*THE PEAKING OF WORLD OIL -- (House of Representatives - February 08, 2006)*

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   The SPEAKER pro tempore (Mr. /Campbell/ of California). Under the
Speaker's announced policy of January 4, 2005, the gentleman from
Maryland (Mr. /Bartlett/) is recognized for 60 minutes.

   Mr. BARTLETT of Maryland. Mr. Speaker, sometime ago, our Department
of Energy commissioned a study with SAIC, Science Applications
International Corporation, to do a study on the peaking of world oil
production, impacts mitigation, and risk management. This very
prestigious scientific organization took some time to complete this
study; and when they completed it, they made a recommendation to the
Congress and to the Department of Energy. Part of what they said in
their recommendation is included here:

   ``The peaking of world oil production presents the U.S. and the world
with an unprecedented risk management problem.''

   That is quite an adjective to use. No risk problem like this ever in
the history of the world is what they are saying: ``..... unprecedented
risk management problem. As peaking is approached, liquid fuel prices
and price volatility will increase dramatically. And without timely
mitigation, the economic, social, and political cost will be
unprecedented.''

   Again, Mr. Speaker, they are pointing out, and they will use these
words in a chart I will have a little later, that the world has never
faced a problem like this.

   ``Viable mitigation options exist on both the supply and demand side,
but to have substantial impact they must be initiated more than a decade
in advance of peaking.''

   When will peaking occur? Do we have a decade? And they are saying if
we do not have a decade, we're going to have problems. Dealing with
world oil production peaking will be extremely complex, involve
literally trillions of dollars, and require many years of intense effort.

   Our next chart, which speaks to the same phenomenon, inspired 30 of
our leaders, Boyden Gray, McFarland, James Woolsey, and about 27 others,
many of them four-star retired admirals and generals, to write a letter
to the President. In that letter they said, Mr. President, the fact that
we have only 2 percent of the world oil reserves, that we use 25 percent
of the world's oil, and we import almost two-thirds of what we use
represents a totally unacceptable national security risk. Mr. President,
we need to do something about that.

   Two other numbers here are of significance. We represent a bit less
actually than 5 percent of the world's population, about one person out
of 22. And in spite of the fact that we have only 2 percent of the world
oil reserves, we produce about 8 percent of the world's oil. We need to
keep this in mind for some of the later charts we are going to show,
because what this means is that we are pumping our little reserves, only
2 percent, four times faster than the rest of the world.

   If we were pumping it as fast, with 2 percent of the reserves, we
would be producing 2 percent of the production; but we are producing 8
percent. So if the world is going to run into trouble with decreasing
amounts of oil, Mr. Speaker, we are going to get there first because we
are pumping our oil more rapidly.

   How did we get here? The next chart speaks to that, and we need to go
back about six decades. There was a scientist by the name of M. King
Hubbert, who worked for the Shell Oil Company; and he noted the
exploitation and exhaustion of individual oil fields. We would find an
oil field, we would start pumping, and the oil field would reach a
maximum production. And then after the maximum production, at about half
of its total ultimate production, it would start falling off. No matter
how hard they pumped, it would produce less and less oil, until finally
the field petered out.

   He rationalized that if he knew how many oil fields there were in the
United States and roughly what their reserves were, and if he could
predict how many new oil fields the United States would find, he could
then add up all these little bell curves and he would get a big bell
curve which would tell him when the United States was going to peak in
oil production. So he did that in a paper in 1956, and he wrote in that
paper that with this analysis he predicted that the United States would
peak, and that was the lower 48 at that time, that the United States
would peak in oil production and consumption of our own oil about 1970.

   Right on schedule, and some authorities will say 1970 and some will
say 1971, but as this chart shows, the smooth green curve here was his
prediction peaking about 1970, and the more ragged large green symbols
represent the actual production, which pretty much followed his curve.
And it did peak, as you can see, at about 1970; and it has been downhill
since then.

   By 1980, we knew very well that we were downhill, and the early
Reagan years provided a lot of incentives for drilling. There were a lot
of oil wells drilled in our country. Notice the tiny increase from that.
It simply brought us back to the curve that had been predicted by M.
King Hubbert.

   Now, the red curve here is the curve for the Soviet Union. They had
more oil than we, and they peaked higher than we. And when the Soviet
Union fell apart, you see that they broke away from the predicted
decline. They are now going to have a second little peak here, and then
it will be falling off. They will never get back to their earlier peak
of oil production.

   The next chart shows some detail about where our oil has come from
through the years. And if you are looking only at the lower 48, you are
going to be following this curve. And if you add to it the liquids that
we are getting from gas, you will see that it still followed Hubbert's
curve. It peaked in 1970 and then fall off.

   But we found a lot of oil in Alaska. As a matter of fact, I have been
there, Mr. Speaker, at mile zero, at Dead Horse, Prudhoe Bay. And
through that pipeline has come for the last several years a fourth of
all of our domestic production. But notice that in spite of that
enormous find of oil in Prudhoe Bay, there was just a little blip on the
downside of Hubbert's peak.

   This yellow here on the chart is very interesting. That, you may
remember, Mr. Speaker, was the fabled Gulf of Mexico oil discoveries. I
remember how that was hyped. That was going to save us. There was plenty
of oil there.

