Peak Oil: Problem Overblown?
The Economist recently ran a story airing Peak Oil concerns from "pessimists" and counters from "optimists." NPR ran a similar spot May 2.

FINANCE & ECONOMICS
The oil industry
Steady as she goes [$]
Apr 20th 2006 | BAKERSFIELD, CALIFORNIA, AND CALGARY, ALBERTA
From The Economist print edition

Why the world is not about to run out of oil
…For years a small group of geologists has been claiming that the world has started to grow short of oil, that alternatives cannot possibly replace it and that an imminent peak in production will lead to economic disaster. In recent months this view has gained wider acceptance on Wall Street and in the media. Recent books on oil have bewailed the threat. Every few weeks, it seems, “Out of Gas”, “The Empty Tank” and “The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel”, are joined by yet more gloomy titles. Oil companies, which once dismissed the depletion argument out of hand, are now part of the debate. Chevron's splashy advertisements strike an ominous tone: “It took us 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30.” Jeroen van der Veer, chief executive of Royal Dutch Shell, believes “the debate has changed in the last two years from 'Can we afford oil?' to 'Is the oil there?'”

But is the world really starting to run out of oil? And would hitting a global peak of production necessarily spell economic ruin? Both questions are arguable. Despite today's obsession with the idea of “peak oil”, what really matters to the world economy is not when conventional oil production peaks, but whether we have enough affordable and convenient fuel from any source to power our current fleet of cars, buses and aeroplanes. With that in mind, the global oil industry is on the verge of a dramatic transformation from a risky exploration business into a technology-intensive manufacturing business. And the product that big oil companies will soon be manufacturing, argues Shell's Mr Van der Veer, is “greener fossil fuels”.

The race is on to manufacture such fuels for blending into petrol and diesel today, thus extending the useful life of the world's remaining oil reserves. This shift in emphasis from discovery to manufacturing opens the door to firms outside the oil industry (such as America's General Electric, Britain's Virgin Fuels and South Africa's Sasol) that are keen on alternative energy. It may even result in a breakthrough that replaces oil altogether.

To see how that might happen, consider the first question: is the world really running out of oil? Colin Campbell, an Irish geologist, has been saying since the 1990s that the peak of global oil production is imminent. Kenneth Deffeyes, a respected geologist at Princeton, thought that the peak would arrive late last year.

It did not. In fact, oil production capacity might actually grow sharply over the next few years (see chart 1). Cambridge Energy Research Associates (CERA), an energy consultancy, has scrutinised all of the oil projects now under way around the world. Though noting rising costs, the firm concludes that the world's oil-production capacity could increase by as much as 15m barrels per day (bpd) between 2005 and 2010—equivalent to almost 18% of today's output and the biggest surge in history. Since most of these projects are already budgeted and in development, there is no geological reason why this wave of supply will not become available (though politics or civil strife can always disrupt output).





Peak-oil advocates remain unconvinced. A sign of depletion, they argue, is that big Western oil firms are finding it increasingly difficult to replace the oil they produce, let alone build their reserves. Art Smith of Herold, a consultancy, points to rising “finding and development” costs at the big firms, and argues that the world is consuming two to three barrels of oil for every barrel of new oil found. Michael Rodgers of PFC Energy, another consultancy, says that the peak of new discoveries was long ago. “We're living off a lottery we won 30 years ago,” he argues.

It is true that the big firms are struggling to replace reserves. But that does not mean the world is running out of oil, just that they do not have access to the vast deposits of cheap and easy oil that are left in Russia and members of the Organisation of Petroleum Exporting Countries (OPEC). And as the great fields of the North Sea and Alaska mature, non-OPEC oil production will probably peak by 2010 or 2015. That is soon—but it says nothing of what really matters, which is the global picture.

When the United States Geological Survey (USGS) studied the matter closely, it concluded that the world had around 3 trillion barrels of recoverable conventional oil in the ground. Of that, only one-third has been produced. That, argued the USGS, puts the global peak beyond 2025. And if “unconventional” hydrocarbons such as tar sands and shale oil (which can be converted with greater effort to petrol) are included, the resource base grows dramatically—and the peak recedes much further into the future. {emphasis added}

After Ghawar
It is also true that oilmen will probably discover no more “super-giant” fields like Saudi Arabia's Ghawar (which alone produces 5m bpd). But there are even bigger resources available right under their noses. Technological breakthroughs such as multi-lateral drilling helped defy predictions of decline in Britain's North Sea that have been made since the 1980s: the region is only now peaking.
Globally, the oil industry recovers only about one-third of the oil that is known to exist in any given reservoir. New technologies like 4-D seismic analysis and electromagnetic “direct detection” of hydrocarbons are lifting that “recovery rate”, and even a rise of a few percentage points would provide more oil to the market than another discovery on the scale of those in the Caspian or North Sea.

Further, just because there are no more Ghawars does not mean an end to discovery altogether. Using ever fancier technologies, the oil business is drilling in deeper waters, more difficult terrain and even in the Arctic (which, as global warming melts the polar ice cap, will perversely become the next great prize in oil). Large parts of Siberia, Iraq and Saudi Arabia have not even been explored with modern kit.

The petro-pessimists' most forceful argument is that the Persian Gulf, officially home to most of the world's oil reserves, is overrated. Matthew Simmons, an American energy investment banker, argues in his book, “Twilight in the Desert”, that Saudi Arabia's oil fields are in trouble. In recent weeks a scandal has engulfed Kuwait, too. Petroleum Intelligence Weekly (PIW), a respected industry newsletter, got hold of government documents suggesting that Kuwait might have only half of the nearly 100 billion barrels in oil reserves that it claims (Saudi Arabia claims 260 billion barrels).

Tom Wallin, publisher of PIW, warns that “the lesson from Kuwait is that the reserves figures of national governments must be viewed with caution.” But that still need not mean that a global peak is imminent. So vast are the remaining reserves, and so well distributed are today's producing areas, that a radical revision downwards—even in an OPEC country—does not mean a global peak is here.
For one thing, Kuwait's official numbers always looked dodgy. IHS Energy, an industry research outfit that constructs its reserve estimates from the bottom up rather than relying on official proclamations, had long been using a figure of 50 billion barrels for Kuwait. Ron Mobed, boss of IHS, sees no crisis today: “Even using our smaller number, Kuwait still has 50 years of production left at current rates.” As for Saudi Arabia, most independent contractors and oil majors that have first-hand knowledge of its fields are convinced that the Saudis have all the oil they claim—and that more remains to be found.
Pessimists worry that Saudi Arabia's giant fields could decline rapidly before any new supply is brought online. In Jeremy Leggett's thoughtful, but gloomy, book, “The Empty Tank”, Mr Simmons laments that “the only alternative right now is to shrink our economies.” That poses a second big question: whenever the production peak comes, will it inevitably prompt a global economic crisis?

The baleful thesis arises from concerns both that a cliff lies beyond any peak in production and that alternatives to oil will not be available. If the world oil supply peaked one day and then fell away sharply, prices would indeed rocket, shortages and panic buying would wreak havoc and a global recession would ensue. But there are good reasons to think that a global peak, whenever it comes, need not lead to a collapse in output.

For one thing, the nightmare scenario of Ghawar suddenly peaking is not as grim as it first seems. When it peaks, the whole “super-giant” will not drop from 5m bpd to zero, because it is actually a network of inter-linked fields, some old and some newer. Experts say a decline would probably be gentler and prolonged. That would allow, indeed encourage, the Saudis to develop new fields to replace lost output. Saudi Arabia's oil minister, Ali Naimi, points to an unexplored area on the Iraqi-Saudi border the size of California, and argues that such untapped resources could add 200 billion barrels to his country's tally. This contains worries of its own—Saudi Arabia's market share will grow dramatically as non-OPEC oil peaks, and with it the potential for mischief. But it helps to debunk claims of a sudden change.

The notion of a sharp global peak in production does not withstand scrutiny, either. CERA's Peter Jackson points out that the price signals that would surely foreshadow any “peak” would encourage efficiency, promote new oil discoveries and speed investments in alternatives to oil. That, he reckons, means the metaphor of a peak is misleading: “The right picture is of an undulating plateau.”

What of the notion that oil scarcity will lead to economic disaster? Jerry Taylor and Peter Van Doren of the Cato Institute, an American think-tank, insist the key is to avoid the price controls and monetary-policy blunders of the sort that turned the 1970s oil shocks into economic disasters. Kenneth Rogoff, a Harvard professor and the former chief economist of the IMF, thinks concerns about peak oil are greatly overblown: “The oil market is highly developed, with worldwide trading and long-dated futures going out five to seven years. As oil production slows, prices will rise up and down the futures curve, stimulating new technology and conservation. We might be running low on $20 oil, but for $60 we have adequate oil supplies for decades to come.”

The other worry of pessimists is that alternatives to oil simply cannot be brought online fast enough to compensate for oil's imminent decline. If the peak were a cliff or if it arrived soon, this would certainly be true, since alternative fuels have only a tiny global market share today (though they are quite big in markets, such as ethanol-mad Brazil, that have favourable policies). But if the peak were to come after 2020 or 2030, as the International Energy Agency and other mainstream forecasters predict, then the rising tide of alternative fuels will help transform it into a plateau and ease the transition to life after oil.

The best reason to think so comes from the radical transformation now taking place among big oil firms. The global oil industry, argues Chevron, is changing from “an exploration business to a manufacturing business”. To see what that means, consider the surprising outcome of another great motorcar race. In March, at the Sebring test track in Florida, a sleek Audi prototype R-10 became the first diesel-powered car to win an endurance race, pipping a field of petrol-powered rivals to the post. What makes this tale extraordinary is that the diesel used by the Audi was not made in the normal way, exclusively from petroleum. Instead, Shell blended conventional diesel with a super-clean and super-powerful new form of diesel made from natural gas (with the clunky name of gas-to-liquids, or GTL).

Several big GTL projects are under way in Qatar, where the North gas field is perhaps twice the size of even Ghawar when measured in terms of the energy it contains. Nigeria and others are also pursuing GTL. Since the world has far more natural gas left than oil—much of it outside the Middle East—making fuel in this way would greatly increase the world's remaining supplies of oil.

So, too, would blending petrol or diesel with ethanol and biodiesel made from agricultural crops, or with fuel made from Canada's “tar sands” or America's shale oil. Using technology invented in Nazi Germany and perfected by South Africa's Sasol when those countries were under oil embargoes, companies are now also investing furiously to convert not only natural gas but also coal into a liquid fuel. Daniel Yergin of CERA says “the very definition of oil is changing, since non-conventional oil becomes conventional over time.”

