[Congressional Record (Bound Edition), Volume 157 (2011), Part 13]
[House]
[Pages 18722-18725]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             ENERGY POLICY

  The SPEAKER pro tempore (Mr. Gosar). Under the Speaker's announced 
policy of January 5, 2011, the gentleman from Maryland (Mr. Bartlett) 
is recognized for 30 minutes.
  Mr. BARTLETT. Mr. Speaker, on the 8th day of March, 1956, a 
scientist, geologist by the name of M. King Hubbert spoke to an 
audience in San Antonio, Texas. The audience was a bunch of oil people. 
He gave what I think is going to be recognized as the most important 
speech of the last century. It was really a very audacious speech. At 
that time, the United States was King of Oil. We produced more oil, we 
sold more oil, and we consumed more oil than any nation in the world.
  M. King Hubbert told that group of oil geologists and company 
executives that in just 14 short years the United States would reach 
its maximum oil production, that no matter what they did after that 
their oil production would decline. This was an incredible speech. 
Essentially no one believed it because, as I say, at that time the 
United States was the King of Oil, producing more, shipping more, 
consuming more than any other nation in the world.
  For a number of years, M. King Hubbert was a pariah. Nobody believed 
him. He was kind of relegated to the lunatic fringe. In 1980, 10 years 
after his prediction that the United States would reach its maximum oil 
production, you could look back, and what you saw is shown on this 
chart. This, of course, goes out beyond that year. What you see is what 
happened then.
  The United States did reach its maximum oil production in 1970. After 
that, the production fell off no matter what we did. Now, there was a 
little blip on the downside because we found a lot of oil in Alaska. 
You can see it there on the chart. And we found a lot of oil in the 
Gulf of Mexico, the yellow that you see there. There was a little blip 
on the down slope, and M. King Hubbert had not included in his 
predictions the oil that we would find in Alaska and the Gulf of 
Mexico. He included only the lower 48.
  This chart shows where that oil came from. A lot of it came from 
Texas, the biggest single source of oil. The first oil, of course, was 
found in Pennsylvania and part of the rest of the USA. Then you have 
natural gas liquids on the top. As we found and used more and more 
natural gas, the natural gas liquids increased. That's not gas in your 
gas tank. That's propane and butane and things like that.
  This is something that could have hardly been believed. How could a 
country as creative and innovative as the United States possibly not be 
able to continue to produce more and more oil when they needed more and 
more oil?
  What M. King Hubbert did was a pretty simple thing. Oil had been 
pumped for long enough--50 years or so--by that time that they had some 
idea of what went on in a field, and the production in an individual 
oil field followed kind of a bell-shaped curve. As you pumped the 
field, you got more and more; and then when you reached the top, it 
became harder and harder to get the oil, and so it fell off as you went 
down the other side of the bell curve.
  And so what he reasoned was, if I can make some estimate of how many 
oil fields there will be in the United States and I add up all those 
little oil fields, all those little bell curves, I'll get a big bell 
curve, and that will tell me when we're going to reach our maximum 
production in the United States.

[[Page 18723]]

  Just about a year later, another speech was given. I don't know if 
these two gentlemen knew each other at all. But this other speech was 
given by the father of our nuclear submarine, Hyman Rickover. Hyman 
Rickover spoke to a group of physicians. The audience is irrelevant. He 
spoke to a group of physicians in St. Paul, Minnesota, and he said 
something that should have been self-evident, but obviously they 
weren't because nobody else was saying them and nobody has said them 
much since then.
  What he said in this speech was that in the 8,000-year recorded 
history of man, the age of oil would be but a blip, and he referred to 
it as this ``golden age.'' Here are a few quotes from that speech.
  By the way, you can find it on the Internet. If you simply Google for 
Rickover and energy speech, it will come up. It was lost for a number 
of years, and a few years ago it was found and put on the Internet. And 
what he says here seems to be axiomatic.
  ``There is nothing man can do to rebuild exhausted fossil fuel 
reserves. They were created by solar energy,'' he says, ``500 million 
years ago and took eons to grow to their present volume.
  ``In the face of the basic fact that fossil fuels are finite''--they 
will run out--``the exact length of time these reserves will last is 
important in only one respect: the longer they last, the more time do 
we have to invent ways of living off renewable or substitute energy 
sources and to adjust our economy to the vast changes which we can 
expect from such a shift.''
  Now, this would seem to be, as I said, axiomatic. Obviously, the Moon 
isn't made out of green cheese and the Earth isn't made out of oil. It 
is finite. One day it will run out. And so it is obvious that one day 
one will have to come to grips with this. You will have to find 
alternative energy sources. Just when is that time for the world?
  When we ran out of our ability to produce more oil when we wanted 
more oil was in 1970. But the United States was the first great 
industrialized Nation and so we would expect that we would reach that 
point before the rest of the world. Just when would the rest of the 
world reach that point?
  I love this statement: ``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 about how his offspring will fare.''

