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High Gas Prices Got You Down?

5/16/2011 9:39:07 AM

Tags: peak oil, gas prices, Cam Mather

North Americans are putting a lot of energy into getting angry over the price of gas these days. Oil companies are ripping us off. Enough is enough. We’re being fleeced. It’s all a scam.

Well I’ve got news for you. You ain’t seen nothing yet!

We are past “peak oil” and this is what the future looks, only much worse.

In 2005 Matthew Simmons wrote a pivotal book on peak oil called “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.” Simmons was an energy investment banker who also served on George W. Bush’s Energy Working Group. He spent a great deal of time and energy looking at the research done by geologists from Saudi Arabia, the world’s largest producer of crude oil. For years the Saudis had denied that there was any problem with their ability to supply endless cheap oil, but Simmons disagreed. He looked at the reports that their geologists presented at conferences and realized that the problems they were discussing indicated that their wells were starting to slow down. When this happens you start pumping water in to push out what oil remains and their main well, Ghawar, the largest oil well ever discovered, was having massive amounts of seawater pumped into it to extract oil. Since the Saudi oil company Saudi Aramco is owned by the government, they are not required to tell anyone how much they have and there is proof that their numbers are heavily fabricated.

Simmons was part of a growing number of geologists and other people who work in the oil industry that are starting to talk about peak oil. They formed the Association for the Study of Peak Oil (ASPO) http://www.peakoil.net/ People in the mainstream media and the oil industry often lumped these professionals in with the tin-foil hat crowd who suggested the Apollo space landing was filmed on a sound stage. When you mentioned peak oil you’d often be referred to as one of those “peak oil nuts.”

 The implications of the world hitting peak oil are profound. If you live in suburbia, commute to work, heat with a fossil fuel, buy your groceries at a store that someone else has grown for you, peak oil is going to change your life quite profoundly.

In one of his best interviews Simmons made the point that the individuals who deny peak oil have vested interests in the status quo, with carrying on business as usual. People like Simmons, who put forward the peak oil theory, had nothing to gain. There was no way for them to profit from warning the world about peak oil. They just realized the implications and felt that they should ring the alarm bell.

Fatih Birol is the Chief Economist for the International Energy Agency, the group that advises world governments about energy issues. For years he denied the existence of Peak Oil. For years he assured the world that we have nothing to worry about. He told the world to ignore those peak oil doomsayers. Until 2008 the IEA basically denied that peak oil would ever happen.

Then recently he completely changed direction and suggested that Peak Oil had occurred in 2006. Huh? What about the tin foil hats, to keep the aliens from reading those peak oil nuts’ brains? Did the alien rays get through? Peak oil has happened? And not only did he admit that we’re past peak, he suggested that it would have been good if governments had started planning for it a decade ago. Huh? But a decade ago you said it would never happen! The U.S. Government Department of Energy commissioned a report in 2006 by Hirsh http://www.energybulletin.net/node/12772 and he warned that the implications of peak oil on the U.S. economy would be so profound that they should have started planning two decades before.

And yet here we are. We are past peak and no government has even acknowledged it. The mainstream media won’t discuss it. That leaves people screaming at the oil companies. It’s not the oil company’s fault that we’re past peak oil. It’s also not their fault that people in China and India and all over the world are buying cars and trying to emulate our North American lifestyle. Do you ever, even for a second, stop to contemplate how much freedom a gas-powered vehicle provides us? It’s unbelievable.

 The fact is that the oil companies only control about 6% of the oil that is out there. Government-run oil companies like Saudi Aramco, and Petrobas in Brazil, and Gaz Prom and Lukoil in Russia, and Pemex in Mexico control the rest. The reality is that they can’t control the price of oil. It’s determined on world energy markets by forces greater than them. Look at me, defending the oil companies! I’m not saying they would never hose us, or be reckless and cause spills, I’m just saying, these things are out of their hands now.

