The Oil Drum | DrumBeat: November 18, 2007

212 comments on DrumBeat: November 18, 2007

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westexas on November 18, 2007 - 10:26am

This is really rich. One of the key members of the oil leg of the "Iron Triangle" congratulating another key member of the oil leg. For more info, do a Google Search on Daniel Yergin and click on Daniel Yergin Day.

http://www.dallasnews.com/sharedcontent/dws/news/nationworld/stories/111...

$100 Oil has OPEC Gushing

The summit opened in a huge ornate chamber lit with 11 spectacular chandeliers. The leaders gathered at a horseshoe-shaped table at least 35 yards in diameter. Mr. Chávez, who hosted OPEC's 2000 summit in Caracas, handed the chair to King Abdullah with a boast that oil was $10 when the leaders met in Venezuela but almost $100 today.

The Saudi monarch honored three researchers and three journalists for helping the world gain a better understanding of petroleum, including Daniel Yergin, author of a history of oil called The Prize.

Dr. Yergin, who chairs Cambridge Energy Research Associates of Cambridge, Mass., accepted the award but afterward offered a gentle riposte to the king's comment on the history of oil prices.

"That [$100] was an actual price for a very brief period in the 1980s," Dr. Yergin said.

Cambridge Energy recently published an analysis saying oil's previous peak was in April 1980, when it hit $39.50 a barrel. After factoring out inflation and the decline in the value of the dollar, that price is equivalent to $99.04 today, Dr. Yergin said.

Some key quotes from "Daniel Yergin Day"

CERA:

"Rather than a 'peak,' we should expect an 'undulating plateau' perhaps three or four decades from now."

Mr. Robert Esser
Senior Consultant and Director, Global Oil and Gas Resources
Cambridge Energy Research Associates
December 7, 2005

EXXONMOBIL:
"Contrary to the theory, oil production shows no signs of a peak... Oil is a finite resource, but because it is so incredibly large, a peak will not occur this year, next year, or for decades to come."

ExxonMobil Advertisement in New York Times, June 2, 2006

OPEC:
"We in Opec do not subscribe to the peak-oil theory."

Acting Secretary General of Opec, Mohammed Barkindo
July 11, 2006

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PeakTO on November 18, 2007 - 10:34am

WT, I love how he seems almost proud that oil is just a single bad day away from a TRIPLE YERGIN ($114).

I am convinced (especially lately) that even when the Yergin's of the world start acknowledging Peak Oil (end of cheap oil), they will be stunned if they fail to realize the Net Exports problem.

2007 seems to be more of a Net Exports situation in many ways.

And, of course, as you say often...The Net Exports decline is going to turn OFF the tap much faster than just depletion.

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westexas on November 18, 2007 - 10:35am

BTW, the author of this article, Jim Landers, has written a stream of cornucopian articles on oil. I don't know if that was why he was invited to Saudi Arabia, but it makes one wonder.

Regarding Danny Yergin, as I noted a couple of days ago, he was on CNBC talking about OPEC "going green." As someone (not me) predicted, the latest evolving excuse for lower oil production is going to be a concern about Global Warming.

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PeakTO on November 18, 2007 - 11:00am

With the latest UN report on climate, and other climate news intensifying, it isn't hard to see GW clouding the realization of peak.

But, maybe progress will occur with a greater motivation and less conflict than the strict realization of than the decline in availability of oil.

Here's hoping a few good decisions get made.

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super390 on November 18, 2007 - 2:13pm

The difference may be, greedy leaders will always be tempted to stave off the effects of Peak Oil by invasion, but it will be harder for leaders whose constituency cares about Global Warming to propose war as a solution.

I'm not saying it can't be done - Frank Miller wrote a graphic novel 20 years ago called "Give Me Liberty" where a militarized government sends troops to Brazil to occupy the rain forest because, apparently, when all you've got is hammers every problem looks like a nail.

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PrisonerX on November 18, 2007 - 4:37pm

Posted at Bloomberg

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKfmA4fMrsbM&refer=home

its about the OPEC meeting and what was said about the dollar and how it is overshadowing the Climate Change money they are offering etc.