Alternative fuels will not become common overnight, as one veteran oilman acknowledges: “Given the capital-intensity of manufacturing alternatives, it's now a race between hydrocarbon depletion and making fuel.” But the recent rise in oil prices has given investors confidence. As Peter Robertson, vice-chairman of Chevron, puts it, “Price is our friend here, because it has encouraged investment in new hydrocarbons and also the alternatives.” Unless the world sees another OPEC-engineered price collapse as it did in 1985 and 1998, GTL, tar sands, ethanol and other alternatives will become more economic by the day (see chart 2).





This is not to suggest that the big firms are retreating from their core business. They are pushing ahead with these investments mainly because they cannot get access to new oil in the Middle East: “We need all the molecules we can get our hands on,” says one oilman. It cannot have escaped the attention of oilmen that blending alternative fuels into petrol and diesel will conveniently reinforce oil's grip on transport. But their work contains the risk that one of the upstart fuels could yet provide a radical breakthrough that sidelines oil altogether.

If you doubt the power of technology or the potential of unconventional fuels, visit the Kern River oil field near Bakersfield, California. This super-giant field is part of a cluster that has been pumping out oil for more than 100 years. It has already produced 2 billion barrels of oil, but has perhaps as much again left. The trouble is that it contains extremely heavy oil, which is very difficult and costly to extract. After other companies despaired of the field, Chevron brought Kern back from the brink. Applying a sophisticated steam-injection process, the firm has increased its output beyond the anticipated peak. Using a great deal of automation (each engineer looks after 1,000 small wells drilled into the reservoir), the firm has transformed a process of “flying blind” into one where wells “practically monitor themselves and call when they need help”.

The good news is that this is not unique. China also has deposits of heavy oil that would benefit from such an advanced approach. America, Canada and Venezuela have deposits of heavy hydrocarbons that surpass even the Saudi oil reserves in size. The Saudis have invited Chevron to apply its steam-injection techniques to recover heavy oil in the neutral zone that the country shares with Kuwait. Mr Naimi, the oil minister, recently estimated that this new technology would lift the share of the reserve that could be recovered as useful oil from a pitiful 6% to above 40%.

All this explains why, in the words of Exxon Mobil, the oil production peak is unlikely “for decades to come”. Governments may decide to shift away from petroleum because of its nasty geopolitics or its contribution to global warming. But it is wrong to imagine the world's addiction to oil will end soon, as a result of genuine scarcity. As Western oil companies seek to cope with being locked out of the Middle East, the new era of manufactured fuel will further delay the onset of peak production. The irony would be if manufactured fuel also did something far more dramatic—if it served as a bridge to whatever comes beyond the nexus of petrol and the internal combustion engine that for a century has held the world in its grip.

Natural gas is the energy of choice for the next 15 to 20 years. Data show that Federal
and private investment in research, and the creative application of technology helped
build the historical natural gas production curve in the United States. Research and the
creative application of technology will likewise grow natural gas production and slow oil
production decline in the future. The private energy sector has decreased fossil energy
research funding significantly over the past decade. The American public must get behind
Federal support of fossil energy research if we are to avoid dependence on foreign
sources of natural gas. The private sector can also be proactive by creating a Private
Energy Research Foundation (PERF) to help fund vital fossil energy research.
Introduction
Technology is a word that has become so overused that it actually means very little
without some context. A geologist might think of 3-D models, a petrophysicist, logging
tools, a geophysicist, waves, a reservoir engineer, numerical simulation, an operations
engineer, drilling and completions, and a manager might consider the leverage that
technology provides on Wall Street. The word means many things to many people. In
fact, all of these definitions are important, all are correct, and all are useful within a
known context. One thing is certain: technology does not equal wisdom, and technology
alone does not add value.
2
A company needs both profit and value to survive over the long run. I consider value to
be a longer-term attribute than profit, which carries a fiscal quarter connotation. In the
descriptive, interpretive, research-oriented upstream-upstream world of the geologist,
geophysicist, and petrophysicist, it is considerably more difficult to quantify value than in
the quantified, blueprint, application-oriented downstream-upstream world of the
operations engineer (Figure 1). Value is difficult to quantify in the upstream-upstream,
and it is therefore difficult to assign, because it is far removed from the point where oil
fills the tank and gas fills the pipeline. The resulting mistake that is commonly made is to
consider the upstream-upstream a cost. I call this the value trap.
Many major oil companies fell into the value trap over the past decade when they asked
their Research Centers to become Technology Centers, which in the end meant 100%
technical service and very little innovative research. Technology Centers were asked to
justify their existence using a quarterly profit metric. In fact, scientists at Technology
Centers were asked to “bill out” to customers within the company at some hourly or daily
rate. Lawyers and accountants perform a service and quantify value by billable hours;
research scientists should not. One is service, the other is science. To those of us who
were in the science trenches at major Technology Centers, the result was predictable.
Based upon the billable-hour metric, Centers were shown to be unprofitable, and a vast
majority were closed. There were, of course, other business justifications for closing
Technology Centers. For example, “does not fit the strategic objectives of the company,”
“technology should be borrowed not invented in house,” and “we should contract the
technology as needed.” Time will tell the wisdom of these decisions.
In actuality, true research is represented by long periods of normalcy with no apparent
progress or results, which are punctuated by moments of brilliance and significant
breakthrough. As such, research does not lend itself to quarterly profit evaluation. In fact,
today’s research often becomes tomorrow’s technology application. An oil company
could certainly not be profitable with research alone, but can it be valuable without it?
The Value of Research
Quantifying the value of research is an age-old dilemma. What is the value of knowing
that seismic amplitude reflectors and depositional time lines are not always synonymous
(Figure 2)? What is the value of quantifying and visualizing the physical forward model
that produced complex salt tectonics (Figure 3)? What is the value of very rapid
acquisition of topographic data and mapping with sub-meter vertical accuracy (Figure 4)?
What is the value of 3-D visualization and the virtual reality presentation of data to
landowners in South Texas (Figure 5)? What is the value of mapping the salinization
variations of soil and ground water around oil fields using a very rapid-acquisition
airborne electromagnetic device (Figure 6)? What is the value of immediate access to 1.5
million boxes of cores and cuttings (Figure 7)?
Most industries recognize the importance of technology and innovation (Figure 8) as a
source of superior shareholder returns (Figure 9), as leverage in partnership negotiations,
3
in differentiating themselves from competitors, and as a source of long-term corporate
value. It is, therefore, somewhat of a paradox that oil company research and development
(R&D) expenditures have been steadily decreasing for a decade (Figure 10). Part of the
explanation for this decrease in R&D can be found in the increase in joint industry
projects (JIP’s) over the past decade (Figure 10). Increased collaboration can help the
bottom line from a short-term cost perspective but may hurt it from a longer-term value
perspective.
Production as a Metric for Research Value
Until the late 1800’s, wood was the primary source of energy in the United States (Figure
11). Coal became an important energy source in the late 1800’s and dominated the energy
scene until the mid-1920’s, when oil and gas became an important alternative to coal. By
1950, oil and natural gas combined had surpassed coal in terms of energy consumption,
and they have dominated the energy consumption scene ever since. Today, with the
exception of nuclear power, demand for every major source of energy in the United
States is increasing. In terms of supply, coal is still the largest source of energy produced
in the United States, followed by natural gas and crude oil (Figure 12).
Oil
The University of Texas owns oil and gas royalty rights to approximately 2.1 million
acres in the Permian Basin of West Texas. Oil production from these lands has been
steadily decreasing for the past two decades (Figure 13). There are two “humps” in the oil
production decline, one in the mid-1980’s and one in the late 1990’s, that combined
represent more than 10 million barrels of incremental oil (production above the decline).
What was the cause of the two humps?
One possibility is that the humps are related to exploration and development driven by oil
price. However, oil price data indicate that the 1980’s hump occurred during a price fall,
the 1990’s hump occurred during a price rise, and there was a complete price cycle in the
mid-1990’s that had no impact on University Lands oil production (Figure 14).
Another possibility is that University Lands oil production is related to larger scale
production cycles, driven by a complex set of global economic factors. One proxy for
these larger scale cycles is oil production from all of Texas. In fact, the mid-1980’s oil
hump on University Lands does mirror the oil production in Texas, both falling in 1986
with the global price decline (Figure 15). However, the 1990’s hump on University Lands
occurred when Texas oil production did very little, and there is a hump in Texas oil
production in the mid-1990’s related to the oil price cycle (Figure 14) that has no
University Lands equivalent.
The Bureau of Economic Geology, funded in part by The University of Texas System,
performed two sets of studies on University Lands reservoirs, one that began in the mid-
1980’s and one that began in the late 1990’s (Figure 16). Often in partnership with
operators, 11 fields were characterized in the mid-1980’s study, and 5 fields in the late
1990’s study. Incremental production from these 16 fields accounts for nearly half of the
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10 million barrels of incremental oil represented by the two humps. Part of the remainder
can be attributed to “copy-cat” programs implemented by operators in similar fields. A $3
million investment in research and technology by the royalty owner, and a multi-milliondollar
investment in field development by operators, resulted in 10 million incremental
barrels of oil.
The study of multiple fields, coordinated with an operational improvement effort,
resulted in incremental production and a positive economic benefit. The ideal program
would shingle these production humps, resulting in a long-term improvement in
production decline (Figure 17). The impact of this type of program on all U.S. oil
production (Figure 18) would result in more than 6 billion barrels of incremental oil over
the next 15 years.
Natural Gas
Natural gas production in the United States was able to keep pace with consumption until
the mid-1980’s (Figure 19). Natural gas imports have risen from around 4% in the mid-
1980’s to more than 15% today (Figure 20). More than 3 Tcf of gas was imported in
2000, and that number is not anticipated to decrease. A large percentage of the U.S.
imported pipeline natural gas comes from Canada. Liquefied natural gas (LNG), largely
from Algeria and Trinidad (Figure 21), accounts for most of the remaining natural gas
imports.
Forecasts for annual U.S. natural gas production indicate natural gas supply will grow
from 21 Tcf in 2001 to around 27 Tcf by 2015. Demand is projected to exceed 30 Tcf by
2015 (Figure 22). Whereas most of the U.S. natural gas to date has come from associated,
high-permeability, and shallow offshore sources, around 50% of the produced natural gas
in 2015 is forecast to come from deepwater, subsalt, and unconventional (tight gas, shale
gas, and coalbed methane) sources.
Analysis of historical Federal and State exploration incentive programs and Federal and
private investment in unconventional natural gas research indicates that the supply curves
benefited greatly from natural gas research and the successful application of technology.
The tight gas production curve shows a large positive increase in slope in 1985 following
$165 million of combined investment in research by the DOE and GRI (Figure 23).
Studies were focused on advanced stimulation technology, the greater Green River Basin,
and the Piceance Basin. Combined with Federal and State tight gas production incentives,
and investments in exploration and production by private sector operators, these
investments in research have produced 11 Tcf of incremental natural gas to date.
The shale gas production curve shows a large positive increase in slope also in 1985
following more than $90 million of investment in research by the DOE in the prior
decade (Figure 24). Another surge in production from shale gas followed $6 million of
additional investment by GRI beginning in 1990. Studies were focused on the Antrim
shales and the Appalachian Basin shales. Combined with investments in exploration and
production by private sector operators, these investments in research have produced more
than 2 Tcf of incremental natural gas to date.
5
The coalbed methane production curve shows a large positive increase in slope in the late
1980’s following $82 million of combined investment in research by the DOE and GRI in
the preceding decade (Figure 25). Combined with Federal and State production
incentives, and investments in exploration and production by private sector operators,
these investments in research have produced nearly 5 Tcf of incremental natural gas to
date, and show no evidence of slowing as coalbed methane expands its productive
horizons to Texas.
To summarize, Federal and State production incentives, combined with tight gas, shale
gas, and coalbed methane research, funded largely by the U.S. Department of Energy
(DOE: $240 million over 25 years), the Gas Research Institute (GRI: $140 million over
20 years), and the private energy sector, resulted in nearly 18 Tcf of incremental gas
production from 1970 through 2000. Investment in research had a positive economic
value.
Meeting Future U.S. Energy Demand
Production
Oil imports have exceeded U.S. domestic oil production since 1994, and the ratio of
imported to produced oil will grow in the future. However, the world is moving
progressively away from heavy carbon energy such as coal and oil to cleaner fuels such
as natural gas and hydrogen. This is good news for the environment but will place a
tremendous burden on the supply of natural gas in the United States.
To meet expected demand, the United States must replace and grow existing natural gas
reserves by nearly 50% over the next 15 years (Figure 22). Much of that growth is
forecast to come from unconventional and deepwater natural gas. Approximately 60% of
the natural gas produced in the United States historically has come from Texas and the
offshore Gulf of Mexico, and will likely remain at 60% or greater in the future (Figure
26).
As history has shown, increasing the natural gas production curve will require a
significant investment in natural gas research and application of new technology. Reserve
replacement will come from continued production of conventional and shallow-water
natural gas and be the primary responsibility of independent producers. Reserve growth
will come from unconventional and deepwater sources and will be the primary
responsibility of the major oil companies. With continued investment, shale gas, coal gas,
and tight gas will supply a part of the future U.S. natural gas demand, but it will not be
enough. Additional sources of natural gas such as deep onshore (>15,000 feet) and
methane hydrates could provide significant new reserves, but will require significant
government investment in research as well as private investment in exploration and
production.
Imports
Part of the U.S. natural gas supply will continue to be satisfied by imported natural gas
from Canada. Although Mexico currently consumes an order of magnitude less natural
6
gas than the United States (<2 Tcf vs. >21 Tcf), demand for natural gas in Mexico is
forecast to increase considerably over the next decade. Several of the Gulf onshore basins
in Mexico, including Burgos, Veracruz, and Macuspana, and the underexplored Mexico
offshore have high natural gas potential. However, because demand for natural gas within
Mexico is growing dramatically, it is unlikely that Mexico will become a net exporter of
natural gas to the United States in the short or mid term. To fill the demand gap, imported
LNG must continue to rise over the next decade.
Energy Research
The United States is facing a very real energy problem. For the past century, the people
of the United States have enjoyed, and actually come to expect, very inexpensive fossil
energy. This cheap energy is the direct result of a century of technological advancements
developed by the private energy industry, with limited Federal support. Inexpensive fossil
energy has allowed the United States to become the most technologically advanced,
wealthiest nation on Earth. During this time of cheap energy, the general public has come
to believe that Federal support of energy research is a form of “corporate welfare.” This
idea is absurd.
In fact, just the opposite is true: the United States has been on “energy research welfare”
provided by the private sector for nearly a century. The major oil companies, who have
been serving up the energy research “soup,” have all but closed the soup lines. The
private energy sector has nearly eliminated the once-great private research and
development laboratories, and R&D expenditures are half of what they were a decade ago
(Figure 27). This is in part because of increased collaboration (Figure 10) and in part
because there are fewer companies than there were 10 years ago. John Rockefeller must
be smiling (Figure 28)! GRI, now called GTI, is no longer passing through funds for
natural gas E&P research, and the Department of Energy is funding limited gas research
externally and internally at the National Energy Technology Laboratory (NETL), but not
at levels necessary to support future reserve replacement and reserve growth needs.
The mega-merger frenzy has resulted in several market realities. There has been a
significant reduction in earth scientists and petroleum engineers over the past decade,
resulting in very “lean” technical staff within each company. Graduate students in
universities have recognized this shrinking job market and are now choosing other
disciplines. Finally, there has been an extreme divergence in “economic class” between
the super-majors and everyone else, which is unhealthy for the long-term survival of the
industry.
The American people must make a decision regarding fossil energy: Either invest in
energy research with Federal funding, including DOE and NSF, results of which would
support the independent producers in the country so that growing natural gas demand can
be meet with U.S. supply, or do not invest, and become dependent upon foreign sources
of natural gas, just as we have with oil.

