American journalistand writer Richard Heinberg is oneof the world's foremost Peak Oil educators. He has taught at New College ofCalifornia’s Campus for Sustainable living a program on "Culture, Ecologyand Sustainable Community" until March 2008 and is a Senior Fellow inResidence of the Post Carbon Institute in Santa Rosa, California. He is the award-winning author of nine booksincluding:

• The Party's Over: Oil, War and the Fate of Industrial Societies (2003),
• Powerdown: Options and Actions for a Post-Carbon World (2004),
• The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism and Economic Collapse (2006),
• Peak Everything: Waking Up to the Century of Declines in Earth’s Resources (2007).

His monthly MuseLetter has been publishedsince 1992 and his essays and articles have appeared widely in such journals as TheAmerican Prospect, Public Policy Research, Quarterly Review, Z Magazine, Yes!, Resurgence,The Futurist and European Business Review. Moreover, he was featured prominentlyin documentary films such as “The End of Suburbia” (2004) by Gregory Greene andBarrie Silverthorne (see for more information: www.endofsuburbia.com). With a wry, unflinching approach based onfacts and realism, Mr. Heinberg exposes the tenuousness of our current way oflife and offers a vision for a truly sustainable future. Since 2002, he hasgiven over three hundred lectures on the subject matter of Peak Oil to a widevariety of audiences. He and his wife Janet Barocco live in Santa Rosa, California.

Mr. Heinberg, yourmost successful book-title to this date is ”The Party’s Over.“ For those of ourreaders who have never heard of you and that book: What kind of party is itthat you were writing about and why do you assume that this festivity and itsspecial features are about to come to an end?

The “party” was humanity’s one-time-onlyopportunity to fuel economic growth and technological innovation with a bountyof cheap, abundant energy from fossil fuels. The harvesting of oil, coal, andnatural gas has inevitably proceeded on a best-first or low-hanging fruitbasis. While the Earth still possesses a wealth of unexploited energyresources, the cheapest and easiest-accessed of those resources have by nowalready been used. All of these fuels are in the process of becoming moreexpensive, and the various energy alternatives are limited in one way oranother in their ability to replace hydrocarbons. That means we are currentlyseeing the end of economic growth as we have known it. The impacts fortransportation, globalization, and world food supplies will be serious indeed.

As a rather criticalobserver of that party: Do you see significant hints that a growing number ofparticipants realize that “The Last Waltz” is near? Or are you afraid that largeparts will continue to dance no matter what?

After over a decade spent in trying to alertpolicy makers and the general public about this issue, I have concluded thatonly a small minority have any idea what is in store. The “dance” you speak ofis indeed coming to an end, but it appears to most that the problem is purely afinancial one, and that once the global economic crisis is sorted out, we willall be able to get back to business as usual. I do not believe that is anoption. We have reached a fundamental turning point, foreseen in the “Limits toGrowth” study of 1972. For a while, world leaders may be able to redistributewealth in various ways—most likely from the poor to the rich—in order to makeit appear that the global economy is continuing to grow. But I suspect thatthis will work only for a very few years at most. At some point soon, it willbecome clear that economies are contracting. And then most people will look forsomeone to blame. No doubt politicians will oblige by trotting out variousscapegoats.

What about the hostsof the party, who pay the band – the so-called elites? They’re aware of thecoming situation for a long time, right? What kind of plans do they have instore for themselves and the rest of us in your opinion? As part of the elites,the Central Intelligence Agency for example, which has always entertained closeties to the financial district in New York City,[1] had the Peak Oilproblem on its radar screen at least since the late 1970’s.[2] Hence, we can be surethat some influential interests not only knew that this historical watershedevent was coming, but also that they had enough time to prepare for it.

