<Angola Joins OPECThe Oil DrumThe Death of Turkmenbashi>

220 comments on A Conversation on Energy Issues

Comments can no longer be added to this story.

oilmanbob on December 21, 2006 - 2:02pm Permalink | Subthread | Comments top
  Good post, Robert, Thanks!

   I've been noticing all my adult life that the oil companies have terrible public relations, and I'm not sure why. Perhaps its anger that we have made the rest of the modern world dependent, maybe its the ham-handed arrogance of many of our public figure, maybe just sheer envy of wealth. It seems too easy to the rest of humanity. API (American Petroleum Institute) has started raising money for a big public relations campaign, but they are the lobbyists for big oil, not the independents.
  Your friend Jerry Unruh's suggestion, that oil companies take a proactive stance to fund alternatives and get new revenue nuetral taxes to support alternatives, is excellent. I heard an opinion today from my coffee drinking bunc at the local cafe, that they would support a dollar a gallon tax just to even out gasoline prices,the uncertainty is making it hard to plan.
  Unfortunately Nancy Pelosi is firmly in favor of a "windfall profits" tax. The last time this was tried it discouraged redevelopment of old oil fields, and penalised royalty owners and independent operators more than the majors, because the majors shifted their production overseas. Plus, it moved the independents and royalty owners to the Republican party, where many remain. It was a domestic disaster, and if we repeat it we're crazy
   I would support limiting depletion allowance to deplete actual cash costs, or covering new investment in domestic production or alternative energy production only. I'd support a big import tax.

0
Comments can no longer be added to this story.
InfinitePossibilities on December 21, 2006 - 2:26pm Permalink | Subthread | Parent | Comments top
What is wrong with discouraging re-development of oil fields? We do not need more oil, we need to learn to live without it. Actually, the most natural way of doing this is a true carbon tax slapped on producers. They can hand it down to consumers any which way they like and the market will reduce demand accordingly. And if the carbon tax is used to encourage conservation efforts on the residential level, consumers can get their money back by upgrading their homes. Once they are upgraded, they will use much less energy and thus pay less carbon tax. It is a win-win-win for everyone which also creates plenty of economic activity for the contractors and thus raises federal and state tax revenue...
0
Comments can no longer be added to this story.
GreyZone on December 21, 2006 - 3:07pm Permalink | Subthread | Parent | Comments top
Your statement makes sense only if we have sufficient oil supplies and time to smoothly transition from oil to alternatives. If we are at or very close to peak, we may not have that time and discouraging remaining oil production at that point exacerbates the problem greatly. Once peak hits, we are in a race to the bottom of the oil supply - can we transition society over to alternatives before the drop in supplies causes disruptions so large that it destroys society itself? As Stuart's VMT discussions demonstrate, the rate at which we can expect normal turnover runs less than the most reasonable estimates of overall decline rates thus the decline rate exceeds conversion rate, stranding more and more of society in an unsustainable situation. Discouraging remaining oil production simply makes that bad situation even worse, which increases the probability of social unrest - exactly what you don't need when trying to make a crash conversion of core energy sources for an entire civilization.
0
Comments can no longer be added to this story.
InfinitePossibilities on December 21, 2006 - 4:13pm Permalink | Subthread | Parent | Comments top
My comment makes sense if you love the planet the way it is and want to preserve it in a halfway acceptable state for your children. But that is another discussion.

I do not believe in therapy for drug addicts that tries to make more drugs available for cheap until they decide to sober up. Neither does anyone who works with drug addicts in the real world.

"Once peak hits, we are in a race to the bottom of the oil supply..."

Or are we? I do not see a problem to reduce our oil dependence in a world where one can buy 13mpg cars as well as 50+mpg cars. The consumer choses his model and then has to live with the consequences of expensive gas. They can pay anywhere from one times the bill to four times the bill. Once PO hits more people will chose more wisely.

"As Stuart's VMT discussions demonstrate, the rate at which we can expect normal turnover runs less than the most reasonable estimates of overall decline rates thus the decline rate exceeds conversion rate, stranding more and more of society in an unsustainable situation."

There is nothing unsustainable about sharing a ride or taking the bus. I have been doing it all my life. I live, I thrive. I just don't whine about it.

"Discouraging remaining oil production simply makes that bad situation even worse"

Discouraging exploitation now makes the situation much better ten years from now. If you have a limited amount of cake and you are afraid to be out of cake tomorrow, what would you do... eat more cake today... or leave some over for later?

