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Next year U.S. oil production will exceed its 1970 peak

Production

Crude oil production in the U.S. will reach an average of 9.9 million barrels a day in 2018, the Energy Information Administration projects in its latest Short-Term Energy Outlook report. This would surpass the previous record of 9.6 million barrels per day, set in 1970.

So much for Hubbert’s Peak.

In 1956, geologist M. King Hubbert famously predicted, in a presentation to the American Petroleum Institute, that oil production in the U.S. would peak no later than 1970. To make his estimates, Hubbert added up all the plausible extrapolations of domestic crude oil reserves. His more conservative calculation assumed the ultimate production of 150 billion barrels, in which case production would peak in 1965. But if ultimate production could rise to 200 billion barrels, the peak would be delayed until 1970.

HubbertsPeak1956M.K. Hubbert

Many people thought Hubbert’s predictions were vindicated when U.S. production began dropping from its 1970 peak. In fact, domestic production of crude reached a nadir of 5 million barrels per day in 2008. (Had Hubbert’s calculations been right, the U.S. would have been producing only about 2.5 million barrels a day that year.) As global oil prices began rising toward their highest levels ever, peak oil doomsaying had its heyday.

My 2006 article “Peak Oil Panic” detailed many of those predictions of an impending petroleum catastrophe. The Princeton geologist Ken Deffeyes suggested in 2001 that global oil production would peak on Thanksgiving Day, 2006. Petroleum geologist Colin Campbell warned in 2002 that dwindling oil supplies would soon lead to “war, starvation, economic recession, possibly even the extinction of homo sapiens.” In his 2004 book Out of Gas: The End of the Age of Oil, the Caltech physicist David Goodstein asserted not just that peak production was imminent but that “we can, all too easily, envision a dying civilization, the landscape littered with the rusting hulks of SUVs.” In 2007, the German Energy Watch Group declared that the world had reached peak oil, and that this could soon trigger the “meltdown of society.”

At the peak oil alarmist website The Oil Drum, one prominent analyst declared in 2009 that global oil production had peaked at 82 million barrels per day in 2008 and would thereafter begin declining at a rate of 2.2 million barrels per day. Had that estimate been correct, world oil production would have fallen by now to about 62 million barrels per day. Instead, the International Energy Agency reported this month that global production now averages around 97 million barrels per day. Keep in mind that this level of production is taking place despite the political and economic chaos afflicting such major oil-producing countries as Venezuela, Libya, and Iraq.

Peak oilers greatly underestimated the power of markets and human ingenuity to solve problems. (Think fracking.) The Energy Information Administration reports that the U.S. has cumulatively produced more than 200 billion barrels of oil. (So much for Hubbert’s “ultimate production” calculations.) During that time, proven domestic oil reserves have never fallen below 20 billion barrels; they are now estimated at 32 billion barrels.

A decade ago, at the peak of peak oil hysteria, I wrote that “the peak oil doomsters are probably wrong that world oil production is about to decline forever. Most analysts believe that world petroleum supplies will meet projected demand at reasonable prices for at least another generation.” That’s still true.

Reason



42 Comments on "Next year U.S. oil production will exceed its 1970 peak"

  1. Sissyfuss on Fri, 28th Jul 2017 8:06 am 

    No, peak oilers underestimated the ability of Ponzinomics to enable tight oil to delay the peak and it’s destructive consequences. Oil is still finite but it seems that money printing is not.

  2. Cloud9 on Fri, 28th Jul 2017 8:13 am 

    I must admit that when gasoline hit $4 a gallon in June of 08 I thought we were toast. What I did not grasp was the impact of the economy rolling over and the zero interest loans that would prop up the national edifice for a decade. Operating at a loss no longer matters for the government or key industries. Debt is infinite and it is free. I have come to realize that oil production will continue far longer than anyone imagined.

  3. Antius on Fri, 28th Jul 2017 9:28 am 

    ‘I must admit that when gasoline hit $4 a gallon in June of 08 I thought we were toast. What I did not grasp was the impact of the economy rolling over and the zero interest loans that would prop up the national edifice for a decade. Operating at a loss no longer matters for the government or key industries. Debt is infinite and it is free. I have come to realize that oil production will continue far longer than anyone imagined.’

    It is too bad that the author of this article does not share your insight. When the peak does arrive (i.e. when debt can no longer be used to inflate the oil supply), he will probably tell us that the world has reached peak demand and celebrate what a momentous occasion it is.

  4. dave thompson on Fri, 28th Jul 2017 10:28 am 

    Conventional oil has peaked. The stuff being counted in volume, now is crap energy. Corn ethanol, tar sands, fracked condensate, refinery gains, all make the numbers look good for production. However energy in the net end user sense is over when it comes to overall growth.

  5. Hello on Fri, 28th Jul 2017 11:49 am 

    >>> So much for Hubbert’s Peak.

    Not true. A little bit of filtering, a little bit of averaging and a single peak is still there. Once you take a step back and look at the production curve in an interval of a few 100 or 500 years you will only see one small blip, one peak. A one time windfall of oil. An then it’s gone.

    All the screaming tantrums of AdamB and other cornucopians won’t make oil infinite.

  6. Cloud9 on Fri, 28th Jul 2017 11:52 am 

    Dave I agree. I’m with Short on his assessment. The moment they decided steam cleaning sand for bitumen was economically viable, I knew we were scraping the bottom of the barrel. I understand that the economy is literally starving for energy as the net btus decline. My guess is the wheels come off somewhere around 2022. Even with a complete collapse of the private economic sector, oil will still be produced. You cannot run an A-10 Warthog on natural gas. So, whatever it takes to keep those bad boys up and running will be done as long as anything remains of the MIC.

