Last time I had a live guest, it was Shel. And, we discussed the basics of peak oil. And, how we got to where we are. So now, I'd life to discuss where we're headed, and what the outlook is for society after the peak. As we start to decline in our oil production, and natural gas production. So, where do you see us standing, right now?
Dale Alan Pfieffer: Oh, right now - we are at peak. Or, just approaching peak. We're at the point, where there's not a whole lot of bare capacity remaining. Not a whole lot that we can continue producing. Or, not a whole lot of growth remaining in oil production. We haven't actually began the decline yet. Probably, the last time you talked with - I'll probably mispronounce his name -
Kevin Patrick: Shel.
Dale Alan Pfieffer: Shel?
Kevin Patrick: Yeah. Shel Aliqled
Dale Alan Pfieffer Yes. He probably told you about Colin Campbell and others. About their projections, and where they consider the peak to actually take place. And, the decline to begin. Most predictions, looking at the latest data, is just in about two years. Right now, what we're seeing is a big, massive increase in demand; which is outstripping supply. Because, supply can't grow at the same rate anymore.
Part of this massive demand is due to the emerging Asian economies, especially China, India, and Indonesia. And, they are basically motoring up and modernizing. And, attempting to achieve the same sort of living standard, and the same style of living as the United States. And, as the world is finding out, there just simply isn't enough available energy for everybody to live the way people do in this country.
Kevin Patrick: And, I noticed in an article that you wrote recently for From The Wilderness. You said, that oil prices might actually drop, towards the end of the year. But, it's kind of just a false hope, because it's mainly just drilling into reserves that we've already discovered years ago. So, we're just kind of draining those last few.
Dale Alan Pfieffer: Yeah. There's a lag time, between discovery and bringing a field on line. The last major discoveries - and, they weren't really major. They were 500 million barrel fields. They call them mega fields. They're not really huge fields. But, they're good sized. The last major discovery, we had of fields of that size range, was in 2003. Those fields are going to be brought on line, this year and next year. However, by the year 2007, there will be no major new discoveries brought on line. And, at that time, they expect that production will start slipping. And, will not be able to keep up with demand, what so ever.
Kevin Patrick: So, even with the tapping out, I think I counted in your article, roughly 30 to 35 fields in the next few years that they're going to be tapping into. Even with that, we're just keeping pace with current demand.
Dale Alan Pfieffer Yes. These aren't major fields. They're big fields. But, they're not like for instance, the size of the North Sea Fields, or the North Slope Field of Alaska. Or, you know, nowhere near the size of Gwar in Saudi Arabia. According to the mathematical models of oil production and demand, and everything; we would need 5 or 6 fields, the size of the North Sea. And, we would need to bring them on line, before the peak; in order to have any sort of effect in delaying the peak. And, 5 or 6 fields, the size of the North Sea; would only delay the peak, for a few years. If we make those discoveries after the peak, and bring them on line; they really won't have any effect on the peak. They sort of create a secondary hump, on the way down in the production profile.
You can see that sort of thing in the United States production profile, if you look at it - the big peak occurs in 1970. But, there's a secondary peak farther down the slope, when the North Slope oil, was brought on line. It didn't replace what we were using, or what we had produced up to 1970. But, it helped alleviate the situation.
Kevin Patrick: And, I hate to admit this; but, I was actually listening to Sean Hannity's Show, on the way home from work the other day. And, he brought out the old argument, that one of the reasons that our oil prices are so high is; that environmental extremists, have kept us from building the refining capacity to keep up with the refined oil fast enough to keep the prices down. And, is it not true, that the major oil companies are just not building major refineries, because they know what most people don't. That it's not a good investment, at this point; to build a refinery for oil that isn't there.
Dale Alan Pfieffer: Yeah, that's the truth. They don't want to invest the money into a refinery, where they're not going to make back their investment. The same goes for big oil tankers. They don't want to build very many of them. Because, they don't see a return on their investments. That's the bottom line there.
Kevin Patrick: Once we get over the peak. And, once oil becomes harder to extract. And, more expensive. What do you think the initial ramifications will be on industry and shipping, and the global trade system?
