Paul Kedrosky's Infectious Greed
Finance & The Money Culture
Good video from recent Milken Conference of Steve Forbes and Boone Pickens debating peak oil.
Thanks Paul, is there a podcast of this?
Does someone want to post a summary of this? I’m interested, but don’t have 1hr10min to watch.
Pickens: Supply is constrained and shrinking. Major fields are in decline. New supply is uneconomical.
Forbes: Government is bad. Technology is good. Markets rule!
It’s better than that, but I am tempted to turn down the sound every time Forbes talks.
Are they actually “debating” or addressing/refuting the other’s position, or are they just saying unrelated yet true statements (i.e., it’s tough to argue against “oil is being used up and not being re-created”, and it’s tough to argue against “tech is good and markets are good”). Sounds like a waste of the audience’s time if you’re just gonna soapbox instead of trying to take down the opponent. I’ll help out ol’ Stevie: yes Boone, oil is running out, but we will have solved the energy crisis LONG before oil peaks, which will thereby vastly diminish demand, followed by inevitable price declines. And as for your OSU Cowboys, Boone, with their proposed plan to play T.T. in the Cotton Bowl (basically a j.v. version of TX-OU) I have one thing to say: Hook ‘Em!
Kinda. It is better than most of its kind, but both miss the big picture. Forbes is preoccupied with blaming goverment, and Pickens is too down in the details to talk much about alternatives.
Yes, T. Boone Pickens knows his stuff and has the facts down, the world is consuming more oil than it is producing—Peak Oil is at hand and unfolding as T. Boone explains, and Steve Forbes is absolutely right that we have the opportunity in this country to take advantage of what we know in the market place—T. Boone apparently made over $1 billion trading energy futures last year–what most investors don’t know is anyone can trade energy futures, and there are now mini-contracts available so the margins are very very low (around $1,800 for mini crude) so smaller investors can take advantage of the Peak Oil scenario—-for those wary of futures/commodities -you can practice and learn how as long as you like for free at our website(sorry for the shameless self-promotion, please forgive me http://www.ptrades.com)—but we feel very strongly about the potential of these markets and the leverqage that is unique to futures provides–The PROFITS can be EXTREME-We have a real supply and demand situation unfolding with Crude Oil right now and feel more people can take advantage of it —-Timing in Investments is Everything.
-Crude Oil is being rapidly depleted Worldwide.
-Gas and Oil Supplies are being consumed faster than they are being replenished
-China’s exploding economy has only scratched the surface of their necessary energy consumption
-the mideast is a tinderbox which may get worse, fast.
-Trade it Now—it’s easy to learn, practice and do—-mini contracts make it accessible to everyone anyway…pk
Forbes position is academic: Markets and human ingenuity will always solve the problem. It’s a beautiful concept, but ignores the two 800 pound gorillas.
Gorilla #1) Exploration does not support the optimism. Despite multiple small, unexploited finds — the reality is we get most of our oil from mega fields like Cantrell, Ghawar, Prudhoe, etc. We haven’t found any of these in decades — and none are light sweet crude.
Gorilla #2) Worldwide (non-American) consumption is on the rise. We consume the lion’s share of world oil. The Chinese are buying cars at a faster rate than we ever purchased them in the U.S. Most oil is nationalized (as Pickens says) — getting U.S. rights for it will only be accomplished at a massive premium (foreign-government mark up, or the military-premium).
We’re done. Cheap oil is 20th century. Buy the hell out of Suncor.
Can that moderator slump any lower in his chair?
Forbes makes three common mistakes:
1) Refuses to admit that fossil fuels are truly finite; constantly alluding to new “potential” discoveries.
2) Assumes that money is a “resource” unto itself, which if unleashed correctly can accomplish anything. This is just another way of ignoring physical limits.
3) Confuses chronic denial with optimism. Optimism alone can’t fix things that are truly broken.
Both Forbes and Pickens show a general lack of regard for nature and the aesthetic problems of oil extraction at any cost.
Pickens clearly has more expertise on the physical aspects of oil reserves. Forbes is too much of a bean-counter/cornucopian.
Paul Kedrosky‘s Infectious Greed
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