoe Bay. I've been there, 
Prudhoe Bay. A 4-foot pipe right where 3 starts there at Prudhoe Bay. 
For years, less now, it's running down. For years a fourth of all our 
domestic production came through that pipeline.
  The next chart is just one of many quotes from one of four studies, a 
fifth one, which is now out, but it's been embargoed so we can't really 
talk about it until they've released it. This is from the first report 
paid for by the Department of Energy, done by the big prestigious SAIC, 
Science International Applications Corporation, known as the Hirsch 
Report because Robert Hirsch was the principal investigator on it.
  And I just want to mention the highlight here. He says the world has 
never faced a problem like this. There is nothing in history, which is 
what these articles were saying, right? There is nothing in history 
that is a precedent to this. There's nothing to guide us as to what 
will happen and where we should go.
  The next chart is a schematic of the peak. Now, I said we were going 
to spread out the abscissa and flatten the peak. That's exactly the 
same peak that you saw before when we compressed the abscissa in a 400-
year scale. This is the schematic. The yellow area is about 35 years. 
Two percent growth, by the way, doubles in 35 years; four times, bigger 
in 70 years; eight times bigger in 105 years.
  No wonder Albert Einstein, in response to a question, Dr. Einstein, 
what will be the next big energy force in the universe after nuclear? 
And he said the most powerful force in the universe is the power of 
compound interest. Exponential growth. And we see it here.
  So if this is, in fact, where we are, and it's now being more and 
more widely recognized that that's probably correct, this is what the 
future will look like. That dark green area represents the amount of 
oil that will be available. If our economies are going to continue as 
they are now, with just a modest 2 percent growth, this is a 2 percent 
growth curve, we're going to need that much more oil. We're going to 
need twice as much oil at the end of 35 years. That is a daunting 
challenge.
  When you represent that, when you remember that we use 21 million 
barrels of oil a day in our country, a fourth of the world's production 
and the total amount we get from all of the usual alternatives is 
something like 3 percent of everything; and they're growing rapidly, 
but it's still only about 3 percent of all of our energy use.
  The next chart, it's really an interesting chart and it points to two 
things that I'd like just for a moment to emphasize. Here we see that 
typical curve. You saw it before, the rise and then the stuttering in 
the '70s. We became more efficient or this would be off the top of the 
chart here. And I won't this evening go into how they got there, but 
using some very suspect data, our energy information agency is 
predicting that we will find as much more oil as all the reserves that 
we now know exist.
  Even if that is true, from their own chart, that pushes the peak out 
from only now to 2016. That's 9 years from now. And the Hirsch report 
said, unless you started preparing 20 years before peak oil, you were 
going to have a pretty rough ride.
  Now, if they're not going to find this enormous amount of additional 
oil, and I think the odds are very good they will not, then peaking is 
about now, and the curve starts down here.
  Let me point to the other thing they note here; that is, if you have 
some really vigorous enhanced oil recovery, and you extend that peak 
production of oil, you might push it out to 2037. But then look what 
happens. You fall off a cliff. Obviously, the area between these two 
curves has to be the same as the area between these two curves down 
here. You know, you can't pump what's not there.
  Now, you may get a little more. You will get a little more by 
enhanced oil recovery. But compared to the trillion barrels of oil that 
we've used so far, the trillion that we will use in the next 150 years 
as we run down the other side of Hubbert's peak, the additional oil we 
get is going to be fairly limited.
  The next chart has a quote by one of the giants in this area, 
Laharrere, who says the USGS estimate implies a fivefold increase in 
discovery rate and reserve addition for which no evidence is presented. 
Such an improvement in performance is, in fact, utterly implausible, 
and I would agree, utterly implausible, given the great technological 
achievements of the industry over the past 20 years, the worldwide 
search and the deliberate efforts to find the largest remaining 
prospects.
  Boy, we have plowed that ground and Laharrere is exactly right. Their 
predictions I think are implausible.
  The next chart is one that I hope more and more of us look at and 
reflect on. This is an interesting one. I wish it was in living color. 
It's just kind of plain Jane. But on the abscissa here we have how much 
energy we use per person, and where would you expect to find us using 
more energy per person than any other person in the world. There we 
are, way up there. And the ordinate here is how happy we are with life, 
how content we are.