                              {time}  1420

  I have 10 children, 17 grandchildren, and two great-grandchildren. 
Particularly my great-grandchildren and some of my grandchildren will 
look back and they will ask themselves, how could they have done it? 
How could they have gone on feverishly looking for and drilling for oil 
when it was obvious that it was finite, when it was obvious that there 
would come a time when we would have to transition from oil to 
alternative sources of energy?
  Now, this is a warning from the past, but that wasn't the only 
warning that we were going to have because your government has paid for 
four separate studies of this problem. And the phenomenon is called 
``peak oil.'' That's the time at which you reach your maximum 
production capability; and after that, no matter what you do, 
production will fall off. As we saw earlier, that happened in the 
United States in 1970. By the way, by 1980 it was painfully obvious 
that M. King Hubbert was right, because looking back those 10 years, we 
say, gee, we really did peak in 1970, didn't we? And we're tipped over 
and starting down the other side now.
  Your government paid for four studies. Why four? Because they didn't 
like what the first one said, and so they ordered another one and 
didn't like what that one said, so a third and then a fourth. I have 
quotes here from two of those studies.
  The first of those studies was a study by SAIC, and the primary 
author of that study was Robert Hirsch, and it's usually referred to as 
the ``Hirsch Report.'' It was issued in 2005. These are just a couple 
of quotes from that: World production of conventional oil will reach a 
maximum and decline thereafter. That maximum is called the peak. A 
number of confident forecasters project peaking within a decade. Others 
contend it will occur later. Prediction of the peaking is very 
difficult because of geological complexities, measurement problems, 
pricing variations, demand elasticity, and political influences. 
Peaking will happen, but the timing is uncertain.
  The world, they said, has never faced a problem like this. Without 
massive mitigation, more than a decade before the fact, before peaking 
occurs, the problem will be pervasive and will not be temporary. We had 
a temporary problem with the Arab oil embargo in the seventies. This 
will not be temporary. Previous energy transitions--wood to coal and 
coal to oil--were gradual and evolutionary. Oil peaking will be abrupt 
and revolutionary, the report said.
  We were very comfortable living in this ``golden age''--as it is 
referred to by the father of our nuclear submarine, Hyman Rickover. He 
noted that the incredible amount of energy and oil permitted us to live 
a very high-quality life, as compared to our ancestors who had not yet 
found how to tap into the enormous riches of fossil fuels. When I first 
heard this statistic I was stunned. I said to myself, it can't be true. 
One barrel of oil--that's 42 gallons--one barrel of oil has the energy 
equivalent of 25,000 man-hours of effort. That's 12 people working all 
year. A barrel of oil has the energy equivalent of 12 people working 
all year long. Wow, that seems incredible, doesn't it?
  And then I thought, I drive a Prius and it takes me about 50 miles on 
a gallon of gasoline, not very big, a gallon of gasoline. Now, I could 
pull my Prius that 50 miles, but it would take me a long time. With the 
come-alongs and the chains and hooking to the guardrail and trees, I 
could get the Prius that 50 miles. Wow, I said, maybe there are 25,000 
man-hours of work in one barrel of oil.
  Now, it wasn't very long ago that oil was worth $12 a barrel. That 
means that you could buy the life-enhancing effects of having a full-
time servant work for you all year long, and you could buy it at the 
well head for $1. If you look around the world and see the quality of 
life that most of the world's people live, it is really quite 
incredible compared to the quality of life that our ancestors lived 
before they found how to tap into the enormous potential of fossil 
fuels.
  There was another report which issued in 2005, and that was a report 
by the Corps of Engineers. And here is a quote from that report: ``In 
general, all nonrenewable resources follow a natural, simple curve--
production increases rapidly, slows, reaches a peak, and then declines 
at a rapid pace similar to its initial increase.'' This is the bell 
curve, the curve that M. King Hubbert had noted that permitted him to 
make his prediction as to when the United States would reach its 
maximum oil production.
  The major question for petroleum is not whether production will peak, 
but when it will peak. There are many estimates of recoverable 
petroleum reserves giving rise to many estimates of when peak oil will 
occur and how high the peak will be. A careful review of all the 
estimates leads to the conclusion that world oil production may peak 
within a few short years, after which it will decline.
  Your government didn't like what these two studies said, and so there 
were two more studies ordered, one from the Government Accountability 
Office and the fourth one from the National Petroleum Council. I do not 
have quotes from these two; but they say essentially the same thing, 
that the peaking of oil is inevitable with potentially catastrophic 
consequences. Since your government didn't want to hear what these 
reports said, it didn't pay any attention to what the reports said, and 
we have gone on with policies of Drill, Baby, Drill.
  Just recently, there have been two more reports that tell us where we 
are--they also look at where we have been--and they make their 
prediction of where we are going. The first of

