You are on page 1of 43

Miami Institute Oil Neg

Johnson/Gonzalez Lab

Oil Neg
Oil Neg............................................................................................................................................................................1
Backstopping 1NC..........................................................................................................................................................2
Backstopping 1NC..........................................................................................................................................................3
No Flooding Now............................................................................................................................................................4
Link- Flood.....................................................................................................................................................................6
Spare Capacity- Yes........................................................................................................................................................7
Spare Capacity- Yes........................................................................................................................................................8
Spare Capacity- Yes........................................................................................................................................................9
Spare Capacity- Yes......................................................................................................................................................10
Spare Capacity- Yes.......................................................................................................................................................11
Spare Capacity- Yes .....................................................................................................................................................12
Spare Capacity- Yes .....................................................................................................................................................13
Spare Capacity- Yes......................................................................................................................................................14
Yes Refinery Capacity...................................................................................................................................................15
Transportation Capacity................................................................................................................................................16
Transportation Capacity................................................................................................................................................17
Transition Now..............................................................................................................................................................18
Transition Now..............................................................................................................................................................19
Transition Now..............................................................................................................................................................20
2NC Oil Link................................................................................................................................................................21
A2: OPEC Irrelevant ....................................................................................................................................................22
A2: No Price Collapse...................................................................................................................................................23
A2: Peak Oil..................................................................................................................................................................24
A2: Peak Oil..................................................................................................................................................................25
A2: Peak Oil..................................................................................................................................................................26
A2: Peak........................................................................................................................................................................27
A2: Peak Oil..................................................................................................................................................................28
A2: Peak Oil.................................................................................................................................................................29
A2 – ME Destabiliziation.............................................................................................................................................30
A2: Supply-Demand Key..............................................................................................................................................31
A2 – Supply/Demand Key............................................................................................................................................32
A2: Hubbert’s Peak.......................................................................................................................................................34
Abiotic Oil.....................................................................................................................................................................35
Abiotic Oil....................................................................................................................................................................36
A2: Dependence Adv.....................................................................................................................................................37
A2: Price Spikes............................................................................................................................................................38
A2: Price Spikes............................................................................................................................................................39
A2: Price Spikes............................................................................................................................................................40
A2: Price Spikes............................................................................................................................................................41
Transition Solves...........................................................................................................................................................42
Transition Solves...........................................................................................................................................................43

1

Miami Institute Oil Neg
Johnson/Gonzalez Lab

Backstopping 1NC
A. Uniqueness and impact- status quo ensures transition solving Aff
Agence France Presse -- English June 4, 2008 p. l/n
Claude Roy, an interministerial official who is coordinating France's efforts in biofuels, said "the real outcome lies
in the battle of the yields," a reference to the amount of fuel that is harvested compared to the energy used to
produce it. "At present, the two techniques have low energy yields. We have to double present yields to make them
viable. Tripling them would be ideal," said Roy. Such improvements can only come through research and
development and economies of scale in manufacturing -- and those in turn can only come through massive
investment. For instance, the German firm Choren Industries is to build a biofuel refinery with a 200,000-tonne
capacity. The cost is a billion euros (1.55 billion dollars), compared with just 40 million euros (62 million dollars)
for a similar facility handling rapeseed, also called colza. Such investments are fine -- just so long as oil prices
hold up. In many minds are memories of a false dawn 30 years ago. Investment in renewable energies surged in
the late 1970s but was wrecked when, a few years later, the price of crude plummeted and oil climbed back
into the saddle.

B.1. Link- Seeing threats causes OPEC to flood the market
Alexander, Editor of Gas and Oil Connections, 4/17/03, p. http://www.gasandoil.com/goc/news/ntm31691.htm
(Alexander, “How OPEC keeps America hooked on oil imports”, Alexander’s Gas and Oil Connections)

Many Americans dumped gas guzzlers for smaller cars. President Reagan ended oil-price controls, setting off a
boom in domestic drilling and arresting, through the mid-1980s, the downward spiral in US oil output. Prices hit $
40 a barrel in 1979 -- $ 100 a barrel at today's prices, after accounting for inflation -- and were expected to double
during subsequent years. Saudi Arabia worried that high prices would backfire. And to reduce US imports, President
Carter championed an $ 88 bn plan to develop synthetic oil from abundant US reserves of coal and shale. So Saudi
Arabia started selling oil at prices several dollars a barrel lower than the OPEC $ 34-a-barrel standard. Then, in
1985, as the cartel was facing increasing competition from Alaskan and North Sea oil fields, Saudi Arabia and
Kuwait engineered a price crash. After a meeting in which OPEC decided to go after market share rather than prop
up prices, Sheik Yamani, the Saudi oil minister, said to several reporters: Let's see how the North Sea can produce
oil when prices are at $ 5 a barrel. At low prices, the Persian Gulf countries have an unbeatable edge. In the mid-
1980s, it cost them a couple of dollars a barrel to produce oil. It cost about $ 15 to produce a barrel off the coast of
Britain and Norway or in the US.

2. Spare capacity exists in the system now
Emirates News Agency June 25, 2008 p. l/n
Energy minister, Mohammed bin Dha'en Al Hamili has reiterated the commitment of the UAE and other oil
producing countries to supply enough oil at a reasonable prices to contribute to the efforts to ensure global economic
growth. Al Hamli made the statement in his address to the Asian Oil and Gas Show, which opens Wednesday here at
the COEX Convention Centre. "We are aware of the importance of reliable stable supplies at reasonable prices
to growing economies in regions such as Asia. Producers and consumers are both in need of stability," Al
Hamli said in his address. He said the UAE and other OPEC countries had, over the past few years, invested
heavily to ensure maximum production of oil reserve for use in case there was a hitch in production as a
result of emergency circumstances. "we have invested heavily to ensure that there is sufficient spare capacity
to replace the occasional unexpected cessation of supplies caused by the weather, geopolitical tensions or the
occasional accident. That spare capacity exists but financial speculators many of whom have never seen an oil
tanker or a refinery continue to drive prices up as they hedge against inflation, the weakening US Dollar and
seek new opportunities for quick returns in commodity markets," he stated.

2

Miami Institute Oil Neg
Johnson/Gonzalez Lab

Backstopping 1NC

3

Miami Institute Oil Neg
Johnson/Gonzalez Lab

No Flooding Now
OPEC won’t add more oil to the market now
Cohen, researcher at Peak Oil Association, April 30 2008
(Dave, http://www.aspo-usa.com/index.php?option=com_content&task=view&id=363&Itemid=91)
The time has come to discuss what we can expect from OPEC as it relates to our prosperity in the coming decade.
After 2010, crude produced outside the cartel will plateau and gradually decline, so any growth in the
conventional oil supply must come from OPEC. OECD policy-makers and consumers must now understand
that OPEC's short term policy on supply-side relief, which is not to provide any, is also their longer term
policy. Do not count on OPEC to bail us out of the oil crunch. We must adjust our expectations to reflect reality,
not our hopes and dreams.

OPEC controls now- they dominate the market
Cohen, researcher at Peak Oil Association, April 30 2008
(Dave, http://www.aspo-usa.com/index.php?option=com_content&task=view&id=363&Itemid=91)
Delusional expectations placed upon OPEC's ability and willingness to expand the oil supply are going to
make our lives untenable within a few short years. Harmful price impacts are already happening now. For most
citizens, future impacts will far outweigh questions about who the next president of the United States will be as
things stand now. In the absence of a major and immediate policy shift in the United States that aims to
substantially reduce our oil consumption, it will be OPEC, not our elected government or "Big Oil"
companies, that sets the minimum (floor) prices for liquid fuels.

4

Miami Institute Oil Neg Johnson/Gonzalez Lab 5 .

don't use as much energy. To lessen dependence on oil.$ 3. the pace of energy efficiency slowed. OPEC was determined to keep prices relatively low to retain market share and scare off rigs in other regions. Newer ascendant ones. fuel-efficient vehicles. Nine energy-intensive industries -- aluminium. not because of energy-saving technology. Alexander’s Gas and Oil Connections) President Carter's synthetic-fuel program couldn't compete with the new OPEC prices and was ridiculed for its massive. according to Congressional Budget Office estimates. such as software and communications. from oil to natural gas. that figure dropped to 4.htm (Alexander. With the economy surging. “How OPEC keeps America hooked on oil imports”. Home heating went through a similar transformation. 13.75 in Japan -. forest products. consumers flocked to minivans. chemicals. When oil prices declined after 1985. glass.16 a gallon in Britain. steel and petroleum -.Flood Empirically Proven: OPEC Manipulates Oil Markets To Only Their Benefit Alexander.account for 80 % of industrial energy use.gasandoil.Miami Institute Oil Neg Johnson/Gonzalez Lab Link. metal casting. 4/17/03. In 1979. the US would have to raise the price of gasoline substantially. a senior manager for energy planning at DaimlerChrysler in Detroit. 6 . on top of the average current tax of 41 cents. Electric utilities and other large customers switched to natural gas. which was seen as a cheaper and cleaner alternative. $ 1. money-losing projects. to reduce gasoline consumption by about one-fourth. The US became somewhat less dependent on oil mostly because of long-term changes in the structure of the economy. p. In the 1990s. http://www. It would take an additional $ 1-per- gallon tax. But most of the gains in fuel efficiency came in the early 1980s when oil prices were high. Editor of Gas and Oil Connections. down from 50 % in 1973.1 % in 1985 and about 3 % today. The American government didn't require further increases in automobile fuel efficiency. economists say. taking inflation into account. The US is far more energy-efficient than it was in 1973.so drivers there overwhelmingly choose smaller. SUVs and other fuel hogs. "To reduce oil consumption." says Loren Beard. Many of those industries are in decline. mining. gasoline prices fell lower than they had been since the oil embargo of 1973. Europe and Japan have especially high gas taxes -. when Arab nations cut off oil exports to the US because of America's support for Israel during the October war.5 % of electricity was produced by oil. It takes about half as many barrels of oil to produce each $ 1 of economic output today as it did 30 years ago. the most obvious thing to do is to tax gasoline and make fuel economy a desirable feature. agriculture.com/goc/news/ntm31691. Petroleum accounts for 40 % of total US energy consumption. and less vulnerable to disruption because it was produced in the US and Canada. a consulting firm. according to Cambridge Energy Research Associates.

