Our Liquid Slave

The American empire on recent display in Iraq rose from a vast, primordial ooze of cheap, abundant petroleum, one of the most energy-intense liquids on earth, packing over 36,000 kcal of heat in every gallon-more energy than produced by 5 kilograms of coal, 10 kilos of firewood, or 1,000 human slaves.[1]

Sure, the invasion of Iraq was about “oil as power” not “oil as fuel,” but oil is powerful because it is fuel, the most intense, versatile, and transportable liquid slave ever known. And the United States is uniquely dependent on a steady flow of oil to feed our industrial and military machine, because we don’t just use oil, we soak ourselves in it. If rapidly growing countries such as China and India were to even roughly approximate the way the United States uses oil, they’d together require 50 percent more than the entire world used in 2000.[2]

The M1 Abrams tanks that plowed through Iraq rumbled just a half a mile forward on a full gallon of petroleum, the average American truck, just 6 miles.[3] Jet planes zooming overhead get just a quarter of a mile to the gallon; ocean liners just .005 miles to the gallon.[4] US industry gorges on over 200 million gallons a day, most profligately in the refining of petroleum itself, producing the fuels, fertilizers, pharmaceuticals and plastics that pulse through the US economy, coating the country in a thick sheen of oil.

Industrial farms saturate the land with petro-fertilizers, packing the harvest off in diesel-burning trucks that burn over 4,000 gallons a year on average. Cars and trucks combust over 500 million gallons every day on almost 4 million miles of petro-asphalt-paved highways,[5] their passengers gorging on petro-fertilized foods off of petro-plastic plates.[6]

Per capita, each American consumes over 3 gallons a day, while the average Italian burns just 1.3 gallons a day[7], the average South African less than half a gallon a day,[8] and the average Chinese about .15 gallons a day.[9] American hydrocarbon culture is an oily edifice protected by the mighty U.S. military machine, a towering monolith of steel and petrochemicals embodying the very apex of fossil energy technology.

The US military lavishly combusted over 2 million barrels a week while “liberating” Iraq and its 112-billion-barrel treasure-chest this spring,[10] causing some to wonder whether such oil-intense military adventures could ever be fought anywhere except amongst the rich oilfields of the Middle East.

For while White House and oil industry execs twitter that the United States could buy all the oil it ever needs on the “free market,” the truth is that the world’s oil supply is rapidly starting to decline, a fact that has been willfully obscured in the mainstream media under a haze of half-truths and innuendo spewed by official US and international energy agencies.

World oil reserves, those barrels of oil still left in the ground, are not growing every year, as official agencies such as the US Department of Energy and the International Energy Agency tell us. According to them, despite pumping out about 60 billion barrels every year, the amount of oil left buried underground keeps magically growing, leaping by over 300 billion barrels between 1982 and 2002.[11]

How can it be? Could oil companies really be discovering as many billions of barrels that are consumed plus tens of billions more every year? Or are they somehow massaging the numbers to make it seem that way, propelled by the very real possibility that if consumers really understood how tenuous their oil supply was they might (gasp!) start investing in alternatives?

It’s possible. The DOE and the IEA passively reproduce estimates of oil reserves gathered primarily by Oil and Gas Journal, a trade periodical for the oil and gas industry. The Oil and Gas Journal’s reserve estimates are acquired simply by requesting oil companies to answer voluntary surveys. Nobody-not the OGJ, nor the DOE nor the IEA nor even BP, a major oil company that distributes the OGJ numbers under its imprimatur-independently verifies any of them.

And so, “in practice, companies and countries are deliberately vague about the likelihood of the reserves they report, preferring instead to publicize whichever figures.best suits them,” explains oil analyst Colin J. Campbell.

When, in the late 1980s six OPEC countries reported that their oil reserves, even while being drained, had abruptly ballooned by no less than 287 billion barrels, it was only the worst example of statistics-bending. In 1997, fifty-nine countries claimed that their oil reserves, despite being continually siphoned off, hadn’t changed in size one iota from the previous year.[12] Iraq’s reported reserves magically remained an even 100 billion barrels for over a decade. As Princeton University geologist Kenneth Deffeyes put it, “‘reserves’ exist in the eye of the beholder.”[13]

There’s several reasons to believe that the world’s oil reserves are, contrary to the official line, depleting. After all, to keep pumping more and more oil out of the ground, new oilfields must be found. Yet finding oil is like picking up glass from a shattered windowpane. First you get the big pieces and then you hunt around for the shards. And by the mid-1960s, the majority of the world’s giant oilfields, in Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, had already been discovered.[14]

The hunt for new oil has devolved into searching for crumbs. One could be forgiven for believing otherwise given how the oil industry-and the mainstream news media that covers it-crow over their new oil finds of a few hundred million barrels or even less. These are touted as massive, vast, huge, and giant, but they are only so in relation to corporate profit. At twenty bucks a barrel, a 500-million-barrel find is a massive $10 billion asset. But in terms of world consumption, 500 million barrels can be slurped down in about a week.

