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290 comments on DrumBeat: November 19, 2007

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westexas on November 19, 2007 - 10:10am Permalink | Subthread | Comments top

Regarding today's WSJ article on oil supplies (at the bottom of yesterday's Drumbeat), following is a copy of my e-mail to the authors:

Kenneth Deffeyes predicted that world oil production (note that he used crude + condensate, not total liquids) would peak between 2004 and 2008, most likely in 2005. He observed that world crude oil production probably peaked in 2000, but he never backed off what his mathematical model showed.

The cumulative shortfall between what the world would have produced at the May, 2005 rate and what it has actually produced is over 700 mb (EIA, crude + condensate). So, the crude oil data suggest that we probably did peak in 2005.

However, the real problem is net export capacity. We are working on our final written report on the top five net oil exporters (about half of current world net oil exporters), but note that their total liquids net exports fell by -3.3%/year from 2005 to 2006, and the decline in net exports is almost certainly going to accelerate from 2006 to 2007. This is the fundamental reason for high oil prices--we are bidding against other importers for declining net oil exports.

You can final several articles that I did on the Net Exports issue by doing a Google Search for Net Oil Exports.

BTW, what puzzles me is that no one in the media ever confronts Yergin & Lynch about their erroneous predictions for lower oil prices. For years, they have both been predicting that higher crude oil production would drive oil prices down. For more info, do a Google Search for Daniel Yergin, and click on "Daniel Yergin Day."

Regards,

Jeffrey J. Brown

Link to article from yesterday's Drumbeat:

http://online.wsj.com/article/SB119543677899797558.html?mod=hpp_us_whats...

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Leanan on November 19, 2007 - 10:12am Permalink | Subthread | Parent | Comments top

Bart has some interesting comments on the WSJ story at EB.

We will probably be doing a dedicated thread/response as well.

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FTX on November 19, 2007 - 12:40pm Permalink | Subthread | Parent | Comments top

Hmm...Interesting to see that the WSJ site is linking directly to TOD from the bottom of the article. Not bad for a Page 1 story, which should send over plenty of readers.

At least that's what I thought at first glance...but the link is to November 13 DrumBeat. Remember that one?

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Leanan on November 19, 2007 - 12:45pm Permalink | Subthread | Parent | Comments top

That's weird. I guess we must be psychic, since we were discussing the article a week before it existed! ;-)

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NeverLNG on November 19, 2007 - 11:54am Permalink | Subthread | Parent | Comments top

BTW, what puzzles me is that no one in the media ever confronts Yergin & Lynch about their erroneous predictions for lower oil prices.

The most important thing to remember about Ponzi-type swindles is that they are enabled by the very government and its captive media that are supposed to be investigating these schemes and protecting the public. One of the best: Ponzi's Scheme: The True Story of a Financial Legend http://www.abebooks.com/servlet/BookDetailsPL?bi=977415454&searchurl=kn%...

This behavior didn't start with peak oil, but the consequences are likely to be a lot more serious than they were with Ponzi's postage stamp swindle.

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Leanan on November 19, 2007 - 2:58pm Permalink | Subthread | Parent | Comments top

This Is Not Your Paranoid Uncle's Peak Oil Theory

For the last couple decades, evangelists of the peak oil theory were often greeted at cocktail parties with the same patient smiles and barely suppressed eye rolls that confront the 9/11-was-an-inside-jobbers today.

But the Wall Street Journal reports that perhaps those skeptical of the idea that the world will soon (if it hasn't already) use up more than half of its oil ought to wipe those smirks off their faces. Yes, it's true, the peak oil folks have been proven wrong again and again - every time the world sails past another date they've identified for petroleum production Armageddon. But these days, oil executives are embracing a view of the world's oil future that sounds awfully similar to the peak oil theory.

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Dragonfly41 on November 19, 2007 - 3:17pm Permalink | Subthread | Parent | Comments top

Holy frickin...wow!! WSJ, CBS...how much more mainstream can this get? Even if the WSJ threw a punch at the peak oil theorists...they used the term "peak oil" in hard copy. That was a taboo up until this year and mostly in the 3rd and 4th QTR. It's sneaking into the psyche of the culture now....no turning back...unless, unless...crude production rises dramatically and price shoots down to $60 again somehow.

With a falling U$D and numerous reports on supply/production issues worldwide, I don't see how anyone could do more than keep the price in a narrow band between $80-100 and even that is working hard.

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PrisonerX on November 19, 2007 - 3:59pm Permalink | Subthread | Parent | Comments top

Well it does seem that the interview with TB Pickens during the Night football game was not an accident, or something the announcer just wanted to talk about.

That was one week ago wasn't it.

so is this "good" news or "bad" news.

good in that PO is being brought to the masses, and not a wacko theory as it was portrayed even recently by most.

but with a media and most others doing all they could to
portray it as non issue and NOW its is something that is right.

Thats probably a BAD thing perhaps for the economy etc.