  7. onlooker on Fri, 28th Jul 2017 12:15 pm 

    All the screaming tantrums of AdamB and other cornucopians won’t make oil infinite.—Yep, our energy intensive soon will not be affordable. That along with other uncomfortable realities is becoming plainly clear except to those in denial

  8. Hubert on Fri, 28th Jul 2017 12:37 pm 

    I don’t think anything remarkable will happen once we run out of oil. People will have to learn how to grow their own food and work the field. Sort of like a larger version of Cuba.

  9. MASTERMIND on Fri, 28th Jul 2017 1:55 pm 

    Notice it’s only right wing sites that deny peak oil. Such as “Reason,WSJ,Forbes,Infowars,Wattsupwiththat”. The usual suspects. LOL

  10. shortonoil on Fri, 28th Jul 2017 1:59 pm 

    “Conventional oil has peaked. The stuff being counted in volume, now is crap energy. Corn ethanol, tar sands, fracked condensate, refinery gains, all make the numbers look good for production.”

    You may find the following posts on this page to be of interest. Shale can not even be processed without the addition of a lot of conventional crude. It takes somewhere between 70 to 80% of the inputs to be conventional for refineries to operate if they include shale. It’s not much of a substitute if can’t do any substituting? That little inconvenience erases about 365 Gb from the world’s reported reserves!

    http://peakoil.com/forums/viewtopic.php?p=1368154#p1368154

  11. rockman on Fri, 28th Jul 2017 2:07 pm 

    “Hubbert added up all the plausible extrapolations of domestic crude oil reserves.” Exactly correct: the plausible reserves and production rate of the KNOWN and producing trends at the time he made his prediction. And he specially pointed out his projection DID NOT INCLUDE yet to be developed trends such as those offshore and the shales.

    One could project the peak in US offshore oil production…eventually. One might have predicted 2002. But would have been wrong by not taking into account Deep Water growth that had us set a new record in 2017: “U.S. GOM crude oil production is estimated to increase to record high levels in 2017, even as oil prices remain low. EIA projects GOM production will average 1.63 million bopd in 2016 and 1.79 million bopd in 2017, reaching 1.91 million bopr in December 2017.”

    So have we reached the ultimate peak in offshore oil production? Check back in 20 years or so and we might know.

    And the shales? The EIA shows they peaked in 2015. But it also projects a new peak some unspecified time beyond 2040:

    “Production from tight oil in 2015 was 4.89 million barrels per day, or 52% of total U.S. crude oil production. From 2015 to 2017, tight oil production is projected to decrease by 700,000 barrels per day in the Reference case, mainly attributed to low oil prices and the resulting cuts in investment. However, production declines will continue to be mitigated by reductions in cost and improvements in drilling techniques. The use of more efficient hydraulic fracturing techniques and the application of multiwell-pad drilling, as well as changes in well completion designs, will allow producers to recover greater volumes from a single well.”

    So time is at hand for a new courageous “Hubbert” to put his ass on the line as King did and predict a new US peak oil date based on the currently known trends as Dr. Hubbert did back in the 50’s. He was proven correct: the peak of trends that he analyzed happened very close to the actual date.

    So boys: step up, out you balls on the chopping block and shows us the DOCUMENTED support for your peak predictions. IOW I doubt many here are interested in anyone’s OPINIONS. We want to see the quantitative analysis that produced the peak dates for the offshore and the shales.

  12. Hello on Fri, 28th Jul 2017 2:15 pm 

    Lets stick with AdamB’s excellent logic, Rock.

    Peak oil was wrong in the past, therefore it’s wrong in the future, therefore there won’t be any peak.

    Does it make any sense? To AdamB it seems.

  13. Plantagenet on Fri, 28th Jul 2017 2:42 pm 

    I think Reason Magazine has it just right. The predictions that the planet would hit peak oil by 2000 (Hubbert) or 2005, 2006, 2007, 2008 or 2009 as others then predicted has been proven wrong.

    But oil remains a finite resource and Ghawar and other a host of other supergiant conventional oil fields are all about to peak and then rapidly decline.

    Then it will be peak oil all over again.

    CHEERS!

  14. shortonoil on Fri, 28th Jul 2017 3:52 pm 

    The world is burning 35 Gb per year, and replacing less than 4. Shale is not an option:

    https://assets.bwbx.io/images/users/iqjWHBFdfxIU/icbkDFACM4iA/v2/-1x-1.png

    [i]Happy days are here again[/i]…. is getting a little thin.

  15. Antius on Fri, 28th Jul 2017 4:32 pm 

    World conventional production peaked in January 2011 and is now several percentage points down from its peak:

    http://www.artberman.com/wp-content/uploads/Chart_World-Con-Uncon-1.jpg

    Unconventional oil may continue to grow so long as interest rates are low and the demand for oil is sufficient to keep price above the cost of production. Neither of these things will be true for very much longer, because the central banks have started raising interest rates in an attempt to bring debt levels under control. This will reduce supply and demand at the same time.

  16. Apneaman on Fri, 28th Jul 2017 5:11 pm 

    Plantard, there is no reason magazine. It’s a fossil fuel funded right wing think tank poorly disguised as a magazine. Your kinda people. Your tribe. Your confirmation bias.

    Reason Foundation
    (Redirected from Reason)

    The Reason Foundation, a self-described “libertarian”[1] think tank, is a right-wing 501(c)3 nonprofit and “associate” member of the State Policy Network (SPN).[2] Reason Foundation’s projects include NewEnvironmentalism.org and Privatization.org, as well as Reason Magazine[3] It is part of the Atlas Economic Research Foundation network.