                              {time}  1800

  And we are okay. We are pretty content. But notice on this chart that 
there are, I think, 20 some nations, all of those from here up, that 
use less oil than we, less energy than we, who are happier than we. Not 
just as happy as we, happier than we are.
  Now, it is obvious at this end of the curve it is really hard to be 
happy when you don't have much energy. When you are burning cow dung 
and so forth for your heat, you are not really happy. But many nations 
with about a fourth of energy that we use are just about as happy as we 
are.
  So this is very encouraging. What that means is that you don't have 
to use as much energy as we are using to be happy. We are the most 
creative, innovative society in the world. We can use far less energy 
and be, I think, happier because we will have the satisfaction of 
really making a contribution.
  The next chart kind of points to some of the difficulties, and these 
two articles I read mention those. I use a really simple analogy to 
help us understand where we are. We are like the young couple whose 
grandparents have died and left them a big inheritance, and they now 
are lavishly spending that inheritance, and 85 percent of everything 
they live on comes from their grandparents and only 15 percent from 
what they earn, and the inheritance is going to run out a long time 
before they retire; so they have obviously got to do something. They 
got to make more or spend less or some combination of those two.
  I use those figures because that is where we are in terms of the 
amount of fossil fuel energy we use, 85 percent. Some will say 86 
percent. Coal, oil, and

[[Page 16060]]

gas make up about 85 percent of all the energy we use. More than half 
of the rest comes from nuclear power.
  By the way, we are the biggest nuclear power producer in the world. 
France produces 75 percent of their electricity. We produce 20 of ours. 
But since we are so much bigger than France in terms of total quantity 
of electricity, we produce more than France does at a much smaller 
percentage. Well, nuclear power could and maybe should increase, but it 
comes with problems, as you know. And, also, unless you go to some 
different technologies, there is not a forever supply of fissionable 
uranium in the world. That is a very finite supply. So you are going to 
be going to burning something else or using a breeder reactor, which 
has problems of enrichment and moving fuel around that is weapons grade 
and so forth. So this comes with some obvious drawbacks. But shivering 
in the dark has some obvious drawbacks too, and we need to trade those 
off as we are looking at maybe using more nuclear power.
  Then we come to the true renewables. And I will tell you that we will 
transition, the world will transition, to sustainable renewables, 
either because geology demands it as we run down the other side of 
Hubbert's Peak, and for the last 150 years of this glorious age of oil, 
we will move to sustainable renewables. If we do it on the terms of 
geology, it may be a really rough ride. If we do it on our terms, it 
will be a much less rough ride and it could really be fun because there 
is no exhilaration like the exhilaration of meeting and overcoming a 
challenge and, boy, this is a huge challenge. I can see this really 
turning Americans on. This is a far bigger challenge than we faced in 
World War II and that turned everybody on. I am 81 years old. I lived 
through that. Everybody had a victory garden. We had daylight savings 
time, I think, for the first time so you could work in your victory 
garden. There were no new cars for us. We made all sorts of 
sacrificing. We did it because we knew we needed to do it.
  And before I forget as far as what we ought to be doing for the 
future, let me tell you that I think we can get there with our enormous 
creativity and innovation if we have proper leadership. We need a 
program that has the total commitment of World War II, that has the 
technology focus of putting a man on the moon and the urgency of the 
Manhattan Project. And I think Americans could be marshaled. I think we 
could make a tremendous contribution and really feel good about it. In 
that little chart that showed how satisfied we are with life, I think 
we would be even more satisfied with life, living just as well as we 
live now on a whole lot less energy and feeling good about the fact 
that we are able to live that well with less energy.
  I want to spend a moment looking at the renewables that we will be 
turning to increasingly. This is a 2000 chart; so there are more now. 
But in 2000 solar was 1 percent of 7.07 percent. So it is five times 
bigger now, 0.35 percent. Big deal. And I am a big solar fan. I have on 
off-the-grid home and I get all of my electricity from solar and wind, 
but I recognize this is a tiny contributor now and has a long way to 
go.
  Wood: That is waste products, and the timber industry and paper 
industry probably can't grow a whole lot without raping our forests.
  Waste energy: We can do a whole lot more of that. But please note 
when you look at that waste pile that is going into the furnace, much 
of it came from oil. In an energy deficient world, that huge stream of 
waste will have really shrunk. There will be nowhere near as much.
  Wind: The rapidest growing, at 30 percent per year that industry is 
growing. Still a tiny percentage. A huge frontier: conventional hydro. 
We don't have any more big rivers to dam in our country. We could get 
maybe as much more hydro from microhydro. Microturbines, that 
technology is really improving now.
  Let's look at the next chart because that helps me talk about fuel 
from food. This is a chart on comparing the energy history with 
petroleum and with corn. And 75 percent of all the energy you get from 
corn comes from the fossil fuels you use to grow the corn and haul it 
to the mill and ferment the grain and so forth.
  The article in the Washington Post of a couple weeks ago noted that 
if you use all of our corn for ethanol, all of it, and discounted it 
for the fossil fuel input, which they said was 80 percent, and this is 
a little optimistic but 80 percent is not bad, that it would displace 
2.4 percent of our gasoline. And they noted correctly that you could 
save that much gasoline if you tuned up your car and put air in the 
tires. That just points out the incredible challenge we have. The 
enormous amounts of energy that we get from this, 21 million barrels of 
oil we use a day, 70 percent of it in transportation.
  Just to look at this bottom pie chart here, why it is not more 
efficient. Look at this purple section here. That is almost half of it. 
That is nitrogen fertilizer that we produce from natural gas. Not much 
in this country because it is too expensive. We produce it some places 
overseas from gas where gas is stranded. That is, there is gas and 
nobody to use it and it is hard to haul; so it is cheaper. So we make 
the nitrogen fertilizer there. Enormous investments of energy in 
growing corn.
  I have several charts that relate specifically to agriculture. Farm 
productivity and number of farms: And to nobody's surprise, the number 
of farms have been going down, down, down. You see it in the red line 
there. While the productivity for the farm has going been going up up, 
up, up. That is because the farms have been getting bigger and bigger 
and bigger.
  Now, to support all of that big expensive equipment, you have to have 
to farm, you need to farm several thousand acres. I bought a farm in 
Frederick County. I milked cows. I had 144 acres. I milked 60 cows, and 
I grew almost everything on the farm that I fed those cows. You can't 
do that today. The farms are very much bigger and they have huge 
equipment and just a very different kind of agriculture.
  There are several charts here that present a very disturbing story 
for the family farm. Today, only 2 percent of our people farm, but 
almost everybody remembers an uncle or aunt or grandparent whose farm 
you went to. There is a lot of nostalgia in our country for farms. And 
this shows a percentage of U.S. farms. And these are the little farms. 
The small family farms are more than 90 percent of all of the farms. 
But look at the value of production. This little 7.5 percent of the 
farms which are large-scale family farms, the big family farms, 
represent 60 percent of all of the productions. And we will see in some 
future charts that almost all those small family farms are losing 
money. The people are working off the farm to support them.
  Here is the next chart. These are things that our farm bill is going 
to have to take into consideration. This is a share of farm business 
assets, acres owned, and acres enrolled in a conservation wetland 
reserve program. These are the assets. And you see again that most of 
the assets are in the small farm. And land owned is nearly the same as 
assets because the land is the biggest asset the farmer has. That is 
why that little circle there looks very much like this one. The assets 
and the land owned are about the same thing because 90 odd percent of 
all the assets are the land. And this shows that our small farms are 
really cooperating with these programs. Notice these small farms. That 
part of the circle has gotten larger. Our small farms are doing a 
really good job of respecting our wetlands and putting their land in 
reserve and so forth.
  The next chart is almost one that almost makes me weep because I 
represent a farm district. It still is the biggest industry in my 
district. And this shows the size of farms and whether they are making 
money or not. The yellow is if you are making 20 percent or more. The 
next one is if you are making 10 percent or more, and then 0 to 10 
percent in the red. Look at it. Losing money. This is by size of farm. 
Every farm group loses money. Generally speaking, the smaller you are, 
the more you lose.
  But even our big farms, our biggest farms, large-scale farms, more 
than a

