Peak Oil and the New Carbon Boom

Oil pipeline pumping station in Nebraska (shannonpatrick17, 2013, via Flickr creative commons)

This essay is adapted from the afterword to the paperback edition of Timothy Mitchell’s Carbon Democracy, out next month from Verso Books. We’ll have more on energy and the environment later this week in anticipation of our Summer 2013 issue, out on Monday, with a special section on environmentalism. Click here to subscribe.

In the past year, the United States appears to have entered a new age of energy abundance. The extraction of gas and oil from shale formations has led to the most rapid increase in new energy supplies in the country’s history.1 Political leaders and the news media present this sudden reversing of a thirty-five-year decline in the U.S. production of fossil fuels as a sign of the recovery of the country’s national independence.2 After the breakdown of financial institutions in 2008—which erased trillions of dollars in wealth as stock markets, pension funds and property values crashed, and led to the loss of 7 million U.S. jobs in the recession that followed—the energy boom also seemed to promise a return of real wealth. The fragile paper economy of financial speculation and consumer credit would give way to a “potential re-industrialization of the US,” built on the solid foundation of expanding material resources.3

To others the bonanza threatened not a newfound independence but a deepening dependency. The new shale gas and oil would reinforce a long-term reliance on fossil fuels, which were becoming increasingly costly to produce. Historic levels of drought, the melting of the Arctic sea ice, heat waves and flooding, and the increasing frequency of other extreme weather events reminded many people of a further calculus of dependence.4 Three numbers shape this calculus: two degrees Celsius—the target accepted in the 2009 Copenhagen Climate Accord as the mean global temperature rise, below which the most dangerous effects of anthropogenic climate change might be avoided; 886 gigatons—the quantity of carbon dioxide humankind can place in the atmosphere between the year 2000 and mid-century and still have some chance of keeping below the two-degree target, a budget of which more than one third was used up in the first decade of the century, leaving just 565 gigatons to spend by 2050; and 2,795 gigatons—the carbon potential of the proven coal, oil and gas reserves owned by the world’s private and public companies and governments.5 This last figure is five times the size of the remaining carbon budget. Energy firms, which dominate the lists of the world’s largest corporations, suffer from a deepening dependency. They depend upon counting as a financial asset a reserve of fossil fuels of which four-fifths must stay buried and uncounted in the ground if we are serious about keeping the planet habitable.

Carbon democracy involves understanding and working upon relations of dependence, and the vulnerabilities to which they give rise. Here we will explore the dependence of credit systems on energy futures. What kind of democratic politics might take account of this?


In the 1970s and 1980s, the passing of the postwar boom in the United States and other industrialized countries ended the arrangement on which postwar carbon democracy had been built. The oil-fuelled expansion of industrial production—and the increasing productivity made possible by supplies of energy that fell in price and surged in volume every decade, without need to account for the costs of depletion or climate change—allowed industrial workforces to enjoy increasing prosperity and improving social welfare without threatening the profits enjoyed by the owners and managers of large firms. From the 1970s, as energy costs rose and cheaper labor became available in newly industrializing countries, firms and their investors found it difficult to make increasing profits out of productive labor at home. Capital that had previously profited from putting people to work in factories at rising wages needed an alternative way to increase its value. The novel solution towards the turn of the twenty-first century was to put people to work as borrowers.6

In the postwar decades, consumer debt had grown gradually, through programs that engineered carbon-heavy ways of living: in the United States and elsewhere, governments subsidized mortgages to spur the growth of suburbia, and vehicle manufacturers developed credit schemes for selling the automobiles on which suburban life depended. The expansion of consumer debt in the 1980s began with the widespread use of the plastic credit card, and was followed by the boom in second mortgages. Both forms of debt were extended in the 1990s and 2000s to those at lower incomes and greater levels of risk, as financial tools were developed for credit scoring and for parceling up and profiting from sub-prime loans. In the United States, total household debt, which was near zero in 1950 and reached $1 trillion in the 1970s, grew to about $7.5 trillion by 2001 and almost doubled to $14 trillion by 2008. Other advanced economies developed similar or higher rates of household debt.7 Those with capital no longer built factories to generate profits from labor. Instead, they arranged worlds of consumer consumption, in which households compensated for stagnant real wages, increased working hours and lowered levels of security and well-being through the ever-expanding ability to borrow.

