Within the broil of geopolitical opinion, political correctness, shadow agendas and trite, posturing exchanges between world leaders, it is certainly difficult to sort out the truth form the drivel. When we are told something of earth shattering importance by a mega-country politician we then always have to analyze and decode it. In its first tellings there is no such thing as basic truth. These political deliveries can usually be split into two areas of explanation: The Convenient Excuse and The Inconvenient Reason. Politicians always tell you only the Convenient Excuse which, if you like, is merely barely believeable propaganda. Try this formula with Iraq, Afghanistan, Iran, the US Polish Missile Base and Georgia and, if you look carefully behind the door, you’ll find a damn good alternative rationale for their political actions and purpose — The Inconvenient Reason — such as aggression, dominance, greed, oil monopolies and a myriad of other power-play reasons to suit any type of Communist, Democratic or Banana Republic government agenda. Let’s face it, there isn’t that much difference between Communist and Democratic puckering or babble is there? And this certainly applies to Big Business too, and particularly to the Oil Majors which is what this blog is all about.
Is Peak Oil Just a Convenient Excuse for High Oil Prices ?
In my last article – The Evidence for Limitless Oil and Gas — I presented as much evidence as I could for both the Western Biogenic Oil Formation Theory and the modern Russian Abiotic Oil Formation Theory. Before I researched this, I too was a firm Peak Oil believer. And Peak Oil can only be perpetuated and true if you believe in the Western Biogenic Oil Theory which, from its very explanation, determines that oil is finite.
But then I became convinced of the validity of the Russian Abiotic Theory and wondered whether Big Oil was perpetuating The Peak Oil Theory for another reason. Perhaps Peak Oil is the Convenient Excuse and Excess Profit is the Inconvenient Reason ?
These two theories also must govern how you find oil. Using the Western Biogenic Method, you are only looking for an ancient static pool or reservoir of oil within the upper sedimentary layers of the Earth’s crust. This is an extremely difficult process, finding oil this way is very hit-and-miss as history has proved. Using the Russian Abiogenic Method, you simply look for cracks or fissures within the deeper igneous or metamorphic rock (calle
d cap rock) which, according to the theory, leaks oil upwards through the hard cap rock into the sedimentary layers above. So oil can indeed be found in the sedimentary layers of rock but actually originates at much deeper levels below the hard capstone rock(as per Kudrayvtsev’s Rule). Searching for oil this way is much easier – just look for faults and fissures in the tectonic plates as evidenced by volcanoes, mud volcanoes, earthquake regions etc. and you will find oil albeit at much deeper levels. Or you simply drill through the cap rock to the oil below using special ultra-deep well extended-reach-drilling techniques. This kind of extended-reach-drilling technology in regard to its difficulty, compares easily with space technology. Also according to the Russian Abiotic Theory, if you have struck oil in shallow sedimentary rock and the oil becomes exhausted, then simply carry on drilling downwards and you will discover more oil either in the sedimentary layer below or in the region below the fissured cap rock.
The Discreet Affinity of the Bush Administration to the Peak Oil Theory
I am pretty stumped as to why the US government still beats its Republican drum concerning its dislike of Middle East Oil dependency. Bush is huffing and puffing about this, currently threatening to open up the offshore oilfields off Alaska and the American West Coast and hang the environmental cost. Bush and Cheney are both die-hard through-and-through American oilmen and are therefore closely aligned to the wishes of The Oil Majors(who funded and installed them into there current positions of power). So, simply put, I just can’t trust their judgements or their Convenient Excuses — since they are both probably well into the Peak Oil ruse. What a bluff!!….Yet another convenient perpetuation of Peak oil theory.
Consequences of Adherence to the Peak Oil Theory
You want reasons ? Click here to see the current running total of the profits earned by the five oil majors(Exxon, Chevron, Total, Shell and BP) since 2003.
The current rate of profit for the 5 Oil Majors is $3203.86 per second.
Well I can tell you, I’m plum exhausted now. To those Republicans(..and there will be a few) who violently disagree with my written blasphemy — for some enlightenment, can I suggest a driving holiday with a Budget Car in Russia ? If nothing else, the petrol will be significantly cheaper there (Russia is not part of OPEC nor does it adhere to the American Peak Oil Theory). For anyone else that disagrees and still sticks to the Peak Oil Theory – may I wish you all well and fair luck. And of course, happy walking. . .
I really need a break here, so I’m off to Burger Bust for the biggest, oilest, abiotic bull-bap I can find . . .And I will be driving. Optimistically, as it happens. . .
Hey Bill, stimulating article. Help me with these ideas stuck in my head:
First: Are you saying the Western Major Oil companies are consciously overlooking a new source of oil they know about (abiotic origin) that they can drill for at a lower cost?
Second: The Major oil companies you speak of are seemingly easy to demonize by those who look only at the US.Your view is much wider than that. There is something I suspect and request you to see if you can figure out how much of the worlds current production of oil is produced by Western Majors from sources IN THEIR OWN COUNTRIES?. By that I mean, separated from oil they extract with the permission and revenue sharing with foreign governments (private companies trying to negotiate with dictators) tough negotiations, with likelihood of nationalization at all times) of sovereign owned oil reserves, be it in Russia, Venezuela, Saudi Arabia, Iran, Iraq or elsewhere where the oil is owned ought right by companies owned/controlled by the government. Think Putin.