   That was all it did, Mr. Speaker. It hardly slowed us down. In terms
of the total amount that we were producing,

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you can hardly see any effect of the Gulf of Mexico oil discovery.

   We were thinking about that discovery and those wells in the recent
hurricane. There are 4,000 wells in the Gulf of Mexico. By the way, Mr.
Speaker, that is about 10 times as many wells as there are in all of
Saudi Arabia. We have about 530,000 oil wells in our country, about 80
percent of all the oil wells drilled in all the world. Maybe that is why
we are able to produce oil from our reserves relatively four times
faster than the rest of the world.

   The next chart looks back through history, and it shows two things.
It shows two curves, one superimposed on the other. One of the curves is
the discovery curve, and this shows when we found the big oil fields
starting way back in the 1930s, and then a lot of them in the 1940s, and
some big oil fields found in the 1950s. But notice that this follows
kind of a curve like so, and it peaks at about 1970, and it has been
falling off ever since that. In spite of very large profits from the oil
companies, they are not finding much more oil.

   I might note, Mr. Speaker, that the profits for the oil companies was
inevitable. They do not set the price of oil. Chevron and BP and
ExxonMobil, they do not set the price of oil. The price of oil is set by
you and me and all the other roughly 7 billion people in the world who
use oil.

   

[Time: 21:15]

   We set the price by our demand relative to the supply. As supply has
fallen off in the last several years, the price has gone up. Oil
companies that were making money at $25 a barrel, how much more money do
you think they will make when oil is $65 a barrel? We should not be
carping about how much money they make; what we should be looking at is
how responsibly they use the profits they make.

   Some of those profits need to be invested in finding new oil fields,
but the experts do not think there is much more to find.

   Several Congresses ago I was chairman of the Energy Subcommittee on
Science, and I wanted to determine the dimensions of the problem. We had
the world's experts in to talk about how much oil is out there that we
can realistically pump. There was general agreement, quite surprising
agreement, that it is roughly 1,000 gigabarrels. Giga is used because in
Europe a billion is not our billion so if you say billion, not everybody
will understand it. So giga means a billion, and it means the same thing
around the world.

   A thousand gigabarrels is about a trillion barrels of oil. That may
sound like a lot, but it is about the amount of oil that we have pumped
so far in all of history. If you divide the 84 billion barrels a day
that we are using today into that trillion barrels of oil, it comes out
to about 40 years. Most of the experts believe we have found about 95
percent of all of the oil we will find. We now have very sophisticated
seismic techniques with 3-D computer modeling. This is what they believe
will be found, this gray-shaded area over here. It is not going to
follow that smooth curve, but on average that is how much they think we
will find.

   The solid black line here represents the amount of oil we have been
using. Up until about 1980, we always found more oil than we were using.
There was always a big reserve out there. Since 1980, we have found less
and less oil, and we have been using more and more oil. We have been
able to do that because we are now using up some of these reserves we
found before.

   All of the oil that we can use has to be all the oil that is there.
If you have not found it, you cannot pump it. So you make your own
judgment how much oil you think we are going to find in the future, then
you add that to the reserves back here. That is going to be the area
under this curve from now on.

   By the way, this 40 years that I mentioned, that is not a plateau.
You do not plateau out for 40 years and then fall off a cliff. It is
going to follow that typical bell curve of every oil field. By the way,
33 of the top 45 oil-producing countries have now peaked. It is only a
few that have not peaked.

   What will this curve look like from here on? We can change the shape.
If we use some of our good recovery enhancement techniques, we can pump
oil a little faster, and we may pump a little more, so we may get a
little more out of these fields than depicted here. This is not all of
the oil in the fields because probably half of the oil there will not
get pumped because it is so difficult to get, it is going to cost more
energy to get the oil than you get out of the oil. So you get to the
point of you stop getting the oil. As the old farmer said, at that point
``the juice ain't worth the squeezing,'' so we stop trying to get oil at
that point.

   The next chart shows a simple schematic that depicts the problem and
where we are. Everybody may not agree this is where we are. Most of the
people that have thought about peak oil think we are here or will
shortly be here. This is a 2 percent growth curve. With 2 percent
growth, that doubles in 35 years. This point is twice that point, and so
this is a 35-year period from here to here.

   Notice what this chart points out is that you start having a problem
before peaking because the exponential use curve, the demand curve keeps
going up like this, whereas when we reach peak oil, it will of necessity
level off, and then no matter what we do, it will inexorably go downhill
after that. It does for individual oil fields. It has for the United
States.

   By the way, the same M. King Hubbard that predicted we would peak in
about 1970, he was right on. He predicted that the world would peak
about now. If he was right about the United States, maybe he is right
about the world, and maybe we should have been paying some attention to
that.

   I would submit that we have now, in common parlance, we have blown 25
years when we knew very well M. King Hubbard was right about the United
States. If he was right about the United States, would not it have been
prudent to recognize that maybe he just might be right about the world?
If he is right about the world, the world is about to peak in oil
production now, then we should have been doing something during these
last 25 years so this would be a smoother transition.

   The next chart shows us the alternatives. As the world peaks in oil
production, we are going to have to, first of all, turn to some finite
resources, and we are now doing that. I will chat for a moment about
those. And those will not last forever. They are finite, as the word
implies, except for nuclear, which is kind of different. The only
nuclear that is finite is light water reactors that use fissionable
uranium. If we go to breeder reactors, as the term implies, you make
more fuel than you are using, and that could go on and on. You have to
accept the problems you buy there with the enrichment and moving fuel
around that could make bombs and so forth.