[[Page 18724]]

these reports is the one on top that issued in '08. And the people who 
issued it were the IEA, the International Energy Agency. They are a 
creature of the OECD, a consortium of major industrial countries. There 
is a similar organization, the Energy Information Administration, which 
is a part of our Department of Energy. And they do similar things and 
have published similar curves; but this is the IEA, the International 
Energy Agency.
  The blue part of the chart here represents conventional oil. Now, if 
they had a long enough chart, it would go back here about 100 or more 
years. We started pumping way back here when we didn't need much, and 
so we didn't pump much. And every time we needed more oil, we could 
find more oil and we could pump more oil. And we've been doing that now 
for right at 150 years.
  And so here we are now. And what they show in this chart is the total 
liquid fuels--that's the line up here--has been plateaued. You can see 
it's flat there at 84 million barrels a day. We've been stuck there for 
5 years now.

                              {time}  1430

  We're in a recession worldwide. We aren't using as much oil as we 
might use. And still oil hovers near $100 a barrel. A couple, 3 years 
ago when the world's economy, including ours, kind of had a momentary 
collapse, the oil prices dropped down to $40 a barrel. But the reality 
of the supply compared to the demand, the prices steadily rose until 
oil is right at $100 a barrel now.
  What this chart showed was a fairly significant drop-off in the 
production of oil from our conventional oil field. This is following 
the same curve, you note, that was followed by the United States after 
1970. So our 1970 plateau is the world's plateau that occurred--what?--
'05 to '09, something like that, was roughly when their curve occurred.
  The chart here has several other contributions to our liquid fuels. 
The top on here is natural gas liquids, and you saw that in the 
previous chart. That's propane and butane and liquids like that. The 
green one under it is nonconventional oil. That is growing, and that 
will grow. That's oil from places like the oil sands of Alberta, 
Canada, where they have a lift there, a shovel that can lift 100 tons 
at a time. It dumps it into a truck that hauls 400 tons, and then they 
haul it to a big cooker, and they heat it up so that the oil will flow. 
It won't flow otherwise.
  They have a large amount of what we call stranded natural gas. 
Stranded natural gas is natural gas that is where you don't have very 
many people. And since it can't be moved--it's not a liquid. It's a 
gas, and it's difficult to move long distances, so it's cheaper when 
it's stranded, and so they're using this stranded natural gas as an 
energy source to warm this oil up so that it will flow.
  The next little wedge there, a dark red wedge, really is a part of 
the dark blue one down here. It's enhanced oil recovery. It's the 
additional oil we get by pumping live steam down there or pumping 
seawater down there, or pushing CO2 down there to push it 
out. Enhanced oil recovery, that is growing. That will grow because 
we're finding more ways of doing that.
  Then they show two wedges to keep this production line going up, 
because they think it should go up, and so we'll just find some oil so 
that it will go up. The light blue here is oil from the fields that 
we've found but are too difficult to develop, like the field in the 
Gulf of Mexico that is under 7,000 feet of water and--what?--30,000 
feet of rock. It's way down there. As the price of oil goes up, why, 
more and more of these fields will be feasibly economically developed.
  The bright red wedge there is a wedge of fields yet to be discovered 
because they, predictably, cannot get enough oil from the fields that 
we have discovered. They're too difficult to develop now, so we'll need 
to find some new fields.
  Notice that by 2030 they have predicted that we would rise from our 
current 84 million barrels of oil a day to about 106 million barrels of 
oil a day.
  Now, this same organization, the IEA, issued another chart 2 years 
later, in '10, and this chart is pretty different. It shows, of course, 
the same plateau. Actually, they show a little dip here. Is it starting 
down or is that simply an undulation at the plateau?
  They have reversed the top two contributions and given them different 
colors, but they're the same thing. This is natural gas liquids, the 
purple one, and the yellow one is nonconventional oil production.
  Notice that they don't show the little wedge here for enhanced oil 
recovery. They have included it where it ought to be, simply as a part 
of the production from the current oil fields. And notice, they go out 
to '35 rather than '30 in this chart. They go out 5 years further, and 
they show a really precipitous reduction in the amount of oil that 
we're going to get from the fields that we're presently pumping.
  And so, to keep this curve going up, because it must go up if the 
world is going to have any opportunity for a growing economy, to keep 
the curve going up, they are predicting two huge wedges that will come 
from the fields that we have now discovered: the too difficult to 
develop and fields yet to be discovered.
  There is little confidence that these prognostications will occur. 
The United States could not do this. We are the most creative, 
innovative society in the world, and we could not reverse the decline 
of oil production in our country. And most of those who are serious 
students in this area do not believe that these two wedges will occur. 
So it is very probable that what the world is going to do is what the 
United States has done, and that is that it will tip over and there 
will be ever less and less oil, harder and harder to get, and more and 
more expensive.
  The next chart kind of puts this in a global perspective. This is a 
chart which shows what the size of the countries of the world would 
look like if their size were relevant to the amount of oil reserves 
that they have. And you notice here that Saudi Arabia dominates the 
world. That's because Saudi Arabia may--we aren't really sure because 
they won't open their books. Saudi Arabia may have 22 percent of all 
the reserves in the world.
  You may remember, oh, 6 weeks or a couple months ago, there was a 
WikiLeaks expose that said that maybe the Saudis had overestimated 
their oil reserves by as much as 40 percent. So the map might not look 
quite like this, but relatively like this.
  Now, why would they overestimate their reserves?
  When OPEC couldn't produce more oil than they were producing and they 
were all anxious for more revenues, OPEC decided that they would limit 
their production so as to keep the price of oil up. And so they 
permitted each of the countries to pump a percentage of their reserves.
  And so if you look back at the history of this, you will see that, 
without finding any new fields, their reserves could go up 50 percent, 
sometimes their reserves doubled. It was kind of a contest amongst 
liars, because the more you said you had, the more you could pump 
because you could pump a percentage of what your reserves were. So we 
really aren't sure what these reserves are because they will not open 
their books, but it's roughly like this. Certainly, the largest 
reserves of all the oil are in Saudi Arabia.
  Look at those countries around them, Iran and Iraq and Kuwait. Little 
Kuwait, that looks like a province down there in the corner of Iraq, 
and look how much oil they have. The United Arab Emirates, you can 
hardly find them on a map.
  Now, I want you to look for the countries on the map that have the 
largest economic activity, and that's the United States. We represent a 
fourth of all the economic activity in the world. We're one person out 
of 22, and we have a fourth of all the good things in the world.
  It's really interesting to ask yourself: How come? What is so 
different about the United States that this one person out of 22 has a 
fourth of all the good things in the world?
  That is a subject for another time, and we will come and talk about 
that, but it's an interesting challenge: Why?
  Look at the United States here. We have only 2 percent of the 
reserves of

