My interview with Michael Klare: Part III

In Part III we continue the discussion of Energo-fascism, the concept of a "peak in oil production," Russia's Arktika expedition to the North Pole, and M.K. Hubbert's theory of Peak Oil.

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Energo-fascism continued...

M. Klare - …made up this term "Energo-fascism." But then, thinking about it, I thought there's some truth to this notion. What I mean by that is, energy will become increasingly scarce. Now when I say scarce I mean scarce with respect to demand. The demand for energy is expected to increase by 50% in the next 25 years, but the supply will not increase by 50%. It may increase, but not nearly as much as demand. So, we will experience virtual scarcity around the world. What I expect is that the state, wherever [it is], whether it's in capitalist countries or communist countries, the state will assume more control over the allocation of energy. You'll have what's called Statism; we see this already, the state assuming more control. Either it will ration energy or it will control the flow of it, and this is happening in every single country in the world.

This could take a repressive form. It will entail the use of military force to secure oil and protect the flow of oil – we see this in the United States and we see this in China. It could also include the state making decisions over what kind of energy and who will get the benefits of that energy. And if we're talking about nuclear power, it will be highly centralized, highly militarized, because nuclear power has the risk of leading to proliferation [of nuclear materials] including terrorism, so you need a heavy police presence at every nuclear power-plant. So the more you have nuclear power, the more state control you have.

So the notion of Energo-fascism, as I call it, is not just a made-up concept, it has real application to the real world.

A.M. - In an article you wrote this month, Beyond the Age of Petroleum, you say that "In the past six months…the signs of an imminent peak in conventional oil production have become impossible…to ignore." What… [are the implications of] an "imminent peak" and what are the ramifications of that?

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M. Klare – …Well, every…non-renewable resource has a natural life-cycle of extraction. When you discover the resource and develop it for commercial purposes, you start and it gushes out of the Earth; that is to say, the commercial development begins very quickly and production rises rapidly. But usually you find the most productive veins of ore or oil very quickly and you use them up very rapidly. Once those most productive oil fields or gas fields are exhausted, then you wind up finding and using less productive ores or oil fields. So the rise of production begins to slow down to the point where you can no longer increase the global production of that resource and you reach a peak point of output. After that you cannot increase it anymore and it begins to go into decline, no matter how much more money you spend, because you're finding smaller…and less productive pockets of oil or gas or whatever.

It appears…that we are now at the peak moment of conventional oil. We're not finding productive new fields anymore; the most productive oil fields in the world were all discovered 30, 40, 50, 60 years ago. The new fields…, even the most productive in recent memory – the North Sea, the North Slope of Alaska, and the fields off the coast of Africa – they were discovered 30-40 years ago. The new one's we've found are much smaller, much less productive and much more difficult, like the Kashagan reservoir in the Caspian Sea, or they're deep, deep underground, very expensive and difficult to produce. So it looks like we're at that moment of peak production today.

Now I'm speaking here of conventional, liquid oil. Once can say that there are unconventional sources of petroleum left in the word, and there's a race on now to develop those: Canadian tar sands, Arctic oil, Venezuelan heavy oil…. But we're likely now to see a declining output, in the not-to-distant future, of conventional oil at the same time that China and India and other rising industrial powers suddenly are developing a new middle class with an appetite for automobiles with a surge of demand for oil. This is going to create immense problems. We see that, for example, in the much higher prices of oil. This is not going to go away because there's a lot of money chasing after oil and no increase in supply likely. This will become more and more the case.

It will also lead to geopolitical competition because China needs more oil, the United States needs more oil, India will need more oil before long, and the supply is not going to grow. So they will be fighting with each other over access to whatever oil is left in the world…. So maybe some of these unconventional sources of oil will become more important and you'll see a race for the Arctic and Venezuela's heavy oil has become more important and so on… But it's become a whole new geopolitical landscape because we have now reached this point of Peak conventional oil.

A.M. – You were referring to the Arctic. There was that recent event in the new in August when the Russian expedition planted a titanium flag on the ocean floor, referring to the Lomonosov Ridge as an extension of Russia's continental shelf. Do you think that that was designed to lay the groundwork for claiming a huge swath of the Arctic?

M. Klare – I don't have to think that. I mean the Russian's were pretty clear about their intentions of claiming that area for future development by Russia as a source of energy. The Russians are already developing offshore areas in the extreme north, right now off Sakhalin Island, is one of their major new sources of oil and gas and they're developing a new gas field in the Barents Sea. So they're already moving in this direction and there are some geologists who say Russia's onshore oil and gas fields are likely to be depleted in the next decade or so. So they must move offshore into the Arctic…if they are to continue to increase their output.

A.M. – Would you care to explain what Hubbert's Peak Theory is.

Link to No more than a Theory

M. Klare – Well M. King Hubbert was an oil engineer who, in the 1950s, developed the mathematical model for this life-cycle that I've described – a parabolic curve – to show the rise, the peak and the fall of a resource, and he looked at the United States; he had data for the United States – excluding Alaska – and he correctly predicted that the United States would reach its peak oil production moment in 1970. And this was in 1955 or 1956 that he made that prediction, and everybody laughed at him; worse than that, they attacked him because this was anathema to the oil industry.

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