By the time OPEC ministers next convene--they have a meeting scheduled for September. Saudi Arabia has also let it be known that it has made an effort to address the problem by increasing its own production. Saudis can produce more. despite the increase in demand.together the two had accounted for nearly 2.4mbd of non-OPEC oil. May 22 2008 p.that oil exists and demand will decrease Middle East Select July 1. 2008 p. oil As oil prices continue their climb to new heights. while insisting that prices are being pushed ever upwards by forces beyond the control of even the world's largest oil exporter. vainly commanding the surging tide of oil prices to recede. Saudi Arabia also has to reckon with the concerns of some of its fellow OPEC member states about the risks of a supply glut. The challenge for Saudi Arabia is to nudge the price into that zone with the minimum disruption. Further. OPEC expanded its member roster to include Ecuador and Angola . l/n Saudi Arabia has described the oil price as unjustifiably high.62mm Justice delivered by Newstex) -.BUSINESS & ECONOMY Oil. l/n At the same as it is seeking to reassure consumers.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. Taking into account inflation and the dollar's depreciation it can be assumed that OPEC "comfort" level is somewhere between $80US-100/b. 2008 p. is deliberately keeping oil supply tight to prop up prices. 23. spearheaded by Saudi Arabia. Supply glut possible. as the graph below shows. total OPEC production remained constant.Yes Saudi Arabia increasing spare capacity 7.62mm Justice June 23. codirector for the institute of Global studies. The changes in the IEA's demand forecasts are suggestive of a trend that might turn out to be much more severe than they seem at present. This is equivalent to the production of Norway disappearing off the market . allowing existing members to reduce production. This translates into a net reduction in non-OPEC supply with no equivalent increase in OPEC supply. even as the global economy has grown and with it demand for oil. Saudi Arabia will add another 500. 7 . In 2007. and it has called for a meeting of major oil producers and consumers in Jeddah on June 22nd to try to devise means to stabilise prices at a level that would satisfy the interests of both parties.000 barrels of daily output to raise its production to the kingdom's highest level in 25 years.4mbd from the global oil market in what amounts to an accounting scam. With demand growth slowing and more Saudi crude about to come to market. Yet. The Saudi government has now put on record its view that it is resolved to prevent oil prices from rising 'in an unjustified and abnormal manner'. 2008 (7. 2008 p. Congressional Testimony) OPEC. OPEC production today is virtually identical to its production thirty years ago. but that could be brought forward--the demand outlook may well look even bleaker. Saudi production has increased. but the cartel has effectively deleted 2. oil.reserves exist Middle East Select July 1. l/n Jun. is a remedy at hand? King Abdullah bin Abdelaziz al-Saud finds himself like a latter- day King Canute. lexis (Anne. Not only is Saudi production lower today than it was two years ago.they just don’t wanna Korin. in an attempt to allay unrest and to continue its client countries' economic growth so they will continue to purchase additional oil. while non-OPEC production has doubled over the last thirty years. the only remaining OPEC country able to increase production is feeling political and economic pressure to do so-although not in the way expected by Congress.

Kuwait has spare capacity Birmingham Post June 25. Kuwait.5 million barrels a day (mbd) rise already planned for July for the remainder of the year. l/n Participants agreed that restoring oil market stability requires concerted moves to implement a broad set of policy measures. 2008 p. 8 . state news agency KUNA reported. including increased oil investment.000 barrels per day starting mid-2009. strengthened pass-through of price signals to end-users.Yes Saudi Arabia expanding operation. and improved oil market data. with ready plans for further expansion to 15 mbd if warranted by demand developments.spare capacity will be A-Go Africa News June 26. although top exporter Saudi Arabia announced over the weekend at a meeting between producers and consumers it would hike output in an attempt to cool markets. 2008 p. another one of the few Opec members with spare capacity. The Saudi Arabian government announced at the meeting that the country stood ready to increase oil production beyond the 0.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. l/n Oil cartel Opec insists supplies are ample and blame the rise on speculators. plans to increase its oil output by 300. Its oil production capacity will reach 12.5 mbd by end-2009.

Although spare capacity is expected to climb above 5 million b/d during 2008.000 bpd oil capacity boost”. p.p5).cms (“Kuwait says plans 300.000 b/d capacity expansion at the Al-Jurf field.58 million barrels per day in May.59 million in April. Opec production cuts over the last year have created a 1 million-1. http://economictimes. excluding those Nigerian volumes shut in due to civil unrest and sabotage.000 b/d of condensate and NGLs from the fifth RasGas LNG train and 65.1 million b/d average expected for 2007." Olaim told reporters when asked about the KUNA report that cited him as saying the OPEC exporter planned an output increase of 300. Oil Minister Mohammad al- Olaim said on Wednesday. The world's seventh-largest oil exporter. and will decline again after the end of next year. according to a media survey.4 million barrels per day. compared with 2. 6/25/08.000 bpd in a year.13.000 b/d of additional capacity from the Idd al-Sharqi field -. from a 40. reliable spare capacity. which sits on a tenth of global crude reserves. Secondly. along with the levels of global commercial and strategic stocks. for both Opec and non-Opec.com/News/International_Business/Kuwait_says_plans_300000_bpd_oil_capacity_b oost/articleshow/3163167. The call on Opec crude next year is projected by PIW sister publication Oil Market Intelligence to be 29. is compensating for slowing non-Opec growth.5 million barrel per day cushion of current spare capacity -. Firstly.and Libya.the degree of geopolitical risk and the location and quality of the available Opec spare. But Opec spare capacity is on the rise. it will still be well below the 7 million b/d peak seen in early 2002. 9/3/07. "Yes.5 million b/d with the completion of Saudi Arabia's three-field Greater Khursaniyah Area (GKA) project along its northeast coast (PIW Aug. p. And lastly.80. But a few trends seem to be firmly in place.indiatimes.p2). By year end.4 million b/d at end-July. excluding Iraq and Angola. new Opec light crude production is being brought on stream to bolster spare capacity even further. continue to interact in a complicated dance.000 b/d of natural gas liquids (NGLs) capacity from both GKA and an expansion of the giant Ghawar field's Hawiyah liquids processing center.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. 9 .energyintel.com/DocumentDetail.Yes OPEC’s Spare Capacity Is on the Rise Petroleum Intelligence Weekly. growth in the "other liquids" category. Besides the 500. low readings point to stormy weather ahead. There are still serious issues surrounding the measurement and adequacy of spare capacity -.000 b/d addition to Arab Light crude capacity.000 barrels per day by mid-2009. http://www.with.20.asp?document_id=210901 (“OPEC Spare Capacity Keeps On Rising”. Olaim declined to comment on the Gulf state's spare capacity levels. Kuwait produced 2. plans to boost output to 4 million bpd by 2020. a large component of lighter crudes. could grow to over 4. clarifying a report by the official news agency KUNA. Smaller contributions are slated to come from Qatar -. capacity. Current Opec spare capacity is rated by OMI at nearly 4. The Gulf Arab state is one of few members of the Organization of the Petroleum Exporting Countries capable of raising output. suggesting at least a lull in the price squalls that have beset the market over the past few years. Energy Intelligence Group) One key barometer of potential turbulence in oil markets is Opec's spare crude oil production capacity. There is Spare Capacity of Oil in Kuwait Reuters. which are not included in the production cut system (PIW Aug. the kingdom will also gain a combined 600. Reuters) Kuwait plans to raise its oil output capacity by 300. down from a 30. importantly. As with hurricanes.

Libya's top oil official. While consumer nations have said an increase in OPEC output would help to calm runaway oil markets. The increased demand in the developing world has coincided with historically low levels of spare oil production capacity. 10 . followed by an address by Prime Minister Gordon Brown of Britain. http://www. announced a task force to explore commodity activity. Today's meeting also is expected to look at whether speculation is responsible for current price levels and what can be done about it. a weak dollar and political instability. said the market had more than enough crude. Demand for fuel from China. have lobbied heavily for more Middle Eastern crude. Staff Reporter." he said. and the Middle East has jumped in recent years along with rapid economic growth in those countries.Yes Many Countries Asked for Oil Prices to Drop But OPEC Countries Have Not Complied Lewis. King Abdullah of Saudi Arabia will open the meeting today. India. Another OPEC delegate said it was not yet clear whether they would join in any output rise." Prince Abdulaziz bin Salman. While Riyadh wants action from the governments of consumer nations to rein in speculators. according to the International Energy Agency. Shokri Ghanem. We believe the prices are high. Kuwait's oil minister. including President Bush. said he had no plans to raise output ahead of the talks. "There's oversupply in the market. Western leaders. p. the highest-level foreign dignitary to attend. Investment funds have pumped billions of dollars into oil and other commodities as they seek to diversify holdings and flee poorly performing asset classes. “OPEC nations consider increase in oil production”. The Boston Globe) The two other OPEC members with some extra capacity are the United Arab Emirates and Kuwait.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. 6/22/08. OPEC member countries have repeatedly blamed factors that include speculation. deputy Saudi oil minister. which oversees futures trading on US exchanges. Mohammad al-Olaim. but it's not because of supply and demand.boston. It also reached a deal with its British counterpart to limit trading on oil futures on the London- regulated ICE exchange. adding he did not expect concrete actions at today's meeting. was quoted as saying by the Saudi-owned daily Asharq al- Awsat. the Commodity Futures Trading Commission.com/news/world/middleeast/articles/2008/06/22/opec_nations_consider_increase_in_oil_product ion/ (Barbara. which fell below 2 million barrels per day among OPEC countries in May for the first time since the third quarter of 2006. "Governments have a role in organizing [oil] markets and structuring them in a way that prevents speculators behaving in a manner that has led oil prices to reach their current levels. but would consider options afterward. Under pressure from US lawmakers.

and will decline again after the end of next year. 11 . could grow to over 4. continue to interact in a complicated dance. excluding those Nigerian volumes shut in due to civil unrest and sabotage. new Opec light crude production is being brought on stream to bolster spare capacity even further. p.5 million barrel per day cushion of current spare capacity -. 9/3/07. it will still be well below the 7 million b/d peak seen in early 2002. the kingdom will also gain a combined 600.1 million b/d average expected for 2007. low readings point to stormy weather ahead.000 b/d of natural gas liquids (NGLs) capacity from both GKA and an expansion of the giant Ghawar field's Hawiyah liquids processing center.and Libya.asp?document_id=210901 (“OPEC Spare Capacity Keeps On Rising”. reliable spare capacity. is compensating for slowing non-Opec growth.energyintel. Besides the 500.000 b/d of additional capacity from the Idd al-Sharqi field -.with.80. By year end.p2). Secondly. But a few trends seem to be firmly in place. from a 40. And lastly.13. Opec production cuts over the last year have created a 1 million-1. The call on Opec crude next year is projected by PIW sister publication Oil Market Intelligence to be 29.p5). Although spare capacity is expected to climb above 5 million b/d during 2008. a large component of lighter crudes. There are still serious issues surrounding the measurement and adequacy of spare capacity -. importantly.Yes OPEC’s Spare Capacity Is on the Rise Petroleum Intelligence Weekly. Energy Intelligence Group) One key barometer of potential turbulence in oil markets is Opec's spare crude oil production capacity.com/DocumentDetail.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. But Opec spare capacity is on the rise.the degree of geopolitical risk and the location and quality of the available Opec spare. As with hurricanes. suggesting at least a lull in the price squalls that have beset the market over the past few years.20.5 million b/d with the completion of Saudi Arabia's three-field Greater Khursaniyah Area (GKA) project along its northeast coast (PIW Aug. excluding Iraq and Angola. along with the levels of global commercial and strategic stocks. Current Opec spare capacity is rated by OMI at nearly 4.000 b/d capacity expansion at the Al-Jurf field.000 b/d addition to Arab Light crude capacity. down from a 30.000 b/d of condensate and NGLs from the fifth RasGas LNG train and 65. which are not included in the production cut system (PIW Aug. growth in the "other liquids" category.4 million barrels per day.4 million b/d at end-July. http://www. Firstly. for both Opec and non-Opec. Smaller contributions are slated to come from Qatar -.