Strangelyenough, I think most of the “elites” are victims of their own public relationsefforts. They have promoted the careers of economists who told them what theywanted to hear—that economic growth is the normal and inevitable state ofaffairs, and that there are no real limits to growth. Yes, certainly there areanalysts in the CIA and the military who understand where this is all heading,but—if the ex-analysts I’ve talked to are typical of their colleagues—they havelearned that reports about resource constraints are not welcome, unless theyare framed in terms of the contest for geopolitical leverage

At the end of lastyear, the World Energy Outlook 2009 received a very cautious reception – forexample from your side.[3] Why was that and howwas it linked to the ongoing discussion about oil reserves? May I also ask youto explain to our readers why the picture related to the latter seems very blurand since when?

Oil “reserves” consist of estimates of theamount of oil that geologists believe can be economically extracted fromoilfields that have been discovered, drilled, and mapped. Unfortunately,reserves reporting is not a transparent affair in many countries that havestate-controlled oil industries. There is strong evidence to suggest that OPECnations have systematically and substantially over-estimated their reserves forover two decades.

In 2009, the International Energy Agency (IEA)took a first cautious step in the direction of realism when it published, inits annual World Energy Outlook, an assessment of rates of production declinefrom the world’s old, giant oilfields, which yield the bulk of the world’scrude oil. On average, there is a net production decline of 4.5 percent peryear from existing fields, which means that the world has to develop a Saudi Arabia’s worth of new production capacityevery five years or so just to maintain existing total production volumes. Thatis an enormous feat, especially given the fact that oil discovery rates havebeen falling since the early 1960s. New oilfields are sill being found, ofcourse, but typically they are very expensive to locate and exploit, when comparedto the oilfields that were being discovered only a decade or two ago.

This debate, thatwe’ve just mentioned, is continuing right now again on a large scale.[4] Maybe there is, if onewants to, an end to it. During an interview with investigative journalist andbook author Mike Ruppert, I’ve asked him a few things about the National EnergyPolicy Development Group, NEPDG, that was run by then-Vice President RichardCheney in Spring of 2001. Mr. Ruppert stated:

“Essentially the NEPDG appears to have been setup, almost from the first day of the Bush administration, to find out how muchoil was left, who had it, and how it could be obtained (bought or stolen) tosupport U.S. hegemony, U.S. consumption, and the monetary paradigm. … The factthat the NEPDG records have been kept secret from the American people who paidfor it is one of the greatest crimes of all time. Seeing those records nowwould save a lot of duplicated effort in trying to inventory how much oil thereis left. The figures on oil reserves quoted by producing nations and companiesare as fraudulent and cooked as the books on mortgages, banking, and evenBernie Madoff. … It was Peak Oil that was driving Dick Cheney's Task Force andnothing else.”[5]

Do you agree with Mr.Ruppert in general and in particular on the notion that the secretNEPDG-records could help us to find out “how much oil there is left”?

Since we don’t know what those records contain,we also don’t know if they would help us to know much more about future energysupply options. Certainly if an agency like the IEA were empowered to performon-the-ground audits of oilfields in all oil exporting countries, we would knowmuch more than we do now.

In another interview,I’ve asked economist James K. Galbraith, who thinks that the Peak Oil scenario“needs to be taken seriously,” if he agrees that itwould be time to make those secret files of the NEPDG public. He answered bysaying:

“Yes. I do agree thatfiles of this type should be made public. If there is an argument, whichundoubtedly some people will make, for a national security reason not to makethem public, then an appropriate procedure, which we have followed in thiscountry in the past, is to appoint a panel of independent outsiders, notpreviously connected to the government, to review the documents and to makethem public unless there is a compelling reason not to, with arguments aboutwhat is compelling and not-compelling ultimately resolved by the presidenthimself. That’s a model that has been applied successfully in the past in the United States on a matter of this kind. I think it would be very useful to do it inthis and other instances on the conduct of the Bush administration.”[6]

My question for youis: Wouldn’t it be a good goal for the Peak Oil movement in the U.S. and around the globeto come together for a concerted effort to makehappen what Mr. Galbraith was talking about? Even if there was only a slimchance to accomplish this goal?

