Has the time for Peaking of Crude Oil Arrived?[1]

“We can't solve problems by

using the same kind of thinking we

used when we created them.”

– Albert Einstein

Maj. Gen. (Retd) S. C. N. Jatar

Introduction

Churchill took over as the First Lord of Admiralty in 1911 after Kaiser Wilhelm sent a German naval vessel, the Panther, steaming into the harbour of Agadir, on the Atlantic coast of Morocco. Churchill was to ensure that the Royal Navy, the symbol and very embodiment of Britain’s imperial power, was ready to meet the German challenge. He faced a seemingly contentious technical question of whether to convert the British Navy to oil for its power source from the traditional coal. Many thought that such a conversion was sheer folly because of the distant and insecure supplies of oil from Persia, as Iran was then known. Churchill, however, immediately saw the strategic benefits of greater speed and optimum use of work force and decided to base British naval supremacy on oil. With that, as Daniel Yergin says in his monumental treatise on oil “The Prize”, Churchill had captured a fundamental truth, and one applicable not only to the conflagration that followed, but to the many decades ahead. For oil has meant mastery throughout the twentieth century. And that quest for mastery still goes on creating more and more problems.

Oil has been the focal point of contention since its discovery on August 27, 1859. It proved its strategic importance through the world wars and the long cold war. By the end of the nineties, it was fashionable to say that oil had lost its strategic significance. However, on August 2, 1990, oil once again became the focus of global conflict – this time in Kuwait. If Iraq had succeeded in controlling the oil reserves of Kuwait, it would have dominated both the Arab world and the Persian Gulf, where the bulk of the world’s oil reserves exist. There would have been a dramatic shift in the international balance of power. So, in early 1991, 33 nations with USA and USSR on the same side threw Iraq out of Kuwait.[2]

The goals set out by the US to eliminate Iraq's weapons of mass destruction, and to liberate the Iraqi people were again the red herrings that the US was dragging in front of the world to justify its attack on Iraq. When the US sank its teeth into Iraq on March 19, 2003 with heavy bombardment and missile attacks on Baghdad itself, could anyone have been oblivious to the vast reservoirs of oil that lie in Iraq, oil that the US needs badly today and in the future? It was thus that the US formed the ‘coalition of the willing’ for Gulf War II out of the concept[3] of the ‘axis of evil’ (North Korea, Iraq and Iran). Bush had indeed spelt out a scary 20-year scenario in which America becomes increasingly vulnerable to oil price shocks, supply interruptions and even blackmail.[4] The Newsweek report came close on the heels of the publication of the restated Olduvai Theory in November 2000 by Richard C. Duncan, PhD. Duncan’s bottom line is that beginning in 2008; the 11 OPEC nations will produce more than 50% of the world's oil. Thereafter OPEC will control nearly 100% of the world’s oil exports and that 2030 would mark the end of the Industrial Civilisation signalling permanent blackouts with the end of the oil era.

Peak Oil

A study of the reserves to production ratios – the number of years that reserves of oil will last at current production rates – gives us a good overview. The R/P ratio is about 8 to 10 years for the US, Norway and Canada. For Iran, it is 53:1, Saudi Arabia 55:1, the UAE 75:1 and Kuwait 116:1. Iraq, because of its inability to produce at optimum rates due to the sanctions and denial of requisite technology, and now the insurgency, has an R/P ratio of 526:1! The OECD[5] area, which consumes a little over 70% of the world’s daily production, produces less than 10% of daily global oil production and, what is perhaps more significant, has only around 5% of the world’s reserves. The US, with 6% of world's population consumes 26% of the world's petroleum.

Indonesia and China have gone from energy independence to become net importers of crude oil. Chinese production is about to peak, Mexican production would peak in 2007 and Canada would peak towards the end of this decade. Iran, Kuwait, Oman, Syria and Yemen have all passed peak output. OPEC production, as a whole, is likely to peak between 2025 and 2030. Many giant oilfields of the Middle East are declining. Former Soviet Union (FSU) oil production has peaked in 1988 at 12.5 million BOPD. Venezuela and Nigeria are overwhelmed with oil production problems.