Electromagnetic & Ultrasonic Methods for Processing Coal & Oil Shale
Reviewed by Robert Nelson

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Plasma Torch

US Patent # 3,122,212: Method & Apparatus for Drilling of Rock ~
High voltage /low current is introduced to an air-fuel flame to drill rock.

USP # 3,443,639: Consolidating Sand w/ Plasma Jet ~
Boreholes are consolidated by fusion of sand w/ a plasma torch.

WIPO Patent # WO 01/33056 A1 ~ PCT/US00/25293 (1 May 2001): Low Power Compact Plasma Fuel Converter ~
Fuel-air mixture is treated w/ ~40 KV @ ~ 10 milliamps to 1 amp to reform the fuel by glow discharge. The High-V/Low-A Plasmatron is low cost, has long electrode life, uses a simple power supply & control, & eliminates need for an air compressor. A catalytic reaction zone can be added downstream.

US Patent Application 2002/0012618 A1 (Jan. 31, 2002): Plasmatron-Catalyst System ~
The system generates hydrogen-rich gas by catalytic reformation of air-fuel-water/steam. The system increases H yield and decreases the amount of carbon monoxide.

Koks, Smola, Gaz (Pol.) 29(8-9) 215-217 (1984) ~ Chemical Abstracts (CA) 102:151899 ~ Gasification of lignite by low temperature H plasma ~
Highest yields of C2H2 (25.3% based on converted coal) and CO (19.8 %) were obtained w/ countercurrent powdered coal-plasma flow. In addition to C2H2 and CO, the reaction also gave C2H4, CO2, and C6H6.

Japan Patent # JP 11-3,542,900 (1999): Pulverized Coal Igniting Plasma Torch

USP # 4,487,683 ~ (CA 102:81593): Acetylene from Coal & Electric Arc ~
Pulverized coal & methane is introduced into an electric arc to form a plasma at 8000-10,000* F, which is then cooled to 5000-6000 & held @ this temp for ~ 60 ms. Liquid slag & product exit. Product contains primarily C2H2, C6H6, & a medium BTU fuel gas.

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Radio Frequencies

Hungarian Patent # 19,498 ~ (CA 95:135690) ~ Coal Refining by GHz EMF ~
Lower quality coals, lignites, and oil shales were fractionated by treatment in high freq. EM fields at 100-160*. Thus, a lignite (caloric value 1700 KCal/kg, H2O 51%, ash 13%) was heated 46 minutes in a 2.55 GHz EM field at 120* in air to give a coal with calorific value 4649 Kcal/kg containing 51.3% C, 8.4% H2O, and 15.4% ash plus 350 gr H2O, oil & gas 10 gr, & tar 32 gr/kg

Belgian Patent # 481,314 ~ (CA 44:3246) ~ Conversion of Crude Oils & Shale Oils into Gasoline by Ultra-Short EM Waves ~
“Very short EM waves produce an effect similar to thermal cracking but at a lower temperature & w/ higher yields.”

French Patent # 973,715 ~ (CA 47:2461) ~ Destructive Hydrogenation @ Low Temp & Low Pressure w/ Radio Frequencies (1-3 MHz) ~
Stationary waves are established w/ points of high T & P & conditions that usually are obtainable only in an autoclave can be obtained in contact w/ atmosphere. Shale, lignite, coal, peat, &c., are treated to produce oxides, aldehydes, alcohols or acids.

German Patent # DE 901,048 (7 Jan. 1954) ~ Gas Reactions in a Magnetic Field ~
Gas reactions in a magnetic field w/ Si & Ni alloy w/ Co & Fe (catalysts for oil cracking) increases susceptibility. Lines of force concentrate in the reaction space, & side reactions are prevented. The catalyst can be made to vibrate by interruption of the magnetic field (i.e., magnetostriction ultrasonics)

Oil Shale Symp. Proc. 12: 283-298 (1979) ~ (CA 92: 211198 ) ~ Comparison of Dielectric Heating & Pyrolysis of USA Oil Shales ~
Dielectric heating is advantageous in terms of rate of heating, product recovery, effects of gas pressure, temp distribution, net energy ratios, in-situ gasification, & U leaching.

Japan Patent JP 84 49,292 ~ (CA 101 113850) ~ Microwave Molding of Lignite ~
Lignite is softened at 120* by microwave heating @ 2450 MHz and molded (400 kg/cm)

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Ultrasound

Report DOE/PC/30143-T4 ~ Energy Res. Abstr. 7(10), Abstr. # 27651 (1982) ~ (CA 97:58220 ) ~ Ultrasonic Coal Cleaning ~
Ultrasonic activation of several coal cleaning processes in all cases "demonstrated effects that would translate in production to processing efficiencies and/or capital equipment savings. Specifically, in the chlorinolysis process, pyritic S was removed 23 times faster w/ ultrasonics than w/o it. In NaOCl leaching, the total S extraction rate was 3 times faster w/ ultrasound. Two benefits were seen w/ oxydesulfurization: ultrasonics doubled the reaction rate and at slightly accelerated rates allowed a pressure reduction from 960 to 500 psi".

British Patent # 737,555 ~ (CA 50:6109): Ultrasonic Gasification of Lignite ~
Gas-gas & gas-aerosol reactions are increased several hundred times by passing a supersonic shock wave through the mixture. Lignite dust having a caloric value of 5060 Kcal/kg is gasified in air at 1200-1700* & 0.8-1.5 atmospheres to give a gas having a caloric value of 745 KCal/cu meter by passing a shock wave of 125 MHz/sec through the mixture. The shock wave is generated by the periodic compression obtained by the exothermic reaction of coal dust with air.

Gov. Rep. Announce. Index (US) 90(23), Abstr. # 060,438 (1990) ~ Report, 1990, GRI-90/-163.1; Order #PB90-269622 ~ CA 115:32418 ~ Ultrasonic Gasification of Coal ~
Numerous operating conditions, catalysts & reactor configurations; "Overall, at the conditions and with the catalysts and slurry media tested, ultrasound was not effective in sustaining coal gasification reactions. The most favorable results were obtained w/ lignite-water slurry irradiated w/ high intensity ultrasound w/ KOH catalyst @ 550 F & 1050 psig. After 1 hour sonification, the C conversion to gas was about 5%... Ultrasound significantly increased the types & quantities of components that were solubilized... and reduced the particle size of lignite..."

