[Congressional Record (Bound Edition), Volume 156 (2010), Part 13]
[House]
[Pages 18853-18859]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       PEAK OIL--THE GROWING GAP

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Maryland (Mr. Bartlett) is 
recognized for 60 minutes.
  Mr. BARTLETT. Madam Speaker, I have come to this floor nearly 50 
times to talk about an energy subject. The last time that I was here in 
the well addressing this subject was about 2 years ago. During those 
nearly 50 appearances, I came here as a prophet. And now I return to 
the floor as a historian, because the event that I was concerned about 
and predicting has in fact occurred.
  Let me explain. In the middle of the last century, two speeches were 
given by men just about a year apart. I am not sure they even knew each 
other. They both talked about the same subject. The first of those 
speeches was given in 1956. It was, I think, the most important speech 
of the last century. It was given by an oil geologist to a group of oil 
men in San Antonio, Texas, in 1956. At that time, the United States was 
king of oil. We produced more oil, we exported more oil, we used more 
oil than any other nation in the world.
  M. King Hubbert predicted to that audience that in just 14 years the 
United States would reach its maximum oil production. That would be in 
1970. And then we would produce less and less each year after that. 
Remember the context. The United States is in 1956 the largest oil 
producer in the world, the largest oil exporter in the world, the 
largest oil user in the world. This was an absolutely preposterous 
prediction. And so M. King Hubbert was relegated to the lunatic fringe.
  Just a year later, about a year later, the father of our nuclear 
submarine gave a speech in 1957, May 15, I believe, in St. Paul, 
Minnesota, to a group of physicians. The audience is irrelevant. You 
can Google and get this speech. It was found a few years ago, and it's 
now on the Internet. If you Google for ``Rickover and energy speech'' 
it will come up. His speech had nothing to do with the audience that he 
was talking to, because he could have been talking to any audience.
  Hyman Rickover noted that we lived in what he called this golden age 
of oil. We had been about 100 years into that age of oil. And he noted 
how much of the quality of life that we enjoyed then

[[Page 18854]]

was a result of having discovered how to exploit this resource that we 
found under the ground.
  Every barrel of oil--and when I first heard this statistic I was 
unbelieving; how can it be?--every barrel of oil has the energy 
equivalent of 25,000 man hours of effort. That means when oil was $12 a 
barrel, that wasn't all that long ago, you could buy the energy-
enhancing qualities of a person working for you all year long, and you 
could buy it for $1. Because there are 12 man-years of effort in a 
barrel of oil.
  When I first heard that statistic, when I first read it, I thought, 
gee, that can't be true. And then I thought: I drive a Prius car, and 
it gets an honest, if you are careful the way you drive, about 50 miles 
per gallon, a little less in the winter. With the winter blends you 
don't get quite the same mileage. And you know, if I pushed my Prius 50 
miles I could do that, but it would take me a long time to pull and 
push my Prius 50 miles. And just one gallon of oil, one out of the 42 
gallons in a barrel of oil, will take my Prius 50 miles. So I thought, 
well, gee, that's probably true, isn't it, that there are 25,000 man 
hours of effort in one barrel of oil.
  Hyman Rickover made what I think was an obvious statement. He was a 
scientist, of course, and he made what I think was an obvious 
statement, and that was that oil would not last forever. And he said 
that in the 8,000-year recorded history of man that the age of oil 
would be but a blip. He had no idea how long the age of oil would be. 
When he spoke, we were about 100 years into the age of oil. He did not 
know how long it would last, but he was certain that in the 8,000-year 
recorded year history of man it would be but a recorded blip.
  We now know how long the age of oil will last. By the way, he made 
several very meaningful statements. One of them was that how long it 
lasted was important in only one regard. The longer it lasted, the more 
time we would have to plan an orderly transition to other sources of 
energy. Of course, we have done none of that.
  We now know how long the age of oil will be. We are now about 150 
years into the age of oil, and we are not going to run out of oil for a 
while. But what we are running out of is our ability to produce oil as 
fast as we would like to use it.
  Back to M. King Hubbert and his speech just the year before Hyman 
Rickover gave his speech in St. Paul, Minnesota. Fourteen years 
elapsed; and sure enough in 1970, and we didn't know it in 1970 because 
we had to look back a few years after that to see that was it really 
true. But in 1970, we indeed did reach our maximum oil production in 
the United States. If you look back now at the oil production, it's 
very obvious that that was true.
  By 1980, it was conspicuously true. We were really, really now moving 
down the other side of what is frequently called Hubbert's Peak. And so 
I tell audiences that we have now blown 30 years when we knew of an 
absolute certainty that M. King Hubbert was right about the United 
States: we did peak in oil production in 1970. And he predicted that 
the world would be peaking about now.
  Now, it's very rational that the United States would be a microcosm 
of the world. And if he was right about the United States peaking in 
1970, shouldn't we have had some concern that he might just be right 
about the world peaking about now?

