“Peak oil is coming in November, and could bring humankind to the brink.”
– Kenneth Deffeyes, ex-Princeton professor, “Peak oil’ spells cataclysm for US, oil theorist warns,” Oregonian Aug. 26, 2005
Michael Economides, professor of Petroleum Engineering at University of Houston was on CNBC last week predicting $100 per barrel oil in 2006. His reasoning was similar to mine regarding supply-demand issues and Middle East “wild cards.” I recently told “CBS Early Show” that I think we’ll see $80 oil before we see $50 oil again. Goldman Saks now predicts $105 as a “peak oil.”
The term “peak oil” refers to “Hubbert’s Peak,” a bell-shaped curve which geologist theorize marks the beginning of the end of plentiful oil forever.
But today, I want to present some fresh food for thought about our emerging “oil crisis.”
According to the mainstream view, peak oil is set to occur around 2006-2008. When peak oil occurs, experts say production will decline approximately 3 percent per year during a time when global demand is increasing at 3 percent or more per year. At that point, oil could soar to $150 to $200 per barrel, say the oil crisis experts.
But what if these experts are all wrong? What if oil is not really as scarce of a resource as we have been led to believe? Keep in mind that ever since automobiles were first invented, there have been predictions that we’re going to run out of oil, yet so far, each one has proven to be wrong.
Imagine with me for a moment that the whole theory behind the “running out of oil scare” is also based on a faulty theory. That’s the premise of my upcoming book, “Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil,” co-written with Dr. Jerome Corsi for release in October 2005.
The fossil-fuel theory
The predominant theory is that oil is a “fossil fuel” produced from decaying pre-historic forests. Since pre-historic forests would be a limited resource, it follows that oil would also be a limited resource. So, the theory goes, eventually we will use up all the oil reserves, especially given the increasing demands of an industrialized world where the United States must now compete with countries like China and India for available oil supplies.
Here’s the problem: This theory fails to take into account available evidence. Despite increased oil demand, the amount of proven oil reserves in the world has never been larger. There is now credible scientific evidence suggesting the earth produces oil on an on-going basis and that its origin has nothing to do with fossils or pre-historic forests.
The work of Dr. Thomas Gold has generated an alternative theory. This theory asserts that oil is produced not by decayed fossils, but instead by a continuing bio-chemical action below the surface of the earth, and that oil is forced to the surface of the earth by the centrifugal force resulting from the earth’s rotation.
In “Black Gold Stranglehold,” we systematically expose the fraudulent science that has made America so vulnerable to ongoing oil shocks: the belief that oil is a fossil fuel and that it is a finite resource.
The politics of oil
Americans now consume more than 25 percent of the world’s oil, but have control over less than three percent of its proven oil supply. This unbalanced pattern of consumption makes it possible for foreign governments, corrupt political leaders, terrorist organizations, and oil conglomerates to hold the economy and the citizens of the United States in a virtual stranglehold.
Oil-producing countries and oil companies have worked hard to perpetuate the myth of oil as a scarce resource in order to keep the price of oil high. There is no greater proof of this than the direct relationship between skyrocketing gas prices and the explosion of wealth among those who control the world’s supply of oil.
Liberal politicians buying into the idea that oil must be conserved have demanded billions be spent on energy conservation, and have resisted our using proven oil resources such as those discovered in Alaska. (See “‘Godforsaken’ ANWR: To drill or not to drill?).
Today, there are 100 years of proven oil reserves fully discovered. We should use that oil now, while ensuring enough is constantly in the market to maintain reasonable prices.
One hundred years ago, our primary method of transportation depended upon utilizing horses and burning coal. One hundred years from now will be sufficient time to develop safe alternatives, including solar and nuclear power, as well as alternative liquid fuels.
With oil now cresting $70 a barrel, unless the United States makes some serious moves to obtain and develop significant oil assets, we will see economies like China and India continue to grow while we shrink.
Will we hit $5 per gallon gas? Unless we begin more exploration for deep-earth oil, I fear the answer is yes. Keep in mind that gas is already over $4 to $5 per gallon in the top 10 most expensive cities in the world including Hong Kong, London, Paris, Amsterdam and Seoul. Read my report on “$5 Gas Coming Soon?”
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