No, not just the United States, I mean the nations of The World.

Yes, according to many experts.  Not just a few experts.  Many.

The problem is easy to understand but hard to grasp: Our society -- worldwide -- is predicated -- is based on oil being cheap.  It takes oil to conceive the breadbasket concept of feeding the world.  It takes oil to move most anything anymore. 

It's not just oil that keeps our society going.  It's cheap oil.  That's about to change and with it will come changes in the way we live in our society.

I'm not kidding.  It's that important. 

We have three huge problems:

1. The world is overrun with crises and we're so accustomed to "doomsday scenarios" that it's hard to see a true crisis when it comes along.  Bombs going off in the London subway system, 9/11, Madrid, Iraq, Hamas, Israel, Sudan, Somalia, trouble everywhere. It's hard to see a crisis like "Peak Oil" looming.  There are no direct explosions, none of the dramatics you see on TV news, no children dying violent deaths or starving, suffering people on videotape because of an increasing scarcity of cheap oil.

2. No one has come up with anything that can in any way, shape or fashion replace or even approach oil when it comes to creating the energy needed to run societies as we know them in the world today.

3. Oil will run out. We don't know when but it will probably be sooner than you might think. Much, much sooner.

Yeah, another doomsday scenario. Well, it doesn't have to be that way.  With a worldwide, dedicated crash program to find substitutes for oil we can make it.

But people in general are lazy.  If you look at the history of mankind, you'll see that human beings can be very, very clever, but they're not very smart.

There isn't enough cheap oil left in the world that we know of to bring all nations up to the standard of living known in Europe and North America. 

To put it simply: Sorry, Al Gore, but saving energy today isn't going to help much.  There are scientists and geologists and analysts and economists who'll tell you this:

The amount of oil left that can be cheaply made into the gasoline and stuff that we need is going bye-bye. Quickly.

"Peak Oil" is just a catchphrase for the concept that the newest oil discoveries are in places that it will cost lots and lots of energy to take out of the ground and turn it into gasoline and stuff.

There's plenty, plenty of oil in Canada and Venezuela, but too much of it is of the kind that's hard to get to and hard to pull out of the ground.  And then there's this dirty little secret you may not know: Iran is starting to run out of plentiful oil, hence it's political desperation.  Mexico is starting to run out of plentiful oil, hence its...  The North Sea oil discovery of the 20th Century is starting to...

Oil is the greatest form of energy ever discovered.

Here's the simple way I've been explaining it on my radio program: A barrel of oil will make gallons and gallons of gasoline, with useful stuff left over.  It takes mere drops of gasoline to start and run an engine for a second!  Tiny explosions inside a metal casing that move pistons and turn the wheels of your car so you can go anywhere you want!

But you gotta get it out of the ground.  If it takes oil-turned-into-gasoline to run the engines needed to pull the oil out of the ground, then it's cheap to take a gallon of gasoline to pull a barrel of oil out of the ground.  Oil in the ground is pressurized, so it spews out.  You have to pull it out evenly, slowly and put it into barrels or you'll waste it spouting all over the ground. (Remember the "gushers" in old movies? Strike oil and it spews everywhere.)

We've found and used most of the oil discoveries around the world.  Some oil "fields" are still full of oil, like Saudi Arabia, Iran, Iraq, some areas of south and central America, offshore oil fields and even some places in the United States. Okay?

But you have a quickly increasing population around the world and nations such as India and China -- the most populous in the world -- building their economies and gaining prosperity all because of cheap oil.

Suddenly oil isn't so cheap, now that people are clamoring for it all over the world as their ticket to prosperity.  Get the picture?

We're using up all the "cheap" oil, the kind it only takes a gallon of gas to get a barrel out of the ground.  So what do we end up with?

The big oil discoveries of Canada and Venezuela, where it's so hard to get the oil out of the ground ("shale") that it requires, oh say, 10 gallons or 20 gallons of gasoline to pull a barrel from the ground, that's what we've got to look forward to.  See the problem?

If a barrel of oil only makes 42 gallons of gasoline, that's a problem.

It does. Only 42 gallons.

Suddenly you're not getting the results you're used to.  One gallon of gas to run the engine to get a barrel of oil out of the ground means you're putting in one gallon to get 42.  With "shale" and the other kinds of oil we're finding these days, you put in 10 or 20 gallons to get the same 42.

(Don't forget, the gallons of gasoline it takes to get oil out of the ground is only the beginning.  It takes more energy (gasoline) to distill, refine the oil into gasoline.  More energy yet to put in additives and ship the oil to your gas station.  And don't forget the energy needed to get the oil from the ground to the refinery in the first place.)

One gallon creates 42 gallons.  One = 42.  Then 20 gallons are needed to make the same 42.  20 = 42.  Suddenly the expenditure of energy creates only twice as much yield.  Versus 42 times as much yield in the easy-to-get-at oil fields.