                              {time}  1950

  We peaked in oil production in spite of the fact that we have found 
oil in Alaska and the Gulf of Mexico that M. King Hubbert did not 
include in his prediction. And in spite of the fact that we have now 
drilled more oil wells than all of the rest of the world put together, 
not only have we peaked in oil production, but we have slid so far down 
the other side of Hubbert's Peak that we now produce just about half 
the oil that we produced in 1970.
  As a matter of fact, we have only 2 percent of the known reserves of 
oil in the world, and we use 25 percent of the world's oil. We really 
know how to pump oil because with that 2 percent of the world's 
reserves of oil, we pump 8 percent of the world's oil.
  What that means, of course, is that on the average, our wells are 
going to run dry sooner than the average well around the world, because 
we are pumping our oil four times faster than the average well in the 
world.
  I have some charts here that may illuminate what we have been talking 
about. I have not seen the sequence of these charts, and so we will 
just speak to them as they come up.
  The first chart is what is known as the oil chart, ``Peak Oil, the 
Growing Gap.'' If you had but a single chart to look at to tell the 
story of where we have come from and where we are going, this, I think, 
would be the chart.
  As you can see it, it's a little out of date, because we were 
predicting the future back there in, what, about '05 and now we are at 
2010. And when we get to that part of the chart, we will see how very 
correct this chart was in its prediction.
  The vertical bars here are the discoveries of oil and when we 
discovered it, and notice that back in the late 1930s and 1940s there 
were some meaningful discussion and, boy, they just crescendoed through 
the 1960s and the 1970s and some in the 1980s.
  Now, this solid black line here is our consumption of oil. And, of 
course, the area under that curve indicates the total consumption of 
oil up to that time. So you can see, up until the 1980s, we were 
discovering oil faster than we were using it. So we were accumulating 
an ever bigger and bigger reserve of oil. That's all of this oil above 
that use line.
  It's a production line and a use line. We didn't store any. We used 
it as we produced it, so it's both the pumping of oil and the 
consumption of oil.
  Now, since the 1980s we have had to dip into these reserves because 
our discovery of oil has fallen down and down and down since the 1980s. 
As a matter of fact, we now find only about one barrel for every four 
or five or six barrels of oil that we pump.
  Now, you can make some predictions about the future from this oil 
chart, how much oil would we be using. This is the world, by the way, 
oil production, and world use of oil and how much reserves do we have 
left and how long will they take us. You can make some guesses about 
how much more oil we will find, and we are now finding some meaningful 
reservoirs of oil. We may find a reservoir of oil that has 10 billion 
barrels of oil. Wow, that sounds like a lot of oil, doesn't it?
  And maybe our concerns about the future of oil go away when we find 
10 billion barrels of oil. We use 84 million barrels of oil a day in 
the world, and it's pretty simple arithmetic to figure out how many 
times 84 million goes into a billion, and it's a bit less than 12. What 
that means is that in less than 12 days the world uses a billion 
barrels of oil. What that means is when they tell you that we have 
discovered a field of 10 billion barrels of oil, that will last the 
world 120 days.
  Now, how much more oil will we find? Much of the oil that we are 
finding now we are not pumping because you can't even develop those 
fields at, what, $85, $90 a barrel, wherever we are today with oil, 
because it has got to be more expensive than that before you can afford 
to develop these fields and pump the oil.
  And, also in these new fields, which are generally very deep, maybe 
under 7,000 feet of ocean and 30,000 feet of rock--as some of the big 
finds in the Gulf of Mexico were--oil has to be a bit higher than it is 
today before you can afford to develop these fields and then one never 
knows how much oil you are going to get, in fact, from those fields.
  Well, back to the oil chart here. If you look at, oh, here's the 
1970s, remember the Arab oil embargo and the big shocks that we had in 
the 1970s? That produced some traumatic and very fortunate changes in 
the world, and its use of oil.
  Notice, notice this exponential curve up to the 1980s, to the Arab 
oil embargo, the 1970s and 1980s. Had that continued, had that 
exponential curve continued, it would be now off the top of the charts. 
That was a real shock to the world's economy and to our country, and we 
developed some more efficient ways of using energy. So now with more 
people living better, the slope

