Oil Supply: A Peak Oil ‘Quake’

In 2005 when I first joined Titan I was exposed to a new term that I had never heard before – ‘Peak Oil’. Now over five years later, I have come to know more about the potential imminent danger, pain, and devastation of Peak Oil and what it will mean to every single person who lives on this planet and depends on oil energy for their sheer existence.

I first learned about Peak Oil by reading two documents in June of 2005. The first document was a 91-page report called “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management” (commonly referred to as the “Hirsh Report”) written by Dr. Robert Hirsch and his associates from CISI and presented to the US Department of Energy in February 2005. The second document was an article called, “Life After the Oil Crash” written by Matt Savinar in mid-2005. Both documents are must reading to better understand why I got interested in the oil industry and specifically – Peak Oil.

I must say that both documents caught my full attention, piqued my interest and now over five-plus years, after reading countless number of books on oil and Peak Oil, found, downloaded and printed out thousands of articles on both subjects, watched scores of videos on Peak Oil, and have had many one-on-one conversations with knowledgeable oil people that I respect (like the late Matt Simmons) have brought me to where I am today – concerned about the future of the world as it relates to oil energy. I have so far written well over 50 pieces primarily on the subject of Peak Oil. Three of my articles have been published over the last two years in some leading E&P publications.

Along the way I have tried very hard to find an appropriate analogy that most people can understand and relate to, as well as accept the potential long term dire consequences of Peak Oil in the United States and the rest of the global world. Very few people actually have heard of or know the definition of Peak Oil, much less the significance of its impact that it has and will continue to have on all of our lives. This already started in a serious way with the 2008 global financial and economic meld down. A major part of the problem for the world today is pure ignorance. The growing number of people today who now believe in Peak Oil has grown materially over the past five years. I call this progress. In 2005 I would estimate that less than 5% of people in the oil world believed in Peak Oil or even knew what it meant. With non-oil people it was probably less than 1%. Now just over five-plus years later the number of Peak Oil believers has gown to something more like 50%-60% inside the oil industry and 20% outside the oil industry and is still growing. This is a very positive development that seemed unattainable five years ago. Still today there are people in very high and influential places in the oil industry (like Dr. Daniel Yergin of CERA) who say straight out – “Peak Oil is a myth”. Even the declining numbers of people who believe as Dr. Yergin believes (or says he believes) in his typical and often stated quote regarding oil production and that oil supply is not the problem. He states: (“It’s not the risk under the ground, but the risk above ground”. Dr. Yergin and his followers (who include other Cornucopian’s like Michael Lynch, Leonardo Maugeri, Michael Economides, Steve Forbes, the IEA, some chief executives of the major oil companies and finally anyone with an abiding faith in abiotic oil have some high level and important connections to big oil and government. Unfortunately their declining voices are still being heard loud and often at some very high places – both inside the oil industry and world governments. My favorite statement to people who say they don’t believe in Peak Oil is, “Wonder if you are wrong”? Most significantly, the International Energy Agency (IEA) in their October 2010 “Annual World Report” stated that Peak Oil actually “arrived in 2006”. After many, many years of denying that Peak Oil even existed they now say Peak Oil has already arrived. Go figure!

It is clear that politicians don’t want to hear or talk about Peak Oil – at least not today in the current political unrest or “on their watch”. It has been reported by highly accredited and knowledgeable sources that Dr. Chu, US Secretary of Energy knows about Peak Oil, but he and President Obama aren’t prepared to talk about it – at least not at the present time. It seems it is not politically correct to do so in today’s highly charged economic and political climate. However, I believe it will become an important issue that will be discussed thoroughly during the 2012 U.S. national election race. Be sure of one thing – some day soon someone high up in our government (the President would be the right person or maybe Dr. Chu) will have to or will be forced to speak out on this issue because it is of such critical importance and it isn’t something that we can’t hide much longer because a “Peak Oil Quake” of immense magnitude is coming soon and it isn’t going to go away, and it is probably going to have an equivalent “world shock magnitude” of a 9.0 earthquake, or greater. It is that serious.