This world of debt was highly profitable for the Wall Street banks and other firms that engineered it and lived off the fees, interest payments and derivatives that followed. But it was too fragile to survive the fourfold rise in oil prices between 2005 and 2008, which contributed to the collapse by slowing the housing boom and causing ordinary consumers to default on second mortgages and other debt payments. Before the housing bubble began to burst, however, oil prices had already helped inflate the bubble. The sovereign wealth funds of Saudi Arabia and other OPEC producers, disappointed by the low return on U.S. Treasury Bonds and the declining value of the U.S. dollar, appear to have shifted some of their growing petrodollar income into investments offering better returns, including mortgage-backed securities.8 The boom in derivatives trading in the years before the crash was connected to the volatile flows of petrodollars created by the peak-oil surge in oil prices.

Elsewhere, the quadrupling of the oil price had other effects. Most important for most of the world was its impact, in interaction with other aspects of carbon democracy, on the price of food. In 2007–08, the global prices of many basic foods doubled. The increase was due to a combination of droughts and other extreme weather conditions, rising production costs due to the heavy use of petroleum products in industrial farming and synthetic fertilizers, and the widespread conversion of corn from a food crop to an industrial energy crop. In the United States, roughly 40 percent of corn production—the country’s largest crop representing about one-third of the world supply—was now used to produce ethanol. A new government requirement that every gallon of fuel be mixed with ethanol had driven this transformation of food into an internal combustion fuel. The rising price of food, added to the difficulties caused by the jump in energy prices, helped lay the ground for the revolts of the Arab spring.

The increase in oil prices that helped trigger financial collapse had another consequence: the post-2009 U.S. hydrocarbon boom. With oil selling for $100 a barrel, and natural gas more than doubling in price to $8 per thousand cubic feet, it became feasible to drill for oil and gas in parts of the United States where production had previously been uneconomic because the resources were so dispersed and difficult to extract. In particular, hydrocarbons could now be extracted from shale formations—the trends formed from densely packed particles of clay, so impermeable that not even natural gas can easily flow through, but which include narrow fissures in which pockets of gas and oil may collect. Since this shale gas and “tight oil” cannot flow through the rock, as happens with conventional oil and gas, the wells have to be manufactured to intercept as many fissures as possible. The drillers use two techniques, both developed decades ago: horizontal drilling, which allows the drill to follow the trend and, compared to a vertical well, greatly improves the chance of intercepting fissures; and hydraulic fracturing, or fracking, which splits the adjacent rock, allowing fluids to reach the well along artificial fissures from nearby natural fissures not directly intercepted.

The high cost of production arises from the expense of these methods and of supplying the water used for fracturing and then disposing of the polluted residue. The cost of drilling for oil in the United States has been rising exponentially. Averaging $50–$100 per foot in the 1980s and 1990s, drilling costs doubled to $200 per foot by 2002, doubled again to $400 by 2006, and by 2012 were approaching $800 per foot.9 Moreover, since the oil and gas in shale plays cannot naturally migrate towards the well, production from each well declines very rapidly. The decline rate in the Bakken Formation, the largest tight oil play in the United States, is 69 percent in the first year and 94 percent over the first five years, compared to 4 or 4.5 percent per year for conventional oil. As a result, producers must drill an estimated 6,000 new wells each year merely to maintain production, at a cost of almost $6 million per well.10 Add the cost of leasing the land, and the increasing number of wells needed as the most promising sites are drilled out and new wells become less productive, and one has an industry with an accelerating need for new capital.

The shale oil and gas producers depended on a further technology to develop the industry: not the technology of extracting energy but the means it developed for extracting funds from investors.11 With the collapse of the speculative home mortgage market in 2008, shale gas and tight oil offered Wall Street a new field in which to speculate and earn fees. The possibility of earning profits from fracking produced a boom in buying and selling on leases for drilling, and in the shares of companies projecting profits from the new reserves.