[[Page 18855]]

now is very much lower than that previous slope.
  I just want to pause and reflect for a moment on this exponential 
function because it is a poorly understood function. When someone tells 
you that there is enough coal, for instance, to last us 250 years at 
current use rates, be careful to note that at current use rates.
  Now the National Academy of Sciences says, in fact, we probably don't 
have 250 years of coal at current use rates. It's probably closer to 
100 years of coal at current use rates because we haven't really looked 
at those reserves since the 1970s.
  But let's say that we had 250 years of coal at current use rates, and 
we are going to increase its use only 2 percent. Now, that's not much. 
As a matter of fact, our stock market doesn't like an economy that's 
growing at only, at only 2 percent. But if we increase the use of oil 
just 2 percent, the 250-year supply drops to 85 years. You see, just 2 
percent increase in growth doubles in 35 years; it's four times bigger 
in 70 years; it's eight times bigger in 105 years; it's 16 times bigger 
in 140 years.
  There is a very interesting story about the exponential function. I 
don't know whether it's true or not, but it's a nice story.
  Chess was invented in an ancient country, and the king was so 
impressed with the contribution that he told the inventor of the chess 
game that he would give him anything he wished up to half his kingdom. 
And the inventor of the chess game said I am a very simple man, I have 
simple needs. If you will just take my chess board and put a grain of 
wheat on the first block and two grains on the second and four on the 
third and eight on the fourth and just continue doubling those grains 
of wheat until you have reached the last of those, what, 64 blocks on 
the chess board, that will be adequate, sir.

                              {time}  2000

  The king thought to himself, silly fellow. I would have given him 
anything up to half my kingdom, and all he asked for is a few grains of 
wheat on his chess board.
  Had he been able to make that contribution, of course, it would have 
consumed all, it would have consumed more than a decade of all the 
world's production of wheat. This is the exponential function, doubling 
it. So whenever you hear somebody say, we have so much of gas or coal 
or oil or whatever it is at current use rates, please calibrate that. 
What does it mean if we increase its use? And by the way, we are going 
to be needing to use coal for things other than just coal and stoking a 
furnace and making electricity. We would like to make some oil out of 
it as Germany did during World War II and South Africa did. And you can 
make some gas out of coal. And if you use some of the energy from coal 
to convert it to a gas or a liquid, if you have this 250 years--which 
we don't--and it drops to 85 years at only 2 percent growth rate, it 
then drops to 50 years if you use some of the energy and divert it to 
gas or liquid.
  And then there's another very interesting reality that you will deal 
with whether you like it or not. You will share your oil with the 
world. You can't avoid it because if you were using the oil you've 
produced from your coal, someone else will be buying the oil from Saudi 
Arabia that you might have bought. So the reality is that you will 
share it with the world. Since we use one-fourth of the world's oil, 4 
goes into 50 12\1/2\ times. What that means is that now this 250 years 
of coal, reduced to 85 years with only 2 percent growth, reduce to 50 
years if you use some of its energy to convert it to a gas or a liquid, 
and then it shrinks to 12\1/2\ years as you share it with the world, as 
you must, because there is no alternative if you use oil produced from 
your coal; someone else will buy the oil you might have bought from 
Saudi Arabia or some other oil-producing country.
  Well since the 1980s we have been consuming some of the reserve 
because we've not found enough oil to meet our needs. Now this chart, 
as you can see, the actual known amounts, ended in about 2005. And then 
you see the lighter shaded part on the other side where it shows their 
prediction. And they predicted that oil production worldwide was going 
to peak in about 2010. Here we are. Now I think a little later we will 
have some charts that show, in fact, that that was true.
  Now what happens from now on? You can make your own guesses as to 
what is going to happen from now on, you can make your own assumptions. 
We have still much of this reserve left that we can pump, fortunately. 
This amount we've pumped here is just about this amount. So we have 
about this whole amount here covered by my hand that we can yet pump.
  Now we're going to find some more oil. The chart here shows an 
orderly downward progression because the more you find, the less there 
will be to find in the future, so the less you are going to find in the 
future. It will not be like that. It will be up and down like this, but 
it is going to be down and down because most of the large fields that 
will be found have been found. So you can make your own assumptions 
about where this is going in the future by assuming how efficient can 
we get, how much conservation are we going to do, how much more oil 
will we find. But from this oil chart, you can do a lot of predicting 
about what the future is going to look like.
  This next chart is a quote from Admiral Hyman Rickover in this talk 
that I mentioned that he gave to this group of physicians in 1957, 
There is nothing man can do to rebuild exhausted fossil fuel reserves. 
They were created by solar energy 500 million years ago. It took eons 
to grow to their present volume. In the face of the basic fact that 
fossil fuel reserves are finite, the exact length of time these 
reserves will last is important in only one respect--the longer they 
last, the more time that we have to invent ways to live off renewable 
or substitute energy sources and to adjust our economy to the vast 
changes which we can expect from such a shift.
  Now, of course, we have done none of that. We and the world in 
general have behaved as if all you need to do to find more oil is to go 
look for more oil and it will just be there if the market incentives 
are appropriate.
  I love this next paragraph: Fossil fuels resemble capital in the 
bank. A prudent and responsible parent will use his capital sparingly 
in order to pass on to his children as much as possible of his 
inheritance. A selfish and irresponsible parent will squander it in 
riotous living and care not one whit how his offspring will fare.
  This is Hyman Rickover's statement. One might conclude looking at the 
behavior of our civilization that this is precisely what we have done. 
I have 10 children, 17 grandchildren, and two great grandchildren. 
Would it be okay if I wanted to leave them a little oil? We are leaving 
them a huge debt. And wouldn't it be nice if they had some oil, gas and 
coal? Now they will have some. But as we will see in future charts, it 
will not be what they would like to have.
  This is a fairly new chart, and it shows what I predicted. I said 
that I was a prophet because nearly 50 times I came to the floor, the 
last time about 2 years ago, then I was predicting that conventional 
oil was going to peak. And here they show it. This is the dark blue. 
Look at it. 2010, it's peaked. And they recognize that the world 
situation will not be meaningfully different from that in the United 
States, that it's going to go down, down, down. And here it goes.
  Now they're making an assumption here that you may or may not agree 
with. I hope they are right. I doubt that they are right, because what 
they say here, and this is crude oil fields yet to be developed, and 
this red is crude oil fields yet to be found. And they believe that by 
2030, that's not very far in the future, that by 2030, about two-thirds 
of all the oil that we will be using will have come from fields yet to 
be developed and fields yet to be found.
  Now there are many experts in oil that will tell you that this is a 
happy dream, that there is little chance that that is going to happen. 
Now we have some other sources of oil. We have natural liquids, and 
they see those growing. We have nonconventional oils, and they will 
grow somewhat. These are