    The Reason Foundation is funded, in part, by what are known as the Koch Family Foundations and David Koch serves as a Reason trustee

    Reason Foundation Called Out for Blocking Action on Climate Change

    In July of 2016, nineteen U.S. Senators delivered a series of speeches denouncing climate change denial from 32 organizations with links to fossil-fuel interests, including the Reason Foundation.[8] Sen. Whitehouse (D-RI), who led the effort to expose “the web of denial” said in his remarks on the floor that the purpose was to,

    “shine a little light on the web of climate denial and spotlight the bad actors in the web, who are polluting our American discourse with phony climate denial. This web of denial, formed over decades, has been built and provisioned by the deep-pocketed Koch brothers, by ExxonMobil, by Peabody coal, and by other fossil fuel interests. It is a grim shadow over our democracy in that it includes an electioneering effort that spends hundreds of millions of dollars in a single election cycle and threatens any Republican who steps up to address the global threat of climate change. . . . [I]t is long past time we shed some light on the perpetrators of this web of denial and expose their filthy grip on our political process. It is a disgrace, and our grandchildren will look back at this as a dirty time in America’s political history because of their work.”

    http://www.sourcewatch.org/index.php/Reason_Foundation

  17. boat on Fri, 28th Jul 2017 5:25 pm 

    Four years ago I ran into this site. I was amused at the idea of a plethora of crash scenarios including depletion/peakoil. Four years later the crazies are still at it. Demand is still strong amid a long lasting glut. Looking out 10 years to much oil will still be with us. Venezuela/Brazil/Mexico/Argentina, etc, oil resources will be extracted by international drillers rather than government enterprise.
    No crash, not enough damage by climate, North Korea, Iran, and Syria may need political change but these are small conflicts. Action may be needed in Lybia and Nigeria to keep oil flowing but no big deal. In most cases oil money will used against Muslims to keep oil flowing.
    The world outlook is good, better than 4 years ago. Now if all Muslims would just have one/two children per family and get religion under control, the world could take another step in the right direction without conflict.

  18. onlooker on Fri, 28th Jul 2017 5:27 pm 

    Good one AP, how readily apparent it is when some of us maintain our fidelity to some concept and seek to justify it no matter from what source or where it originates. Or the opposite when only certain “acceptable” sources are considered acceptable by some even on this site. So tell me again why Zerohedge cannot be trusted? I do not trust anybody who tells me they know what or who can be trusted. Trust yourself

  19. Newfie on Fri, 28th Jul 2017 5:32 pm 

    Oil is finite. Hubbert will get the last laugh. He who laughs last laughs best.

  20. boat on Fri, 28th Jul 2017 5:47 pm 

    Antius,

    Show me that decreased demand. You doomers have been saying that shyt for decades. A history of Blatant false claims. Unconventional, conventional, tar sands etc. If any of these extractions methods have a positive return on investment, oil will be sold. The lower cost producers survive.

  21. Apneaman on Fri, 28th Jul 2017 5:50 pm 

    boat, no crash? What about 2008 and the bailing out of banks all over the world? Oh, right doesn’t count because it doesn’t fit your fantasy. Ya climate change, is not finished you know. It’s just getting started, so you might want to withhold judgement on that one. Do you know what nonlinear means? Do you understand what inertia is? If not you’ll be finding out soon enough.

    Boat, why would you come here? If everything is awesome, why come to a site with plenty of peak oilers-decliners-collapsers-doomers? You say you don’t believe it so why come here?

    You know what I don’t believe in? God. You will never find me at a religious site constantly telling all the believers how much I don’t believe in what they believe in and call them stupid and shit. You know why I don’t do that? Because I really really truly do not believe in god so I have no need to pretend that I’m arguing with the god believers when in fact I’m arguing with myself.

  22. Makati1 on Fri, 28th Jul 2017 5:57 pm 

    I noticed only a few oblique references to the fact that when the world economy crashes, the whole world will change for the worse. Those ‘operating at a loss’ oil/NG companies will shut their wells and their doors forever. That is why I say “peak oil” is NOT the most important thing in life today. Not even close, so I don’t bother reading most of the articles written to entertain the masses.

  23. onlooker on Fri, 28th Jul 2017 6:02 pm 

    Boat, do you think we doomers really enjoy talking about all this doom? No. At least I do not. But reality is what it is. My advice is never give up hope, but see reality for what it truly is.

  24. Makati1 on Fri, 28th Jul 2017 6:03 pm 

    Ap, nice analogy. There are a few more like that here who should read it. I too don’t believe in any god and it is a freeing experience. I certainly don’t hang out with a bunch of believers, arguing about it. I prefer to spend my time pointing out the faults of the U$ and it’s wannabees. And, getting the latest on our real problem, CC. ^_^

  25. Harquebus on Fri, 28th Jul 2017 6:08 pm 

    Except, it’s no laughing matter.

  26. boat on Fri, 28th Jul 2017 6:49 pm 

    ape,

    There are a few who I consider to have a fairly good assessment in various areas. I even agree with certain parts of climate change problems you post daily. Most of the topics have plenty of grey areas to opine about. Hell ape it was you doomers that taught me to be rude. Don’t you like it?

  27. boat on Fri, 28th Jul 2017 7:06 pm 

    onlooker,

    You doomers like to blame sources. Look around a bit and you can find what you agree or disagree with or varying degrees of both on about any subject. Blaming msm, some religion, rich, poor bla bla bla. You don’t stop reading Koch brothers propaganda or George Soros propaganda if you want to know what their pushing. Millions of opinions. We each have a filter so read away and quit blaming what you read.

  28. JJHMAN on Fri, 28th Jul 2017 7:19 pm 

    boat:

    Please point me to some “Soros propaganda”.

    I keep hearing from right wingers that I am marching, zombie like, to his tune and if that’s true I should know where I can find it. However I can’t download it because my iPod doesn’t work any more.

  29. Apneaman on Fri, 28th Jul 2017 7:20 pm 

    Boat, I have never thought of you as rude and I wouldn’t care if you were – that shit is just testosterone fueled locker room gamesmanship anyhow.

  30. boat on Fri, 28th Jul 2017 7:27 pm 

    ape,
    lol, I like that description. However being a preachers kid and son of a crusty southern woman, I would have been beaten.

