Since writing a couple of pieces on ‘Peak Oil’ (here and here) I’ve been deluged with stuff on the subject, so much so that I simply have to deal with the issue once more, even though, frankly, I’m fed up with it, especially when it’s ‘lefties’ doing the deluging when they should know better. But as it has the ‘Left’ sleeping with ‘strange bedfellows’ to quote Vladimir Ilyich Lenin, there is obviously much more at stake here than the issue of how much of the stuff (oil, not ‘Lefties’) there actually is. As I pointed out before, all kinds of other antedeluvian ideas have been dragged into the debate, especially the totally discredited Malthusian population rubbish of plus-200 years ago, global warming, 2 billion Chinese with a car and a fridge, 1 billion Indians with a car and a fridge and so on and so forth (only Euros and Yanks are allowed these ‘luxuries’ and fortuitously for us, we’ve already got them and understandably, are extremely loathe to give them up or share them with anyone else!) and finally, oil wars. Have I missed anything?
Yet in spite of all my efforts to show that ‘peak oil’ is an invention, it seems to fall on deaf ears with immense tomes landing with a thump on my virtual desktop that attempt to show that the Huppert ‘peak oil’ hypothesis is the only true and righteous path and anyone who dares challenge it is either burying their heads in (should it be oil-bearing?) sand, or defending an oil-based economy.
I ask myself how can this be so, for on the hand, I am being accused – by default – of defending an oil-based economy, something I’ve been at pains to show that I’m not and on the other, of simply ignoring the ‘facts’, namely that shortly there will be oil wars as the countries of the planet seek to make sure they’ve got their fix.
I’ve already pointed out that we’ve been going to war over (and with) oil for the past century, that going to war over valuable resources is the bedrock of capitalism and has absolutely nothing to do with the amount of whatever resource it is, but its location and who ostensibly owns it. So ‘oil wars’ are, as they say, par for the course (see my review of William Engdahl’s excellent book on the subject).
Now I’m not an oil expert (my most intimate connection to oil is cooking with it) so I have to rely on the ‘experts’ and my own intelligence and knowledge of political economy in order to arrive at what seems to be a rational conclusion on the issue.
First (and hopefully for the last time), there is no doubt that at some point in the future we will effectively ‘run out of oil’, that is, economically viable recovery of the stuff, assuming that is, that it’s still central to an industrial economy. This assumes that all recoverable reserves have been discovered, itself a contentious issue (see below).
The one thing missing from these allegedly ‘left analyses’ of the oil debate is the political economy of capitalism and the inevitable fall in the rate of profit, a fact so fundamental to the issue, that one must ask the question why alleged lefties rarely, if ever mention it. One must assume that it muddies the (oily) waters to bring up such a crass subject, as it would mean actually looking at the nature of capitalism. In my last essay, I quoted from S. Artesian’s excellent series on Venezuela, who commits the ‘sin’ of actually dealing with the nature of capitalism rather than the appearance. And, as comrade Artesian felt compelled to repeat his view, and as I did also in my last piece, I’ll bloody well do it again, Goebbels-like, until it sinks in:
Daily output [in Venezuela, of oil] continued to fall, and by 1982, production was only half the 1970 production peak. Proven, recoverable reserves from conventional sources
34 percent. This bears repeating: while daily output continued to fall, proven recoverable reserves increased. Daily production levels were, and remain, independent of proven reserves.
Further exploration and development has continued to yield increased estimates of proven recoverable reserves. 2003 reserves from conventional sources are now twice those estimated in the peak production year of 1970, despite the continued restriction of daily output. [my emph. WB] (See Class and History Part 6 by S. Artesian).
To which I got the following response from Mike Harrington, who, if I’m not mistaken, is a ‘lefty’:
The “reserves” of Venezuela increased, but the quality declined. Venezuela has classified billions of barrels of heavy , high-bitumen oil as “reserves.”
This is one of the symptoms of peak oil. Deposits that were considered uneconomical when the cheap, light, low-sulfur oil was freely flowing now are suddenly classified as reserves to bolster sick balance sheets. (email correspondence)
Comrade Artesian sent me the following in response to comrade? Harrington’s assertion:
Mr. Harrington is wrong. The increase in Venezuelan proven reserves does not include the super heavy oil/bitumen from the Orinoco belt. Those resources are considered non-conventional and are
part of the 78 billion barrels of proven reserves.
Estimates of the quantity of petroleum in the Orinoco super heavy/bitumen belt exceed 1.2 trillion, yes trillion, barrels with recoverable quantities currently estimated at 267 billion barrels. [my emph. WB]
Hence we come back to the fundamental issue – why, if proven reserves are growing – is output and the rate of profit falling? After all, in the UK even with the increases in the cost of oil brought about, not by shortages but by speculation in the oil futures market, is oil cheaper today than it was in 1970?
Another email I received today referred me to yet another ‘analysis’ from which I quote:
Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.
Yes, doubled (but in dollars that have lost 30% of their value over roughly the same period) and the writer’s use of the lack of refinery capacity is not necessarily because we’re going to run out of oil to refine but simply because it ain’t profitable to build more capacity. As to the issue of tankers, the key here is the type and size of tanker, not that there’s no oil to ship. The question of decommissioning is something I also dealt with before as it has to do with the introduction of double-hulled tankers, a safety feature that has been reached through a global agreement.
