Petroleum Petroleum ManMan

Presentation Based on Chapter of the Same Presentation Based on Chapter of the Same Name in ‘Crossing the Rubicon’ by Mike Name in ‘Crossing the Rubicon’ by Mike

RuppertRuppert

Increasing DemandIncreasing Demand

Global demand oil and gas increasingGlobal demand oil and gas increasing New supplies not being found at the same New supplies not being found at the same

raterate Use 4-6 barrels for every new barrel foundUse 4-6 barrels for every new barrel found Trend getting worseTrend getting worse Natural gas use is increasing, rate of Natural gas use is increasing, rate of

discoveries, especially in North America is discoveries, especially in North America is fallingfalling

Population increasing.Population increasing.

Colin CampbellColin Campbell

World Expert – worked at BP, World Expert – worked at BP, Amoco, FINA, TexacoAmoco, FINA, Texaco

1 trillion barrels left1 trillion barrels left 82 million used per day82 million used per day 35-years at present rate35-years at present rate Rate is increasing, estimates 20 Rate is increasing, estimates 20

yearsyears Harder / More expensive to getHarder / More expensive to get

Colin CampbellColin Campbell

Key principleKey principle

““When it takes more energy to pump When it takes more energy to pump a barrel of oil than is obtained by a barrel of oil than is obtained by burning it, the field is considered burning it, the field is considered dead, regardless of how much oil dead, regardless of how much oil remains”remains”

The Bottom LineThe Bottom Line

Without the sugar-coating Rupert says:Without the sugar-coating Rupert says:

““In order to prevent the In order to prevent the extinction of the human race, extinction of the human race, the world’s population must the world’s population must be reduced by as many as be reduced by as many as four billion people.”four billion people.”

HydrocarbonsHydrocarbons

World has used ½ of all World has used ½ of all hydrocarbons created over millions hydrocarbons created over millions of years in just 100 years.of years in just 100 years.

95% of all transport – powered by 95% of all transport – powered by OilOil

50% of all produced is used for 50% of all produced is used for transportationtransportation

HydrocarbonsHydrocarbons““Oil pervades our civilization; it is all around you. The shell for your computerOil pervades our civilization; it is all around you. The shell for your computer

is made from it. Your food comes wrapped in it. You brush your hair and teethis made from it. Your food comes wrapped in it. You brush your hair and teeth

with it. There’s probably some in your shampoo, and most certainly its container.with it. There’s probably some in your shampoo, and most certainly its container.

Your children’s toys are made from it. You take your trash out in it. It makes yourYour children’s toys are made from it. You take your trash out in it. It makes your

clothes soft in the dryer. As you change the channels with the TV remote you holdclothes soft in the dryer. As you change the channels with the TV remote you hold

it in your hands. Some of your furniture is probably made with it. It is everywhereit in your hands. Some of your furniture is probably made with it. It is everywhere

inside your car. It is used in both the asphalt you drive on and the tires that meetinside your car. It is used in both the asphalt you drive on and the tires that meet

the road. It probably covers the windows in your home. When you have surgery,the road. It probably covers the windows in your home. When you have surgery,

the anesthesiologist slides it down your esophagus. Your prescription medicine isthe anesthesiologist slides it down your esophagus. Your prescription medicine is

contained in it. Your bartender sprays the mixer for your drink through it. Oh yes,contained in it. Your bartender sprays the mixer for your drink through it. Oh yes,

and the healthy water you carry around with you comes packaged in it…and the healthy water you carry around with you comes packaged in it…

HydrocarbonsHydrocarbons

Be careful. If you decide that you want to throw this book out, your trashcanBe careful. If you decide that you want to throw this book out, your trashcan

is probably made from it. And if you want to call and tell me what a scaremongeris probably made from it. And if you want to call and tell me what a scaremonger

