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253 comments on DrumBeat: June 20, 2007

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Rob-Organic-Chemist on June 20, 2007 - 9:50am Permalink | Subthread | Parent | Comments top

It's kind of ironic. I thought they priced fixed at around $20.00 a barrel for nearly twenty years. :)

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CrystalRadio on June 20, 2007 - 10:05am Permalink | Subthread | Parent | Comments top

So sue them!:>)

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River on June 20, 2007 - 11:47am Permalink | Subthread | Parent | Comments top

Big oil has been in bed with OPEC since Moby Dick was a sardine. We can count on the current big oil administration to stop any suits against OPEC. Besides, its ok for governments to join cartels, just not individuals...unless you are seeking to be charged with the felony of 'running a continuing criminal enterprise.'...the RICO act.

According to Greg Palast's book, Armed Madhouse, there were two factions with designs on Iraqi oil: The neo cons wanted to sell off the oil to many producers in order to flood the market and bust OPEC, big oil stepped in and stopped the neo cons and demanded that Iraqi oil be placed under the Iraqi Oil Ministry because 'it is the only way an OPEC country can insure adherence to OPEC quotas.' Neo cons are dropping like flies around DC, big oil is getting its way, as usual. We can choose to believe, or not, the assertions by Palast but the events on the ground so far seem to back what he put forth in his book.

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mr f on June 20, 2007 - 12:29pm Permalink | Subthread | Parent | Comments top

I hate to bicker, but Palast just doesn't know what he is talking about about. He is not a thorough journalist, and lacks integrity in his writing on this topic. To me he is a partisan political hack, he's just trying to rile up the Left--and he does a huge disservice to it with his conspiratorial thinking about Big Oil and da-big-bad neocons. He talks to Alex Jones, yet he contradictorily criticizes all the wacky PO conspiracy theorizing on the internet. If you don't like conspiracy theories Greg, then why do you mix them up with basic geology? He should have his facts straight on what peak oil is before he goes on about how "I know Lewis Lapham and since he comes from old money that started the oil industry and he's my friend I know everything there is to know about that stuff that flies me from NY to London and powers me around as I drive to and fro diligently investigating but forgetting to find out the truth.... yippee!" Instead of pursuing facts he wanders off in the direction of that familiar mental delirium that most Americans, or wishful thinkers, rush to when talk begins of oil depletion.

I don't trust a concept that comes out of Mr. Palast's head when it comes to the oil industry, it is that simple.

Palast is just another incorrect liberal who whines "aghghh they're gouging us, they're gouging us!" *whimper* *cry* *whimper* ... That's what capitalism is Greg, get used to it!

Someone call a senator or a member of the house! Surely the congress can do something... *sigh*

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Joseph Palmer on June 20, 2007 - 1:03pm Permalink | Subthread | Parent | Comments top

But -- It is a conspiracy. A geological conspiracy! The rocks are against us! The rocks are against us! ^_^

I was a big fan of Palast's work in other areas, until I read his stories on peak oil. When I applied the same error offsets to his political reporting, I was terribly disappointed.

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mr f on June 20, 2007 - 1:47pm Permalink | Subthread | Parent | Comments top

Our world is a big monkey conspiracy! =]

See, these here monkeys create "entities" known as corporations. Time passes and the monkeys conspire to make money.

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River on June 20, 2007 - 2:15pm Permalink | Subthread | Parent | Comments top

I purposefully left out Palast's comments on PO because I think he is wrong about PO. I also know Palast likes to stir the pot. That said, if you follow his scenario about the battle over Iraqi oil between the neo cons and big oil, the facts on the ground, so far, fit his scenario. That is the statement that I made in my original post. Because Palast is wrong about some subjects does not necessarily mean that he is wrong about all subjects. logic 101...or, for the logically impared 'even a blind hog finds an acorn on occasion.'

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mr f on June 20, 2007 - 4:51pm Permalink | Subthread | Parent | Comments top

Perhaps you are right and Palast can find an acorn, but he couldn't find a truffle if his life depended on it!

