Oil Prices: It Gets Worse

[robertpaulsen]

Source: Time

Oil prices hit a record high of $97 a barrel on Tuesday, but the next generation of consumers could look back on that price with envy. The dire predictions of a key report on international oil supplies released Wednesday suggest that oil prices could move irreversibly over the $100 a barrel threshold in the not too distant future, as the global economy faces a serious energy shortage.

This gloomy assessment comes from the International Energy Agency, the Paris-based organization representing the 26 rich, gas-guzzling member nations of the Organization for Economic Cooperation and Development (OECD). The agency is not known for alarmist warnings, and its World Energy Outlook is typically viewed by policy wonks as a solid indicator of global energy supplies. In a marked change from its traditionally bland, measured tones, the IEA's 2007 report says governments need to make urgent, bold decisions on energy policy, or risk massive environmental and energy-supply crises within two decades — crises and shortages that could spark serious global conflicts.

"I am sorry to say this, but we are headed toward really bad days," IEA chief economist Fatih Birol told TIME this week. "Lots of targets have been set but very little has been done. There is a lot of talk and no action." .

The reason for the IEA's alarm is its expectation that economic development will raise global energy demands by about 50% in a generation, from today's 85 million barrels a day to about 116 million barrels a day in 2030. Nearly half that increase in demand will come from just two countries — China and India, which are electrifying hundreds of cities and putting millions of new cars on their roads, most driven by people who once walked, or rode bicycles and buses. By 2030, those two countries will be responsible for two-thirds of the world's carbon gas emissions, which are the primary human activity causing global warming .


Read more: http://www.time.com/time/business/article/0,8599,168136...

---

Peak Oil is here, folks.

[gateley]

1. I know there's a difference between the price of oil and the price at the pump

but last week in Clayton, NC gas at my corner station was $2.64 -- today it's $3.06.

[lancer78]

2. Usually a jump like that

means that the store probably bought gas a few weeks ago when it was cheaper and now has to buy it when it is higher. As a store owner that sells gas, I can tell you that all a station makes is around 12 cents a gallon. We keep our margins low on gas in order to bring in people to the store so we can sell them the higher margin products like soda and chips. Those products usually have a 33% mark-up. If you want to complain about high gas prices, complain about the speculators.

[lvx35]

6. Informative. Gracias. nt

[gateley]

11. I've heard that - about the store owners. I always spring to their (your) defense

when people accuse them of rakin' in the dough. And the local/national news is actually pretty good at explaining that, too.

[Fovea]

53. I don't blame the retailers

when Jabba the CEO gets the cream off the top.

[robertpaulsen]

3. DAMN! I knew gas prices were catching up with oil prices...

But that's ASTOUNDING! A 42 cent jump?! And I thought the 25 cent jump in southern California was bad!

[Andy Canuck]

4. In the US rising oil prices and the falling dollar means double the inflation and

hence the steep rise in gasoline prices. In Canada our oil prices are staying constant because our dollar is rising. The US is probably going to experience profound inflation as your dollar drops. Where as other countries will experience deflation and stagflation as their currencies bound around trying to find footing.

[AnneD]

26. DING DING DING

We have a winner.

[Bruce McAuley]

5. I'm getting my electric tricycle together.

I've got all the parts, just a matter of putting it together.
Gas is $3.29 a gallon here in Eastern Washington, and it looks to go to $4 a gallon is what "they" are saying.
All I need is a little town scooter for zipping to the Post Office with eBay packages, and trips to the grocery store which is only about 10 blocks away, mostly uphill though. Downhill all the way home, though!
One thing about high prices, it will FORCE us to get away from the Oil Tit.
I've been ready for an electric car for a long time.

Bruce

[CoffeeCat]

9. If I'm not mistaken...

You can make arrangements--through Ebay or the post office--to have
your Ebay merchandise picked up from your house!

I'm sorry that I don't know more, but I know I read this.

I sell quite a bit on Ebay, too. I have a feeling I'm gonna need
those extra bucks.

[Fovea]

54. Note the picture of my vehicle.

It fits on bus racks and even goes unboxed on some amtrak trains.

[CoffeeCat]

7. Oh pishaw!

While eating my frosty, sugar flakes, I heard a reporter on "The Today Show"
say that America will have no problem bearing $100 a barrel oil--and that
the price-per-barrel would have to reach $125 before Americans would be affected.

That's like, SUCH goods news!

So....drive your miniature greyhounds to the grocery store with no worries! We
aren't going to be affected for a long time!

No worries people..."The Today Show" lady expert said so!

[Delphinus]

24. Her sister,

on the Morning Show, basically said the same thing. The thing that I always listen for is what they say about supply. When they don't say anything about demand outstripping supply, or if they say that there's plenty to go around, I know the entire story is bs.