  31. boat on Fri, 28th Jul 2017 7:31 pm 

    george soros beliefs

    1. Gives billions to left-wing causes: Soros started the Open Society Institute in 1993 as a way to spread his wealth to progressive causes. Using Open Society as a conduit, Soros has given more than $7 billion to a who’s who of left-wing groups. This partial list of recipients of Soros’ money says it all: ACORN, Apollo Alliance, National Council of La Raza, Tides Foundation, Huffington Post, Southern Poverty Law Center, Soujourners, People for the American Way, Planned Parenthood, and the National Organization for Women.

    2. Influence on U.S. elections: Soros once said that removing President George W. Bush from office in 2004 was the “central focus of my life.” He put his money where his mouth is, giving $23.58 million to various 527 groups dedicated to defeating Bush. His early financial support helped jump-start Barack Obama’s political career. Soros hosted a 2004 fund-raiser for Obama when he was running for the Illinois Senate and gave the maximum-allowed contribution within hours of Obama’s announcement that he was running for President.

    3. Wants to curtail American sovereignty: Soros would like nothing better than for America to become subservient to international bodies. He wants more power for groups such as the World Bank and International Monetary Fund, even while saying the U.S. role in the IMF should be “downsized.” In 1998, he wrote: “Insofar as there are collective interests that transcend state boundaries, the sovereignty of states must be subordinated to international law and international institutions.”

    4. Media Matters: Soros is a financial backer of Media Matters for America, a progressive media watchdog group that hyperventilates over any conservative view that makes it into the mainstream media. Now its founder, David Brock, has openly declared war on Fox News, telling Politico that the group was mounting “guerrilla warfare and sabotage” against the cable news channel, and would try to disrupt the commercial interests of owner Rupert Murdoch—an odd mission for a 501(c)(3) tax-exempt educational foundation that is barred from participating in partisan political activity.

    5. MoveOn.org: Soros has been a major funder of MoveOn.org, a progressive advocacy group and political action committee that raises millions for liberal candidates. This is the group that had on its website an ad comparing President George W. Bush to Adolf Hitler and ran the infamous “General Betray Us” ad in the New York Times, disparaging the integrity of Gen. David Petraeus.

    6. Center for American Progress: Headed by John Podesta, White House chief of staff under President Clinton, the Center for American Progress has been instrumental in providing progressive talking points and policy positions for the Obama administration. There has also been a revolving door between the White House and the Soros-funded think tank, with Obama staffing his administration with many CAP officials.

    7. Environmental extremism: Former Obama green jobs czar Van Jones and his leftist environmental ideas have been funded by Soros’ money at these groups: the Ella Baker Center, Green For All, the Center for American Progress, and the Apollo Alliance, which was instrumental in getting $110 billion in green initiatives included in Obama’s stimulus package. Soros also funds the Climate Policy Initiative to address global warming and gave Friends of the Earth money to “integrate a climate equity perspective in the presidential transition.”

    8. America Coming Together: Soros gave nearly $20 million to this 527 group with the express purpose of defeating President Bush. A massive get-out-the-vote effort, ACT’s door-to-door canvassing teams included numerous felons, its voter registration drives were riddled with fraud, and it handed out incendiary fliers and made misleading taped phone calls to voters. ACT was fined $775,000 by the Federal Election Commission for violations of various federal campaign finance laws.

    9. Currency manipulation: A large part of Soros’ multibillion-dollar fortune has come from manipulating currencies. During the 1997 Asian financial crisis, Malaysian Prime Minister Mahathir bin Mohamad accused him of bringing down the nation’s currency through his trading activities, and in Thailand he was called an “economic war criminal.” Known as “The Man who Broke the Bank of England,” Soros initiated a British financial crisis by dumping 10 billion sterling, forcing the devaluation of the currency and gaining a billion-dollar profit.

    10. Delusions: Soros has repeatedly said that he sees himself as a messianic figure. Who but a megalomaniac would make these comments? “I admit that I have always harbored an exaggerated view of my self-importance—to put it bluntly, I fancied myself as some kind of god” or “I carried some rather potent messianic fantasies with me from childhood, which I felt I had to control, otherwise I might end up in the loony bin.” If only the loony bin were an option. As it is, one of the wealthiest men in the world is using his billions to impose a radical agenda on America.

  32. Antius on Fri, 28th Jul 2017 8:19 pm 

    Soros would appear to be a Marxist and anti-nationalist. He hates the ideas of nationhood, tribalism and racial loyalty, seeing him self as a detached internationalist, a citizen of the world. Ultimately he is anti-human, for these sorts of tribal loyalties are what gives life meaning.

  33. boat on Fri, 28th Jul 2017 8:34 pm 

    Myth # 1:
    The Koch network is a recent reaction to the Obama presidency.

    Even though the political activities of the Koch brothers gained national visibility only after Barack Obama moved into the White House, Charles and David were no neophytes. They had been at work for decades trying to reshape American politics and public policies. Starting in the 1970s, Charles and David Koch founded and provided sustained funding for an array of free-market and libertarian think tanks and academic research entities, including the Cato Institute and the Mercatus Center at George Mason University. David Koch became active in Libertarian Party politics and even ran for vice president on the party ticket in 1980.

    In 2003, because of what the Bush administration was doing, we said, ‘gosh, we’ve got to get involved in politics.’
    — CHARLES KOCH

    After making little headway through a minor party, the Koch brothers expanded their giving to include new, more conventional lobbying groups that could use both insider tactics and public campaigns to press preferred policies on Congress and the states. They funded groups like Citizens for a Sound Economy and the 60 Plus Association to push against business regulations, energy taxes and new social spending, while also promoting the privatization of Medicare and Social Security.