By 2012, 10 percent of the land area of the lower forty-eight U.S. states had been leased for oil and gas, making this the largest single land-use in the country, surpassing the areas planted in even the largest crops like corn.12 The drilling companies, land speculators and banks promoting the development marketed the process of horizontal drilling and fracking to investors as an engineering process similar to manufacturing, with a greater probability of production than the drilling of conventional wells that depend more on the physical characteristics of the oil and the geological properties of the source rock.

An investigation by the Post-Carbon Institute argues that Wall Street hyped the industry, enabling investment to pour in. The boom in shale gas, which preceded the development of tight oil, led to oversupply and a collapse in gas prices. The banks then profited again, from fees for arranging the acquisitions and mergers of struggling companies that resulted. Bankers and investment analysts were increasingly driving the industry, so that drilling decisions were made not necessarily to maximize long-term production, but to hit the target numbers of the Wall Street analysts, so that investment funds continue to flow in.13

When I visited western Pennsylvania in April 2013, in the heart of the Marcellus Shale region, the main topic of conversation among the fracking engineers at a local hotel was the new role of bankers, “all about twenty-five years old,” in deciding in which counties to drill and how to market the product. One engineer had recently attended a conference in Houston on the state of the fracking industry, where he found himself surrounded by bankers and private equity holders. “I was the only guy at that conference,” he said, “that didn’t have cufflinks.”14

It is unclear how long the boom will last. Arthur Berman, a petroleum geologist and columnist for World Oil, an oil industry journal published since 1916, persistently raised questions about the inflated claims for shale production. He was asked to stop devoting his column to the question, following pressure from two oil companies that advertised in the journal. When the editor failed to move quickly enough to stop the columns, the editor himself was fired. With field experience and a background in physics, he suggested that he would be “the last editor of World Oil with a technical background; part of a line of technically qualified Editors going back decades.”15

The sudden abundance of oil in the United States in fact reflects a global scarcity. The shale boom has been used to dismiss the evidence of peak oil; in fact, the boom is its latest symptom. The era of easily accessible, cheaply produced, and ever increasing supplies of conventional oil that shaped the politics of the twentieth century is passing away. ExxonMobil, the world’s largest corporation, publishes an annual scenario, The Outlook for Energy, which lays out a picture each year of expanding populations, growing consumption, and the continually increasing demand for energy on which its own share value depends. But even ExxonMobil now acknowledges, towards the end of its 2013 report, that the supply of conventional oil has reached a peak and will gradually decline.16 The peak reflects the fact that oil firms have already pumped from the ground roughly half the world’s recoverable stores of conventional oil, and will produce the remainder at slower rates and with increasing difficulty.

Humankind has now consumed about two trillion barrels of oil since the rise of the modern petroleum industry in the 1860s. It is worth repeating that burning the first trillion took about 130 years, but we went through the second trillion in only twenty-two years. Estimates differ on how soon the peak in the supply of unconventional oil or other fossil fuels will arrive. But under any scenario, the rate of their depletion is astonishing. The world’s fossil fuels were formed out of 500 million years of buried sunshine. Whether we spend most of this “capital bequeathed to mankind by other living beings” within a span of three hundred years or four hundred, from the perspective of geological history, or even merely of human history, the era of the Anthropocene is brief and extraordinary.

Not found in the ExxonMobil scenarios, the term Anthropocene is the label adopted by geologists and environmental scientists to describe the recent era in which humans have combined with material and technical forces to act not merely as an animal or social agent, but as a global chemical, biological and geological force. The geological language captures not so much the brevity of time in which the energy from fossil fuels has enabled agency on a new scale, but the extraordinary length of time, looking forward, over which the effects of this brief agency will be felt. The modes of common life that have arisen largely within the last one hundred years, and whose intensity has accelerated only since 1945, are shaping the planet for the next one thousand years, and perhaps the next 50,000.17

From this perspective, the optimism of ExxonMobil and other oil corporations, echoed in the U.S. news media, that the shale boom and further yet-to-be-discovered reserves of coal, oil and gas might prolong the era of expanding use of fossil fuels by another twenty or thirty years seems strangely misplaced. The projected discoveries would allow us to briefly double or triple the rate at which we burn fossil fuels, with potentially catastrophic consequences for collective life. But the projections are required to enable the share price of ExxonMobil and the world’s other giant energy companies to continue growing, along with the ever-larger flows of credit whose circulation and expansion depend on the calculations of future abundance. Since the extravagant claims surrounding the U.S. shale boom have tended to obscure the wider picture, it is worth considering what has been happening in the rest of the world.