French Patent # 973,715 ~ Cracking of Lignite & Shale w/ Ultrasound ~
Hydrogenation of oil shale & lignite @ low temperature & low w/ 1-3 MHz ultrasound.

USP # 2,722,498 ~ Ultrasonic Extraction of Oil Shale ~
Solvent extraction of shale oil is improved w/ ultrasound (400 KHz). The amount of organic material extracted is tripled and the time required is reduced by 90%.

USP # 4,280,558 ~ (CA 95:153539) ~ Ultrasonic Recovery of Oil from Sand ~
Water is pumped into an oil-bearing formation and ultrasound is applied to drive out the oil.

USP # 4,151,067 ~ Ultrasonic Extraction of Oil Shale ~
Oil is separated from a slurry of oil shale by treatment w/ ultrasound.

Brazil Patent # PI BR 82 04,258 ~ (CA 99:161300) ~ Ultrasonic Extraction of Oil Shale ~
A mixture of powdered oil shale & bitumen is heated to 300-400* and treated w/ ultrasound. "The process produces a higher yield than previous techniques, produces relatively few and environmentally acceptable emissions, and uses a minimal amount of water."

Brazil Patent # PI BR 80 08,635 ~ (CA 96:165417) ~ Ultrasonic Extraction of Oil Shale ~
Application of 20 KHz & 80 kg/cm2 to crushed oil shale for 1 minute generates internal temperatures up to 315*, liberating petroleum extracts.

Brazil Patent # PI BR 81 06,361 ~ (CA 97:112397) ~ UV-Ultrasonic Gasification of Oil Shale ~
Pulverized oil shale & TiO2-RuO2-Pt catalyst & H20 are irradiated w/ UV light @ 0.83u to give H & CO2. Ultrasound is used to maintain movement of the particles.

Fuel 68(10):1227-1233 (1989) ~ (CA 111:198237 ) ~ Ultrasonic Extraction of Coal ~
Ultrasound (0.455-1.46 W/cm2 ) can extract at least 58% of mobile organic matter w/o rupturing any chemical bonds. The average molecular weight of the extract is 340-1055

British Patent # GB 2,139,245 ~ (CA 102:64815) ~ Coal Cleaning w/ Ultrasound ~
Coal slurry (pH 6-9) is agitated w/ ultrasound and separated by centrifuging or froth flotation. A second treatment w/ ultrasound and ozone releases more contaminants.

Probl. Obog. Tverd. Goryuch Iskop. 5 (2): 70-80 (1976); Increasing Effectiveness of Coal Flotation w/ Ultrasound ~ (CA 87:154619 ) ~
15 sec treatment increases yield of concentrates to 78% (originally 66%). Exposure of slurry containing both collector (kerosene) and frothing agent sharply decreased flotation efficiency.

USP # 4,156,593 ~ (CA 91:94260) ~ Ultrasonic Wet-Grinding Coal ~
Coal contaminants (e.g., pyrites, clay) are removed from coal slurry @ relatively low temp & press & @ increased throughput rates by an ultrasonic source. Pyrites are reduced from ~ 30 % to ~ 0.7 %.

USP # 4,151,067 ~ ( CA 91:60105) ~ Ultrasonic Production of Shale Oil ~
A slurry of pulverized oil shale is treated w/ ultrasound to emulsify it. The emulsion is separated by aeration. "The process has only moderate requirements for heat and energy".

An. Quim. 86(2):175-181 (1990) ~ Ultrasonic Extraction of Tar Sand ~ (CA 113:234362 ) ~
Extraction of tar sands w/ a solution of sodium-silicate & ultrasound produces bitumen w/ very low ash content & virtually free of metals and asphaltenes, w/ ~ 95% cumulative recovery (based on C content) in a continuous operation.

USP # 4,054,506 ~ (CA 88:25480) ~ Extraction of Tar Sand w/ Solvent & Ultrasound ~
78% of the bitumen was removed in 60 sec; all of the bitumen was removed in 4 extractions w/ 60 KHz

Japan Patent JP 81,127,684 ~ (CA 96:71736) ~ Ultrasonic Hydrogenation of Coal ~
Powdered coal & catalyst (CuCl2-AnCl2) was hydrogenated w/ ultrasound (20 KHz) for 1 hr to nearly double the yield of the same reaction w/o ultrasound.

USP # 4,226,879 ~ (CA 93:222950 ) ~ Fluid Resonator ~
A fluid resonator for recovery of oil, drilling, emulsification, & secondary recovery of oil; the fluid flows through and around cylinders positioned in the stream and parallel to the flow causes ultrasonic vibrations in fluid.

Japan Patent # JP 97 40,980 ~ (CA 126: 253301) ~
Dry coal preparation for a wide range of particle sizes; high efficiency removal of impurities (esp. sulfides).

Ranliao Huaxue Xuebao 24(4): 360-363 (1996) ~ Ultrasonic Treatment of Coal Slurry ~ (CA 125:304721 ) ~
Ultrasound greatly decreases viscosity & improves static stability of slurried coal; "All these results show that the ultrasonic treatment is a practical method to improve the high-load coal water slurry".

Prepr. Paper: Am. Chem. Soc., Div. Fue Chem 39(4):1223-7 (1994) ~ (CA 121:259407 ) ~ Deashing of Coal w/ Ultrasound ~
A crossbow filter w/ sonic waves radiated parallel to the filtering surface prevents buildup of solids at filter medium, eliminates clogging.

Proc. Intl. Conf. Coal Slurry Technol. 16: 323-334 (1991) ~ (CA 120: 275037 ) ~ Ultrasonic Ash/Pyrite Liberation ~
Enhancement of ash & pyrite separation from coal by pretreatmnt w/ ultrasound.

USP # 4,391,608 ~ (CA 99:90944) ~ Ultrasonic Beneficiation of Coal ~
Slurried coal is deashed & desulfurized by treatment w/ ultrasound (20 KHz @ 0.7 W/cm2/30 min) followed by separation & washing. Froth flotation alone resulted in coal containing 5.03% ash & 1.22% S. Ultrasonic treatment resulted in 4.07% ash & 0.125% S.

USP # 4,537,599 : Ultrasonic Deashing/Desulfurization of Coal ~
Sulfur, clay & pyrite are removed from slurried coal by treatment w/ ultrasound

S. African Patent # ZA 80 06,424 ~ (CA 96:18067) ~ Ultrasonic Coal Cleaning ~
Slurried coal is irradiated w/ ultrasound to produce cavitation, reduce particle size, & detach pyrites & ash from the coal. The impurities are removed by density differences.

Japan Patent # JP 82,128,791 ~ (CA 98:56945) ~ Deashing of Coal w/ Ultrasound ~
Slurried coal is deashed by ultrasound; ash content is reduced from 14.1 to 5.4% by weight.

Japan Patent # JP 84,223,793 ~ (CA 102:206456) ~ Ultrasonic Deashing of Coal ~

Japan Patent # JP 84,142,289 ~ (CA 102:9523) ~ Ultrasonic Deashing of Coal ~

Japan Patent # JP 76,138,055 ~ (CA 87: 28575 ) ~ Removal of Oil from Waste Water ~
Emulsified oil (1 liter) is mixed w/ inorganic salt (CaCl, 40 gr), flocculant or electrolytic surfactant & exposed to ultrasound (20 KHz / 20 W / 10 min ) and settled 10 min, followed by removal of the floated oil. Treatment reduced wastewater content from 850 ppm oil & 1030 ppm COD to 15 ppm oil & 65 ppm COD.

USSR Patent # 126,072 ~ Apparatus for Concentration of Coal Fines Using Ultrasound ~

Report DOE/PC/88883-T9 ~ Energy Res. Abstr. 17(4), # 8452 (1992) ~ (CA 118: 237345 ) ~ ElectroAcoustic Dewatering (EAD) of Fine Coal ~
Pilot plant study for economic dewatering of -100 mesh & -325 mesh coal by synergistic combination of electric & ultrasonic fields in conjunction w/ conventional mechanical processes.

Godishnik Upravlen. Geol. Prouch., Otdel A-12: 97-104 (1961/62) ~ Ultrasonic Extraction of Bituminous Material from Sedimentary Rock ~
Ultrasonic vibration for 12 hrs nearly doubled the yield of material extracted, w/ no change in the character of the extracted bitumen.

Can. J. Chem. Engg. 61(5):697-702 (1983) ~ Ultrasonic Irradiation of Coal-Solvent Extraction ~

Japan Patent # JP 94,220,457 ~ (CA 121:304495) ~ Coal Liquefaction w/ Ultrasound ~
A slurry of coal and solvent is liquefied in an high-pressure H2 atmosphere w/ a catalyst and ultrasound. See also: JP 94 108,062 & JP 94 108,061 & JP 94,108,060 (CA 121:13753 )

~ Powder Technology 40(1-3):187-194 (1984) ~ (CA 102:48468 ) ~ Selective Agglomeration of Coal Slimes w/ Ultrasound ~
Acoustic agitation is much more efficient than mechanical-rotational agitation w/ an impeller mixer.

Sudovye Energ. Ustanovki 1981, pp. 21-24 ~ (CA 98:21738 ) ~ Ultrasonic Separation of Oil-Water Emulsion ~
10-15 minutes irradiation of unstabilized water-oil emulsions, e.g., petroleum-containing ship wastewaters, w/ an asymmetric sound field increases the rate of emulsion separation 15 times compared w/ untreated emulsions.

Japan Patent 81,52,613 (CA 96:180491): Ultrasonic Mixing ~
Fuel oil & water are mixed & atomized in air by ultrasonic apparatus designed to increase the efficiency of fuel combustion.

J. Appl. Chem. 20(8): 245-251 (1970): Ultrasonic Solubilization of Coal ~
"The amount of coal solubilized is a function of time & particle size. The use of char prepared at the temperature of maximum coal fluidity increased the amount of material solubilized".

Wien. Mitt.: Abwasser-Gewasser 1971, 6, K1-K18 ~ (CA 79:57346 ) ~ Ultrasonic Clarification of Oil Industry Waste Water ~
"Ultrasound provides an effective means for clarification of waste water from the oil, metal , and pharmaceutical industries..."

Neftepererab. Neftekhim. (Moscow) 10:14-16 (1981) ~ Ultrasonic Stabilization of Fuel ~
"Ultrasound disperses asphaltenes and tars present in diesel fuels, thus improving their storage stability... Ultrasound (15 KHz) disperses all sedimenting impurities in a few minutes giving stable fuels".