So every member faces the same incentive to ‘cheat’ the cartel. an Economist at the Centre for Independent Studies. if all members pump out more than the quota. And since no individual country has the reserves to influence global prices. 6/24/08.cis. http://www.every member knows that it can quietly produce more than its quota without facing lower prices. “The Myth of OPEC”. 12 . The problem with this is that no one can check whether individual countries are sticking to their quotas. Because the incentive to cheat by individual members is so strong and the ability of the cartel to enforce compliance so weak. This has been the pattern of behaviour not just of OPEC in the past. It does this by allocating each member country a quota for production. p. but of all cartels.html (Gauray.org. cartels have historically produced more than they say they do. This means that all 12 members are told to produce at lower levels than they otherwise would to keep prices high. Of course. the price starts to fall and the cartel falls apart.with the possible exception of Saudi Arabia.au/executive_highlights/EH2008/eh63608.Yes OPEC Countries Have Ability to Produce More than Projected Sodhi.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. Executive Highlights) But it is actually just a loose alliance of 12 diverse oil producing countries that tries to influence prices by controlling output.

And since no individual country has the reserves to influence global prices. That said. pressured by Congress and consumers at home. The Kingdom has responded by posting a number of confusing and contradictory explanations. With gasoline prices set to rise to between $4. Lastly. it is simply stating that it cannot produce a significant volume of new oil. Associated Content) In a visit to the Kingdom of Saudi Arabia this week. Over the past year. First it blamed speculators for the high price of oil.com/article/771441/saudi_arabia_unable_to_produce_more. Then it claimed supply and demand were in balance. the price starts to fall and the cartel falls apart. As time ticks by and Saudi Arabia continues to fail to meet its production goals. President Bush. the Kingdom of Saudi Arabia is the last hope for adding significant supplies of oil to market and reducing cost. 6/24/08. Saudi Arabia Has the Most Spare Capacity Fanney. cartels have historically produced more than they say they do.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. so far. Pledging to raise output by 300. output from Saudi Arabia has wavered between 8. we're doing everything we can to meet this problem.50 per gallon. most of this oil is in the form of very heavy crude that is difficult to refine into usable grades. the moment of a world peak in oil production appears to be imminent. “The Myth of OPEC”.html?page=2&cat=75 (Robert. Now.5 and 9.associatedcontent. Though the Kingdom claims about 2 million barrels per day of spare capacity.with the possible exception of Saudi Arabia.au/executive_highlights/EH2008/eh63608.org. So every member faces the same incentive to ‘cheat’ the cartel. But these new projects are aimed at old wells and. the call for lower costs is becoming more and more shrill with each passing day. Out of all these statements. Of course. but of all cartels. Former Editor. Over the past two years. Saudi leaders responded by telling Bush they are doing all they can to produce more oil. a number of calls have been made to the Kingdom to ramp up production in the face of record prices. National Security Adviser Stephen J.every member knows that it can quietly produce more than its quota without facing lower prices. This means that all 12 members are told to produce at lower levels than they otherwise would to keep prices high. p. Hadley provided a little more light by telling reporters "I think the message the Saudis were sending was. production. 5/17/08.5 million barrels per day in new production was supposed to be brought online from Saudi fields. underscores the increasing need to lower oil prices which have climbed inexorably from around $90 per barrel to nearly $127 per barrel in a four month period. have met with disappointing results.000 barrels per day in June. If the Saudis cannot increase production substantially and with 54 of the world's 65 major oil producing countries in decline.html (Gauray. if all members pump out more than the quota. an Economist at the Centre for Independent Studies. The fact that the Saudis are admitting they cannot substantially increase production should be further sign that the wolf of peak oil is now howling at the door. Executive Highlights) But it is actually just a loose alliance of 12 diverse oil producing countries that tries to influence prices by controlling output. it becomes increasingly obvious that both the Saudis and the world are in for serious trouble. there have been a number of signs in recent years that the Kingdom has struggled to maintain. it seems increasingly in doubt that the Saudis will succeed in their goals. “Saudi Arabia Unable to Produce More Oil”. http://www.00 and $4. It does this by allocating each member country a quota for production. it joined a large group blaming high oil prices on the falling dollar. This year alone. much less increase. 13 . was the best the Kingdom could do to help an increasingly strained world oil supply. despite record prices worldwide. The problem with this is that no one can check whether individual countries are sticking to their quotas. asked the Kingdom to increase oil production. According to news reports from the Washington Post and Associated Press. With the largest stated spare capacity in the world.Yes OPEC Countries Have Ability to Produce More than Projected Sodhi. This has been the pattern of behaviour not just of OPEC in the past. http://www. over 1. and the only country currently not pumping oil at full capacity.5 million barrels per day." Underlying causes include a current inability to increase production and with the Kingdom already investing billions in attempts to squeeze more oil out of its older wells. The Kingdom's answer to Bush's call for oil was as clear as it was chilling. The visit. but it's a complicated problem and the underlying causes of these high gas prices are going to take time and money to address. Bush's second to the Kingdom since January. Because the incentive to cheat by individual members is so strong and the ability of the cartel to enforce compliance so weak.cis. p. only the last has in it a glimmer of truth.

Saudi Arabia and other producers with oil to spare could agree to raise output at an emergency meeting of energy powers this weekend.5 million barrels per day by the end of next year.com/news/world/middleeast/articles/2008/06/22/opec_nations_consider_increase_in_oil_product ion/ (Barbara. 14 ." he added.7 million barrels per day in July. triggering protests from Brussels to Bangkok over record fuel costs that threaten the world's economy. 6/22/08. US Energy Secretary Sam Bodman said yesterday that producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices." a senior OPEC official said. "While increases in near term oil production are welcome and necessary. and chief executives from big oil firms to meet today. is behind high prices. Staff Reporter. but the Organization of Petroleum Exporting Countries says speculation. Saudi Arabia has said it will raise its crude output to 9. the source also said Saudi Arabia would consider increasing its capacity beyond an existing goal of 12. not supply.boston. Riyadh summoned energy producers. has a policy of keeping a cushion of spare capacity and has said other OPEC members that can bring on extra production quickly would also discuss boosting output to try to tame the oil rally. The oil price has more than doubled in a year to almost $140 a barrel. Looking to the longer term." Bodman said. fundamentally the market needs to see investment in increasing the longer term production capability. Saudi Arabia . "The short-term policies to be discussed include the proposal that those OPEC countries that have spare capacity should boost supply. just like Saudi Arabia has announced it will do in July. the world's biggest oil exporter. The Boston Globe) JEDDAH. Saudi Arabia.Yes OPEC Can Decide When Or When Not to Improve the Economy Through Oil Markets Lewis. “OPEC nations consider increase in oil production”. He blamed tight supplies for the price surge. p.Miami Institute Oil Neg Johnson/Gonzalez Lab Spare Capacity. http://www. consumers. "Anything that will add supply to the market is important.

html (William. operable capacity went up. If capacity utilization were on the level it was in 2000. (Get this data and more from the EIA.) From the summer of 2006 to the summer of 2007. “Refinery capacity utilization”.Miami Institute Oil Neg Johnson/Gonzalez Lab Yes Refinery Capacity 85% of Refineries Have Free Capacity Polley.4 would be as high as I would be comfortable in guessing. I doubt is the case). even in the short run. It's bad public policy. Maybe more like 3 or 4 cents. fine. let me be very clear. That's just not enough to justify temporarily tinkering with the tax code to win political points. EIA.williampolley. Professor at West IL University. p.com/blog/archives/2008/05/refinery_capaci. If you want to provide relief to working families. There are a dozen better ways.. Unless things have ramped up immensely in a way that hasn't been seen for years (which due to the higher than average inventories. But again. then I am a little bit skeptical of claims that the supplies. inputs of crude oil into the refineries went down. http://www.. the amount that the consumer would benefit would be a small fraction of the tax reduction--5 or 6 cents out of the 18.) The most recent data point on refinery capacity from the EIA was 85% in February. 15 . 5/5/08. and idle capacity went up. Any extra capacity would suggest that the consumers would get some benefit from the tax holiday. are "fixed". I'd be more inclined to see the supplies as fixed.

standing alone among CPC shareholders in arguing for higher transit tariffs. together with the fact that CPC shareholders have already agreed to all of Russia's demands. Kazakh President Nursultan Nazarbayev. with Tengizchevroil (the Chevron-led consortium developing the Tengiz field) having launched an expansion at the field earlier this year that is expected to double output to 540. The agreement paves the way for the privately owned CPC pipeline to expand to its design peak capacity of 67 million tonnes per year (1. up 4. "A joint position has been agreed on the issue of the CPC [Caspian Pipeline Consortium] expansion. later.Miami Institute Oil Neg Johnson/Gonzalez Lab Transportation Capacity Russian Oil Pipeline Transport Is Increasing Global Insight. as the exit route for Kazakh oil exports heading west to the Mediterranean market (see "Related Articles"). Russia has repeatedly blocked an early expansion of the pipeline. however. Kazakhstan Agree to Double CPC Oil Pipeline Capacity by 2012”. will provide an additional export option for Tengiz volumes. yet it has still taken until now to finally secure an agreement on a plan to double the pipeline's capacity. In practice. opening up the first direct oil export route to world markets for Kazakh oil. The expected completion of this leg. In the meantime. That is. and the other CPC shareholders consented to higher transit tariffs.8% year-on-year.com/SDA/SDADetail12462. as will the start of a Kazakhstan-Azerbaijan oil supply agreement that would see oil from western Kazakhstan shipped by barge across the Caspian for reloading via the BTC. having agreed to support the Russian-sponsored Burgas-Alexandroupolis route. p. only for these deals to fall through.htm (“Russia. but throughput volumes quickly reached initial capacity. and. which will link two existing pipelines in central Kazakhstan. in theory. At the time. expanding capacity through the use of drag agents and pumping an average of 655. http://www. until now. The progress on these alternative oil export options for Kazakhstan.34 million b/d). the statement said. Nevertheless. The pipeline's shareholders had agreed to restructure the consortium's debt and go along with an increase in the transit tariff in September of last year. pushing for Kazakhstan to commit to supporting Russia's own preferred "Bosphorus bypass" pipeline. thereby allowing Kazakh oil from the Caspian region (including from Tengiz) to flow across Kazakhstan to China. a move that will permit the Central Asian state to increase its crude oil exports.000 b/d by the end of the year. The CPC launched the 1. up from its current capacity of around 32 million tonnes/year. However.000 b/d in 2007. 16 . and progress (albeit slow) towards starting trans-Caspian oil exports for re-export via the Baku-Tbilisi-Ceyhan (BTC) pipeline.510-km pipeline from the Tengiz oilfield in western Kazakhstan to Russia's Black Sea port of Novorossiisk in October 2001. Outlook and Implications With initial oil production from the Central Asian state is keen to move forward with ensuring that the Kazakhstan's Kashagan oilfield now slated to come onstream in 2011. capacity on the pipeline was 28 million t/y (565. Russia and Kazakhstan—the two largest stakeholders in CPC (see table) and the two countries through whose territories the pipeline runs—have previously "agreed" to expand capacity on the pipeline several times. Several times in recent years. Kazakhstan believed it had met Russia's conditions for an expansion of the pipeline. Considering the slow progress in reaching an agreement—and the numerous times in which an "agreement" has proven only a false promise—Chevron and the other CPC shareholders will be hoping that this time Russia lives up to its end of the deal. In a statement announced by the Russian Industry and Energy Ministry. Viktor Khristenko said that he and his Kazakh counterpart. Global Insight) Russia's Industry and Energy Ministry today confirmed that it has reached a deal with Kazakhstan to double capacity on the Caspian Pipeline Consortium (CPC)'s Tengiz-Novorossiisk oil pipeline. perhaps by next year. even came away from a meeting with Russia's then-president Vladimir Putin announcing that a deal had been reached to expand the CPC's capacity. Kazakhstan is in need of additional oil export options to handle the anticipated rise in volumes. a restructuring of the consortium's debt from construction of the multi-billion- dollar pipeline. had reached an agreement on an expansion of capacity on the Tengiz-Novorossiisk oil pipeline.globalinsight. triggering discussions on an early expansion on capacity for the route. and in December Russia said it had dropped its opposition to an expansion of the pipeline. only for Russia to drag its feet again. China has already begun work on the third and final phase of the Kazakhstan-China pipeline. for various reasons. 5/8/08. seems to have finally convinced Russia to stop stalling and permit CPC to begin the long-awaited capacity expansion. Sauat Mynbayev. infrastructure is in place to handle its anticipated increase in oil exports. with the launch of exports via the Kazakhstan-China oil pipeline in 2005. which should take place before 2012 in two stages". the Burgas-Alexandroupolis pipeline from Bulgaria to Greece. only for Russia to renege on an agreement. however. The CPC itself has pushed the Tengiz-Novorossiisk pipeline to its limits.000 b/d). Kazakhstan has been moving slowly towards further diversification of its oil export options.