Global oil demand has grown by more than 14 million barrels a day (BOPD) in ten years. Non-OPEC/non-FSU oil supply grew by 3.2 million BOPD. Non-middle east OPEC oil supply grew by 0.6 million BOPD. Thus, the Middle East is supplying 74 % of incremental oil demand while 36 % of Middle East oil reserves are with Saudi Arabia. The danger of peak oil looms large. What peaks is oil that is easy to produce. Oil that is difficult to produce takes more energy to produce and costs are some times prohibitive.[6] Matthew R. Simmons in his path-breaking discourse on Saudi Arabian oil[7] says that Saudi Arabia does not have an inexhaustible oil supply. Its four to five key oilfields have been supplying 90%+ oil for the past 40 years. Real proven reserves were 110 billion barrels in 1979 with 77 billion probable reserves. Saudi Arabia has produced 63 billion barrels since then, that is, more than 57 % of the proven reserves. As Middle Eastern nations are not truly democratic, no one is even sure as to the authenticity of the figures for its hydrocarbon reserves because of lack of transparency.

Hubbert observed the obvious, namely that oil production from a field rises, then falls, as time goes by. He fitted a logistic curve to this rise and fall, but only as a mathematical convenience. He never said that the logistic curve had some fundamental power. There does not seem to be any physical reason why either a field or the entire world has to enter decline on producing exactly 50% of its oil. It could be earlier or later! The production curve can in theory be any shape whose area is equal to the extractable oil (itself a variable within limits, depending on how much effort and resource one is prepared to invest). Hence, Peak Oil is not going to happen just because the world has precisely reached the production of the median barrel. [8]

In his book, The Hydrogen Economy, Jeremy Rifkin[9], writing about "when there is no more oil", notes that at 1970 prices of oil at $3/barrel, Saudi Arabia was earning $1.2 billion. After Yom Kippur war, Organisation of Petroleum Exporting Countries (OPEC) acting on its own raised prices 70%, such that in 1974, OPEC revenues were $340 billion; by 1980 they had grown to $438 billion. OPEC currently earns over $300 billion/year. Rifkin further states that "Osama bin Laden urges his followers around the world to reclaim the Saudi holy land, establish a universal Islamic state, and raise the price of oil to $144 a barrel.” And the price of oil is only $ 75 now!!

“The Times of London on 8 April 2006 ran a story that should have pre-empted every other major story that day, headlined, ‘World cannot meet oil demand’. The story’s first sentence read, ‘The world lacks the means to produce enough oil to meet rising projections for demand for fuel, according to Christopher de Margerie, head of exploration for Total.’ Later the story quoted de Margerie as saying, ‘Numbers like 120 million barrels per day will never be reached, never’ he said. In 2005, we have seen the collapse of Kuwait’s super-giant field Burgan; accelerated decline in the world’s second-largest field, Mexico’s Cantrell; and an overall global decline rate approaching 8%. We have seen Saudi Arabia fail to increase production while at the same time finding it more difficult to hide deteriorating reservoir conditions in all of its mature fields, including Ghawar. As of now, more than 30 of the world’s largest producing nations have entered steep decline. Discoveries continue to fall off a cliff. Over the last four years the world has been consuming 6 barrels of oil for every new one found. Publicity stunts, such as the recent attempt to reclassify Venezuelan tar as oil – even when applauded by dilettantes like Gregg Palast – are having no impact on markets, prices or public policy.”[10]

Peak Oil, the day when oil production reaches its maximum and begins a steady decline until it is gone in 40-50 years, is fast approaching. Its approach correlates with the increasing tensions in the world. If a world war comes, it may well be fought with nuclear weapons in the Middle East. The fable of Armageddon could well be a reality.[11]

Problem Day is the day when demand permanently exceeds production. It would generally happen before Peak, when demand and supply are both still rising, but when demand is rising the faster. The consequence will be a sharp and permanent rise in prices to suppress that demand (as is the case at present). Chris Skrebowski[12] reckons that the sum of all the known major projects currently in development is insufficient to match expected demand. By 2010, we will have reached Problem Day, assuming that global demand continues to climb at 2% p.a.[13]