    The Kochs’ third — and by far most ambitious — burst of organizational activity got going during the administration of Republican President George W. Bush, as Charles and David became disillusioned with this supposedly conservative president’s embrace of certain regulations and new social spending on a Medicare drug program. As Charles Koch put it, “In 2003, because of what the Bush administration was doing, we said, ‘Gosh, we’ve got to get involved in politics’” — by which he meant that the Kochs were about to fund and direct a full array of political party-like activities, including organizations that could operate in the states and mobilize grassroots activists along with paid operatives.

    The year 2003 was the very moment when the brothers launched those twice-yearly convenings of wealthy conservative donors. As we will elaborate below, these “Koch seminars” have grown to channel huge streams of funding to all of the network’s political organizations — including the Kochs’ largest effort, a nationwide political federation called Americans for Prosperity (AFP), founded in 2004.

    By the end of 2007 — a year before the 2008 presidential elections that would bring President Obama and large Democratic congressional majorities to power — Americans for Prosperity already had 58 paid staffers, including national and regional managers and paid directors in 15 states encompassing almost half the US population. AFP and other Koch-directed organizations have grown dramatically since then, but it is clear that the large-scale construction of the current network was underway well before Obama even accepted his party’s nomination in the summer of 2008.

    Myth #2:
    The Koch network is a personal pet project of the brothers themselves.

    Much media attention has focused on David and Charles and on the controversial history of their family. After the recent release of Jane Mayer’s Dark Money, many outlets focused on such titillating details as family patriarch Fred Koch’s investments in oil refineries in Nazi Germany and Stalinist Russia, and the maneuvers undertaken by Charles and David to force their brother Frederick to give up his financial stake in the family company. Even the coverage of current political efforts by the brothers has tended to rivet attention on their personalities and beliefs. Typically, the PBS Newshour posed the question, “How much money do Charles and David put into politics — and what motivates them?”

    To be sure, Charles and David are extraordinarily wealthy — individually tied for fifth on the Forbes magazine’s list of the 400 richest Americans in 2015 — and the brothers do contribute large amounts from their own fortunes to political causes. But to think of the “Koch network” as a personal pet project funded by these two is to miss the forest for the trees. In fact, Charles and David have succeeded in rallying hundreds of other wealthy conservative families to support their strategic political operation. For years, many wealthy donors — including husbands with their wives — have gathered at swank resorts for the twice-a-year Koch seminars, where they listen to presentations about conservative politics and ideas and pledge funds to support the Koch political organizations. Available data, which we have pulled together, indicates that these meetings have grown from about 17 participants in 2003 to around 500 in early 2016. Regular attendees must now pay annual dues and shell out contributions in Koch-approved directions amounting to at least $100,000 per year.

    Most donors clearly give a lot more than that. One member of the hotel staff serving participants at the winter 2011 seminar claimed he heard donors standing up to make pledges in increments of $5 million. According to estimates from journalists and tax records from the Koch operation itself, the seminars went from raising just shy of $100 million in 2008 to just under $300 million in 2014, and the Kochs’ organized donors plan to raise somewhere between $700 and $900 million for the current 2016 election cycle.

    The explosive growth of the seminars shows just how important it is to think about the Koch network as the joint project of many super-wealthy conservatives determined to reshape US politics and public policy in libertarian and anti-government directions. A huge and growing slice of America’s conservative-minded billionaires and multi-millionaires are now organized into a self-righteous movement to take charge of our government and politics.

    Myth #3:
    The Koch network is little more than a corporate front.

    Especially on the left, there is a strong tendency to view the Koch network as merely a political front for their privately owned corporate conglomerate, Koch Industries, headquartered in Wichita, Kansas. Or else the network is portrayed as a somewhat broader front for many companies represented by participants in the Koch seminars. Liberal activists and researchers are quick to notice any time the policies backed by the Koch network might feed Koch Industries’ bottom line. According to the environmental group Greenpeace, the Koch brothers “direct a web of financing that supports conservative special interest groups and think-tanks, with a strong focus on fighting environmental regulation, opposing clean energy legislation and easing limits on industrial pollution.”

    That stance, the group argues, is because the brothers “have a vested interest in delaying climate action: they’ve made billions from… an oil corporation that is the second largest privately-held company in America (which also happens to have an especially poor environmental record).” Echoing the same logic, the National Committee for Responsive Philanthropy argues that it is not surprising that philanthropic giving directed by the Koch brothers often goes to “nonprofit organizations that do research and advocacy on issues that impact the profit margin of Koch Industries.”

    While the interests of mainstream business and the Koch network are tightly aligned when it comes to reducing taxes, loosening government regulations and undercutting labor unions, the Koch network promotes a much more sweeping, ideologically inspired free-market agenda.
    There certainly are complementarities between political organizations created and supported by the Koch brothers and their own corporate operations. Koch Industries executives and managerial methods have been loaned to the political operation, and the full array of Koch for profit and nonprofit groups concur on certain basic tenets of free-market conservatism, such as opposition to environmental regulations and unions. However, Koch political advocacy goes beyond mere corporate self-interest. As philosophically committed libertarians, Charles and David support or encourage many causes far beyond opposing environmental and labor-market regulations. Koch leaders and organizations seek a radical reduction in the role of the government in American society; they aim to dismantle not just Obama’s achievements but most federal government activities dating back to the Progressive Era.

    Corporate self-interest, for instance, cannot explain the fierce opposition of the Koch network to Medicare, Social Security and even the efforts of GOP governors to tap federal health reform funding to expand market-oriented forms of Medicaid in their states. Ongoing Medicaid civil wars in the GOP pit the Koch network against local and regional chambers of commerce and medical associations that have teamed-up with Republican governors to push for acceptance of this part of Obamacare. After all, Medicaid expansion promises to infuse local economies with billions of dollars in federal funding, boosting profits and revenues for hospitals, medical businesses and health care providers. The Koch political network has also come out strongly against many other kinds of subsidies for private sector businesses — including some that Koch companies collect for themselves. The network has pushed GOP legislators in Congress to discontinue the Export-Import Bank and has opposed business-friendly tax breaks and infrastructure funding strongly supported by the US Chamber of Commerce.