000 barrels a day to 17. http://peakoiljournal.Miami Institute Oil Neg Johnson/Gonzalez Lab Transportation Capacity OPEC Shipments are Projected to Fall Dow Jones Newswire.08.63 million barrels a day. because of the strong demand from the east. except Angola and Ecuador. 17 .- based tanker tracker Oil Movements said Thursday. 6/19.K. p. Shipments from members of the Organization of Petroleum Exporting Countries are expected to total 24.82 million barrels a day in the previous four-week period to June 7.com/topic/opec-exports-to-fall-back-in-july-oil-movements- 5305. "We were having a couple months of exceptionally strong eastbound sailings.html () OPEC crude oil shipments are projected to fall by 230. Oil Movements forecasts OPEC exports based on spot and term chartering of crude oil from OPEC member countries. "But sailings out from the Middle East are still extremely high. Shipments from key Middle Eastern OPEC producers are projected to decrease by 350.000 barrels a day in the four-week period to July 5. Oil Movements said.59 million barrels a day in the four-week period. down from 24. "Now they are coming down a little bit and westbound sailings are picking up. but not enough to fill the gap." Mason said." said Roy Mason. U. head of Oil Movements.

government will be at the table if more money is required." He said simply the best way to cut energy costs is to cut energy consumption. which eventually would destroy their oil market altogether.S. (President Bush could start by rescinding his father's executive order reinforcing the offshore drilling ban. Exxon Mobil (NYSE:XOM) is unloading its 800 company-owned gas stations in addition to 1." Speaking of refineries. High prices make renewables competitive The Times & Transcript (New Brunswick) May 30.S. Some projections say that the U. not the long-term leadership we need to solve our dependence on oil.Miami Institute Oil Neg Johnson/Gonzalez Lab Transition Now High oil prices cause shift to alternative energy now 7.3 percent profit (which is seven-tenths of a percent below the average for all U. and now it's Maurice Hinchey (S-NY): "We [the government] should own the refineries. l/n Left unsaid by the Saudis is that current oil prices have rekindled alternative-energy (OOTC:AEGC) efforts. and the cost of producing oil from shale located in the United States is about half the current cost of a barrel of oil. The price of gas even has GOP presidential nominee John McCain reversing his stance on offshore drilling. First it was Maxine Waters (S-CA). the first such facility built in the U. l/n "Because of the strong uptake so early in the program's infancy. manufacturing).000 barrels per day of Canadian oil. and the effect on gasoline prices would be negligible at best since America only has three percent of the world's oil. has enough oil shale to meet its current needs for the next 400 years. It's another example of short-term political posturing from Washington. since the 1970s is in the works in South Dakota. which happens to be located merely 60 miles from the 15 billion barrels of oil already sent by Alaska through the pipeline in Prudhoe Bay). and noted that the province's growing portfolio of renewable energy will help control energy costs that are tied to oil prices.) Unfortunately. 2008 p. this is the same Congress controlled by Democrats who are on record calling for the nationalization of oil companies and refineries. 2008 p. Both he and President Bush have called on Congress to allow such drilling. Then we can control how much gets out into the market. The major auto manufacturers are well along in their development of hydrogen and electric vehicles. Iowa and Nebraska.400 dealer-operated locations.S. "We are still going to continue to push for competitiveness on power rates. meeting the combined demands of South Dakota. and we're the only province doing this today in the country. Meanwhile. Selling marginally unprofitable retail outlets will carry nowhere near the same price impact as drilling for more oil (such as in ANWR. Exxon's divestiture is unlikely to affect oil and gas prices as the largest American oil and gas companies produce only three percent of global oil production and six percent of global refining capacity. This week's Braying Jackass' award "[O]pening our coastlines to offshore drilling would take at least a decade to produce any oil at all. The refinery would process about 400.62mm Justice June 23." 18 . While in 2007 American oil companies turned in an 8.

''We have the capacity. Ola Fredriksson. Additionally." said Anurag Behar. At the same time.S. according to the company's filings with the U. investors might move funds from Iberdrola Renovables to EDP Renovables. the share price has gone down by 21. in particular. 2008 p. l/n A combination of rising energy demand and the prospect for higher electricity rates is leading a growing number of homeowners and businesses to go solar.42 per cent so far this year. especially with oil prices so high. However. In the case of Iberdrola Renovables. Also. 2008 p. a New Delhi-based market research firm. has stoked investor interest the world over as oil prices rule at around $120 (Rs5." Shushmul Maheshwari." Zech said. performance. or 75 miles. an engineer at Gryaab. the sewage facility in Goteborg. Hoku said that fixed energy pricing for renewable energy is part of Hawaiian Electric's effort to secure renewable energy at costs not tied to oil prices. without disclosing a launch date for the business. Wipro's entry into the business comes at a time when renewable energy. Securities and Exchange Commission. Renewable research increasing Press Democrat May 9. ''If the oil price keeps on going up. investors are keener to invest in renewable energy companies due to the recent surge in oil prices. "Thin film (a kind of technology that helps harness solar energy) will see large emerging applications and a robust demand (for manufacturing capacity) that is expected to grow 10-fold from 250MW currently to 2GW by 2010 with a market size of $6 billion. the average stock market performance of renewable energy companies has been less than strong since the beginning of the year. l/n "We are at a stage of exploring various concepts and renewable energy is one of them. it could boost the share price of renewable energy companies in other countries. 19 . said that what an average person flushed down the toilet each year created enough biogas to drive 120 kilometers. then it will make our company interested in producing more biogas. chief executive of RNCOS E-Services Pvt. l/n In relation to how the IPO could affect the share price of Spanish peer Iberdrola Renovables. if the IPO is successful. l/n Many people in Goteborg remain optimistic about the virtuous link they have created between waste and secure energy supplies. The company will be seeking shareholder approval for entering the renewable energy business at its annual general meeting on 16 July. People are very focused on renewable energy." Real Goods Solar plans to expand into new markets where competitors have little brand recognition and target other states with financial incentives for installing solar. and operations and maintenance. had told Mint in January this year. The utility will have an option to purchase the system from Hoku after five years.088) a barrel. Market shifts from oil cause increase in alternative fuels The International Herald Tribune May 28. and people are prepared to pay more for renewable energy. according to company officials.'' he said. PV is among renewable technologies not facing fuel costs which may vary from year to year. l/n Hawaiian Electric initiated the Archer Substation project to increase its use of renewable energy and gain experience with photovoltaic development. Ltd. 2008 p. Renewable energy becoming widly popular MINT May 16. analysts believe that if the IPO price is very low.Miami Institute Oil Neg Johnson/Gonzalez Lab Transition Now High prices boost renewable investment The financial Times 5/28/08 p. "More and more solar energy systems are popping up.' High oil causes push for renewables Wireless News May 21. 2008 p. managing director of Wipro Infrastructure Engineering Ltd. economics. "People are making a smart investment decision with their money.

and biomass-derived liquids. I am sure.market best Smil.Miami Institute Oil Neg Johnson/Gonzalez Lab Transition Now SQ solves.html These facts.ca/~vsmil/publications_pdf. Irrelevant because once the extraction of conventional liquid oil peaks we will intensify our (already advancing) efforts to produce more non-conventional oil and to use more natural gas and accelerate the production of gas.cc.umanitoba. http://home.and coal. economics professor @ the University of Manitoba. and whose insistence has been on pinpointing its largely irrelevant arrival. will not make the least difference to the devotees of an imminent oil peak whose mantra has been to elevate the timing of an obviously inevitable event to a dreadful watershed of history. 20 . 2007 p.

323 (Paul. The End of Oil) QuickTimeª and a TIFF (Uncompressed) decompressor are needed to see this picture. 2005 p. massively published author and columnist. 21 .Miami Institute Oil Neg Johnson/Gonzalez Lab 2NC Oil Link Massive US consumption reduction triggers price collapse and global economic destruction Roberts.