[AndyA]

8. Do we need another reason to get rid of the "global economy is good for America"

bullshit?

Well, this is it.

Buy goods from local providers. Less distance to ship, will save a ton of oil!

Next!

[Cronopio]

10. "Peak Oil is here, folks."

Would you consider the possibility that Peak Oil itself is a fictitious media psy-op, created to get consumers used to the idea of paying drastically higher oil prices?

Especially given the likelihood that the oil industry has probably accepted the reality and economic impact of global warming, and the Peak Oil meme is part of their strategy of dealing with it.

If not, no problem. Just checking.

[gateley]

14. Hmmm. That's a possibility worth considering. nt

[glowing]

16. Peak oil, whether it is today or tomorrow is complete speculation..

Where we go and what we do to extract it is getting more expensive. The reason why no one knows for certain when we run dry is because of these explorations and engineering of the modern day. 10 yrs ago we were at peak oil and destined to be out at 2020. Now its been extended.

Not to say we need to get off the stuff... Its black gold and anything it touches turns into greed and corruption.

[robertpaulsen]

20. It's true, the peak can only be verified looking in the rearview mirror.

But I don't remember anyone in 1997 saying we would be out of oil by 2020.

Now, however, there are reports that we already peaked in 2006:

Steep decline in oil production brings risk of war and unrest, says new study


· Output peaked in 2006 and will fall by several a year
· Decline in gas, coal and uranium also predicted

Ashley Seager
Monday October 22, 2007
http://www.guardian.co.uk/oil/story/0,,2196435,00.html

[glowing]

46. Perhaps it was a little after 2020, but while sitting in my Environmental

Science classes, that was the thought.

In another post where everyone was dooming and glooming and thinking total collapse of the economy, I had written that the demise of the US was not necessary.. that we are about to embark on a Green Revolution, and if we do this correctly, it will not cost us carbon taxes just to breathe and take a shit. Right now we are on a threshold of old versus new. We are at the end of the oil barrons robbing us dry. The old monarchy, of course, is struggling to continue the trend for reliance on their "black gold". The reason they want an all out world war is because it will throw the market on oil futures and create a lot of survivalistic wars. We are now entering a time where people are examining what is and what is not important in their lives. We are examining the old mantra of what we have been taught, and we are rebelling. This is a time where we could restructure in this country our entire transportation system, our farming pracitises, and our idea of value. We are on the verge... It would be awesome I think to have someone like Kucinich or Edwards (shit select them p and vp) to embark on a New Green Deal. We will have many "Green collard workers) coming into play. Engineering, building designs, transportation, alternative energy sources (which will become the main sources), and science that will take us beyond our now primitive perspective. There are some amazing things happening to our world between its placement in space and the people who are living in this space.

Anyway, the future can go 2 ways.. war and destitution...or green and peaceful. There are ways to become sustainable and there are technologies that we are accessing that will help us get there.

Like I said, Peak Oil, whether it is today or tomorrow doesn't matter. It is time to get off the black gold and allow for a simpler happier life. If you ask most people what they would like, it would be a home that they could afford, a job they liked, more time with their family, and a general well being for their lives. Not everyone wants or needs a huge mansion, yacht, or car collection to be happy in their lives. I think the Peak Oil thing sucks because they use it in their model for oil prices. As I see it, we will be done with oil long before the end runs out.

As for the whole climate change, it is happening. There are different things within the model that cause this. We as a species are going to have to move into the future and erase these crazy lines and these notions about owning land the way that we do. Regional changes will happen, and if people cannot move to places that work more nomadically, then we will continue to have these problems like Atlanta is facing now.

[robertpaulsen]

47. I like your attitude.

Hopefully, the rest of the country will share it and we will get a real President this time. What you talk about with a New Green Deal sounds similar to what Kucinich said when I asked him a question about Peak Oil:

Me: Are you familiar with the Hirsch Report for the Department of Energy on Peak Oil that was one of Project Censored’s top 20 censored stories of 2005, and what would you do as President to prepare America for the global peak of oil production which Robert Hirsch believes could occur within the next ten years?

