[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[House]
[Pages 7547-7552]
[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 came early to our office 
yesterday morning, and I opened the door and took the newspapers inside 
and put them out on the reading table. And as I took them out, seven of 
them, four newspapers and three of the kind of inside-the-beltway 
papers, I noted the lead story above the fold. In the Sun there were 
two stories: ``Demand Eats Supply, swiftly rising food prices are 
undoing progress in fighting hunger globally''; and another above the 
fold headline: ``Energy Bill Aid Payouts on Rise.'' Then I picked up 
the Washington Times and noticed an above the fold headline, ``Bush 
Lays Gas Blame on Congress.'' And then I picked up the Washington Post, 
a major headline above the fold: ``Syphoning Off Corn to Fuel Our 
Cars.'' And then the Wall Street Journal, the biggest headline above 
the fold, with a graphic and picture above it: ``Grain Companies' 
Profit Soar As Global Food Crisis Mounts.''
  And then I took the three inside-the-beltway newspapers to put them 
on the reading table, and I looked at the headlines there, on the front 
page: ``Gas Prices Fuel Effort to Jam GOP.'' ``Alexander Eyes Energy 
Agenda.'' The first of those was Politico; the second was Roll Call. 
And the third, The Hill: ``Politics at the Pump.''
  So, Mr. Speaker, the seven papers that our office gets, every one of 
them yesterday had as their leading story above the fold something 
about energy prices and food prices, which, of course, are related.
  Also appearing today, and I wanted to make sure that we didn't miss 
this New York Times column by Thomas Friedman, a very well-known author 
and commentator, which describes America's energy problems as the 
``predictable consequences of an energy strategy that would be 
exacerbated by the most popular proposed changes to maximize demand, 
minimize supply, and buy the rest from the people who hate us most.'' 
In a little bit, I will read some other excerpts from this very 
interesting op ed piece by Thomas Friedman.
  I have here a little book which came across my desk, signed by one of 
the authors to Representative Roscoe Bartlett: ``You are a political 
voice in the dark. Please continue trying to shed light on this 
critical issue.'' And the critical issue he's talking about is 
explained in the title of his book, ``A Very Unpleasant Truth . . . 
Peak Oil Production and Its Global Consequences.'' And I turned to the 
little page that talked about who the authors are, about the authors: 
W.D. Lyle, Jr. holds a Ph.D. in engineering from Purdue University. L. 
Scott Allen holds a Ph.D. in physics from SMU. Both are retired 
scientists from the Exploration and Producing Technical Center of a 
large international oil company. They have been awarded over 40 patents 
and coauthored or authored more than 50 technical papers with 
contributions appearing in a variety of journals such as Science, 
Geophysics, Nuclear Science and Engineering, and the Journal of 
Petroleum Technology. Both authors, it says, live in the Dallas area. 
So those are obviously well-respected authorities in their fields.
  And I turned to chapter 6: ``What About Alternative Energy Sources 
and What Should We Do Now?'' And it begins by saying, ``What must we do 
now to prepare for and respond to the inevitable and impending energy 
crisis?''
  And, Mr. Speaker, the seven papers that I just referred to and the 
headlines on all of them about energy and food would indicate that 
maybe, just maybe, we're on the cusp of this crisis.
  And then he says, ``The first and most important thing that needs to 
be done is to educate and convince the public that a problem even 
exists.''
  Long before I got this book, more than 3 years before I got this 
book, I thought also that that was the most important thing that needed 
to be done. And so, Mr. Speaker, I think this is the 43rd time I have 
come to the floor to spend an hour talking about the challenge. Really 
it was to explain to the American people the challenge that we face, to 
educate and convince the public that a problem even exists. Well, I 
think these seven headlines indicate that at least the editors of those 
papers thought that a problem existed because they were all talking 
about the high price of energy and its consequences on food prices.
  But education is not the only thing that I have been doing. I have 
been personally involved in at least four activities, which I think 
will help to advance America on the path that we need to be treading. 
I'm sponsoring, in conjunction with the SMART Organization, a Smart 
Green Showcase on July 18 of this year in Frederick, Maryland, that 
will offer smart energy solutions for homeowners and small business 
owners. There is a lot of information out there. There's a lot of new 
technology that just isn't widely known. Practical ways you can use 
less energy, save money, and help our country transition to domestic, 
cleaner, and renewable energy sources. The conference will provide 
educational and networking opportunities for homeowners and 
representatives of large and small businesses, academic and nonprofit 
organizations.
  This Smart Green Showcase has its own Web site, and I would encourage

[[Page 7548]]

you to go to that Web site, www.smartgreenconference.com, for a fuller 
explanation of what will be shown at this Smart Green Showcase.
  In the next few days, I will submit a bill that is a companion bill 
to a Senate bill, S. 2821, that was introduced in the Senate on the 3rd 
day of last month by Senator Maria Cantwell and Senator John Ensign, 
and almost half of the Senators have already signed onto this bill.