[[Page 16061]]

fourth of them are losing money. There is no other segment or society 
that has as much capital at risk who work so hard and get so little for 
it as our farmers. Please remember your farmer when you go to the 
grocery store tonight. When I was a kid 25 percent of the average 
family budget went for food. Now it is less than 10 percent. And that 
farmer is subsidizing your quality of life by 15 percent because of his 
ingenuity and hard work and his willingness to work for less than 
nothing. He is losing money here. So he is subsidizing your quality of 
life. Please remember your farmer when you go to the grocery store. You 
are living as well as you are because he is working as hard as he is.
  The next one shows the farmer on the tractor. And, boy, has he got a 
red tractor. And these are the low sales and the medium sales farms, 
and if you sell a little more, you don't lose as much.
  You have to be a pretty good farmer today to break even, by the way, 
and a really good farmer to make money.
  The next chart: Principal farm operators reporting off-farm work. 
Boy, the small farms, they are working a lot off the farm, aren't they? 
I guess you heard the story of the farmer who won $5 million in the 
lottery. They asked him what he was going to do with it. He says, ``I 
guess I will just keep farming until it's gone.'' And that is kind of a 
sick joke but it is true. That is what our farmers are doing. Many of 
our farmers are farming away those huge assets you saw in the form of 
land. They are farming those assets away.
  The next chart, this is principal farm operators and self-employed 
workers and nonagriculture industries who are at least 65 years old. 
Every year the average age of our farmers gets almost 1 year older. I 
know a lot of farmers. I know almost no farmer whose kids want to farm. 
It is really tough work. There is little financial reward for it. Huge 
risks, risks that you can't control. Drought, cold weather, frost in 
the spring, you can't control any of these things and you are at risk 
by all of those. A very serious problem. Our farmers are getting older 
and older and who is going to replace them?
  Next chart: Gross sales of $1 million or more. And it is still the 
family farm but these are, many of them, big family farms. They farm 
their farm and they lease maybe ten farms around them. And the others 
have the nice quality of life of living on a farm. And you can have 
cover 100 acres of land and you lease it to one of these big farmers, 
and they will be a family farm and they may spend 6 days a year on your 
farm. They come in with two combines and cut the whole thing. They put 
Paraquat on it that kills the weeds in the spring and then in 1 day 
they will plant the whole farm to corn, for instance. They may spend 6 
days a year on your farm total.
  The next chart is a really interesting chart, and this shows the 
problem that we would be in if we hadn't been as efficient as we have 
been. And you saw from those previous charts how our efficiency has 
slowed that rate of increase in the use of oil, of energy generally, 
and this shows the avoided supply. That is our efficiency. Wow, that is 
about a third of it, isn't it?

