Note to Readers:

Please Note: The editor of White Refugee blog is a member of the Ecology of Peace culture.

Summary of Ecology of Peace Radical Honoursty Factual Reality Problem Solving: Poverty, slavery, unemployment, food shortages, food inflation, cost of living increases, urban sprawl, traffic jams, toxic waste, pollution, peak oil, peak water, peak food, peak population, species extinction, loss of biodiversity, peak resources, racial, religious, class, gender resource war conflict, militarized police, psycho-social and cultural conformity pressures on free speech, etc; inter-cultural conflict; legal, political and corporate corruption, etc; are some of the socio-cultural and psycho-political consequences of overpopulation & consumption collision with declining resources.

Ecology of Peace RH factual reality: 1. Earth is not flat; 2. Resources are finite; 3. When humans breed or consume above ecological carrying capacity limits, it results in resource conflict; 4. If individuals, families, tribes, races, religions, and/or nations want to reduce class, racial and/or religious local, national and international resource war conflict; they should cooperate & sign their responsible freedom oaths; to implement Ecology of Peace Scientific and Cultural Law as international law; to require all citizens of all races, religions and nations to breed and consume below ecological carrying capacity limits.

EoP v WiP NWO negotiations are updated at EoP MILED Clerk.

Friday, June 3, 2011

ArmAGideon: The CIA Accurately Predicted How Long World Oil Supplies Would Last—in 1978

The CIA Accurately Predicted How Long World Oil Supplies Would Last—in 1978

by William Hicks
Bill Hicks is Dead, via Energy Bulletin

Perhaps I am atypical, but I’ve always been hypersensitive to what’s going on around me in the real world. Among my earliest childhood memories are the gas lines that followed the 1973 Arab oil embargo; the event which probably planted the seed that sprouted into awareness of peak oil during my fifth decade on this planet. Despite being just a kid at the time, I was keenly aware that my family’s cars needed that gasoline that was being rationed, and we furthermore needed those cars to do just about everything that was important--from my dad getting to work in the morning, to me getting to school, to my mom going grocery shopping every weekend.

My heightened awareness is likely also the reason why I still have vivid memories of a headline that appeared in our local small town newspaper one day several years after those gas lines had abated. The headline read in stark simplicity: “60 to 90 Years' Supply of Oil Left,” and it really grabbed this thirteen-year-old’s attention. Being a thoughtful youth, I did a quick mental calculation and realized that if the headline was accurate it meant if I was lucky there was a chance I would not live to see the end of the oil age.

Flash forward to middle age, and while researching this article I unearthed a reference to what it was that generated that headline from so many years ago. According to a Time magazine story published in October 1978, the source of that “60 to 90 year” figure was an official report produced for the Central Intelligence Agency by Richard Nehring, a policy analyst for the Rand Corporation. The Time article, entitled “Oil: What’s Left Out There?” centered on two basic questions: “How much oil does the world have left?” and “When will it run out?”

These were hotly debated topics at the time. The article points out that President Jimmy Carter, in his drive to get an energy program through Congress, had been relying on a previous CIA analysis estimating that world oil supplies would be depleted by the end of the 1980s. Nehring’s report, therefore, represented a considerable change from the agency’s previous thinking on the issue and also had important political ramifications.

What strikes me looking back in hindsight is just how accurate Nehring’s prediction has turned out to be. It is now nearly 33 years later, and the general consensus among peak oil analysts today is that the world has something on the order of 35-40 years of remaining oil supplies at current consumption rates (putting aside the fact that production rates will no doubt fall well before then). Add those two figures together and the headline that grabbed my attention when I was a kid will hit almost the exact middle of its 60-90 year target range.

Even more telling is what the Nehring paper had to say about how his prediction would be affected by increasing oil demand: “If demand does increase and supplies are being used up more quickly, Rand experts believe that energy requirements could still be met through conservation measures and the use of special techniques to squeeze more oil out of existing reserves.” Done and done. Conservation through greater efficiency in the early 1980s caused oil consumption to actually fall for awhile and special techniques are now used to extract more oil from older fields.

Nehring’s credibility is further enhanced by a caution added to his relatively optimistic analysis: “the world's reserves can really be significantly increased only by additional recovery from known fields and by further discoveries of ‘supergiant’ fields containing at least five billion barrels of oil.” As we now know, the former has become standard practice while the latter has not occurred at all. In fact, the Rand report noted at the time that new discoveries of supergiant fields had already almost completely tapered off.