Japan Patent # JP 82,119,822 ~ (CA 97:219406) ~ Ultrasonic Emulsification of Oil-Water ~

USP # 4,126,547 ~ (CA 90:156672) ~ Ultrasonic Oil Spill Removal ~

Belgium Patent # BP 874,315 ~ (CA 91:177966) ~ Ultrasonic Preparation of Coal Slurries ~

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Electro-Carbonization/Gasification

Univ. Missouri School Mines & Met., Bull., Tech. Ser. No. 78 (1952), 84 pp.: The Process of Underground Electrocarbonization ~
Review of methods used in 8 Euro countries & USA: chamber, stream, borehole, filtration linking, and hydrolinking. Electrocarbonization (EC) involves drilling boreholes, installing steel pipe, pre-heating, electro-linking (~ 30 min), EC (3-4 hrs), electro-gasification (w/ air/steam injection) yields producer gas, 120-300 BTU. Electro-carbonization takes place in a dumb-bell-shaped elliptical zone, the long axis being fixed by the electrodes. Fire channel fractures form, and considerable fusion occurs.

Producers Monthly 16(11):14-20 (1952) ~ (CA 50: 2151 ) ~
At a critical voltage level, current may be caused to flow through an oil shale or sand bed, resulting in the gradual development of a path of carbonized particles from one electrode to another. Oil & gas are produced by low-wattage electrical heating of shale and tar sand; the path of carbonization is used as a heating element.

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Electro-Osmosis

There are dozens of patents for various forms of electro-osmosis, some of which also may be applicable to coal. The following are specific to coal:

USP # 2,799,641 ~ Electrolytic Promotion of Oil Well Flow ~
Pulsed DC stimulation of oil flow can double production.

USP # 3,417,823 ~ Electro-Osmosis of Oil Well Water ~
Water is electrically transported to the cathode and removed to improve the permeability of the remaining oil.

J. Canadian Petroleum Technology 3:8-14 (Spring 1964): Electro-osmotic Increase of Reservoir Flow Rate ~

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Electro-Chemical

USP # 4,043,884 ~ (CA 87:143348) ~ Electrolytic Hydrogenation of Oil Shale ~
Kerogen is upgraded by extracting it from oil shale and treatment w/ reductive electrolysis.

Sci. Technol. Oil Shale 1976, pp. 83-101 ~ Electrolytic Oxidation & Reduction of Oil Shale ~
Almost all the higher hydrocarbons are removed by the process; about 73% of the hydrocarbons were oxidized & dissolved. See also: USP # 4,045,313 ( CA 87:143372 ).

Report 1984, DOE/FE/60339-T2 ~ Energy Res. Abstr. 10(1), Abstr # 8 (1985) ~ (CA 102:169454 ) ~
Electrochemical desulfurization w/ simultaneous production of H @ 75*, 1.2-1.3 V, almost 100% electrical efficiency, ~ 53% removal of S. Addition of HI catalyzes reaction: 83% removal of S.

USP # 4,043,885 (CA 87:143346 ) ~ Electrolytic Removal of Pyrite from Oil Shale ~
75-95% of the total S is removed after 1-5 hr of electrolysis and 83-95% of S converted to sulfate.

CA 85:49084 ~ Fuel 55(1):75-78 (1976) ~ Electrolytic Removal of Pyrite from Oil Shale ~
Electrolytic treatment of kerogen concentrates removes pyrite. The process uses alkali existing in the shale as electrolyte.

USP # 4,045,313 ~ Electrolytic Recovery of Bitumen from Oil Shale ~
About 75% of the organic hydrocarbons are oxidized & dissolved in the alkaline electrolyte.

Proc. Electrochem. Soc. 84-5: 492-509 (1984) ~ Anodic Oxidation of Coal Slurries ~
Up to 50% of the lignite slurry in NaOH @ rm temp & electrolyzed (1.2 V) dissolved as humic acids (= fertilizer). An increase in potential (2.5 V) gave more humic acids. Higher potential decreases formation of humic acids. Other reaction products: CO2 & H @ anode & cathode, & removal of over 70% of total S.

J. Electrochem. Soc. 128(10):2097-2102 (1981) ~ Electrolysis of Coal Slurries ~
"Coal slurry electrolysis as a method for cheap H evolution is not a good prospect, because of the low c.d. available after the removal of Fe. [Add Fe?]

USP # 4,043,881 ~ (CA 87:143370) ~ Electrolytic Recovery of Oil From Retort Water ~
Electrolysis of shale oil retort water yields ammonia; 40-50% of the total residue and 80-90% of the organic chemicals were recovered at the anode. The COD value was reduced to ~ 65%.

USP # 3,915,819 ~ Electrolytic Purification of Oil ~
Sulfur is removed from crude oil and an electrolyte w/ low-V/High-A DC .

USP # 555,511 ~ Coal Battery ~
Coal logs (produced by LTC) in electrolyte (molten NaOH), bubbled w/ air: "Average electrical HP developed: 2.16 HP ~ Average electrical HP used by air pump: 0.11 ~ Average net electrical HP developed: 2.05 ... ~ Carbon consumed in pots per electrical HP: 0.223 lb ~ Coal consumed on grate per electrical HP: 0.336. "

Total fuel consumed per electrical HP: 0.559 ~ Electricity obtained from 1 lb of coal*: 1336 watt hours (32% of that theoretically obtainable) ~ (* 0.4 lb in pots & 0.6 lb on grate). Thus the efficiency of this particular generator was 12 times greater than that of the average electric light and power plant in use in this country, and 40 times greater than plants of corresponding size.

Fuel 28(1):6-11 (1949) ~ (CA 43:1664 ) ~ Production of Electricity from Coal by Electrochemical Means ~

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Electrostatics

Chem. Engg. Commun. 108: 49-66 (1991) ~ (CA 116:43943 ) ~ Electrostatic [ES] Beneficiation of Oil Shale ~
Oil shale pulverized to 5 microns can be completely liberated of mineral inclusions from the organic matrix by electrostatic treatment with a copper tribocharger. Kerogen is enriched from 12% in feed to ~ 34% in the product stream.

CIM Bull. 73(822): 51-61 (1980) ~ (CA 88:194216 ) ~ ES Beneficiation of Fluidized Coal ~
"Recoveries & ash contents of beneficiated coal are comparable to recoveries by water washing, but the dry process avoids potential water pollution problems".

J. Powder Bulk Solids Technol. 1(3):22-26 (1977) ~
An ES separation tower & ES beneficiation loop were tested; yields coking concentrate high in vitrinite and low in pyrite & ash.

J. Coal Res. Inst. (Jap.) 2:97-104 (1951) ~ ibid., 3:11-16 (1952) ~ (CA 49:7220 ) ~
ES beneficiation w/ 30-35 KV produced a concentrate of coal.

Suiyokaishi 15: 51-56 (1963): ES Concentration of Coal ~
Low-Fe coal is attracted to the corona-discharge rollers & high ash/high-Fe coal is repelled.

Feiberger Forschungsh. A326: 161-165 (1964): ES Enrichment of Coal ~
The coal concentrate w/ low-ash/Fe is attracted to the grounded cylinder of a Huff separator. Coal particles w/ high ash/Fe are repelled in the corona field. "Separation is more effective in the corona field compared w/ that without corona discharge".

Nenryo Kyokai-shi 48(512):869-876 (1969): ES Separation of Coal ~
Coal was concentrated in a Huff-type electrostatic separator w/ or w/o corona discharge (15-20 KV) The recovery rate was >96% and the optimum relative humidity was nearly 60%.

Braunkohlenarchiv. 56:29-48 (1949) ~
Up to 94% of metal impurities can be separated from powdered coal by ES treatment w/ 25 KV.

Obogaschen. Polenz. Iskop., Akad. Nauk SSSR, Inst. Gorn. Dela 1960, pp 168-174 ~ ES Separation of Large Particles from Coal ~
Pilot plant for electrostatic precipitation of large particles from coal fines. Grounded collector electrode, DC corona discharge. 90-95% efficiency.

Ind. Eng. Chem. Fundamentals 1(1):48-52 (1962) ~ ES Mixing ~
ES forces produce an extremely fine dispersion w/o moving parts.

Nauch. Soob. Inst. Gorn. Dela (Moscow) 45:31-38 (1968): Electroseparation of Coals ~
Corona discharge separation of coking coal used for sulfonation gives simultaneous partial removal of coal impurities. Power consumption: ~ 0.1 KW-br/metric ton. Efficiency: 90%

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Magnetism

Magnetic Separation is a well- established technology that need not be treated here. The following example will suffice:

Coal Process Tech. 5: 19-23 (1979) ~ (CA 92:183360 ) ~ Coal Beneficiation w/ Magnetic Fields ~
"The process is useful in supplementing conventional dense-media washing".

If you know what the Vice President And Probably The President knows when it comes to oil.(Both are Oil Barrons).Then when one of them states that there is going to be a,"Peak Oil,"scenario in our near future.Also knowing that they are in the most coveted place to contol oil and all things connected with it's production.One would have to come to the conclusion that we are indeed going to have a peak oil
scenario.And thus are already beggining to feel the effect's of the,"Peak Oil,"scenario with our sky rocketing gasoline prices,and unheard of record profit's from big oil company's.The elite are all paniking and thus should you be as well.If this is the way that they see it.Then that will be the way that it is in the end.They control and make all the decisions to where we are going already.Thus you know then that this is what is going to happen.They have hold of the reins/direction and are steering us this way for a reason.


Life After the Oil Crash

"Deal With Reality or Reality Will Deal With You"

Dear Reader,

Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global "Peak Oil."

"Are We 'Running Out'? I Thought

There Was 40 Years of the Stuff Left"

Oil will not just "run out" because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole.

Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.

In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil-dependant economies will crumble, and resource wars will explode.
(Graph: Dr. C.J. Campbell/Petroconsultants)
The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.

In a similar sense, an oil-based economy such as ours doesn't need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10-15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty.

The effects of even a small drop in production can be devastating. For instance, during the 1970s oil shocks, shortfalls in production as small as 5% caused the price of oil to nearly quadruple. The same thing happened in California a few years ago with natural gas: a production drop of less than 5% caused prices to skyrocket by 400%.

Fortunately, those price shocks were only temporary.

The coming oil shocks won't be so short-lived. They represent the onset of a new, permanent condition. Once the decline gets under way, production will drop (conservatively) by 3% per year, every year.

That estimate comes from numerous sources, not the least of which is Vice President Dick Cheney himself. In a 1999 speech he gave while still CEO of Halliburton, Cheney stated:

By some estimates, there will be an average of two-percent

annual growth in global oil demand over the years ahead,

along with, conservatively, a three-percent natural decline

in production from existing reserves.That means by 2010 we

will need on the order of anadditional 50 million barrels a

day.