GreyZone... your logic does not make sense. Please think about it again.

0
Comments can no longer be added to this story.
slaphappy on December 21, 2006 - 4:32pm Permalink | Subthread | Parent | Comments top
I like it, makes perfect sense to me. A huge carbon tax (for example) right here and now would get most of the nastiness out of the way while we still have control. The tax could be eased off a little, for instance, if the situation required it.

Soon enough we'll see the equivalent of a huge carbon tax, whether it's coming out of our hides in the form of powerful hurricanes or is going to the oil barrons makes little difference. We won't be able to tweak and loosen that if we find that it's a little too sudden to cope with.

0
Comments can no longer be added to this story.
ET on December 22, 2006 - 1:38pm Permalink | Subthread | Parent | Comments top
His logic makes perfect sense to me as well. You seem to be blissfully unaware of the tendencies of growth-dependent economies to collapse when certain growth-sustaining elements are removed. The rapid rise of oil prices, coupled with the gargantuan debt of the US, plus the increasing lack of any productive capacity add up to a volatile mix that IMO is likely to result in an economic collapse.

If we do have an economic collapse, you can crunch all the optimistic numbers you want and it won't decrease the millions of homeless on the streets or bankrupted people. Starting an economy over was difficult after 1929. With a large energy deficit it would likely be an order of magnitude more difficult.

0
Comments can no longer be added to this story.
Aniya on December 21, 2006 - 9:13pm Permalink | Subthread | Parent | Comments top
Thanks GZ,

"Once peak hits, we are in a race to the bottom of the oil supply - can we transition society over to alternatives before the drop in supplies causes disruptions so large that it destroys society itself?"

 Q: What do you see as the ideal "alternatives", and how would you incorporate the twin problems of 1) "Jeavons" - or, what I call "need to conserve lest increased consumption overwhelm 'technofix'" and 2) population, (same reason) - ?...into your "alternatives"?

0
Comments can no longer be added to this story.
oilmanbob on December 21, 2006 - 3:12pm Permalink | Subthread | Parent | Comments top
   The main thing wrong with dicouraging the redevelopment of old oil fields is I make my living from them. But aside from my purely personal considerations, we are importing nearly 2/3rds of the oil we use in the US. About 1/2 of your oil cost goes to produce the oil, about 1/2 to refine and distribute it. So my back of the napkin arithmatic shows that1/6th of the cash you spend on gasoline leaves the United States, and not into the hands of your co-countrymen. And the really big oil exporters are not our friends.
  Admittedly some of them, like the Saud family, buy lots of US bonds with the money. That means that your taxes are going to pay interest to slave owning aristocrats who fund terrorists, and this has been happening for years. The only good historical comparison is the nobility in pre-revolutionary France who collected taxes but paid none.
  And, pray tell , do you suggest we get out of this situation. We're like junkies slobbering for a fix. An oil cut-off would rapidly throw the United States into a complete economic convulsion, just as too rapid heroin withdrawel killed Jerry Garcia.
  So think about it. Domestic production is like methadone for the United States. It will ease the symptons while we taper off. Remember what George Bush said, as he left the room with a sulpherous smell "We are addicted to oil". .
0
Comments can no longer be added to this story.
InfinitePossibilities on December 21, 2006 - 4:15pm Permalink | Subthread | Parent | Comments top
Oilmabob... what are you going to make your living with ten years from now when all oil in the US will have been exploited? Wouldn't it be better for you to leave some over for your old days?

Just asking...

0
Comments can no longer be added to this story.
oilmanbob on December 21, 2006 - 4:45pm Permalink | Subthread | Parent | Comments top
  There is at least 80% of the original oil in place. Early recovery techniques were wasteful. The rate of production is the operative parameter, and I suspect it will be more like 50 years before we stop fiddling around with oil domesticially. And since I'm 55 and diabetic, I expect to be amoung the dead.
  And, if you believe Freddie Hutter, it will be 190 years before the oil runs out. Wonder what kind of mushrooms he's eating in the woods of the Yukon? He probably prays for global warming!
  At any rate, it won't be in anyone's lifetime, although in another 20 or 30 years it won't be used as transportation in anything but antiques and toys. We're definitely ending the cheap oil era in less than 10 years, probably 2 years if I'm reading the signs correctly.
  Don't get me wrong, I'm not a Cornucopian. But we're not going to produce enough domestic oil cheap enough to do more than ease the transition, but I see that as worth doing.
0
Comments can no longer be added to this story.
InfinitePossibilities on December 21, 2006 - 4:58pm Permalink | Subthread | Parent | Comments top
"There is at least 80% of the original oil in place. "

And we all know you can't get to it economically. So what is the deal? Are you hoping to drive mine shafts all the way down to the remaining oil?