Politically it just would not look right to see the group lower its output will prices are at all-time highs.html (Gauray. Strong demand for energy from the developing world and a faltering US dollar have both contributed to a secular bull market in oil that has absorbed the rampant cheating of OPEC member countries. or should they stand by and let the market figure it out for itself for the time being? 22 . This is unlikely to be the case during a period of falling prices. In the aftermath of the Asian financial crisis in the late 1990’s oil prices fell close to $10 a barrel and the flaws of the cartel were open for all to see.cis. Blogging Stocks) Up until the past few weeks we were getting signals from OPEC that we would be seeing some cuts coming in the near future.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: OPEC Irrelevant OPEC is Still Here Only Because The Economy’s Demand Sodhi. In fact. Executive Highlights) Consequently. OPEC has argued that the recent surge in prices has nothing to do with fundamentals. they don’t usually have a great deal of influence in markets. 2/29/08. p. OPEC Will Do What OPEC Wants Fowlkes. but now I believe it to be highly doubtful that any cuts are coming in the next several months.S. but they are better disguised today. I think that OPEC will lean more towards cutting back supplies to prevent over saturating the market in the event of a recession down the road. I wouldn't expect to see any changes coming out of the group.000 barrels a day under that of 2007.bloggingstocks. “The Myth of OPEC”. Those same flaws still exist.org.au/executive_highlights/EH2008/eh63608. They point to the rising inventories in America as evidence that demand is not up to the levels that would justify opening up the pumps a little more. but for now. http://www. But then again. an Economist at the Centre for Independent Studies. OPEC typically does what OPEC wants to do. they have estimated that demand this year will fall 400. 6/24/08. Stock Trader. p. http://www. why has OPEC managed to survive so long? OPEC hasn’t really been successful as a cartel.com/2008/02/29/what-is-opec-to-do/ (Michael. “What is OPEC to do?”. What are your thoughts? Does OPEC need to step in a lift its quotas in order to cool prices down.? In the end. So what will OPEC ultimately decide to focus on? Should it look at the current record high prices and look to put some oil into the market? Or can we expect it to pay more attention to the inventory levels in the U. If cartels are so inherently flawed.

not supply/demand Cohen. it is probable that (oil) prices will fall by 40 percent" [Note — to $71.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: No Price Collapse Low dollar is the key factor behind high prices. and of course vice versa.com/index. researcher at Peak Oil Association. even though supply is adequate. April 30 2008 (Dave." [Khelil] added: "The prices are high due to the fact of the recession in the United Sattes and the economic crisis which has touched several countries. a situation which has an effect on the devaluation of the dollar. the price of the barrel rises by $4.aspo-usa. and therefore each time the dollar falls one percent. He added that: "If this (the dollar) strengthens by 10 percent. http://www.35/barrel at today's price] Insert Dollar Will Rebound 23 . because the market is driven by the dollar's slide.php?option=com_content&task=view&id=363&Itemid=91) This week brings news that OPEC president Chakib Khelil "does not rule out oil prices reaching $200 a barrel." he was quoted as saying in brief remarks to journalists on Sunday.

after all. Peak is really stupid Smil. http://home. has been so damaged by waterflooding (used for enhanced recovery of oil) that it faces imminent and massive extraction downturn. al-Ghawar. by about 0. surpassing the level of 12 million barrels a day for the first time since the collapse of the USSR and coming within 5 percent of the record annual production reached in 1987 So much for the rumored inability of Russia to maintain its production. this must be the stupidest business decision of the 21st century. and that their. 2007 p. 2007 p. life-long observers of global oil scene. http://home. a major oil power on the Caspian Sea. global oil extraction may be lower in 2007 than it was in 2006. economics professor @ the University of Manitoba.5 million years ago? And no one else can be blamed for the repeated failure of their forecasts but the prominent peak-oilers themselves.ca/~vsmil/publications_pdf. and for the "disappointing" results in Azerbaijan and Kazakhstan. And then it slid below $50/barrel in January 2007. largest oilfield. This supply had fully covered the global demand even with OPEC's production cuts and with China's record imports of oil bought in order to start filling the country's new massive strategic oil reserve. Deffeyes set it first in 2003 and then.umanitoba. another prominent peak-oiler. economics professor @ the University of Manitoba.market fixes problems and landing soft Smil. not any physical inability to produce more oil or outright absence of requisite oil reserves in the Earth's crust.85 million barrels a day. one of the most astute. 24 . of course.html If one is to believe the catastrophic prophecies of Matthew Simmons. According to Colin Campbell the global oil extraction was to peak in 1989.2 million barrels a day effective November 1.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Peak Oil Peak is foolish. And. Well. or more than the annual output of Oman or nearly twice the annual extraction in Azerbaijan. market forces eventually assert themselves as prices rise. de rigueur to say only bad things about Saudis). an equivalent of adding a bit more than UK's entire North Sea production or Iraq's annual extraction." Some of them were quite unhappy when I pointed out (in Energy at the Crossroads. Perhaps they know something that Simmons is not aware of (these days it is. In 2006 non-OPEC production rose strongly in the countries of the former Soviet Union. But how else can one label such writings as Richard C. And they show that even after OPEC once again cut its production (by 1. with ridiculous accuracy. the numbers for 2006 are in.cc.html Peter Odell.ca/~vsmil/publications_pdf. in these pages. Simmons claims that Saudis have falsified their oil reserve data so much that in reality they have only a fraction of the claimed oil left in the ground.cc. but if such a dip were to take place (China's and India's imports will make it unlikely) it would reflect a reaction to prices. That is about 42 million metric tons a year. Ivanhoe's peak was in 2000. In 2006 oil demand was down in all of the leading importing affluent countries (US. And yet Saudis will be investing nearly $50 billion between 2007 and 2011 to get this nonexistent oil to the global market. and the world's. EU and Japan) and no dramatic increases are expected this year. 2006) in order to arrest yet another rapid fall in prices.umanitoba. Consequently. But once we take into account the need to replace worldwide reserve depletion (currently amounting to more than one million barrels a day) this means that some 2 million barrels of new oil found their way on the global market. the global oil supply for the entire year rose once again. and in Worldwatch in January 2006) their propensity for wholesaling catastrophic scenarios of the world once the global oil production peaks and begins to decline. calls them "peak-oilers. on the Thanksgiving of 2005. Duncan's "Olduvai theory" according to which the declining oil extraction will plunge humanity into life comparable to that experienced by some of the first primitive hominids who inhabited that famous Kenyan gorge some 2. The average price of OPEC's basket of exported crude oils dropped from the peak of about $70/barrel in July to $55/barrel by the end of the year.

D and Professor of Economics – 6/25/2008 (Ismael. Behind the drive to war and military adventures in the Middle East lie powerful special interests (vested in war. and the resultant booming speculation in oil markets) have triggered a new round of oil price hikes. revolutions and wars.D and Professor of Economics – 6/25/2008 (Ismael. Hossein-zadeh – Ph. the promising offshore oil fields of West Africa. As recent geopolitical convulsions in the Middle East (especially the US war on Iraq. indeed. unrealistic. there is actually an oil surplus. the Gulf of Mexico.com/atimes/Global_Economy/JF25Dj08. Horizontal drilling has boosted extraction.html There is no hard evidence. for example. US GDP expanded over 20% while oil usage rose by only 9%. "over a period of five years (1994-99). The success rate has risen in 20 years from less than 70% to over 80%. [5] 25 . In fact. oil. from war. Asia Times Online) http://www. Not only is Peak Oil theory unscientific. “Are they really oil wars?”. Peak Oil theory has once again become fashionable. Peak Oil theory pays scant attention to the drastically enabling new technologies that have made (and will continue to make) possible discovery and extraction of oil reserves that were inaccessible only a short time ago. Before the 1973 oil shock.html Peak Oil theory is based on a number of assumptions and omissions that make it less than reliable. both economic and geopolitical. Big Oil prefers peace and stability.) Peak Oil theory was originally floated around in the 1940s.atimes. To begin with.html The view that recent US military adventures in the Middle East and the broader Central Asia are driven by energy considerations is further reinforced by the dubious theory of Peak Oil. which maintains that. Asia Times Online) http://www. having peaked. it discounts or disregards the fact that energy-saving technologies have drastically improved (and will continue to further improve) the efficiency of oil consumption. and more recently. precipitated not by oil shortages but by international political convulsions. Asia Times Online) http://www.atimes. militarism. or that the current skyrocketing price of oil is due to a supply shortage. lead to costly. despite the lucrative spoils of war resulting from high oil prices and profits. in global energy markets. which the new technologies now permit. world oil resources are now dwindling and that. It died down once the price of oil fell back to pre-crises levels. not war and geopolitical turbulence. that oil has peaked. Another important development has been deep-water offshore drilling. but also by some apparently antiwar liberals such as Michael T Klare and James H Kunstler.com/atimes/Global_Economy/JF25Dj08. incidentally. however.atimes. arguing that world oil reserves would be exhausted within the next two decades or so. “Are they really oil wars?”. especially in Alaska.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Peak Oil Peak Oil is unscientific." [4] Second. Computers have helped to reduce the number of dry holes.D and Professor of Economics – 6/25/2008 (Ismael.in order to justify military adventures to derive high dividends. war power and military strength are key to access or control of the shrinking energy resources. not cheap. [3] The peak oil theory totally ignores new technologies allowing more oil extraction. therefore. which were. Hossein-zadeh – Ph. the ratio was about one to one. and perhaps even fraudulent. Hossein-zadeh – Ph. war and military force are no longer the necessary or appropriate means to gain access to sources of energy - resorting to military measures can. or that global oil reserves are shrinking. The theory is being promoted not only by war profiteers and proponents of an unbridled domestic oil exploration and extraction. (As shown below. unrealistic and fraudulent. Evidence shows that. One of the results of the more efficient means of research and development has been a far higher success rate in finding new oil fields. and geopolitical concerns of Israel) that use oil as an issue of "national interest" - as a facade or pretext .com/atimes/Global_Economy/JF25Dj08. “Are they really oil wars?”. Good examples are the North Sea. Peak Oil is only a lie spread by people who profit off oil to encourage more drilling. no shortage. It resurfaced in the 1970s and early 1980s in reaction to the oil price hikes of those years.