So: Cheap oil is ending. Consider it a fact, because when you talk to optimisic geologists like I have, they always talk about finding new technology to get oil out of difficult places.  Technology costs money and, yes, energy. That's the de facto end of cheap oil. 

Eventually we'll get to the point where it takes 42 gallons of gasoline to get a barrel of oil out of the ground and to get 42 gallons into your gas tank.  

Can you even imagine that?  Oil becomes the most precious commodity in the world, outstripping gold, if you'll excuse the expression.  Gold is pretty to look at and hard to extract from the ground. Think of another use for gold or silver or platinum.  Oil is slimy and ugly and hard to get out of the ground but 42 gallons will get you to work or to Grandma's house.

As soon as it takes gallons and gallons of gasoline to get oil out of the ground, we've gone way, way beyond the concept of cheap oil.  We've even gone past "Peak Oil."

Because "Peak Oil" simply means the worldwide "need" for oil and gasoline reaches all known ability to use, say, a gallon of gas to pull up a 42-gallon barrel of oil.

Scientists say we're getting there fast. 

Some say we reached it two years ago and we now have a crisis on our hands.  It may not turn into a real, bold, in-your-face-and-your-pocketbook crisis for years, but if you're wondering why gas prices keep going up but only come down a little, well, that's what you're seeing: the beginnings of a crisis.  And it's not just about your pocketbook, it's about the hopes and future of all nations of the world.

You would think that oil companies would embrace the concept of "Peak Oil" because it gives them an excuse to raise prices.  To think such a thing would betray your cynicism about Big Business and marketing.  But they're taking the opposite tack: "There's plenty of oil everywhere. We just have to divise new methods of extracting it," as one CEO put it.

Beyond Petroleum is the new "name" for British Petroleum, because they want us to believe they're working on the future. And maybe they are.  But they're not telling us of any real progress.

Even Exxon Mobil is holding to the opinion that there's plenty of oil out there, it just takes creativity and ingenuity to find and extract it.

I'm not really knocking the oil companies.  You can think they're being greedy obnoxious capitalists with their increases in oil prices. That, too, betrays a kind of cynicism, though.  I'm no friend of so-called "Big Oil," but unlike many anti-capitalists and diehard environmentalists, I have an open mind.  To paraphrase the TV commercial, I want to protect the environment, but I love my sporty little car. So what do you suggest we do?  What will you do?

The oil companies are doing what they have to do. I'll explain this in later column.  It's a fascinating story, especially when you remember that someday your life will be a part of history. (Pssst: Here's a clue: All these people who are talking all the time about Saving The Planet, they may actually believe they're talking about ecology, but they must sense on at least a primal level that economic and environmental chaos will ensue when the only abundant combustible energy source is widely perceived as disappearing quickly. It's their way of trying to get you ready for Big, Tough Changes To Come while cloaking themselves in magnanimity to achieve their political goals.)

Okay.  But listen to the "Big Oil" optimists.  Perhaps there really are great discoveries around the bend. Or maybe there's oil on Mars! Maybe there's oil in Aunt Clara's backyard and it's the biggest discovery that's ever been made.  Maybe the rumors started by some scientists that oil is a renewable resource will come true. Hey! Maybe there's oil on the Moon!

I'm not ruling out any possibilities. I'm a broadcast journalist.  I've been investigating this most intriguing of stories and I have to stick with what I've learned.

I've learned that we're running out of oil.  Quickly.

Resources are limited. How much drinkable water is there in your area?  Most places in the U.S. are moving away from pumping groundwater and moving toward pumping and cleaning lake water and river water.  Why?  Because it's cheaper? No. It's cheaper to dig a well till you hit water, then drink it.  Forget pollution for a minute, there are potentially dangerous organisms even in pure lake water that you won't find in underground water.  But we're depleting our groundwater so quickly that we have to go to surface water.

Resources are limited.  The time has come when we as residents of Planet Earth must confront the "Peak Oil" phenomenon and come to grips with it.

First acknowledge that it exits.  Cut the Ostrich act. Then deal with it.  Then get on with a concerted effort to find the closest thing we can to replacing oil.

That's our only hope, according to all my research.

It would take a crash collaboration of scientists, government, business, media and citizens like America's Manhattan Project in World War II to come up with anything approaching a replacement for oil as a source of energy -- if we're going to avert this crisis in the making.  Nothing exists today.

Nothing exists today that can even approach oil for its abundant combustible energy.  It's that kind of substitute we have to find.

Let's get on with this thing before it's too late.

I'm serious.  This is the news story of the 21st Century.

Because it's driving so many other news stories, and we just don't get it.

-- Mike Shiloh

Thanks to Professor Lane Sloan at the University of Houston for some background on this subject and this material.  (Broadcast Interview with Lane Sloan  5/7/05 "The Mike Shiloh Program")


Contents © copyright 2008 Michael Shiloh, Jack Bennett unless otherwise noted. All rights reserved.