Mega-projects adding New Capacity

According to Petroleum Review (April 2006)[14], the mega projects database shows that both Canada and the OPEC producers plan major significant new capacity additions by the end of the decade. The database identifies some 21.3mn b/d of new capacity due on-stream by 2010. Of this total, some 10.3mn b/d is to come from OPEC producers and nearly 11mn b/d from non-Opec producers. The projects that actually come on-stream in 2005 had a notional capacity of around 2.6mn b/d. However, the actual increase in 2005 supply was just 1.05mn b/d (according to IEA’s Oil Market Report, February 2006). This is because of the loss of capacity through depletion and due to the Gulf of Mexico hurricanes. For the OPEC producers, the gross capacity addition in 2005 was 1.16mn b/d and the net addition was 1.02mn b/d. Petroleum Review has assumed that, with most OPEC producers operating flat out, there has been little or no change to the spare capacity largely held by Saudi Arabia. In the case of the non-OPEC producers, which all operate at capacity, the gross addition in 2005 of 1.42mn b/d yielded a net addition of just 30,000 b/d (IEA Oil Market Report, February 2006). The Gulf of Mexico hurricanes cost the system the equivalent of 278,000 b/d on an annualised basis. The erosion of non-OPEC capacity (Petroleum Review, August 2005) accounts for the remaining 1.1mn b/d. Virtually all of the capacity erosion occurred in the OECD countries. Collectively, OECD output fell by 0.95mn b/d in 2005. There is a possibility of further erosion by four possibly predictable and one, unpredictable factors. These are (i) project slippage, (ii) Supply shortfalls due to normal maintenance and operational factors, (iii) Capacity erosion or depletion due to fields moving into depletion.[15] (iv) Petroleum Review has used a figure of around 1.5mn b/d for demand growth [16] (v) Wars, revolutions and hurricanes are unpredictable.

CERA’s Crude Oil Outlook to 2010[17]

Cambridge Energy Research Associates Inc. (CERA) sees potential for exceptional growth in non-OPEC oil production in 2006 and 2007 – a cumulative two year-increase of approximately 2.5 to 3 million BOPD. This would put downward pressure on price, but non-OPEC output is only one variable in the oil price equation. The downward force of strong non-OPEC supply gains will be influenced by the degree of stability in the Middle East and by demand growth. If fear of a major supply disruption in the Middle East or elsewhere recedes and the rate of demand growth moderates to around 2 percent annually – well under the 3.4 percent rate of growth in 2004 – then prices would move to the low $40s by 2008. This price trend, which is CERA’s baseline long-term outlook, is illustrated by the Managed Commodity Cycle Scenario. In this case, OPEC cohesion would be tested by the need to restrain supply in 2007 in order to prevent prices from falling even further. However, a period of lower prices slows production growth, which would then lead to higher prices as 2010 nears.

Why the world is not about to run out of oil[18]

In 1894, Le Petit Journal of Paris organised the world's first endurance race for “vehicles without horses”. The race was on the 78-mile (125km) route from Paris to Rouen, and the purse was a juicy 5,000 francs. The rivals used all manner of fuels, ranging from steam to electricity to compressed air. The winner was a car powered by a strange new fuel used previously chiefly in illumination, as a substitute for whale blubber: petrol derived from oil. Despite the victory, petrol's future seemed uncertain back then. By 1900, steam, electricity and petrol had equal market share. In the decades after that great race, petrol came to dominate the world's transportation system. Oil left its rivals in the dust mainly because oil reserves proved to be abundant.

Now comes what appears to be the most powerful threat to oil's supremacy in a century: growing fears that the black gold is running dry. 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. …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? … 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. The race is on to manufacture “greener fossil fuels” for blending into petrol and diesel, thus extending the useful life of the world's remaining oil reserves. 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 before 2009.

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).

However, this thesis is not borne out by the study by Petroleum Review (April 2006) referred to above.

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 OPEC. And as the great fields of the North Sea and Alaska mature, non-OPEC oil production will probably peak by 2010 or 2015.

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. However, the decline would be steep as seen in Chart 2[19] below. Additionally, the prices are indeed rocketing.