                              {time}  1700

  I have a brief summary of the bill, and because what it does is so 
important to where I think we need to be going, I am going to take just 
a moment to read this brief summary. This Clean Energy Tax Stimulus Act 
of 2008 amends the Internal Revenue Code to extend certain tax 
incentives for energy production and conservation. It extends through 
2009 the tax credit for production of electricity from renewable 
sources. For example, biomass, geothermal energy, landfill gas, and 
trash combustion.
  It includes marine and hydrokinetic renewable energy as a resource 
eligible for such credit. It allows sales of electricity produced from 
renewable resources to regulated public utilities. This one is really 
very important to encourage everybody, even every homeowner, to produce 
electricity. If they are not using it, sell it back to the power 
company.
  It extends the Energy Investment Tax Credit for solar energy through 
2016 for fuel cell and microturbine property through 2017. It repeals 
the dollar per kilowatt limitation for fuel cell property under the 
Energy Investment Tax Credit. It allows public electric utilities to 
qualify for such credit.
  It extends through 2009 the tax credit for residential energy-
efficient property expenditures. It repeals the 2000 limitation on the 
tax credit for solar electric property. It allows an offset against the 
alternative minimum tax of tax credit amounts. It extends through 2009 
the tax credit for investment in clean, renewable energy bonds, 
increases the national limitation amount for such bonds.
  It extends through 2009 deferral provisions relating to the 
recognition of gain by certain electric utilities, and extends to 2009 
the tax credit for nonbusiness energy property. It includes residential 
biomass fuel stoves, that is pellet stoves, as eligible energy property 
for purposes of such credit.
  It extends through 2010 the tax credit for energy-efficient new 
homes. It extends through 2009 the tax deduction for energy-efficient 
commercial buildings, and increases the allowable amount of such 
deductions. Finally, it extends the tax credit for energy-efficient 
appliances, to include appliances produced in 2008, 2009, and 2010, and 
it revises and updates energy efficiency standards for such appliances 
in accordance with the Energy Independence and Security Act of 2007.
  As shown on the first chart here, I also have a Self-Powered Farm 
Energy Bill, H.R. 80. This is really a very significant approach to 
addressing our energy problems because we are going to have to turn 
more and more to our farmers for energy and products that are produced 
by energy, that in the future will have to be produced with less 
energy. This bill would support Federal research, development, 
demonstration, and commercial application activities to enable the 
development of self-powered farms that are net producers of both food 
and energy. They should be capable of independence from offsite sources 
of energy. A farm standing all alone.
  Mr. Speaker, if our farms can't be energy independent, we really, 
really have a huge challenge for the future. I think this is very 
doable, and this bill will offer awards, rewards to those who do that. 
Offsite sources of energy, fuel and raw materials for fuel. A community 
resource for food and energy or raw materials for fuel would minimize 
or eliminate ongoing operating expenditures to offsite entities for 
fossil fuel-derived energy, employ sustainable farming practices for 
long-term soil fertility. We mustn't forget that what we do to make our 
farms energy independent and to get energy from our farms, that we must 
be really concerned about sustainability. It would be easy for a few 
years to mine the soil, that is take out of the soil more than you're 
putting back. But if it is not sustainable, it will not be useful for 
the long term.
  Employ sustainable farming practices for long-term soil fertility and 
produces at least two times as much energy, including fuel or raw 
materials, or fuel, as it consumes both onsite and in the transfer of 
farm products to market.
  The next chart shows an additional bill, H.R. 670, that I have 
introduced, American Energy for America's Future, the bipartisan DRIVE 
Act, Dependence Reduction through Innovation in Vehicles and Energy 
Act. What this does is to encourage transition from depending so much 
on liquid fuels from oil for transportation and move to electricity for 
transportation.
  And the reason for this, Mr. Speaker, is pretty obvious, if you stop 
to think about it. We use two kinds of energy largely in our lives 
today; electricity for many, many things, but not much for 
transportation. Most of our transportation comes from fossil fuels, 
from oil, and some gas. You see city buses advertising that they are 
running on clean natural gas.
  We have lots of opportunities to produce more electricity. We can do 
more solar. France produces 75, 80 percent of their electricity from 
solar. We have enormous opportunities to grow wind and solar. They are 
now growing at something like 30 percent a year. That is incredible 
growth rate. But they started very small. So even with that big growth 
rate, they are still producing a very minimal amount of energy to the 
grand mix of energy.
  We can get a lot more energy in those parts of our country where 
you're close enough to the molten core of the Earth to get true 
geothermal energy. You go to Iceland, I have been there, and I did not 
see a single chimney in Iceland. They may have one. I didn't see it. 
They get essentially all of their energy there from geothermal energy. 
That is tapping the molten core of the Earth, which will heat water, 
and you can do lots and lots of things with it, and hot water.
  Then, of course we have lots of opportunities for microhydro, without 
the kind of impact on the environment that our macro hydro has had with 
these huge dams and we try to compensate with fish ladders and so 
forth, compensate for the damage we have done to the environment with 
fish ladders and so forth so the fish who are spawning can get around 
to them. So we have lots of opportunities for producing electricity.
  Our options for producing more liquid fuels are far more limited. So 
this is a very important bill. We are going to be talking for the rest 
of our few moments together today about these opportunities for 
producing more liquid fuels. You will see that they really are limited. 
We really do have a challenge there.
  So to the extent that we can move transportation dependency from oil 
to electricity, we will have done a great deal to minimize our 
dependence on oil and free ourselves from dependence on oil, as the 
President appropriately said in his State of the Union Message, from 
people who don't even like us.
  I wanted to just spend a couple of moments reading some additional 
comments from Thomas Friedman's article. I don't read this because I 
necessarily agree with everything he says, but I read it because I 
think that it's very important, as this little book said, that the 
American people understand the seriousness of the challenge that faces 
us.
  So let me read a few more excerpts from his article that appeared 
today in the New York Times. The title of his little op-ed piece is 
called: Dumb as We Wanna Be. ``Here's what's scary: Our problem is so 
much worse than you think. We have no energy strategy. If you are going 
to use tax policy to shape energy strategy, then you want to raise 
taxes on the things that you want to discourage, gasoline consumption 
and gas-guzzling cars, and you want to lower taxes on the things you 
want to encourage, new renewable energy technologies. We are doing, he 
says, ``just the opposite.''