Third: My feeling is, while the Majors are benefiting from owning oil due to their prior work, just like the owner of real estate benefits from increasing value of property bought earlier, or the owner of a stock benefits from increasing value of a stock bought earlier, the Majors have every right to benefit from owning oil acquired earlier. Ask Nancy Pelosi where her net worth comes from? She and husband earned it the hard way, they bought real estate and it went up in value and they will NEVER pay taxes on that windfall. They will pay taxes on the increasing revenue those income producing property yield, less very generous expenses I’d guess, but not the increased value of their “oil.”
Fourth (followup on Second) I think with a complete world view in mind, the Majors are declining pikers when you look at who really owns known oil and how that ownership creates a conflict of interest at the highest levels of governments in those oil owning countries when it comes to foreign policy. Think of a major oil company owned by the government. Think Russia (who stole much of theirs from the oligarch that stole it from the Soviet Union), Venezuela, who nationalizes private property when convenient, Saudi Arabia, Iran, Iraq and so on. How much oil do you think non Western sovereign countries own/control versus the Western Majors for reserves in their domicile.
Fourth: It is relatively well know that the Majors are not continuing to pay and incur costs for new oil projects much over $80 as they naturally do not want to get stuck with overpriced oil. Why would anybody not produce all the oil via any manor they can and sell them at today prices of $115 to $135? Only “convenient excuse” (and perhaps just good business) I can think of is they do not believe prices will go higher and actually expect them to go lower. I think oil prices have peaked (not supply) and will come down because supply will increase and the increase in demand will ease a little but not a lot, and:
Fourth: I am afraid we will never run out of oil, that someone on and off the earth will keep finding it and its costs will remain just below substitution prices. Note biofuel independent Brazil will be a major exporter some day, Iran is converting to cheaper natural gas so it can sell oil to the world, and as I think you have pointed out, there is more oil on some planets than here on earth.
I wish it would all disappear and then we, the public would have to pay the current higher prices for the substitutes we already know about and which more of can be produced domestically by domestic workers in every country in the world. And then there would be competition for those sources and for some time the costs would decrease as technology increases.
Hi,
Regarding your points:
First: Yes, both the Western Scientists and The Majors have completely ignored the scientific findings of the Russian Scientists regarding The Abiotic Formation Theory of Oil and Gas. There are over 250 Russian research papers(see http://www.gasresources.net) already written on this subject in Russian which has been studied since 1951. When I was digging on the internet there were very few of these articles on the internet, Google Scholar etc referring to this russian research. Scientists do not as a rule ignore other scientists and their findings. Unless of course they have been directed(by the Western Oil Majors or governments perhaps ?).
Second: It is well known that Putin has pushed to nationalize and own all the oil and gas in Russia. Look how he has treated both Shell and BP in Russia. And as a result his govt now owns all its vital energy resources. Since oil is power, I am not surprised at oil nationalization by people like Putin, Chavez etc. This a clever way of building up economic power. So that Putin’s govt now can and have been pressurizing the Dollar by trading their oil in Euros, Yen anything but the Dollar. In turn this weakens US markets, adding to the recession that is happening now.
Third: My feeling is that you are right it isn’t fair perhaps, but it is still a disgusting amount of profit made by the oil majors. After all, it’s the ordinary person in the street who is paying and suffering. I also don’t believe that there will be a winfall tax on US oil companies, their lobby is too strong in Washington. Obama won’t have a chance in hell of passing that one through. All hot air.
Fourth: Estimating ownership by soveriegn wealth funds is a tough one, because this data is generally kept highly secret for sensitivity reasons – after all, how would you like it as an American, if you found out that Microsoft for instance was owned by some SWF in Russia, The Middle East or Venezuela ? I also agree that the western oil majors are pikers in a dying industry – especially if they believe that Peak Oil is upon us. But I don’t think they are that stupid. They have been squeezing max profit out of the markets and out of your pocket and soon they will be forced to switch to Deep Oil techniques because there will be no other choice. Russia, Brazil and Vietnam have used and proved the Deep Oil Abiotic Theory for heaven sakes, and the Russian scientist have been shouting it for decades. There will be a sudden switch to Deep Oil technology by the oil majors, but not until they have extracted max profit from their Peak Oil. Business as usual.
Fifth: Oil prices will come down, but perhaps not for the reasons you think. Russia and the Mid-East are squeezing America’s pockets too, which is why Bush has been screaming against external oil dependency. This possible slip down in US Oil hegemony will mean a significant loss of world power via the dollar. Energy is what drives business and lifestyles. In other words — Everything.
Sixth:If you believe in Abiotic Oil Formation, that oil is regenerated within the Earth(also part of the Russian theory), there is plenty enough oil on this planet.
Oil wont disappear. It will be with us for a long time I reckon. But it is interesting that Brazilhas not only got a blooming Oil and Gas industry — but they are also moving full-ahead with their ethanol production programe. I guess they’re hedging, but it’s certainly clever.
slowsmile