Dale Alan Pfieffer Well, that's kind of hard to foresee, because we're traveling into new territory. In the history of mankind, we've never been in the position that we are coming to now. Throughout the history of mankind, there have always been other energy resources to turn to. Greater energy resources. You look at the history of technology. The industrial revolution. If you look at the population curve. Basically, what you see, is a reflection of the amount of energy available to civilization. And, there then is growth.
In the first 20 or 30,000 years of civilization, that growth was very slow. Then, as you get up to the industrial age; you see the population growth jump. And, what caused it to jump, was not just the discovery of coal. But, the discovery of how to use coal to release the energy. And, then the population really jumped; once we started using oil. And, throughout the last century, it's raised exponentially. And, now we're at the point where the energy resource, that all of this growth is based upon, are going to begin declining. We've never been in that position before.
We can look at populations of other animals that have been in a position where they lost their energy base. And, what we can see is chaos. The population die off. And then, the species levels off. And, a new population.
Kevin Patrick: You're listening to WGDR, Plainfield 91.1 FM. It's a few minutes after noon. You're listening to Dale Alan Pfieffer. We're discussing the post peak situation with fossil fuels. And, where we're headed. And, how it could effect us, in this country. And, on a global scale. So, I'm sorry - you were talking about other populations of species, that have experienced a peak in their energy supply.
Dale Alan Pfieffer: Yeah. The picture for humans, is much more complicated. Because, we have this complex civilization. This socio-economic structure. And, you know, we've never had a look at how such a structure would react to energy depletion before. There are alot of suggestions. And, probably the most obvious thing, is that our economy cannot continue to grow; once the energy input begins to diminish.
Kevin Patrick: At the same time, we're entering this situation, where the oil that we've reached a peak in - fossil fuel production or near the peak. That we've fractured our production and distribution, to the point where we're not producing things anywhere near where we're needed or where we're utilizing them. So, it's going to make it much, much more tougher, like you said; to figure it out.
Dale Alan Pfieffer Yes. Globalization, will most probably be reversed. Things are going to have to localize, again. And, that could lead to big problems, in the short term. Because, everything has - production has so spread around the world; that alot of the local infrastructure, who are supporting local economies, is no longer there. It has to be redeveloped. And, there's a big question, as to whether there is the financial support to even do that. With our massive budget deficit. Various state deficits.
Kevin Patrick: Other countries are going to look, as they invest. And, understand this peak oil situation. Then they're going to look at societies that are more geared towards adapting to a post fossil fuel age. Europe, which they still have much more mass transit. And, they're more localized, in many ways. Versus, say the U.S.; which is - got an awful situation, from what our mass transit and agribusiness.
We use trucks to transport food to hundreds or thousands of miles away, where they're being used. So, they look at us, as not a very good investment. Further, our dollar declined even more.
Dale Alan Pfieffer: There is already alot of evidence that that is happening. And, there are some people suggesting, that various countries - mainly China, possibly Russia, and a few other countries; have plans for economic warfare with the U.S. Based ont he dollar reserve that they hold. And, the portion of the trade deficit, which they hold.
Kevin Patrick: So, while we're the self proclaimed, number one superpower, militarily; we have financial commitments to these other countries. Who can call in their markers and make it much difficult for us to function in the global system.
Dale Alan Pfieffer Yes, and then the fact that the dollar is a fiat currency. It's not tied to a gold standard. Really, the only standard that the dollar is tied to; is oil - the petrol dollar. And, should the oil market destabilize. Or, should the dollar destabilize, to the point that OPEC were to switch over to EUROs; then the dollar would simply collapse. There would be nothing to back it with.
Kevin Patrick: Michael Clair, is a professor at Amherst, I believe. The New Hampshire College. And, he was talking about how one of the reasons we may be ramping up against Iran; is they want to create their own little oil market. And, they're leaning towards using the EURO, as the exchange for the oil market.
And, Iran has, I believe, the second largest oil reserve in the world, right now. And, the second largest gas reserve. If you combine them together, they're right behind Saudi Arabia, in combined reserves.
Dale Alan Pfieffer: Actually, their oil reserves are third, after Iraq. But, they're probably second in production, right now. Because, Iraq's production is off so much, due to our fiasco there.