    In sum, while the interests of mainstream business and the Koch network are tightly aligned when it comes to reducing taxes, loosening government regulations and undercutting labor unions, the Koch network promotes a much more sweeping, ideologically inspired free-market agenda. Ironically, it might be a good thing for liberals if the Koch network really was an industry front, because business interests are often willing to enter into legislative bargains. At times, corporations — and business associations — are willing to work with liberals on policies such as investments in infrastructure or education. Politicians can and do negotiate trade-offs on such issues. But liberals will have no such luck cutting deals with the ideologically driven Koch network or with most of the hardline Republicans it backs.

    Myth #4:
    The Koch network scatters big money to hundreds of conservative groups.

    Journalists and pundits typically talk about the Koch network as a “secret bank” scattering money to hundreds of conservative groups across the political landscape. This understanding is best typified by the widely shared “Maze of Money” chart assembled by the Center for Responsive Politics, which traces circuitous routes through which hundreds of millions in funding tied to the Kochs flowed to dozens of organizations linked in what is called “far-reaching operation of unrivaled complexity.”

    The Koch network is better understood not as a labyrinthine tangle of funding flows, but as an evolving set of core organizations directly created and funded by the Kochs and run by their close associates.
    According to this portrayal, the Koch network encompasses groups as diverse as anti-abortion lobby Americans United for Life, the US Chamber of Commerce, the Heritage Foundation, the Club for Growth and the National Federation of Independent Business — pretty much the entire array of important organizations operating on the contemporary American right. However, by branding practically all major conservative groups as Koch affiliates, journalists and pundits obscure the real centers of action in the network. Our examination of IRS reports indicates that, even though Koch funding conduits like Freedom Partners dispense grants to dozens of groups, most of these grants are temporary and tiny. Take for instance the grant of $3 million that Freedom Partners made in 2012 to the US Chamber of Commerce. That may seem like a large sum, but it was a mere drop in the bucket given the nearly $200 million in revenues the Chamber collected that year. What’s more, of the $236 million in total grants Freedom Partners dispensed in 2012, more than three-fourths went not to outside groups but to core, Koch-controlled political organizations.

    The Koch network is better understood not as a labyrinthine tangle of funding flows, but as an evolving set of core organizations directly created and funded by the Kochs and run by their close associates. Our research has documented a complementary and tightly coordinated set of entities, each of which performs important functions in the overall Koch political operation.

    To collect and dispense funds for the network, the Kochs have set up the Freedom Partners Chamber of Commerce, now tasked with running the twice-yearly seminars and directing the donations wealthy conservatives pledge during and between those meetings. Additional core members of the network include organizations recently established to reach out to specific constituencies — the Libre Initiative to engage Hispanics, Generation Opportunity to build networks among young adults and Concerned Veterans for America to mobilize military veterans and push for the privatization of veterans’ health care. To support election efforts, the Kochs have built Themis/i360, which collects and analyzes voter data, and Aegis Strategic, which recruits and trains promising conservative candidates like Joni Ernst in Iowa.

    At the very heart of the network, finally, is Americans for Prosperity, a nationwide federated organization that now has paid staff in 34 states and contact lists for millions of conservative activists nationwide. AFP leverages its large financial war chest and grassroots contacts to oppose Democrats, help to elect very conservative Republicans and conduct policy campaigns to push those lawmakers in Congress and the states to enact Koch-supported policies and block or dismantle policies the network opposes.

    In short, far from being an impenetrable “maze of money” widely scattered to a cacophony of right-wing groups, the Koch network is a tightly interlocked set of organizations that the brothers and their closest advisors have developed over time into an integrated political machine of unparalleled clout.

    Myth #5:
    The Koch network is virtually a third US political party.

    Consider how a parasite interacts with its host: the parasite cannot survive for long without the host, because it exploits the resources of the host to survive and grow. In a similar way, the Koch network has penetrated the GOP to advance its electoral and legislative priorities.
    According to Kenneth Vogel at Politico, the Koch network has about three and a half times as many employees as the Republican National Committee plus GOP congressional campaign affiliates. And the network has pledged to spend between $700 and $900 million during the 2016 election cycle, more than double what the Republican committee apparatus spent in the previous election. Such juxtapositions have led some observers to bill the network as tantamount to an extra US political party. “It’s official,” stated one Mother Jones article, “The Kochs and their rich friends are the new third party.” Echoing that sentiment, The New York Times suggested that the network’s ambitious financial pledge for 2016 “effectively transforms the Koch organization into a third major political party.”

    Such comparisons rightly dramatize the size and scope of Koch endeavors, but it is a mistake to think of this network as operating outside of — or independently from — the GOP. That notion gets the relationship wrong and overlooks an important source of the Koch network’s political clout. Far from being independent of the GOP, the network’s operatives and resources are closely intertwined with the Republican Party. Forging this symbiosis, we believe, has been the whole point, a deliberate, long-term strategy to move the Republican Party to the far right. Koch honchos do not aim to displace the GOP; they want to capture and use it as a tool to radically cut back American government.

    A biological analogy can help us understand what is going on. Consider how a parasite interacts with its host: the parasite cannot survive for long without the host, because it exploits the resources of the host to survive and grow. In a similar way, the Koch network has penetrated the GOP to advance its electoral and legislative priorities. It would be hard to imagine the Koch network achieving significant impact operating entirely outside of the GOP.

    How many voters would cast their ballots for a fully independent third party visibly run in an oligarchical fashion by some of America’s wealthiest families? Even if elected to Congress, could smatterings of Koch Party representatives and senators advance their own extreme legislation? A far better strategy is what the network actually does: work through the Republican Party to help elect officeholders and then inspire and push them to enact the Koch agenda.

