Good Evening. I am very pleased to be part of the meeting to discuss what many people say is the most significant event in our history, that of Peak Oil. The title of the conference does not reflect that term but it is at the basis of President Bush's comment about addiction to energy. Peak Oil implies that sometime in the fear future, oil extraction will reach a peak and begin a decline that will continue until supplies are exhausted in four to six decades.

Peak Oil comes from a particular historical event. This event was the presentation by Dr. M. King Hubbert, who was employed at that time by Shell Oil, to the spring meeting of the American Petroleum Institute in San Antonio Texas in March 1956 – just about 51 years ago. The essence from Hubbert's paper was that America's oil production from the 48 continental adjoining states would reach a maximum in the late 1960s or the early 1970s. The basis of his argument was that the total recoverable oil could be measured based on discoveries and the rate of extraction. Discoveries had peaked in the U.S. in 1930 and in the world in 1965. Hubbert estimated that there was about 200 billion barrels in the U.S.

Hubbert's work was controversial and the issue was not settled until oil U.S. production reached a peak at 11.3 million barrels per day in 1970. It is now close to 6 million bareels per day in terms of the continental U.S. In 1975 the National Academy of Sciences accepted Hubbert's calculations while acknowledging its own higher estimates had been wrong. When oil production peaked in 1970, Hubbert was working for the director of the United States Geological Survey, Vincent McKelvey, who estimated three times the amount that Hubbert had estimated. A few years later he retired, somewhat disgraced.

Major discoveries in Alaska and the North Sea relieved the near term shortage of oil in the U.S. We simply began importing more oil. Hubbert continued to work on the issue of oil resources and predicted a world oil product peak in about 2000.

Dr. Colin Campbell, an English petroleum geologist, brought Peak Oil to the forefront when he wrote the Coming Oil Crisis in 1995. In 1998 Science magazine devoted an issue to the Peak Oil work of Campbell and Jean Laherrere. A seminal event was the publication in 2001 of the book "Hubbert's Peak – The Impending World Oil Shortage" by Ken Deffeyes, another oil geologist who had worked with M. King Hubbert.

Since that time there have been about 40 books published on the subject and they are still coming out at the rate of almost one new book per month. Two key reports from the Department of Energy and the Department of the Army have been published in the last two years. The GAO, at the request of the House Peak Oil Caucus, is to publish a report next month, and the Petroleum Institute has been asked to review the topic by Energy secretary Bodman

Colin Campbell went on to found the Association for the Study of Peak Oil, or ASPO, in January 2001. The first conference was held in Uppsala, Sweden in 2002 .Subsequent conferences have been held in Paris, Berlin, Lisbon, and Pisa. ASPO organizations have now appeared or are being formed in 25 countries including the United States which has held two Peak Oil conferences in the last two years in Denver and Boston. My organization has held three conferences and will hold another in September of this year. I or other members of my staff have attended all the European conferences and the U.S. conferences. There are many local conferences also being held across the country.

Last year a key conference was held in Washington D.C. with title "Peak Oil and the Environment." This marked the point when those concerned with Peak Oil began go dialouge with the Climate Change Movement. At this point there is a lot of overlap between the two areas which may come up in our discussions.

It's important to understand that the idea of Peak Oil has been around for 50 years and that major attention has been paid to the topic since the late 1990s. Certainly the concept is clear to the CIA who monitors energy supplies carefully. And I believe the CIA keeps the President of the U.S. up to date on energy resources. You may recall that the president, his father and his chief advisors as well as the vice president are aware of depletion and the threat of a peak in production. What's more important is that the people in the oil exporting nations firmly believe that the U.S. government has detailed knowledge of all aspects of oil and that it drives government policy. And this brings us to the geopolitical aspects of energy, the invasion of Iraq and the possibility of attacks on Iran.

The story begins in WWII when Harold Ickes who was the Secretary of the Interior from 1933 to 1946 under Franklin Roosevelt advocated for more government involved in oil and even proposed the nationalization of the oil industry. This had occurred in Mexico in 1938 and most of the oil toady is under control of national oil companies rather than private ones. This led directly to the now famous secret visit of Roosevelt to meet Ibn Saud of Saudi Arabia on the USS Quincy after the Yalta Conference in 1944. The U.S. and Saudi Arabia have been tied together by oil since that time and even the large numbers of Saudi's that were part of the 911 attack (16 of 19 terrorists) have not broken that friendship. In his book "Blood of the Earth: The Battle for the World's Vanishing Oil Resources" the author Dilip Hiro tells of a meeting with Roosevelt and the British ambassador in Washington in 1944 at which time he said, "Persian Oil is yours, we share the oil in Iraq and Kuwait. As for Saudi Arabian oil, it's ours."

The British had controlled Iranian oil since 1901 when a 60 year exclusive rights were given to a British subject, for oil exploration and exploitation in Iran's southern provinces. In 1908 oil was struck and The Anglo-Persian Oil Company was established. The company controlled the oil and paid only minimal royalties. Prime Minster Mohammad Mossadegh, democratically elected in 1951, nationalized the oil industry in December 1951.

