RE: Hummers

["bon moun" <sherrynstan@xxxxxxx>]

The Industrial Revolution began in England when a set of technologies
fortuitously converged to overcome a shortage of energy and raw
materials
(principally iron and steel). The shortage emerged at the end of
an extremely rapid cycle of proto-industrial development during
the 17th and 18th centuries.

The technologies of steam power and of iron-manufacture utilising coal
Instead of wood- charcoal, had interdependent origins. The first
railways and steam engines were developed in coal-mining districts to
answer specific problems of deep shaft working, where coal had to be
transported considerable distances and flooded mines had to be pumped
dry. Once the technologies emerged they swiftly became generalised,
first to the iron and steel industries, then to textiles, machine
building, transport, agriculture and arms manufacture. The era of fossil
fuel-based industry was launched and led to very rapid population
increases which consolidated the new system's
dependence on its material and energy basis, which emerged in this
fortuitous way at the beginning of the 19th century. World capitalism
has
enjoyed two centuries of sustained development since 1800. However the
gigantic growth in social productivity, resource-use and population, the
creation of a vast new built environment and the subordination of
natural
processes and resource-systems, has never enabled capitalism to shake
free
of its initial path-dependence. On the contrary, capitalism today is
more
critically dependent on fossil fuels and the use of non- renewable
resources
than at any time in the past, and the absolute level of
resource-extraction
and energy use continues to grow.

Although much capital and inventiveness has gone into searching for
alternative energy bases, and in seeking out more energy-efficient
production technologies, no real progress has been made in finding
substitutes for fossil fuels. For a variety of reasons, none of the
alternatives which have been explored have anything more than marginal
importance: biomass, wind, tidal and solar power, hydrogen fuel-cells,
hydropower and nuclear energy still account for less than fifth of
energy
consumption and can never replace fossil fuels, primarily oil and gas
which
together account for more than half of energy consumption in the
industrialised world (it should be borne in mind that more than half of
humankind still has almost no access to electricity or fossil fuels and
relies upon wood, dung and other biomass for heating and cooking fuel
and
animal or human powered transport). The exhaustion of primary fuels
would
under present circumstances lead quickly to a complete collapse of
western
industrial civilisation. Despite much talk about dematerialisation,
'virtualisation', energy-conservation, substitutability and
'sustainable'
technologies, it remains more true than ever that there are simply no
known
alternatives to fossil fuels; the industrial energy base has not changed
substantially for most of this century, other than for a gradual
transfer
from coal to oil and gas.

Throughout its history until the 1960s, capitalism
never experienced energy shortages other than local or transient ones as
the
result of war, the effects of economic crisis and so on. The transition
from
coal to oil occurred long before there was any pressure on coal
supplies,
which remain (theoretically) abundant. It appeared (and is still
commonly
argued) that there are no foreseeable shortages of hydrocarbons, and the
picture drawn by official oil reserve estimates suggest a rosy picture
of
oil reserves which have continued to increase as a result of new
discoveries, despite the high current world consumption of more than 25
bn
barrels/year.

Nevertheless, oil is a distinctly finite resource and recent estimates
by Jean Laherrere, Colin Campbell and others suggest that world
oil production will peak within the next decade and decline thereafter.

These new estimates have been broadly if grudgingly accepted by
such bodies as the US Energy Information
Agency and the International Energy Authority. The significance of the
impending end of the fossil-fuel era has still not been widely discussed
however. Future energy shortages will dramatically impact world
capitalism.
Yet their impact has still to be fully recognised or understood and
scenarios for the future of the world economy still do not incorporate
the
reality of declining energy production. Forecasts are routinely prepared
by
a wide variety of bodies, including the IMF, World Bank, the United
Nations
and most major states. Many private forecasting bodies and think tanks
also
forecast the future: but with very few exceptions, their forecasts still
do
not begin to address the impact of future energy supply deficits. The
reasons are obvious: since world capitalism is so path- dependent, and
since
no-one has found any realistic alternatives to fossil fuels, the future
of a
world in sharp energy-decline is not just bleak. It is apocalyptic. The
bourgeoisie is neither psychologically nor strategically prepared to
engage
with the drastic alternatives which confront capitalism, and the whole
of
humankind. In fact, the historical impasse posed by energy-limits is not
recent. It began 25 years ago and has been deepening since.