Chart 2

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.” …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, gas-to-liquid (GTL), tar sands, ethanol and other alternatives will become economic by the day. However, non-hydrocarbon fluid to replace crude oil is nowhere on the horizon. The oil-prices at which the following energy sources are economically viable are as follows:[20]

a. Bio-diesel - $80 (excludes impact of tax credit)

b. US Corn based Ethanol - $60 (excludes impact of tax credit)

c. Shale Oil - $50

d. Tar sands, Brazilian cane-based Ethanol, Gas-to-Liquids & Coal-to-Liquids (GTL is economic at $40 if gas feedstock price is $2.50 or less per million BTU, CTL is economic at $40 if feedstock price is $15 per tonne or less)

e. Conventional Oil - $20

Energy Returned On Energy Invested (EROEI)

Efforts are afoot to use renewable energy sources as additives to oil. The most common in India are methanol and ethanol from Jatropha plant. These additives could delay the effects of peak oil and the consequent decline of crude oil production. This is where the concept of energy returned on energy invested (EROEI) comes in. When we substitute a source of energy — oil, for instance – with a positive EROEI with another energy source such as ethanol with a negative EROEI, there is a loss of gross energy produced. Thus, when we move to energy sources, which have negative or reduced EROEIs, the net amount of energy available for use diminishes. By way of illustration, let us take an energy source, which has an EROEI of one – which means that for every unit of energy spent or invested, you get back one unit of usable energy.[21] When the EROEI is negative, you are actually burning up more energy than you are getting for use.

According to current data, the returns on extracting oil from tar sands works out to roughly three barrels of oil for every two consumed, representing an EROEI of about 1.5. That is without taking into account the massive environmental costs involved in terms of water pollution, the degradation of land and so on. Unfortunately, India is going headlong into producing ethanol without working out ERORI or the long-term viability of producing Jatropa at the cost of grains. The figures for EROEI for renewables and non-renewables for the US are interesting:

Non-Renewable Energy Sources[22]

• 100 Oil Fields of the 40’s
• 8 – 23 Oil and Natural Gas 70’s
• 80 Coal 50’s (mine mouth)
• 30 Coal 70’s (mine mouth)
• 1 – 5 Geo-pressured Gas
• 0.7 - 13.3 Shale
• 0.5 – 8.2 Coal Liquefaction

EROEI if renewable is mixed[23]

• 0.78 Ethanol (corn)
• 0.69 Switch Grass
• 0.64 Wood
• -0.79 Bio-diesel (soybeans)
• 0.46 Bio-diesel (sunflower)
• 11.3 Hydroelectric
• 4.0 Nuclear (light water)

Note:

The reader would have discerned by now that there are a group of optimists (CERA, The Economist, etc); the moderates (oil Companies, IEA and so on), and the pessimists (Peak Oil protagonists, Simmons, Bakhtiari, Deffeyes, etc). It is for the reader to judge the merits and demerits of each argument and arrive at his or her own conclusions.

The Hirsch Report[24]

This Hirsch report was prepared in February 2005, as an account of work sponsored by an agency of the United States Government although the US government has stated specifically, “The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.” The report deals with impacts, mitigation and risk management of ‘peaking of world oil production’. Below are a brief summary and the conclusions of the Hirsch Report along with the three mitigation scenarios drawn by the Hirsch Committee.

Projections of future world oil production will be the sum total of 1) output from the entire global producing oil reservoirs, which will be in various stages of development, and 2) all the yet-to-be discovered reservoirs in their various states of development. This is an extremely complex summation problem, because of the variability and possible biases in publicly available data. In practice, estimators use various approximations to predict future world oil-production. The remarkable complexity of the problem can easily lead to incorrect conclusions, either positive or negative. Various individuals and groups have used available information and geological estimates to develop projections for when world oil production might peak. A sampling of recent projections is in the Table below:

Projected Date	Source	Background & Reference
2006-2007	Bakhtiari A.M.S.	Iranian Oil Executive
2007-2009	Simmons M.R.	Investment banker
After 2007	Skrebowski C.	Petroleum journal Editor
Before 2009	Deffeyes K.S.	Oil co geologist (ret)
Before 2010	Goodstein D.	Vice Provost Cal Tech
Around 2010	Campbell C.J.	Oil co geologist (ret)
After 2010	World Energy Council	World NGO
2010-2020	Laherrere J.	Oil co geologist (ret)
2016	EIA nominal case	DOE analysis/information
After 2020	CERA	Energy consultants
2025 or later	Shell	Major oil company
No visible peak	Lynch M.C.	Energy economist

Table: Projections of the Peaking of World Oil Production

As we see above, world Oil Peaking is going to happen. World production of conventional oil will reach a maximum and decline thereafter. That maximum is the peak. A number of competent forecasters project peaking within a decade; others contend it will occur later. Prediction of the peaking is extremely difficult because of geological complexities, measurement problems, pricing variations, demand elasticity, and political influences. Peaking will happen, but the timing is uncertain.