Kevin Patrick: And, they have a very large upside for production, too, I guess. Compared to some other sources. They're producing something like 50 to 60 percent of their capacity right now. So, they're kind of a key piece in the puzzle.
Dale Alan Pfieffer Yes, Michael Clair, I believe, is totally correct. they are trying to start up an alternative to oil markets, based on the EURO. And, of course, the United States doesn't want to see that, at all. They are also very close with China. And, China has as much as stated; that if they U.S. attacks Iran, then China will have to get involved in it In some way, or another. I doubt that they would send troops there. More probably, they would give the Iranians weaponry.
Kevin Patrick: And, in addition to it's reserves in fossil fuels. And, also the ties with China. They're working with India, for a pipeline through, I guess, Pakistan. Which is kind of interesting. India and Pakistan, are actually going to cooperate on running a pipeline from Iran to India. And, Condoleezza Rice expressed distress that those two countries would cooperate. Which I thought was kind of strange. For a Secretary of State; for cooperation between India and Pakistan, was all of a sudden a bad thing.
Dale Alan Pfieffer: There has historically been a lot of friction between India and China, as well. And, they have stood firmly together on the issue of Iran. They have both agreed that they would not react well to any sort of invasion of Iran. China does have a lot of economic clout with the U.S. And, they have made threatening sounds about divesting of U.S. dollars. And, calling in U.S. debt; should the U.S. attack Iran. Another country that has aligned itself with Iran is Venezuela. President Chavez - I should say President-Elect, because he is clearly popularly elected in a very fair election. As opposed to the U.S. In Venezuela, he has made a number of statements and signed some agreements; that should the U.S. attack Iran, he will stop his oil production. And, oil shipments to the U.S.
Kevin Patrick: And, he's already, I believe - it was last week or so, that he decided to kind of disconnect with the United States.
Dale Alan Pfieffer Yes, well, it's debatable. You know, U.S. political advisors in South America, tend to be destabilizing influences
Kevin Patrick: They have long history. A dual mission. Since we're talking about Iran, a lot, because President Bush is talking about Iran a lot. If you look at the positioning. Not only with the fossil fuels in Iran. And, their connections with China, and India. And, they're also kind of the bridge between the Arab oil and natural gas reserves. And, the Central Asian reserves. So, geographically, they're kind of key, too. They're right in the middle. In the connection between the two large, fossil fuel reserves. And so, it's possible we're trying to settle in there, to have our base in the middle. So, we can control them in both directions.
Dale Alan Pfieffer: Yes, there is that idea. Of course, there's the off side, too. It we can go in there, is it going to be any more settled, than Iraq is right now. Or Afghanistan. You know, how apt are the major players going to be to have the pipelines running through Iran, if the U.S. is occupying the country. And, the public is resorting to armed resistance. That is, if we're even able to occupy the country.
Kevin Patrick: We just had Tariq Ali, recently. And, he was recently in Vermont, when I brought that question up to him. When he was speaking in Vermont about Iran. and, he seems to believe, that we may try some strategic sites on their nuclear capabilities. But, he can't see how we could possibly even attempt an invasion of Iran. And, one reason he brought up, was that the action in Afghanistan. And, also in Iraq; neither would have been possible, had the mullahs in Iran, not given kind of their consent. You know, that it was okay. So, he said; it would just be inconceivable that we could gone in and actually try an invasion, which could kind of explode the entire region.
Dale Alan Pfieffer That's an interesting view. I hadn't considered that, before.
Kevin Patrick: You once wrote an article. What was it titled? "What Would Be The Next Target Of The Oil Coup?" So, if you look at the curves. You know, supply curves. Production curves around the world, that we've spoken about. You've brought up Iran. You've brought up, briefly, Venezuela. What other areas of the world, do you think are gonna become greater interests?
Dale Alan Pfieffer: Well, one area that will of interest is Equatorial Africa.
Kevin Patrick: This is Nigeria? In that area?