The disintegration of world socialism and the collapse of the USSR are
directly related to the growing world energy-crisis. The profound crisis
in
Asia which began in 1996/97 but had its roots in a prolonged slump
experienced by Japanese capitalism, are part of the same slowly
enveloping
tide of global general crisis. Now the emerging crisis in western
financial
markets and stock exchanges herald a new stage in the rapid
disintegration
of the US- dominated world-system and the deepening spiral of
interlocking,
interacting contradictions which are both cause and effect within it.

Oil in the Ground

Oil and other fossil hydrocarbons were formed from
organic material under conditions that rarely occurred in the Earth's
history and only in a few places. Where oil came from algal material,
gas
comes from vegetal remains. Organic debris that settled to sea floors
was
mostly oxidized by bottom dwelling organisms or currents, but in certain
stagnant environments it was fossilised and buried beneath sediments.
Heated
by the Earth's heat flow, anaerobic reactions converted it to petroleum.
On
deep burial oil is cracked into gas and lighter fractions, which migrate
upwards through fractures, finally becoming trapped in geological
faults.
Perhaps one percent of what was formed is trapped in accumulations large
enough to be commercially exploited.  The world has now been thoroughly
explored and most potential oil provinces have now been found. Oilfields
are
rare. They occur in the geologically-unusual discrete trends where the
exceptional conditions needed for generation and entrapment are met.
They
are separated by huge tracts that are barren and the geophysics and
geochemistry of why, is now well understood. For obvious reasons, the
more
prolific trends were found first, as were the larger fields within them.
Most of what remains to be discovered will come from ever smaller fields
in
mature areas.

Finding it...

Much of the world's oil was found long ago using primitive
technology. Current technology deploys an array of methods including
satellite scanning, 3D seismology, the semisubmersible rig which opened
the
offshore to exploitation. Modern seismic surveys map oil zones at high
resolution, and geochemistry can explain where and when the oil moved.
As
Campbell writes, 'These tools are sufficient to efficiently find and
produce
the world's endowment of conventional oil... Further technological
advances
can be expected and will be needed to find and develop ever smaller
accumulations that have progressively less impact on world supply
[but]...
there is no technological solution to the impending shortfall: it is not
a
technological problem.'  In discussing the future availability of oil,
Campbell distinguishes between conventional and non-conventional oil.
Conventional oil is cheap, easily produced and easily processed, but the
original endowment was strictly limited. Estimates of the total have
varied
little during the past thirty years: there was around 2 trillion barrels
of
conventional oil in the ground when the oil era began a century ago.
About
half has now been used.

Getting it out...

Non-conventional oil includes tar sands, shales and heavy
oil such as that from Venezuela. It can also include oil which requires
enhanced recovery techniques such as changing the characteristics of the
oil
in the reservoir by steam injection or in other ways. Non-conventional
also
includes oil found in hostile environments: polar regions or deep waters
such as the North Atlantic Frontier. It will also include oil got from
infill drilling to reach pockets by-passed in the primary depletion of a
field. What all these forms of oil have in common is that they are
expensive
to extract and process. The cost of producing non-conventional oil can
be
looked at in money terms, but it can also be analysed in energy terms:
each
barrel of oil requires a certain amount of energy to extract. Exactly
how
much can be reduced by improved technologies. Tar sands and shales,
Orinoco
crude and orimulsion, although copiously available, require large
amounts of
energy. The oil era will end when each new barrel of oil requires more
energy than is in a barrel, for its production. For this reason alone,
most
of the non-conventional oil which exists will never be exploited. More
to
the point, the world energy-system rests on cheap Persian Gulf oil which
costs less than a dollar a barrel to extract. This abundant oil provides
an
energy subsidy which reduces the cost of extracting offshore and
non-conventional oil, by reducing the cost of energy inputs into
industry as
a whole. This invisible subsidy applies to all 'alternative' energy
forms.
Nuclear power plants do not pay back in electricity produced the amount
of
energy consumed in building them, operating them and managing their
toxic
wastes. Optimistic assessments of the falling costs of 'renewable'
energy
(photovoltaics, biomass, wind turbines) similarly do not take into
account
the Persian Oil energy subsidy involved in manufacturing them. The
replacement costs of turbines and photovoltaics, household heating
insulation, the costs of petrochemical-based fertilisers used in biomass
production, and so on, will reflect the much higher energy input costs
prevailing as oil declines. Renewables will not support an energy-rich
economy.