Oil Peaking could cost the world economy dearly. Over the past century, abundant, low-cost oil has shaped the development of the economy and lifestyle. Oil scarcity and several-fold oil price increases due to world oil production peaking could have dramatic impacts. The decade after the onset of world oil peaking may resemble the period after the 1973-74 oil embargo, and the economic loss could be measured on a trillion-dollar scale. Aggressive, appropriately timed fuel efficiency and substitute fuel production could provide substantial mitigation.

The report states that the peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking approaches, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking. While significant improvements in fuel efficiency are possible in automobiles and light trucks, any affordable approach to upgrading will be inherently time-consuming, requiring more than a decade to achieve significant overall fuel efficiency improvement. Besides further oil exploration, there are commercial options for increasing world oil supply and for the production of substitute liquid fuels. These are 1) Improved Oil Recovery (IOR) can marginally increase production from existing reservoirs; 2) Heavy oil / oil sands represents a large resource of lower grade oils, now primarily produced in Canada and Venezuela; those resources are capable of significant production increases;. 3) Coal liquefaction produces clean substitute fuels from the world’s abundant coal reserves; and finally, 4) Clean substitute fuels can be produced from remotely located natural gas, but exploitation must compete with the world’s growing demand for liquefied natural gas.

However, world-scale contributions from these options will require 10-20 years of accelerated effort. Dealing with world oil production peaking will be extremely complex, involve literally trillions of dollars and require many years of intense effort. To explore these complexities, the Hirsch committee analysed three alternative mitigation scenarios:

• Scenario I assumed that action is not initiated until peaking occurs.

• Scenario II assumed that action is initiated 10 years before peaking.

• Scenario III assumed action is initiated 20 years before peaking.

The Hirsch Report concluded inescapably that more than a decade would be required for the collective contributions to produce results that significantly affect world supply and demand for liquid fuels.

Important observations and conclusions from this study are as follows:

a. When world oil peaking will occur is not known with certainty. A fundamental problem in predicting oil peaking is the poor quality of and possible political biases in world oil reserves data. Some experts believe peaking may occur soon. This study indicates that “soon” is within 20 years (that is, 2025).

b. 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.

c. Oil peaking will create a severe liquid fuels problem for the transportation sector, not an “energy crisis” in the usual sense that term has been used.

d. Peaking will result in dramatically higher oil prices, which will cause protracted economic hardship in the United States and the world.

e. In the developed nations, the problems will be especially serious. In the developing nations, peaking problems have the potential to be much worse.

f. Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large.

g. While greater end-use efficiency is essential, increased efficiency alone will be neither sufficient nor timely enough to solve the problem. Production of large amounts of substitute liquid fuels will be required, which is feasible with existing technology.

h. Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important guides as to government actions that are desirable and those that are undesirable, but the process will not be easy.

Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive than delayed mitigation. A unique aspect of the world oil peaking problem is that its timing is uncertain, because of inadequate and potentially biased reserves data from elsewhere around the world. In addition, the volatile nature of oil prices may obscure the onset of peaking. Since the potential economic impact of peaking is immense and the uncertainties relating to all facets of the problem are large, detailed quantitative studies to address the uncertainties and to explore mitigation strategies are a critical need.

The purpose of the analysis by the Hirsch Committee was to identify the critical issues surrounding the occurrence and mitigation of world oil production peaking. The analysis clearly demonstrates that the key to mitigation of world oil production peaking will be the construction a large number of substitute fuel production facilities, coupled to significant increases in transportation fuel efficiency.

In summary, problem of the peaking of world conventional oil production faced by modern industrial society is unique. The challenges and uncertainties need a much better understanding. Technologies exist to mitigate the problem. Timely, aggressive risk management is essential.

