Paul Kedrosky's Infectious Greed
Finance & The Money Culture
Two quick bits of Matthew Simmons-related peak oil reading/viewing. First, this set of PowerPoint slides, and then the following appearance on Bloomberg Television.
Simmons has been preaching this gospel for years. When are we finally going to listen and act?
“Gospel” sums up the tone, and the content is as lame as the slides. So… religious in tone, and light on ideas and facts. I guess he follows the Bush Admin’s lead in communication.
I prefer Daniel Yergin as expert, against whom I can apply peak oil skepticism myself in my own mind. Yergin presents the proper historical context, i.e., that this is the fifth time the world has supposedly been running out of oil. You need to know that if you are remotely interested in business. After all, after the fourth time, the price of oil went to ten bucks instead of $100. Check it out: the price of oil in 1998 was? $10.
Hell, if drilling goes as planned in just one area of the US I have been doing my own dd on, the natural gas supply for the whole country will double! It is a hope, but an educated one. Unconventional” oil and gas is a new category for us to place against the assumed category of “conventional” which this guy above seems to limit himself to. As an investor, I am interested, I am very interested in “unconventional” when they relate to large numbers. Nothing is guaranteed, of course, but then it seems the predictions of our fifth oil peak cycle are not so guaranteed either.
he’s also been right for years, in saturday WSJ, T. Boone Pickens points out: the world is producing 85 million barrels of oil per day and can’t produce anymore ie peaked in addition, the world uses 85 million barrels of oil per day–with china consuming a fraction of the U.S. and just beginning their industrial revolution(not to mention India) i’d say Pickens is right on when he says “You’ll not see oil below $50 a barrel again except on short spikes” Simmons knows his stuff—also theoildrum.com has great scientific info on oil gas and energy—-also for those interested we have free oil quotes, charts and price forecasts, Patrick Kerr, OilGasFutures.Com
There are already other sources of energy, but they’re too expensive when compared to $50/bbl oil (or even $60-70). Once you consistently hit that range for oil though, the other sources will be utilized (as we’re currently seeing the ramp up of wind farm development). I for one will be happy to see oil consistently over $70, because that will allow the alternatives/renewables to be established in wide use and seal oil’s fate as an energy source of the past – OR, will that very threat be what keeps OPEC in line with supply, preventing oil from going over $70+ on a consistent basis in order to delay wind, et al, from getting established on a wide scale?
Read “Thousand Barrels a Second” by a petrophysicist turned economist (Peter Tertzakian). GREAT read and puts a LOT of this stuff in laymans terms plus the added benefit of how we came to be where we are.
Remember, in order to orient you need to points of reference (where you are or have been and where you’re headed). He accomplishes that in this book.
Hubbards Peak makes me regurgitate some words Guy Kawasaki posted on his blog the other day, “You exhibit a masterful command of the obvious.” DUH! Yeah, one day we’ll run out. Once we’re on the downslope it will be apparent sans new discoveries. Meanwhile, other potentially more economically viable/green sources are coming upslope. We’ll be fine.
Seems like a major proponent of this Peak Oil b.s. is Boone Pickens. That dude doesn’t seem like he’s one to hold the interests of his fellow man above his own enrichment, so what reason would he have for espousing this theory publicly and loudly other than to drive up the price of oil through fear? This is a man who, as he looked down the road ahead several years back and saw that a huge problem would be a shortage of fresh water, took some of his billions and did which of the following: A) invested and tried to develop ways to desalinate ocean water to stave off the problem and make money to boot, or B) tried (and is still trying) to buy up all the water rights he could, in order to control the future fresh water supply and make a KILLING as people can crops thirst. I don’t think I need to tell you the answer. Don’t believe what he says, or at the very least, ask yourself why he’d be telling YOU anything!
Paul Kedrosky‘s Infectious Greed
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