I am, you will be holding it in your hands as you dial. And if you wear correctiveI am, you will be holding it in your hands as you dial. And if you wear corrective

lenses, you will probably be looking through it as you write down a number withlenses, you will probably be looking through it as you write down a number with

a pen that is made from it. Plastic is a petroleum product, and its price is everya pen that is made from it. Plastic is a petroleum product, and its price is every

bit as sensitive to supply shortages as gasoline. Oil companies do not charge a bit as sensitive to supply shortages as gasoline. Oil companies do not charge a

significantlysignificantly

different price for oil they sell to a plastics company than they charge adifferent price for oil they sell to a plastics company than they charge a

gas station owner. If the wellhead price goes up, then every downstream use isgas station owner. If the wellhead price goes up, then every downstream use is

affected.” – affected.” – Page 23/24 – Crossing the RubiconPage 23/24 – Crossing the Rubicon

Oil and the Food SupplyOil and the Food Supply

Modern food: 10 calories consumed for Modern food: 10 calories consumed for each 1 calorie containedeach 1 calorie contained

Farm machinery all uses oil.Farm machinery all uses oil. Fertilizers – Ammonia – Natural GasFertilizers – Ammonia – Natural Gas Pesticides – OilPesticides – Oil Water for crops – pumped by OilWater for crops – pumped by Oil Harvest -> Processing Plant -> Harvest -> Processing Plant ->

Refrigeration -> Grocery Store -> Refrigeration -> Grocery Store -> HomeHome

Food – Consider this…Food – Consider this…

4 out of 6 billion people on this 4 out of 6 billion people on this planet do not have, and want, these planet do not have, and want, these things.things.

Economies are encouraged to growEconomies are encouraged to grow ““One way or another, the have-nots One way or another, the have-nots

must become consumers”must become consumers”

Food – The Scariest PartFood – The Scariest Part

““If fertilizers, partial irrigation and pesticides If fertilizers, partial irrigation and pesticides were withdrawn corn yields, for example, were withdrawn corn yields, for example, would drop from 130 bushels per acre to would drop from 130 bushels per acre to about 30”about 30”

Same applies to wheat, lettuce, celery, onion: Same applies to wheat, lettuce, celery, onion: anything that commercial agriculture anything that commercial agriculture produces.produces.

Organic Farming? Infrastructure not in place.Organic Farming? Infrastructure not in place. ““You could ask several billion people to stop You could ask several billion people to stop

eating for a year or two while we switch..”eating for a year or two while we switch..”

Food – CattleFood – Cattle

Grain production will affect meat Grain production will affect meat prices as they feed on it.prices as they feed on it.

Would you pay $50 for a burger or Would you pay $50 for a burger or $25 for a chicken breast?$25 for a chicken breast?

The US contains 5% of the The US contains 5% of the world’s population yet world’s population yet consumes 25% of the world’s consumes 25% of the world’s energy.energy.

GrowthGrowth

The whole world economy is shifting The whole world economy is shifting towards more consumption – not lesstowards more consumption – not less

Developing world – massive increase Developing world – massive increase in consumer spending – rising literacy in consumer spending – rising literacy etcetc

2002 Chinese Auto Sales jumped 50%2002 Chinese Auto Sales jumped 50% GM sales in China up 300% in 2002 GM sales in China up 300% in 2002

alonealone

Petroleum ManPetroleum Man

Hydrocarbons have led to huge Hydrocarbons have led to huge increases in human populationincreases in human population

• UnsustainablUnsustainable peak due to e peak due to the “Age of the “Age of Oil”Oil”

Rational AssessmentsRational Assessments

OK – can’t all be bad right? Our OK – can’t all be bad right? Our governments have planned for this right?governments have planned for this right?

Moving to ‘alternative’ energy will lead to Moving to ‘alternative’ energy will lead to tens of millions of people being laid off.tens of millions of people being laid off.

Process might take decades. Who would Process might take decades. Who would fund it?fund it?

