OnEarth Magazine Interview: After half a century in the oil business, Charles Maxwell
is widely referred to as the dean of energy analysts. As a Marshall
Scholar at Oxford he specialized in Arabic and Persian language and
history before joining Mobil in 1957. He spent a decade with the oil
giant, scheduling tanker shipments, working in a field office in
Nigeria, and negotiating Middle East production agreements. When the
Arab oil embargo hit in 1973, he was already being hailed by
Institutional Investor as Wall Street’s number-one oil analyst. Today
he is a senior energy analyst with Weeden & Co., which provides
proprietary research to institutional investors. Charley Maxwell is not
your classic environmentalist — he favors further development of coal
and nuclear energy and sits on the board of a coal-bed methane company
in Denver. But in this late-September conversation with Sonia Shah, author of Crude: The Story of Oil, Maxwell urges a new conservation ethic that may — or may not — save us from the worst energy crisis we have yet faced. You are famous for coining the term “energy crisis” in the 1970s. Do you think that we’re entering another crisis now?
I do. In the first energy crisis, we tried to keep prices low and
ration the physical gasoline. People sat in these long queues and it
was a huge loss of time and money. When the second energy crisis hit,
in the late seventies and early eighties, we just allowed the price to
rise. And that’s what we’re doing now — rationing by price. The fact
that gasoline recently hit $3.20 a gallon would suggest that we are in
crisis. I would say even $2.50, which is where it is now, represents
some form of crisis. What are the underlying reasons?
There are four, I think. First and foremost, there was a lot of oil
that could have been discovered that wasn’t, because the national oil
companies such as Saudi Aramco didn’t invest enough in exploration.
Second, the big oil companies didn’t exercise much vision. When prices
went up in 2000, they basically pocketed the money. Of course, if
you’re an executive and you have stock options, you start to think that
the whole world depends on your stock price rather than on getting more
oil. And who’s to say that we should have more oil? If it means that
everyone is going to work harder and longer to make possible the
greater use of SUVs, is that a worthy end in the world of God? And the other two reasons?
The third is political instability around the world. And the fourth is
that we are now approaching the 50 percent mark of recoverable oil.
Global oil production will reach a maximum rate and then it will
inexorably start to go down. I predict that will be between 2015 and
2020. When that happens it will be the single biggest problem that we
face. (12/10/06)
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George Monbiot writes:
It is a testament to the power of money that Nicholas Stern’s report
should have swung the argument for drastic action, even before anyone
has finished reading it. He appears to have demonstrated what many of
us suspected: that it would cost much less to prevent runaway climate
change than to seek to live with it. Useful as this finding is, I hope
it doesn’t mean that the debate will now concentrate on money. The
principal costs of climate change will be measured in lives, not
pounds. As Stern reminded us yesterday, there would be a moral
imperative to seek to prevent mass death even if the economic case did
not stack up. But at least almost everyone now agrees that we must act, if not at the
necessary speed. If we’re to have a high chance of preventing global
temperatures from rising by 2C above pre-industrial levels, we need, in
the rich nations, a 90% reduction in greenhouse gas emissions by
2030. The greater part of the cut has to be made at the beginning of
this period. To see why, picture two graphs with time on the horizontal
axis and the rate of emissions plotted vertically. One falls like a ski
jump: a steep drop followed by a shallow tail. The other falls like the
trajectory of a bullet. To the left of each line is the total volume of
greenhouse gases produced in that period. They fall to the same point
by the same date, but far more gases have been produced in the second
case, making runaway climate change more likely. So how do we do it without bringing civilisation crashing down? Here is
a plan for drastic but affordable action the government could take. It
goes much further than the proposals discussed by Tony Blair and Gordon
Brown yesterday, for the reason that this is what the science demands. (12/10/06)
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