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Published Oct 30 2012 by ASPO International, Archived Oct 29 2012

The 127th Assembly of the Inter-Parliamentary Union and Peak Oil

by Kjell Aleklett

“The Inter-Parliamentary Union” (IPU) has its seat in Geneva and was formed as long ago as 1889 on the initiative of the then freedom activists William Cremer of the United Kingdom and Frédéric Passy of Frankrike. They were both members of their respective nations’ parliaments and intended that conflicts would be solved by negotiation rather than war. In 1901 Frédéric Passy became the first person to receive the Nobel Peace Prize while William Cremer has to wait until 1903 for that honour. Today the IPU consists of 162 members and 10 associate members http://www.ipu.org/english/home.htm).

(The flags of the member parliaments)

From 22 to 26 October the IPU gathered for its 127th meeting in Quebec, Canada. For the first time in its history it had a panel session that discussed energy. I am very honoured that IPU have chosen to discuss the topic, “Peak Oil: What prospects for energy security?” The morning on the last day of the IPU meeting concluded with three parallel sessions and it was with considerable excitement that those of the IPU behind this energy discussion initiative waited to see how many of the delegates from the 162 member nations would attend. It turned out that about 120 delegates came and participated in the debate on Peak Oil. From the start I have regarded our work with Peak Oil as a contribution to the goal of global peace and in the light of the history behind the IPU I was very pleased to begin the session with a short introduction to Peak Oil. (My presentation can be downloaded here).

(From the left: Saleh E. Al Husseini, Anne Korin, and Kjell Aleklett)

The moderator for the session was Saleh E. Al Husseini from Saudi Arabia. He is “President of Sustainable Development, Finance & Trade Committee of the IPU”. Beside me on the panel was Anna Korin, Co-Director of the Institute for the Analysis of Global Security (IAGS) and Adviser to the United States Energy Security Council. I was invited to the session as the President of ASPO International and I began by introducing ASPO and our definition of Peak Oil. I showed where in the world suitable geological conditions exist for finding oil and I used the North Sea as an example of a region in which oil production had peaked (in 2000) and had then declined. Discoveries of crude oil in the USA and the world show clear peaks during the 1930s and 1960s respectively. The fact that one cannot produce more oil than one has found means that a peak in production must follow a peak in discoveries and the statistics show that the USA saw peak production around 1970 while the entire world saw peak production of crude oil in 2005. What is presented by organizations such as the International Energy Agency (IEA) as a future possible increase in oil production is so-called “unconventional” oil production such as from Canada’s and Venezuela’s oil sands. I concluded by showing that the world has now reached a plateau of oil production (conventional plus unconventional) while the oil producing nations are increasing their oil consumption. This means that the largest volume of oil ever available for export to the world market was in 2005. The fact that India, China and the other nations in South East Asia are increasing their imports of oil means that the OECD nations and the rest of the world now have access to less oil than in 2005. If current trends continue then, by 2020, the volume of oil on the world export market available to the OECD nations and the rest of the world will be half of what was available in 2005. Spreading understanding of this reality and thereby assisting in preventing the conflicts that may arise as a consequence is an important task in the promotion of global peace. I hope that the IPU can participate in this work.

I had not previously met Anna Korin or heard her views on Peak Oil. (See Wikipedia’s entry on Anna Korin: http://en.wikipedia.org/wiki/Anne_Korin). Her introductory speech showed that Peak Oil was not a foreign concept to her and that the USA planned to tackle the problem by creating a competitive market for various forms of transport fuel. Principally, she asserted that methanol would play a greater role in future. Also, the future vehicle fleet would need to change so that it could use all forms of fuels. This would create market pressure that would return the price of a barrel of oil to the $50 range. She was very critical regarding OPEC’s current oil production. If OPEC really have the reserves they claim – two thirds of the world’s reserves – but only supply one third of total world production then either their declared reserve volumes are incorrect or they are intentionally not increasing production. In other words, if the international oil companies BP, Exxon Mobil, Shell etc. had two thirds of the world’s reserves then they would supply two thirds of production. The impression I received was that the future she sketched out was very much the future that the USA needed. There remains more to say about her introductory remarks.