Dennis: (to me) Of course I’ve read the reports and I’m familiar with it. And Congressman Roscoe Bartlett, who is a Republican from Maryland has done some great work on the Peak Oil issue. (to audience) In a word, what Peak Oil means is it’s a point at which we pass the peak of an oil supply and we start to work on non-renewable resources being depleted. What does this mean? It means that they’ll seek other environments such as in Iraq and Venezuela in the inevitable way some of our leaders like the open markets. It also means there’s an urgency right now to work at conservation, I mentioned this earlier. What we have to make…when I was growing up, President Kennedy created this challenge of wanting to put somebody on the moon. So they organized the whole country, we were competing with Russia at the time, but he organized the country. So we had this great cause, to harness our intellect for our scientific power and to bring this nation together, this great cause to reach for the stars. We need a similar call! And I’m ready to lead this nation in a similar call. To conserve energy, to develop alternative energy and to move away from non-sustainable forms of energy which, by the way, not only jeopardize our politics, but jeopardize the planet. So all this is connected. I spoke earlier about oil being interconnected and interdependent, you know, our energy policies have an effect on our politics. Our politics affects the rest of the world. Our energy policies have an effect on our health. Our health determines what our demands are for health care in this country. All this stuff is bound up together. So we need to have a call where we come together as a nation. There’s a hunger in America right now for coming together! For uniting! But not some kind of false unity, but in a higher purpose that states who we really are and just identify ourselves with something that’s almost transcendent, beyond ourselves. We have this potential right now to be more than we are, dreaded(?) in the world. Americans are ready to call and to participate something in this grand cause, not just to save ourselves but to save our nation and the planet. What a great opportunity this is! What a wonderful time it is to be alive, to realize that we can consciously reconstruct the world! That we are called upon to save the world! That we have the intelligence and spirit to do it and we only have to have the willingness to do it. We only have to believe that our political system is ready for transformation and if we have the courage to take it in that direction, then I’ll take it and I’ll change it. But (we’re) just waiting and testing ourselves as to how far we’re ready to go to bring about the change, and I think there’s a readiness now. I think people have seen enough of the war! I think people have seen enough of the deception! They’ve seen enough of the undermining of our civil liberties! They’ve seen enough to the point that (they’ve) hijacked(?) an entire American agenda!



This is my transcription of my audio cassette recording. I placed question marks after words I was unsure of, but for the most part I think Kucinich's message is pretty clear. We need to have a plan to deal with Peak Oil on the level of the Apollo Moon Project President Kennedy initiated. Has any other 2008 Presidential candidate articulated an understanding of or a plan for Peak Oil? Regardless, I've decided that even though mainstream media may ignore him, Kucinich has earned my vote for President in next year's primary.

http://www.democraticunderground.com/discuss/duboard.ph...

[glowing]

48. This is the attitude and the direction that will really propel our world

into a kinder and gentler place to live... Time will only tell.

[robertpaulsen]

17. No.

If it's a fictitious media psy-op, they're really doing a horrible job of it. Peak Oil should be on the tip of the general public's lips in the same way that global warming is. It isn't. Do a google search on global warming, then do a google search on peak oil. Compare the number of entries, it's something like 80,000,000 more for global warming. Notice the linked article in the OP doesn't say peak oil anywhere. Pretty big oversight for a psy-op.

Nope, Peak Oil is a geological reality, whether it's the world, a country, or a single well. If it wasn't, the United States would have been able to produce more oil since 1970. But we haven't.

[robertpaulsen]

21. Furthermore...

If the IEA was part of the psy-op, it makes no sense why their chief economist, Fatih Barol, decided to clarify the findings of the IEA's report in this fashion:

IEA “supply crunch” is not peak oil - Birol
http://www.energybulletin.net/36874.html

[Cronopio]

40. They may not be using the term "Peak Oil", but the idea of oil scarcity is well known.

Whether people understand it as being due to an actual scarcity of the product, or a manufactured scarcity due to political tensions or an embargo, the idea of endless, plentiful oil went out in the general public's mind in 1973.

The main issue I have with Peak Oil is this:

People know from the old Exxon commercials of the early 70s (the ones with the enlarged Saudi Arabia in the redrawn world map) that the taps could be shut off at any time, and that the only thing keeping them on is the greed of the oil sheiks. It's a belief in the power of the oil market to supply the needs of the economy rather than a belief in the ready availability of more oil.

The problem is that oil consumers aren't in a position to bargain in the market. An equal alternative doesn't exist. Therefore, in reality, oil isn't really a market commodity - rather, an elaborate apparatus has been set up to promote the illusion that it is. Trading Exxon shares or price fluctuations in "sweet crude" doesn't change the fact that for a market to truly exist, the buyer has to have the option of leaving the negotiation table. No oil consumer has that option - it's a certainty that all of the oil will be sold.

Also, the global operations of the oil industry are so extensive that there is effectively no monitoring of those operations. The only information about world oil reserves come from within the oil industry itself. Governments don't have the resources (or the political motivation) to duplicate this research.