There are no substitutes for oil.

The Hubbert Model shows how unrestricted production of
conventional oil rises rapidly to a peak and then
declines exponentially; whereas the production of non-conventional oil
rises
only slowly to a long low plateau, before in turn declining. As Campbell
puts it: 'Non-conventional production is unlikely to make an impact
until
the tail end of conventional depletion and then only in a high or very
high
price environment. It is no substitute for conventional oil as has
fuelled
the Twentieth Century economy.'  For both technical and cost reasons, no
oil
reservoir is ever fully depleted. Production falls when the wells have
to
draw on oil farther and farther from the wellbore. A point is reached
when
no more can be produced. The percentage recoverable ranges from 20 to
60%
depending on the gravity of the oil and the current price. Improved
technology may improve recovery but it is also true that the apparent
improvements may reflect initial underestimate or understatement of the
amount of oil-in-place. Companies and governments have reasons both the
under- and over-estimate reserves, at different times. The oil industry
is
not just secretive; it is chronically dishonest.

How much oil is left?

There is a great deal of data publicly available,
but much of it is disinformation. There is a also a deal of confusion in
the
defining of terms, and much of that is deliberate too.  The US
Geological
Survey (USGS) is the most important source of information, most of it
published in various reports and surveys of the US Department of
Energy's
Energy Information Agency. The International Energy Authority, set up at
the
time of the 1970s oilshocks, also publishes data. Industry sources
include
_The Oil and Gas Journal_, which is widely quoted even though its data
on
reserves and production by country is often misleading, because the
numbers
supplied by national governments are reprinted without attempting to
interpret the validity of the data provided. _World Oil_ is a second
authoritative industry source which publishes a survey each August. Oil
companies do their own reporting; BP and Shell are both considered
authoritative. However BP's annual _Statistical Review of World Energy_
merely reproduces reserve data from _The Oil and Gas Journal_ and does
not
reflect BP's own assessment. Many brokerages and industry analysts also
publish assessments. OPEC itself publish wide-ranging and detailed
assessments. The standard OPEC view is that oil will remain cheap and
plentiful for a century or more . A firm with a somewhat maverick
reputation
is the one Campbell himself is associated with: Petroconsultants. This
Geneva-based company maintains what Campbell calls 'the most
authoritative
database on production and reserves as well as important drilling
statistics
for the world outside the United States and Canada.' Its report is
available -- for $20,000(?). But Petroconsultants' assessments are more
downbeat than the others. Petroconsultants is well-known for predicting
the
imminent decline of world oil. The American Petroleum Institute reports
that
reserve-to-production ratios have never been higher and in 1998 stood at
43
years .