[[Page 7549]]

  ``The McCain-Clinton gas holiday proposal is a perfect example of 
what energy expert Peter Schwartz of Global Business Network describes 
as the true American energy policy today.'' Then I quote again, 
``Maximize demand, minimize supply, and buy the rest from the people 
who hate us the most.''
  Then additional excerpts from the article go on to say, ``This is not 
an energy policy. This is money laundering. We borrow money from China 
and ship it to Saudi Arabia and take a little cut for ourselves as it 
goes through our gas tanks. No, no, no. We'll just get the money by 
taxing Big Oil. Even if you could do that,'' he says, ``what a terrible 
way to spend precious tax dollars.
  ``For almost a year now, Congress has been bickering over whether and 
how to renew the investment tax credit to stimulate investment in solar 
energy and the production of tax credit to encourage investment in wind 
energy. The Democrats wanted the wind and solar credits to be paid for 
by taking away tax credits from the oil industry. President Bush said 
he would veto that. Neither side would back down. Stalemate.''
  You know, as I said, I read this not because I necessarily agree with 
everything he says, but I read it because it is a very important voice 
that is saying what I have been trying to say for more than 3 years 
now, Hey, we face a problem. We have really got to do something about 
that problem.
  The next chart, this is a little cartoon which I think tells the 
story that many people don't believe. Just why is gas so expensive, 
over $3.50 a gallon now? Just why is gas so expensive? The cartoon says 
it with just two words, a tiny little supply and a huge big demand.
  Now there are many people who believe that gas is very expensive at 
the pump because the major oil companies are gouging us. Many people 
think that gas is high at the pump because the oil from which we refine 
it is very expensive because the Arab world is holding back and not 
producing as much oil as they could produce, or somehow gouging us.
  The reality is that neither one of these commonly believed reasons 
for our high gas prices are probably true. There may be a little 
gouging here and there by stations and so forth. The price of oil is 
not determined by our big oil companies, ExxonMobil and Shell and Royal 
Dutch. The price of oil is determined, as this cartoon indicates, by 
how much there is and how much we would like to use.
  The Arabs don't determine the price of oil. They can affect the price 
of oil. If they could produce more oil, they could drive down the price 
of oil by increasing the supply so it would be more consistent with the 
demand, and that would reduce the price of oil. There is increasing 
evidence that they could not do this. That is they could not increase 
their supply.
  Russia, a couple of weeks ago, announced that they had peaked in oil 
production. That they could no longer increase their production. Just 
last week, Saudi Arabia indicated that they had reached a maximum oil 
production. They have the granddaddy of all oil fields, the Ghawar, a 
huge field, producing 5 million barrels a day. They want to bring 
online a new field. I read a lot about the technicality of that field. 
It's very interesting, what they have done. This is the field that has 
a lot of potential oil in it. Khurais, I think. It's hard for me to 
pronounce words with k-h.