Rather, reduce supply so as to raise the price by artificially creating shortages and hence attempt to solve the problem of the falling rate of profit. The article also ignores the issue of the switch to gas for electricity production, hence obviating the need for more refinery capacity. And once more, supplies of gas are estimated to last for at least two hundred years.
The same piece goes on to say:
As Kenneth Deffeyes notes in Beyond Oil: The View from Hubbert’s Peak, it meant that as of 2003, there was no major underutilized oil source left on the planet. Even as established oil fields have reached their maximum production capacity, there has been disappointing production from new fields. Globally, according to some geologists’ estimates, we have discovered 94 percent of all available oil.
The piece opens up with the following, once more pointing to the real agenda behind the ‘peak oil’ hypothesis:
While global information for predicting this “event” is not so straightforward as the data M. King Hubbert used in creating his famous curve that predicted the U.S. oil production peak, there are indications that most of the large exploration targets have been found, at the same time that the world’s population is exploding. [my emph. WB]
Note that the issue is not ‘peak oil’ but conveniently, the writer alleging that it’s the world’s population explosion that is the problem. So the issue then, is not one of when we run out of oil but of there being too many people on the planet. As I’ve said before and I’ll say again (at the risk of being boringly repetitive), by conflating the issue of population with that of resources, the fundamental issue of political economy is avoided.
Finally, we read:
It is reluctantly concluded that there is strong evidence that the restricted Hubbert Curve for the world’s total EUR of oil may first peak about the year 2000.
Which it hasn’t, in fact new sources of oil are being discovered constantly and, this is critical, there has been the switch from oil to gas, so the issue of population is totally unconnected to the amount of oil but is connected to the falling rate of profit and the need to devise a means of raising it and the oil companies are also the gas companies, it stands to reason that a switch to gas is to their benefit.
Much more important is the issue of global warming, noticeable by its almost complete absence in the ‘peak oilists’ arguments and one has to ask why? Why the emphasis on population and not on global warming for surely if we face a real danger this is it, not the ‘exploding’ population? The great majority of the world’s scientists concur on the issue of global warming, whilst the jury is most definately still out on ‘peak oil’. The population ‘explosion’ is a myth and was demolished decades ago. Indeed, the ‘developed’ world has a population implosion problem.
When we dig further into the connection between global warming and ‘peak oil’ we reveal an interesting dichotomy. If as the ‘peak oilists’ assert, we are about to run out of oil, why is the world’s numero uno consumer of the stuff, the US, so adamant in resisting all attempts not only in reducing oil consumption but in denying that there is such a thing as global warming and instead would rather blame it on the fictitious population explosion? For surely, if ‘peak oil’ were a real phenomenon one would expect the US to be hellbent on switching from oil/gas to other sources of energy.
Of course the ‘left’ faction of the ‘peak oilists’ contends that the US will just grab all available supplies for itself, hence the ‘oil wars’ theory, that’s why Iraq was invaded etc. And of course, the US does want to control oil supplies but not because it’s running out but because it’s intrinsic to the nature of the capitalist economy to expand or die, to find new markets and control existing ones. Oil is obviously crucial to this for without it, there can be no military force capable of controlling the world’s economy, especially the role of the US Navy, the largest and most potent on the planet, a navy that is totally dependent on oil. This has been the driving force behind the ‘oil wars’ of the past century whether initially the British and now the US. I refer you once more to Engdahl’s book which details this process.
The one thing the ‘peak oil’ brigade do not deal with is the connection between climate change and a carbon-based economy. The focus rather is on population and war, both of which do not require an analysis of the political economy of capitalism. Instead the ‘blame’ is shifted to two connected ideas both of which have their roots in the idea of an immutable ‘human nature’, that is of war and having too many babies (all conveniently poor of course), both assumed to be central to our species above anything else.
Moreover, the ‘peakists’ offer no way out, no solution to the alleged problem that ‘peak oil’ poses (except, as I have pointed out, “prayer”, not proven to be a reliable option), or are they advocating some kind of mass eradication of the poor people of the planet? Already I see ‘documentaries’ on TV talking of the ‘threat’ of all those “Chinese and Indian fridges and cars”.
Ultimately, the issue devolves on to the problem of transforming capitalist society, that has most of us addicted to useless consumption via debt and imprisoned by house payments for the rest of our lives.
How much easier it is to find a convenient scapegoat for the crisis that confronts us and thus avoid the complex issue of confronting the fundamental contradictions of capitalism. When I find ‘lefties’ in bed with apologists, nay defenders of capitalism, I worry that once more, the ‘left’ has lost its way, seduced by pseudo-scientific theories such as those by the long-dead and discredited Malthus, long dispensed with by rational, thinking people.
This is the third or fourth essay I’ve written dealing with this issue as well as publishing writings and references by other people on the subject (both for and against) because I believe this is a very important issue, not the least reason of which is how the ‘left’ has been suckered into the myth of ‘peak oil’, hence it’s vitally important to deal with it, dispense with it and move on.