    On occasion, Koch leaders may disagree with actions taken by Republicans, but over time they are using their financial resources and organizational capabilities to draw GOP candidates and officeholders toward their preferred positions. GOP candidates and officeholders want and need Koch network resources — money, activists, publicity, access to donors — and in return they offer access and fealty to top Koch policy priorities, whether or not those priorities are popular with voters. The Koch network can leverage the institutional brand and resources the modern Republican Party has built up over the past century to win elections for network friends and influence legislative bodies in Washington, DC, and states across the country.

    The evidence of GOP penetration by the Koch network is striking. Some top Koch leaders have previously worked for Republican presidents or party organizations and others have gone on to do the same after working for the Kochs. Also pertinent are the career paths followed by state directors in Americans for Prosperity. We have tracked all the state directors who have ever served in the first fifteen AFP state organizations (all set up between 2004 and 2007). Nearly seven in ten of these directors, we found, had previously held staff posts in GOP campaigns or in the offices of Republican elected officials; and three in ten went on to hold even more important GOP posts after their stints with AFP ended. Others worked in businesses servicing Republican campaigns. Clearly, the Koch network has woven strong connections with the Republican Party at the local, state and regional levels, and these relationships mean that Koch operatives know exactly how to lobby GOP officeholders to advance their free-market, anti-government agenda.

    Like a parasite and its host, we cannot imagine the Koch network enjoying success without strong ties to the GOP, yet it is important to remember that the core network leaders, the Koch brothers and their close associates, are not themselves subordinated to the major political party they use and influence. In fact, some Republican leaders have openly worried about the Koch network’s growing sway over their party. “I think it’s very dangerous and wrong to allow a group of very strong, well-financed individuals who have no accountability to anyone to have control over who gets access to the [party resources],” bemoaned the Republican National Committee’s chief of staff at one juncture. She has a point, but there does not seem to be much party officials could do even if they really wanted to reduce the network’s influence. Koch organizations control resources too many Republican politicians need and want — and, by now, large numbers of GOP operatives are themselves alumni or close associates of the Koch network.

    There is only one likely way the clout of the Koch network could suddenly dwindle: if the GOP itself goes into a tailspin or breaks apart. The emergence of loose cannon Donald Trump as the leading contender in the 2016 Republican presidential primaries suggests the sort of disruption that can weaken the GOP host on which the Koch operation feeds. Ironically, although Trump is a billionaire, he has not so far paid obeisance to the Kochs or their agenda, as virtually all of the other 2016 GOP presidential candidates have done. Yet many voters in Republican primaries seem to approve of the very un-Koch-like policies Trump touts from time to time — such as limiting free trade, taxing hedge fund managers, preserving Social Security and deporting immigrant low-wage workers.

    As this ironic situation suggests, the Koch network’s very successes in drawing Republicans toward extreme free-market positions can potentially weaken their mass electoral appeal, opening the door to new contenders and threatening the future of the political party the Koch network uses to enact its radical agenda.

    TOPICS: MONEY & POLITICS
    TAGS: 2016 ELECTION, AMERICANS FOR PROSPERITY, BARACK OBAMA, DARK MONEY, KANSAS, KOCH BROTHERS, REPUBLICAN PARTY

    ALEXANDER HERTEL-FERNANDEZ
    Alexander Hertel-Fernandez is a doctoral candidate in government and social policy at Harvard University. He studies the political economy of the United States, with an emphasis on the politics of organized interests, especially business, and public policy. Follow him on Twitter: @awh.

    THEDA SKOCPOL
    Theda Skocpol is the Victor S. Thomas Professor of Government and Sociology at Harvard University. At Harvard, she has served as dean of the Graduate School of Arts and Sciences (2005-07) and as director of the Center for American Political Studies (2000-06).

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  34. MASTERMIND on Sat, 29th Jul 2017 12:04 am 

    I have no need to pretend that I’m arguing with the god believers when in fact I’m arguing with myself.

    Great point Ap!

  35. deadlykillerbeaz on Sat, 29th Jul 2017 3:48 am 

    There are several ghost towns in the nearby region. Lots of empty farmsteads everywhere you go.

    Wasn’t that way 50 years ago.

    Trains and boats and planes and cars disrupted a way of life. No more milking the cow and feeding the hogs and chickens, time to kill on the golf course drinking beer is better.

    Ain’t nobody getting out of here alive.

    At the beginning of the nineteenth century oil sold for two dollars per barrel. After Spindletop, the price fell to three cents.

    From feast to famine.

    Edison was a peakoiler, as were others back then. They saw the end of oil, and it was. Titusville was all over. One peakoiler who was also a rich oilman said he would drink every gallon of oil west of the Mississippi.

    Peak oil has been around since the beginning of oil drilling and commercial production. Titusville land sold for one million dollars per acre. After it went dry, land sold for 25 cents per acre. Gotta clean up the mess.

    In Ohio, John D. Rockefeller bought malodorous oil for $0.15/barrel. Millions of barrels of oil nobody wanted. Hermann Frasch removed the ‘skunk’ smell, clean burning kerosene for lamp oil. Beats killing whales. Oil for commercial consumption, energy and light, saved the whales. Edwin Drake deserves all of the credit for humans to not hunt whales to extinction. There is a God. Humans need one in a bad way.

    Back when gasoline was dumped into gullies, was useless, had to get rid of it somehow. Hundreds of thousands of barrels of gasoline gone, nobody had any use for it.

    Henry Ford fixed the problem, gotta give him some credit.

    Around Beaumont, land prices soared to one million dollars per acre. Boom to bust to boom.

    There was oil west of the Mississippi, now you know the rest of the story. Where isn’t there oil? It’s a booming business, everybody wants oil, willing to pay for it, will pay the price. Don’t kid yourself, when it’s gone, the tank is empty, you will buy more. Everything goes bust without oil and you better believe it.