The last of the introductory presentations was by our moderator from Saudi Arabia Saleh E. Al Husseini. Not unexpectedly he was unconcerned about Peak Oil. He compared the world’s oil reserves in 1980 of 667 billion barrels with 2011’s reserves of 1653 billion barrels. What he forgot to mention was that this increase in reserve estimates was not due to discovery of more oil rather than changes in what is regarded as oil. The fact is that the oil discoveries made from 1980 to 2011 are insufficient to compensate for the oil the world consumed during that period. He finished the technical part of his remarks with conclusions according to the figure below. The last conclusion agrees well with the IEA’s viewpoint: It is not the resources below ground that matter but what happens above ground, i.e. investment, government policies, technology, etc.

In finishing Saleh E. Al Husseini delivered a message that must be regarded as a political comment rather than as a comment on Peak Oil. He said that Saudi Arabia had sent thousands of students out to places around the entire world to receive educations that would allow them to build a new future for the nation. This future would include large investments in renewable and also nuclear energy technology. The high taxes levied by e.g. the EU nations were criticised since these meant that the oil producing nations received less capital for necessary investments. Another way to express this is that the taxes have a dampening effect on the price of oil and this is very interesting since it means that e.g. one way to oppose the high price of oil is for the USA to increase its taxes on oil. He finished by saying that God had been very generous in bestowing such large oil reserves upon Saudi Arabia so that Saudi Arabia also has a responsibility to aid humanity and those nations that need oil.

(IPU delegates who participated in the debate about Peak Oil)

Then followed the longest question time on Peak Oil that I have ever experienced. During two and one half hours questions were asked by around 20 delegates. There were direct questions but often also questions embedded in a statement on a nation’s attitude in regard to oil production, OPEC’s role and/or the price of oil. The “Arab Spring” was also mentioned as a Libyan delegate proudly declared that Libya was now a democratic nation with free elections and he could not imagine it any other way. The nation required income from oil to construct the new Libya. The representative from Algeria mentioned that their national budget required an oil price of $105 per barrel while other delegates stated that high oil prices threatened their economies. The delegates of some oil producing nations expressed doubts regarding Peak Oil while others showed through their statements and facial expressions that they agreed when I discussed various aspects of the issue. During the debate I wove in a few viewpoints on the other panelist’s presentations and I explained that the increase in reserves that Saleh E. Al Husseini had mentioned were not new discoveries rather than redefinitions of already discovered reserves. I also criticized partially Anna Korin’s position on the fuel market that, if all fuels were given free rein, competition from alternative fuels would reduce the price of oil to $50 per barrel.

Ultimately, the session ended up as more of a political debate on OPEC, the oil producing nations’ right to determine their production volumes and the price of oil. Not unexpectedly the strongest political statement came from Venezuela’s representative who noted that Venezuela has the world’s largest oil reserves (if we ignore that these are unconventional oil in the form of oil sands) and that it is a free nation with a popularly elected president. The income from the oil should benefit the nation’s people and she defended the nationalisation of the oil industry that Venezuela had carried out. When Anna Korin commented on the nationalisation she was conscious that it could be appreciated as brutal which was also how Venezuela’s delegate saw it. Biofuels and food, the climate issue and more came up as questions and I had the opportunity to describe our research in these areas at Uppsala University.

There are additional details about the debate that I would like to mention but they are more of a political nature. After the long debate many delegates who presumably were less interested in the energy issue left the auditorium but a large number remained until the end. I was glad that the Swedish delegate and parliamentarian Krister Örnfjäder came up to me after the session and extended his congratulations on a good debate. I had mentioned my book “Peeking at Peak Oil” and after the debate there were numerous people who wanted to see it translated into French, Spanish and Arabic.

The fact that there were strong political views advanced in the debate on Peak Oil shows that it is a politically charged issue. One reason for this was that Anna Korin presented viewpoints that were more US-centric rather than global. I interpret the fact that the IPU took up the debate on Peak Oil as indicating that it understands that the issue of the world’s future energy supply can lead to conflicts and that they believe this issue should be solved peacefully. When Colin Campbell wrote his first newsletter on Peak Oil back in January 2001 there were 25 people who received the newsletter by email. The fact that the 162-member nation IPU is now engaging with the issue means that ASPO has been very successful in its campaign to make Peak Oil an issue that must be discussed when considering the world’s future. As the president of ASPO International I would like, on behalf of our national ASPO member organisations, to extend our sincere thanks to the Inter-Parliamentary Union.

Editorial Notes

Kjell is President of ASPO International.

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