com/atimes/Global_Economy/JF25Dj08. their crystal ball has failed. Thanks to advances in water and CO2 injection. Hossein-zadeh – Ph. But more importantly.com/Despite+Reality+Belief+in+Peak+Oil+Persists/article12119. culminating in the end of life as we know it. Asia Times Online) http://www. It is thanks to developments like these that since 1970. These include Canada's giant reserves of extra-heavy bitumen that can be processed to produce conventional oil.so the theory goes -.html Third.atimes. Asher – Writer for DailyTech . Higher demand means higher prices. Petroleum production for the first quarter of 2008 rose to 74. a theory popular among Chicken Little types. Saudi Arabia has pledge to pump another half million barrels a day. no matter what. Although this was originally considered cost inefficient.html Fifth. There are trillions of barrels in the ground that can't profitably be pumped at $50/bbl. Peak oil is a lie. efficient energy utilization in industrially advanced countries.. As science advances. [6] Peak Oil proponents exaggerate impacts of increased oil demands. with the notion that supply is independent of both price and demand. Those figures don't take into account Saudi Arabia's recent pledge to pump another half-million barrels a day. Peak Oil puts the economic cart before the horse. Asher – Writer for DailyTech .000. this predictably brought the usual Peak-Oil disciples out of the woodwork. and many times since -.dailytech.6/19/2008 (Michael. Hossein-zadeh – Ph. proponents of Peak Oil tend to exaggerate the impact of the increased oil demand coming from China and India on both the amount and the price of oil in global markets. Asia Times Online) http://www. has been much in the news recently.atimes. experts working in this area now claim that they have brought down the cost from over US$20 a barrel to $8 per barrel. “Are they really oil wars?”. Once half those reserves have been consumed -. Russia.5M bbl/day -. But once again. the story is different.dailytech. and others. These include slower growth in US demand due to its slower economic growth. But at $140. the URR (ultimately recoverable reserves) of existing fields rise in pace. “Are they really oil wars?”.1. and increases in oil production by members of the Organization of Petroleum Exporting Countries. many oilfields predicted to have been dry a half-century ago are still pumping strong today.htm How does Peak Oil get things so wrong? First.com/Despite+Reality+Belief+in+Peak+Oil+Persists/article12119.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Peak Oil The Peak Oil theory ignores giant oil reserves being developed.production will steadily fall.” DailyTech) http://www. But that rapid growth in demand is largely offset by a number of counterbalancing factors. “World oil production continues to rise.D and Professor of Economics – 6/25/2008 (Ismael. and 26 . Existing fields are worked harder. outlook good for next decade or more. Peak Oil theory also pays short shrift to what is sometimes called non-conventional oil. unprofitable fields get opened up.com/atimes/Global_Economy/JF25Dj08. world oil reserves have more than doubled. The idea behind it is that future production levels of any consumable resource can be reliably predicted based off a single factor: the size of the known reserves.D and Professor of Economics – 6/25/2008 (Ismael.was finally upon us. So when world petroleum production dipped slightly in 2006 and again in 2007.first predicted for the mid-1990s. Peak oil ignores technological improvements and makes supply independent of price and demand. outlook good for next decade or more. production would steadily fall. a promise they've already met by the first 300. they said. From this moment on. and higher prices increase supply. “World oil production continues to rise. So much for Economy 101..” DailyTech) http://www. The alleged disparity between supply and demand is said to be due to the rapidly growing demand coming from China and India.htm Peak Oil. The global oil peak -.6/19/2008 (Michael. Similar developments are taking place in Venezuela. it ignores technological improvements in oil discovery and production.2M higher than the 2007 average. despite the extraction of hundreds of millions of barrels.

"And I'm not saying it's a nasty word — people speculate in margins all the time — but that would. rising oil prices are more likely due to an old-fashioned case of supply and demand — as well as the faltering U." 27 . dollar. in my view.html Supply and demand By Fisher's reckoning.Miami Institute Oil Neg Johnson/Gonzalez Lab exploration picks up pace.2933. and speculation. “Do High Petroleum Prices Mean We've Reached 'Peak Oil'?” Fox News) http://www." he said. you suspect that there's some speculation that's going on." Fisher said.S. "The other contributor is the weakening value of the dollar compared with the Euro. since oil is priced and sold in dollars. "We've just had a red-hot increase in demand in the emerging economies of Asia.com/story/0. Chua – Freelance writer – 2008 (Jasmin Malik. "When you see a commodity like oil that will vary by 2 to 3 percent of its value in a day's time." A third offender: commodity speculation. have some secondary role. fall of the dollar.369553. particularly China and India.00.foxnews. A2: Peak Rising oil prices are due to supply and demand.

"No Blood for Oil" has been a rallying cry for most of the war's opponents. Interestingly.com/atimes/Global_Economy/JF25Dj08. Not only do the two arguments contradict each other. most antiwar forces use both claims interchangeably without paying attention to the fact that they are diametrically- opposed assertions. but because war is no longer the way to control or gain access to energy resources. or because Big Oil does not desire higher oil prices. but each argument is also wanting and unconvincing on its own grounds. been abandoned for more than four decades.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Peak Oil Wars is no longer effective to control resources and has been abandoned for four decades. 28 . Hossein-zadeh – Ph. Asia Times Online) http://www. therefore.D and Professor of Economics – 6/25/2008 (Ismael. While some of these opponents argue that the war is driven by the US desire for cheap oil.html A most widely cited factor behind the recent US wars of choice is said to be oil. “Are they really oil wars?”. others claim it is prompted by Big Oil's wish for high oil prices and profits. Colonial- type occupation or direct control of energy resources is no longer efficient or economical and has.atimes. not because the US does not wish for cheap oil.

especially those located in the Alaskan Wildlife regions. For one thing.com/atimes/Global_Economy/JF25Dj08. Asia Times Online) http://www. it has led others to argue in favor of unrestrained exploration and extraction of oil reserves. this view provides fodder for the cannons of war- profiteering militarists who are constantly on the look-out to invent new enemies and find new pretexts for continued war and escalation of military spending. are now dwindling. [2] 29 . it tends to disarm many anti-war forces that accept this thesis and. Significant policy and/or political implications follow from the view that oil is running out.D and Professor of Economics – 6/25/2008 (Ismael. For another. "internalize responsibility for US foreign policy every time they fill their gas tank.html Has oil peaked? The Peak Oil thesis maintains that world oil reserves.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Peak Oil The Peak Oil theory only encourages war. All evils are blamed on a commodity upon which we are all utterly dependent". therefore. While this has led many to call for more vigorous conservation. having reached their maximum capacity." [1] The Peak Oil thesis serves as a powerful trap and a clever manipulation in that it lets the real forces of war and militarism (the military-industrial complex and the pro-Israel lobby) "off the hook.atimes. it is a fabulous redirection. Hossein-zadeh – Ph. “Are they really oil wars?”. with grave consequences of oil shortage and high energy prices. Thus they own the wars.

D and Professor of Economics – 6/25/2008 (Ismael. and perhaps more importantly. by plunging the US ever deeper into debt and depreciating the dollar.com/atimes/Global_Economy/JF25Dj08.atimes. Perhaps more importantly. The war also contributes to the escalation of fuel prices in indirect ways. “Are they really oil wars?”. not oil shortages. Asia Times Online) http://www.html Finally. claims of "peaked and dwindling" oil are refuted by the available facts and figures on global oil supply. but also the threat of a looming war against Iran. which is heavily contributing to the recently soaring oil prices. Contrary to the claims of the proponents of Peak Oil and champions of war and militarism. Hossein-zadeh – Ph. especially oil. the current oil price shocks are a direct consequence of the destabilizing wars and geopolitical insecurity in the Middle East. an atmosphere of war and geopolitical instability in global oil markets serves as an auspicious ground for hoarding and speculation in commodity markets. or by creating favorable grounds for speculation. As oil is priced largely in US dollars. fuel prices move up several notches. for example. These include not only the wars in Iraq and Afghanistan. The record of soaring oil prices shows that anytime there is a renewed US military threat against Iran. oil exporting countries ask for more dollars per barrel of oil as the dollar loses value.Miami Institute Oil Neg Johnson/Gonzalez Lab A2 – ME Destabiliziation Oil price shocks are due to destabilizing wars and insecurity in the Middle East. 30 . Statistical evidence shows that there is absolutely no supply-demand imbalance in global oil markets.

"resulting in US crude oil inventories that are now higher than at any time in the previous eight years.html As much as 60% of today's crude oil price is pure speculation driven by large trader banks and hedge funds. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and highcrude oil prices . during this period global supplies have exceeded demand. if the futures price is even higher.atimes. Asia Times Online) http://www. according to the US Department of Energy.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Supply-Demand Key Wall Street speculators control oil prices.[14] 31 ..D and Professor of Economics – 6/25/2008 (Ismael.com/atimes/Global_Economy/JF25Dj08.D and Professor of Economics – 6/25/2008 (Ismael. “Are they really oil wars?”. “Are they really oil wars?”. Asia Times Online) http://www. Hossein-zadeh – Ph. speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage.atimes. By purchasing large numbers of futures contracts.com/atimes/Global_Economy/JF25Dj08. In fact. It has to do with control of oil and its price. Wall Street financial institutions have accomplished this feat through "innovative" financial instruments such as establishment of energy hedge funds and speculative oil futures markets in New York and London. control of oil prices has left OPEC and gone to Wall Street. Hossein-zadeh – Ph. [9] This has led to a steady rise in crude oil inventories over the past two years. dwindling oil is not why prices are high. such subversions of competitive market forces are often brought about not so much by OPEC or other oil producing countries as by manipulative speculations of financial giants in New York and London. and thereby pushing up futures prices to even higher levels than current prices.. It has nothing to do with the convenient myths of Peak Oil. [8] Wall Street financial giants that created the Third World debt crisis in the late 1970s and early 1980s." [10] Speculations of financial giants decide oil prices. not OPEC. Since the advent of oil futures trading and the two major London and New York oil futures contracts. even if it costs $115 per barrel. the tech bubble in the 1990s and the housing bubble in the 2000s are now hard at work creating the oil bubble.html To the extent that competitive oil markets and/or prices are occasionally manipulated.. A refiner will purchase extra oil today. It is a classic case of the tail that wags the dog.

that is. they control supply. Theoretically. And vast North American deposits of tar sands and oil shale -. such as Brazil's Tupi and Kazakhstan's Kashagan -.com/atimes/Global_Economy/JF25Dj08. including vast stretches of land in Russia. Hossein-zadeh – Ph. the so-called "limited flow" policy. Saudi officials reminded the president that "there is plenty of oil on the market.'" [11] And why would producing more oil not "affect the price at all"? Because what is driving the soaring oil prices is not shortage but speculation: "with so much investment money sloshing around in the commodities markets. the Arctic and Antarctica. A hypothetical numerical example might be helpful here.dailytech. just as do oil producers. of being able to stay in or go out of business . or "super". 'It wouldn't affect the price at all. Now. in order to manipulate price. Take.the latter not much smaller than Saudi Arabia's Gwahar. if the limited flow policy raises the actual trading price to $35 per barrel. it will raise the profits of all producers accordingly. price of oil is $30 per barrel. the largest field in the world. low-cost. They blame the recent price run-ups on speculation and fear of shortages [not real shortages]. But that would not be good business as it would lower prices and profits. producers who produce under average conditions of production in terms of productivity and cost of production. Suppose that the market-determined. prices continue to rise on speculation. profit. and nearly all the deep sea itself. that is. 'If we produced more oil.com/Despite+Reality+Belief+in+Peak+Oil+Persists/article12119.” DailyTech) http://www. supply manipulation (in pursuit of price manipulation) is not limited to the oil industry. or through five miles of ocean floor will be trivial to implement. In fact. This also means that some of the high-cost producers may end up going out of business altogether." [12] Oil companies only limit supply of oil to keep prices up when there’s actually more. Asher – Writer for DailyTech . the Saudis calculate they have no hope of controlling short-term price fluctuations.6/19/2008 (Michael. Several oil fields have been discovered. for high-cost US producers it is a matter of survival. high productivity producers. In today's economic environment of giant corporations. This means that producers who produce under better-than-average conditions. “World oil production continues to rise. factors they say are beyond their control.atimes. Further.D and Professor of Economics – 6/25/2008 (Ismael. thereby also keeping in business some high-cost producers that might otherwise have gone out of business. the automobile industry.com/atimes/Global_Economy/JF25Dj08.atimes. Most of the world hasn't even been fully explored for oil. for example.Miami Institute Oil Neg Johnson/Gonzalez Lab A2 – Supply/Demand Key Despite the fact that Saudis say they have surplus oil. is designed to raise the actual trading price above the market-determined price in order to keep high-cost US producers in business while leaving low-cost Middle East producers with an above average.an important but rarely mentioned or acknowledged fact. many of the major industries try and often succeed in controlling supply in order to control price. “Are they really oil wars?”. suppose this price entails an average rate of profit of 10%. Hossein-zadeh – Ph. or $3 per barrel. While for low-cost producers this limited flow policy is largely a matter of making more or fewer profits. “Are they really oil wars?”. 32 .too expensive to process even a decade ago -.html The fact that the skyrocketing oil prices of late have been accompanied by a surplus in global oil markets was also brought to the attention of President George W Bush by Saudi officials when he asked them during a recent trip to the kingdom to increase production in order to stem the rising prices. we've found five new barrels of oil for every three we've burned. The word "average" in this context refers to average conditions of production.D and Professor of Economics – 6/25/2008 (Ismael.' says the Saudi source. or free-flow. will make a profit higher than $3 per barrel while high-cost. Some of these undiscovered fields are in places we can't pump oil -- not with today's technology.html Producers' policy to sometimes curtail or limit the supply of oil. So. Furthermore. it wouldn't find buyers.are now beginning to look like a bargain. wells atop the thickest Antarctic ice. Asia Times Online) http://www. since 1965. automobile producers could flood the market with a huge supply of cars. Asia Times Online) http://www.htm Several large new fields have been discovered in the past decade alone. low efficiency producers will end up making less than $3 per barrel. though. Iran has put some 30 million barrels of oil that it can't sell into floating storage. outlook good for next decade or more. By 2050.

