(Note: Commentaries do not necessarily represent the ASPO-USA position.)

As Pogo said, “We have met the enemy and he is us.”

I think that a large portion of the US oil & gas industry has basically shot itself in the foot, by agreeing with, or failing to confront, assertions such as the following by CERA, ExxonMobil and OPEC:


“Rather than a ‘peak,’ we should expect an ‘undulating plateau’ perhaps three or four decades from now.”

Robert Esser
Senior Consultant and Director, Global Oil and Gas Resources Cambridge Energy Research Associates
December 7, 2005


“Contrary to the theory, oil production shows no signs of a peak… Oil is a finite resource, but because it is so incredibly large, a peak will not occur this year, next year, or for decades to come”

ExxonMobil Advertisement in New York Times
June 2, 2006


“We in OPEC do not subscribe to the peak-oil theory.”

Acting Secretary General of OPEC, Mohammed Barkindo
July 11, 2006

Given the consistent message from most of the oil & gas industry that the worst case scenario for global oil production is an “Undulating Plateau” many decades away, I think that consumers are to some extent justified in their anger against oil companies. After all, if we should have seen decades of steadily increasing oil production, but we haven’t, then there must be a conspiracy to reduce supplies.

If global crude + condensate (C+C) production had kept increasing at the 3%/year rate that we saw from 2002 to 2005 (when we went from 67 million b/d to about 74 million b/d), then global C+C production in 2010 would have been about 86 million, versus the 74 million b/d that the EIA currently shows (and the data show a decline in global net oil exports, relative to the 2005 level, with China and India taking an ever greater share of global net oil exports).

Having said that, in effect the US heavily subsidizes energy consumption relative to the energy consumption tax rates in most OECD countries. It’s a little ironic that, having effectively subsidized energy consumption for so many decades – resulting in what Jim Kunstler called the “Biggest misallocation of resources in the history of the world,” i.e., the suburbs – the key question is how to punish the producers, but as noted above, the oil industry basically painted a big fat target on its back.

Jeffrey J. Brown is a graduate of Texas A&M University, and he is a licensed Professional Geoscientist in the State of Texas. He has written and coauthored several articles on Peak Oil related topics, with a special emphasis on global net oil export capacity

3 thoughts on “US Oil & Gas Industry Shoots Itself in the Foot”

  1. For the three months ending March 2011, ExxonMobil paid $25 bn in taxes on revenues of $114 bn, and net income of $19 bn. I defy you to show me subsidies to the within an order of magnitude of taxes paid. To call the non-taxation of revenues “a subsidy” is to presume a world in which property rights are vested in the government, with the individual or corporation entitled to only that portion of their labor from which the government demurs. It’s like guilty until presumed innocent. Very French, really.

    Exxon’s financials can be found here:


  2. The presumption by Mr. Kopits is there is no societal interest in the sustainability of a FINITE resource. The issue transcends the paying of taxes or their amount. For example, wireless spectrum is the property of the American people which is assigned to private sector companies. Why is it “public property”? Because it is a finite resource whose use greatly impacts the welfare of the American people.

  3. Since the ASPO-USA apparently can’t tolerate constructive criticism and stand by its own supposed convictions, I suggest you shut the website down.

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