On September 23, Dave Bowden video-taped Colin Campbell at his home on the southwestern coast of Ireland. Excerpts of that interview are attached below:
Question: Please reflect on the evolution of ASPO and your evolution of peak oil thinking. Maybe you can start by touching on your studies while in the industry.
Campbell: My interest in peak oil goes back a long time. Of course it was not initially identified as peak oil. I was asked by the company I worked for to make a study of Columbia in 1966 and in the course of doing that I looked all the different basins of Columbia. I saw how many wells had been drilled, what they had found, what the underlying geology delivered and even then, as long ago as 1966, it was evident that there were certain limits. Some areas not yet fully explored were very promising and indeed they’ve turned out to be productive. Others you could say just didn’t have what it took, nor have they delivered since. So, that was my first understanding of this subject. But in those days I had no global feeling in any way. It was just what I thought about a small country in Latin America.
Later in 1969, I was part of a team with Amoco in Chicago which was instructed to make a world study. I did Latin America and other people did other areas around the world. Back then we more or less figured out the limits of the on-shore, we didn’t know much about the off-shore in those days. But the on-shore we could perceive, we could see the size, see the limits, see the declines. And really it made a huge impact on me both personally–I could see somehow I was living at the end of an age you could say–and professionally. It had an unusual consequence because whenever I did see a prospect that truly had the conditions one needed, well I I just went after it, nothing would stand in my way. So, whereas the company was sort of bland, running economic evaluations of everything and not really distinguishing the prime prospects from the ones that weren’t, my kind of attitude didn’t exactly fit, so I was always a bit of an outsider in the corporate world.
Later in Norway, where I ended up being an executive, their government asked the companies to sponsor research. That is how you ingratiated yourself with the government. One of the projects for my company was indeed our evaluation of oil and gas discovery and production; so the foundation of the peak oil story was evaluated by the Norwegian government and the major project that we sponsored. So, that’s how I got into it. And then that lead to articles and lectures and conferences and so on. Which eventually lead to the formation of ASPO some years later.
Initially ASPO was no more than an informal sort of network. I started writing a little newsletter simply distributed by e-mail to interested people. Eventually it grew. Professor Aleklett in Uppsala took a leading role in all of this and it was formalized and then it held these international conferences which have been very successful over the years. So, that’s sort of the background of this situation.
I’ve a lot of interest from the media. There have been television crews arriving and journalists and the subject is widely covered now. Perhaps the turning point was the article in the Scientific American in 1998. Carrying the prestige of the Scientific American publication added weight to the subject. But there’s also been counter-views expressed all over the place; economists don’t particularly like the idea of a finite limit beyond market forces. So there’s an argument raging back and forth with a lot of vested interest in between.
Question: The peak oil message doesn’t seem to be heard in the halls of government and in corporate board rooms. Why?
Campbell: The question of peak oil is a difficult, sensitive one. There are many people, especially in government and industry, who’d prefer not to know it. The reason is quite logical: they’re looking for expansion, for economic growth, for prosperity, and for a continuation of the successful epoch we’ve lived in. To suddenly wake up and say, well, things are changing radically and we don’t really know what it means, is not something an executive would wish to say. And yet I think behind the scenes they are beginning to plan and prepare in sensible ways. You’ll find the oil companies, for example, are selling and disposing of secondary marketing chains, secondary refineries and so on, because they know full well that the supply is going to lead to surplus refining capacity. I think if you look elsewhere, the airline businesses is changing radically because it’s so dependent on cheap oil. We see hidden messages that do deliver the correct reading of all of this, but it’s not something people really want to talk about.
Question: What does your most recent analysis indicate?
Campbell: My latest numbers suggest that the peak of regular conventional oil was passed in 2005. This gave a small short-fall in supply, which was made up by the heavy oils from Canada and the deep water expensive oils. But, the shroud traders saw a rising trend and they began to buy futures on the market. And I think that the industry, especially the national companies, probably kept their tanks full, seeing them get more valuable every day. This lead to a surge in oil prices that went on for the next two or three years, then to extreme levels in 2008.
I think when the surge in oil prices approached $150/barrel in mid-last year, the traders said that’s as far as she’s going to go and they started selling short on the futures market. The industry started draining its tanks, demand for oil fell because the high price was killing demand, so prices collapsed back down to 2005 levels and have since edged upwards to about $70 today. But this flood of money that resulted from the high prices delivered a massive flood of petrol dollars to the Middle East. This was a surplus that they couldn’t use, so it was recycled back to western banks which started lending it out on ever less reliable terms. The net result of all of this is a financial economic crash of really almost unparalleled magnitude; and it may be no coincidence that it matches the date of the peak of all oil in 2008.
Question: What about the notion of making America energy independent?
Campbell: It can’t be done voluntarily. To make America energy-independent is not something I think any government can achieve. But within 50 years that’s what nature will deliver. Countries will have to be energy independent. They have no alternative. Some may get there quicker than others, but it’s not something some government will say, well this is our plan of action. It will delivered to them by the force of nature. So America will indeed be energy independent and probably quite soon if these imports dry out. What that means and how they react to such a situation is another day’s work.