   Of course, the one thing that gets us home free is nuclear fusion. If
we could harness the kind of energy that the sun sends down to us every
day, we are home free. But, Mr. Speaker, the odds of our doing that are
a bit like you or me solving our personal economic problems by winning
the lottery. That would be nice, and by the way, I do not play the
lottery, but I do not think that rational people count on solving their
economic problems by winning the lottery, and neither do I think that we
should count on solving our energy problems of the future by nuclear
fusion. That does not mean I do not support it. I vote every year for
all of the money, $250 million

   or so, that we put into that, because we have to try. If we do not
successfully harness nuclear fusion, we have a really challenging road
ahead.

   Let us look at these finite resources and what kind of potential we
can expect from them. There is a lot of suggestion today about the tar
sands up in Alberta, Canada. There are enormous reserves there. The
reserves there are at least as large of all of the oil reserves in all
of the world. Then what we are worrying about? Well, because it is there
does not necessarily mean that we can harness it in enough quantities or
soon enough to really make a big contribution.

   As an example, Mr. Speaker, every day the Moon goes around the Earth
roughly in a day, and it lifts the oceans about 2 feet. That is an
incredible amount of energy. I carry two gallon buckets of water and
lift them up, that is a lot of energy. If we could harness the energy of
the tides, we would be home free. There is an old adage that says energy
to be effective must be

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concentrated, and because those tides are spread out over all of the
oceans of all of the world, it is difficult to harness them.

   The tar sands are a little like that. There is an incredible amount
of energy there, and the Canadians are working very hard at harnessing
that. Let me see if I can remember the numbers. I think they have a
shovel in Alberta, Canada, that lifts 100 tons at a time and dumps it
into a truck that carries 400 tons, and I think those are the right
numbers. It carries them to a place where they are cooked, because the
oil in those tar sands is a bit better, but kind of like the oil in your
asphalt road. If you put a blow torch on an asphalt road and mix it with
some lighter fuels, it will flow. That is kind of like what we are doing
with the tar sands. They are working very hard, and they are producing a
million barrels a day. We will talk in just a moment about energy profit
ratio. They are making a lot of dollars doing that because it costs them
less than $30 a barrel to make it. The oil is now bringing $60-some a
barrel, so the dollar-profit ratio is up there. They are using, I have
heard, maybe more energy from natural gas to produce the oil than they
are getting out of the oil. That makes good sense for them because they
have natural gas there, and it is hard to ship, and it is relatively
cheap, and the oil is easy to ship and in high demand at $60-some a barrel.

   Mr. Speaker, by the end of the day, we really need to be thinking
about energy profit ratio because that is what will be telling. They are
now producing a million barrels a day, and if they work real hard, they
will be producing 2 million barrels a day in 5 years. Big deal.

   The world today is using 84 million barrels a day, and if they work
really hard, 10 years from now they will be producing 3 times as much as
today, 3 million barrels a day, but the world would like to be using
another 40 million barrels a day. I do not think it will be there, but
if you project our current demand for those 10 years, we would like to
be using another 40 million barrels of oil, and they will be producing
another 2 million barrels of oil, \1/20\ of the additional oil the world
would like to use. Although there is a lot of energy there, and I am
sure that we will find techniques to get it out that have some energy
profit ratio so there will be energy there for a long time, but it is
not going to be available anywhere near the quantities needed to meet
the needs of contending with the crisis that will occur with peak oil.

   Now, the oil shales in our country are very much the same thing.
Recently you may have read of an experiment out in Colorado. I think it
was Shell Oil Company that devised a new technique for getting the oil
out of the oil shales, which is like the oil in the tar sands. It is
very thick and will not flow.

   What they did to avoid polluting the groundwater was drill a series
of holes in a circle, and then they froze the ground because the oil
will not move through frozen ground. Inside that frozen vessel, if you
will, they cooked and cooked it for a year. They put steam down and
cooked it for a year. After that year, they started sucking on the oil,
and for another year they cooked and they sucked, and they got a pretty
meaningful amount of oil out of that.

   There is an awful lot of oil in the oil shales, maybe about as much
as in the tar sands, but the scale, scaling up for this is incredibly
difficult. I am not sure what the energy profit ratio is, because if you
have to freeze the perimeter of that big vessel, if that is what you
want to call it, and then you have to cook it for a couple of years,
obviously you are putting a lot of energy in. They believe they got more
energy out than they put in. But still, the energy profit ratio is not
going to be enormous. Even if you can make that attractive, you still
have the problem of scale. With the world using 84 billion barrels of
oil a day, you have to have a lot of a million here, a million there
before it adds up to what we are using.

   Coal, you may hear people do not worry about energy, we have 500
years of coal. That is not true. At current use rates, we have about 250
years of coal. That is a long time, so why are we worrying? If we have
250 years of coal at current use rates, and obviously you can do with
coal what we do with oil. Hitler did it. When we denied him access to
oil, he made oil out of coal. When I was a little boy, the lamps that we
call kerosene lamps today, we called them coal oil lamps because they
were filled with oil, made from oil. So if you must use coal, if you
have greater demand than we use today, that 250 years quickly shrinks. I
have a chart a little later that shows that. But it quickly shrinks to
about 85 years, and if you have to use some of the energy to convert the
coal since you cannot have a trunkload of coal in your car, the energy
to do that now shrinks that supply. There is only a 2 percent growth
rate, and I think we will have to use it at much more than 2 percent
growth rate, and it shrinks it to 50 years. So we have to husband that
resource very wisely.