Cheney's assesement is supported by the estimates of numerous non-political, retired, and now disinterested scientists, many of whom believe global oil production will peak and go into terminal decline within the next five years. Unfortunately, many of these experts are no where near as optimistic as Dick Cheney was in 1999. Andrew Gould, CEO of the giant oil services firm Schlumberger, for instance, recently explained the global decline rate may be far higher than what Cheney predicted seven years ago:

An accurate average decline rate is hard to estimate, but an

overall figure of 8% is not an unreasonable assumption.

An 8% yearly decline would cut global oil production by a whopping 50% in under nine years. If a 5% cut in production caused prices to triple in the 1970s, what do you think a 50% cut is going to do?

Other experts are predicting decline rates as high as 10%-to-13%. Some geologists expect 2005 to be the last year of the cheap-oil bonanza, while many estimates coming out of the oil industry indicate "a seemingly unbridgeable supply-demand gap opening up after 2007," which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012. As we slide down the downslope slope of the global oil production curve, we may find ourselves slipping into what some scientists are calling the "post-industrial stone age."



Dr. Richard Duncan: The Peak of World Oil Production and the Road to the Olduvai Gorge
Ultimately, the energy-intensive industrial age may be little more than a blip in the course of human history:
Graph: The Energy Curve of History?

Source: Community Solution
Peak Oil is also called "Hubbert's Peak," named for the Shell geologist Dr. Marion King Hubbert. In 1956, Hubbert accurately predicted that US domestic oil production would peak in 1970. He also predicted global production would peak in 1995, which it would have had the politically created oil shocks of the 1970s not delayed the peak for about 10-15 years.

"Big deal. If gas prices get high, I’ll just drive less. Why should I give a damn?"

Because petrochemicals are key components to much more than just the gas in your car. As geologist Dale Allen Pfeiffer points out in his article entitled, "Eating Fossil Fuels," approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US.

The size of this ratio stems from the fact that every step of modern food production is fossil fuel and petrochemical powered:

1. Pesticides are made from oil;

2. Commercial fertilizers are made from ammonia, which is

made from natural gas, which will peak about 10 years

after oil peaks;

3. With the exception of a few experimental prototypes, all

farming implements such as tractors and trailers are

constructed and powered using oil;

4. Food storage systems such as refrigerators are

manufactured in oil-powered plants, distributed across

oil-powered transportation networks and usually run on

electricity, which most often comes from natural gas or

coal;

5. In the US, the average piece of food is transported

almost 1,500 miles before it gets to your plate. In

Canada, the average piece of food is transported 5,000

miles from where it is produced to where it is consumed.

In short, people gobble oil like two-legged SUVs.

It's not just transportation and agriculture that are entirely dependent on abundant, cheap oil. Modern medicine, water distribution, and national defense are each entirely powered by oil and petroleum derived chemicals.

In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, all computers and all high-tech devices.

Some specific examples may help illustrate the degree to which our technological base is dependent on fossil fuels:

1. The construction of an average car consumes the energy

equivalent of approximately 20 barrels of oil , which

equates to 840 gallons, of oil. Ultimately, the

construction of a car will consume an amount of fossil

fuels equivalent to twice the car’s final weight.

2. The production of one gram of microchips consumes 630

grams of fossil fuels. According to the American Chemical

Society, the construction of single 32 megabyte DRAM

chip requires 3.5 pounds of fossil fuels in addition to 70.5

pounds of water.

3. The construction of the average desktop computer

consumes ten times its weight in fossil fuels.

4. The Environmental Literacy Council tells us that due to

the "purity and sophistication of materials (needed for) a

microchip, . . . the energy used in producing nine or ten

computers is enough to produce an automobile."

When considering the role of oil in the production of modern technology, remember that most alternative systems of energy — including solar panels/solar-nanotechnology, windmills, hydrogen fuel cells, biodiesel production facilities, nuclear power plants, etc. — rely on sophisticated technology.

In fact, all electrical devices make use of silver, copper, and/or platinum, each of which is discovered, extracted, transported, and fashioned using oil-powered machinery. For instance, in his book, The Lean Years: Politics of Scarcity, author Richard J. Barnet writes:

To produce a ton of copper requires 112 million BTU's or the

equivalent of 17.8 barrels of oil. The energy cost component

of aluminum is twenty times higher.

Nuclear energy requires uranium, which is also discovered, extracted, and transported using oil-powered machinery.

Most of the feedstock (soybeans, corn) for biofuels such as biodiesel and ethanol are grown using the high-tech, oil-powered industrial methods of agriculture described above.

In short, the so called "alternatives" to oil are actually "derivatives" of oil. Without an abundant and reliable supply of oil, we have no way of scaling these alternatives to the degree necessary to power the modern world.

(Note: alternatives to oil are discussed in depth on Page Two)

"Is the Modern Banking System

Entirely Dependent on Cheap Oil?"

Yes.

The global financial system is entirely dependent on a constantly increasing supply of oil and natural gas. The relationship between the supply of oil and natural gas and the workings of the global financial system is arguably the key issue to understanding and dealing with Peak Oil, far more important than alternative sources of energy, energy conservation, or the development of new technologies, all of which are discussed in detail on page two of this site.

Dr. Colin Campbell presents an understandable model of this complex (and often difficult to explain) relationship:

It is becoming evident that the financial and investment

community begins to accept the reality of Peak Oil, which

ends the first half of the age of oil. They accept that banks

created capital during this epoch by lending more than they

had on deposit, being confident that tomorrow’s expansion,

fuelled by cheap oil-based energy, was adequate collateral

for today’s debt. The decline of oil, the principal driver of

economic growth, undermines the validity of that collateral

which in turn erodes the valuation of most entities quoted

on Stock Exchanges. The investment community however

faces a dilemma. It desires to protect its own fortunes and

those of its privileged clients while at the same time is

reluctant to take action that might itself trigger the

meltdown. It is a closely knit community so that it is hard

for one to move without the others becoming aware of his

actions.

The scene is set for the Second Great Depression, but the

conservatism and outdated mindset of institutional

investors, together with the momentum of the massive

flows of institutional money they are required to place, may

help to diminish the sense of panic that a vision of reality

might impose. On the other hand, the very momentum of

the flow may cause a greater deluge when the foundations

of the dam finally crumble. It is a situation without

precedent.

Commentator Robert Wise explains the connection between energy and money as follows:

It's not physics, but it's true: money equals energy. Real,

liquid wealth represents usable energy. It can be exchanged

for fuel, for work, or for something built by the work of

humans or fuel-powered machines. Real cost reflects the

energy cost of doing something; real value reflects the

energy expended to build something.

Nearly all the work done in the world economy -- all the

manufacturing, construction, and transportation -- is done

with energy derived from fuel. The actual work done by

human muscle power is miniscule by comparison. And, the

lion's share of that fuel comes from oil and natural gas, the

primary sources of the world's wealth.

In October 2005, the normally conservative London Times acknowledged that the world's wealth may soon evaporate as we enter a technological and economic "Dark Age." In an article entitled "Waiting for the Lights to Go Out" Times reporter Bryan Appleyard wrote the following:

Oil is running out; the climate is changing at a potentially

catastrophic rate; wars over scarce resources are brewing;

finally, most shocking of all, we don't seem to be having

enough ideas about how to fix any of these things.

Almost daily, new evidence is emerging that progress can no

longer be taken for granted, that a new Dark Age is lying in

wait for ourselves and our children.

. . . growth may be coming to an end. Since our entire

financial order — interest rates, pension funds, insurance,

stock markets — is predicated on growth, the social and

economic consequences may be cataclysmic.

If you want to understand just how cataclysmic these consequences might be, consider the current crisis in the UK as a "preview of coming attractions." On October 23, 2005 the London Telegraph reported:

The Government has admitted that companies across Britain

might be forced to close this winter because of fuel

shortages. "The balance between supply and demand for

energy is uncomfortably tight. I think if we have a colder

-than-usual winter given the supply shortages, certain

industries could suffer real difficulties." The admission was

made after this newspaper revealed that Britain could be

paralysed by energy shortages if the winter is colder than

average.

The Met Office says there is a 67 per cent likelihood of

prolonged cold this year after almost a decade of mild

winters. That, coupled with high fuel prices, raises the fear

that industry will not be able to cope.

The severe consequences of these relatively small shortfalls between supply and demand (less than 5%) have prompted the UK government to look into draconian energy conservation measures that would be enforced via house-to-house searches by a force of "energy-police."

Parts of the US are facing similarly dire possibilities. In December 2005, US News and World Report published a six-page article documenting some potentially nightmarish scenarios about to descend on the US. According to the normally conservative publication, people in the northeastern US could be facing massive layoffs, rotating blackouts, permanent industrial shutdowns, and catastrophic breakdowns in public services this winter as a result of shortages of heating oil and natural gas.

This is happening despite the fact we are probably at least a few years away from seeing the peak in either oil or natural gas production. You have to ask yourself, "what's going to happen when the 'real problems' start showing up?"

"Are the Banks Aware of This Situation?"

The central ones certainly are. (Those new bankruptcy laws were passed for a reason.) On June 28, 2005, Gary Duncan, the economics editor for the UK based Sunday Times, reported that the Bank of International Settlements (BIS), aka "the central banker's central bank", had issued the following warnings regarding the economic fallout of further rises in the price of oil:

Oil prices may well remain high for a prolonged period of

time . . . Further rises — if they materialize — may have

more severe consequences than currently anticipated . . .

Everyone needs to commit to some unpleasant

compromises now, in order to avoid even more unpleasant

alternatives in the future . . .

Duncan goes on to summarize the bank's report as follows:

The US current account deficit meant that a further slide in

the dollar was "almost inevitable", while the BIS sounded a

warning that the deficit could yet lead to "a disorderly

decline of the dollar, associated turmoil in other financial

markets, and even recession."

A bank as crucially important to the world economy and as influential to the markets as the BIS doesn't just casually toss out terms like "unpleasant compromises", "severe consequences", "even more unpleasant alternatives", "turmoil," and "disorderly decline" in relation to the oil markets and the dollar (which is the reserve currency for all oil transactions in the world) unless something very nasty is brewing in the background.

(Note: to read the full text of the bank's report, click here.)

On a similar note, Warren Buffet, the world's second richest man, recently warned of "mega-catastrophic risks" and "investment time bombs" currently threatening the global economy. Add those to a mix of sky-high energy prices, destabilizing resource wars, less than inspiring leadership, a possible currency collapse, more"petrodollar warfare", and well, the picture begins to look pretty grim, pretty quick.

"What Does All of This Mean for Me?"

What all of this means, in short, is that the aftermath of Peak Oil will extend far beyond how much you will pay for gas. If you are focusing solely on the price at the pump, more fuel-efficient forms of transportation, or alternative sources of energy, you aren’t seeing the bigger picture.

"Is the Bush Administration

Aware of This Situation?"

Of course they are.

As mentioned previously, Dick Cheney made the following statement in late 1999:

By some estimates, there will be an average of two-percent

annual growth in global oil demand over the years ahead,

along with, conservatively, a three-percent natural decline

in production from existing reserves. That means by 2010

we will need on the order of an additional 50 million barrels a

day.