[[Page 18725]]

oil in the world, and we use 25 percent of the oil in the world.
  Now look at Europe. It's hard to find them on this map, isn't it? 
Europe, collectively, is economically a bit bigger than the United 
States, and they're even in worse shape than we are as far as having 
oil reserves. They are almost totally dependent on oil which is shipped 
in.

                              {time}  1440

  And now look to find the two countries that have between them better 
than 2\1/2\ billion people out of our 7 billion people in the world, 
China and India. See them over here? Tiny, tiny. They have very small 
reserves of oil.
  Last year the Chinese bought 13 million cars. We struggled to sell 12 
million cars. China is now the world's largest polluter. They just 
passed us. We're number two in that category. China's economy is 
growing very rapidly. Their demands for oil are increasing rapidly. I 
do not have the chart here, but China is buying up oil all over the 
world.
  I asked the State Department why would China buy oil. We have only 2 
percent. We use 25 percent. We're not buying oil anywhere. I said why 
would China buy oil. You see, you get your oil today by going to the 
global oil auction and if you have the money--it's dollars today; let's 
hope it stays that. If it turns to yen or euros, we're going to be in a 
heap of trouble. And if you have the money, you get the oil. So you're 
not benefited at all by owning oil today.
  The State Department's answer was, I'm not sure China understands the 
marketplace. Wow. A country at that time growing at 14 percent, I think 
China understands the marketplace. I think they understand that there 
is such a thing as peak oil. Well, do they understand that?
  Five years ago, I led a codel to China, this holiday season. I was in 
Shanghai on New Year's Eve. Nine of us went to talk about energy. China 
began their discussion of energy by talking about post-oil. Of course 
there will be a post-oil world. It's not today.
  We're not running out of oil. That's not what we're running out of. 
There is a lot of oil left. There is more oil left than all of the oil 
we have used in all of the world's history up to now. What we're 
running out of is our ability to produce that oil at the increasing 
rate to meet increasing demands. We're not running out. There will be 
oil for another 150 years. Ever less and less, more and more expensive, 
harder and harder to get.
  Our time is running out.
  If you have only one chart to look at, this would be the chart.
  This is when we discovered oil way back there. Huge amounts of oil. 
This dark, heavy line here is our consumption of oil. You need to kind 
of thank the Arabs or their Arab oil embargo. If they hadn't had that 
in the seventies, look where this curve would be. It would have gone 
off the top of the chart. That woke us up. Your air conditioner now is 
probably three times as efficient as your air conditioner was then.
  Well, we will return to talk about what can we do about this. Today, 
we talked only about the problem. It's a huge problem. We're equal to 
that problem. We'll be back and talk about how we respond to the 
problem.
  I yield back the balance of my time.

                          ____________________