Britain attempted to undermine Mossadegh's authority, imposed a worldwide embargo on the purchase of Iranian oil, froze Iranian assets and threatened Iran with invasion by amassing a naval force in the Persian Gulf. Working jointly with the American CIA, Britain plotted a coup to overthrow his democratically elected government. With the help of their Iranian agents a CIA drafted plan called Project Ajax went into action. They succeeded in a violent overthrow on August 19, 1953. Mossadegh was tried and convicted, placed in solitary confinement for three years followed by house arrest for the remainder of his life. The Shah of Iran ran the country as a monocracy until his overthrow in 1979 using the dreaded secret police Savak.

When Iranians took U.S. officials hostage in the U.S. embassy in Tehran in 1979, Americans were mystified and angry, not understanding how Iranians could be so hateful toward U.S. officials. They did not realize it was rooted in a horrible, anti-democratic act that the U.S. government committed in 1953. The Iranian people hated the U.S. government, not only because their world-famous democratically elected prime minister had been ousted by the CIA but also for having had to live for the following 25 years under a brutal and torturous dictatorship, one which also offended many Iranians with its policies of Westernization. In fact, the main reason that the Iranian students took control of the U.S. embassy after the violent ouster of the Shah in 1979 was their genuine fear that the U.S. government would repeat what it had done in 1953.

It was not until March 2000 that this was recognized officially in a speech by Madeleine Albright (then secretary of state ), who said "In 1953, the United States played a significant role in orchestrating the overthrow of Iran's popular prime minister, Mohammed Mossadegh. The Eisenhower administration believed its actions were justified for strategic reasons, but the coup was clearly a setback for Iran's political development and it is easy to see now why many Iranians continue to resent this intervention by America in their internal affairs. Moreover, during the next quarter century, the United States and the West gave sustained backing to the Shah's regime. Although it did much to develop the country economically, the Shah's government also brutally repressed political dissent. As President Clinton has said, the United States must bear its fair share of responsibility for the problems that have arisen in U.S. – Iranian relations."

We have talked now about the two most populous countries and oil holders in the Middle East, Saudi Arabia and Iran. The U.S. has guaranteed the Saudi monarchy and, after the Iranians threw off the dictator, treated Iran as an implacable enemy. The U.S. also supported Iraq in its attempt to invade and take over the Iranian oil fields in 1980, which turned into an 8 year war with about a million dead.

Iraq has suffered enormously from the two invasions by the United States. There were about 120,000 Iraqis killed in the first war compared to a few hundred coalition forces. After the majority Shiites rebelled against Saddam Hussein, instead of helping them, the U.S. moved its forces out of the way, refused to give the rebels captured arms and allowed Saddam's revolutionary guard to use helicopters. When the Shiite majority attempted to gain control after the first war, the U.S. did not allow them weapons and Saddam Hussein slaughtered the revolutionaries. During the sanctions about one million people died. Secretary of State Madeleine Albright said it was a price worth paying. Finally about 600,000 have died violently since the second invasion according to researchers at John Hopkins.

The U.S. has supported the main oil producer Saudi Arabia as a political monarchy, overthrew the largest democracy in the Middle East, Iran, and has caused enormous suffering to the innocent people in Iraq with the death toll nearing two million. This, plus the continued support of Israel, is why we are hated in the Islam world. We are enormously powerful and could easily destroy all three nations. The only thing that gives them some protection is to threaten to destroy the oil sources which is what is taking place in Iraq. At great sacrifice to the country, the rebels are denying the benefits of the invasion – the oil. And according to Gerald Posner, in his book "Secrets of the Kingdom" the Saudis have mined their oil fields with radioactive material so they can be destroyed and not recovered. No one has conjectured on what Iran might do. A U.S. attack on Iran might lead to an attack on the Saudi or Iraq oil fields. No one can guess at the US response.

In the same period, relations between the U.S. and Russia and China have deteriorated. The U.S. support of NATO extension into the former Soviet Union and the setting up of bases in the so called "Stan" countries has brought US power right to the borders of both countries. This growing influence of the U.S. in Central Asia has alarmed Russia and China, who consider the region their backyard. The Shanghai Cooperation Organization (SCO), initially formed in 1996 as part of confidence-building measures between China and the former Soviet republics, now seeks to draw Russia, China, and a number of Central Asian states closer together. India and Iran are both observers to the S.C.O .and the concession by Bush on India nuclear weapons is an attempt to keep them from joining the S.C.O.

Russia is in a very strong position because of the availability of oil and gas and the dependence of Europe on Russian supplies. The tactics of the Russian government have become more forceful and direct. They have re-nationalized the oil industry that was de-nationalized. They are bringing their ex-satellites into line using oil and natural gas cutoffs as a threat. And they are performing joint military efforts with China. China, in the meantime, is buying up oil and gas rights around the world.

The U.S. has the apparent military advantage but is spread very thin throughout the world. The Middle East Oil fields are very close to Russia and China and both countries have friendly relations with the Islam countries, while there is great enmity between these same Islam countries and the U.S. As oil peaks and supplies become more limited the race will be on for who controls the oil resources. It's hard to project the future but the next flash point will probably come with some kind of U.S. strike against Iran. The possible responses and alliances that may occur are grim.

The U.S. government is aware of Peak Oil and the allocation of the earth's oil resources. The U.S. and Europe are exhausting their original supplies and must control the Middle East oil-exporting countries. These countries, or at least the people, are hostile to the U.S. and want our military forces to leave the area. They will attempt to align with Russia and China. The actions of these two countries are anyone's guess. But the situation is serious.

– Pat Murphy is the executive director of The Community Solution, a program of Community Service, Inc.