[[Page 18856]]

heavy, sour oils, for instance, the kind that we get from Venezuela. 
It's the oils that we get from the oil sands in Alberta, Canada, at 
considerable expense of energy, environment, and so forth. Well this 
same chart produced 2 years ago would not have looked like this because 
just 2 years ago, the same people that give you this chart today would 
have had conventional oil production going up and up. So now there is a 
recognition that conventional oil production has, in fact, as predicted 
by M. King Hubbert, peaked in the world. It peaked in our country in 
1970.
  The next chart shows some detail of that peaking. There are two 
entities in the world that do a really good job of tracking the 
production of oil. They do not do as good a job in predicting the 
future of oil production. They do a very good job in tracking how much 
oil is being produced. One of those is a part of our Department of 
Energy, the EIA; the other is a creature of OECD, the IEA, and you see 
those two curves here, and they both show essentially the same thing, 
and that is, in the 3 years before the recession, oil production was 
flat across the world, 84 million barrels, a little over 84, 85 million 
barrels a day of oil production.
  Now, pretty simple economics: With flat production and increasing 
demand, what happened to the price of oil? Oh, here it is. Now this 
chart only goes to less than 100. You remember it went to $147 a barrel 
a little bit later off this chart? Well now we had the recession 
worldwide and demand for oil dropped conspicuously.