   We have already chatted briefly about nuclear fission and nuclear
fusion. Today we produce 20 percent of our electricity from nuclear.
France produces 75 or 80. If you have some concerns about nuclear power,
when you drive tonight note that every fifth business and every fifth
house would be dark if were not for nuclear energy.

   

[Time: 21:30]

   One-fifth, 20 percent, of all the electricity in our country comes
from nuclear. Well, once these are gone, and they will be gone, except
nuclear breeder reactors, as many of those as we want to have and maybe,
maybe if we are lucky nuclear fusion. But we will transition, Mr.
Speaker, whether we like it or not, as the world runs out of oil, we
will transition to the renewables. What are they? They are solar and
wind and geothermal. Geothermal is when we tap into the molten core of
the Earth when we are close enough to that that you can get some heat
from that. If you go to Iceland, there is not a chimney there because
all of their energy comes from geothermal.

   We are trying very hard, as I mentioned previously, to tap into ocean
energy. It is not just the tides. It is the waves. It is the thermal
gradients in the ocean, the cold water at the depths, the warmer water
on top, kind of a thermal couple effect that you can get there.

   Then there is lots and lots of talk about getting energy from
agriculture. Soy diesel, bio diesel, ethanol, methanol, biomass. The
President mentioned it in his State of the Union. He said we are hooked
on oil and have got to wean ourselves from that, and technology will do
it. And he talked about some exciting technology, about taking some
biomass like soybean stubble and corn stalks and switch grass. What is
switch grass? Switch grass is prairie grass, and a lot of it grows. Of
the prairie that we did not plow up and let that return to switch grass,
it is a big crop every year. And they are talking about harvesting that
and using something like culling cellulosic ethanol. We bioengineered a
little organism that can split cellulose into its requisite glucose
molecules. It is made of sugar. Sure does not taste like sugar. See,
because the human's molecules are so closely tied together that the
enzymes in our body cannot split them. But these little bioengineered
organisms can do that, so we break cellulose down to glucose, and then
we ferment the glucose, and we get ethanol from it. And there is a lot
of talk about that.

   And biomass. Waste energy. Burning waste. There is a plant not far
from here in Montgomery County, I would be proud to have it by my
church. It looks like an office building. You do not even know it is an
incinerator burning trash and producing electricity. They bring the
trash in by truck or train in containers. You do not even see it until
it is inside the building and then they dump it. Really interesting to
watch it because that trash comes in with all sorts of things in it.
They have a crane there that picks it up and drops it to see if there is
something evil in it like a tank of propane. You would not want to put
that in the fire. It might explode. And if they drop it and there is
nothing evil-looking in it, they pick it up again and drop it over into
the fire. It is really worth a trip there. And we now get a meaningful
amount of energy, as a later chart will show from waste to energy.

   Then hydrogen. Many people think that we do not have to worry about
energy because we have got hydrogen. Hydrogen, Mr. Speaker, is not an
energy source. Hydrogen is simply a way of transferring energy from one
point

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to another. It will always cost more energy to make hydrogen than you
will get out of the hydrogen. I can say that with some confidence
because just as sure as there will never be a perpetual motion machine,
we will never suspend the second law of thermodynamics. And that says
that when you transfer energy from one form to another, you will always
loose some energy in that transfer. Why are we so enthusiastic about
hydrogen if that is true? It is because hydrogen has some incredible
capabilities. When you burn it, you get water. That is really not very
polluting, is it? And further more, hydrogen is a great thing to put in
a fuel cell. And a fuel cell gets twice the efficiency of a
reciprocating engine. So I am not depreciating the value of looking at
hydrogen. I am simply pointing out that hydrogen is little more than a
battery which takes energy from one place to another place. As a matter
of fact, in a recent hearing, we had three experts on hydrogen, and
there are three ways that you could transport hydrogen. One is as a
liquid. It must be really, really cold, several hundred degrees below
zero to keep it as a liquid, which means you have to have a lot of
insulation, and even then it is going to boil off, so you have got to
use it faster than that boils off.

   The other way to carry it is as a gas. Well, hydrogen is the lightest
element we have. Those gas molecules are really trying to get apart from
each other, so it takes a really high pressure vessel to contain hydrogen.

   The third way to transport hydrogen is in solid state. You adhere the
hydrogen either by some adhesion or by some chemical process. You carry
it in a solid state. That is very much like the way we carry electrons
in what we call a battery. Hydrogen is a proton plus an electron; and
so, and I asked the question, is a hydrogen battery inherently going to
be more efficient than an electron battery? Well, we really need to look
at hydrogen, but it is not a salvation to our problems.

   The next chart looks at the characteristics that we are going to want
to find in whatever alternative we turn to, and here we have on the
ordinate the energy profit ratio. I have talked about energy profit
ratio. That is how much energy you put in compared to how much energy
you get out. And our big oil fields here, you see, they are up at 60 to
one. As a matter of fact, the charts were even higher. Some of those
were more than 100 to one. By the way, there were none of those in our
country. They exist only in the Middle East and most in the big Darwar
oil field. The granddaddy of all oil fields is in Saudi Arabia.