I read and googled the story to try and find out what I could about the purported reason of why the meeting was broadcast to the press via a TV set.

Here is what I found

Several reports keep using the word "broadcast" and report what was "said".

One report said that ONLY the audio was broadcast.

The "mistake" lasted 40 minutes.

It was discovered after Reuters put out a report.

Then some officials and security "burst" into the room and ordered security to "pull the plug" on the 50 something inch TV.

The reason for the mistake was given as " a technician made a "patch" that was incorrect.

Was this on purpose, its very hard to say. I looked to the "cover" of why it was allowed to be heard (can't verify that it was "seen") from any report.

I see the story as possible it was a mistake. Lasting 40 minutes is a long time. It appears that the "communication" side of OPEC found out when they read it coming out over press reports LIVE.

However the "patch" story as (someone that is well familiar of how these things are patched and sent out) bears scrutiny.

To patch something means to "route" it somewhere. If the technician was patching it, where was it "supposed" to go. Was this supposed to go to a recording device. (and did the others in the room know that it was).

You would PULL patches or turn off equipment. Adding something means leaving it on and routing it somewhere. Why did the technicians not notice it was not being sent to where they thought they sent it.

Doing the AV/Video for a meeting like OPEC means security clearances and a reputation that you do things correctly, not some hotel or local guy.

I lean toward a mistake, but the cover story needs scrutiny by the press (which will not happen).

It also is not clear, but this Room and "monitor" they were viewing on appears to have been used to broadcast the "open" part, and was supposed to be turned off/unpatched from that room. Which is why a wrong patch was made doesn't really make much sense. But not knowing what else was in the system etc, hard to say.

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fleam on November 18, 2007 - 5:48pm

Stupid blunders with mics and A/V equipment like this happen ALL the time. There are numerous sayings about this, Vox Is Not Your Friend, treat all mics as live, etc.

Anyone who's listened to live feeds on TV or radio, call-ins, etc knows blunders are really common.

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Pudentilla on November 18, 2007 - 6:21pm

On the other hand, if you wanted to send Cheney (and the rest of the world) a message that you were willing to kill the dollar if that's what it took to stop a US war with Iran - this is not such a bad way to do it.

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PeakTO on November 18, 2007 - 7:31pm

I guess you have to think about that one. IF he wanted to send Cheney a message as direct as that...he could just pick up the phone.

What does the rest of the world care? Unless to warn us to bail on USD$.

Oops...too late already done that...perhaps they are the ones behind the ball?

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PrisonerX on November 19, 2007 - 2:17am

A radio/tv show etc and a top meeting of very high officials were it is supposed to be top secret, and for their ears only, is not the same in my opinion Fleam. This is a HUGE mistake if it is a mistake.

One other thing that bothered me was the "show" of bursting into the room and yelling for security to pull the plug etc.

Why didn't they go to the AV people and tell them, and make them pull the plug at their end. My answer to this and why I can understand it, is simple. They didn't wish to let the Leaders know what had happened during the discussion. At least not yet, and they needed to prepare for the press to follow. If these were Saudi technicians, oh my for them. 200 lashes for being in a car and getting raped. What will they get for this.

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Cid Yama on November 19, 2007 - 3:18am

This report describes the what was seen. Was not audio only.

The live transmission showed OPEC oil, finance and foreign ministers assembled at a round table decorated with bouquets of white flowers and surrounded by flags of the OPEC nations.

http://www.stltoday.com/stltoday/business/stories.nsf/story/7EF8B661148F...

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PrisonerX on November 19, 2007 - 2:39pm

Interesting Cyd, so when I start to see conflicting reports of what was on and not on the screen then the whole thing starts to fall apart.

One of th4 links listed here had the reporter specifically say that audio only was sent, not video.

If video was also sent then you have to ask why were the camera's left on also.

not so sure if it was an accident if the camera's were on.

This makes it a compound error and not a single error.

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River on November 18, 2007 - 11:21am

The fact that Yergin had the audicity to correct the KSA about the 'real' cost of oil today is very telling. Yergin must indeed hold himself in very high esteem. I suspect that when the KSA no longer finds Yergin useful he will squash him like a camel plop...Of course, the KSA will not dirty his own sandals.