                              {time}  1815

  We would be using a third more if it weren't that we were as 
efficient as we are.
  So what do we do now? Well, I mentioned that I thought that we needed 
a national program that had the total commitment of World War II. 
Everybody has to be involved. These two articles, boy, I was 
appreciative for these two articles. We scheduled this time with you 
before these articles came out. This was great that they came out 
because they make my point. We face huge problems.
  I have a bill, H.R. 80, the Self-Powered Farm Energy bill. If our 
farmers can't produce enough energy to run their farm and a bit more 
for the guy who lives in town, we're in for a really rough time, aren't 
we? So this is a bill which challenges our farmers to be energy 
independent. And there's a reward for that. This is not going to cost 
the taxpayer much money. You know, people work really, really hard for 
an award, maybe harder than they would work if you were paying them. We 
are going to give an award for this, for the farms that do the best in 
this. And we think there is a lot of creativity and ingenuity out there 
and we should do very well with this.
  Another bill that's a good bill, H.R. 670, the so-called DRIVE bill, 
and American Energy For America's Future, the bipartisan DRIVE Act, 
Dependence Reduction through Innovation in Vehicles and Energy Act. By 
the way, driving that SUV does not make you safer. Look at the fatality 
statistics. They are higher in the SUV than the family car. Because 
they turn over so easily, the actual fatality figures are higher for 
the SUV than they are for the standard family car. You don't need to be 
in an SUV to be safer.
  Well, Mr. Chairman, I think that Americans will really rally to this 
challenge. As I have said, there is no exhilaration like the 
exhilaration of meeting and overcoming a big challenge, and boy, this 
is a huge challenge. And I think properly motivated, the American 
people will turn to and demonstrate to the world that we are still the 
most creative, innovative society in the world. I think we can again 
become an exporting Nation.
  There is going to be a lot of technology associated with moving to 
these sustainable alternatives. Who better than we to develop those 
technologies. And let's sell them to the world. Let's not turn over the 
manufacture of these technologies to somebody overseas, let's sell them 
to the world.
  There are two reasons for doing this. One is that if we are going to 
maintain anything like the quality of life we have now, we really need 
to do this. And the other thing is there is going to be a mad global 
scramble for energy. If we haven't led the way, if somebody hasn't led 
the way to move us to renewables, what will the world do when we come 
to the reality that there just isn't going to be enough oil there?
  Just one little note in closing. We need to rethink a lot of things. 
Our whole financial structure needs to be rethought. If you think about 
our financial structure, and I am not an economist, I don't think you 
have to be an economist to understand obvious things. When we put more 
money in circulation, it is printed by the Feds. And they put it into 
the circulation by loaning it to somebody. Now, if there are only two 
of us in the world, and I borrow money and I have to pay interest on 
it, one of two things has to happen, either there has to be growth so 
that I have the money to pay the interest with, or you, if you are the 
only other guy in the world, you have to lose money. So I have some of 
your money so that I can pay interest on the money that I borrowed. 
That's why we start to shudder about the economy when it drops below 2 
percent growth. Because we can't imagine an economy that doesn't 
include growth because our whole financial system is predicated on 
growth. We have got to have growth.
  Now, we can have growth without using more energy if we become more 
efficient. That's a challenge. So we still can grow some. But that is 
not limitless growth because that you can't be infinitely efficient. So 
we will have to, one day, sooner or later, come to the realization that 
we've got to have a financial system that doesn't require growth. But 
we can do that.
  We have met a whole lot of challenges in the past and done very well 
with overcoming. And Mr. Speaker, I am very encouraged that with proper 
leadership, and you know, I will tell you, we don't have much oil in 
this country, but we have even less real leadership on energy. But with 
responsible leadership in this country, I think that Americans will 
heed to, and we will surprise the world with what we can do in meeting 
the challenges of peak oil.

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