The Empty Tank: Oil, Gas, Hot Air, and the Coming Global Financial Catastrophe - Hardcover

Leggett, Jeremy

Hardcover

ISBN 10: 1400065275 ISBN 13: 9781400065271

Publisher: Random House, 2005

Synopsis

In The Empty Tank, Jeremy Leggett, an internationally renowned geologist and energy entrepreneur who spent the 1980s working for Big Oil, sounds the alarm about an unprecedented crisis.

The oil topping point–the day half of all the world’s oil is used up–will be reached, by many calculations, sometime soon. In fact, it may already be upon us. When the financial markets realize what’s happening, an economic crash and soaring energy prices will result. The entire global marketplace we all inhabit will crack and crumble.

Oil companies and governments don’t want you to know this. They have been covering up depletion, while stoking addiction and holding back alternatives. Leggett shows how major energy producers have been exposed providing false information about climate change and underground reserves.

He describes how governments collude with private enterprise and one another to keep the global economy hooked on oil. And he explains the science behind oil extraction, demonstrating with unimpeachable expertise why the well is indeed running dry a lot faster than we think.

Written with verve and eloquence, The Empty Tank explains how we became addicted to oil and why that addiction is leading us toward disaster. Yet Leggett also points the way forward. All the technology we need to get off the road to disaster is already at hand. A new Manhattan Project for energy can save us if we can wake up and confront the problem directly, as this important book urges us to do.

"Among the shelf full of books on the oil situation that have been published in the last year or so, (this) is far and away the best."
-Lester Brown, President of the Earth Policy Institute

What’s it all about? ... tough titles made simple by David Shukman
THE EMPTY TANK by Jeremy Leggett

WHAT’S IT ALL ABOUT?

OIL, gas, hot air and the global energy crisis, according to the explanation on the front cover. Delving into the nightmare scenario of mankind sleepwalking to global disaster, this book focuses on two related dangers: how we’ll run out of oil far sooner than we think and how burning what’s left of it will warm our planet to a catastrophic level. The central contention is that the oil industry is in a state of denial about the size of its reserves. The scandal over Shell’s distortion of its real figures is said to be the tip of the iceberg. And the conclusion is stark: that we’re all using the black stuff at a far faster rate than geologists are finding new deposits, and that as soon as the truth gets out there’ll be panic in the markets, soaring prices and a mega-crash. It’s scary.

SO IS IT READABLE?

YES, though towards the end some sections lapse into lists of points. But the writing is always clear and conveys complicated but important technicalities in very accessible terms.

DAVID SHUKMAN is environment & science correspondent for BBC News
Daily Mail, 18 November 2005

About this title

About the Author:

Jeremy Leggett spent the 1980s in the service of Big Oil, as a geologist and faculty member of the Royal School of Mines in London, and the ’90s as top campaigner for Greenpeace International; he has spent the ’00s as a leading alternative-energy activist and entrepreneur. He is the author of The Carbon War. Leggett is a recipient of the U.S. Climate Institute’s Award for Advancing Understanding, was named by Time magazine as “one of the next generation of young leaders” for his work on renewable energy sources, and is currently CEO of one of the fastest-growing tech companies in the United Kingdom. He lives in London.

Excerpt. © Reprinted by permission. All rights reserved.:

Chapter 1

PART ONE

CHAPTER

1

INSUFFICIENCY

We have allowed oil to become vital to virtually everything we do. Ninety percent of all our transportation, whether by land, air, or sea, is fueled by oil. Ninety-five percent of all goods in shops involve the use of oil. Ninety-five percent of all our food products require oil use.1 Just to farm a single cow and deliver it to market requires six barrels of oil, enough to drive a car from New York to Los Angeles.2 The world consumes more than 80 million barrels of oil a day, 29 billion barrels a year, at the time of writing. This figure is rising fast, as it has done for decades. The almost universal expectation is that it will keep doing so for years to come. The U.S. government assumes that global demand will grow to around 120 million barrels a day, 43 billion barrels a year by 2025.3 The International Energy Agency, the organization set up by industrialized countries to give them advice on oil and other energy matters, is scarcely less bullish. Its 2004 World Energy Outlook forecasts 121 million barrels a day by 2030.4 Few question the feasibility of this requirement, or the oil industry’s ability to meet it. They should, because the oil industry won’t come close to producing 120 million barrels a day. The most basic of the foundations of our assumptions of future economic well-being is rotten. Our society is in a state of collective denial that has no precedent in history, in terms of its scale and implications.

Of the current global demand, America consumes a quarter. Because domestic oil production has been falling steadily for thirty-five years, with demand rising equally steadily, America’s relative share is set to grow, and with it her imports of oil. Of America’s current daily consumption of 20 million barrels, 5 million barrels are imported from the Middle East, where almost two thirds of the world’s oil reserves lie in a region of especially intense and long-lived conflicts.5 Every day, 15 million barrels pass in tankers through the narrow Strait of Hormuz, in the troubled waters between Saudi Arabia and Iran.6 The U.S. government could wipe out the need for all their 5 million barrels, and stanch the flow of much blood in the process, by requiring its domestic automobile industry to increase the fuel efficiency of autos and light trucks by a mere 2.7 miles per gallon.7 But instead it allows General Motors and the rest to build ever more oil-profligate vehicles. Many sport utility vehicles average just four miles per gallon. The SUV market share in the United States was 2 percent in 1975. By 2003 it was 24 percent. In consequence, average U.S. vehicle fuel efficiency fell between 1987 and 2001, from 26.2 to 24.4 miles per gallon. This at a time when other countries were producing cars capable of up to sixty miles per gallon.8