                              {time}  2010

  The price of oil momentarily dropped from $147 a barrel to less than 
$40 a barrel. The world's economy has begun to recover now, and the 
price of oil is slowly inching up. It is $85, near $90 a barrel.
  I am reading a book brought to me by an oil scientist, an engineer 
from Canada, and he makes a prediction that I have been making, so I 
have some additional confidence that I can restate that prediction. It 
is that unless we do something really serious about conservation and 
about efficiency and about husbanding the fossil fuels that we have 
remaining, that the next recovery will be short lived; because as the 
world recovers, it will demand more oil and there will not be more oil 
because we have plateaued, and so the price will go from $100 to $150 
to $200 a barrel and the economy will be squelched.
  Four years ago I led a codel of nine Members of Congress to China to 
talk about energy. I was stunned. They began their discussion of energy 
by talking about ``post oil.'' Now, in our country and in the Congress 
here we have a lot of trouble thinking beyond the next election because 
it is really important that you get yourself reelected. And our 
businesspeople have trouble thinking beyond the next quarterly report 
because, gee, that better look good or the stockholders are really 
unhappy and the board of directors may replace you if that doesn't look 
good. So it came as quite a surprise to me that here are people who are 
looking a long way down the road. We are not post oil yet.
  By the way, I say we know how long the age of oil will be, and it 
will be about 300 years. Hyman Rickover said that in the 8,000-year 
recorded history of man, the age of oil would be but a blip. He had no 
idea how long it would be in 1957 because we were there on the 
ascending part of Hubbert's peak. But he knew that it was finite and he 
knew that it couldn't last forever and knew that in the 8,000-year 
recorded history of man that the age of oil--the golden age, he called 
it--would be but a blip. We now know how long the age of oil will be. 
It will be about 300 years.
  We are about 150 years into the age of oil, and we are not running 
out of oil. There is a lot of oil left out there; at least as much more 
oil to pump as we have pumped in the last 150 years. But for the 
future, that oil will be ever harder and harder to get and more and 
more expensive. We are now slipping down the other side of Hubbert's 
peak.
  We have talked a lot about Hubbert's peak, and here is some old data 
on Hubbert's peak. It went up in 1970, and then down. You see where we 
are today. The actual is the green squares there. We now are down to 
less than half the oil that we have produced in 1970. That is, again, 
from drilling more wells than all the rest of the world put together, 
from finding oil in Alaska and the Gulf of Mexico, which we didn't 
expect to find.
  There are two other interesting things on this chart. Hubbert's 
prediction was the little yellow triangles here. The actual production 
from the lower 48 is the green. If you add the oil we found--and 
remember the huge find of oil in Canada and Alaska, and I have been 
there. I have been at the beginning of that 4-foot pipeline. It was 
just a blip in the downward slope of Hubbert's curve. Now, there are 
those who would like to convince you that Hubbert didn't know what he 
was talking about because there is a huge difference, they will tell 
you, between his actual prediction and those green rectangles.
  Now, I think the average person looking at that would say, gee, he 
got it pretty close, didn't he. Now a statistician looking at it might 
say he kind of missed it. He predicted that we would peak in 1970. We 
peaked in 1970. We are now about half of what we were producing in 
1970.
  I mentioned, when we put our first chart up, that if you had only one 
chart, that would be it. I think if you were allowed a second chart to 
give you some idea of the challenges we face, this would probably be 
that second chart.
  This is the world according to oil. This imagines a world in which 
the surface area of a country is relative to how much oil the country 
has. So the more oil the country has, the bigger it appears on this 
map; and the less oil a country has, the smaller it appears on this 
map. And then the things are colored. The coloring is who uses the oil. 
Well, you can't read this, but yellow is the biggest users of the oil. 
That shouldn't surprise you. That is us. The blue is the next biggest 
users, and green next down the line.
  Well, look at this chart. Saudi Arabia is pretty big. As a matter of 
fact, it is 22 percent of all of the land mass in all the world if the 
surface area of a country is relative to how much oil it had.
  And look at little Kuwait there. It looked like a little province on 
the corner of Iraq to Saddam Hussein when he wanted to claim it. Wow, 
look at how much oil it has--just about as much Iraq has. And Iraq and 
Kuwait and Iran are big oil producers.
  By the way, look at Iran there. It is a pretty big oil producer, and 
notice its color. It is blue. It uses a lot of oil. Not nearly as much 
as we use, but it uses a lot of oil. The truth is that, within a 
decade, Iran will be an oil importer if their domestic use continues at 
its present rate and they do not increase their production.
  Just looking at production in these OPEC countries, back when the 
world could produce more oil than it might use, if they produced extra 
oil, it simply drove the price of oil down. Remember when OPEC got 
together and decided to reduce the production of oil so we can keep the 
price up. And then they said the amount of oil that you can pump is a 
certain percentage of your reserves of oil. So OPEC countries that 
wanted to pump more oil, they just suddenly had bigger reserves of oil 
without finding any new oil. They just said they looked at it again, 
the statistics, and they had more oil than they thought. Well, having 
said that, they could then pump more oil. So we really aren't sure what 
the size of these countries are, but they are big. But we aren't sure 
how big, because we are not sure how truthful they were in what they 
said about their reserves.
  By the way, they pumped oil for 10 years, and they still had as much 
oil to pump as they had 10 years ago, without finding any new oil. So 
there is a lot of suspicion about how much oil is really there. But 
there is a lot of oil there, and the size of the countries, the oil 
reserves are relatively what is shown here.
  Our biggest importer of oil is Canada. Until a bit ago, our second 
largest importer of oil was Mexico. That has been replaced now by Saudi 
Arabia.
  Look at Canada and Mexico. They don't probably have much more oil

[[Page 18857]]

than we have. Canada has way less than we have, maybe half to a third, 
yet they are our biggest importer. They can do that because they don't 
have very many people in Canada to use the oil.
  Mexico, which has two-thirds as much as we, they were our biggest 
exporter of oil. We got the second largest amount of oil from Mexico 
until recently. They have a lot of people, but they can't afford to buy 
the oil, so they are exporting the oil.