   And the energy profit ratio is 60. You put in one unit of energy, one
BTU, and you get out 60 BTUs. The abscissa here is economic
effectiveness in transport, that is, how handy is it to use. And we are
talking primarily about transportation and liquid fuels, how handy is it
to use. Well, oil of course is the handiest thing to use. It is way over
here on the right. And it had an enormous energy profit ratio if it came
from the giant oil fields. In 1970, when we peaked, our energy profit
ratio was down here. Now it is harder and harder to get our oil, and so
by 1985 the energy profit ratio had slid down to here. Notice where the
energy profit ratio is for tar sands and ethanol and that sort of
source: way down here, just about zero. In fact, some people think that
the energy profit ratio for ethanol, the way that it is frequently made,
is below zero here, that more energy goes into making ethanol from the
fossil fuels that made the tractor and plows field and makes the
fertilizer and so forth than you get out of the ethanol.

   Well, here we have some of the other things: hydro, coal fired,
nuclear, photovoltaics. They now are getting much better. They are
moving up in energy profit ratio. Wind machines should be on here too,
and they would be about in this same category. So whatever alternative
energy source we use, to see how useful it is going to be, we need to
put it on this chart: does it have a high energy profit ratio, and is it
really convenient to use for transportation.

   The next chart is one which really has the long look. I like this
chart because it is kind of humbling. It kind of puts us and oil and our
whole history into perspective. Here we have only about 400 years, a little

   less than 400 years out of 5,000 years of recorded history. But for
the first 4,600 years not a whole lot happened. And so if you extended
this back 4,600 years, it would look very much the same. Very little
energy produced. Here you see it. Wood. And then we learned how to use
it more effectively. The Industrial Revolution started here in the early
1800s. We denuded the hills of New England to send charcoal to England
to make steel. There is a little historic place called Catoctin Furnace
up in Frederick County, and we denuded our hills up there to make
charcoal for Catoctin Furnace. And then we found coal.

   Oh, the ordinate here is quadrillion BTUs, how much energy you are
producing. And then we found coal. And boy, look what happened. Look
what happened. We really took off. The coal was very limited in what it
could do compared with gas and oil, and the red curve here is gas and
oil. And look what happened. It just took off and was reaching for the
sky. Notice here the worldwide recession after the Arab-induced oil
price spike hikes, worldwide recession, and we did use less oil. So we
can economize. We can be more efficient. We can use less.

   I might point out, Mr. Speaker, that the world's population has
pretty much followed this. Just this afternoon I was looking at a chart
of world population. Half a billion, a billion people for way back as
far as we can look in history. And then we start the Industrial
Revolution, and the world's population took off and it mirrors this.
From a half a million, half a billion to a billion people up to now
nearly seven billion people.

   If, in fact we are at peak oil, and almost nobody denies, the most
optimistic estimate I have ever seen is that we will reach peak oil at
about 2035 or 2036. You know, that is not forever in the future. Most
authorities believe that we are either here or it is very imminent. But
if we have reached peak oil, we are about halfway through the age of
oil. That is incredible. Out of 5,000 years of recorded history, 150
years now we are into the age of oil. In another 150 years we will be
through the age of oil. Our great grandchildren will live then. What
will their world be like? We face a lot of really serious challenges.

   Mr. Speaker, when I think back, and someone asked me the other day
how long I have been thinking about this subject, and maybe it is
because I am a scientist. I knew that the fossil fuels could not be
forever and so maybe 30, 40 years ago, when I was teaching school and
doing research, I started asking myself that question, what does that
mean, not forever? Do we have another 10 years, a hundred years, a
thousand years? Obviously, it is not going to last forever. But what
does that mean? And so I have been following this for 30, 40 years now.

   The next chart looks at something that I have spoken briefly about
and that is coal. And some will tell you, and I have heard a lot of
people who ought to know better say, do not worry, we have got 250 years
of coal. That is true, at current use rates. But if you start increasing
coal only 2 percent a year, you know, Albert Einstein was asked after
the discovery of nuclear energy, what is next? What is the most powerful
force in the universe, Dr. Einstein? You know what his response was? The
power of compound interest. That is exponential growth. Compound interest.

   And if you grow only 2 percent a year, that 250 years now immediately
shrinks to about, what, 85 years here? And obviously you cannot fill
your trunk up with coal. You are going to have to convert it to a gas or
a liquid. And so when you have used some energy to convert it to a gas
or a liquid, after conversion you have got about 50 years left. That is
a long time. And it is a meaningful resource. But it is not forever. And
by the way, there are one of two penalties you are going to pay for
burning coal. Either you are going to pay a big environmental penalty if
you do not clean it up. And every year we vote some billions of dollars
for clean coal technology. And still we have too much CO

   *2, too much pollution from coal. *

   And by the way, Mr. Speaker, the use of coal is not without its
price. We have had, what, 16 miners killed in West Virginia in the last
couple of weeks in producing coal.