You need to stop putting so much energy into complaining about the price of gas today. A decade from now you’ll look back at 2011 as the good old days of cheap gas. You’ll be driving a lot less. Your life will be much different. It’s not because the oil companies conspired. It’s because there was only so much oil created on this planet, and we’ve removed all the easy stuff. The reason that they are drilling for oil 3 miles below the surface of the Gulf of Mexico at the Macando oil field (the one that blew out last summer) is because that’s all that’s left. It’s hard to get at and it’s expensive to extract and it isn’t going to be cheap by the time it gets to your local gas station.

You need to do is to start taking steps that will help minimize the effects of peak oil on your family. When I wrote “Thriving During Challenging Times” many people were still telling me I was nut bar for even suggesting that peak oil would ever happen. For years I’ve been giving workshops and telling my audiences that we hit peak in 2005. Hundreds of people who looked at me quizzically can verify this. Apparently, as out of step with reality I might have seemed at the time, I was correct. I take no glee in knowing that I was right because it’s going to mean profound changes in all of our lifestyles, including mine. You can either put your energy into wishing it wasn’t so, or you can get proactive and start taking steps to minimize its impact on you.

The truth was out there. The mainstream media wasn’t providing you with that truth, and they continue to ignore it. The markets have recognized peak oil and they are behaving rationally. You need to start behaving rationally too, accept the new reality and get on with mitigating its impact on you.

The Australian Broadcasting Company just did a great “Catalyst” documentary on this topic. Take 12 minutes and watch it http://www.abc.net.au/catalyst/stories/3201781.htm. If you’ve never heard of peak oil or doubt we’ll ever hit, it could the most important 12 minutes you’ll ever spend. When you see Richard Branson, owner of Virgin Airlines, telling you to start preparing, it puts it in a whole new perspective.

For more information about Cam or his books visit www.cammather.com or www.aztext.com

 



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Post a comment below.

 

frank lee
6/20/2011 1:33:28 AM
Anyone? Beuller?

frank lee
5/27/2011 11:59:15 PM
"...but from the poor on up through the middle class, who need to drive a big, inefficient car to get to work, things are only going to get dramatically worse" Ok, I'm dying to know, why would the poor/middle class be saddled with big inefficient cars unless that is WHAT THEY CHOSE?

Starkate
5/27/2011 10:29:42 AM
When we visited friends in the U.K. a couple of years ago, they were paying $7.00/liter for gas ....... and the price they have paid for gas has been similarly high for a long time. You can see the impact of such prices in the size of vehicles. Tiny, fuel-efficient. European countries in general are way ahead of the US in recognizing the need for less wasteful ways, for various reasons. We love our SUVs and 'manly' big engines. Unfortunately (for us) our country's infrastructure and transportation system, particularly the western 2/3, is literally built around the automobile. Leaving aside the whole issue of food growing, the day-to-day reality is that, it's going to be pretty tough to get around, ie to a job, when gas reaches its 'true' price. The rich can afford (literally) to ignore the cost, but from the poor on up through the middle class, who need to drive a big, inefficient car to get to work, things are only going to get dramatically worse.

frank lee
5/21/2011 1:29:19 AM
Cam's post should be required reading for EVERYBODY! brandt's point about the dollar valuation is good too- check out the opinions of the typical American anywhere, and they blame any and everything and everyone for $4 gas except the true causes: themselves, the typical gluttonous lifestyle, and population growth.

t brandt
5/17/2011 6:58:52 AM
But the dollar didn't get devalued by 50% in the past 2 yrs, but gas went up by 50%. The author is right about the "lo hanging fruit" of the oil reserves already having been pumped out. At current use rates, oil will only last 40 yrs. At current use growth rate, it'll only last 20 yrs. I wonder if a Hummer can be turned into a planter? For strategic reasons, we need to use up foreign oil first and keep ours in reserve. That will also help economically in the long run. We need to get back to living locally: walking to schools, stores & work, using local products & services. We'll be back to a 19th century lifestyle. Maybe that ain't all bad.

FreedomLover
5/16/2011 9:19:22 PM
Actually, the cause is the Federal Reserve. Look at the price of oil in gold. The fed has stolen 98% of the value of the dollar since 1913.










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