"And since I'm 55 and diabetic, I expect to be amoung the dead."

I guess you want me to take your agument as that of a desperate person who's got nothing to lose? That wouldn't make your argument any better... it simply would make you a desperate person. Sorry Bob... you got to do better than that.

"And, if you believe Freddie Hutter, it will be 190 years before the oil runs out."

Why would I believe that? Because "Freddie" is a cute name? Please...

"Don't get me wrong, I'm not a Cornucopian. But we're not going to produce enough domestic oil cheap enough to do more than ease the transition, but I see that as worth doing."

Cheap oil is exactly the source of the problem. It does not matter how long you can keep it cheap... people will not change just because you tell them that it will be extra pricy two years from now. The longer oil stays cheap, the harder the landing will be. You of all men should know that.  It would be far better for the US to limit production at home right now, drive global prices up and force everyone to conserve. Then, ten years from now when the real crunch hits, we would not only need less, but we would have more left over, globally and especially domestically.

0
Comments can no longer be added to this story.
Dot on December 22, 2006 - 10:29am Permalink | Subthread | Parent | Comments top
You say, in "ten years from now when the real crunch hits".

I agree with this assessment, but it's very uncertain.

If the crunch was going to hit in two years, as alluded to by OMBob, could you imagine that the courses of action you have suggested would greatly magnify the crunch, and thus we shouldn't do them?

0
Comments can no longer be added to this story.
elwoodelmore on December 21, 2006 - 4:55pm Permalink | Subthread | Parent | Comments top
 there will still be domestic oil prouction in the us for a long   long  time beyond 10 yrs (and exploiters like oilmanbob to exploit it)    your plan for a carbon tax  has about as much chance as     well   lets just say it doesnt look real good     cold turkey on oil ........    yeah  right    
0
Comments can no longer be added to this story.
InfinitePossibilities on December 21, 2006 - 5:25pm Permalink | Subthread | Parent | Comments top
A near 100% tax on gas is already being payed by more people in Europe than there are people in the US. The US will follow. Not because it likes to but because it is the only solution.

:-)

0
Comments can no longer be added to this story.
oilmanbob on December 21, 2006 - 7:22pm Permalink | Subthread | Parent | Comments top
InfinitePossibilties, I feel like I'm arguing with a kid. Saying at 55 with a chronic health issue that I believe I won't live to 105 is just reality. Only young guys think that we are immortal.
   The USA is in huge financial trouble because of our profligate ways. Money spent drilling and producing oil wells and reentering oil wells here mostly stays here, is taxed here and provides good, well-paying, honest, productive work for Americans.They spend it in the United States, it has a multiplier effect in the economy making a real product that people need. And that should be obvious.
  As far as the economics, oil has always been a crap shoot. But many old fields were abandned with the wells making 10 or 20 bbl/day per well, just the wells weren't good enough to make a profit at low prices. This is particularly true of fields abandoned about 1932-1933 when oil fell from $100 a bbl to 10 cents a barrel.In lots of fields wells were abandoned making a 20% oil cut because of water disposal costs. In many fields the wells were overproduced and coned, and horizontal wells or infill drilling can profitably restore production. Few fields were waterflooded before 1960, and virtually none were flooded with CO2. Sure, its going to cost a lot per barrel to reenter and produce these wells, but its a hell of a lot cheaper than the $500,000 per barrel per day that Shell is spending on tar production in Canada, plus lifting costs, waste disposal costs and refining costs.
0
Comments can no longer be added to this story.
InfinitePossibilities on December 21, 2006 - 8:01pm Permalink | Subthread | Parent | Comments top
Oilmanbob, as much sympathy as I have with your personal condition, the world was not created to serve you alone. And by that mean any one of us. PO and GW, of all matters are things that concern you and me but will even more concern our children and their children.

I can not look at either problem from my own perspective. I simply can't. Maybe you can and maybe the majority of Americans can, for now, but that does not concern my consciouns.