Yes, this would be a worthy goal from a certainstandpoint. However, the peak oil “movement” is a highly non-politicalcollection of individuals with little sense of group identity or any history ofconcerted political action. Even if the effort succeeded, I doubt if much trulynew information would be revealed. Many “peak oil” analysts are alreadyextremely well informed on world energy supply issues—much better informed thanall but a very few officials at even the highest levels of government, andbetter informed than most of the members of the National Energy PolicyDevelopment Group. So the advantage would not be in finding out someinformation that is currently being kept secret, it would simply be in seeingpublic confirmation of certain key bits of information that are seldomdiscussed in the mainstream media.

Mr. Heinberg, you havestated publicly in 2004 that you have your doubts related to the officialnarration of the attacks of 9/11.[7] May I ask you if thoseattacks are in your opinion connected to Peak Oil?

I have no idea. My assertion then and now issimply that the events of 9/11 were not properly investigated. It is certainlytantalizing to imagine what a proper investigation would uncover, but imaginewe must—because at this point the likelihood of a re-opening of that case isextremely remote. It is a dead issue.

One facet of the“Global War on Terror” that resulted from those attacks, is the U.S. invasion of Iraq. What has thisinvasion to do with oil, or more specifically: with the competitive relationshipbetween the US-dollar vs the Euro? Was there a threat looming for the so-called“Petrodollar System” that was established during the early 1970’s?

There was some speculation at the time of theinvasion that part of the motive was to protect the U.S. dollar, which is thecurrency used in nearly all international oil sales. Saddam Hussein had beenthreatening to abandon the use of the dollar, and some saw this as a mortalthreat to global dollar hegemony. In retrospect, I’m not sure that analysisholds up, though I agreed with it at the time. While the level of U.S. debt is such that one might expectother nations to be looking for some alternative to the dollar forinternational transactions, the reality is that there is no good candidate atthe moment.

I suspect that there were complex motives forthe invasion of Iraq. It is strange that even today,seven years later, we must speculate on this question. The public still has notbeen told the real reasons for one of the longest and most expensive wars inrecent history.

What would happen tothe US economy if the “Petrodollar System” would collapse? Do you see signsthat this arrangement to the advantage of US-American consumerism could come toan end rather sooner than later?

At some point the dollar will indeed fail as acurrency. Whether this failure comes about as a result of oil exporters dumpingthe dollar, or simply because of problems inherent to the U.S. economy remains to be seen. And itis impossible to know whether that moment is a few months or many years aheadof us. I suspect that we will see some serious problems with the dollar wellbefore 2020. Certainly every effort will be made to keep the current worldmonetary system working as long as possible, but the problems just keepaccumulating. The result may be a rather sudden re-adjustment in which enormousamounts of apparent wealth simply disappear, and global trade comes to a nearlycomplete halt, at least temporarily.

In the past, you havesaid that the worst thing that could happen is a financial / economic crisis atthe exact same time when we’re about to enter the Peak Oil phase. Well,obviously this seems to be the case now. Why has this been a nightmarishoutlook for you? And do you think that this financial / economic crisis, which remains mysterious and enigmatic to most people, will usherin on a global scale what Robert Kennedy once called “the mindless menace ofviolence”? If you agree on that, isn’t that the result not of this crisis alone,but also because people are not told the truth about its long-lasting characterin an honest way?

The reason it’s bad for both an energy crisisand a financial crisis to occur together is that each makes the other harder toaddress. Without adequate credit and investment capital, how will we buildrenewable energy infrastructure to replace our current fossil-fuel-dependenttransport and electricity systems? And without cheap energy, how can we digourselves out of a financial crisis?