Most U.S. presidents since the Second World War have ordered military action of some sort in the Middle East. American leaders may prefer to dress their military entanglements east of Suez in the rhetoric of democracy building, but the long-running strategic theme is obvious. It was stated most clearly, paradoxically, by the most liberal of them. In 1980 Jimmy Carter declared access to the Persian Gulf a vital national interest to be protected “by any means necessary, including military force.”9 This the United States has been doing ever since, clocking up a bill measured in the hundreds of billions of dollars, and counting.10

With such a strategy comes an increasingly disquieting descent into moral ambiguity, at least in the minds of something approaching half the country. The nation that gave the world such significant landmarks in the annals of democracy as the Marshall Plan is forced by its deepening oil dependency into a foreign policy maze that involves arming some despotic regimes, bombing others, and scrabbling for reasons to make the whole construct hang together.

America is not alone in her addiction and her dilemmas. The motorways of Europe now extend from Clydeside to Calabria, Lisbon to Lithuania. Agricultural produce that could have been grown for local consumption rides needlessly along these arteries the length and breadth of the European Union. The Chinese attempt to emulate this model even as they enforce production downtime in factories because of diesel shortages and despair that their vast national acreage seems to play host to so little oil.11

This half-century of deepening oil dependency would be difficult to understand even if oil were known to be in endless supply. But what makes the depth of the current global addiction especially bewildering is that, for the entire time we have been sliding into the trap, we have known that oil is in fact in limited supply. At current rates of use, the global tank is going to run too low to fuel the growing demand sooner rather than later this century. This is not a controversial statement. It is just a question of when. One purpose of this book is to explain this.

Why, then, have we not been seeking an earlier transition to the alternatives that must lie beyond oil dependency? Hydrogen fuel, biofuels, fuel cells, and advanced batteries are among the technologies that can provide the direct power for transportation in the future. Solar and many other forms of alternative energy can provide the electricity to split water into hydrogen and charge batteries. This too we have understood for decades. We have also known that there are massive untapped reservoirs of oil savings in energy-efficiency measures and innovative mass transit. These alternatives may not be able to replace oil quickly or easily, given their tiny current markets. But they work, and in most cases they have been waiting for a green light for years. This is without any further fruits of human ingenuity, suitably directed. In a society that put a man on the Moon more than three decades ago, surely there can be no doubt that we could replace oil use if we seriously wanted to. I ask again, why have we not been fast-tracking the solutions to the problem long since? A second purpose of this book is to examine that question.

A third purpose of the book is to pose and endeavor to answer the question of how fast oil is now depleting. Finite resource that it is, there will come a day, inevitably, when we reach the highest amount of oil that can ever be pumped. Beyond that day, which we can think of as the topping point, or “peak oil” as it is often called, will lie a progressive overall decline in production. Putting the same question a different way, then, at the current prodigious global demand levels, where does oil’s topping point lie?

This is a question, I contend, that will come to dominate the affairs of nations before the first decade of the new century is out, and one whose broad parameters I will outline now.

The Late Toppers Versus the Early Toppers

A great battle is raging today, largely behind the scenes, about when we reach the topping point, and what will happen when we do. In one camp, those I shall call the “late toppers,” are the people who tell us that 2 trillion barrels of oil or more remain to be exploited in oil reserves and reasonably expectable future discoveries. This camp includes almost all oil companies, governments and their agencies, most financial analysts, and most business journalists. As you might expect, given this lineup, the late toppers hold the ascendancy in the argument as things stand.

In the other camp are a group of dissident experts, whom I shall call the “early toppers.” They are mostly people who have worked in the heart of the oil industry, the majority of them geologists, many of them members of an umbrella organization called the Association for the Study of Peak Oil and Gas (ASPO). They are joined by a small but growing number of analysts and journalists. The early toppers reckon that 1 trillion barrels of oil, or less, are left.

In a society that has allowed its economies to become geared almost inextricably to growing supplies of cheap oil, the difference between 1 and 2 trillion barrels is seismic. It is roughly the difference between a full Lake Geneva and a half-full one, were that lake full of oil and not water.12 If 2 trillion barrels of oil or more indeed remain, the topping point lies far away in the 2030s. The “growing” and “cheap” parts of the oil supply equation are feasible until then, at least in principle, and we have enough time to bring in the alternatives to oil. If only 1 trillion barrels remain, however, the topping point will arrive sometime soon, and certainly before this decade is out. The growing and cheap parts of the oil supply equation become impossible, and there probably isn’t even enough time to make a sustainable transition to alternatives.

Should the early toppers be right, recent history provides clear signposts to what would happen. Figure 1 shows the history of the oil price since 1965. We will return to this history in some detail later in the book, but let me summarize its main themes now. There have been five price peaks since 1965, all of them followed by economic recessions of varying severity.13

The most intense peaks were the first two. The first oil shock, in 1973, saw the oil price more than double, reaching around $35 per barrel in modern value. The cause was an embargo by the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and triggered through overt American support for Israel at the time of the Yom Kippur War. World oil supplies fell only 9 percent, and the crisis lasted only for a few months, but the effect was simple and memorable for those who lived...

About this edition

• Publisher: Random House
• Publication date: 2005
• ISBN 10: 1400065275
• ISBN 13: 9781400065271
• Binding: Hardcover
• Edition number: 1
• Number of pages: 256