   When was the last time you heard that a worker in a nuclear power plant

[Page: H211]

was killed or injured? The answer is, never in this country. It just has
not happened. I lived through the Three Mile Island disaster. I was not
very far from it in Frederick, Maryland. There was a lot of hoopla about
that. Very little actual effects of that. I have some friends who have
been avidly antinuclear. When they are considering the alternative of
shivering in the dark as we run down the other side of Hubbert's peak,
they are wisely taking a new look at nuclear.

   Our next chart is a very interesting one. We have talked about the
potential from agriculture. Let me make two generalizations as a
caution. We are barely able to feed the world. Tonight, 20 percent of
the world or so will go to bed hungry. How much food can we convert to
energy and still feed the world, particularly if we permit the world's
population to increase as it is today?

   The other caution is, how much biomass can we take from our land and
still have topsoil? With all of our good techniques today, no till
farming and so forth, every bushel of corn we grow in Iowa is
accompanied by three bushels of topsoil that go down the Mississippi River.

   Now, topsoil is topsoil, rather than subsoil simply because it has
organic matter in it. And that organic matter, the humus comes from
decaying organic material. And if you are taking all that organic
material off to burn or to ferment or whatever you are going to do with
it, I am not certain how long we can maintain the quality of our topsoil
so that we can continue to produce the food and fiber that we need and
that the world needs.

   On the top here are shown two depictions. One is the amount of energy
you get out of petroleum. Obviously, you do not get all the energy in
your car. It takes energy to drill the wells, to pump it out, to
transport it, to refine it, to haul it to the gas station and so forth.

   

[Time: 21:45]

   So when we get out 1 million BTUs, there are probably, they estimate,
it took 1.23 million BTUs input. So you do not get it all in your car.
You would not expect to.

   Now, what about the energy profit ratio here of ethanol? And here we
are getting a lot of energy from the sun. What does that mean in terms
of the final product? And I am told by some this is a pretty optimistic
assessment here. But even if we reach this, you have put in .74 million
BTUs. Almost three-fourths of the energy you get out of ethanol is
represented by the energy that went into producing ethanol. There is an
energy profit ratio, although some have disputed that. There is a doctor
in the East here and one in the West, and they have done what they say
is a very good analysis of all the energy, and it is hard to keep track
of that, Mr. Speaker. It is not just the diesel fuel they use in the
tractors. How much energy does it take to make the tractor? Every
automobile tire has the equivalent of 6 gallons of oil in it. As you
burn the tire, you get some sense that that is probably pretty close to
the truth.

   These two scientists believe that today in the way that some ethanol
is made, it takes more energy from fossil fuels to make the ethanol that
we get out of the ethanol. Even if that is true, there is a good
byproduct remaining, all the fat and all the protein. Tofu is a protein,
by the way. That is the protein from soybeans. We get a similar protein
from corn. So we can use that as animal food or human food.

   The bottom chart here shows some of the challenge of getting energy
from corn. This is a pie chart which shows the total amount of energy
that goes into producing a bushel of corn. And notice, Mr. Speaker, that
almost half of that total energy comes from nitrogen. That is because
nitrogen fertilizer is made from natural gas. Before we learned how to
do that, the only source of nitrogen fertilizer was barnyard manure and
what we call guano. Guano is the droppings of bats and birds for very
long periods of time, hundreds of years, maybe thousands of years, and
it accumulated on the tropical islands, and in the case of bats, we
mined that to get guano. That is gone. If we wait another 10-, 20-,
30,000 years, there will be some more. But it takes a very long time to
accumulate that.

   This is all the other energy that goes into producing a bushel of
corn. Potash was mined using fossil fuels. Phosphate was mined using
fossil fuels. The lime was quarried using fossil fuels. Here is the
diesel fuel that ran the tractor and the combine, the gasoline that is
used in some of the farm equipment, liquid gas, electricity, all of
which is produced by fossil fuels, most of it by fossil fuels, some by
nuclear, 20 percent by nuclear. The custom work, the diesel that went
into doing the work, the energy, the fossil energy it took to build the
tractor and so forth. And many of the chemicals we use in agriculture
are made from oil. The water is pumped using energy. The hauling, the
seed, fossil fuel energy goes into producing all of this.

   Mr. Speaker, how will we feed the world once we run down the other
side of Hubbert's peak?

   The next chart, this is a really interesting one. I use an analogy
here that helps me to understand this. I imagine a young couple that has
just gotten married, and their grandparents died and left them a pretty
big inheritance. So they have now established a life-style where 85
percent of all the money they spend comes from their grandparents'
inheritance and only 15 percent from their income. And they look at the
amount they are spending and at the size of the grandparents'
inheritance and say, gee, this is not going to last until we retire. So
obviously they have got to do one or both of two things: Either they
have got to spend less money, or they have got to earn more money.

   I use that 85-15. Others may use 86-14. The 85 or the 86 is the
percentage of energy in our economy that we get from the fossil fuels,
natural gas and petroleum and coal. Only 15 percent in this depiction do
we get from nonfossil fuel sources. A bit more than half of that,
nuclear energy, 8 percent, that is, 8 of 15, a bit more than half, comes
from nuclear. That is 20 percent of electricity, but 8 percent of our
total energy use heating buildings and manufacturing and so forth. Seven
percent of it comes from renewables. Remember that previous chart?
Ultimately we will transition to these renewables, with the exception of
what we will get from nuclear. When we are through the age of oil, it
will all be renewables.