Hydrogen fuel cells are not the answerHydrogen fuel cells are not the answer Electricity has to be ‘generated’. Electricity has to be ‘generated’. Move back to coal? Environmental impactMove back to coal? Environmental impact

Rational AssessmentsRational Assessments

Production of electricity is a huge Production of electricity is a huge usage of energyusage of energy

In 1999 42% of world’s energy was In 1999 42% of world’s energy was used to produce electricityused to produce electricity

In 2002 50% of all electricity in the US In 2002 50% of all electricity in the US was from coal-burning power plantswas from coal-burning power plants

Hoped natural gas would be the Hoped natural gas would be the answer. Gas is running out faster than answer. Gas is running out faster than oil!oil!

Rational AssessmentsRational Assessments

US oil production peaked in the 1970s. US oil production peaked in the 1970s. Then became dependent on foreign oil.Then became dependent on foreign oil. ““Whatever anyone tries to say to the Whatever anyone tries to say to the

contrary, our dependence on foreign contrary, our dependence on foreign oil is permanent and increasing all oil is permanent and increasing all the time”the time”

Oil is getting more expensive to produce Oil is getting more expensive to produce everywhere in the world.everywhere in the world.

Global oil discoveries peaked in the 1960sGlobal oil discoveries peaked in the 1960s

Rational AssessmentsRational Assessments Middle East nations will peak last. Soon Middle East nations will peak last. Soon

the middle east will supply 40% of the the middle east will supply 40% of the world’s oilworld’s oil

Saudi Arabia has 25% of the world’s Saudi Arabia has 25% of the world’s recoverable oil, Iraq 11%.recoverable oil, Iraq 11%.

US population and reliance of Oil project US population and reliance of Oil project as follows over the next 20 years:as follows over the next 20 years: Oil Consumption up 33%Oil Consumption up 33% Natural Gas up 50%Natural Gas up 50% Electricity Demand up 45%Electricity Demand up 45% Overall consumption up 32%Overall consumption up 32% Yet the US produces 39% less oil then in 1970Yet the US produces 39% less oil then in 1970

World Oil Reserve World Oil Reserve FiguresFigures

““The books on world oil reserves are as The books on world oil reserves are as cooked as the books of Enron.”cooked as the books of Enron.”

In the producers interest to insist the In the producers interest to insist the supply is there and to inflate their reservessupply is there and to inflate their reserves

Controlling the price of oilControlling the price of oil Overstating reserves help maintain share Overstating reserves help maintain share

pricesprices Shell have been caught recently on this Shell have been caught recently on this

overstating reserves by 20%overstating reserves by 20%

The Oil Companies KnowThe Oil Companies Know

Already lots of mergers and Already lots of mergers and downsizing in the Oil world.downsizing in the Oil world.

According to BP-Amoco world oil According to BP-Amoco world oil production per capita peaked in production per capita peaked in 1979.1979.

Following this peak production is Following this peak production is sinking downwards and this trend is sinking downwards and this trend is not reversing.not reversing.

What is needed?What is needed?

Pimentel and Pimentel in 1996 stated:Pimentel and Pimentel in 1996 stated: ““the nations of the world must the nations of the world must

develop a plan to reduce the global develop a plan to reduce the global population from near 6 billion to population from near 6 billion to about 2 billion. If humans do not about 2 billion. If humans do not control their numbers, nature will.”control their numbers, nature will.”

What is the biggest issue? Its not What is the biggest issue? Its not ‘profitable’ to slow decline.‘profitable’ to slow decline.

Conclusion?Conclusion? The author goes to suggest such strains on The author goes to suggest such strains on

the US economy and its thirst for oil meant the US economy and its thirst for oil meant Iraq and Afghanistan had to be securedIraq and Afghanistan had to be secured

He argues the attacks of 9/11 were planned He argues the attacks of 9/11 were planned by factions of the US government or at least by factions of the US government or at least “allowed to happen” to provide a pretext for “allowed to happen” to provide a pretext for war in Iraqwar in Iraq

A shock treatment was needed to get the A shock treatment was needed to get the public support for the war.public support for the war.

Ignoring all that the issues of energy Ignoring all that the issues of energy production peaking and the time for production peaking and the time for ‘Petroleum Man’ coming to an end are ‘Petroleum Man’ coming to an end are serious for each one of us.serious for each one of us.