(DV) Bliss: Chevron, Peak Oil, and China

“It took us 125 years to use the first trillion barrels of oil,” notes Chevron Corporation’s two full-page ad that began appearing in July in the Wall Street Journal, the Economist, the Financial Times and elsewhere. “We’ll use the next trillion in 30,” the ad continues, thus quietly admitting to the Peak Oil that the industry has not previously disclosed publicly.

“One thing is clear: the age of easy oil is over,” the ad reveals in a folksy letter from “Dave”, Chevron’s Chairman and CEO David J. O’Reilly. Most Americans are still unaware of the pending Peak Oil or try to deny the tremendous impact it will have. Chevron proudly presents itself as “the Good Guy” by informing the public of the lessening supply of petroleum at a time when the demand is soaring, especially in China, India, and other industrializing countries.

Chevron’s multi-million dollar global corporate goodwill campaign includes TV teaser ads throughout the US, Asia, Africa, the Middle East, and Latin America. Airport locations in Beijing, Moscow, Washington, D.C. and elsewhere broadcast the ad, also available on-line. Yet as the prices of crude oil and gasoline soar -- symptoms of Peak Oil -- so do the profits of Big Oil.

Exxon/Mobil also admitted to Peak Oil earlier this year, but without all of Chevron’s fanfare. Their report, “The Outlook for Energy: The 2030 View,” forecasts a peak in five years. “No oil company has ever discussed peak oil production before,” writes energy consultant Alfred Cavallo in the May/June issue of the authoritative Bulletin of Atomic Scientists. “The public should heed the silent alarm sounded by the Exxon/Mobil report,” he continues.

Chevron and Exxon/Mobil are two of the largest and most profitable oil companies, so they should know a lot about petroleum. They have half the story correct -- that Peak Oil is upon us -- but they may have the timing off, according to at least half a dozen recent books by oil experts. Peak Oil may be sooner-rather-than-later.

“It is my opinion that the peak will occur in late 2005 or in the first few months of 2006,” writes geologist Kenneth Deffeyes in his new book Beyond Oil. Deffeyes was a Shell Oil company engineer and is a retired Princeton University professor.

Houston-based energy investment banker Matthew R. Simmons echoes this sooner scenario in Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Saudi Arabia is the world’s largest oil producer. Simmons “argues that Saudi Arabian production is at or very near its peak.” Richard Heinberg, author of The Party’s Over and Powerdown also predicts Peak Oil within a year or two.

The Earth may have another 30 years, more or less, of a dwindling supply, which will be increasingly difficult and expensive to extract. I wonder what Chevron’s studies reveal will happen to civilization during and after that time. When they say that “easy” oil is over, how difficult do they think our petroleum-dependent lives will become as a result?

The consequences of Peak Oil are well described in The Long Emergency: Surviving the Emerging Catastrophes of the 21st Century, by James Howard Kunstler. He documents some of the details in his chapter “Nature Bites Back: Climate Change, Epidemic Disease, Water Scarcity, Habitat Destruction, and the Dark Side of the Industrial Age.”

Meanwhile, Chevron CEO O’Reilly speaks out of both sides of his mouth. While sweet-talking to the world in the ad campaign, he tough-talks against China’s attempt to outbid Chevron for Unocal. After China’s state-owned CNOOC offered $18.5 billion for Unocal, besting Chevron’s $16.6 billion offer, the American suitor raised its bid to $17 billion. “Our increased offer has been driven by competitive circumstances,” an aggressive O’Reilly stated on July 19, the day his folksy letter appeared in the San Francisco Chronicle.

Chevron and other corporations are pressuring Congress to reject the CNOOC offer as a national security risk and Un-American, should the Chevron shareholders accept the higher bid at their Aug. 10 meeting. “Chevron Donates to Lawmakers Against China Bid” announces a July 23 San Francisco Chronicle headline: “Chevron has given campaign contributions to politicians trying to block the company’s Chinese rival in the bidding war for Unocal, with some of the money flowing in the last month,” the article reveals.