   What are they? Solar. This is a 2000 chart. We are better today. In
2000, solar represented 1 percent of 7 percent. That is .07 percent. It
has been growing at 30 percent a year. That doubles in about 3 years. So
now, big deal, it is .28 percent of our total energy.

   Wood, 38 percent. Not the West Virginia hillbilly, but this is the
timber industry and the paper industry wisely using a waste product,
what would otherwise be a waste product.

   I mentioned waste before. That is 8 percent of our total renewable
energy. We ought to be producing a lot more of that. Landfills are
pretty silly when you think that you could be producing electricity with
that rather than worrying about the methane that is produced there. They
do harvest some of that, by the way, and use it.

   Wind, another 1 percent. By the way, wind and solar are essentially
the same energy source. The wind blows because of the differential
heating of the sun; so they both go back to the sun. We can now produce
electricity from wind at 2 1/2 cents a kilowatt hour. That is really
competitive. Why are we not producing more of it? Wind farms are
growing. You may see them. Some people do not like the look of those. I
think that the big wind machines are pretty handsome. That is about
where solar is today, about .28 percent of our total energy.

   How long will it take us to get to any meaningful percentage there?
Because that is increasingly what we are going to have to rely on in the
future.

   Conventional hydro, almost half of all of our renewables comes from
an energy source that is not going to grow in our country. We have
dammed every river that should be dammed and probably a few that should
not; so

   that is not likely to grow.

   Now we are down here to agriculture, alcohol fuels and so forth.
Again, almost in the noise level. And geothermal, where we are close
enough to the molten core of the Earth, we really should tap into that.
That is free. It is forever if you use it properly.

   The next chart shows us something very interesting. Mr. Speaker, I
would like to get some input from statisticians on this because
everybody knows

[Page: H212]

the jargon of something which is statistically significant. There is a
95 percent probability, there is a 5 percent probability, and so forth.
And here they have done something which I find very strange. If you are
looking at the path that a hurricane is going to take, you notice it
starts out very narrow. It could get pretty good for the next few hours,
but when it gets out to hours and days, it gets broader and broader.
Now, the hurricane maybe will go down the middle, but there is just as
big a chance it will go to the left as there is that it will go to the
right. And what these folk are doing and what they are using here is
statistical jargon. They are saying a high 5 percent probability, low 95
percent, and the mean is what is in the middle. Now, that could just as
well be a whole lot less as that much more. So the real peak is probably
going to occur about right here.

   This is where we are now. This is the 2000 chart. We are about right
here. They are using this mean here. No one that I know of believes that
the ultimate recovery, 1 billion barrels of oil, is 3 trillion. But even
if you use the 3 trillion, that takes you only to this point. It pushes
peak oil out only to 2016.

   The next one is a really interesting one. If you assume that you are
going to get it faster and move the peak out to 2037, look what happens
after that. You fall off a cliff.

   So we need to be careful about this enhanced oil recovery, because if
there is only so much to pump, and you pump it sooner rather than later,
later you are going to have less to pump.

   Back to Robert Hirsch and the study done by SAIC. They say on Page
64, ``World oil peaking is going to happen.'' And down here he says that
oil peaking presents a unique challenge. The world has never faced a
problem like this without massive mitigation, more than a decade before
the fact. And remember, Mr. Speaker, very few authorities believe that
peak oil is more than a decade from now. So we are pretty much here.

   The next chart points out something very interesting, and that is
that this really is a worldwide problem. We are all in the same boat on
this little planet Earth traveling through space. There is only so much
oil. There are about 7 billion people, and clearly we would do better to
engage the nations of the world in a competition to achieve
sustainability instead of a consumption contest, which is now what we
are doing: Who can use the most oil to grow their economy the fastest?

   The next chart shows ideally what we need to be about.

   By the way, Mr. Speaker, I think that if we do not have a national
and indeed international program which kind of has the breadth of
putting a man on the Moon and the intensity of the Manhattan Project, I
think we are in for a pretty rough landing.

   First of all, there is voluntarily conservation, and we can do that.
We can conserve. California did. They had no rolling blackouts because
they voluntarily reduced their electricity use by 11 percent in a single
year. That is big. We start out with voluntary conservation, ride with
two in the car, turn our thermostat down, put a sweater on. To organize
voluntary conservation, working together to provide for the van pools
and so forth, then the government can provide some monetary incentives,
giving you the incentive to do the right thing. And then efficiency, of
course. These were two words that were absent from the President's very
good message on energy, conservation and efficiency.

   I am a conservative. My wife says she thinks that there ought to be
some relationship between conservation and conservatives. Does that make
sense, Mr. Speaker?

   The next chart we are going back again to the Hirsch report. That was
such a great study. They said on page 24, ``We cannot conceive of any
affordable government-sponsored crash program to accelerate normal
replacement schedules so as to incorporate higher energy efficiency
technologies into the private-owned transportation sector. Significant
improvements in energy efficiency will thus be inherently time-consuming
of the order of a decade or so.''

   For instance, if everyone was to drive a hybrid car, which gets two
or three times the mileage of an ordinary car, it takes one or two
decades to turn over the motor fleet; 28 years, I think, for the big
trucks; much less than that for the vanity of cars and so forth.