As you point out, both are indeed happeningnow, and this should be no surprise given the inherent linkages between energy pricesand the health of the economy. Will we see global violence as a result? Ofcourse I hope the answer is “no,” but the likelihood of war would besubstantially reduced if the general public had a better idea of why theirstandard of living is eroding. Since politicians don’t really understand whatis happening, I suppose they can be somewhat excused for not telling theirconstituents. But that means, once again, that the most likely response will bea hunt for scapegoats.

Now that we’ve alreadytouched the subject “money”: What has the financial crisis and the ongoingrecession to do with the monetary system and debt-based growth? Is there atricky part involved  - just as MikeRuppert characterized it this way during the above mentioned interview:

a) The current global economic paradigm -- governed by fractional reservebanking, fiat currency, and compound interest (debt-based growth) -- isinherently and by definition a pyramid scheme. Money is useless without energy.One cannot eat a dollar bill or crumble it up and throw it in his gas tank.Each of the trillions of dollars created out of thin air since the fall of 2008is a commitment to expend energy that cannot and will not ever be there.

b) Therecan be no "recovery", no return to growth (which is what the economicparadigm demands), without energy.[8]

Yes, I agree with Mike Ruppert on this. If theworld is to return to stability, an entirely new economic system, based on anew and different form of money, will be required. The world still has willingworkers and consumers, and enormous productive capacity in the forms offactories, soils, and recyclable materials. But without a functioning monetarysystem, there will be no means of connecting production with consumption. Ourcurrent money system requires constant growth so as to enable repayment of theinterest on the debts that created the money to begin with, so it cannotfunction well in the context of general resource scarcity and economiccontraction.

How does a new monetarysystem need to look like vis-à-vis Peak Oil?

There aremany possibilities for alternatives, including tradable energy vouchers.

Is it this monetarychange that has to take place that constitutes the “Heart of Darkness” so tospeak when it comes to the problem that the elites and the mainstream media are“too fearful to publicise peak oil reality”?[9]

I don’t think reality is that conspiratorial.Certainly there are some deep, dark conspiracies out there, but with regard topeak oil my belief is that, for the most part, the elites genuinely do notunderstand the situation or its implications.

Of interest withregard to the recession is of course the oil price spike of 2008. GlobalPortfolio Strategist Marshall Auerback stated in an interview with me that eventhough “recessionary pressures were already ‘baked inthe cake’ well before the oil price spike”, that this was “the straw that broke the camel's back, or the ‘icing on thecake.’”[10]That given, I would like to get your reading of that oil price spike. Do youagree with James Hamilton’s analysis given in “Causes and Consequencesof the Oil Shock of 2007-08”?[11]

Yes, I discussed Hamilton’s analysis at somelength in my essay “Temporary Recession or the End of Growth?” http://heinberg.wordpress.com/There’s no point trying to paraphrase that article here; if readers areinterested, they can read it. I think it’s a pretty good summary of thesituation.

Critique onthe Peak Oil scenario comes from all kinds of sides. Among them are theadvocates of the abiogenic petroleum origins. What is your response to thosecritiques – for example related to the doubts that the common theory of fossilfuels was never scientifically proven?

I have also published an essay onthis subject, titled “The Abiotic Oil Controversy” http://energybulletin.net/node/2423.To summarize: there may indeed be some interesting points for further researchregarding the origins of some of Earth’s hydrocarbons. But that research isunlikely to have immediate practical implications for the supply of oil ornatural gas. These fuels are found only in sedimentary basins, and those basinshave already been identified by geologists using every tool from pick andcompass to seismic surveys to satellite imaging. Moreover, oil and gas wellsare observed to deplete, and are not observed to replenish themselves in aneconomically significant way over humanly observable time scales. The very fewexceptions to these general statements have been studied by geologists andexplained in terms of local anomalies.

Anotherthing one can hear quite often is that Peak Oil authors / educators like youare spokesmen for big oil interests. Does this make sense to you? Why shouldthe oil and automobile industry be interested in propagating a “Peak Oil myth”?