In 2005, the rate of production of oil in countries outside the United States hit a plateau, above which it has not been able to move.18 Even to stay on that plateau, as we know, new oil fields must be brought into production each year to compensate for the decline in production from existing fields. The rate of decline, a production-weighted average of the rate of increase or decline in oil produced from all the world’s major fields, is difficult to estimate. In June 2012, the Geopolitics of Energy project at the Belfer Center for Science and International Affairs at Harvard University, a project funded by BP and other energy companies, published a wildly optimistic forecast of low decline rates and hence increasing supplies, which news media around the world reported with enthusiasm. Scholars in the UK quickly showed that the forecast was based upon misreading the available data and an elementary and embarrassing, but less widely reported, arithmetical mistake.19 Facing an annual decline rate of 4 or even 4.5 percent, the world must discover and bring online the equivalent of a new Saudi Arabia—or one could equally say, a new United States, complete with shale boom—every four years, or perhaps every three, in order merely to maintain current rates of production.20

The rate of decline reflects the depletion of major oil regions like the North Sea and the North Slope of Alaska, and the decreasing flow from countries that were once among the world’s largest producers such as Indonesia and Mexico. But it also reflects the difficulty in increasing production in countries that were supposed to account for much of the future growth in the supply of conventional oil, in particular the three large producers of the Persian Gulf, Saudi Arabia, Iran and Iraq.

Saudi Arabia is no longer a “swing producer” with surplus oil ready to bring online. Its exports declined through the second half of the last decade, and may soon decline again. In 2014, when Saudi Aramco expects to finish developing Manifa, the last of its known giant fields (discovered in 1957 but left mothballed for decades because its oil is inferior in quality and difficult to extract), the company does not expect the additional supply to increase the country’s production. The 900,000 barrels per day anticipated from the new field will merely replace the decline in production from older fields.21 Saudi Arabia currently uses as much as one-fifth of its daily oil production to power the twenty-seven desalination plants it needs to produce domestic water, and almost as much again on other domestic consumption. Unless the government finds a way to slow the growth in this use of oil, which reduces the proportion available for export, Saudi Arabia’s exports are set for a rapid decline.22 (Brazil discovered the largest new oil field found in the Western hemisphere in more than thirty years in 2007, and may prove to have the world’s seventh largest reserves; but due to rising domestic consumption, the country will never become an exporter.)23 Iran faces similar problems and more: with decline rates of 13 percent in the six supergiant fields that hold most of its reserves, rising domestic consumption, and sanctions imposed by the United States and the European Union that prevent the use of enhanced extraction technologies, the country’s oil production now faces long term decline.24

The largest “new Saudi Arabia” was to be Iraq. In a scenario published in 2012 forecasting energy developments to 2035, the International Energy Agency predicted that Iraq would make ‘the largest contribution by far to global oil supply growth’ over the following two decades.25 When the Iraqi oil ministry offered international contracts for developing existing oil fields in the south, beginning in 2008, it implied an increase in production from 2 million barrels per day (bpd) to 12 million by 2017. However, the firms now working in southern Iraq have found it difficult to produce more oil from fields damaged by efforts to optimize extraction during the period of international sanctions under the Baathist regime. They have also found it difficult to increase shipments of oil from a largely landlocked country with few pipelines, inadequate storage tanks, and limited berths for loading tankers. The government reduced its production goal of 12 million bpd by 2017 to 9.5 million. The IEA considers even the lower figure optimistic. It suggests that 6.1 million bpd is a more realistic target, but not until 2020, rising to 8.3 million bpd by 2035. In 2012, after almost a decade of war and reconstruction, Iraqi production finally passed the pre-war, sanctions-restricted level of 2.5 million bpd and then reached 3 million, before new production difficulties intervened to interrupt the increase.26