What all of this adds up to is an industry that is uniquely capable of manipulating all information about the product for the purpose of manipulating the valuation of that product. If a drug company manufactures the only drug that can keep you alive, you may not be able to negotiate the price, but you could look into the resources the company uses to create the drug and determine that you are being extorted. With oil, unless you have an unbiased third party able to duplicate the research into the capacity of the world's oil wells you don't know for certain whether an oil well is actually running out or whether the oil industry is just telling you the oil is running out. The oil industry has no motivation to provide you the truth because lying to you raises the price of their commodity and their profits just as surely as running out of the commodity itself. Their advantage in lying to you is that the resources are still there and the golden goose is still alive if they need it.

I'm not trying to convince you that this means that Peak Oil *has* to be a psy-op, because it isn't proof. The oil industry has so much wealth and so many resources that anyone outside of the group probably can't know with 100% certainty whether Peak Oil is a myth or not. With global warming, it may be more practical to assume that the Peak Oil scenario is real. But it's like the standard media meme about 9/11 - it serves the welfare of the powers that be too conveniently for me to completely buy into it as read.

[robertpaulsen]

45. Interesting points you make. Here's some more food for thought.

In 1967, in response to US support for Israel during the Six Day War, Saudi Arabia launched an oil embargo against the United States. The impact of this embargo was insignificant. Yet when Saudi Arabia did the same thing in October 1973 in response to US support for Israel during the Yom Kippur War, the impact of this embargo was staggering. What changed? In 1967, the US was THE leading producer of oil in the world. Saudi Arabia was certainly a big player, but the US had no problem raising production to accomodate the artificial shortage created by Arab countries in 1967. But in 1970, US oil production peaked so that by 1973, production was already in decline. In order for the US peak to be a myth, a psy-op, it would have to have occurred in collusion with the Saudis during the Nixon administration, as during the Johnson administration, we simply brushed the problem off our shoulders like a case of bad dandruff. OK, I can buy Nixon involved in a conspiracy; it's certainly been proven he was not opposed to covering them up. But then how do you explain the Nixon plan under UK Eyes Alpha to seize Saudi oil fields? http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/200...

In a larger context, if Peak Oil is a myth, how do you explain the fact that 33 of the 48 largest oil producing countries have already peaked? Are all 33 countries part of the psy-op? I know you don't KNOW, I'm just asking what you think to get a better understanding of what your idea of the psy-op might be as far as its scope. Does it just apply to countries that profit off of large oil industry companies like Exxon or does it apply to countries whose oil industry is state run, like PEMEX in Mexico?

I guess that's the main reason why I find the idea that Peak Oil is a psy-op or a myth unbelievable: countries DO PEAK. If countries peak, then the question of whether the world will peak is not a matter of if, but when.

[Cronopio]

55. I hadn't heard about this before, so I can only offer an off-the-cuff reading.

What you've mentioned about the two embargoes leads me to suspect that the '67 embargo had a bigger effect on the oil industry itself than the price of oil. I think the oil industry would have responded to it by realizing the need to expand more of its operations more aggressively into the foreign policy of the U.S. government. Not that it wasn't involved beforehand, but as you say, the U.S. oil industry had leverage in the early 60s that it didn't have in the early 70s by virtue of its ability to outproduce its competition. The first CIA operation in the late '50s was overturning the democratically elected President of Iran in a coup to install the Shah as head of state, but was this an operation conducted by the oil companies using U.S. intelligence resources to counter the influence of Saudi Arabia or was it a purely military operation conducted to preserve strategic resources against the incursion of the Soviet Union? I suspect it was more the latter.

This also brings to mind the part that the oil industry played in the movie "Nixon" in promoting Nixon's candidacy - I assume that oil industry support was one of the reasons he ran a much more effective race in '68 than in '60. (Not that I believe everything that Oliver Stone writes up in a screenplay, but it does provide some possible answers to a few questions.) The movie also portrays Nixon as breaking ranks with the oil industry in '71. Was that part of the reason for the oil embargo - U.S. oil companies colluding with OPEC to weaken Nixon's presidency? It's possible Nixon got the message and ordered UK Eyes Alpha. If not for Watergate, the first Gulf War might have started in 1974 by Nixon.

In the '70s the oil industry played off of the operations of the government, but in the late '70s, when they saw that Carter wasn't going to play the game at the level they wanted him to play it, I think they used the Iran hostage crisis (possibly engineering the crisis behind the scenes) to destroy the Carter presidency and commandeer U.S. foreign policy. This gave the U.S. oil companies the leverage they lost during the '73 oil embargo - they weren't the bigger producer anymore, but they had the government of the biggest oil consuming economy of the world in their pocket, and the most lavishly funded military system as a perk. The price of oil and oil industry profits dramatically jumped at this time, but the media criticism didn't last long as i recall.