Miami Institute Oil Neg Johnson/Gonzalez Lab 33 .

26% lower than Hubbert's predicted peak. the global oil extraction did not peak either in 1990.cc. when it was actually about 4% below the level forecast by Hubbert.8 billion barrels or 2.6 billion barrels a year. hardly an enviable accuracy for a 30-year forecast. So in this case Hubbert was nowhere near being correct either on the timing or the production level. Consequently. In later revisions of this original work (the last major one was published in October 1968 and published as a chapter in the National Academy Science's Resources and Man in 1969) he put the peak of the complete cycle of US petroleum liquids (that is crude oil and natural gas liquids) at "about 3.2 billion barrels.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Hubbert’s Peak Hubbert’s peak is wildly off Smil.html Hubbert is the patron saint of peak-oilers. And Hubbert's record is no better in forecasting the peak of global oil extraction. 18% above Hubbert's prediction. The actual extraction was 2.33 times higher. That is not an insignificant miss. 1979-81) of extortionary price increases. He could not. during the first half of the 1970-decade." The actual peak came in 1970 at 4. when it was. or in 2000 at 37 billion barrels. that the post-peak decline of extraction is a mirror image of the incline. one for the ultimate US output of 150 billion barrels that peaked in 1962 at 2. anticipate a substantial decline of oil demand following OPEC's two rounds (1973-74.umanitoba. In his March 8. 2007 p. 1956 presentation before the Spring Meeting of the Southern District Division of Production of the American Petroleum Institute. . http://home. . Not quite.12 billion barrels. seen as an infallible and astonishingly prescient seer because he correctly predicted the peak of the US oil production in 1970. it was still below 31 billion barrels a year in 2006.ca/~vsmil/publications_pdf. This led Hubbert to produce a curve that put the US oil output in 1980 at about 3 billion barrels (while the actual production was 3. economics professor @ the University of Manitoba. And while the global production still keeps going up. projecting again a symmetrical curve and continuing high demand that prevailed during the 1960s. In 1969 he put it (for two different estimates of ultimately recoverable oil) either in 1990 at 25 billion barrels. or in 2000.4 billion barrels. and another one for the ultimate output of 200 billion barrels that peaked in 1968 at 3 billion barrels a year. at 27.7 billion barrels) and the 2000 extraction at 1.that is. Hubbert plotted two production curves. as nobody did. but it is a small error compared to Hubbert's insistence that the complete production curve of a resource is perfectly symmetrical -. 34 .5 billion barrels a year .

Finally. You might see the stone at the mouth of the stream covered over within a few years. a stream where the current is not so great that it will sweep the stone away. but they are not regenerating. http://www.worldnetdaily. Here is an experiment you can conduct to get an idea how slow the rates of deposition are. which asserts oil is a natural product the Earth generates constantly rather than a "fossil fuel" derived from decaying ancient forests and dead dinosaurs. And the chemistry of magma does not compare to the chemistry of hydrocarbons. both living matter and hydrocarbons are carbon based. it must be buried by the process of deposition.probably less. 2008 p. Geological processes take place over a different frame of time than human events. These ideas are really groundless. then you would expect to see some closer kinship in their chemistry. That is why hydrocarbons are called non-renewable resources.com/index. including within the mantle of the earth. Check both of these stones yearly until they have been buried by deposition. the rate of deposition must be quick. All unrefined oil carries microscopic evidence of the organisms from which it was formed. a line can be drawn from photosynthesis to the formation of hydrocarbon deposits. 35 . no risk of oil scarcity Pfeiffer. they mean any time in the next million years -. geological and chemical processes. and which provides the very energy for life itself. This primal energy comes from radioactive decay and from the heat energy originally generated during accretion of the planet some 4.net/docs04/peakoil1. It is the sun's energy that powers all energy processes on the Earth's surface. have confused the rock as the originator rather than the depository of the hydrocarbons. FTW energy editor 3. After organic matter has accumulated on the sea floor. The lead scientist on the study ? Giora Proskurowski of the School of Oceanography at the University of Washington in Seattle ? says the hydrogen-rich fluids venting at the bottom of the Atlantic Ocean in the Lost City Hydrothermal Field were produced by the abiotic synthesis of hydrocarbons in the mantle of the earth. Likewise.or within many lifetimes. The abiotic theory of the origin of oil directly challenges the conventional scientific theory that hydrocarbons are organic in nature. If hydrocarbons were generated from magma. Traditional petro-geologists. The second primal energy source is light and heat generated by our sun. Recent studies support oils abiotic theory Corsi author and conservative activist. Photosynthesis is the miraculous process by which the sun's energy is converted into forms available to the life processes of living matter.04 p. in order for this matter to be a likely prospect for hydrocarbon generation. The advocates believe the oil seeps up through bedrock cracks to deposit in sedimentary rock. and all forms of energy descend from one of these two. that hydrocarbons are naturally produced on a continual basis throughout the solar system. but it is unlikely that you will see the stone in the pond buried within your lifetime.generally asserting that oil is formed from magma instead of an organic origin. There are no known mechanisms for transferring this internal energy into any secondary energy source.php?fa=PAGE. If this oil is drawn out. created by the deterioration of biological material deposited millions of years ago in sedimentary rock and converted to hydrocarbons under intense heat and pressure. Place a small stone on the bottom of a motionless pond. In geological time. These organisms can be traced through the fossil record to specific time periods when quantities of oil were formed. Likewise.February 1. The first is the internal form of energy heating the Earth's interior. It is a simple geological fact that the oil we are using up at an alarming rate today will not be replaced within our lifetime -. While organic theorists have posited that the material required to produce hydrocarbons in sedimentary rock came from dinosaurs and ancient forests. in contrast. more recent argument have suggested living organisms as small as plankton may have been the origin. It is for this reason that when geologists say that the San Andreas fault is due for a powerful earthquake. http://www. Following biological. it proceeds at an extremely slow rate from our human perspective.questionsquestions.html ( Dale “A Word about a biotic oil”) There is some speculation that oil is abiotic in origin -.12. Magma is lacking in carbon compounds.6 billion years ago. there are two primal energy forces operating on this planet. Discovery backs theory oil not 'fossil fuel') A study published in Science Magazine today presents new evidence supporting the abiotic theory for the origin of oil. Take another stone of about the same size and place it at the mouth of a small stream. It is simply an effect of oil slowly migrating through pore spaces from areas of high pressure to the low-pressure area of the drill hole.Miami Institute Oil Neg Johnson/Gonzalez Lab Abiotic Oil Oil is an abiotic substance. because oil generation is in part a geological process. Geological processes move exceedingly slow. The abiotic theory argues. it will take even longer for the hole to refill again.view&pageId=45838 (Jerome R. they say. Capped wells may appear to refill after a few years. Oil is a non-renewable resource generated and deposited under special biological and geological conditions. and hydrocarbons are lacking in silicates.

it appears to make little difference to actual production. If there are in fact vast untapped deep pools of hydrocarbons refilling the reservoirs that oil producers drill into. The abiotic theorists also hold that conventional drillers. A small group of mostly Russian scientists . 36 . as tens of thousands of oil and gas fields around the world are observed to deplete.com/general58/biot. and some of their moons) where no life is presumed to have flourished in the past. with advances in geophysics and geochemistry. ignore many sites where deep. the oil companies have used the biotic theory as the practical basis for their successful exploration efforts over the past few decades.have held out for an abiotic (also called abiogenic or inorganic) theory. and are known to be abundant on other planets (Jupiter. Meanwhile. The abiotic theory holds that there must therefore be nearly limitless pools of liquid primordial hydrocarbons at great depths on Earth. pools that slowly replenish the reservoirs that conventional oil drillers tap. among them the late Cornell University physicist Thomas Gold . During the latter half of the 20th century.but including a tiny handful Western scientists. Heinberg Senior Fellow of Post Carbon Institute 10.htm (Richard “The Abiotic Oil Controversy” ) The debate over oil's origin has been going on since the 19th century.or that it is made through an inorganic process.6. and refilling (which is indeed very rarely observed) is not occurring at a commercially significant scale or rate except in one minor and controversial instance discussed below. there were those who contended that oil is primordial . Saturn. however. they would discover much more oil than they are finding now. the latter's book The Deep Hot Biosphere (1998) stirred considerable controversy among the public on the questions of where oil comes from and how much of it there is. while others argued that it was produced from the decay of living organisms (primarily oceanic plankton) that proliferated millions of years ago during relatively brief periods of global warming and were buried under ocean sediment in fortuitous circumstances. http://www.Miami Institute Oil Neg Johnson/Gonzalez Lab Abiotic Oil Oil is a biotic substance. constrained by an incorrect theory. Gold argued that hydrocarbons existed at the time of the solar system's formation. primordial pools of oil accumulate. if only they would drill in the right places. From the start. Uranus.that it dates back to Earth's origin . While some of the Russians appear to regard Gold as a plagiarist of their ideas.rense. the vast majority of scientists lined up on the side of the biotic theory.04 p.

