Oil School

Because the lack of characters I can put in one post I had to split this into 3...
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World of Change
By: Anthony T. Gorman

Out in the ancient forests of the Arabian Peninsula, trees wither, shrubs die, and bushes fade. But this is not the end of their life cycle. Soon our lives will be changed forever because of plants that died millions of years ago.

In the near future your world will change. We are living in a rapidly growing time, both growing exponentially in worldly population and in material consumption. We will soon be seeing a transition that will drastically change our lifestyles forever.

You may have been wondering lately at some of the decisions of the Bush administration. What our government seems to be doing is preparing the nation for a global collapse of civilization and/or economies. This collapse will come about by the onslaught of the peak of oil production. A real life example of this can be seen by the fact that the U.S. government doesn't seem to be too concerned about the national debt because it will not be important if the world's economies collapse. What we will be going over here is reviewing what is currently going on in today's world and what the future brings.

Today's economies are thriving currently because of the fact that we are using very potent and cheap energy sources, mainly crude oil and natural gas. These commodities are very important to note because there has never been a time where energy has been so abundant and powerful. Now we will dive into why this powerful resource is essential to worldly growth.

Economic growth is dependent on cheap energy. As this cheap energy - oil and natural gas - start to decline in production, so will the growth of economies around the world. This is important because when economies decline so does the population. The main concern is not IF this decline in energy will happen it is WHEN it will happen. Richard Heinberg author of "The Party's Over" explains it like this:

"Ultimately, we will know for sure when global oil production peaks only after the fact: one year we will notice that gasoline prices have been climbing at a rapid pace, and we will look back on the previous few years' petroleum production figures and note a downward slope. It is possible (as Colin Campbell has suggested) that the first global production peak has already happened in the fall of 2000 and that the next decade will be a "plateau" period, in which recurring economic recessions will result in lower energy demand, which will in turn temporarily mask the underlying depletion trend."

Heinberg gives some pretty noteworthy information there. It is also important to know that the U.S. reached its peak oil production in the 70's. It is difficult to figure out the reserves for other countries because politicians and owners of oil productions have an incentive to over state their supply to remain in economic and political power. An overstatement like this can be seen between 1986 and 1987 with OPEC countries. "during the late 1980's, six of the 11 OPEC nations increased their reserve figures by colossal amounts, ranging from 42 to 197 percent, they did so only to boost their export quotas."(C.J. Campbell) The more you exaggerate the amount you have the more you can sell, in turn the more money you make.

The next step in understanding the role energy plays on economies is to understand the concept of peak oil...


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Here's a crash course in peak oil. Oil is a remnant of organic material that died very long ago. This organic material was broken down through the years and later pressurized under the earth's surface. This, over time, produced oil and natural gas reserves. Oil, like all other materials on this planet, is a finite resource.

Now that we know there is a limit we can understand many things, primarily the conflicts that ensue over the production and acquisition of these resources. Resource wars if you will. As stated earlier, in order for economies to grow they need cheap energy. In short, with cheap energy consumers can spend their money on other things, which keeps the economy rolling. The fact that economies are so dependant on cheap energy brings us to why peak oil is so important.

The problem is not running out. The problem is when the cost of retrieving oil supersedes the profit from selling it. This happens when the reserve is about dry or a new site is not cost effective. When this happens it is not profitable and on a grand scale you get peak production. This is when demand overcomes the supply. The demand for oil has been steadily growing. Discoveries have been yielding less and less. This is a sign that the retrieval of this resource is becoming less economical and production is slowing down.

As production stops growing, so will the worldly economies. At this time, a government's natural defense will kick in so that they remain in power. Currently this can be seen throughout the conflicts of the Middle East with the U.S. Politics aside, it is easy to see the reasons why we are concerned with places like Iraq, Iran, Saudi Arabia, Israel, and many others in that oil rich region. What the U.S is currently doing in the Middle East, is securing this precious commodity so it remains powerful as this resource declines semi evenly throughout the world. Whoever goes down on top stays on top.

You can also see that the oil crisis is coming by looking at the industry itself. The major oil companies are consolidating. This is a tell tale sign, that can be seen throughout history, pointing to the demise of the industry. As an industry dies it becomes more and more consolidated because owners are selling and getting out. The Saudis have a saying: My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel.

Estimates for when the peak production of oil will occur range everywhere from right now to never. The most accurate peak predictions seem to be sometime between the years 2010 and 2020. I like to be conservative with predictions so it really could be further down the road but most agree that it will happen within our lifetimes. With peak oil looming over us it is important to understand your government, the governments around you, and how they operate.
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To this I come to a personal note. I used to be a Republican because my parents were so and that suited me. As I started to learn, in and out of the classroom, I changed my political position to Democratic. After some time and much more information I have realized that it doesn't matter as much as you think, either being a republican or a democrat. The government, like all governments, is efficient at survival. It will do what ever it takes to become more powerful and at the very least ensure its survival. After this realization, I chose to belong to no party and to simply view the government for what it is and how it operates.

If you truly want to know, and you should, about how the world around you operates you need to seek out information personally. The media outlets tell us what we (and sometimes what politicians) want to hear. Conventional schooling, i.e. kindergarten to high school, teaches a message of obedience and conformity. Little is taught of different views and ideas. It's the American way or no way. Please do not allow this close-mindedness to occur within you. Go out and learn what has not been taught. Learn and be enlightened.