American Empire Project

Entering the Tough Oil Era

The New Energy Pessimism
By Michael T. Klare

When "peak oil" theory was first widely publicized in such path breaking books as Kenneth Deffeyes' Hubbert's Peak (2001), Richard Heinberg's The Party's Over (2002), David Goodstein's Out of Gas (2004), and Paul Robert's The End of Oil (2004), energy industry officials and their government associates largely ridiculed the notion. An imminent peak -- and subsequent decline -- in global petroleum output was derided as crackpot science with little geological foundation. "Based on [our] analysis," the U.S. Department of Energy confidently asserted in 2004, "[we] would expect conventional oil to peak closer to the middle than to the beginning of the 21st century."

Recently, however, a spate of high-level government and industry reports have begun to suggest that the original peak-oil theorists were far closer to the grim reality of global-oil availability than industry analysts were willing to admit. Industry optimism regarding long-term energy-supply prospects, these official reports indicate, has now given way to a deep-seated pessimism, even in the biggest of Big Oil corporate headquarters.

The change in outlook is perhaps best suggested by a July 27 article in the Wall Street Journal headlined, "Oil Profits Show Sign of Aging." Although reporting staggering second-quarter profits for oil giants Exxon Mobil and Royal Dutch Shell -- $10.3 billion for the former, $8.7 billion for the latter -- the Journal sadly noted that investors are bracing for disappointing results in future quarters as the cost of new production rises and output at older fields declines. "All the oil companies are struggling to grow production," explained Peter Hitchens, an analyst at the Teather and Greenwood brokerage house. "[Yet] it's becoming more and more difficult to bring projects in on time and on budget."

To appreciate the nature of Big Oil's dilemma, peak-oil theory must be briefly revisited. As originally formulated by petroleum geologist M. King Hubbert in the 1950s, the concept holds that worldwide oil production will rise until approximately half of the world's original petroleum inheritance has been exhausted; once this point is reached, daily output will hit a peak and begin an irreversible decline. Hubbert's successors, including professor emeritus Kenneth Deffeyes of Princeton, contend that we have now consumed just about half the original supply and so are at, or very near, the peak-production moment predicted by Hubbert.

Since the concept burst into public consciousness several years ago, its proponents and critics have largely argued over whether or not we have reached maximum worldwide petroleum output. In a way, this is a moot argument, because the numbers involved in conventional oil output have increasingly been obscured by oil derived from "unconventional" sources -- deep-offshore fields, tar sands, and natural-gas liquids, for example -- that are being blended into petroleum feedstocks used to make gasoline and other fuels. In recent years, this has made the calculation of petroleum supplies ever more complicated. As a result, it may be years more before we can be certain of the exact timing of the global peak-oil moment.

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Escalation by the Numbers

What "Progress" in Iraq Really Means
By Tom Engelhardt

Someday, we will undoubtedly discover that, in the term "surge" -- as in the President's "surge" plan (or "new way forward") announced to the nation in January -- was the urge to avoid the language (and experience) of the Vietnam era. As there were to be no "body bags" (or cameras to film them as the dead came home), as there were to be no "body counts" ("We have made a conscious effort not to be a body-count team" was the way the President put it), as there were to be no "quagmires," nor the need to search for that "light at the end of the tunnel," so, surely, there were to be no "escalations."

The escalations of the Vietnam era, which left more than 500,000 American soldiers and vast bases and massive air and naval power in and around Vietnam (Laos, and Cambodia), had been thoroughly discredited. Each intensification in the delivery of troops, or simply in ever-widening bombing campaigns, led only to more misery and death for the Vietnamese and disaster for the U.S. And yet, not surprisingly, the American experience in Iraq -- another attempted occupation of a foreign country and culture -- has been like a heat-seeking missile heading for the still-burning American memories of Vietnam.

As historian Marilyn Young noted in early April 2003 with the invasion of Iraq barely underway: "In less then two weeks, a 30 year old vocabulary is back: credibility gap, seek and destroy, hard to tell friend from foe, civilian interference in military affairs, the dominance of domestic politics, winning, or more often, losing hearts and minds." By August 2003, the Bush administration, of course, expected that only perhaps 30,000 American troops would be left in Iraq, garrisoned on vast "enduring" bases in a pacified country. So, in a sense, it's been a surge-a-thon ever since. By now, it's beyond time to call the President's "new way forward" by its Vietnamese equivalent. Admittedly, a "surge" does sound more comforting, less aggressive, less long-lasting, and somehow less harmful than an "escalation," but the fact is that we are six months into the newest escalation of American power in Iraq. It has deposited all-time high numbers of troops there as well, undoubtedly, as more planes and firepower in and around that country than at any moment since the invasion of 2003. Naturally enough, other "all-time highs" of the grimmest sort follow.

This September, General David Petraeus, our escalation commander in Iraq, and Ryan Crocker, our escalation ambassador there, will present their "progress report" to Congress. ("Progress" was another word much favored in American official pronouncements of the Vietnam era.) The very name tells you more or less what to expect. The report has already been downgraded to a "snapshot" of an ongoing set of operations, which shouldn't be truly judged or seriously assessed until at least this November, or perhaps early 2008, or...

With that in mind, here is the second Tomdispatch "by the numbers" report on Iraq. Consider it an attempt to put the Iraqi quagmire-cum-nightmare -- two classic Vietnam-era words -- in perspective.

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