Newt Gingrich can’t Count (oil) he’s dangerous.

Today the House Energy Committee got a visit from Al Gore… and he ruffled some feathers… especially those of Mr. Gingrich.

Here’s his response

He says that Al Gore presented “misleading ascertions”.

Newt says…

[Al Gore] said for example, the rate of new discoveries, is falling for energy. That’s factually not true.

Actually, Newt, it is true. And it has been true for over 60 years… and here’s the proof Newt:


In 1965, 60 Billion barrels of conventional oil were discovered.

But Newt goes on:

In the last 3 years we have found (who is we?) have found 100 years of Natural Gas in the United States

That’s nice Newt. If I took only one sip out of a coke bottle every day then it might last 100 years as well. The question Newt, is not the amount, it is the rate. How much of the 20 million barrels of oil that the US consumes in a day can that “new natural gas” displace.

The answer, according to the US Energy Information Administration (PDF), is very little.

From 2004 – 2007, 46 Trillion Cubic Feet of “Proved Reserves” were added. Yet Estimated Production only grew by 0.2 Trillion cubic feet a year… the US consumed 23 Trillion Cubic Feet of Natural Gas in 2007

The picture for oil and oil substitutes like Natural Gas Liquids is even more grim:

From 2004 – 2007, 1.6 Billion Barrels of Crude Oil Equivalent were discovered of Natural Gas Liquids reserves. Yet estimated Production grew by 4 million barrels a year. That equates to 11,000 barrels of oil a day… roughly 0.06% of the daily 18 million barrel consumption in the US.

And finally, for crude oil…

From 2004 – 2007, -547 million barrels. Repeat. Negative 547 Million Barrels of crude oil were “discovered”….. in other words, we used it up faster than we discovered new stuff. Which brings us back to the graph above, the graph that matters.

Production of crude oil in the United States was 1.8 Billion barrels in 2004, and 1.7 in 2007. That’s a drop of 100 Million Barrels of oil a year or 0.5%.


I hope that clarifies things for you Newt. The party is over. I know you’ll never accept it… probably not even when either your country collapses under its own debt to oil producing countries, or riots erupt from gas shortages and skyrocketing prices… but at least there are some who get it.

And by the way, from 1997 to 2007 total estimated production of Crude Oil plus Natural Gas Liquids went from 3 Billion Barrels of oil a year, to 2.5 Billion Barrels. A drop of 16%.

Brazil can’t save you Newt. Even without the current global recession, production from the new Brazilian finds wasn’t going to reach its full potential of 1.1 Million barrels a day (400 Million a year) until, wait for it, 2017.

Lets see.. in another 10 years we will likely drop another 16%… another 500 Million a year… much more than Brazil could provide, if even it all went to the US, which it won’t.

You’re dangerous Newt. You’re Dangerous!

Here we go again… Oil Price Speculation or Real? this morning has an article that I wasn’t expecting until at least August this year. But here it is all the same. The topic? Oil Prices Resist the World’s Recession Trend

Their main point:

The resilience shown by the oil markets is not because of any improvement in the global economy or rise in oil consumption. Global demand remains on course for its steepest drop since the early 1980s, and oil inventories are at their highest levels in 19 years.

Instead, analysts said, oil is once again being sought by investors as a refuge against a slumping dollar and rising inflation.

Lets stop right there. Slumping Dollar? The US Dollar has gained over 20% over the Canadian dollar since July and the same can be said for the Euro and Yen. INFLATION? Last month, the US officially experienced DEFLATION (negative inflation)… so I’m really not sure what planet CNBC is on!

But then, the very next sentence, they take a different tone:

Stabilization of the oil price is also a victory for the OPEC cartel, which has succeeded in cutting output sharply to match lower demand.

and so, once again, it’s all evil OPECs fault. Because, you know, it has nothing to do with plummeting oil production in Mexico (World #3 Super Giant field Cantarell is now producing less than other Mexican fields).

Oh.. but wait…

The perception remains well ingrained in the market that oil supplies, while plentiful today, may prove insufficient once demand picks up again.

Huh. So you mean investors don’t buy the “drill drill drill” mantra? You mean investors have looked abroad and seen conventional production in Mexico, Canada, the UK, Russia and Norway declining even while prices skyrocketed over the past 5 years? You mean investors have seen Saudi Arabia hit a wall, unable to pump more oil without damaging it’s fields.

Investors know this.

The OECD knows this.

So why the “speculation” talk? We have been given a great opportunity during this recession… depression, the first shrinking of the world economy since WWII (OECD), demand is knocked down. The pressure is off… people are LOOKING for work. We need to put them to work creating a new economy… low energy, high efficiency, low carbon.

If we wait until “recovery” happens, then we are doomed to be right back here within 2 years.