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Twilight on November 19, 2007 - 4:19pm Permalink | Subthread | Parent | Comments top

It seems like something has changed. Is it just the MSM doing it's job and informing the people of a major "new" issue? Did it take so long because they are just slow and there was too much inertia?

I dunno, the MSM act as an official government mouthpiece on every other issue - it seems to me like there has been an official change in message. The question is why?

I'm happy to see the word getting out, but my level of trust is zero, and I can't help but think that someone has a plan to use this to their advantage (and by definition, not mine).

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NoLogos on November 19, 2007 - 5:50pm Permalink | Subthread | Parent | Comments top

The MSM is doing its job, but they don't work for me or you. However, as with global warming, the evidence is so in-your-face that the average 'Merkin would begin to doubt the MSM if they continued with the lies. Besides, there are alternative sources of info, like this venue-and it is easy to see which source of news is trustworthy. The 'iron triangle' doesn;t want too many more folks go off and learn things...that would make it hard to sell SUVs and McMansions.

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Twilight on November 19, 2007 - 6:00pm Permalink | Subthread | Parent | Comments top

Well I certainly have my opinion of who the MSM works for, so this is not news! If I read what you wrote correctly, the idea seems to be that the MSM would lose face if they persisted in denying PO, so that they have to let people in on it. But this does not feel right - the thing is that I do not see this as any more of a bald-faced deceit than a dozen other issues where what is reported is obviously untrue. This is a group with no shame, and this feels different - fear of being discredited does not seem like a strong enough reason for the about face.

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oregon7 on November 19, 2007 - 6:55pm Permalink | Subthread | Parent | Comments top

I read the WSJ article while waiting for a sandwich today for lunch.

It's amazing how the WSJ both reports the peak oil story yet attacks the people who have been talking about it as "out of the mainstream." The article presents all sorts of reasonable arguments about undulating plateaus and near future peak dates as if they were counter to some imaginary extremists... when those are the very arguments that people are already making. It's more about character assassination and propaganda than rational argument. But the WSJ long ago took leave of political rationality.

It's also fascinating how they portray the problem primarily as one related to the effect of security and instability on extraction. Most people look at peak oil and think... hmmm maybe we should change how we live, and consider reducing our energy consumption... wouldn't be bad for the global climate either. But the WSJ portrays the problem as something that can be fixed by more "security"... which means more tanks, more airplanes, more military industries. It is so predictable. When you are a propaganda mouthpiece for an empire the whole world looks like a colony.

They really do see the problem as "how did our oil get under their sand?"

They really do understand the problem as an opportunity... to sell killing machines. Up to a point they may have a point... but in the end we're not facing a security crisis but an oil production shortfall. The WSJ crowd figures that until it really hits this is all just another money making opportunity in the armaments business.

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Greg Hunter on November 20, 2007 - 7:23am Permalink | Subthread | Parent | Comments top

It's also fascinating how they portray the problem primarily as one related to the effect of security and instability on extraction.

Larry Kudlow was cheerleading regime change and multinational management as the solution to the problem last night on CNBC. The American way of Life is not negotiable, but the terms of surrender....! I wonder how long it will take the Saudi's to notice the pattern?

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NZSanctuary on November 20, 2007 - 2:51am Permalink | Subthread | Parent | Comments top

Theory: The MSM is embracing PO now for the same reason Global Warming has become such a large issue. Consider Gandhi's quote that is sometimes on this site... First they ignore you, then they laugh at you, then they fight you, then you win.

1. First they ignore you. (Now very difficult)
2. Then they laugh at you. (Becoming harder)
3. Then they fight you. (Bring it out in the open so doubt can be instilled)
4. Then you win. (Draw out stage 3 as long as possible to avoid this)

"You can never solve a problem on the level on which it was created."
Albert Einstein

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SacredCowTipper on November 20, 2007 - 3:45am Permalink | Subthread | Parent | Comments top

I think this situation is a little different. If the things we read here are right there is no #4 - everyone loses.

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NZSanctuary on November 20, 2007 - 4:38pm Permalink | Subthread | Parent | Comments top

Well, yes.

"You can never solve a problem on the level on which it was created."
Albert Einstein

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oilmanbob on November 19, 2007 - 7:00pm Permalink | Subthread | Parent | Comments top

I've got 4 nephews and one niece and my son all rolling their eyes at the mention of peak oil . No wonder, with CBS, MSNBC and Dow Jones all talking about the oil supply I'm hopelessly unhip. Bob Ebersole

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PrisonerX on November 19, 2007 - 11:41pm Permalink | Subthread | Parent | Comments top

Not that its NBC ABC, etc, but PO had another voice last night. Matt was on Coast to Coast AM, as a replay from his appearance last week wasn't it. I don't think I have ever seen that happen before (such a quick replay of a show). I don't know if someone dropped off the show or if it was scheduled that way. That show has a large audience. Though I have noticed lately imo the scheduling of the guests has been erratic and gaps in the upcoming guests are becoming common. That they picked a recent show and one on PO perhaps is another signal.

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