All of this would be efforts to control the market against a competitor that could outproduce the U.S. oil industry, potentially making the industry as hostage to foreign interests. It wouldn't necessarily mean that the total resources were running out.

"In a larger context, if Peak Oil is a myth, how do you explain the fact that 33 of the 48 largest oil producing countries have already peaked?"

That's my point, I don't necessarily believe that they have. Countries can promote a myth of Peak Oil for the same reasons that the oil industry would, especially if their industry is socialized.

"If countries peak, then the question of whether the world will peak is not a matter of if, but when."

Agreed, but again, my point is that a peak can be manufactured by deliberate underproduction and a reliance on the element of truth that any natural resource is finite. But here's a question: If you were in charge of an oil company and realized this, would you wait until the peak had passed and then allow the market to raise the price on your product, or would you control the process yourself by preemptively creating the impression that the peak had passed (by not developing as many new oil fields), and in doing so extend the time that you would be able to enjoy increased prices and profits?

From an oil producer's standpoint, I think it's better to be able to raise the price of a plentiful product than to command a higher price for your product because you *can't* produce as much of it.

[robertpaulsen]

59. Damn! You are really taking me down the rabbit hole.

Not that I'm complaining, it's actually kind of fun.

I'm a huge fan of the movie Nixon. Especially the Director's Cut DVD with the extra scenes with Sam Waterston as Dick Helms. I believe the scenes you are referring to are the ones with the Larry Hagman character. Fictional scene, of course, but I think it does a good job of illustrating the shadowy relationship between Nixon and Texas oil tycoons, specifically regarding Hunt oil and their relationship with far right elements like Birchers and the Minutemen. But it brings up a pertinent question regarding your theory that they broke with Nixon and conspired with OPEC to weaken him. Why not just raise oil production? Or is your theory that the US did in fact hit Peak Oil in 1970 and that their collusion with the Saudis was an attempt to financially ameliorate this?

Which brings up another question from a global perspective: how do you maintain control of this psy-op? The scenarios you're describing sounds an awful lot like a transnational conspiracy. If you buy into that mentality, it would make sense that the Bilderberg group would have an awareness of it transpiring, if not a controlling interest. But rather than speaking of Peak Oil as a psy-op that should be perpetrated on the useless eaters of the world, they seem to be saying the opposite. http://www.democraticunderground.com/discuss/duboard.ph...

Countries can promote a myth of Peak Oil for the same reasons that the oil industry would, especially if their industry is socialized.

I don't understand what you're saying here. If a country has passed its peak of production, by definition it is producing less oil. How exactly do they profit off of this when they don't have the power to exert any influence on the price of oil the way OPEC nations do? Take for example the Soviet Union, or the former Soviet Union to be precise. Their oil production peaked at 12.6 million barrels per day in 1987. Four years later, the Soviet Union ceased to exist. Obviously they didn't profit off of their peak, though it certainly didn't help that the CIA was on to this inevitability since 1977. In this case, we have a probable example of governments in collusion regarding the price of oil, not to drive it up but to drive it down, where Reagan persuaded the Saudis to flood the market with cheap oil in the mid 80's, which made the Soviet Union earn less as they pumped more, leading to their eventual demise. http://www.fromthewilderness.com/free/ww3/081503_cia_ru...

One of the ways this was done was by overinflating their reported reserves. During the 80's there was a wave of significant increases in the reported reserves of OPEC nations. Were there any major oil discoveries reported at the time to account for the increases? Nope, the increase existed on paper only. They got away with it, and have continued to get away with it, because there is no legitimate oversight to make them accountable. It is in this area that I agree with you that the oil industry certainly has the will and capability to conspire, collude and just plain lie. However, doing so just hides the truth of the reality of when Peak Oil will actually occur by making it look on paper like some far off event. Hiding the truth doesn't extend to actual oil discoveries. Why? Because then their stock wouldn't go up, which is what happens when you report actual discoveries, as occurred today in Brazil. http://www.cnn.com/2007/WORLD/americas/11/08/brazil.oil...

But here's a question: If you were in charge of an oil company and realized this, would you wait until the peak had passed and then allow the market to raise the price on your product, or would you control the process yourself by preemptively creating the impression that the peak had passed (by not developing as many new oil fields), and in doing so extend the time that you would be able to enjoy increased prices and profits?

As I pointed out in the example of the Soviet Union above, it would not be profitable to do this unless you were a swing producer. In a sense, that is exactly what OPEC has achieved by overinflating their reserves; they get to dictate to what degree the spigots get turned up to satisfy our demand. But it would not be profitable for Exxon or Shell to do this since they are not swing producers. If prices go up, it makes it that much more expensive to develop new oil fields, which begs the question: why were you sitting on it pretending you didn't have it? I don't believe anyone outside of OPEC has the ability to do this profitably, and there is significant evidence that Saudi Arabia, deceptive as they are, no longer has the ability to do this either.