The Time article goes on to list the reasons why the oil crisis seemed somewhat less dire a half-decade after the appearance of those first gas lines. Among the factors cited was the development of already discovered supergiant oil fields in the North Sea, Alaska and Mexico, which we now know were largely responsible for oil prices returning to their pre-oil shock, inflation-adjusted norms during the 1980s and 1990s.

So what do we learn from this little detour through the recent past? First and foremost, the evidence is right there in black-and-white that America’s political leadership has for the past third of a century had available at its disposal a highly accurate prediction from its own intelligence analysts as to how long conventional oil supplies were likely going to last. The fact that the more dire previous predictions regarding oil production relied upon by Carter were just then being overtaken by positive developments in the oil industry did not lessen the obvious need for long term planning to prepare the nation for the inevitable day when the oil would run out for good.
History records what happened next. Despite being the last president to take oil depletion seriously as a political issue, Carter hedged his bets and issued the Carter Doctrine, making it American policy to guarantee uninterrupted oil shipments from the Middle East, by force if necessary. Among his opponents during his 1980 reelection bid was Republican Congressman John Anderson--running as an independent—whose platform called for even more drastic conservation measures like a 50 cent a gallon gasoline tax (equivalent to about $1.50 a gallon today). Both men were of course defeated by Ronald Reagan, the first candidate to run on the notion of unfettered American exceptionalism, including the ludicrous idea that even geologic reality could be overcome by enough positive thinking.

For over three decades Americans have been living in a dream world created by politicians of both parties and reinforced by our mainstream media. Despite some indications that cracks are beginning to appear in the façade, most people have yet to awaken to peak oil reality. The guy driving the Hummer with the “Drill, Baby, Drill” bumper sticker plastered on the back is just as firmly in denial as he ever was. If you don’t believe me, read the comments section below any mainstream press Internet article about high gasoline prices and you’ll see more than you’ll likely ever care to see of the infantile mindset that still predominates among large numbers of our fellow citizens when it comes to energy issues.

As yet another quadrennial political spectacle begins to unfold before us, we must lament the fact that no serious candidate vying to take the presidential oath of office on January 20, 2013, has publicly acknowledged the stark realities of peak oil and resource depletion. Those of us in the peak oil movement are now also aware, of course, that oil production is going to drop off steeply long before we reach Nehring's projected date range for supplies to run out. What was once an inconvenient truth stubbornly denied by Reagan in the name of short-term political advantage is now emerging as the most serious crisis this nation has faced since its founding. That this is so should not come as a surprise to anyone. After all, we were given a very clear warning about what’s coming all the way back in 1978.

» » » » [Bill Hicks is Dead, via Energy Bulletin]
» » [1977 CIA Intelligence Memo: The Impending Soviet Oil Crisis (PDF)]

Business: Oil: What's Left out There?

A new study delays doomsday, but there is still a crisis

Monday, Oct. 16, 1978
Time Magazine

The visions of an imminent energy Armageddon that seemed so plausible right after the 1973 Arab oil embargo have gradually faded, but the serious questions remain: How much oil does the world have left? When will it run out?

Firm answers are difficult to come by; witness the Central Intelligence Agency's forays into the slippery field of oil forecasting. In his drive for a conservation-oriented energy program early last year, President Carter leaned heavily on a CIA forecast for his ominous prediction that depletion of all of the proven reserves "in the entire world" could begin by the end of the 1980s. Now comes another CIA report, this one prepared by Richard Nehring, a policy analyst for the Rand Corp., which concludes that doomsday is considerably further off.

At present rates of consumption, the Rand researcher says, there is enough oil around the world that is recoverable through conventional drilling to last for 60 to 90 years. If demand does increase and supplies are being used up more quickly, Rand experts believe that energy requirements could still be met through conservation measures and the use of special techniques to squeeze more oil out of existing reserves.

The differences between the two CIA studies illustrate the difficulties that oil forecasters face. The earlier report went wrong because it made dubious predictions that the Soviet Union would soon become a major oil importer, placing further strains on the world's resources. In fact, the Russians seem more likely to add to the world's reserves than deplete them.