Chevron has given about $30,800 to Senator Dianne Feinstein (D., Calif.) since 1989. On July 22, according to the Chronicle, “Feinstein called for the secretaries of Defense, Energy, and Homeland Security to review any deal between CNOOC and Unocal.” CNOOC initiated its bid for Unocal on June 22. Then on June 29, “four lawmakers who have criticized China National’s bid received money from Chevron,” according to the Chronicle. All had previously received donations from Chevron. A fifth Congressman, Richard Pombo (R., Calif.) received $2,000 on June 29. He chairs the House Resources Committee and has called China’s National’s bid a threat to US security.

The Chevron-China struggle to buy Unocal and thus control more oil is not over. Wall Street expects CNOOC to raise its bid. China has passed Japan as the world’s second largest consumer of oil, behind the US, and is expected to take more assertive efforts to secure its energy needs.

The Iraq War may expand from being partly a behind-the-scenes US-China conflict into a hotter war between the world’s declining power and the world’s emerging power. The US and China seem to be on a collision course over oil, currency, Taiwan, and other matters. The July 21 New York Times reports that, “a Chinese general threatened the United States with a nuclear attack if the United States attacked China during a Taiwan crisis.”

Attempting to cover up its conflict with China and ongoing pollution, the Chevron ad is classic green-washing. Whitewashing is a superficial coat that makes something appear cleaner than it is; green-washing is an attempt to present something that is environmentally damaging as clean. Now that most oil experts agree that Peak Oil will happen, Chevron wants to appear to be the oil company that acts for the public good by informing people that we are indeed running out of oil. Chevron seems more greedy than green.

“The same Madison Avenue firm, Young and Rubicom, that put together Bush’s TV ads in 2004 and the Army’s ‘Be All You Can Be!’ campaign prepared these ads,” according to attorney Matt Savinar. He wrote the book The Oil Age is Over and maintains the website www.lifeaftertheoilcrash.net. Savinar spoke on July 20 at the fifth meeting of a grassroots Peak Oil group in Sonoma County, Northern California.

We should ask “the tough questions,” fatherly Dave advises in his friendly letter. “What role will renewables and alternative energies play? What is the best way to protect our environment? How do we accelerate our conservation efforts?”

One would almost think that the Chevron chairman was in fact the chairperson of the Sierra Club. Dave makes it sound like one of the world’s most polluting companies in one of the world’s most polluting industries is actually on the side of the Earth, rather than merely trying to maximize profits by extracting natural resources whose use stimulates global climate changes.

“At Chevron, we believe that innovation, collaboration and conservation are the cornerstones on which to build (a) new world,” the ad concludes. I wish that I could accept this as genuine corporate accountability. Chevron’s past degradation of the environment leads me to believe that they are once again seeking to fool the public with carefully chosen words at a time when a Peak Oil movement is growing. In Europe and Japan and in some US communities citizens and government officials are making plans to mitigate the impact of Peak Oil.

What sort of “new world” might Chevron have in mind, this skeptic wonders. America’s control of the world’s oil supplies -- which it seems to be loosing during oil’s end game --enabled it to dominate the 20th century. As petroleum dwindles, so will US power, as China positions itself to be the superpower at this beginning of the 21st century. Dave’s folksy letter seems inclusive when it talks about “every citizen of this planet” and even calls upon environmentalists to “be part of reshaping the next era of energy.” Don’t be fooled.

As the struggles provoked by Peak Oil and its consequences heighten we can expect more such calculated public relations language to paint Big Oil as the Earth’s friend. Seeing through such green-washing will be important. Let’s not make the same mistakes during the 21st century that we made in the last century by allowing the following: one country, the US, hoarded too much of the world’s natural resources; one industry, oil, concentrated too much power; and a few companies, like Chevron, dominated that industry.

Look for yourself at the newspaper ad and see and listen to its television version by going to Chevron’s friendly website: www.willyoujoinus.com.

Dr. Shepherd Bliss teaches at the University of Hawai’i at Hilo and writes for the Hawai’i Island Journal. He can be reached at: sb3@pon.net.