                              {time}  1715

  They have hired Halliburton to drill a large number of wells, and 
what they plan to do, what they hope to do, is to flood that field 
where the oil will not flow. If you drill down in that field, you will 
not get any oil, although there is a great deal there, and they hope to 
make this oil flow by pumping water in at the periphery of the field 
under considerable pressure.
  But this is a very delicate operation, because if they pump at too 
high a pressure and too large a volume and the water overflows the oil, 
it could seal off the little interstices through which the oil would 
flow and it might kill the field, so there would be no oil from the 
field. But hopefully they won't do this. They are very good at this 
technology. And if they are able to develop this field, they will get, 
they hope, 1.2 million barrels a day. This, they hope, will make up for 
the oil that they are not getting as the present fields they are 
pumping tail off. They have reached a maximum production of oil.
  The next chart is a chart whose history begins in 1956 with a talk 
which I think will go down as the most famous speech given in the last 
century by M. King Hubbert to a group of oil engineers and business 
people at San Antonio, Texas, in 1956, 52 years ago, on the 8th day of 
March. This was 1956. Here we are, 1956 right here.
  He told them that in 1970, this point here. This part of this chart 
was not available. All they had was this, rapidly increasing oil 
production. We were the largest producer of oil in the world, the 
largest consumer of oil in the world, and I think the largest exporter 
of oil in the world. He said in 14 years, in 1970, the United States 
will reach its maximum oil production. Shell Oil Company asked him, 
please don't give that talk. You will make us look silly and make you 
look silly. He gave the talk, and for a long while was an object of 
derision. Then, right on schedule, in 1970 we reached our maximum oil 
production.
  Now, they didn't know that in 1970. You only know you have reached a 
maximum when you look back and see, gee, we were pumping more oil then 
than we are now. But this was clearly, clearly known by 1980, because 
you can see by 1980 here we are well down the other side of Hubbert's 
Peak.
  There are a couple of things in this chart that he did not include in 
his analysis. He couldn't have known that we were going to get so much 
natural gas liquids, and he looked at only the lower 48. He didn't look 
at Alaska, and he didn't look at the Gulf of Mexico, where we have 
found huge amounts of oil.
  I have been to Alaska, to Dead Horse, to Prudhoe Bay, and I have seen 
the very beginning of that 4-foot pipeline through which for a number 
of years now about one-fourth, about one-fourth of our total domestic 
production has been flowing.
  Well, you can see that even when you add the oil which he did not 
include in his analysis, the oil that we got from the find in Alaska 
and from the Gulf of Mexico, that that was just a blip on the slide 
down the other side of Hubbert's Peak.
  Now, we have done a number of things to try and reverse this, because 
we are not at all comfortable in this country having only 2 percent of 
the world's oil and using 25 percent of the world's oil. We have very 
good scientists and engineers, and we have used a lot of enhanced oil 
recovery. We have used discovery techniques, 3-D, seismic and computer 
modeling to go out and find more oil, and we have drilled more oil 
wells than all the rest of the world put together.
  In spite of better discovery, of aggressive pumping of these fields 
with this enhanced oil recovery, in spite of drilling more oil wells 
than all the rest of the world put together, and in spite of finding 
oil in Alaska and the Gulf of Mexico, we today are producing about half 
as much oil as we produced in 1970.
  I spent a few moments looking at this chart. I think it is very 
important to understand what M. King Hubbert predicted and what 
happened and the reality that no matter what we have done, we have not 
been able to reverse what he said would happen, and that was in 1970 we 
would reach our maximum oil production, and that after that, no matter 
what we did, oil production would fall off.
  The next chart, if I can have the next chart, the next chart is a 
quote from one of four different reports that our government has paid 
for and not totally ignored, but largely ignored. They all say the same 
thing, by the way. This is from the first of those four reports done by 
SAIC, a very large, prestigious international engineering science 
organization. Dr. Robert Hirsch was the principal author of that, so it 
is frequently called the Hirsch Report. He says here on page 64, 
``World oil peaking is going to happen.''