Between 1999 and 2001, the top five oil companies, ExxonMobil, BP, Shell, TotalFinaElf and ChevronTexaco, spent $110 billion looking for new oil, using the most high-tech, computer-intense technology, but for all that only pumped out about 500,000 more barrels of oil or oil equivalent every day.[15] That’s less than 1 percent of the volume of oil slurped down by the global industrial machine every day-not a particularly promising replacement rate.

Even when oil prices surge, companies aren’t bothering to push up their drilling activity-there just isn’t enough left to find, admitted Susan Cunningham of Noble Energy to a trade magazine. “What is missing is the volume we are getting from the drill bit..You can’t just keep on drilling for smaller things at higher costs.”[16]

To wit: demand marches forward, growing by 2 percent every year, the world’s already discovered oilfields are being depleted at about 3 to 5 percent annually[17]–and at least some sectors of the oil industry have all but given up on finding new oil. It won’t be long before the inexorable calculus of these trends tips the balance, transforming today’s buyer’s market into that glorious, super-profitable oil-industry fantasy–a seller’s market. According to Campbell and Princeton University geology Kenneth Deffeyes, that day will be coming sometime within the next ten years if it isn’t already upon us.

In such a market, the hungriest mouths will need to stand on the crushed bodies of others in order to get their fill at the oil spigot. The global oil fire must be fed. For, as the World Resources Institute has put it, noting that the heaviest flow of material both in and out of industrial economies comes from fossil fuels, “modern industrial economies, not matter how high-tech, are carbon-based economies,” the WRI says, “and their predominant activity is burning material.”[18]

Sonia Shah’s book on the science and people behind oil is forthcoming from Seven Stories Press.

[1] The human body metabolizes energy with 20 percent efficiency, so on a standard 3,000 kcal diet can produce 600 kcal of kinetic energy. Charles A. S. Hall, Cutler J Cleveland, Robert Kaufmann, Energy and resource quality: the ecology of the economic process (New York: John Wiley & Sons, 1986).

[2] Jeremy Rifkin, The Hydrogen Economy: the creation of the world-wide energy web and the redistribution of power on earth (New York: Jeremy Tarcher/Putnam, 2002), p.22-23

[3] Energy Information Administration, Annual Energy Review 2001 (Washington, DC: Office of Energy Markets and End Use, US Department of Energy, November 2002), Table 2.9, p. 61

5 Hall et al, Table 1.2 b

[5] CIA World Factbook, United States, 2002

[6] Energy Information Administration, Annual Energy Review 2001 (Washington, DC: Office of Energy Markets and End Use, US Department of Energy, November 2002), Table 2.9, p. 61 and Table 5.12c, p. 152

[7] Total population Italy = 57,403,421 (www.population.com); total oil consumption 2001 = 92.8 million tonnes/year or 78,307,945 gallons/day

[8] Total population South Africa = 43,426,386 (www.population.com); total oil consumption 2001 = 23 million tonnes/year or 19,408,219 gallons/day

[9] Total population China = 1269385100 (see www.population.com). Total oil consumption 2001 = 232 million tonnes. One tonne of crude = 308 gallons. So 71456 million gallons/year or 195769863 gallons/day.

[10] John M. Broder, “Fuel Supplies Are a Top Concern of Military Planners,” The New York Times, March 19

[11] BP statistical review of world energy 2002

[12] Colin J. Campbell and Jean H. Laherrere, “The end of cheap oil,” Scientific American, March 1998, pp 78-83

[13] Kenneth S. Deffeyes, Hubbert’s Peak: The Impending World Oil Shortage (Princeton, NJ: Princeton University Press, 2001) p.6

[14] Matthew R. Simmons, Simmons & Company International, “The world’s giant oilfields: how many exist? How much do they produce? How fast are they declining?” December 18, 2001, p 19

[15] Matthew R. Simmons, “Are oil & Murphy’s law about to meet?” World Oil, February 2003

[16] Rick von Flatern and Marshall DeLuca, “Advisory notes,” Offshore Engineer, April 2003, p. 15

[17] Dr. Pierre Jungels, “Future outlook of oil and gas supply and demand,” Institute of Petroleum, February 17, 2003

[18] Emily Matthews, et al, The Weight of Nations: material outflows from industrial economies (Washington, DC: World Resources Institute, 2000)

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