After participating with mixed success in the first round of bidding for Iraqi production rights, the major Western oil companies stayed away from subsequent involvement. They were discouraged by contracts that offered them only a fee-per-barrel for producing the oil, which would remain the property of the government, with the fee agreed at $7 a barrel or lower; by the unanticipated difficulties in increasing production; and by competition rights, the major Western oil companies stayed away from subsequent involvement. They were discouraged by contracts that offered them only a fee-per-barrel for producing the oil, which would remain the property of the government, with the fee agreed at $7 a barrel or lower; by the unanticipated difficulties in increasing production; and by competition from Chinese, Russian and other oil firms. In 2011 ExxonMobil risked disqualification from all future contracts in Iraq by turning instead to make a deal with the regional government of Iraqi Kurdistan to develop fields in northern Iraq. The Baghdad government, still hoping for an agreement with the regional government over the sharing of future oil revenues, and with the support of the U.S. State Department, had urged companies not to make separate arrangements for the northern fields. Informing Washington of the Kurdistan deal after the fact, ExxonMobil explained that any obligation to respect the goals of U.S. policy in Iraq was outweighed by a corporate duty to its shareholders, the value of whose shares it had to maintain.

It was not clear, however, that the oil fields of northern Iraq offered shareholders any better guarantees of long-term growth. In 2012, a U.S. government report indicated that “output has been dropping in Iraq’s northern fields, with production zones shrinking, geological structures breaking down, and well pressures dropping.”27 Even the muted optimism of the IEA scenario began to seem unrealistic. The international oil industry needs to find a new Saudi Arabia every three years, but Iraq, the most promising candidate, now offers to add just one-third of a Saudi Arabia, and only in nine years’ time.


Given the difficulties in accessing oil and securing share value in Iraq, the main alternative for the major international oil companies has been to develop unconventional sources, including fields located deep offshore and in the Arctic region. But finding and producing oil at enormous depths from platforms at sea and in remote and inhospitable sites presents technical difficulties, escalating costs and high risks. Annual capital spending by the oil industry more than tripled in the decade from 2001 to 2011, but the increased spending failed to produce more oil. In 2012, the major European oil companies found less oil than the reserves they depleted, achieving a reserve replacement ratio of only 92 percent.28

Since the value of an oil firm depends on its ability to replace its reserves, two consequences have followed. First, as complex projects are completed late and over budget, firms sacrifice the long-term productivity of oil fields for the short-term benefit of reassuring shareholders and equity partners by getting the first oil out. “The drive for unobtainable speed to first oil is crippling the industry,” according to a study by the consulting firm Independent Project Analysis. “It is driving up cost by many billions of dollars in [capital expenditure] each year, and it is driving down production attainment after first oil is achieved.”29 So as energy production becomes more expensive, an increasing dependence on short-term equity exacerbates the long-range problems of energy supply.

Second, the pressure for short-term investor profit and the difficulties of production appear to drive firms into taking excessive risks, leading to equipment failure, loss of life, and escalating damage to the environment. The challenges of drilling deep offshore led to the Deepwater Horizon disaster, the oil blowout off the coast of Louisiana in 2010 that killed eleven workers on the BP-operated rig and proved so powerful and difficult to cap that as much as 5 million barrels of oil spilled into the Gulf of Mexico in the three months before the leak was plugged. BP agreed to pay an estimated $7.8 billion to settle civil lawsuits and $4.5 billion to settle government charges, the largest corporate fines ever levied.

Drilling in the Arctic has proven even more difficult and dangerous. In 2012, Shell Oil was forced to suspend drilling off the north coast of Alaska, after a series of accidents, equipment failures and environmental legal challenges, reflecting the extraordinary risks of operating in the heavy storms, iceberg-strewn seas, extended darkness and extreme cold of the region. The company had spent $5 billion exploring for oil without completing a single well.30 Following Shell’s decision, other large companies with plans to drill in the Arctic seas, including Statoil and ConocoPhillips, suspended operations.