[[Page 7550]]

  Now, the same person that predicted that we would peak in 1970, in 
1979 predicted that the world would be peaking about now. I have asked 
myself a question so many times and asked the question to others, if M. 
King Hubbert was so right about the United States and if he predicted 
that the world would be peaking about now, wouldn't it have been 
appropriate to have a plan B, a plan B which recognized that that might 
happen, and, gee, you better have some contingency plans preparing for 
it? When I say ``we,'' I mean the world. That is not what we have done.
  There is no indication, as evidenced by the behavior of any company 
or any country, that any of these entities have been doing anything to 
address the huge challenge that we would have if in fact the world 
followed the course that the United States so predictably followed, 
that the world would peak about now. ``World oil peaking is going to 
happen,'' this report said. ``World production of conventional oil will 
reach a maximum and decline thereafter. That maximum is called the 
peak. Oil peaking presents a unique challenge,'' this report says. 
``The world has never faced a problem like this. There is no precedent 
in history to guide us,'' is what this report says. There is no lesson 
from the past that you can use to guide you as to what you need to be 
doing to get you through this challenge.
  The next chart, this is a chart of data which is compiled by the two 
leading entities in the world that track the production and consumption 
of oil. Now, we store a little, very little, in our strategic reserves 
in this country and some other countries, but, by and large, all the 
oil we produce is consumed.
  ``Peak Oil: Are We There Yet?'' These two agencies are the IEA, the 
International Energy Agency, a part of the UN, and the EIA, the Energy 
Information Administration, a part of our own Department of Energy.
  The IEA, the international one, says that for the last 18 months or 
so we have reached a plateau in oil production. As a matter of fact, 
just at the end of the line they have drawn through there up and down, 
because it is not a constant thing, up today and down tomorrow and so 
forth, it is actually tipping over just slightly. The EIA, the green 
line, shows that from their data we have been constant and actually a 
little lower now, but relatively constant in oil production for the 
last 3 years.
  Now, if in fact the world's production of oil has been flat in the 
last 3 years, and these are the two best recognized entities in the 
world for tracking this, if in fact it has been flat for the last 3 
years and demand has continued to go up, what would naturally happen to 
oil prices?
  Well, oil prices were, what, when they started, $50-some dollars a 
barrel. Now, they are off the chart now, about $110 today. It has 
dropped off a little from the $120 of last week. I think that dropoff, 
Mr. Speaker, is because $120 oil is just plain too costly for a lot of 
the world and they haven't been able to use it. They just make do with 
less. So we have some higher reserves than we thought, and the 
speculators now are speculating that the price of oil will come down 
for the moment because of these reserves. Of course, $110 oil, the 
price is off the chart here.
  M. King Hubbert predicted in 1979 that the world would be peaking 
about now. All four of these studies, the first one I mentioned, the 
SAIC study, the second one, the Corps of Engineers study, the third 
one, the Government Accountability study, and the fourth one, one done 
by the National Petroleum Council, and all four of those say 
essentially the same thing: Peaking of oil is inevitable, absolutely 
inevitable; that it is either present or imminent, with potentially 
devastating consequences.
  Now, I say again, if M. King Hubbert was right about the United 
States, and we spent quite some little while looking at that chart, and 
in spite of everything that we have done, better oil discovery, 
aggressive pumping of the oil, enhanced oil recovery, and although we 
drill more wells than the rest of the world put together, M. King 
Hubbert 's prediction is still true. Today we are producing about half 
the oil we produced in 1970. He predicted that the world would be 
peaking in oil production about now. These four studies all said that 
peaking of oil is inevitable. They didn't know when it would occur.
  These data from the EIA and the IEA would lead you to believe, unless 
this is just a little plateau and it will take off again, and the next 
chart we will look at, if we can have the next chart now, the next 
chart will tell us how likely it is that this is just a little plateau 
and then it is going to take off again.
  If you had only one chart to look at, only one chart to use for 
informing yourself and talking about this subject, this would be the 
chart. This chart shows in the bars here going back as far as 1930 the 
discoveries of oil, and, boy, it was up and down. We found some big 
fields in some of these years, so we got some huge spikes. But notice 
the general trend of this. Since about 1970 it has been down, down, 
down, down, and that is in spite of evermore aggressive and better 
techniques for finding the oil.
  Now, if this peak is just a plateau and is going to take off again, 
then you need to believe that one of two things is going to happen: 
Either we are going to find very quickly better ways of teasing out 
from the reserves we are now pumping more oil, or we are going to find 
more reserves of oil, more big reserves of oil.