                              {time}  2020

  The second-largest oil field in the world was the Cantarell oil field 
in Mexico. This was an interesting field. There was a Mexican fisherman 
by the name of Cantarell, who brought his fishing nets in, because they 
were fouled with oil, and took them up to Pemex, which is the national 
oil company in Mexico. If your fishing nets are fouled with oil, you 
know who to go to because all of the oil is owned by the national 
company there.
  So they finally said, Gee, where are you finding all this oil? We 
didn't know we'd spilled that much oil.
  He said, Come. I'll show you.
  He showed them, and it was kind of bubbling up out of the ocean, and 
they had drilled there.
  For a number of years, it was the second-largest oil field in the 
world. The largest, of course, is the huge Ghawar oil field in Saudi 
Arabia. The Cantarell oil field in Mexico is now in rapid decline, 
falling about 20 percent a year.
  Look at Venezuela. Wow, it dwarfs us, doesn't it? Venezuela has--
what?--two, three times the amount of oil that we have.
  See if you can find Europe on this map. Here they are. They're tiny, 
tiny little countries. Lots of people. Little oil. Dependent on 
somebody else.
  The really remarkable thing, though, is China. It is blue over there. 
It's getting close to yellow. Just a few months ago, China surpassed us 
as the largest CO2 emitter in the world. There are 1.3 
billion people in China.
  Look at India. Dwarfed. Dwarfed by China. Here it is. There are a 
billion people in India. Through the miracle of communications, these 
people know the benefits of an industrialized society, and they are 
demanding of their leadership those benefits, so there is a huge, huge 
demand for energy in China and India, and they have very little.
  Russia. I think Russia is now the largest exporter of oil in the 
world. They don't have the most oil, not by a long shot, and most 
Russians are too poor to use much oil. They are very aggressively 
developing their oil fields, and so Russia is now a major exporter of 
oil. But note the relative size of Russia. I would think Kuwait is 
probably larger than Russia, isn't it?
  Well, you can imagine all of the geopolitical frictions that are 
going to occur in the future as the availability of oil becomes less 
and less, as it is harder and harder to get and as its price goes up 
and up. What do you think will happen with the demands and the tensions 
in the world?
  Well, as I've said, if you had two charts to look at, the oil chart--
the first one we showed, I think--would be the first one. This would be 
the second one because there is an awful lot that you can conclude and 
surmise from this chart.
  Now, this chart was implicit in the last chart that we showed you, 
but this shows it more dramatically. This left-hand bar is the top 10 
oil and gas companies on the basis of oil production in 2004. That was 
a few years ago, and it would be a bit different now.
  Gee, here are the big boys, those huge corporations that can have a 
$1 billion profit, which is not excessive because it's a lesser 
percentage than the smaller, profitable, little company. Here they are: 
Exxon Mobil, Royal Dutch Shell, BP. They have only 22 percent of the 
top 10 production. Seventy-eight percent of that is all in country-
owned oil facilities. Look at them: Saudi Arabia, Iran, Mexico, 
Venezuela, and so forth.
  Now, the picture is even more distorted if you look at the right-hand 
bar. These are the top 10 oil and gas companies on the basis of oil 
reserves in 2004. The big actors in our country don't even show up on 
that chart. They own so little oil that they're not even among the top 
10. They don't even exist on that curve. There is only one that is only 
kind of not national, and that's Lukoil, in Russia, which is 2 percent. 
Otherwise, all of the reserves, the top 10 largest reserves--all of 
those--are owned by countries rather than companies.
  I mentioned that I went to China. I led a CODEL there--there were 
nine of us--to talk about energy. They began their discussion of energy 
by talking about ``post oil.'' That kind of blew me away that they were 
thinking this far ahead. Then they had a five-point program, and 
everybody knew it. It wasn't just the people concerned about energy. 
Everybody we talked to in China was tuned into this five-point plan:
  Conservation. You know, there is a lot of conservation back in the 
Arab world.
  Do you remember the van pools? We didn't have any cell phones then 
and no Internet, but we had 1-800 numbers, and you were encouraged to 
get in van pools.
  Do you remember the little decals over the light switch? Don't be 
foolish--turn out the light when you're not in the room. Do you 
remember the decals over the thermostat? Turn it up in the summertime 
and down in the wintertime. Do you see any of those things now?
  We knew then it was only temporary. I am having a lot of trouble 
understanding our collective response to these two situations. Back 
then, we knew it was temporary. We didn't have enough oil because the 
Arabs wouldn't sell us the oil. They had plenty of oil to sell. They 
just were unhappy with us for the moment, and they wouldn't sell us the 
oil. Yet we did rational things in conservation: We got more than one 
person in a car. We, you know, turned off the light switch. We turned 
up the thermostat in the summertime and down in the wintertime.
  I have no idea why, collectively now, we don't have this kind of a 
response when oil is more than $80 a barrel and when there is a growing 
recognition that the world has reached its maximum production of 
conventional oil, and we will be more than lucky if we can find enough 
unconventional oil, or new oil, to make up for the loss that we are 
going to have in conventional oil as we slide down the other side of 
Hubbert's peak.
  Conservation, what is it? Conservation is using a Prius instead of a 
gas-guzzling SUV. That's efficiency, I guess, too. If you put two 
people in it, then it's really conservation, isn't it?
  I remember driving down the road, with two of us in our Prius, and we 
passed an SUV. I thought, gee, we're getting--what?--six times the 
miles per gallon, per person, in this Prius at 50 miles per gallon than 
that one person is getting in that SUV. We could almost immediately, if 
we had to, if we had the will to, drastically cut our use of energy for 
transportation. Drive down the road, and see how many people are in the 
HOV lane. Look at how many of our people are driving with one person in 
a pickup truck or an SUV.
  A bit ago, I was in France, and I was looking at how many people were 
driving pickup trucks and SUVs for personal transportation. On that 
trip, I did not see a single SUV. On the trip before, I saw one. They 
weren't driving it. It was parked in the parking lot up at that church 
up on the hill. I don't know how long it had been there. As far as I 
can see, they don't even make in Europe the equivalent of our passenger 
pickup trucks. They have some little trucks that are about the size of 
ours, but they aren't vanity kinds of trucks. They are ugly, little 
things that are really utilitarian. They carry stuff around. It's not 
something you would buy to carry yourself back and forth to work.
  There are enormous opportunities for conservation. This is where 
China says it begins.
  Then they say: Domestic sources of energy and diversify as much as 
you can. That's what everybody is trying to do, and many of those 
domestic sources will be alternative sources of energy.
  Then the fourth one is very interesting: Be kind to the environment. 
They recognize that they are a huge