Oil-industry maven Morris Adelman claims that oil is so plentiful it
should be thought of as a 'renewable resource' . The US Department of
Energy's 1997 annual report sets the Estimated Ultimate Recoverable
(EUR) at
up to 3 trillion barrels ? and gives an upbeat assessment of energy
prospects, claiming prices will not rise for at least a decade .  So is
the
Petroconsultant view one that should be excluded? In March 1998, the
journal
_Scientific American_ published an article by Colin J.Campbell and his
colleague at Petroconsultants, Jean Laherrère, concluding that oil
production worldwide will start to decline within two to five years and
that
all the world's recoverable oil will be gone by 2050. The prognosis was
particularly gloomy. In the weeks which followed, however, the price of
oil
continued to fall; by April 1998, US gasoline is cheaper at the
petrol-pump
than it is has ever been. And the price was predicted to fall lower.
Nonetheless, Petroconsultants should not be written off. For one thing,
the
USGS itself relies on the Petroconsultants' database for its assessment
of
reserves outside North America. Thus, although the US government in its
official pronouncements about reserves, production and price forecasts,
simply ignored Petroconsultants in favour of other (more optimistic)
analyses, for the hard number-crunching it is the Geneva-based firm's
data,
processed by the USGS into comprehensive province-by-province analyses,
which the DEA relies on. What's more, the USGS figures for reserves and
p/r
ratios, do not add up, as we shall see. They do not add up but if they
did,
they would tend to support the Petroconsultants' version, that oil is
going
to run out sooner than people expect. The USGS explain their assumptions
by
pointing to the fact that historically every oil province has yielded
more,
often several times more, than anyone at first expected. Bearing in mind
that, as we have seen, only one percent of the oil in the ground is ever
likely to be extracted, it is obvious that an assessment of reserves
which
increases that amount by half a percent or a percent (allowing for
better
technology or higher prices) immediately increased total reserves by
fifty
percent or even double the original estimate.  If 'proven' reserves have
a
90% chance of recovery, probable reserves are defined as having only a
5%
chance of recovery. Yet these wildly dissimilar magnitudes are often
routinely lumped together to produce a number for the Ultimate.

In the past few years, great excitement has been generated
about Caspian oil by these methods.

The Wall Street Journal reported that Caspian 'reserves' total 197
bn barrels , making the Caspian similar in importance to North Sea oil.
Yet
at the time, proven Caspian reserves totalled just over 20 bn barrels,
that
is, around one-tenth as much. The Wall Street Journal had lumped in
'probable' reserves of oil alleged to lie deep under he Caspian seabed
in a
region where, as of this writing, not a single exploratory well has been
drilled. Maybe the oil is there, but there is an oil industry saying
that
'reserves are what I'll pay my own money to extract, probables are what
I'll
ask you for yours to look for.' There is perhaps a 5-10 percent chance
that
those probables will ever become actual.  Even if is there, 197 bn
barrels
is enough to supply the world with oil for less than 8 years at present
rates of consumption.  The Petroconsultants database is used by oil
companies, but they also contribute to it. There are other reasons for
being
sceptical about Petroconsultants. Oil is strategic like no other
commodity,
and intelligence agencies of consuming and producing countries alike can
have their own reasons not just for investigating each other's claims
but
for suffusing the subject with disinformation. I am not claiming that
any
firm of body reporting on oil is consciously fronting for the CIA or
anyone
else. I'm not saying they aren't either. I don't know, and no-one does
except those concerned.  And because oil is strategic, and big oil firms
are
so deeply connected with national governments, the truth is still harder
to
get at. In 1986, most OPEC countries increased their published reserves
by
arbitrary, but very large amounts. This revision seemed to be prompted
by
quota considerations (how much they are allowed to sell depends on the
overall size of their reserves). But the upward revisions, which
totalled
more than anyone is claiming lies under the Caspian, have been widely
accepted, to the extent that these revisions formed the basis of many
euphoric pronouncements by the American Petroleum Institute and the US
government about the long-term viability of oil supplies and the great
additions to world reserves.  It is possible that the EUR for Persian
Gulf
oil may turn out to be larger than anyone now supposes, as has been true
of
North Sea oil, which has enjoyed a second lease of life in recent years.
But
the effect will only be to re-emphasise the importance of OPEC in
general
and the Arab states of the Middle East in particular, at a time when
non-OPEC oil production is declining sharply. One of the consequences of
the
new enhanced recovery technology is to accelerate the final depletion of
the
North Sea and other important provinces. The effect is likely to be
still
more destabilising to the US-dominated geostrategic balance, in the
future.
No doubt the CIA knows the truth about the claims by individual OPEC
countries. As things stand, official US government statements provide
ample
reassurance about the safety of future oil supplies. Yet the statistical
basis for this optimism is often not present, or even contradicted, in
the
small print of their own publications.

-MJ, 1999