Since the early talk about the crunch of the 1980s, the headlines have been full of seemingly good news about oil. Exploratory drilling activity has risen by 30% since the 1973 embargo. In the past year or so, oil has begun to flow from Alaska's North Slope, North Sea production has increased, and promising indications of oil and natural gas have been found in the Baltimore Canyon off the U.S.'s East Coast. Oil companies have also been exploring what are thought to be big deposits along China's coast. And in Venezuela, development is continuing in the area known as the Orinoco Oil Belt, although the oil is thick and heavy. New exploration is also under way in the Arctic, Argentina, Brazil and the Sudan. In Asia, Malaysia and India may soon join Indonesia as sizable oil producers.

Discoveries in the southeast region of Mexico particularly excite U.S. oilmen. The country has recently revised its estimates of proven reserves* from 14 billion bbl. to 20 billion bbl., which would put it in a league with Venezuela, and officials are happily suggesting that the total may be as high as 200 billion bbl. If so, that would put Mexico in a class with the present leading oil country, Saudi Arabia, which has proven reserves in the area of 180 billion bbl.

Another sanguine sign: partly because conservation efforts (especially by industry) have had more effect than almost anyone originally expected, the annual growth in world oil consumption has been held to about 1% in the five years since the embargo, compared with the 5% to 7% increases in the extravagant days before. As a result, the OPEC countries have been holding their production well below full capacity; even so, they are preparing to end their two-year price freeze with an increase (perhaps 5%) next year.

Understandably, people are confused about the oil situation. While the President continues to try to get his stalled energy program through Congress, and the cost of imported oil—which now supplies 42% of U.S. needs, vs. 35% in 1973—continues to increase the nation's balance of payments deficit, critics like Ralph Nader scoff that "the world is drowning in oil." Indeed, the experts themselves are increasingly divided into two camps.

Among the energy optimists, the rosiest view is offered by Dutch Economist Peter Odell, who has concluded that world oil reserves, including deposits in deep sea areas and the polar regions, stand at 4,500 billion bbl., or seven times current proven reserves. That is also well above the Rand Corp.'s estimate, which puts the reserves within a range of 1,700 billion bbl. to 2,300 billion bbl. Odell argues that the size of some known fields has been greatly underrated, notably the North Sea and Orinoco Oil Belt, whose resources he believes are even "greater than those of Saudi Arabia."

ER 77-10147: 1977 CIA Intelligence Memorandum: The Impending Soviet Oil Crisis (PDF)
Another oil optimist, Bernardo Grossling, a researcher with the U.S. Geological Survey, puts the range of recoverable oil at anywhere from 2,500 billion bbl. to 6,000 billion bbl. His argument: the potential of countries in Asia, Africa and Latin America is "staggering."

But others sharply dispute the optimists. Rand's Nehring argues that for all the recent exploratory activity, the world's reserves can really be significantly increased only by additional recovery from known fields and by further discoveries of "supergiant" fields containing at least 5 billion bbl. of oil. The 33 known fields in this class account for more than half the world's oil reserves, but discoveries of new supergiants have dropped off. In the 1970s the oil companies have turned up only two fields with such potential: in Mexico and on the Iraq-Iran border.

The Rand Corp.'s vision of ample reserves for some decades ahead but big trouble after that is echoed by many other researchers. Trying a novel approach to assessing the world's reserves, Pierre Desprairies, head of the French Petroleum Institute, recently polled 28 leading oil companies and individual experts on how much oil they thought was economically recoverable at a cost of $20 per bbl., which is about $6 above the going price. The consensus, he reported, was that "the reservoir of oil is large and full"—about 2,000 billion bbl. But there was also general concern about the declining rate of major new discoveries. Says Desprairies: "The big fields have been discovered."

The optimists would reply that the returns on that are scarcely all in yet. All but 800,000 of the 3.2 million wells drilled to date have been sunk in just one country: the U.S. As recently as 1976, nearly 90% of all drilling activity was still concentrated in the U.S. and Canada, even though these nations account for only 14% of the world's estimated reserves. While the debate between the oil optimists and pessimists remains unresolved, it is clear that there is much more room for new exploration.

*In describing oil reserves, "proven" is one of the few universally accepted definitions. It generally refers to the minimum amount of oil that can be recovered from known reservoirs under existing economic and operating conditions.

» » » » [Time]
» » [1977 CIA Intelligence Memorandum: The Impending Soviet Oil Crisis (PDF)]

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