with 220 million cars and trucks in the United States alone (today.S. more than twice the ratio of imports before the 1973-74 Arab oil embargo.S." To diminish the strategic importance of oil to the international system it is now critical to expand the Churchillian doctrine beyond geographical variety to a variety of fuels and feedstocks. Plan is too little too late. "safety and certainty in oil lies in variety and variety alone. only 2 percent of U. America is poor in oil relative to its need. The United States now imports over 60 percent of its oil. Neither efforts to expand petroleum supply nor those to crimp petroleum demand will be enough to reduce America's strategic vulnerability anytime soon. oil demand is due to electricity generation. contrary to popular belief. codirector for the institute of Global studies. is utterly dependent on it. and conversely only about 2 percent of U. then Lord of the Admiralty Winston Churchill famously remarked. lexis (Anne. It consumes one of every four gallons in the world but has barely 3 percent of the world's proven reserves of conventional oil. transportation energy based on petroleum. electricity is generated from oil.) With 97 percent of U.S. 37 . When the British Navy made the shift from coal to oil. May 22 2008 p.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Dependence Adv. oil is the lifeblood of America's economy.shifts in fuel dependence can only occur long term Korin. Congressional Testimony) The unique strategic importance of oil to the modern economy beyond that of any other commodity today stems from the fact that the global economy's very enabler. the transportation sector.

containing an estimated 12 to 19 billion barrels of oil. Bureau of Land Management – 6/9/2008 (“Oil Shale and Tar Sands”. 38 . More than 70 percent of American oil shale — including the thickest and richest deposits — lies on federal land. Nearly five times the proven oil reserves of Saudi Arabia underlies a surface area of 16. primarily in Colorado. More than 50 tar sands deposits are found in eastern Utah. These federal lands contain an estimated 1. Utah. and to the quality of life Americans enjoy today and hope to ensure for future generations. The enormous potential of this domestic resource is a key to the Nation’s energy security and economic strength. The BLM is working to ensure that development of federal oil shale and tar sands resources will be economically sustainable and environmentally responsible. US Department of the Interior) http://www.23 trillion barrels of oil — more than 50 times the nation's proven conventional oil reserves.html The United States holds the world’s largest known concentration of oil shale.gov/wo/st/en/prog/energy/oilshale_2.blm. there is new interest in developing both of these domestic resources.000 square miles.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Price Spikes US has a large concentration of oil shale and tar sands. and Wyoming. As oil prices rise.

such projects -.” The Washington Post) http://www. High oil prices makes tar sands profitable.far below the recent $50 range.sputtered at the fringes of the oil industry. But since technological breakthroughs brought down costs and oil prices have soared. water.7080513. Profits are going to ugly oil-fed regimes.com/opinion/displaystory. Companies are now producing over a million barrels of oil per day from the tar sands. “Where Oil Is Mined.washingtonpost. seeing three-figure oil as a way of limiting greenhouse emissions. At today's higher oil prices. these tar sands are seen as a profitable and reliable source of oil but they require environmentally devastating mining processes and vast amounts of energy to extract. The resulting heavy crude oil requires also more energy to process at refineries. whose deposits of a substance called bitumen smell something like roofing tar and are as thick and sticky as molasses.chicagotribune. High oil prices are having tar sands are hit the market but it also emits way more CO2. Companies move enough dirt and oil sands in two days to fill Yankee Stadium 39 . Greenpeace is calling on oil companies and the government to stop the tar sands. high prices have put tar sands in business which create far more carbon dioxide than conventional oil. Deposits of tar sands are spread out over 138 000 km2 of land (an area the size of Florida) and including 4. Blum – Staff writer – 2008 (Justin. (Editors note: I believe this does not include "upstream" emissions resulting from the energy intensive mining processes. air. “Refinery pollution may soar.167. and this number is constantly increasing. The Economist – 5/29/2008 (“The Oil Price Recoil” The Economist) http://www.cfm?story_id=11454989 Hope at the bottom of the barrel So the oil shock will take time to abate.full.” Greenpeace Canada) http://64. the Tribune reports.story?ctrack=1&cset=true Canada has huge reserves of tar-soaked clay and sand known as "tar sands" lying under the swampy forests of northern Alberta. Researchers have calculated that refining the Canadian tar sands crude produces 15 percent to 40 percent more carbon dioxide emissions than conventional oil.economist.greenpeace. not Western exchequers. but over the past few years increases in oil prices and technological changes have made it possible. Not Pumped. Until recently.) High oil prices make oil sands production profitable.3 million hectares of the Boreal Forest. As well as curbing oil use. damaging land.org/canada/en/campaigns/tarsands+Tarsands +and+oil+prices&hl=en&ct=clnk&cd=19&gl=us Buried below the Boreal Forest of northern Alberta is a source of oil known as the tar sands.104/search?q=cache:EoL2JoyiPeQJ:www.com/wp- dyn/content/article/2005/06/14/AR2005061401533_pf. for the sake of people and the planet. and the climate.com/news/local/chi- greenhouse_12feb12. companies have been investing heavily here. Conservation will indeed increase. Just outside this boomtown. analysts said -.” The Chicago Tribune) http://www. huge machines dig up the earth and remove the oil sands. And the wild unpredictability of prices will blunt the effect of dear oil on people's behaviour.called "oil sands" or "tar sands" -. it was too expensive and complicated to extract the tar sands to produce oil.233.1.html Until a few years ago.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Price Spikes The high oil prices put tar sands in business. But the explosive growth of these projects has huge environmental costs. Oil-sands production is now profitable when a barrel of oil sells in the low $20s. Greenpeace – No Date Mentioned (“Stop the Tar Sands. Some greens may welcome that. Companies are mining hundreds of feet deep and running the unearthed deposits through a complex process to convert them into oil. forests. Hawthorne – journalist – 2/12/2008 (Michael. and profitable. But everything high prices achieve could be done better by sensible carbon taxes.

once again. and hence the influence. 40 . Asia Times Online) http://www. Hossein-zadeh – Ph.D and Professor of Economics – 6/25/2008 (Ismael. lower demand for their oil. “Are they really oil wars?”.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Price Spikes OPEC will not inordinately jack prices up. In addition. For one thing. OPEC members are not unmindful of the fact that inordinately high oil prices can hurt their own long-term interests as this might prompt oil importers to economize on oil consumption and search for alternative sources of energy. high oil prices tend to raise the cost of oil producers' imports of manufactured products as high energy costs are bound to affect production costs of those manufactured products. thereby limiting producers' export markets.com/atimes/Global_Economy/JF25Dj08.[16] For another. the share. of Middle Eastern oil producers as a percentage of world oil production has steadily declined over time.html It is also necessary to keep in mind that OPEC's desire to sometimes limit the supply of oil in order to shore up its price is limited by a number of factors. limits on oil will drop.atimes. OPEC members also know that inordinately high oil prices could precipitate economic recessions in oil importing countries that would. from almost 40 percent when OPEC was established to about 30 percent today.

" Oil is really that important to life as we know it today in first world nations. the Renewable Energy and Energy Conservation Tax Act (H.php?name=News&file=article&sid=5236 Whilst most people are vaguely aware that oil is important to the world economy. Finally. They were trying to protect their country's economies.naturalnews.) would come crashing down. It means a huge recalibration of the economy. the entire world economy is now seriously threatened.Miami Institute Oil Neg Johnson/Gonzalez Lab A2: Price Spikes High oil prices are threatening the world economy Bloom – staff writer for The Market Oracle – 6/27/2008 (Brain.” The Market Oracle) http://www.com/021942. Adams .” Natural News) http://www. in June 2007.co. and it transforms "easy times" into "hard times. 2776) was passed. “After peak oil: Will America survive?. $10 a gallon means massive layoffs and job loss. few understand the true impact of the recent rise in the oil price. bread.R. Ironically. But the damage had been done. beef and other processed food items will double.html $10 a gallon for gas means all your milk. sub-prime lending bubble. “World Recession 2009 as a Result of Peak Oil.consumer health advocate and author – 7/21/2007 (Mike. 41 . The cost of building supplies would skyrocket.marketoracle. $10 a gallon means triple or quadruple the price for an airplane ticket. In 1998 the heads of state of the USA and Australia failed to ratify the Kyoto protocols. and all the financial bubbles we now pretend don't exist (the debt bubble. real estate bubble. It had to do with the fact that their failure to take action at that time blocked the march to market of alternative energy technologies. Higher oil prices from oil peak will destroy our economy.uk/index. It took a further nine years for the US government to finally understand how serious an error of judgement the failure to ratify Kyoto was. The issue had nothing to do with Carbon Dioxide emissions. triple or quadruple in price thanks to the oil-powered miles necessary to transport those items to your local grocery store. diminishing home construction. The entire economy would nosedive into a deep depression. they engineered a situation where not only is the US economy under greater threat than it would have been had our leaders ratified the protocols. The sharp rise in the oil price – from around $65 a barrel in June 2007 to around $135 a barrel in June 2008 – has been a direct consequence of that original error of judgment. etc.

Without solar panels.html Can alternative forms of energy replace oil? Yes and no. Adams . This is the "No" part of the answer: All the energy in the world is useless to you if you can't harness it. Actually harnessing these alternative. the wind in Wyoming is useless to us. "Yes" because there's plenty of energy all around us that can replace oil. for example.” Natural News) http://www. Likewise. There's enough solar energy hitting the land in the state of Arizona.Miami Institute Oil Neg Johnson/Gonzalez Lab Transition Solves Alternative energy forms can replace oil. Thus. there's enough wind power in Southern Wyoming to power the whole country. too. But this power is untapped.naturalnews. the United States may find itself energy starved in the near future even though it is surrounded by abundant (unharnessed) energy! 42 . “After peak oil: Will America survive?. renewable energy sources would require many billions of dollars in infrastructure spending. to meet the entire energy needs of the United States.com/021942. Without wind turbines.consumer health advocate and author – 7/21/2007 (Mike. nobody in Washington seems to have the foresight to plan for a world without oil. There is currently very little investment in developing renewable energy sources. the Arizona desert is likewise useless to us as an energy source. and right now.

consumer health advocate and author – 7/21/2007 (Mike. The truth is that if our next president does not put this nation on a radical. our population and even our military strength are all totally dependant on oil.” Natural News) http://www. 43 . Slapping some solar panels on the roof of your corporate headquarters building doesn't cut it (although it's great for corporate publicity and P. broke and starving when the oil stops flowing.R.html The oil economy will soon be history The era of cheap. accelerated shift towards renewable energy. Constructing a couple thousand wind turbines isn't enough. easy oil is ending. The future can either be abundant and clean.Miami Institute Oil Neg Johnson/Gonzalez Lab Transition Solves Renewable energy sources are the only way to save us from poverty and starvation.html If Bush had any brains left at all.com/021942.naturalnews.). It all depends on whether society will wake up and get serious about making a transition away from oil and towards clean. or we are going to be stuck poor. “After peak oil: Will America survive?. our cities. it will soon be too late to save America from economic collapse.” Natural News) http://www. renewable energy infrastructure in the next decade. or devastating and chaotic. Take away the oil. Adams . Never underestimate the enormous impact that cheap energy has made on America today.naturalnews.consumer health advocate and author – 7/21/2007 (Mike. the man is too steeped in oil to seriously pursue alternatives. “After peak oil: Will America survive?. Adams . and military. populations. he'd announce a JFK-like challenge to America to build a new. Our economy. Only renewable energy will save our economy our cities. and America collapses under its own weight. But alas.com/021942. renewable energy sources. We either pursue a massive switch to renewable energy using an Apollo space mission kind of national priority.