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radlafari on November 18, 2007 - 12:17pm

BTW I just read in the German Media that Chavez once again dropped a brick by crossing himself before the eyes of Saudi King Abdallah. (He might as well have offered him pork to eat.) He's really funny, that Colonel Chavez.

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beggar on November 18, 2007 - 12:44pm

The Saudis are well aware that not everyone has the same religion.

My guess is that folks who make a big deal out of the differences in religions between various members of OPEC have an agenda other than concern for potential hurt feelings between these rather worldly -- if not world-weary -- leaders.

The real strange thing for me is that OPEC continues with an ostentatious display of wealth and energy consumption, while our planet burns and while people are oppressed to allow for more pumping and consuming of oil.

Of course that has to do with a sense of common good and concern for "The Creation" as one community of life that many folks -- in addition to OPEC leaders -- are seduced into denying every day.

As E.O. Wilson has said, we must find a way to join religion and science in order to address the key issue of our day: the sixth great extinction caused by the mortal wound our species has dealt our ecosystem.

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radlafari on November 18, 2007 - 2:53pm

The real strange thing for me is that OPEC continues with an ostentatious display of wealth and energy consumption

Yes, quite naively I've always imagined that consumerism is fundamentally opposed in most religions, if not all.

By the way, Chavez was even mentioned by
Radio Vaticana (In German).
The text says that Chavez mentioned Jesus Christ twice in company of the Saudi nomenclatura, where wahabism, the one and only Saudi state doctrine, prohibits non-islamic demonstrations of any kind.

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Alfred on November 18, 2007 - 5:42pm

... dropped a brick by crossing himself before the eyes of Saudi King Abdallah ...

Actually, it is rather sad, if true. Mohammad, the prophet, was taught to read and write by an Coptic (i.e. Egyptian Christian) priest when he was young. It is worth noting here that, unlike Jesus, he was a noble from the main tribe of the Mecca and Medina region.

In any event, the Saudi royal family has access to excellent supplies of whiskey you can be sure of that. I have been offered such luxuries during my sejourn in the Kingdom by locals but I always declined because I did not want to place myself in a compromising position. Just like in the USA they have one law for the rich and another for the poor, the Saudis have one for the Wahabis and another for everyone else.

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Dennis Brumm on November 18, 2007 - 6:26pm

Just like in the USA they have one law for the rich and another for the poor, the Saudis have one for the Wahabis and another for everyone else.

"Do as we say, not as we do." May be as true as the first law of thermodynamics.

Who's the Saudi Royal Family's Mary Cheney? mewonders.

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PrisonerX on November 19, 2007 - 2:27am

One of the reports I read mentioned the King talking to Chavez after the session.

He was reported to have told him in regard to his fiery speech against the US and everything else.

"my you did go on a bit"

and this was reported to have been said in a "joking" manner to Chavez.

where is Lawrence to help explain the Arab mind to us infidels.

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soleman on November 18, 2007 - 3:41pm

The best way to deal with the likes of Yergin and Lynch is to simply and utterly ignore them. They are both very quickly looking like the lonely fools on the hill. If it wasn't for the very short attention span and memory of the public and media they would already be fully discredited, but don't worry the interested and knowledgeable parties must be laughing when Yergin and Lynch are still referred to as "experts".

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Byron Walter on November 18, 2007 - 5:17pm

The best way to deal with the likes of Yergin and Lynch is to simply and utterly ignore them.

They are "utterly ignored" by the public at large. But so are Simmons, et. al.

In my neck of the woods (Ohio) no one thinks beyond the price at the pump (with the rare exception).

I really gotta get me some of those reusable grocery bags:)

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unrepentantcowboy on November 18, 2007 - 7:37pm

There's what you believe and then there's reality. I don't give a shit what you believe. The reality is that oil production has been on a plateau in spite of all the good news about new finds that will save the world.

I'll bet a dollar to all takers that in ten years, daily worldwide production of oil is lower than it is today.

I did inhale.

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