[Strelnikov_]

28. I have concluded that the psy-op is peak oil denial

The play: By maintaining a constant state of tension, high petroleum prices can be explained away as a temporary spike due to politics. This way, the publics attention can kept from the accelerating supply problems worldwide, thus preventing them from starting to make other arrangements for a post-carbon world (they can't have the addicts kicking too soon).

The motive: Whoever controls the remaining (cheap) petroleum reserves stands to make a fortune in the years immediately following the peak of production. Even the most optimistic scenarios indicate it would take twenty years to mitigate the loss of petroleum production following peak. During this period of transition, the 'addicts' will have no choice but to pay, and pay, and pay.

The name of this con: The Global War on Terror.

Recycled screed follows.

++++++++++++++++

The 'War On Terror' Is About Oil

Specifically, Peak Oil.

The purpose of the 'War On Terror' and all of its subsidiaries are related to Peak Oil as follows:

- By maintaining a constant state of tension, high petroleum prices can be explained away as a temporary spike due to politics. This way, the publics attention can kept from the accelerating supply problems worldwide, thus preventing them from starting to make other arrangements for a post-carbon world (they can't have the addicts kicking too soon).

- Whoever controls the remaining (cheap) petroleum reserves stands to make a fortune in the years immediately following the peak of production. Even the most optimistic scenarios indicate it would take twenty years to mitigate the loss of petroleum production following peak. During this period of transition, the 'addicts' will have no choice but to pay, and pay, and pay.

- Nearly 70% of the worlds remaining petroleum and 40% of natural gas reserves are located in the Middle East. If we throw in the Caspian Region, which is predominately Muslim, we probably approach 80%/60% of remaining reserves in predominately Muslim regions.

The demonization of Muslims to raise ‘fear of the other’ to a high state is needed to desensitize the public to the wars of aggression and carnage required to seize and/or maintain hegemony over these resources.

Cheney as much acknowledged that peak will occur in the latter part of this decade at a speech in 1999 when he was still an 'official' oilman. Yet the Reich-wing media and echo chamber spouts the party line that additional supplies will come on line. All one has to do is read about the wildly exaggerated EIA estimates to know that the facts are being covered up.

The peaking of worldwide conventional (high EROEI) petroleum is real, and will probably occur within the next few years. During the initial 10 yrs.+ following peak oil, petroleum will still be readily available. But with demand chronically outstripping supply, prices will go through the roof, and the profits for those selling the oil will be massive.

And if this bunch did not believe Peak Oil is looming, why are they throwing money at highly risky resources such as Russia (nationalization), Deep-Water and Artic (mother nature, limits of technology, limited net energy).

Consider the following statement:

From the standpoint of the oil industry obviously - and I'll talk a little later on about gas - for over a hundred years we as an industry have had to deal with the pesky problem that once you find oil and pump it out of the ground you've got to turn around and find more or go out of business. Producing oil is obviously a self-depleting activity. Every year you've got to find and develop reserves equal to your output just to stand still, just to stay even. This is as true for companies as well in the broader economic sense it is for the world. A new merged company like Exxon-Mobil will have to secure over a billion and a half barrels of new oil equivalent reserves every year just to replace existing production. It's like making one hundred per cent interest; discovering another major field of some five hundred million barrels equivalent every four months or finding two Hibernias a year. For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from? Governments and the national oil companies are obviously in control of about ninety per cent of the assets. Oil remains fundamentally a government business. While many regions of the world often greet oil opportunities, the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greater access there, progress continues to be slow..

- Cheney At London Institute of Petroleum, 1999

[robertpaulsen]

30. Brilliant analysis! You should make this into an OP.

I think it would open a lot of eyes. I haven't read this book, but I'm pretty sure Peter Dale Scott is covering a lot of what you're talking about:

http://www.democraticunderground.com/discuss/duboard.ph...

[Cronopio]

42. The article quoted by the OP was saying the opposite.

That $100 for a barrel is inevitable and that "cheap oil" is a thing of the past - as in, not a temporary spike.

They don't use the term "Peak Oil", but it's essentially the same message - supplies are permanently dwindling so prices are permanently going up. Wasn't that the stated rationale for opening up ANWR to oil drilling?

And sorry, the last person I'd believe in this issue is Dick Cheney. An inside source with a conflict of interest does not make a reliable source in my book, even when he is *ostensibly* speaking in a meeting to other insiders.

[Strelnikov_]

43. One article that says we kinda sorta may have a problem

does not glasnost make. It is a beginning.