Conclusion

This paper discusses conflicting views on the peaking of world oil production. The reader should weigh the divergent views to arrive at a rational interpretation. Three major conclusions come to the fore: firstly, there is a lot of loose talk of substitute fuels, especially ethanol from Jatropha plant. In India, there has been no study to work out the EROEI, without which the effort could well be a waste if the EROEI turns out to be negative. Secondly, there is yet no fuel in sight that could fairly substitute liquid hydrocarbons, which is mainly (60 to 80 % of the total hydrocarbon use) used as a transportation fuel. Surely, one cannot conceive the use of nuclear energy for transportation purposes! The Planning Commission’s paper on Energy Policy also does not cover these vital issues in any detail.

Lastly, peaking is bound to occur because hydrocarbon fuel is non-renewable. The question is of timing. As Ecclesiastes 3:1-15 says, “There is an appointed time for everything. And there is a time for every event under heaven”. So has the appointed time for peaking of conventional world oil production arrived? And if so, when? It is time that we view this in light of what Albert Einstein said, “We can't solve problems by using the same kind of thinking we used when we created them.” As the Hirsch Report said, mitigating the effect of peaking would be a great economic trauma for the world and preparations for which should commence ideally 20 years in advance. Again, Indian Planning Commission’s Energy Policy does not seriously deal with this aspect either.

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[1] “Ecclesiastes 3:1-15”: Time for Everything: There is an appointed time for everything. And there is a time for every event under heaven

[2] Yergin, Daniel, “The Prize”, 1990, Touchstone, New York, Published by Simon & Schtur

[3] US National Security Strategy Report September 2002

[4] Newsweek, April 2002

[5] The Organisation for Economic Cooperation and Development Current membership: Australia, New Zealand, Japan, United States, Canada, United Kingdom, France, Germany, Italy, Spain, Portugal, Belgium, Luxembourg, Netherlands, Denmark, Norway, Sweden, Switzerland, Eire, Austria and Greece.

[6] Simmons Matthew R. “Twilight in the Desert,” Presentation, PDF

[7] Simmons Mathew R. “Twilight in the Desert, The Coming Saudi Oil Shock and the World Economy”

[8] Miller, Richard G, “Question regarding Hubbert”, millerr@bp.com, 12 May 2005

[9] Rifkin, Jeremy, in Hydrogen Economy, quoted in “This looming war is about oil”, Fisk, Robert, 1 World Communication

[10] Ruppert Michael C., “The Paradigm is the Enemy”, Speech for the Local Solutions to the Energy Dilemma Conference, April 27-29, New York City, at Cooper Union

[11] Murphy, Pat, “A Peak Oil War, A World Peace Story”, 2005, The Community Solution, A Programme of Community Service, Yellow Springs, Ohio, USA

[12] Editor, Petroleum Review since June 1997, formerly editor of Petroleum Economist, oil market analyst in London for Saudi Arabia, long-term planner for BP, journalist with Petroleum Times

[13] Miller, Richard G, “Question regarding Hubbert”, millerr@bp.com, 12 May 2005

[14] Megaprojects, “Prices holding steady, despite massive planned capacity additions”, Petroleum Review, April 2006

[15] All the evidence shows that depletion tends to speed up rather than slow down – the North Sea being a good example

[16] It is virtually impossible to predict demand growth due to a wide variety of fluctuating factors. However, other figures widely quoted are 1.75-2mn b/d or about 2-2.5% growth

[17] CERA Long-Term Oil Price Scenarios December 2005

[18] Extracts from “The Oil Industry, Steady as she goes”, The Economist print edition, Apr 20^th 2006

[19] Ratnam Chudamani, former C&MD Oil India Limited

[20] Cambridge Energy Research Associates, The Economist, April 6, 2006

[21] Ravindran, Pratap, “Oil: On the skids”, 24 August 2004

URL: http://www.thehindubusinessline.com/2004/08/24/stories/2004082400091000.htm

[22] Energy and the U.S. Economy: A Biophysics Perspective by C. J. Cleveland, R. Costanza, C.A.S. Hall, R. Kaufmann, and Science Vol. 225, No. 4665, August 31, 1984 pp. 890-897.

[23] Ethanol Production using Corn, Switch grass, and Wood: Bio-diesel Production using Soybeans and Sunflower, by D. Pimentel and T. W. Patzek, Natural Resources Research, Vol. 14:1, May 2005, pp. 65-76.

[24] “Peaking of World Oil Production: Impacts, Mitigation, & Risk Management”, Robert L. Hirsch, SAIC, Project Leader, Roger Bezdek, MISI, Robert Wendling, MISI, February 2005