Peak Oil News: The Peak Oil Crisis: Washington Stirs

Thursday, December 01, 2005

The Peak Oil Crisis: Washington Stirs

Falls Church News-Press

By Tom Whipple

Until recently, the phrase “peak oil” was among the last elected and appointed official in Washington wanted to hear or see in print. Should there be any doubt as to the correctness of their position, one only has to look at what happened when President Carter donned a cardigan sweater and told us how one day we were going to run short on oil and how we should start sacrificing now to prepare for it.

Relevant administration officials are well aware world oil production will peak someday, but for obvious reasons, they don’t want to acknowledge this until they absolutely have to. They hope beyond hope peaking won’t happen until after they retire so somebody else can deal with the unpleasant consequences.

We know President Bush understands peak oil, for we have the word of Congressman Bartlett, who last summer went down to the White House using his access as a staunch conservative Republican congressman to tell the President all about it.

Later, when asked of the President’s reaction, the congressman reported that it is a matter of the important and the urgent. We can interpret this to mean that yes, the President understands the serious consequences of peak oil, but, no, the evidence of imminent peaking is not yet persuasive enough that he should unleash unknown forces by an official acknowledgement that peak oil may be imminent.

In the meantime, the administration will stick with a policy of encouraging more production through legislation and paying lip service to conservation through public service announcements.

Last week this pattern was broken, or at least shaken a bit, by two stories appearing in select newspapers. The first was published by USA Today and has all the earmarks of an administration leak to a friendly journalist.

The story, which appeared on November 24, reported that on October 5, the Secretary of Energy wrote to the National Petroleum Council (NPC) asking “for a study of the industry’s ability to produce enough oil and natural gas at prices that won't cripple the economy.” Craig Stevens, an Energy Department spokesman, amplified the letter by saying “He’s asked them to take a big-picture look out several years… He wants to get some definitive information."

Of even more interest is that the letter is reported to contain a reference to the “peak oil debate.” After telling us of the administration request, the USA Today story discusses the peak oil debate in much detail giving the arguments for “imminent” and “decades away”.

A day after the USA Today story, a second story appeared in the administration-friendly Washington Times, on, of all things, peak oil. The story, which was keyed to a talk the Chief Economist for the International Energy Agency gave to the Council on Foreign Relations the previous week, was supposed to express optimism – there is plenty of oil in the ground so that the “market” with the help of “technology” will sort things out without any serious dislocations. Between the lines however, a careful reader could detect a warning all may not be well.

What is going on here? Is there some major policy shift in the offing or is the Administration just asking for another group to justify the current policy of unhindered drilling?

The National Petroleum Council, which consists of some 175 CEOs of the biggest oil and energy companies in the US (the current Chairman is the CEO of ExxonMobil) was founded by President Truman in 1946 to give the government advice on petroleum matters. During the last 60 years, the organization has completed some 200 studies on various aspects of oil production in the US , but most of these have dealt with technical issues or contain policy wishes of the oil industry. None have ever grappled with an issue approaching the importance of peak oil.

The first thing to remember about studies like this is that an administration never asks for them unless it knows in advance what the study is going to conclude— less its release do more harm than good. The notion expressed by the DOE press spokesman that the Secretary is seeking “definitive information” about the future availability of cheap oil is absurd. What the Secretary is seeking is definitive backing for either the current policy or a rationale for a change.

The Secretary of Energy is clearly asking the leaders of the oil industry the key question: Is imminent peak oil for real? Can you oilmen continue to provide the American people all the cheap oil they need and want for many years or not?

The underlying issue is whether this request signals that the administration might be considering policy change in the not too distant future.

If the report comes back saying that “yes, oil supplies are getting a bit tight, but if the Congress will let us drill and build what we want where we want then all will be fine for awhile,” then this request is nothing more than the administration seeking more allies in the fight over drilling in Alaska.

If, on the other hand, the report honestly admits the era of cheap oil is nearly over, then we have a new ball game and a new national debate. The mere mention of the words “peak oil” in the request for a report is a tantalizing hint that change may be in offing.


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