I think we agree that America has lived beyond its limits. But that is not some diffuse entities fault but our own. We are the only ones who can fix it. And we won't fix it by drilling a few more holes into Earth's crust. The little extra oil we will get from that won't even get you through retirement, far less me and to the kids who are celebrating their first conscious Christmas it won't mean as little as another number in a history book they will probably never read. And sadly enough, even a diabatic these days has all the chances in the world to live longer than the tiny amount of time that your proposed drilling fix can buy us.

I am not talking about Shell having the solution by mining tar. That is just another road we shouldn't bother going down. The richest oil fields in the world right now are in the tanks of our cars. We could have easily stretched the world's oil twofold if we had wanted to. We missed that opportunity. We are missing the last chance to stretch what is left by a third, right now.

The consequences will not be as dire as they will be rather simple. Oil will go to $100 or $120 a barrel and the US government will start raising the gas tax to stop the country from bleeding to death. Either that or the country will bleed to death... it will be black blood but the results will be all the same.

0
Comments can no longer be added to this story.
austex on December 21, 2006 - 8:23pm Permalink | Subthread | Parent | Comments top
The current situation is the reality.  Your idealistic thoughts may sound good to you, but they sound rather silly to me since I know they will never be implemented.  

Besides doubling the price of gas by taxing the shit out of it, shutting in our currently producing oil wells therebye putting honest hardworking people out of work like oilmanbob, and shutting down the oil sands production in Canada - do you have any ideas that are realistic?

0
Comments can no longer be added to this story.
elwoodelmore on December 21, 2006 - 9:17pm Permalink | Subthread | Parent | Comments top
there is no doubt that the befuddled one spoke the truth (i sort of hate to admit it) when he stated that "america is addicted to oil"    and rather than going cold turkey as infinite suggests   maybe a 12 step program is called for     and i think the first step is admitting we have a problem     and maybe   just maybe when oil gets to $100 or maybe $ 200   people will come to the conclusion that yes we do have a problem    its not too late      americans got along perfectly well during ww2 (or so i have been told)
0
Comments can no longer be added to this story.
Aniya on December 21, 2006 - 9:40pm Permalink | Subthread | Parent | Comments top
Hi elwoodelmore,

 I like your idea of "steps". Have you given much thought to a "list" of first steps, and if so, could you share?

 Personally, my view was that "addiction" was not the best metaphor...perhaps came from the speaker's experience. One can (and people do) live without addictive substances. Although people can use what would otherwise be more-or-less nutritional substances as addictions (I suppose both "over-" and "under-" eating can be viewed this way as well), the primacy of oil is more closely tied to basic survival (food and water), on the individual level, even in the US.

 If one wants to use the "addiction" analogy, my suggestion is to take a look at the work of people like Lance Dodes, MD (author, The Heart of Addiction) and others, who put aside oft-repeated conventions and began a fresh exploration. Dodes found the first impulse (in any particular decision to act in line w. the addiction in place) was to respond to an inner feeling of helplessness or lack of control. http://www.amazon.com/Heart-Addiction-Understanding-Alcoholism-Behaviors/dp/0060198117

0
Comments can no longer be added to this story.
elwoodelmore on December 22, 2006 - 8:11am Permalink | Subthread | Parent | Comments top
hello aniya    no i dont have a 12 step program as i have never been a direct participant    but call it what we may the "addiction model" has merit  some  call it inelastic demand   but addiction seems to explain why we (americans) are in the fix we are  
   consider for example the junkie who makes damaging choices to feed his or her particular "habit"   and maybe it is not a "physical addiction" at all but only  "psychological addiction"  in any case it think the metaphor has  merit   and maybe the "solution" contains a similar metaphor  
   we may not be able to achieve a 100% cure    and different strokes for different folks   maybe cold turkey will work for some    maybe a gradual weaning will work for some  and maybe an alternative addiction will work .............  on and on    thanks for the link
0
Comments can no longer be added to this story.
Dot on December 22, 2006 - 10:39am Permalink | Subthread | Parent | Comments top
The addiction analogy has some merit, but it is limited.

The difference between addiction and overshoot is that when remove an addicted substance, you have withdrawal symptoms, but when overshoot removes an available resource, you have death.

0
Comments can no longer be added to this story.
elwoodelmore on December 22, 2006 - 11:50am Permalink | Subthread | Parent | Comments top
huh ?
0
Comments can no longer be added to this story.
Aniya on December 21, 2006 - 9:23pm Permalink | Subthread | Parent | Comments top
HI austex,

 I appreciate your questions.  In all sincerity, what are your ideas?