And regarding Cheney's statement, when a statement correlates with motive and action, I consider that statement. A statement, coupled with the few documents from his task force, that indicate the current plays in the Middle East are to grab the last energetically viable reserves and move them into private hands. The GWOT made for a good cover story.

[Cronopio]

52. "... when a statement correlates with motive and action, I consider that statement."

Very wise. But Cheney being a sociopath in a sociopathic system with a lot of resources also enters strongly into my own considerations.

[KansDem]

32. Except that the "Peak Oil" theory goes back to 1956.

Based on the Hubbert peak theory, a model M. King Hubbert used in 1956 to accurately predict that United States oil production would peak between 1965 and 1970, peak oil is the point or timeframe at which the maximum global petroleum production rate is reached. After this timeframe, the rate of production will enter terminal decline. If global consumption is not mitigated before the peak, the availability of cheap conventional oil will drop and prices will rise, perhaps dramatically. According to the Hubbert model, the production rate will follow a roughly symmetrical bell-shaped curve.

Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy. Predictions as to what exactly these negative effects will be vary greatly.

If political and economic change only occur in reaction to high prices and shortages rather than in reaction to the threat of a peak, then the degree of economic damage to importing countries will largely depend on how rapidly oil imports decline post-peak. The Export Land Model shows that the amount of oil available internationally drops much more quickly than production in exporting countries because the exporting countries maintain an internal growth in demand. Shortfalls in production (and therefore supply) would cause extreme price inflation, unless demand is mitigated with planned conservation measures and use of alternatives, which would need to be implemented 20 years before the peak.<1>.

More optimistic models, which assume a delay of peak production until the 2020s or 2030s and assume major investments in alternatives will occur before a crisis, show the price at first escalating and then retreating as other types of fuel sources are used as transport fuels and fuel substitution in general occurs. More pessimistic predictions operate on the thesis that the peak has already occurred<2><3><4><5> or will occur shortly<6> and predict a global depression, perhaps even leading to a collapse of industrial global civilization as the various feedback mechanisms of the global market cause a disastrous chain reaction.
wikipedia


A bell-shaped production curve, as originally suggested by M. King Hubbert in 1956.

Now, you might be right in observing that the oil producers are using this model to jack up prices...(Hey! Of course the price is going up! It was predicted!), but I sooner think this is what we get for putting two oil execs in the White House.

[Cronopio]

39. Hubbert could have been where they got the idea of the psy-op from.

I'm not trying to assert with 100% certainty that Peak Oil is a psy-op, but I am acknowledging the fact that, to those of us who are not in the oil industry and not privy to the primary data, a "running out of oil" situation and a "oil companies choosing not to develop enough oil to meet a drastically increasing demand" situation would look exactly the same, and play out the same way in the markets.

When you're talking about an industry that takes in astronomical quarterly profits and commands the global resources it does, it's difficult to be sure about anything it does. Any industry expert, politician, or media outlet can be bought off, threatened, or killed, and any information about the industry operation can, and probably will be, largely fabricated.

[Viva_La_Revolution]

33. I considered it, researched it, and no.

We've watched it play out right in front of us, well by well, continent by continent. The poles are the last un-searched bits of earth left. It's possible that there might be oil up there. I guess we'll find out in a decade or two, when the ice is gone and we can get up there to search. I'm not willing to bet on that though.

That is not to say that the oil companies aren't milking the situation for all it's worth. They've had to admit it's true since their own leaked memos confirm it.

[Cronopio]

41. How do you know that they didn't leak the memos themselves?

It certainly wouldn't be the first time that kind of tactic was used. I recall that one of Rove's staff leaked a set of misleading PowerPoint presentations right off of his personal computer during the 2002 midterms, and the media bought it.

When lies about a commodity can influence the price of that commodity, the lies themselves become a commodity to be manufactured, bought, and sold.

[Viva_La_Revolution]

44. those memos just confirmed what the science already told us.

so really, it's irrelevant if they leaked the memo's themselves.

[FiveGoodMen]

49. You do know there has to be peak oil at some point, right?

They could be lying about it now, but there's no question that we use oil a lot faster than the earth makes it.

[Bushwick Bill]

56. Jesus Christ.

Look at the fucking graphs. From the public entities who are cornucopians. What do you see?

[Vinca]

12. We got a heating oil delivery today. Anyone want to buy a kidney? nt

[Megahurtz]

13. Yikes!

It just keeps getting worse and worse. Scary times we live in.

[Robbien]

15. CNBC was just saying this morning that no one is bothered by prices at the pump

Sure oil is high, but main street is not concerned says CNBC. Perhaps if pump prices go to $4/gallon then maybe there could be some problems.

CNBC lives in a totally different world than the one with which I am familiar.