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River on June 20, 2007 - 5:47pm Permalink | Subthread | Parent | Comments top

Please advise when your new best seller concerning PO hits the stands, I dont want to miss it.

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Gilgamesh on June 20, 2007 - 3:15pm Permalink | Subthread | Parent | Comments top

I would like to point out something I learned in economics.

Inelastic supply and inelastic demand make for very high price swings. As neither the consumer or the supplier has real control price goes all over the place.

Suppliers, once the oil is tapped, it is coming out. Standard oil knew this and used it to bankrupt many other oil companies.

Consumers, once you build up your life around oil, when it goes you are screwed.

This is what gave OPEC power, being able to control supply, and therefore prices very keenly. Hopefully now oil is more elastic than before. (even though i have seen articles saying its more inelastic.)

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WNC Observer on June 20, 2007 - 3:38pm Permalink | Subthread | Parent | Comments top

The conventional wisdom is that oil demand is highly inelastic, but I wonder to what extent that is really true. A huge amount of what we use oil for directly or indirectly really falls into what could be classified as discretionary rather than indiscretionary expenditures.

My guess is that most people SAY they cannot and will not cut back regardless of price, but if the price actually did go high enough, they would indeed cut back their consumption, albeit while complaining to high heaven.

For example, all that commuter mileage is supposedly inelastic demand. However, if prices got high enough, or rationing were imposed, people would start carpooling. They did it in WWII, they did it in the late 70s, so they would do it again -- if fuel prices were high enough to provide enough inventive to do so.

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Aniya on June 20, 2007 - 8:44pm Permalink | Subthread | Parent | Comments top

HI WNC,

Thanks for your comment, and let's hope there's some room to lower consumption (i.e., relatively painlessly).

re: "...what could be classified as discretionary rather than indiscretionary expenditures."

Q: Is it not the case, though, that we begin to see a problem when the providers of "discretionary" services/products (or, we might call these folks, "recipients of discretionary dollars") do not receive the income they "need" (ie., rely upon) for their livlihoods (i.e., necessities) - ? (question mark?)

That said, I like your suggestion of things people might do when the prices get high enough.

Q: Will this be enough to offset the loss?

Q: What about as the supply declines and the decline continues on...?

Q: Do you see any way to bring about these "elastic" changes now, in an effort to use the energy we have for preparing for future/alternative sources, or etc.?

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WNC Observer on June 20, 2007 - 11:02pm Permalink | Subthread | Parent | Comments top

Q: Is it not the case, though, that we begin to see a problem when the providers of "discretionary" services/products (or, we might call these folks, "recipients of discretionary dollars") do not receive the income they "need" (ie., rely upon) for their livlihoods (i.e., necessities) - ?

Yes, there will be a lot of jobs that will be made redundant. That is why WT says in his ELP plan "Get thee to the non-discretionary side of the economy."

Q: Will this be enough to offset the loss?

Supply and demand will adjust to each other to stay in equilibrium, albeit a constantly changing equilibrium. Shrinkage and elimination of the discretionary side of the economy will obviously be a big part of it. I suspect that our definition of discretionary and non-discretionary, luxury and essential will change with time.

Q: What about as the supply declines and the decline continues on...?

See above. While some of our past experiences (Great Depression, WWII, 70s Energy Crisis) offer some useful lessons and templates, this time around things will be different. In the Great Depression, there was a 3 1/2 year economic collapse, and then the slow recovery; WWII lasted a few years and then was over; The energy crisis lasted a few years, and then the spigots were opened and oil prices plunged. This time, energy price increases will just keep going up and up and up for decade after decade, without relief. There are not many precedents for such a long term, unrelenting crisis.

Q: Do you see any way to bring about these "elastic" changes now, in an effort to use the energy we have for preparing for future/alternative sources, or etc.?

Individuals can always make their own lifestyle choices. Anything society wide is going to have to take a massive government intervention. I'm not so pessimistic as to think that nothing will be done, but I am realistic enough to recognize that what is done will mostly be too little, too late, and sometimes not even the right thing.

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253 comments on DrumBeat: June 20, 2007

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