0
Comments can no longer be added to this story.
tch on December 21, 2006 - 3:10pm Permalink | Subthread | Parent | Comments top
What makes you think that the oil companies care about their public image?  Oil is more like heroin than a plasma TV.  The individuals working in the oil production process focus on reducing costs and managing output rather than flashy PR because the latter just doesn't pay off.  There's nothing innately distinctive about the oil industry's goals; consumer electronics companies work for the same ends, only they need to smile and shake your hand while they do it.  If you have a problem with the profit motivator as the sole reason to exist, you have a problem with the corporate concept (it's their legal responsibility to maximize profit) and, dare I say, capitalism itself.
0
Comments can no longer be added to this story.
memmel on December 21, 2006 - 3:41pm Permalink | Subthread | Parent | Comments top

The Oil companies are in a similar position to the Railroad barons of old.

Also in general the ice/icebox salesman did not become the refrigerator salesman.

I'd much rather see properly funded small companies grow to be our next energy provides than to see big oil control the area.

Big Oil is that last place I'd look for real alternative energy solutions.

Instead of charging oil companies I think a better approach is to first eliminate all subsidies for the current oil infrastructure and to funnel all tax monies from the oil companies into alternative energy and also of course provide plenty of incentives. Oil companies should be barred from having a controlling interest in alternative energy companies that receive subsidies. So it they want to play the get no help.

And we should remove support for federal highway funding asap. This is probably the biggest and simplest change we need to make to move away from automobiles if we quit subsidizing road construction we can and will convert from automobiles.

0
Comments can no longer be added to this story.
Aniya on December 21, 2006 - 9:28pm Permalink | Subthread | Parent | Comments top
Hi memmel,

 I follow your thinking with interest.

"Instead of charging oil companies I think a better approach is to first eliminate all subsidies for the current oil infrastructure and to funnel all tax monies from the oil companies into alternative energy and also of course provide plenty of incentives. Oil companies should be barred from having a controlling interest in alternative energy companies that receive subsidies. So it they want to play the get no help."

 I'm curious:

  1. Robert, is there any chance you could share your response to this?
  2. memmel, could you possibly specify a little more and fill this out?
0
Comments can no longer be added to this story.
Robert Rapier on December 21, 2006 - 11:21pm Permalink | Subthread | Parent | Comments top
Robert, is there any chance you could share your response to this?

Prop 87 tried something like this: Taking from the oil companies to give to alternative energy. There are a couple of problems with that. First, no doubt it would crimp supplies. Now, I don't think that's a bad thing, but it scares people because they don't know how high prices might rise. The other thing is: Which alternatives get the subsidies?

I would rather see a gas tax and the alternatives compete in the market with higher priced gasoline.

The thing is, though, that people who want to exclude oil companies from the alternative energy business probably can't comprehend the difference in scale between oil and alternative energy. If you really want alternatives to scale up and compete, you need oil companies in there helping make that happen. They have the money and they have the infrastructure.

To put the matter in perspective, the entire ethanol production in the U.S. is about the same as the output from one decent-sized oil refinery.

0
Comments can no longer be added to this story.
Aniya on December 21, 2006 - 9:04pm Permalink | Subthread | Parent | Comments top
Hi OilmanBob,

 Thanks.
 "...It seems too easy to the rest of humanity. API (American Petroleum Institute) has started raising money for a big public relations campaign, but they are the lobbyists for big oil, not the independents."

  In a sense, it was easy - that's the one-time FF boost from Nature, we might say. Who understood the ramifications?  Perhaps most people have never wondered about the causes of economic growth - let alone tied it to energy; or the fact, as Nate has said, that humans are the only species studied apart from their resource base.  At this point, Richard Rainwater's (Kjell Aleklett's, and others) conclusion seems the only ethical stance: Whose "job" is to inform and act? Those who know.  

Hence, I question how a PR campaign (toward what end?) is ethical at this point. So many things about the Chevron ads, for example, (http://www.chevron.com/about/advertising/)seem
disingenuous. And this becomes - in context - further tragic waste of precious resource.  

From the first ad "Why should you care?"  A: People care about what they know and understand. Why do you cast doubt on my (generic) ability to care - (as though "caring" is the issue?) - when you are not being fully forthcoming with your information?  

Having said that, I echo your sentiment of "pro-active" - something from people who understand would be a "different way of thinking".  

0
Comments can no longer be added to this story.