Irving, TX -- A few weeks ago, ExxonMobil slapped President Bush in the face by declaring that, in spite of the President's State of the Union call for energy independence, the world is now, and must continue to be, held hostage to OPEC and Middle Eastern oil. Now the company has picked up the cudgel of deep denial again. In its favorite spot on the op-ed page of the New York Times, it proclaimed, "Peak Oil? Contrary to the theory, oil production shows no sign of a peak."
However, careful readers of the company's annual analyses of energy trends, intended for its own key stakeholders, know that ExxonMobil doesn't believe its own hype. Indeed, the 2005 Energy Outlook Report clearly showed that the company expected non-OPEC oil production to peak in about 2010 and then begin declining. The company then reassuringly commented that OPEC production would somehow, magically, continue to grow indefinitely, so that the increasingly tight non-OPEC market wouldn't matter:
"Today's OPEC crude production, inclusive of Iraq, is about 30 MBD. Post 2010, the need for OPEC crude production will grow, rising to 47 MBD by 2030. We believe the resource base will support this increase, assuming that investments in development are made in a timely fashion."
Why the laws of petroleum geology should be different depending on whether or not a nation happens to belong to OPEC or not is never explained. In its Times ad, the company suggests that peak oil won't happen because we are "getting better -- technically and environmentally -- at tapping it every day." But if we are getting better, then surely non-OPEC nations also are getting better. Nevertheless, ExxonMobil, which produces all its own crude in non-OPEC nations, concedes that even with new technology these sources will peak.
The company also concedes, quietly, that without massive improvements in energy efficiency, the world is in deep trouble even with its wildly optimistic assumptions for future OPEC oil production. In a speech to the Scottish parliament a year and a half ago, an ExxonMobil spokesman warned that without energy-efficiency improvements, the world in 2030 would face an enormous shortfall of oil production -- 155 million barrels a day. The spokesman provided a fascinating graph showing that, in reality, ExxonMobil's strategy for sustaining the global energy economy is entirely driven by two assumptions: that OPEC can increase its daily production by 50 percent, and that increases in energy efficiency will produce twice as much oil by 2030 as total projected OPEC production.
It is hard to imagine a more alarming scenario from the world's largest oil company -- we are entirely dependent on OPEC's being both willing and able to increase its production dramatically, even if we are very diligent about pursuing energy efficiency. If either one of those assumptions (cooperative, successful OPEC; energy-efficient consumers) fails to hold true, then we are cooked. So why is ExxonMobil running such soothing ads in the New York Times?
Because if the world does hit a major oil shortage, then prices will soar, and ExxonMobil, which just reaped a record profit, will become even richer.
What's really shameful is not that they feed us this toxic pabulum -- but that we seem to swallow it.