To put Cheney’s statement in perspective, remember that the oil producing nations of the world are currently pumping at full capacity but are struggling to produce much more than 84 million barrels per day. Cheney’s statement was a tacit admission of the severity and imminence of Peak Oil as the possibility of the world raising its production by such a huge amount is borderline ridiculous.

A report commissioned by Cheney and released in April 2001 was no less disturbing:

The most significant difference between now and a decade

ago is the extraordinarily rapid erosion of spare capacities at

critical segments of energy chains. Today, shortfalls appear

to be endemic. Among the most extraordinary of these

losses of spare capacity is in the oil arena.

Not surprisingly, George W. Bush has echoed Dick Cheney’s sentiments. In May 2001, Bush stated, "What people need to hear loud and clear is that we’re running out of energy in America."

One of George W. Bush's energy advisors, energy investment banker Matthew Simmons, has spoken at length about the impending crisis.

(Note: Although he has advised Bush/Cheney, Simmons considers himself strongly non-partisan on energy issues. His writings are highly regarded amongst the energy and banking community for their grounding in nonpartisan, heavily documented, and virtually infallible research & analysis.)

Simmons' investment bank, Simmons and Company International, is considered the most reputable and reliable energy investment bank in the world.

Given Simmons' background, what he has to say about the situation is truly terrifying. For instance, in an August 2003 interview with From the Wilderness publisher Michael Ruppert, Simmons was asked if it was time for Peak Oil to become part of the public policy debate. He responded:

It is past time. As I have said, the experts and politicians

have no Plan B to fall back on. If energy peaks, particularly

while 5 of the world’s 6.5 billion people have little or no use

of modern energy, it will be a tremendous jolt to our

economic well-being and to our health — greater than

anyone could ever imagine.

When asked if there is a solution to the impending natural gas crisis, Simmons responded:

I don’t think there is one. The solution is to pray. Under the

best of circumstances, if all prayers are answered there will

be no crisis for maybe two years. After that it’s a certainty.

In May 2004, Simmons explained that in order for demand to be appropriately controlled, the price of oil would have to reach $182 per barrel. Simmons explained that with oil prices at $182 per barrel, gas prices would likely rise to $7.00 per gallon.

Simmons predictions are downright tame compared to what other analysts in the world of investment banking are preparing themselves for. For instance, in April 2005, French investment bank Ixis-CIB warned, "crude oil prices could touch $380 a barrel by 2015."

If you want to ponder just how devastating oil prices in the $200-$400/barrel range will be for the US economy, consider the fact that one of Osama Bin-Laden's primary goals has been to force oil prices into the $200 range.

Oil prices that far north of $100/barrel would almost certainly trigger massive, last-ditch global resource wars as the industrialized nations of the world scramble to grab what little of the black stuff is remaining. This may explain why the director of the Selective Service recently recommended the military draft be expanded to include both genders, ages 18-to-35.

A March 2005 report prepared for the US Department of Energy confirmed dire warnings of the investment banking community. Entitled "The Mitigation of the Peaking of World Oil Production," the report observed:

Without timely mitigation, world supply/demand balance will

be achieved through massive demand destruction

(shortages), accompanied by huge oil price increases, both

of which would create a long period of significant economic

hardship worldwide.

Waiting until world conventional oil production peaks before

initiating crash program mitigation leaves the world with a

significant liquid fuel deficit for two decades or longer.

The report went on to say:

The problems associated with world oil production peaking

will not be temporary, and past 'energy crisis' experience will

provide relatively little guidance. The challenge of oil peaking

deserves immediate, serious attention, if risks are to be fully

understood and mitigation begun on a timely basis.

. . . the world has never faced a problem like this. Without

massive mitigation more than a decade before the fact, the

problem will be pervasive and will not be temporary.

Previous energy transitions were gradual and evolutionary.

Oil peaking will be abrupt and revolutionary.

As one commentator recently observed, the reason our leaders are acting like desperados is because we have a desperate situation on our hands.

If you've been wondering why the Bush administration has been spending money, cutting social programs, and starting wars like there's no tomorrow, now you have your answer: as far as they are concerned, there is no tomorrow.

From a purely Machiavellian standpoint, they are probably correct in their thinking.

"How Do I Know This Isn't Just Fear- Mongering by Loony-Environmentalists?"

If you think what you are reading on this page is the product of a loony-left nut, consider what Representative Roscoe Bartlett (Republican, Maryland) has had to say in speeches to Congress or what billionaire investor Richard Rainwater has had to say in the pages of Fortune Magazine.

On March 14, 2005 Bartlett gave an extremely thorough presentation to Congress about the frightening ramifications of Peak Oil. During his presentation Representative Bartlett, who may be the most conservative member of Congress, quoted from this site extensively, citing the author (Matt Savinar) by name on numerous occasions, while employing several analogies and examples originally published on this site. You can read the full congressional record of Representative Bartlett's presentation by clicking here. You can view a video of Bartlett recommending the article you are now reading to Resources for the Future, an extremely influential DC think tank, by clicking here.

On April 19, 2005 Representative Bartlett was interviewed on national television. Again, he referenced the article you are now reading:

One of the writers on this, by the way, starts his article by

saying, 'Dear Reader, Civilization as we know it will end

soon.' Now your first impulse is to put down the article. This

guy's a nut. But if you don't put it down and read through

the article, you're hard-pressed to argue with his

conclusions.

On May 12, 2005 Representative Bartlett gave another presentation about Peak Oil on the floor of the House of Representatives, stating that this website "galvanized" him. On July 19, 2005 he had the following to say:

Mr. Speaker, if you go to your computer this evening and do

a Google search for peak oil, you will find there a large

assortment of articles and comments. Like every issue, you

will find a few people who are on the extreme, but there will

be a lot of mainstream observations there.

One of the articles that you will find there was written by

Matt Savinar. Matt Savinar is not a technical person. He is a

lawyer, a good one, and he does what lawyers do. He goes

to the sources and builds his case.

Matt Savinar could be correct when he said, "Dear Reader,

civilization as we know it is coming to an end soon.'' I would

encourage you, Mr. Speaker, to pull up his article and read

it. It is really very sobering.

In subsequent speeches, Representative Bartlett read large excerpts of this site verbatim into the official US Congressional record.

According to the December 26, 2005 issue of Fortune Magazine, Richard Rainwater, a multi-billionaire investor and friend of George W. Bush, reads this site regularly. In an article entitled "Energy Prophet of Doom" Fortune reporter Oliver Ryan writes:

"Rainwater," the voice on the phone announces. "Now, type

L-A-T-O-C into Yahoo, and scroll down to the seventh item."

Rainwater doesn't use e-mail. Rather, he uses rapid-fire

phone calls to spread the gospel he discovers every morning

on the web. One day it might be the decline of arable land in

Malaysia. The next it could be the Olduvai theory of per

capita energy consumption. "L-A-T-O-C" stands for

LifeAfterTheOilCrash.net, a blog edited by Matt Savinar, 27,

of Santa Rosa, Calif.

The article goes on to quote Rainwater as saying:

The world as we know it is unwinding with respect to Social

Security, pensions, Medicare. We're going to have

dramatically increased taxes in the U.S. I believe we're going

into a world where there's going to be more hostility. More

people are going to be asking, 'Why did God do this to us?'

Whatever God they worship. Alfred Sloan said it a long time

ago at General Motors, that we're giving these things during

good times. What happens in bad times? We're going to have

to take them back, and then everybody will riot. And he's

right.

Apparently, Richard Rainwater and Alfred Sloan aren't the only people expecting large scale civil unrest in the foreseeable future. In January 2006, the Department of Homeland Security gave Halliiburton subsidiary Kellog, Brown, & Root a $400 million dollar contract to build vast new domestic detention camps. While the camps are ostensibly being built to house and process an "emergency influx of immigrants", one can't help but suspect they will be used to house domestic citizens who respond to the economic fallout of declining oil production by taking to the streets.

"How is the Oil Industry Reacting to This?"

If you want to know the harsh truth about the future of oil, simply look at the actions of the oil industry. As a recent article in M.I.T.'s Technology Review points out:

If the actions - rather than the words - of the oil business's

major players provide the best gauge of how they see the

future, then ponder the following. Crude oil prices have

doubled since 2001, but oil companies have increased their

budgets for exploring new oil fields by only a small fraction.

Likewise, U.S. refineries are working close to capacity, yet

no new refinery has been constructed since 1976. And oil

tankers are fully booked, but outdated ships are being

decommissioned faster than new ones are being built.

Some people believe that no new refineries have been built due to the efforts of environmentalists. This belief is silly when one considers how much money and political influence the oil industry has compared to the environmental movement. You really think Ronald Reagan and George H. Bush were going to let a bunch of pesky environmentalists get in the way of oil refineries being built if the oil companies had wanted to build them?

The real reason no new refineries have been built for almost 30 years is simple: any oil company that wants to stay profitable isn't going to invest in new refineries when they know there is going to be less and less oil to refine.

In addition to lowering their investments in oil exploration and refinery expansion, oil companies have been merging as though the industry is living on borrowed time:

December 1998: BP and Amoco merge;

April 1999: BP-Amoco and Arco agree to merge;

December 1999: Exxon and Mobil merge;

October 2000: Chevron and Texaco agree to merge;

November 2001: Phillips and Conoco agree to merge;

September 2002: Shell acquires Penzoil-Quaker State;

February 2003: Frontier Oil and Holly agree to merge;

March 2004: Marathon acquires 40% of Ashland;

April 2004: Westport Resources acquires Kerr-McGee;

July 2004: Analysts suggest BP and Shell merge;

April 2005: Chevron-Texaco and Unocal merge;

June 2005: Royal Dutch and Shell merge;

July 2005: China begins trying to acquire Unocal

While many people believe talk of a global oil shortage is simply a conspiracy by "Big Oil" to drive up the prices and create "artificial scarcity," the rash of mergers listed above tells a different story. Mergers and acquisitions are the corporate world's version of cannibalism. When any industry begins to contract/collapse, the larger and more powerful companies will cannibalize/seize the assets of the smaller, weaker companies.

(Note: for recent examples of this phenomenon outside the oil industry, see the airline and automobile industries.)

If you suspect the oil companies are conspiring amongst themselves to create artificial scarcity and thereby artificially raise prices, ask yourself the following questions:

1. Are the actions of the oil companies the actions of

friendly rivals who are conspiring amongst each other to

drive up prices and keep the petroleum game going?

or

2. Are the actions of the oil companies the actions of

rival corporate desperados who, fully aware that their

source of income is rapidly dwindling, are now preying

upon each other in a game of "last man standing"?



You don't have to contemplate too much, as recent disclosures from oil industry insiders indicate we are indeed "damn close to peaking" while independent industry analysts are now concluding that large oil companies believe Peak Oil is at our doorstep.