                              {time}  1730

  The solid black line here indicates the oil that we have used. And 
the world was in a very happy position up until about 1980. Every year 
until 1980, we found more oil, sometimes a lot more oil, than we used 
that year. If you integrate under this curve, you will get the total 
volume of oil that we have used. So this area represents the volume of 
oil that we have used.
  Now, ever since about 1980, of course, we have been finding less oil 
than we use, so now this area here has been filled in by reserves back 
here. They are still there. We know they are underground. We know we 
can pump them.
  Now, how much more will we find in the future? Most of the experts 
believe that we have probably found, of conventional oil--we will talk 
in a few minutes about unconventional oil. Most experts believe that 
for conventional oil we have probably found 90 percent, 95 percent of 
all the oil we will find in the future. Those who made this chart 
suggest that future discoveries will follow a descending curve, ever 
less and less, as we go further and further into the future, because 
once you found some oil, then additional oil is more and more difficult 
to find. Now, this clearly won't be that smooth, it will be up and 
down, but they are suggesting it will follow a curve much like that.
  Now, what will the future look like? What the future will look like 
will depend upon your perception of several things: How much more oil 
you think we will find; it will depend upon how aggressive you think we 
can be in pumping oil. But one thing is certain: You cannot pump oil 
you have not found.
  Now, the way this chart is drawn, it doesn't go clear out until the 
end, of course; it goes out another 150 years. Every year, and this has 
been the experience in the United States, less and less oil, harder and 
harder to get. And now, with the world situation, not true in our 
country because nobody else made up the deficit for the oil we didn't 
pump; and so for a long while, even when our oil production was 
dropping off, oil was still $10 a barrel because other countries could 
produce it quickly and easily, and they did, so that made up for our 
shortfall. But that is not going to happen in the future because, as 
indicated by a prior chart, as indicated by all four of these studies, 
paid for by your government, delivered to your government, oil is going 
to peak.
  And if the United States is a microcosm of the world, you would 
reasonably judge that, no matter how aggressive we become, and we have 
been really aggressive in our country, like drilling more oil wells 
than all the rest of the world put together, you still are not going to 
reverse that decline.

[[Page 7551]]

