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Wednesday, July 14, 2004

Peak Oil Reaches Houston

Oil prices are high, but Houston's economy isn't.
There are several reasons Houston is not enjoying a return to the days of the 1970's, when it was the nation's fastest-growing metropolitan area, flush with oil money and a backdrop for stories about roughnecks in the big city. A leading reason is the evolution in the oil business in Texas and around the world that has concentrated deal making and specialized research in Houston while large, labor-intensive exploration projects moved elsewhere.

The prolific oil wells of Texas, especially the East Texas gushers that were the basis for Houston's emergence as an oil center a century ago, have been steadily depleted over the last 25 years. Daily production statewide is now about 360,000 barrels a day, or nearly a third of what it was in 1978, the last year output surpassed a million barrels a day, according to the Texas Railroad Commission, which oversees the oil and gas industry in the state.
The same thing is happening or will soon happen in oil wells around the world, even as SUV's from Boise to Beijing are ready to kill for their next fix. If we're not there already, it will happen very soon, the dreaded event that politicians dare not mention: peak oil, the year when the earth is drained of more petroleum than it ever has been before, or ever will be again. Peak oil in the U.S. was reached in 1970, and no amount of despoiling of the ANWR or even the entire American West will change that fact. Doing so might actually use more energy than it finds, in any case.

If it weren't for the government taking out huge loans from China, Saudi Arabia and elsewhere in the names of the next generation to funnel money to Halliburton and other oil-economy corporations by starting wars under false pretenses, Houston would have been flushed into the Gulf already. The oil is running out. We can either get out of the SUV and approach the wall carefully, looking for ways to lessen the damage and maybe a way through to the other side, or we can just continue putting the pedal to the metal and crash our industrial society into the energy wall in a spectacular crash filled with wars, pestilence, and starvation. I'm starting to think those end-timers are right; what worries me is that they seem to be excited about the prospect.

(Most of what I just said is the gist of a book I read recently: The Party's Over by Richard Heinberg. If you prefer knowing what's happening to blissful ignorance, I highly recommend it.)