As the Bulletin of Atomic Scientists recently observed, even ExxonMobil is now "sounding the silent Peak Oil alarm." In their 2005 report entitled, "The Outlook for Energy", ExxonMobil suggests that increased demand be met first through greater fuel efficiency. The fact that ExxonMobil - one of the largest oil companies in the world - is now recommending increased fuel efficiency should tell you how imminent a crisis is at this point.

Equally alarming is the fact that Chevron has now started a surprisingly candid campaign to publicly address these issues. While the campaign fails to mention "Peak Oil" or explain how a drastically reduced oil supply will affect the average person, it does acknowledge that, while it took 125 years to burn through the first trillion barrels of oil, it will only take 30 years to burn through the next trillion.

"How Do I Know Peak Oil Isn't Big Oil Propaganda That is Being Used To Create Artificial Scarcity & Justify Gouging Us at the Pump?"

If Peak Oil is "Big Oil propaganda" (as some claim), why did Sonoma State University's Project Censored declare it one of the most censored stories of 2003-2004? Surely, if "Peak Oil is Big Oil propaganda", Big Oil would have found a way to get it off the pages of under-funded publications like Project Censored and onto the pages of the mainstream papers and into the 24/7 cable news cycle years ago.

Likewise, if "Peak Oil is a myth propagated by the greedy oil companies to justify high prices", why didn't any of the greedy oil company CEOs offer "the peaking of world oil production" as a partial justification for high gas prices when they testified before Congress about high gas prices?

Yet "Peak Oil" was never mentioned during the hearings by either the executives or the Senators questioning them. Given the obvious importance of the issue, any reasonable person can't help but to ask, "Why the heck not?"

The answer is simple: the true consequences of Peak Oil cannot be acknowledged in such a highly public forum without crashing the financial markets or begging the obvious yet politically-dangerous and "patriotically-incorrect" question:

Is the war in Iraq really a war for the world's last remaining

significant sized deposits of oil?"

Although the answer to this question should be obvious, broaching the issue in such a highly public forum would bring more skeletons out of Dick Cheney's energy task force closet than any sane member of the Senate, Republican or Democrat, would ever want to face. (Would you?)

Finally, if Peak Oil was just "Big Oil" propaganda, why is Exxon Mobil (one of the biggest oil companies in the world) spending millions of dollars on its anti-Peak Oil advertising campaign?

What About Chevron's "Will You Join Us Campaign"?

The Chevron campaign, while far more candid than previous industry propaganda (or the propaganda currently put out by Exxon Mobil) still does not come close to conveying the truth about our situation or how it will affect the average person. The campaign is likely an attempt at controlling the parameters of the Peak Oil debate and making sure the public does not panic. The campaign appears geared towards keeping investors' confidence high and public anxiety low by acknowledging the (now obvious) problem but reassuring all interested parties that things are under control. Naturally, Chevron would much rather you learn about Peak Oil from their team of public relations experts (aka "spin miesters") than from this site or others like it.

That's probably why Chevron hired the Madison Avenue public relations firm Young and Rubicom, the same firm that handled the Bush/Cheney 2004 election advertisements, to produce the campaign.

Ironically, it's better for the oil companies that you think you are being gouged than to know the truth. If people knew the truth, they would likely begin drastically curtailing their consumption of oil, which would drive the price down. Consumers are unlikely to take such actions so long as they perceive the current price spikes as just "more of the same old-same old" and are confident about the future. The goal of Chevron's campaign is to maintain this confidence as long as possible.

"Can't We Just Explore More for Oil?"

Global oil discovery peaked in 1962 and has declined to virtually nothing in the past few years. We now consume 6 barrels of oil for every barrel we find.

Oil Discovery: (3 Year Average, Past and Projected)

Source: Association for the Study of Peak Oil

According to an October 2004 New York Times article entitled "Top Oil Groups Fail to Recoup Exploration Costs:"

. . . the top-10 oil groups spent about $8bn combined on

exploration last year, but this only led to commercial

discoveries with a net present value of slightly less than

$4bn. The previous two years show similar, though less

dramatic, shortfalls.

In other words, significant new oil discoveries are so scarce that looking for them is a monetary loser. Consequently, many major oil companies now find themselves unable to replace their rapidly depleting reserves.

Take a look at the above chart. During the 1960s, for instance, we consumed about 6 billion barrels per year while finding about 30-60 billion per year. Given those numbers, it is easy to understand why fears of "running out" were so often dismissed as unfounded.

Unfortunately, those consumption/discovery ratios have nearly reversed themselves in recent years. We now consume close to 30 billion barrels per year but find less than 4 billion per year.

In light of these trends, it should come as little surprise that the energy analysts at John C Herold Inc. - the firm that that foretold Enron's demise - recently confirmed industry rumors that we are on the verge of an unprecedented crisis.

"How Can I Be Sure This Isn't Just More 1970s Doom-and-Gloom?"

The oil shocks of the 1970s were created by political events. In 1973, OPEC cut its production in retaliation for US support of Israel. In 1979, Iran cut its production in hopes of crippling "the great Satan." In both cases, the US was able to turn to other oil producing nations such as Venezuela to alleviate the crisis. Once global production peaks, there won't be anybody to turn to. The crisis will just get worse and worse with each passing year.

The evidence of an imminent peak in global oil production is now overwhelming:

1.Ninety-nine percent of the world's oil comes from 44 oil

producing nations. At least 24 of these nations are

past their peak and now in terminal decline.

2.The entire world - with the exception of the Middle

East peaked in 1997. The US peaked in 1970, Russia in

1987, the UK in 1999. Even Saudi Arabia - the famed

"producer for all seasons" may be on the verge of

seeing it production collapse.

3.Global production of conventional oil has essentially

plateaued since the year 2000.

As far as "doom-and-gloom" consider what widely respected Deutsche Bank had to say about Peak Oil in a recent report entitled, Energy Prospects After the Petroleum Age:

The end-of-the-fossil-hydrocarbons scenario is not therefore

a doom-and-gloom picture painted by pessimistic end-of-the

world prophets, but a view of scarcity in the coming years

and decades that must be taken seriously.

The Australian Financial Review echoed the sentiments of Deutsche Bank in a January 2005 article entitled, "Staring Down the Barrel of a Crisis":

The world's oil production may be about to reach its peak,

forever. Such apocalyptic prophecies often surface in the

middle of the northern hemisphere winter. What is unusual is

that this time the doomsday scenario has gained serious

credibility among respected analysts and commentators.

Given the credentials of those sounding the alarm the loudest, it is extremely unwise for you to causally dismiss this as just more "1970s doom-and gloom."

"What About the Oil Sands in Canada and the Oil Shale in the American West?"

The good news is that we have a massive amount of untapped "non conventional" oil located in the oil sands up in Canada.

The bad news is that, unlike conventional sources of oil, oil derived from these oil sands is extremely financially and energetically intensive to extract. Whereas conventional oil has enjoyed a rate of "energy return on energy invested" (EROEI) of about 30 to 1, the oil sands rate of return hovers around 1.5 to 1.

This means that we would have to expend 20 times as much energy to generate the same amount of oil from the oil sands as we do from conventional sources of oil.

Where to find such a huge amount of capital is largely a moot point because, even with massive improvements in extraction technology, the oil sands in Canada are projected to only produce a paltry 2.2 million barrels per day by 2015. This doesn't even account for any unexpected production decreases or cost overruns, both of which have been endemic to many of the oil sands projects.

More optimistic reports anticipate 4 million barrels per day of oil coming from the oil sands by 2020. Even if the optimists are correct, 4 million barrels per day much oil when you consider our colossal and ever-growing demand in conjunction with the small amount of time we have left before the global peak:

1.We currently need 83.5 million barrels per day.

2.We are projected to need 120 million barrels per day

by 2020.

3.We will be losing over 1 million barrels per day of

production per year, every year, once we hit the

backside of the global oil production curve.

4.The general consensus among now disinterested

scientists is that oil production will peak by 2010 at

the latest.

The huge reserves of oil shale in the American west suffer from similar problems. While Shell Oil has an experimental oil shale program, even Steve Mut - the CEO of their Unconventional Resources Unit - has sounded less than optimistic when questioned about the ability of oil shale to soften the coming crash. According to journalist Stuart Staniford's coverage of a recent conference on Peak Oil:

In response to questions, Steve guesstimated that oil shale

production would still be pretty negligible by 2015, but

might, if things go really well, get to 5mbpd by 2030.

Disinterested observers are even less optimistic about oil shale. Geologist Dr. Walter Youngquist points out:

The average citizen . . . is led to believe that the United

States really has no oil supply problem when oil shales hold

"recoverable oil" equal to "more than 64 percent of the

world's total proven crude oil reserves." Presumably the

United States could tap into this great oil reserve at any

time. This is not true at all. All attempts to get this "oil" out

of shale have failed economically. Furthermore, the "oil"

(and, it is not oil as is crude oil, but this is not stated) may

be recoverable but the net energy recovered may not equal

the energy used to recover it. If oil is "recovered" but at a

net energy loss, the operation is a failure.

This means any attempt to replace conventional oil with oil shale will actually make our situation worse as the project will consume more energy than it will produce, regardless of how high the price goes.

Further problems with oil shale have been documented by economist Professor James Hamilton who writes:

A recent Rand study concluded it will be at least 12 years

before oil shale reaches the production growth phase. And

that is a technological assessment, not a reference to the

environmental review process. If it takes 15 years to get an

oil refinery built and approved, despite well known

technology and well understood environmental issues,

viewing oil shale as something that could make major

contributions to world energy supplies in the immediate

future seems highly unrealistic.

"I have pursued my enemies and overtaken them...They have fallen under my feet.."Psalm 18:37-38.

If you've been standing around wringing your hands and worrying about what the devil is doing, it's time you made a switch.
It's time you put that devil under your feet!

Jesus has already given you all the power and authority you need to do it.
He's given you the keys of the kingdom.
He's promised you that whatever you declare locked on earth is locked in heaven and whatever you declare unlocked on earth is unlocked in the heavenlies.Matt. 16:19.
"Behold, I give you the authority to trample on serpents and scorpions, and over all the power of the enemy, and nothing shall by any means hurt you".Luke 10:19.

That means you can speak the Word and bind wicked spirits.
You can speak the Word and loose the angelic forces of God to work in your behalf.

You've been given the Power of Attorney that enables you to use the mighty Name of Jesus!
A Name that's above every other name.
A Name which will cause every knee to bow--in heaven, in earth, and under the earth! Phil. 2:9-10.

Don't waste time worrying about the devil!
Take authority over him. Bind the evil spirits that try to destroy your home, your church, your mission and your nation. Loose God's Word in the earth and enforce it with the Name of Jesus.

You hold the keys!
Learn to use them and before long the devil will be wringing his hands worrying about you!

Now-
Speak the Word of God to work on your behalf!