[[Page 18858]]

polluter, but they have 900 million people in rural areas who, through 
the miracle of communications, as I mentioned, know the benefit of an 
industrialized society.
  They're asking, Hey, what about us?

                              {time}  2030

  And China, I believe, understands that if they can't meet the needs 
of those people, that they may see their empire begin to unravel the 
way the Soviet empire unraveled. So they understand that although there 
is a huge environmental consideration, there is an even bigger 
consideration on their part to supply energy for these 900 million 
people in rural areas. So they build a coal-fired power plant, about 
one a week--I forget the number, a fairly large number of nuclear power 
plants that are presently under construction.
  The fifth part of this is a really interesting one, international 
cooperation. They know that there is nothing really meaningful that any 
single country can do, and so they plead for international cooperation. 
I was so impressed in that picture when they looked back over their 
shoulder on their way to the Moon, and you saw this little spaceship 
that we call Earth, and that's it, that's all there is, and there's 
nearly 7 billion of us living on it.
  And so they recognize that this has got to be a global, international 
cooperation; or it's going to be really tough. But while they plead for 
international cooperation, they plan in the event that there won't be 
any.
  Here is a chart, a world energy picture in January--this is '05, so 
they would have acquired some more oil since then--and you can see the 
little symbol here for Chinese investment in oil and gas. They are 
buying oil and gas all over the world. And I asked the State 
Department, why would they do this because today it doesn't make any 
difference who owns the oil. We own only 2 percent of the oil, and we 
use 25 percent of the oil; that's because we go to what is in effect a 
global market for oil and we bid and we get 25 percent of the oil. So 
today there is no advantage in owning oil. So why would the Chinese be 
going around the world aggressively buying oil and gas? By the way, 
they almost bought an oil company in our country. You remember all the 
furor over that when they almost bought that oil company here.
  Well, at the same time China is buying gas and oil around the world, 
they are also buying goodwill. What do you need, an airport? Hospital? 
Soccer fields? Roads? Watch the newspapers at what China is doing as 
they go around the world buying this gas and oil.
  Well, at the same time they are buying gas and oil around the world, 
they are very aggressively building a blue water navy. Now a major 
concern of China is Taiwan, a little country the size of Maryland, 23 
million people--we have about 5 or so--three-fourths uninhabited 
because it's mountainous. Oh, gee, you can inhabit mountains. But I 
went to Taiwan. You don't inhabit those mountains. They are really, 
really steep.
  China has 1.3 billion people. Why are they so concerned about Taiwan? 
I had the privilege of spending about an hour and a quarter, an hour 
and a half or so and we explored that. The concern of course is that if 
Taiwan can declare its independence, so can a number of other 
provinces; and they see their empire unraveling. And so I hope, pray, 
please, tonight that we can resolve Taiwan issues through diplomacy 
rather than war.
  Well, at the same time they are buying all this gas and oil and 
buying goodwill around the world, they are also aggressively building a 
blue water navy. They don't need a blue water navy to protect their 
interests in Taiwan; a brown water navy will be just fine there, thank 
you. I believe--I hope I'm wrong--I hope I'm wrong about a lot of 
things, by the way--every time I came to the floor, just about 50 
times, and talked about peak oil I said I hope I'm wrong, because if 
I'm not wrong, the world faces some real challenges. By the way, that's 
not all bad. There is nothing so exhilarating as meeting and overcoming 
a big challenge, and the energy future that we face is a huge 
challenge. So I find it exhilarating.
  Remember the exhilaration of putting a man on the Moon? We need to 
have that same kind of exhilaration. What are we going to do so we can 