Dale Alan Pfieffer Nigeria, in that area. Ther isn't a whole lot of oil there, compared to the Middle East. Or, even Venezuela. But, the oil from that area; it does not take as long to reach the market in the U.S., as middle eastern oil does. It can take a month or more for middle eastern oil to reach the United States. It only takes between one and two weeks for oil from that area of Africa - Nigeria and around there; to reach the U.S. There's already been alot of unrest there. And, alot of U.S. support for military regimes in the area.
There have even been a few small coups in small island nations off the coast of Africa, where there have been off shore reserves discovered. And, it is an area, which will probably see conflict within the next several years; if the U.S. continues with it's policy of oil imperialism
Kevin Patrick: We tried to take charge of the oil resources, militarily. It kind of works in contrasts. Because, the military actions themselves, also rely on fossil fuels.
Dale Alan Pfieffer: Yes. And, it's one of the most oil intensive activities we can undertake. Years ago, when those of us who first became aware of the global oil peak. Began discussing it among ourselves; we quickly decided that the worst thing that the U.S. could do, was precisely what it's doing now. The oil imperialists, and the oil wars. That it would be the worst reaction we could take. We also felt, that it was possibly the most likely reaction. And, events seem to have borne that out.
Kevin Patrick: So, what have you and some of the other folks that you mentioned; like Michael Clair, Michael Ruppert, others that have been involved in this issue. What do you see as our best options. Richard Heinberg, another. Our best options, going forward. To adapt to the situation we're facing, with fossil fuel supplies?
Dale Alan Pfieffer Well, I can't speak for everyone. But, by and large, I agree with Richard Heinberg. It is, that our best option is to powerdown". To lower our consumption. Slowly reverse our population trends. Allow our population to decline a bit. We need to bring out a few facts here.
Kevin Patrick: Go Ahead.
Dale Alan Pfieffer: In the United States, currently it takes 10 calories of fossil fuel to produce 1 calorie of food. That's largely the input of natural gas based fertilizers, and oil based pesticides. Also involved, are all the energy involved in planting. Tending the crops. Harvesting the crops. Trucking the crops, to where they're processed. Processing them. Then trucking them with the processed food, to the supermarkets. Which doesn't include the energy that the average consumer uses to drive to the supermarket. And, then back home. Nor, the energy the average consumer uses to cook and prepare the food at home.
But, 10 calories of fossil fuel, for every 1 calorie of food. And, I believe it was Dr. David DeMantel. out of Cornell University, who ran these numbers through his computer models. And, deduced, that in order for the U.S. to subsist without modern agriculture - without fossil fuel based agriculture; our population in this country, needs to decline by one third. That's a big decline. That's on the order of the Great Plague.
Kevin Patrick: And, the world population, by two thirds?
Dale Alan Pfieffer Yes. The world population, would need to be reduced down to 2.5 billion.
Kevin Patrick: So, since it's unlikely that that's going to happen, voluntarily. How do you see that playing out. I mean, is it going to be situation where - you brought up agriculture first, in your discussion. Is it going to be discussion, where you have starvation?
Dale Alan Pfieffer: Well, you have to figure in; when we're talking about the decline in energy production. So, as far as oil is concerned. It's not a fast thing. It's not like overnight, we're not going to have oil anymore. It's a very minor decline. Most estimates, take it at about 2 percent per year. There are some estimates showing a - how to put it in lay man's terms; asymmetrical production curve, with a deeper decline. Which would bring it up to 8 or 10 percent decline. Which you're getting very serious there. But, most of the scenarios suggest about a 2 percent decline per year. That means, by the year 2020; we'll be producing as much oil as we produced in 1990.
Kevin Patrick: So, there is time, at this point - although it's running out; to make some adjustments. And, make this transition relatively smooth.
Dale Alan Pfieffer Yes, if it were just a matter of oil production and the oil necessary for agriculture. And, you know, the oil necessary for transportation. And, industry, and everything else; we could probably do it. It would be difficult. Because, we should have been doing this back in the 1970's. But, basically, we could probably do it. The big catch is, and where it's really going to hit us soon; is in the economy. Because, we have an economy which lies upon continuous growth. Without continued growth, our economy may tank. That's the whole nature of our capitalist economy. And, we're soon going to be looking at a day, when our energy input is going to start to decline. It's only going to be 2 percent decline per year. But, for our economy to continue to grow, we need the energy input to grow; not decline. So, when that decline comes; it's going to cause economic havoc.