If I’m secretly on the payroll ofan oil company, then somebody forgot to let me in on the secret. A few of theoil companies are delicately admitting some of the main elements of the peakoil thesis. Other oil companies heatedly deny any possibility of supplyproblems and call people like me very nasty names. Some of the auto companies,such as Toyota, understand peak oiland speak of it openly. But I don’t see any public relations advantagewhatsoever in some supposed cynical plot to promulgate a “peak oil myth.” I’vebeen studying this subject for over a decade and have interviewed dozens ofpeople inside and outside of these industries, including scientists, managers,economists, and public relations officers, and have seen no evidence whatsoeverof such a plot. Instead I see general ignorance and denial. Those within theindustry who do understand peak oil tend to be scientists, though there areexceptions. Scientists often do rather poorly at following instructions withregard to fabricating myths. They have an annoying habit of seeking out data,analyzing it, and thinking for themselves.

Mr.Heinberg, we seem to face huge problems with Climate Change, Overpopulation andthe depletion of natural resources in general, not only hydro carbons. ClimateChange is discussed worldwide – so let the both of us concentrate on the othertwo points. Where the whole problem of Peak Oil is getting real ugly is thewhole issue of Overpopulation. Without oil there would never have been thepossibility to let the world population rise to 6.5 billion human beings.Therefore, the outlook of Peak Oil is that now that we have all those humans onPlanet Earth, the oil that supports them declines. Two questions: how do youcope with the knowledge you have about that day in, day out? And don’t you fearthat mankind is about to lose the last rest of dignity that was leftover afterthe barbaric events of the 20^th Century?

How do I cope with the knowledge?Well, it’s distressing, but one learns to cope. As we age, we are forced tocope with the knowledge of our own mortality. Our relatives and friends startdying. It’s depressing, but we go on. What would be really depressing would beto have knowledge about imminent global crises but to have no way ofinfluencing the situation. In fact, there is a great deal that still can bedone to lessen impacts on humanity and the natural world, and as we engage inthat kind of activity it tends to help us psychologically.

Anothermajor problem that we face is the depletion of natural resources in general – yousum it up best by giving your book on this subject the title: “PeakEverything.”[12]  In that book you mention that

“in thecourse of the present century we will see an end to growth and a commencementof decline in all of these parameters:

-        Population,

-        Grain production (total and per capita),

-        Uranium production,

-        Climate stability,

-        Fresh water availabilityper capita,

-        Arable land inagricultural production,

-        Wild fish harvests,

-        Yearly extraction ofsome metals and minerals (including copper, platinum, silver, gold and zinc).”[13]

Can youtell us how we humans can survive this especially seen under the focus of Liebig’s Law (or the Law of the Minimum)?

As I say in the book, we must reduce the scaleof the human project—our population and our consumption rates (the latterespecially in the industrialized nations). That means redesigning our economicand food systems, re-localizing and down-sizing them, until they can bemaintained with renewable resources harvested at sustainable rates.

Do you fear that somepeople in powerful positions become increasingly “trigger happy” – that is tosay, that they will try to get us involved in a major war as a Last ExitStrategy?

I don’t see major war as an “exit strategy”; ifit happens, it will likely be simply a failure of politics—an expression of theinability of leaders to solve the worsening problems that are confronting them.

To sum our interview up, Mr.Heinberg: We’re about to enter extremely interesting, stormy times. They have alot of danger in store for us. On the other hand, isn’t it true that the coming 20 – 30 yearswill be a great opportunity to totally re-evaluate who we are and what isreally important to us?

Absolutely. Every crisis is an opportunity, andwe will be presented with the greatest array of opportunities in history.Survival will require us to evolve quickly, and to change our thinking, our habits,and our expectations. If we do these things, it is just possible that thesociety that emerges in the process will be far more stable, interesting, andbeautiful than the one we see around us today.

Thank you very muchfor taking your time, Mr. Heinberg!

Mypleasure, thank you!

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