Most of the major global companies have also invested in Canadian tar sands. The strip-mining of the bitumen-impregnated soils of Alberta is an expensive but technically more straightforward way to access new sources of carbon, in a form that can be converted into synthetic oil. Leave aside for the moment the increased carbon emissions from strip mining and processing bitumen and the environmental costs of bulldozing through thousands of acres of boreal forest and muskeg and of disposing of the polluted river water used to separate the tar from the sand. After all that, the oil companies face the problem of moving the bitumen, diluted to allow it to flow through pipelines, to the refineries in Texas equipped to process heavy oil. Diluted bitumen is more corrosive than crude oil and has been linked with rates of pipeline failure four times the US average.31

In March 2013, diluted bitumen from tar sands that ExxonMobil was shipping from Alberta to Texas ruptured an old twenty-inch pipeline near Little Rock, Arkansas. But the spill was small compared to the diluted bitumen spill in 2010, when a pipeline owned by Enbridge, the Canadian operator of the largest pipeline network in the world, burst and dumped tar sands oil into the Kalamazoo River in Michigan. The operators assumed the problem was merely an air bubble in the pipeline and continued operating the pumps for hours after the alarms sounded. Three years later, the cost of the continuing cleanup was approaching $1 billion.32


With the declining availability of conventional oil and the risks and expense of developing unconventional sources, the major oil companies face a difficult future. In the short-term, however, a positive aspect of the production plateau has masked their difficulties. The shortage of new supplies of conventional oil, combined with the high marginal cost of producing unconventional oil and the logistical problems of rerouting pipelines and reconfiguring refineries to adjust to the changing sources and kinds of oil, helped trigger a very large increase in its price. After three decades at around $20 to $25 per barrel, the price of oil doubled to $50 in 2005, as the rate of production reached its plateau, and doubled again to more than $100 by 2008.33The suddenly increased revenues helped finance the growing cost of exploration, but were also used by many of the larger oil companies to buy up their own shares. The repurchase of stock supported share prices, reducing the pressure on share values caused by the difficulty in developing large new sources of oil.

The quadrupling of oil prices contributed to setting off the global banking failure of 2008, the greatest financial collapse since the Great Depression. The failure of large banks and insurance companies, the collapse of stock market prices, and the bursting of the financial bubble caused by derivatives tied to housing loans, can be linked not only to the immediate issue of oil prices but also to the longer story of carbon democracy.


The post-2009 energy boom that seemed to pull the United States out of a financial collapse and global recession caused by the excesses of speculative capital is not the antidote to that world of excess and speculation. The claim that the shale revolution represents a path to a “potential re-industrialization of the US” was published in the Wall Street Journal by the head of global commodities research at Citigroup. The same banks and newspapers that helped organize and profit from the system of exponentially growing consumer debt and the overvalued derivatives built on it were now creating the unsustainable expectations of a carbon-fueled future. Few people seemed to notice that the decline in U.S. oil imports that signaled the new age of energy independence was, to a significant degree, due not to increased oil production but to a shrinking demand for gasoline, as the doubling of the number of the unemployed and other economic hardships forced people to find ways of reducing the number of miles driven.

As we move, with a dangerous slowness, towards the increased use of renewable sources of energy that do not require the combustion of carbon and its further accumulation in the atmosphere, it is sometimes assumed that the post-carbon world will inevitably be more democratic. More cogently, it is argued that the European model of distributed and networked renewable energy production, based on transforming every household and business into a producer of its own energy and a generator of small surpluses, has a greater democratic potential than U.S. plans for utility-scale generation of renewable power distributed through a conventional long-distance grid. The democratizing potential of the Internet is offered as a model of the political benefits of a localized, distributed and intelligently networked design.34 The lesson from Carbon Democracy is that one cannot predict democratic possibilities directly from the design of socio-technical systems—as the internet itself demonstrates, with its capacity for open communication always threatened by the monopolistic commercial powers of the largest software, computer and internet businesses. The point, rather, is that in battles over the shape of future energy systems the possibilities for democracy are at stake.