I came up with the idea of using earthquakes as an analogy after viewing some of the photos and pictures in news print and television of the 9.0 Japan Earthquake. I also say some video on television recently of the 1925 Santa Barbara 6.3 Earthquake that literally destroyed the city. I live in Santa Barbara today, so I feel it happened in “my home town”. I felt that something so real, so powerful and “so close to home” had to be used to try and call people’s attention to the devastating disasters that lie ahead for all of us in the very near future. This includes the 6.5 billion people living anywhere in the world who don’t start to intelligently plan, prepare, and take necessary precautions to mitigate the full impact of a 9.0 Peak Oil Quake that is coming to our global world starting soon……if not tomorrow. Remember that the International Energy Agency (IEA) says Peak Oil already arrived in 2006. Unfortunately, a Peak Oil Quake will only be seen and recognized after it has happened in the world’s “rear view mirror.” An interesting side note – although most of the major buildings in Santa Barbara were destroyed in 1925 since that time with new building codes supported by adequate funding and the will and the desire to re-build, Santa Barbara today is considered to be one of the best cities in the world to visit or live. Unfortunately, a 9.0 Peak Oil Quake would change all that. It will be too late to do a re-start on our energy world.

Somewhat like an Earthquake, a Peak Oil Quake isn’t fully understood or appreciated by the average citizen of the world or people both inside and outside the oil world. We know other powerful earthquakes will happen for sure, but we don’t really feel that all of us as individuals can really do anything to stop or prevent them unless we move to more secure places to live and there are no guarantees doing this. The truth is that we can do some amount of smart advance preparation to help mitigate the full impact of a 9.0 Peak Oil Quake (but, most people feel they can’t really do anything), and just hope and pray that a “Big One” doesn’t happen to “us” or “me” living in a certain place in the world.

Some facts about earthquakes:

• There was one 9.2 earthquake in Alaska in 1964. This is the largest earthquake ever recorded.

• The Japan March 2011 earthquake was a 9.0.

• There have been seven earthquakes of 8.0 to 8.8 since 1899.

• There have been nineteen earthquakes of 7.3 to 7.9 since 1811.

• In 1998 there were 21,688 earthquakes someplace in the world.

• In 1998 there were 979 earthquakes of 5.0 to 5.9 magnitude.

• An earthquake of 8.0 is ten times greater than a 7.0 earthquake and a 9.0 is 100x more than an 8.00 earthquake.

• Some earthquake ruptures can be hundreds of miles long and have tens of feet of slippage. The Japan 9.0 earthquake actually moved Japan six feet closer to the United States.

To properly prepare for a 9.0 Peak Oil Quake that is coming for sure (if it hasn’t already started to happen) we must first recognize and accept the fact that Peak Oil is a for real thing and a given in the next few years. I personally believe based on my own studies that Peak Oil arrived in 2008 and I believe we really saw the beginnings of this in the mid to late 2008 global financial and economic meltdown when oil reached $147 a barrel in July 2008. We must start immediately to prepare for the big “9.0 Peak Oil Quake” hopefully allowing enough time to prepare over the next several decades that will be required, even if we started today. There are no quick fixes. We must realize and accept this as fact and start to respond quickly “today” to find suitable, renewable, and affordable energy replacements for oil…but we must start today. Together, we must “Build a Bridge to the Future” while we still have time. Finding suitable replacements for oil energy must happen because our sheer existence depends on it.

The world is fast running out of “cheap” affordable oil. Yes, there will be oil available for the next 100 to 150 years, but none of it will really be affordable for 90 percent of the world population for things like transportation fuels (gasoline, diesel, plane fuel, desolates, etc.) as well as the 300,000 consumer products that are made from oil that we all take for granted.. About 70% percent of all oil produced today is used to produce transportation fuels.

Titan offers proprietary, safe, proven, and affordable Microbial Enhanced Oil Recovery (MEOR) technology that “Recovers new oil where old oil has already been produced” and does it for under $10 per incremental barrel of oil. Titan doesn’t have the complete answer, but it does have technology that offers the world an incentive to invent or find alternative sources of renewal sources of energy to replace oil.

Most informed people will agree that oil energy is by far the greatest single challenge of the 21st Century. We cannot allow the 9.0 Peak Oil Quake that is loaming in our near future (or here today) to take us down.

Once the leaders of the world come to their senses, recognize the challenge, and then make it a top priority, I am confident that affordable and renewal replacements for oil energy will be invented or found over the next few decades, but we must start today on this important journey….and not tomorrow.

Oil Voice