  So what the future looks like, and you see the oil that you are using 
here above the amount of oil that you found is going to have to be 
filled in by reserves from here. You can use your eye and transfer 
these reserves there and see reasonably what that curve will look like.
  The next chart presents a little schematic. Now, I will point out 
what is quite obvious: That this peak can be made very sharp if I 
compress the abscissa and expand that ordinate, that will become a very 
sharp curve. Here, I have spread it out so it is a very gradual curve. 
This is a 2 percent growth curve. That is about the rate at which the 
world has been increasing its use of oil. By the way, 2 percent growth 
doubles in 35 years; it is four times bigger in 70 years; it is eight 
times bigger in 105 years; it is 16 times bigger in 140 years.
  This led Albert Einstein to answer a question asked by someone after 
we had discovered nuclear energy: What will be the next big energy 
force in the universe? And his response was: The most powerful force in 
the universe is the power of compound interest. And, of course, 
compound interest is compound growth.
  This chart shows a 35-year growth period, the yellow. I think we are 
about here, and peaking is either present or imminent. And most people 
are looking at avoiding any problems in the future by filling the gap. 
If this is what you have available and this is what you would like to 
use, this yellow area represents the gap.
  There are a lot of things out there that we can exploit to get some 
liquid fuels from. In their totality, most of the experts that are 
really seriously looking at this, in their totality, most people 
believe that it will be extremely difficult to produce as much liquid 
fuel as we now are using, let alone filling the gap. I will say that 
that will not bring us to any calamitous end. We have enormous 
opportunities for conservation and efficiency.
  The other morning as I came into work, I noticed in one of the lanes 
in front of me a big SUV with one person in it. In the lane right next 
to them was a Prius with two people in it. Now, the Prius, I have one, 
we get about 48 miles per gallon. That is at least three times that 
SUV. Isn't it? So the Prius gets three times the miles per gallon of 
the SUV; and there were two people in it; so that means that miles per 
gallon per person was six times better in the Prius with two people in 
it than it was in the SUV with one person in it. And the Prius is a 
very comfortable vehicle, and riding with someone else makes the trip 
to work more enjoyable. So, we have lots and lots of opportunities to 
increase our efficiency.
  The next chart is an interesting one, because there are a lot of 
people who believe that somehow we are going to find a huge amount of 
more oil out there. In a few moments we are going to talk about some of 
these potentials. And there may be a lot out there. But what I am 
saying is that we really need to have a plan B, because there is 
nothing that we have done in our country which has avoided the 
inevitable slide down the other side of Hubbert's Peak that M. King 
Hubbert predicted in 1956.
  This is a chart again from Robert Hirsch, and he gets this from EIA, 
Energy Information Administration, and they are predicting here in this 
chart that we will find as much more oil as all the reserves we now 
know to be able to be pumped.
  Most experts believe that the ultimate amount of oil, the total 
amount that we will pump in the world from the beginning to the end of 
the age of oil will be about 2 trillion barrels. Here it is 2.2. They 
are suggesting here that we will find another nearly 1 trillion, 
because this curve is based on what they call the main or expected 
value of 3 trillion barrels. Now, that means that they think we are 
going to find just about as much more oil as all the oil which we now 
have in reserves which can be pumped.
  Now, even if that curve occurs--and this is because of that 
exponential growth. Even if this occurs, the peak is pushed out from 
here to 2016. The dotted line, by the way, and I don't know if it is 
even doable. The dotted line shows what would happen if you would have 
an aggressive, enhanced recovery and pump it more quickly. It pushes 
the peak out a little bit, and then you fall off a cliff after that.
  This black curve, by the way, you will recognize from the big black 
curve on the oil chart, remember, with all the bars going up. This is 
the recession in the 1970s. If it weren't for that--the old saying, it 
is an ill wind that brings no good. And that ill wind of those Arab oil 
price spike hikes and the worldwide recession that followed that, that 
is this dip here, we actually were using less energy for a while, we 
really looked at our efficiency. And your air conditioner now is 
probably three times as efficient as it was then. Your freezer, the 
same thing. If we had not done that, look at this curve, look where it 
would be, off the chart.
  There was a stunning statistic during the Carter years, and that was 
that every decade we used as much oil as had been used in all of 
previous history. That is really different now. This slope you can see 
is very much less than this slope. So this was kind of a blessing in 
disguise, because it woke us up, and we now have a much lesser 
challenge than we would have had if we not had those oil price spikes 
and that little recession in the 1970s and this call to arms that 
resulted in a lot of equipment that is now a whole lot more efficient.
  The next chart is a fairly recent statement by Shell Oil Company CEO 
van der Veer. By the year 2100, he says, the world's energy system will 
be radically different from today's. The world's current predicament 
limits our maneuvering room. We are experiencing a step change in the 
growth rate of energy demand. And Shell estimates that, after 2015, 
supplies of easy-to-access oil and gas will no longer keep up with 
demand. It may be a little sooner than that, as indicated by these 
curves from the IEA and the EIA. As a result, he says, society has no 
choice but to add other energy sources.
  The next chart is one that kind of puts this in perspective. This 
looks at the industrial age.
  By the way, there is a fascinating speech that was given. If M. King 
Hubbert's speech was the most important speech of the last century, I 
think the most insightful speech of the last century would be the 
speech given by the father of our nuclear submarine, Hyman Rickover, 
given 51 years ago the 14th day of this month to a group of physicians 
in St. Paul, Minnesota. If you do a Google search for ``Rickover'' and 
``energy speech,'' it will pop up.
  He noted then that we were about 100 years into the age of oil, 
which--and he uses just beautiful expressions, which he referred to as 
the golden age. And truly it has been a golden age. And he had no idea 
how long the age of oil will last; now we have a much better idea. But 
he made a very important statement. He said that, how long the age of 
oil lasted was important in only one regard: That the longer it lasted, 
the more time that we have to plan for an orderly transition to 
nonfossil fuels.
  About 17 months ago, I was privileged to lead a codel of nine Members 
of Congress to China to talk about energy. Interestingly, they began 
their discussion of energy by talking about post-oil. Wow, I thought, 
these people think in terms of generations and centuries.
  We are a great country, and a part of our affluence and our greatness 
is that we have a near-term focus, essential for our business, but I 
think it would be nice if we had a little longer term view, too. It is 
hard for our businesses to see beyond the next quarterly report; hard 
for elected officials to see beyond the next election. But they were 
talking about post-oil, and what they would be doing and what the world 
should be doing now and would be doing in a post-oil world.
  Well, Hyman Rickover talked about 8,000 years of recorded history, 
and he said that the age of oil would be but a blip in the history of 
man. I only have here about 400 years of that 8,000 years; but if you 
went back to the rest of the 8,000 years, it would be flat because we 
use very little energy. Here is the industrial revolution beginning 
with wood; and then we have coal; and, boy, did it take off when we 
found gas and oil.