   The next chart, this is something that we are doing out in Frederick.
We wanted to demonstrate that it was possible to be totally
self-sufficient, so we have proposed, and we have funding to do it
thanks to the generosity of the taxpayers, that we are going to build a
welcome center coming down into Frederick that is totally energy
self-sufficient. We will get all of our water from the rain. We will
handle all of our waste without putting anything into the ground, with
composting toilets and constructed wetlands and so forth. We will
produce all of our energy with wind machines and solar panels and so
forth. This should in the next couple of years be existing. If you go up
270 into Frederick and start down the hill where you look over the
Frederick Valley and see the city there, on your right will be the
Goodloe Byron Overlook. If you pull in there, you will be at this
welcome center, which will have a lot of what we call benign technologies.

   In the few minutes remaining, I would like to use the /Apollo 13/ as
an example of the challenge that we have. You may remember the /Apollo
13/. They had an explosion in one of their oxygen tanks. They had two
oxygen tanks. And that explosion caused the other oxygen tank to leak.
So not only were they going to be short of oxygen for themselves if they
were not careful, they were going to be short of energy because they
were using that oxygen to combine with hydrogen in a fuel cell to
produce energy.

   

[Time: 22:00]

   What they had available to them was the module, the lunar lander.
They turned around, as you may know. They had to evaluate what they had
to work with, and that is all they had to work with, what was in that
little spacecraft out there. What could they do with that? They had a
big challenge of CO

   *2 buildup and what they were going to do to manage that so that they
could get back. They had a very narrow window. *

   There are a lot of analogies between the /Apollo 13/ and where we are
today. They had a challenge not of their choosing. We did not choose to
reach peak oil at this time, but they were faced with the inevitable
decision of either making the right choices or not making it through,
and we are faced with very much that same kind of a dilemma. We have
some choices to make now, and the next chart points to the kinds of
choices that we have and what I think we need to be doing.

   I want to refer you to an earlier chart which, by the way, we had
that bell curve and we had the consumption going up like so, and there
is a gap there.

   A lot of people are trying to fill the gap. Here is that chart. Put
that in front of this one. We will talk about that in just a moment. A
lot of people are talking about filling the gap so that we continue on
this course and use ever more and more.

   I would suggest, Mr. Speaker, it is not what our challenge should be.
As a matter of fact, to get alternative energy sources, we are going to
have to invest three things. Money, we will not worry about that. We
will borrow that from our kids and our grandkids, I am sorry to say; but
we cannot borrow time from them, and you cannot borrow energy from them.
We have run out of time. We are using all the oil that is available. If
there was more oil than we would like to use, it would not be a
sixty-couple dollars a barrel, would it? So in order to have any energy
to invest in the alternative, we have to reduce our demand for oil so we
have something to invest.

   Trying to fill the gap just puts off the inevitable. If, in fact, we
are able to do that momentarily, since there is not going to be much
more oil found out there, the experts believe all you are doing now is
setting yourself up for a bigger fall later. The old adage, in a hole,
stop digging, the corollary to that is you are climbing a hill and you
are going to fall off the other side, the higher you climb, the further
you fall. This is pretty much where we are with oil. Let us go back now
about the choices before us now.

   Like /Apollo 13/, we have got to develop those contingency plans.
What will we do? We need to prepare proactively. We have almost run out
of time to do that. We must reduce energy consumption to make some
energy available. That will

[Page: H213]

buy some time. By the way, the cheapest oil is the oil you do not use.
We have bought some time so we can make investments now in more
efficiency, first of all, and then in these alternatives which we will
increasingly turn to.

   The ultimate goal is to achieve sustainable growth. By the way, Mr.
Speaker, there is no such thing as sustainable growth, whether short
term you may make it appear to be so; but ultimately there is no such
thing as continued forever sustainable growth. We are going to have to
learn to be happy with being satisfied with what we have got.

   I think, Mr. Speaker, we have some really, really great times ahead
of us. I can imagine nothing more than all Americans feeling really good
about contributing to a solution to this problem.

   What we really need is leadership that the American people understand
that they really can contribute. We have enormous creativity and
entrepreneurship. We need to harness that. The next big burst in
economic efficiency and growth can be in developing these alternatives
and more efficient ways of doing things.

   The ultimate goal, and we will get to that goal, we will transition.
When the age of oil is finished and there is no more oil that can be
gotten without paying more for the oil than you get out of it, we will
have been transitioned to the renewables. What will life be like then?
What will life be like in that transition?

   This is really a good-news story. The sooner we start to address this
problem, the less traumatic will be the transition. I like to think, Mr.
Speaker, that if we harness the creativity and the energy of the
American people, there is nothing that will make sleep so refreshing
other than just knowing you really contributed something that day.

   Mr. Speaker, I think that we have a bright future ahead of us. Unless
we recognize, we probably are approaching peak oil. I would encourage,
Mr. Speaker, that you go do a Google search for peak oil, pull up the
articles on peak oil or do Hubbert's peak, you will find essentially the
same articles there. There is a lot of information out there.

   The average person is so consumed with the necessities of life, the
tyranny of the urgent that pushes the important off the table: you
really need to change the diapers; you really do need to be responsible;
you also need to be thinking about tomorrow. We think about our next
election. The board of directors thinks about the next quarterly report.
Who is looking 5 years from now, 10 years from now?

   Mr. Speaker, I think we have a great future ahead of us. The American
people will respond if properly challenged.