Now that sustained high oil prices and environmental concerns have stimulated massive efforts to develop alternative fuel sources, the oil industry pooh-bahs are finally realizing they have overstepped themselves. For decades they have been frightening us into accepting ever higher prices with their postured concerns of the imminent demise of oil. Suddenly they and their allies in the media are rushing to inform us they have been wrong wrong wrong, for decades. Oil is not scarce, nor are we about to run out of it!
On Monday March 5 in a first page right-hand column The New York Times' oil specialist Jad Mouawad, following up on the recent commentary by Cambridge Energy Research analyst Daniel Yergin, two of the oligopoly's most amenable parrots, have finally come round to the argument I have been making for years (see "Oil Is Not Scarce -- The Oil Industry Continues to Play Us for Fools," 5/24/06, not to speak of my book Over a Barrel: Breaking the Middle East Oil Cartel, pub date 08/05).
But why this sudden sea change? Mouawad unwittingly telegraphs the producers new strategy when he opines that OPEC's clout will be reinforced in coming years" because the cartel "is poised to control more than 50 percent of the oil market". The king of the thieves, Saudi Arabia, is now bandying about about a number for its potential reserves pegging them closer to 1 trillion barrels. You may remember when scarcity was the ploy the Saudis owned up to having only 260 billion barrels of oil (and not to overlook Matt Simmons who made millions trading by propagating his Halloween scenario in "Twilight in the Desert", spooking us with predictions of the near term end of Saudi oil"). Now, suddenly having more oil not less is the game plan and that makes great good sense if the goal is to run alternative energy developers off the playing field. Mouawad, always ready to impart the oil patch pitch advised us the oil companies "see few alternatives to fossil fuels" (where did the Times find this guy). What else would those sitting on top of all the oil say, particularly if they wanted to scare away any competition.
There seems to be a lot more oil our there and under our oceans than most so-called experts thought, many of whom have their own vested interests to tweet "peak, peak, peak". As Times' Mouawad breathlessly related in his longish epiphany not only are new, deepwater deposits being found, but new technology and techniques developed in the last decade are discovering and bringing to the surface trillions more barrels still left in wells long thought unrecoverable. Indeed, the Cambridge consultants now put recoverable oil reserves at 4.8 trillion barrels, and that's their low-end guesstimate.
Of course, the diehard peak-oil theorists among petroleum geologists and those pundits with their own agendas still won't face up to their error. They continue to sound the alarm of shortages, price spikes, and economic decline just down the road. If this dubious line of reasoning sounds familiar, it is. Ever since oil was first discovered more than a century ago, alarmists have been predicting its imminent disappearance. But such stubborn wrongheadedness isn't winning any new converts these days, merely casting the naysayers in the dim light of the ill-informed.
Here are the two things we must not lose sight of:
• First, OPEC, the Saudis, and Big Oil in general are not our friends. They're all in it for the money, no matter how their extreme greed harms us and the global economy. What is more, far too many of the billions upon billions of dollars we've shipped to the Middle East have bankrolled those who seek to destroy us. We have to free ourselves from their grasp. And we can only do that by developing alternative sources of energy.
• Second, if Big Oil doesn't bankrupt us and if Islamic extremists don't kill us, we'll do the job for them unless we can wean ourselves away from fossil fuels, no matter how large the supply. Global warming is no joke; greenhouse gases are choking the life out of our planet. Our only hope for saving ourselves is by cutting emissions and developing alternative sources of energy.
That means we mustn't be lulled by any temporary price declines or false hopes that the likes of ExxonMobil will find a conscience. The biggest of Big Oil admits that the planet is warming, but, "hey, it's not my problem" appears to be its response (see "Size Begets Arrogance...," 3/2/07). Making obscene profits is Exxon's be-all, end-all.
Now that the truth about oil resources has been revealed by America's most famous newspaper, we can at least hope that the scarcity threat has lost its punch. But if the truth is going to set us completely free, we have to keep the pressure on Congress to rein in our consumption of fossil fuels while giving more support to the development of alternatives.