continue--not just us, but my 10 kids, my 17 grandkids and my two 
great-grandkids, so that they can live as well as we're living? We're 
going to have to be very creative and innovative, and we can do that in 
our country.
  I hope that the day does not come when China says, gee, guys, I'm 
sorry, but it's our oil and we can't share it because we don't have 
enough for our people, and we have a navy big enough to say that we're 
not going to share it. I hope that day doesn't come.
  There are three groups that have common cause in solving three very 
different problems with exactly the same remedy, and these three groups 
are forever harping at each other, criticizing each other's premise 
instead of locking arms and marching forward, because the solution to 
three very different problems is just about exactly the same solution.
  One of those groups is the group that these statistics identify that 
are really concerned about our national security. We have 2 percent of 
the oil reserves in the world. We pump that oil, I mentioned earlier, 
really fast. We produce 8 percent of the oil. We have only 5 percent, a 
little less than 5 percent, of the world's population and we consume 25 
percent of the world's oil, importing about two-thirds of what we use.
  Now what is the solution to this? The solution to this is to develop 
more of our own oil if we can, but that's really tough because we are 
now really down the other side of Hubbert's Peak. So the ultimate 
solution to that is alternatives. So those who are concerned about 
national security want to free ourselves from dependency on foreign oil 
by using alternatives because of national security interests.
  A second group we've been talking about all evening are those that 
are concerned that it just is not going to be there. Of course, the 
solution to diminishing supplies of fossil fuels is to supplement them 
with alternatives.
  And there is a third group that we haven't talked about yet--and I am 
kind of a card-carrying member in all three of these groups--and that 
is a group that's concerned about climate change. Now, I don't know if 
they're right or wrong, but what I do know is that what they want to do 
about that is exactly the right thing to do from a national security 
perspective.
  It's exactly the right thing to do, if you believe in climate change 
or peak oil. These three groups all have exactly the same solution to 
very different agendas. What we ought to be doing is stop harping at 
each other's premise and simply lock arms, because whether you believe 
that the excessive use of fossil fuels is changing the climate or not 
is irrelevant because excessive use of fossil fuels is certainly 
diminishing their supply. And from our perspective, a national security 
perspective, we don't have enough of them. So the solution to all three 
of these problems is more dependency on alternative fuels.
  We are near closing time, and I just want to point out--and we'll 
come back again because there are some wonderful quotes from these five 
reports--four studies, but two are reports from one study. Your 
government has paid for four different studies; all of them were 
prophetic. As I mentioned, we are now historians because peak oil has 
occurred. But all four of these studies were saying--they were in '05, 
'06 and '07. And your government didn't like the conclusions of the 
first one in '05, and so they had another one in '06, another one in 
'07. They all said the same thing.

                              {time}  2040

  The peaking of oil is either present or imminent with potentially 
devastating consequences. We still aren't paying much attention to 
this, are we? With the world's economy still floundering and oil 
already at more than $80 a barrel, what do you think will happen to the 
price of oil when the world's economy really starts to come back?
  Well, let's end our discussion here tonight. I have been pleased to 
spend these moments with you talking about

[[Page 18859]]

something that's very important to me but I think even more important 
to my 10 kids, my 17 grandkids, and my two great grandkids.
  When we come back again, we're going to talk about these reports and 
what they said, and we'll have some quotes from these reports.
  Thank you, Madam Speaker.

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