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America's New Production and the Farce of Peak Oil

Recent Discoveries Put Americ. New Fields May Propel Americas to Top of Oil Companies' Lists ... Brazil has begun building its first nuclear submarine to protect its vast, new offshore oil discoveries. Colombia's oil production is climbing so fast that it is closing in on Algeria's and could hit Libya's prewar levels in a few years. ExxonMobil is striking new deals in Argentina, which recently heralded its biggest oil discovery since the 1980s. – NY Times as Back in Oil Companies' Sights ..

Dominant Social Theme: The world is running out of oil. Renewables are the ticket. People will have to make do with less.  

Free-Market Analysis: It wasn't supposed to be this way. By now, Peak Oil was supposed to be a fact of daily life. People were supposed to be lined up at gas stations, struggling to buy US$10-a-gallon gas. Solar and wind companies were supposed to occupy prominent places on the Big Board instead of going out of business right and left.  Pipelines

People were supposed to have diminished expectations – resigned to shivering in the dark. Free markets, a flawed system of commerce, were to be exposed as a misleading theoretical construct, incapable of providing for people's needs. The Invisible Hand, while real, could not combat an equally real and disturbing fact: The world was running out of resources.

But not according to this recent article in the New York Times. Yes, THAT New York Times, the newspaper of record that has spent the past decade banging the drum for Peak Oil – the idea that the world is running out of energy and that people will have to lower their expectations about how to live and perhaps abandon modern society altogether.

Now, suddenly, there is a different tale to tell. And the Times is up to the task. Up and down the Americas, we learn, there is an Oil Boom. Suddenly, we have gone from enforced austerity to an unheralded plenty. Middle East, watch out! Here's how the article puts it:

A Chinese-built rig is preparing to drill in Cuban waters; a Canadian official has suggested that unemployed Americans could move north to help fill tens of thousands of new jobs in Canada's expanding oil sands; and one of the hemisphere's hottest new oil pursuits is actually in the United States, at a shale formation in North Dakota's prairie that is producing 400,000 barrels of oil a day and is part of a broader shift that could ease American dependence on Middle Eastern oil.

Petrobras is investing more than $200 billion to help make Brazil a major oil player. Technology has made Canada's oil sands easier to tap in recent years, creating foreign interest as well as a demand for workers. For the first time in decades, the emerging prize of global energy may be the Americas, where Western oil companies are refocusing their gaze in a rush to explore clusters of coveted oil fields.

"This is an historic shift that's occurring, recalling the time before World War II when the U.S. and its neighbors in the hemisphere were the world's main source of oil," said Daniel Yergin, an American oil historian. "To some degree, we're going to see a new rebalancing, with the Western Hemisphere moving back to self-sufficiency."

The facts revealed in this article are startling. Venezuela and Mexico, despite their reserves, are relegated to the back of the pack because of government inefficiencies. Nonetheless, the New York Times makes the following startling statement: "Venezuela is now considered to have bigger oil reserves than Saudi Arabia, putting it at the top of OPEC's rankings."

There is some hedging, of course. The Middle East can still influence oil prices greatly, the Times reports, and its oil fields are generally cheaper to develop. But advancements in technology have suddenly made the Americas – from Argentina to Brazil to the US and Canada – an energy powerhouse. Imagine that!

Shale oil and fracking may soon help the US produce two million barrels of oil a day. While discoveries of Brazil's new offshore fields could yield even more. "Brazil will become an oil power by the end of the decade, with production in line with that of Iran," the Times quotes Pedro Cordeiro as saying. He is an energy consultant for Bain & Company, who sees the country's oil production climbing to 5.5 million barrels a day by 2020.

Is this idle chatter, or is OPEC really being challenged? Canada, we learn, is already the top gas exporter to the United States, ahead of Mexico. Canada's oil sands may produce 3 million barrels a day by 2020. Such production increases have already helped the US cut OPEC imports by more than a million barrels a day. Brazil and Colombia now surpass Kuwait as oil exporters to the US.

We have been writing about the economic illiteracy that supports Peak Oil for nearly a decade now. We have always believed it to be a kind of propaganda – a dominant social theme advanced by the Anglosphere power elite for purposes of control and further exploitation.

The great Western banking families always float scarcity memes as a way to consolidate control and further expand global governance. In fact, if the Peak Oil meme is now going out of fashion, this may only mean that some other kind of propagandistic measures is about to be initiated.

We don't know what it is but we can guess, as it seems obvious and evident that the powers-that-be are trying to form pan-national building blocks for world government. The EU is supposed to be one and the North American Union – a merger of Mexico, Canada and the US – is supposed to be another.

This sudden "discovery" of the Americas' potential for energy sufficiency may be a way of tying together North and South American economies. By making energy available within the Americas, a certain degree of continental solidarity may be fostered, along with a number of binding political and economic ties.

Of course, from our point of view, the great banking families that want to run the world have been retarding North and South American oil exploration and production for at least 50 years. What is perplexing and condescending about theNew York Times article is that the "newspaper of record" has been a willing tool of this promotion for at least that long.

Now all of a sudden, the New York Times is reversing its editorial policy – but without a single apology or mea culpa. That's how it works, of course. The Times is not a reportorial device; it is a propaganda outlet for power elite memes. When the time comes for a meme to be discarded it will be. The Times will reverse decade's worth of reporting in a single day and never even bother to acknowledge the editorial shift.

One of the Forbes brothers (of magazine fame) was quoted some months ago as saying the US itself, even in the lower 48, might contain enough oil (not to mention coal and natural gas) to provide for its needs for the next 1,000 years. And that's with the current technology.

Conclusion: We happen to believe oil may be abiotic – that it occurs naturally over time. But whether or not this is so, it is increasingly indisputable that oil and other energy resources are NOT in short supply. The scarcities are managed ones, intended to ensure that people must turn to national and global solutions for what should be local and entrepreneurial solutions. The Times is getting around to admitting this is so. Perhaps the Peak Oilers shall not be far behind.

Editor's Note: This meme seems to be gaining momentum! The Wall Street Journal recently published an article by Daniel Yergin taking on Peak Oil and its Oilers. In the article, "There Will Be Oil," Yergin writes that, "For decades, advocates of 'peak oil' have been predicting a crisis in energy supplies. They've been wrong at every turn." Yergin even blasts the ludicrous M. King Hubbert and his Peak Oil theory often referred to as "Hubbert's Peak." Even more astonishingly, Yergin mentions Hubbert's nutty theory of "Technocracy" in which scientists and engineers should rule the world using mathematical analysis. Of course, what Yergin doesn't mention is that Smart Meters are now being installed around the world to monitor every aspect of people's energy consumption, on the theory that the world is running out of oil and corporate and government monitoring is necessary to survival. You can see a DB article on Smart Meters here: Google "Smart Grid, Edge of the Authoritarian Wedge."   

SOURCE: Daily Bell

© Copyright 2008 - 2011 All Rights Reserved. The Daily Bell is an informative compendium of independent economic views and analysis, which is published by The Foundation for the Advancement of Free-Market Thinking (FAFMT).

 

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