Iraq and the Problem of Peak Oil

The connection between the Iraq invasion and oil has always been a bit mysterious. Even discounting the conspiracy theorists, it is a connection that refuses to go away. This article makes the conections a bit more clear.

The article has a good little summary of the problem of peak oil:

The problem in oil production is not how much reserves are underground. There the numbers are more encouraging. The problem comes when large oilfields such as Prudhoe Bay Alaska or the fields of the North Sea pass their peak output. Much like a bell curve, oil fields rise to a maximum output or peak. The peak is the point when half the oil has been extracted. In terms of reserves remaining it may seem there is still ample oil. But it is not as rosy as it seems. The oil production may hold at the peak output for a number of years before beginning a slow decline. Once the peak is past however, the decline can become very rapid. Past the peak, there is still oil, but each barrel becomes more difficult to exploit, and more costly, as internal well pressures decline or other problems make recovery more expensive for each barrel. The oil is there but not at all easy to extract. The cost of each barrel past peak is increasingly higher as artificial means are employed to extract it. After a certain point it becomes uneconomical to continue to try to extract this peak oil.

As an aside--the big problem is not when extraction becomes uneconomical, because then rising oil prices would at some point make it economical again--the big problem is when it takes more energy to get it out of the ground than you get from it. At that point it is no longer an energy source.

Some recent cases make the point. In 1991 the largest discovery in the Western Hemisphere since the 1970's, was found at Cruz Beana in Columbia. But its production went from 500,000 barrels a day to 200,000 barrels in 2002. In the mid-1980's the Forty Field in North Sea produced 500,000 barrels a day. Today it yields 50,000 barrels. One of the largest discoveries of the past 40 years, Prudhoe Bay, produced some 1.5 million barrels a day for almost 12 years. In 1989 it peaked, and today gives only 350,000 barrels daily. The giant Russian Samotlor field produced a peak of 3,500,000 barrels a day. It has now dropped to 325,000 a day. In each of these fields, production has been kept up by spending more and more to inject gas or water to maintain field pressures, or other means to pump the quantity of oil. The world's largest oil field, Ghawar in Saudi Arabia, produces near 60% of all Saudi oil, some 4.5 million barrels per day. To achieve this, geologists report that the Saudis must inject 7 million barrels a day of salt water to keep up oil well pressure, an alarming signal of near collapse of output in the world's largest oil kingdom.

The growing problem of peak oil has been known among oil industry insiders since the mid-1990's. In 1995, the leading oil consulting firm, Petroconsultants in Geneva, published a global study, 'The World Oil Supply.' The report cost $35,000, written for the oil industry. Its author was petroleum geologist, Dr. Colin Campbell. In 1999 Campbell testified to the British House of Commons, 'Discovery of (new oil reserves) peaked in the 1960's. We now find one barrel for every four we consume ...'

Another oil industry "insider" who knew about this problem was Dick Cheney:

In a speech to the International Petroleum Institute in London in late1999, Dick Cheney, then chairman of the world's largest oil services company, Halliburton, presented the picture of world oil supply and demand to industry insiders. 'By some estimates,' Cheney stated, '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.' Cheney ended on an alarming note: 'That means by 2010 we will need on the order of an additional fifty million barrels a day.' This is equivalent to more than six Saudi Arabia's of today's size.

Perhaps it was no coincidence that Cheney, as Vice President, was given as his first major assignment the head of a Presidential Task Force on Energy. He knew the dimension of the energy problem facing not only the United States, but the rest of the world.

Cheney is also well identified as the leading Iraq warhawk in the Bush Administration, together with Defense Secretary Rumsfeld. Repeatedly it was Cheney pushing for military action against Iraq, regardless of which allies support it.

You can argue whether the Iraq war was "about" oil, but certainly oil was somewhere in the calculous that led us to invade.