There is, however, a considerable campaign to be undertaken before we reach a post-carbon world, especially in the United States. A larger lesson from Carbon Democracy is that such democratic struggles depend not on future designs but upon identifying in current socio-technical systems their points of vulnerability. This postscript has traced the peculiar vulnerability of oil companies dependent on flows of equity investment that must increase as rapidly as the costs of producing oil are rising. Yet those rising costs reflect a world in which cheap, conventional oil is more and more scarce and the technical expense and environmental costs of producing unconventional oil are escalating. These risks and costs reveal a world at odds with the optimistic scenarios on which accelerating flows of equity depend. Meanwhile, capital that long ago began losing interest in organizing—and thus becoming vulnerable to—large-scale productive labor, tried the easier route of organizing lives around the making and servicing of debt. The problems of peak oil hastened the collapse of the debt machine. The recent U.S. energy boom offers only a temporary and equally vulnerable diversion.


Timothy Mitchell teaches at Columbia University. His books include Colonising Egypt, Rule of Experts, and Carbon Democracy.

Footnotes

1 U.S. Energy Information Administration, “Monthly Energy Review,” March 2013, available at www.eia.gov. U.S. primary energy production grew from 72.6 quadrillion BTUs in 2009 to 79.2 in 2012, with fossil fuels accounting for 85 percent of the increase.

2 Clifford Krauss and Eric Lipton, “US Inches Toward Goal of Energy Independence,” New York Times, 23 March 2012: A1.

3 Ed Morse, Wall Street Journal (online), 19 March 2012, available at online.wsj.com. The author was head of global commodities research at Citigroup.

4 On the relationship between anthropogenic climate change and extreme weather events, see International Panel on Climate Change, Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation, edited by C.B. Field et al., Cambridge: Cambridge University Press, for the IPPC, 2012.

5 Bill McKibben, “Global Warming’s Terrifying New Math,” Rolling Stone, 2 August 2012; “Unburnable Carbon—Are the World’s Financial Markets Carrying a Carbon Bubble?” available at www.carbontracker.org. Seven of the world’s ten largest companies by revenue are oil companies, as are eleven of the largest twenty. A majority of the rest are power distribution or automobile manufacturing companies and thus closely linked to the fossil fuel industry (Fortune ‘Global 500’, at money.cnn.com). A gigaton is one billion tons.

6 On this shift, see Maurizio Lazzarato, The Making of the Indebted Man, Los Angeles: Semiotext(e), 2012; and David Graeber, Debt: The First 5,000 Years, Brooklyn, New York: Melville House, 2011.

7 U.S. Federal Reserve, Consumer Credit-G19, available at http://www.federalreserve.gov/econresdata/statisticsdata.htm, and Flow of Funds, at http://www.federalreserve.gov/apps/fof; IMF, “Dealing with Household Debt,” World Economic Outlook, April 2012: 89.

8 Kent Moors, The Vega Factor: Oil Volatility and the Next Global Crisis, Hoboken, NJ: Wiley, 2011: 73–4.

9 See www.eia.gov/dnav/pet/pet_crd_wellcost_s1_a.htm. Costs are in nominal dollars, but inflation-adjusted figures are similar.

10 J. David Hughes, “Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance?” Post-Carbon Institute, February 2013, available at www.postcarbon.org.

11 See John Dizard, writing in the Financial Times about shale plays: “along with the technology you can also thank the advanced American ability to extract money from investors,” in “Shale Gas Numbers May Not Add Up,” 1 November 2009. In this respect the shale boom is reminiscent of the U.S. transcontinental railroad boom of 150 years ago. See Richard White, Railroaded: The Transcontinentals and the Making of Modern America, New York: W. W. Norton, 2012.

12 Deborah Rogers, “Shale and Wall Street: Was the Decline on Natural Gas Prices Orchestrated?” Post-Carbon Institute, February 2013, available at www.postcarbon.org.

13 Ibid.

14 Personal communication, Moon, Pennsylvania, 1 April 2013.

15 See the blog entry for 6 November 2009 at http://petroleumtruthreport.blogspot.ca.

16 ExxonMobil, “Liquids Supply by Type,” The Outlook for Energy: A View to 2040, 38, available at http://www.exxonmobil.com/energyoutlook. ExxonMobil is the world’s largest company by net income, about 50 percent larger than Apple, Inc., which in 2012 overtook it as the largest by share value, see http://www.ft.com/intl/companies/ft500.

