<CERA Page (or is it year) 2 projects The Oil Drum Hybrid Taxis Are Coming>

21 comments on Open thread for a little bit

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Sunlight on September 9, 2005 - 1:30pm Permalink | Subthread | Comments top
Ridge, obviously there are some people who know more than most but I never buy this idea that there are people "who know everything and are manipulating things to the disadvantage of the rest of us." I mean, the people at the various national oil companies of OPEC countries, Saudi Aramco, for example, know more about their own reserves than anyone else. And to the extent that their major customers (major oil companies) talk to them, they may know more about that than most others. THe majors have their knowledge. People like Boone Pickens and Simmons have their special knowledge. And so on.

But to assume that "They" know everything and run everything is a way of giving up our own power. Not healthy.

Having said that, on this site we watch the behavior of key industry players all the time. Stuart noted in an earlier thread that the industry cares alot about future LNG capacity -- enough to get things set up in the new energy bill so that the federal governement will have sole jurisdiction over siting of new LNG terminals, so states and local governments will not be able to block new terminals okayed by FERC. In response I said that  no similar language was inserted in the bill for refineries -- which says the energy companies didn't want or need them. And on the crude front, many people have said that the Saudis have not sold more oil to dampen the current supply/demand crunch, so that is something new.

It's just a matter of keeping up, and by getting together we do a better job than most of us could do alone. I don't think there are simple shortcuts, and when you talk about personal behavior (other than legal insider stock tranactions reported to the SEC) most of us just aren't privy to that.

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Rick on September 9, 2005 - 2:23pm Permalink | Subthread | Parent | Comments top
Ridge--
I agree entirely with Sunlight's comments. It's always possible to construct a complex conspiracy theory, but I can't believe it's working that way.

I'd beware of what is said, and not said. There are certainly many people who know more than they are saying. Bush and Cheney understand depletion, but will never mention it. Lord Browne of BP made news when he told the House of Commons that oil would stay above $40 for the forseeable future. It hardly seemed like news, with oil at about $55 at the time. But he was the first spokesman for a major oil company to utter a price above $30. Politicians and oil companies have a lot to lose if they start talking about high prices and difficult times

Sunlight's point about watching actions is very important. Ken Deffeyes makes the same point. In a macro sense, we see the oil industry preparing for a smaller future: reduced funds for exploration, no new refineries being built even though capacity is strained, tankers being retired faster than they are being replaced. This is a pretty strong signal.

At present, there are a lot of knowledgeable people, but we all need to decide who we believe. Do you agree with Simmons, or Yergin? We can't definitively prove that either one is right, or wrong--yet. So listen to the signals, and assemble a world view that makes sense to you. And TOD is a huge resource of worldwide brainpower applied to one context--it's distributed parallel processing at its best.

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step back on September 9, 2005 - 5:16pm Permalink | Subthread | Parent | Comments top
Many theories about conspiracy are like those about "intelligent design". Just because a pattern emerges from the chaos does not mean that the pattern was "designed" into being by some intelligent master. It may simply mean that current conditions favor the proliferation of that dominant pattern over randomly generated, but less successful other patterns.
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Dave Cohen on September 9, 2005 - 6:03pm Permalink | Subthread | Parent | Comments top
Sunlight is correct. Keep track of the posts HO is doing here on TOD about CERA (2005, 2006, 2007....). Look at Rembrandt's document here (pdf file).

Frankly, I don't think anyone has better data than we can come up with here at TOD and maybe, in the case of HO's (and others' here) analysis about decline rates, TOD information is cutting edge.

One hard lesson that comes out of looking at Peak Oil is that there is no authority out there that knows more than we do. Just because CERA charges exorbitant amounts of money for their reports doesn't mean they know something that we don't. Again, look at the CERA 2006 thread here, which is based on a CERA audio/visual presentation we had access to last weekend.

There's no "big daddy" to tell us we're all wrong. We're all adults here and we're on our own, looking at the future of Western Civilization.
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Rick on September 10, 2005 - 10:08pm Permalink | Subthread | Parent | Comments top
"... we're on our own, looking at the future of Western Civilization."

Sadly, I agree. And to be explicit about being on our own: I am aware of no political or economic leadership, anywhere in the world, that is seriously addressing the issue of peak oil. Compare it to the issue of climate change. Kyoto may be too little, and too late, but world action on climate change is at least a decade ahead of action on peak oil.

It would be an improvement if the world were just doing nothing about peak oil. Instead, we're putting the pedal to the metal--ratcheting up production, and consumption, and worsening the problem every day. Based on what I've seen to date, there is no political leader anywhere that I would choose to follow on this issue.

We have no leaders, and we are not in good hands.

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RayJ on September 9, 2005 - 8:30pm Permalink | Subthread | Parent | Comments top
Sunlight,
In general, I agree with what you say in that no single or even a group of people knows everything.  However, we should not forget that there is always room for strategic behavior by the major players in the industry.  

Let's assume that PO is imminent.  What are the options that major players will have?

  1. Major oil company - as implied by a poster in Econbrowser, oil companies may decide that it in their best interest to save their oil for a later time. They could do this by delaying investments to develop reserves or even shutting wells and reporting higher depletion.
  2. Iran - Slow development of reserves, reduce production and start developing nuclear power.  You have to be careful not to invite "regime change" though.
  3. China - build an SPR, lock up as much physical supply as you can by developing projects overseas, try to obtain reserves and technology by buying foreign oil companies.
  4. US - Expand the SPR.  Come up with plans to develop fields in environmentally sensitive areas but allow the environmentalists to slow the process down.  If you believe that PO will result in resource wars, ensure that the military is the dominant global force.  Maintain or even increase consumption of foreign oil to grow your economy as much as possible to increase your dominance.  
  5. Russia - take physical control of national oil reserves, etc, etc.

Note that the above strategic moves do not require any single party to know everything.  Each player is going to try to maximize their benefits by taking individual actions as well as forming coalitions to improve their outcomes.  This game theoretic approach was used extensively during the cold war and I don't see any reason why it will not be used now.
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21 comments on Open thread for a little bit

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