[[Page 7552]]

  This is the same curve that you have seen before, by the way. This is 
the dip in the 1970s in the lesser slope now. Here, we have compressed 
abscissa and expanded the ordinate, so now we have a very sharp curb 
compared to the very gradual one we have been looking in the past.
  If I superimposed on this a graph of population growth, it would 
explode from roughly \1/2\ billion here, following this up almost 
exactly to the nearly 7 billion people we have in the world today.
  This reality, as the next chart shows us, introduces us to a very 
challenging geopolitical reality. We have 2 percent of the world's 
reserves; we use 25 percent of the world's oil; we import almost \2/3\ 
of what we use. We pump four times faster than the rest of the world. 
We produce, from our 2 percent, 8 percent of the world's oil 
production. So, we are pumping and our more wells than all the rest of 
the world put together are working. We are pumping down our reserves 
faster. We represent a bit less than 5 percent of the world's 
population, one person in 22, and we use \1/4\ of the world's energy.
  The next chart speaks a little more to this geopolitical challenge 
that we face. If you look at the top ten owners of oil, that is the bar 
on the right here, it is mostly countries that own it: Saudi Aramco, 
National Iranian Oil, Iraqi National Oil, and so forth.

                              {time}  1745

  And Luke Oil which is kind of private in Russia has only 2 percent. 
These are the top ten.
  If you now look at the top ten producers of oil, they are really big 
guys: ExxonMobil, Royal Dutch, BP. They produce only 22 percent of the 
oil. Most of the oil is produced by countries rather than companies.
  The next chart speaks further to this geopolitical challenge that we 
face. This shows what China is doing around the world. The dollar signs 
indicate where we own some oil. You don't see very many of them here. 
This symbol indicates where China owns oil, a lot of it in Russia. 
Notice they have bought up oil all over the world.
  The next chart speaks again to this geopolitical challenge that we 
have. This is what the world would look like if the size of the country 
was relative to the amount of oil they have. Very interesting. Saudi 
Arabia dominates the landscape. They should, they have 22 percent, more 
than a fifth of all of the oil in the world. Iraq, Kuwait, and you have 
to get a magnifying glass to see the United Arab Emirates on a map. 
Russia, not a giant compared to the others, but they are an aggressive 
pumper of oil. I think they are now the number two producer of oil in 
the world.
  Venezuela, it dwarfs our part of the world. Bigger than everybody 
else in this part of the world, but notice we get most of our oil from 
Canada. Our third largest producer of oil is Mexico. Together they have 
about as much oil as we have. Canada doesn't have very many people, and 
they are too poor in Mexico to use the oil and so they can export the 
oil. But this speaks again to the geopolitical challenge that we face.
  The last chart, I just wanted to look at the sources from which we 
are going to get liquid fuels. I have argued that because we face this 
huge challenge in the future, and because it is going to be very 
difficult to produce as rapidly as we would like to, the liquid fuels 
to replace what won't be there as we slide down the other side of the 
world, Hubbert's peak, that it would be nice to have in reserve a 
little bit of the oil we know that is out there which is why I have not 
been enthusiastic about drilling in ANWR or offshore or on our public 
lands.
  Maybe it is because I have 10 kids and 16 grandkids and two great-
grandkids. And I came to Congress because I was afraid that my kids and 
grandkids weren't going to live in the same kind of country that I grew 
up in. I thought we had too much government, it taxed too much, it 
regulated too much, and it spent way too much. I would just like for my 
kids and my grandkids and great-grandkids to have the same opportunity 
I have had, and energy is so important in our world. So I have been 
resistant to immediately drilling in ANWR and offshore and on our 
public lands because it is like money in the bank that is yielding huge 
interest rates. I don't think you ought to rush to the bank and pull it 
out and spend it. It will be even more valuable later.
  We will get a little of this and a little of that. There is no magic 
bullet out there. I am sure everybody is familiar with what happened 
with corn ethanol. We are using so much corn for ethanol, it has raised 
the price of food around the world. Farmers have diverted land from 
wheat and soybeans to corn. Rice harvests are down. Costco, I 
understand, will sell you only one bag of rice now.
  Mr. Speaker, let me close by saying I am kind of exhilarated by this. 
There is no exhilaration like meeting and overcoming a big challenge, 
and I think America is up to this. With leadership, I think we can once 
again become an exporting country. We have the technology and the know-
how. We are the most innovative, creative society in the world. I think 
when America understands this challenge, they will be up to the 
challenge, and America will lead the world in moving from fossil fuels 
to renewables.
  I think I will be here a week from today, and what I want to do at 
that time is spend most of the time talking about realistic 
expectations from all of these alternative sources of liquid fuels.

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