17 Paul J. Crutzen and Christian Schwägerl, “Living in the Anthropocene: Toward a New Global Ethos,” Environment360, 24 January 2011, available at http://e360.yale.edu. Paul Crutzen, the scholar who popularized the term, now suggests that we date the Anthropocene not from the beginnings of industrialization around 1800, but from 1945 and the start of the “great acceleration,” a period defined in part by the accelerating use of petroleum. See Will Steffen, Paul J. Crutzen and John R. McNeill, “The Anthropocene: Are Humans Now Overwhelming the Great Forces of Nature?” Ambio 36: 8, 2007: 614–21; and Paul Voosen, “Geologists Drive Golden Spike Toward Anthropocene’s Base,” Greenwire, 17 September 2012, available at http://www.eenews.net/gw. See also Dipesh Chakrabarty, “The Climate of History: Four Theses,” Critical Inquiry 35, 2009: 197–222.

18 World production of crude oil and condensate showed no increase from 2005, when it stood at 72.5 million bpd, to 2009; by 2012 it had grown marginally, to 75.5 million bpd, with the United States accounting for about 70 percent of the increase (www.eia.gov).

19 Leonardo Maugeri, “Oil: The Next Revolution: The Unprecedented Upsurge of Oil Production capacity and What it Means for the World,” Geopolitics of Energy Project, Belfer Center for Science and International Affairs, Kennedy School of Government, Harvard University, June 2012, available at http://belfercenter.ksg.harvard.edu; Steve Sorrell and Christophe McGlade, “Commentary: Maugeri’s Decline Rate Assumptions,” ODAC Newsletter, 6 July 2012, available at http://www.odac-info.org; David Strahan, “Monbiot Peak Oil U-turn Based on Duff Maths,” 30 July 2012, available at http://www.davidstrahan.com/blog.

20 Steve Sorrell, Jamie Speirs, Roger Bentley, Richard Miller, Erica Thompson, “Shaping the Global Oil Peak: A Review of the Evidence on Field Sizes, Reserve Growth, Decline Rates and Depletion Rates,” Energy 37:1, 2012: 709–24.

21 Reuters, “Aramco: Manifa Field to Pump 500,000 bpd in H1 2013,” 16 October 2012, at uk.reuters.com.

22 Mamdouh G. Salameh, “If Current Trends Continue, Saudi Arabia Could Become an Oil Importer by 2025,” USAEE /IAEE Working Paper Series, available at http://ssrn.com/abstract=2187643; see also the ExportLand model of Jeffrey J. Brown, a petroleum geologist who writes for theoildrum.com under the name Westexas.

23 Mamdouh G. Salameh, “Brazil’s Pre-Salt Oil Potential: The Hype and the Reality,” USAEE Working Paper No. 2109947, 16 July 2012, available at http://ssrn.com/abstract=2109947.

24 Oxford Analytica, “Iranian Oil Production Faces Long-term Decline,” cited in UPI, “Iran’s Oil Output Faces Long-term Decline,” 28 February 2013, available at www.upi.com.

25 International Energy Agency, World Energy Outlook 2012, Executive Summary, 4.

26 Special Inspector General for Iraq Reconstruction, Quarterly Report to Congress, 2012, Q3, 81, available at http://www.sigir.mil; IEA, ‘Iraq Energy Outlook’, 11 October 2012.

27 Special Inspector General for Iraq Reconstruction, Quarterly Report to Congress, 2012, Q3, 81.

28 Sylvia Pfeifer and Guy Chazan, “More Buck, Less Bang,” Financial Times, 12 April 2013: 9.

29 Quoted in ibid.

30 Ibid.

31 The evidence is under investigation by the National Academies. See http://www8.nationalacademies.org/cp/projectview.aspx?key=49461.

32 Jennifer Bowman, “Enbridge: Oil Spill Cleanup Costs Nearing 1 Billion,” battlecreekenquirer.com, 21 March 2013, available at http://www.battlecreekenquirer.com.

33 Source: www.eia.gov.

34 Jeremy Rifkin, The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World, New York: Palgrave Macmillan, 2011.