Peak Cheap Oil Passed

In nature, for reasons not clear to me, distribution laws often follow “Normal Distributions” (aka “Bell Curves“, because they look like bells cut in half). Henri Poincare’ himself, admitted that he found Normal Distributions mysterious, and that experimentalists believed theorists had established them, whereas theorists believed experimentalists had done so… Poincare’ contributed to probability theory as he did in so many subjects, with his characteristic honesty.

This, (pre-)supposing Normal Distributions, allows to make predictions of a “scientific” character:

  1. Suppose the phenomenon at hand satisfies a Bell Curve distribution law.
  2. Identify, from know data, the inception of said curve, hence the curve itself.
  3. Read out on the graph its extent and peak.

Thus geologist Marion King Hubbert predicted in the 1950s that the US oil production would peak out around 1970. His prediction was verified. He applied his model to world oil production. The model predicted peak oil around 1995.

However, as the cheap oil was depleted oil prices went up, making it economic, in appearance, to get oil from tar sands, and ever deeper underwater drilling. The cost to the companies did not reflect the true cost to the economy of society at large.

Hydraulic fracking was also used increasingly in the USA as Western oil companies got chased out of the developing world (to be replaced by national oil companies). Texas, and the Bakken formation of North Dakota became targets of extensive fracking.

Fracking in the USA for gas and oil is changing quickly the energy balance of the USA. It has been immensely profitable, for now, for the companies indulging in it, and the production of fossil fuels in the USA has augmented enormously.

Fracking, in the present state of technology, consists into injecting enormous quantities of water charged with various poisons and rock devouring bleach or acid. The poisonous water is injected again and again to break the rock, releasing gas, or oil. And also countless poisons held by Pluto down below, such as radioactive materials (checking for workers for radioactivity is standard when fracking).

Thanks to the personal intervention of Vice President Cheney, CEO and shareholder of Halliburton, in 2005 hydraulic fracturing was exempted by US Congress from any regulation under the Safe Drinking Water Act.

During the period November 2001 to November 2011, the general government inflation index in the USA, CPI-U, grew from 176.7 to 226.23, an increase of about 28%. But, during the same period, the CPI motor fuels index went from 96.1 to 294.049. The same volume of gasoline roughly tripled in price over the last decade. (In Europe, because of enormous energy taxes, and cheaper oil close at hand, the effect has been attenuated; whereas in the USA, my interpretation is that the oil spike played a role in the subprime crisis!)

People have debated whether we passed Peak Oil or not. Maybe not. Why not? Because we have cheated. The enormousexploitation philosophy in the USA, overruling anything else, such as, for example, common sense, has allowed to cheat.

It is likely that the cost of fracking on the environment is going to be catastrophic. It causes even earthquakes. Meanwhile, fossil fuel companies will make lots of money, and give off many campaign contributions to their pet politicians, in the country where these corrupt practices are legal, namely the USA.

France, followed now by South Africa, has outlawed fracking in its present state of technology, as they fear for their water table. We can have life without gas and oil, but not without water. At least so think the silly French, who should go back to drinking wine, so that they can reason like real Americans.

In any case, Canadian fossil fuel interests are firmly determined to frack and to heat up sands full of tar, to extract fuel. The cost in terms of CO2 pollution and energy is enormous. And it will get bigger: Canada has sold its soul to the fossil fuel burning Satan. But, when one has started with an ethnic cleansing of the French (!) and the Indian natives, one may be forgiven, to stupidly hope, to do the same to the entire planet…

The real currency of economy ought to be energy. As it was in prehistory. Peak CHEAP oil means that it costs more and more to extract fossil fuels, in terms of the only currency which really counts, energy (every word in this sentence was carefully considered).

The exploitation philosophy has been the ruling philosophy in many Anglo-Saxon lands, ever since it got pushed by the “West Country Men” (circa 1600, the Elizabethan Age) ). Historically the Anglo-Saxon colonies deeply believed that no exploitation of the land, or the peoples, was harsh enough. The assault of the USA against Afghanistan, since July 3, 1979, to jump on the gigantic minerals reserves found by the French there, is an example of thisavoir plus grand yeux que grand ventre philosophy (having bigger eyes than stomach philosophy: in Afghanistan, the USA tried to swallow more than it could chew).

One can compare Australia with French held, nickel rich New Caledonia next door: the dumb French forgot to massacre the natives to the exacting Anglo-Saxon standards. Thus, they have had to face an independence movement.

The French ruled New Caledonia archipelago is made of half aboriginal descendants, while the natives were essentially extinguished from Australia. In Australia, up to the 1960s, methods now classified by the United nations as genocide were used.

In any case, the mentality that no exploitation of natural resources is harsh enough has to be thrown into the garbage of history, or reserved to the outer planets. It’s important to be able to diagnose all its ramifications.

In the case of the energy policies of the USA, that country, and the entire planet, is led into a trap. Subsidies to expensive fossil fuels make continuing with a very dangerous form of energy possible. What’s more dangerous than destroying the air we breathe, and the oceans we rule? When the subsidies will run out, the real cost of fossil fuels will show itself to be unbearable. But then new forms of energy will not have been deployed in a timely manner. The rats will be many, but the food short, the air unbreathable…

Historically, it has taken 50 years to fully deploy new energy systems. It is true that going all electric would spare a lot of energy (electric engines are much more efficient, as they do not depend upon a flow between a hot source and a cold sink). Making fossil fuels pay their true cost is another must. Some of the cost is to maintain enormous, and enormously expensive British, French and American military forces to be ready to keep forcefully open the Strait of Ormuz (say). 35% of the world oil passes below the noses of gasoline starved Iranians (don’t ask).

Another example:  Since ever and ever, fossil fuels for air transportation have not been taxed, worldwide. The European Union has decided to fix that, and its new taxation policy for air transportation is going into effect today, January 1, 2012, for all flights flying into Europe.

The USA has protested loudly, threatening economic sanctions. The USA, through Hilary Clinton’s voice box, called the correct pricing of air transportation an attack against the free market.

Apparently we are far from having reached peak impudence!

Patrice Ayme

Patrice Ayme blogs at

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