[robertpaulsen]

18. CNBC has such a myopic world view.

Oil is $98 a barrel? Great! Maybe energy stocks will catch up and we'll really make a profit!

[Neshanic]

19. I have been listening to CNBC while working. They are parroting what you just said.

All day. "This is not really a problem because of our low inflation rate, and people said that there would be problems when gas would be 3 bucks a gallon, and look there was no problem there!"

Some of the others were just out of left field. One moron said that the Christmas season will be a good one, and consumers are not that affected. Then he got smaked down by another guy.

[AnneD]

27. I heard that too this am...

what a diaper load. It may not be a problem on Wall Street....but it is a monkey wrench in the motor on Main Street. They deserve a Baghdad Bob Award.

Many consumers have no more room on the Credit Card balance to handle this hike, let alone Christmas. Things are about to get grim.

[FiveGoodMen]

50. Nice of them to tell us what we think, isn't it?

[Strelnikov_]

22. The both of us know what a major shift this is in the IEA's past position

But I have to wonder what impact it will have on US policymakers as the EIA/Yergin/et.al. blow smoke up their collective asses.

[robertpaulsen]

23. Zero. I saw Yergin on CNBC today.

Didn't mention a word about the IEA. Total ostrich denial.

I got an invitation today to attend a Presidential forum on America's energy future on November 17 that Clinton and Edwards have confirmed they will attend. Hopefully, there will be a Q&A session where I can find out what they have to say about all this.

[Bushwick Bill]

57. RP, I want a peaker beatdown.

Please! Print out my graphs. Give them the TOD skinny on Saudi Arabia and Ghawar, anything!

[robertpaulsen]

58. That's exactly what I'm planning to do.

Thanks, I will definitely print up those great graphs! I don't know if I'll have the opportunity to physically present them, though I'll certainly try. I've been playing phonetag with one of the forum associates trying to verify that there will be a formal Q&A session, if not I'll try to approach them informally. In any case, I want to approach my question so that there will be as little wiggle room as possible. If any candidate responds by quoting Yergin or CERA, I'll be sure to report their denying ass right here on DU.

[Jersey Ginny]

25. My fireplace insert is on its way - look into these or wood stoves

My brother bought a high tech pellet/corn stove last year and it was pricey but he said that it will be paid for by the middle of this winter. They are carbon neutral and very efficient.

[Wednesdays]

29. That's terrific, except...

I can't do the same. I live in the suburbs...where's all the wood going to come from?

[Bruce McAuley]

31. Might I suggest old pallets?

The wife and I lived in a bus within the city limits of Seattle for a short period of time in the late 90's. We had a small wood stove inside it, totally illegal for sure but I found it easy to heat with an electric chain saw and old pallets I could scavenge around the malls. Some places behind box stores have a pile of "beaters", and if you have a rack on your car you can bring 3 of them home on a Volkswagen Fox or any other small rig. Them old pallets used to be oak or whatever, and you can easily figure how to cut between the nails both ways to get small stove size wood for "free".
Happy hunting!

Bruce

[Viva_La_Revolution]

36. I hope you checked them first!

don't burn pressure treated wood (arsinic) and
many others are contaminated or sprayed with chemicals that are toxic when burned.

[Strelnikov_]

34. Executive Summary of IEA report

http://www.iea.org/Textbase/npsum/WEO2007SUM.pdf

[olddad56]

35. Does anyone remember the other oil price problems of the past....

The government was always preaching conservation. Funny, I hear no talk from the WH about conserving fuel. No lowering of the speed limits as in the past, no emphasis by the government on building more fuel efficient cars. I wonder why that is. It almost seems like they are still encouraging us to use more fuel. I wonder why that is? It makes you feel like Cheney is still the CEO of Haliburton.

[Nevernose]

37. It's more insidious (and more pathetic) than that

The BFEE doesn't need any more money or power. I believe that, to them, far worse than losing s little money or influence would be to lose any face at all. To admit ... GASP ... that they were wrong. That they were not infallible, and that a mistake was made.

I encounter these people daily in my personal and professional life (I'm sure most of us do), and they are inevitably the ones who drive me to complete exasperation. They're the manager or cop or school principal who lie directly to your face, telling you completely ridiculous untruths because in their stunted, twisted little psyches admitting to a mistake would make them appear weak -- a fate worse than death.

Bush Incorporated are only still playing "the game" because they don't, deep in their tiny little hearts, know that there's more to life than their game. Their paradigms have blinders; they know only one world view.

[tabasco]

38. Good point. The welfare of the Nation is not the goal of the Bush cabal.

Massive profits for oil companies are more important to these traitors.

[sarcasmo]

51. The End, this is the End my friend.

Time to buy a scooter.