    Been boom ever since, when the bust comes, look out.

    Peak oil is dejavu all over again.

    6,000,000,000,000 barrels with shale and the Athabasca tar sands in Canada, wherever that is. The Orinoco Basin is filled to the brim.

    Up in Tennessee, there’s oil.

    1,250,000,000,000 gone, leaves 4,750,000,000,000 yet to extract and burn.

    At a rate of 35,000,000,000 barrels consumed each year, it is easy to see that there is another 135 years of oil yet to be brought to market and sold.

    There is nothing to worry about, so don’t.

    Civilization will collapse before the oil is gone.

    Might as well have a good day, nothing better to do.

  36. rockman on Sat, 29th Jul 2017 7:47 am 

    “The world is burning 35 Gb per year, and replacing less than 4.” And that dynamic HSS been documented for many years. And yet we recently set an all time record high global oil production rate. The difficult some have is not understanding the difference between the discovery of new oil resource and the DEVELOPMENT of those resource. The surge in US oil production in the last 10 years is a perfect example. The Eagle Ford Shale production was DISCOVERED in the 1940’s. The Bakken in the 1950’s.

    The Deep Water GOM oil trend began producing in the 1970’s and yet 40 years later the production from the GOM just reached an all time high in 2017. Offshore DW Brazil was discovered decades ago and probably decades from peaking. On the other side of the Atlantic offshore of Angola offshore oil trends were discovered in the 70’s…and the Deep Water oil resources began producing almost 20 years ago. And yet offshore production peaked just 10 years ago.

    And the Alberta oil sands? A resource discovered long ago: efforts to tap the oil sands resource began in the early 20th century. However, their potential wasn’t fully grasped until the late 1930s. And it still took 80 years for its peak to be reached recently. A peak that may be exceeded in the future if oil prices get high enough again.

    Obviously there can be a huge lag time between the discovery of an oil resource and its peak production. A dynamic dependent upon technology development which is very dependent on the price of oil. But that lag time is a doubled edged sword: the decline of new resource discoveries in recent years will eventually impact the global oil production rate. But has little impact, positive or negative, on near term production. As was just proven the price of oil controls the production rate of resources. Some of which were first discovered more the half a century ago. IOW the recent decline in both US and global production has nothing to do with a lack of new oil resource discoveries and everything to do with lower oil price restricting production from resources discovered many decades ago.

  37. Anonymous on Sat, 29th Jul 2017 9:18 am 

    Peak oil got ass kicked by shale.

  38. Anonymous on Sat, 29th Jul 2017 9:33 am 

    The problem with tracking discoveries is backdating. Rock is right on Eagle Ford but I know the Bakken better. First well in the 50s. Late 90s resource estimated at few hundred million barrels. Over last few years revised to 5 and then 10 billion barrels.

    So when were those extra barrels discovered? Discovery time series change the old info and say it was in the 50s. But from a practical standpoint those billions of barrels were discovered in a known field.

    This happens all the time. EOR is another example. This is why the poor stupid peakers are always befuddled by peak oil predictions getting surpassed.

    Doesn’t mean depletion is not a phenomenon. Does show how peakers underestimate development.

  39. John Norris on Sat, 29th Jul 2017 1:50 pm 

    Boat’s article: Five Myths About the Koch Brothers

    Link: http://bit.ly/2tSc12i

  40. bobinget on Sat, 29th Jul 2017 7:11 pm 

    Back to the thread:
    Rockman, This one is a must look.

    https://shaleprofile.com/

  41. efarmer on Sat, 29th Jul 2017 7:43 pm 

    Hubbert predicted a peak in 1970 in 1956. So 14 years in advance based on technology of his day. This thread predicts a surpassing of the American peak of 1970 in 2018. So 14+48=62 years. So instead of thrashing Hubbert, give us the genius who shows us the next 62 in some concise form. I am certain Hubbert didn’t suppose we would use natural gas to make ammonia to fertilize corn, ferment it and burn it up with government subsidy. Nor that we would steam tar from sands to make something to burn. Fracking was probably totally unanticipated. But for the sake of honesty, do I buy your next year estimate for production with unknown hang time to abandon all merit in a simple theory that truthfully described a huge market for 60+ years? This is Wall Street mind, my next projection undoes 6 decades of history, click the link to make a killing in this great play. Bullshit.

  42. joe on Sun, 30th Jul 2017 9:22 am 

    Peak oil is here. Certainly in one form or another. With Britain and France and Norway etc bound to ban fossil fuel cars, it should be obvious to people that it does not matter if the US exceeds 1970 production of black sludge from the soil. The easy oil of JR Ewing and George W Bush (which was the fictional t.v. character?) are gone. Hubbert predicted easy oils demise, let’s not continue the lie ‘Hubbert was wrong’, Hubbert was right.
    Post Great Recession global growth has been slow and low and oceans of cash thrown at the problem has not resolved the real issue. Too many people not enough wealth, aging population and slow transfer of wealth and title to younger generations is stunting demand and is causing people to consume less. Low interest rates (even 5-6% is historically low) are helping tight oil to be competitive but it can’t last forever.
    By mixing tight and easy oil together in stats, the powers that be are making the oil situation look different to investors than it should. Instead of telling people what the true cost of capital is, they want people, to assume that the order of things is fine and not to worry. An honest look at oil should tell you that the reason that the US is over producing oil is because it’s locked in battle with Russia and Saudi Arabia, but mainly Russia. There is an effort to bankrupt them again but the US is not facing the USSR again, it’s facing a tiny part of that once potent empire, one with a tiny population comparitivly and a smaller capitalist dynamic economy with a much smaller budget. Russia exports mainly the EU and China. Neither of them wants to stop trading with Russia, so it’s game over for the US.

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