If the economy collapses - if the world economy collapses, nobody's sure exactly how bad it's going to be. But, that in itself, could lead to chaos. There's alot of suffering, starvation. That sort of thing. And, you look back at the Great Depression, and all the suffering that occurred back then. And, there was an end to the Great Depression. But, what we're talking about; there wouldn't be an end to it.
Kevin Patrick: So, you think the role of our leaders - they're one of the major roles they should be playing right now, should be getting the society in the mind set of the fact that we're not going to have the same situation in the same kind of economy
Dale Alan Pfieffer: Yes. And, the likelihood of our leaders doing that, is very small. Our leaders and our media, don't want to present this problem accurately to the American people, or to the world public. Because, if they do, there will be a market panic. And, the stock market will suddenly drop. Especially, stock of the oil companies, the automobile manufacturers, the airlines. Any company that has a big demand for oil, is going to drop, once the public becomes aware of just how serious this problem is.
They don't want to see that, which is why they will not - you won't hear them speak the words 'peak oil'. And, if you hear it spoken in the mass media, they will not discuss all the implications for it. So, it's a problem. It's sort of a catch-22
Kevin Patrick: The growth economy and the global inter-related - interconnected economy, are obviously not compatible with the peak oil decline. Or, with oil decline. What do you think we should do right now, even on a local level to prepare? Because, I was thinking - and, you talked about the population situation. So, to help with the problem, you have to look at the population actually becoming smaller.
But, if you look at traditional agricultural societies; they've always depended on large families. So, it sounds like what we need to do, is instead of looking at it on a family basis; to look at it as a community basis. And, have the community itself, kind of work the farm - own the farm, produce the food.
Dale Alan Pfieffer Yes, that's - if we're going to get through this - in anything like a free democracy; then we're going to have to start implementing change, on a local community level. There are a number of things people can do in their communities. You can get involved in your community. Starting a community vegetable garden. On vacant lots and other areas, where the people in the surrounding neighborhood, jointly take care of the garden. And, jointly share in the produce.
You could be Johnny Appleseed, with pear seeds, peach seeds, cherry pits, perennials, vegetables, roots, cucumbers. You could even donate a little money or time, into purchasing vines or saplings, in the case of grapes. Bushes and brambles. Runners, in the case of strawberries. You could get involved in a Food Not Bombs type project. Where you organize local picnics and advertise the local picnic. And, invite anybody in the area; including homeless and hungry people, to just take part in the picnic. You lay out the food. Everyone serves themselves. And, you all, just basically have a good time.
Support farmer's markets. Unity Supported Agricultural Combines. CSA's - they're farms, where for a yearly subscription price, members are given a percentage of the produce. And, sometimes the members even pitch in on the harvesting. And, the farmers usually tell you what you can do, to preserve the produce, as they give it to you. You could start a community transportation network. Those will become a lot more popular, as gas prices go up. And, that's not just carpools, to and from workplaces. But, to shopping centers and elsewhere. You could start bicycle co-ops. Provide bicycles for members. Or, to rent them, temporarily to non-members.
Support local businesses. That kind of goes, without saying. You could form co-ops, for any sort of essential services that are needed in a community. Any sort of community activity. Such as barn dances, music or arts festivals, local theater. All that sort of thing. It's not only needed to be supportive. But, it also gives you a place, where you can socialize with like minded people. And, it gives an outlet for artists; where they can reach audiences. And, hopefully inspire them with visions of where they can take their community.
Community Refurbishing Co-ops. You could start a co-op, to remodel homes in your community, for greater energy efficiency. Or, to erect or refurbish community centers. Or, possibly erect shelters, for the homeless. Community Energy Co-ops. You could put together a co-op, to put up some wind turbines, some solar cells. Or, even a hydro-electric facility. Or, even geo-thermal; if it's suitable in your area. You know, there's alot of activities that you can get involved in, to help prepare. Not just yourself, but your local area. Your local community.