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46 comments on What are Chevron and Shell trying to tell us

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ronbeas on November 7, 2005 - 12:51pm Permalink | Subthread | Comments top
The "senior members of the oil fraternity" know damn good and well that peak oil is for real, their exploration people have been telling them so for years.  The exploration department of ExxonMobile has had seminars on it.  It must be something in the mindset of oil people to deny reality until the very end.  All you have to do is look at Dick Cheney.
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louGrinzo on November 7, 2005 - 2:06pm Permalink | Subthread | Parent | Comments top
I couldn't agree more.  I'm constantly amazed by how many people ask, with no apparent irony whatsoever, whether oil companies (as well as other big corporations) or national leaders/politicians know about PO.  

How the heck could they NOT know???  Yes, I'm sure there are a few clueless twits in high places who assume that current oil and NG prices are just a blip, and that things will soon be back to business as usual for the next century or so.  But the overwhelming majority of these people have to be aware of our collective energy situation, whether they're willing to acknowledge it publicly or not.

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Dave Cohen on November 7, 2005 - 2:45pm Permalink | Subthread | Parent | Comments top
That would be "clueless twits" like Michael Lynch, Daniel Yergin (CERA), Lee R. Raymond (ExxonMobil), Steven Levitt (Freakonomics), Alan Greenspan, Claude Mandil (IEA), Ali Al-Naimi (Saudi Oil Minister), Peter Huber, every member of Congress except Roscoe Bartlett, the USGS, the EIA, Samuel Bodman (US Energy Secretary), etc.

So, I think our work is cut out for us.
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MikeCotton on November 7, 2005 - 2:58pm Permalink | Subthread | Parent | Comments top
I'm pretty sure Lee Raymond knows exactly what's happening.  He knows Exxon is good at oil, and pretty much not good at anything else.  So he's going to let other people spend the R&D dollars and make the mistakes, and when he sees a renewable solution that meets his ROI requirements, he'll be sitting on the world's largest stack of cash.  

He's just keeping his powder dry.

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TJ on November 7, 2005 - 4:28pm Permalink | Subthread | Parent | Comments top
He's going to wait a long time.  I thought there is no renewable that has the ROI of just sticking a pipe into the ground.  After peak oil you actually going to have to spend money to make money.
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step back on November 7, 2005 - 5:47pm Permalink | Subthread | Parent | Comments top
"clueless twits" like Michael Lynch, Daniel Yergin (CERA), ...

I do not think it is fair to engage in name calling against all these people.

Some of them may have good intentions in their hearts.

The problem may be that they may lack proper "education" in in areas of science and how the world actually works.

The problem may be that some of them have been indoctrinated into the cult beliefs of the "economists" --that "supply" is a given and that people will "trade" in civilized manner rather than at the point of a gun.

If you think back to your higher education days, you may remember that not everyone enrolled in the "Rocket Scientist" program.

Maybe that Intro to Physics course convinced them they were going to pursue other interests or maybe the decision was made when they hit trigonometry in high school. I'm not making fun here. Hey, not everyone is a John Steinbeck either. We each have a limited set of talents.

Peak Oil is a fairly complicated subject to understand in full. It brings into play all sorts of tehnical and nontechnical issues. So here at TOD we some of the folks arguing over whether deep earth esterfication occurs in the presence of metal oxides (abioitc oil) and some folks arguing politics and some delving into the surreal world of economics.

It is kind of like rocket science.
You shouldn't t curse at folks  like Yergin, Greenspan and all just for not fully appreciating every aspect.

We are all here to learn.

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Dave Cohen on November 7, 2005 - 6:35pm Permalink | Subthread | Parent | Comments top
"We are all here to learn"--Yes, we are all here at TOD to learn ;)

"clueless twits" -- I was quoting Lou. I myself would never call anyone that. I prefer terms like "myopic", which means "people who have their head up their ass".
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louGrinzo on November 7, 2005 - 6:41pm Permalink | Subthread | Parent | Comments top
Sorry for the "clueless twits" comment, everyone.  I was speaking sarcastically, probably more so than I should have.  It's one of the "cult beliefs" we economists hold dear, you know... <g>
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mikeB on November 8, 2005 - 7:15am Permalink | Subthread | Parent | Comments top
Sorry, I don't share your charity toward these folks and their intentions.

I'm a mere English professor, yet I can clearly grasp all the details of peak oil and economic theory without a good basis in math.

All the men cited above are far more educated and experienced than I am.

I'm tempted to call them cynical monsters, but I won't.

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LevinK on November 8, 2005 - 1:17pm Permalink | Subthread | Parent | Comments top
Oh, please don't, that might heart someone's feelings.

My temptation is to call these guys the inevitable (self)delusional result of contemporary neocolonialism. The same voodoo economics practiced over the third world now being projected upon us so that we stay in the Matrix... obviously we are supposed to be the next third world. Ironical isn't it?

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Halfin on November 7, 2005 - 8:09pm Permalink | Subthread | Parent | Comments top
Lou -

I couldn't agree more. I'm constantly amazed by how many people ask, with no apparent irony whatsoever, whether oil companies (as well as other big corporations) or national leaders/politicians know about PO.

How the heck could they NOT know???

How can you reconcile this supposed insider knowledge with the fact that oil futures prices remain low? Wouldn't you expect insiders to want to make enormous profits between now and 2010 by using their inside knowledge to load up on oil futures?

As an economist you are aware that one of the benefits of futures markets is that they take private information and make it public. There are any number of ways for these insiders to profit from their knowledge, but these actions will collectively drive up prices and thereby expose the reality of future shortages for everyone to see.

I don't see how an economically literate person can believe that there is widespread insider knowledge of a hard Peak Oil scenario in the next five years, given the price information presently available from futures markets. There is just no way we could have such low prices, if that many people knew this supposed truth.

How do you explain it?

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ericy on November 7, 2005 - 10:27pm Permalink | Subthread | Parent | Comments top
Yes, in theory you could go and start buying futures in the hopes of making a fortune. The problem is that if there is a major economic downturn, then demand could fall along with prices, and you could lose your shirt.
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LevinK on November 8, 2005 - 1:16am Permalink | Subthread | Parent | Comments top
Everyone knows the geological truth but noone knows how the market will react. Oil is not an ordinary commodity and everyone knows that.
I suggest that there is a great chance of market failure so huge that all futures are rendered void and some kind of rationing is imposed. There are many scenarious including severe recession and a price drop afterwards.
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mikeB on November 8, 2005 - 7:18am Permalink | Subthread | Parent | Comments top
You're assuming "markets" will respond according to "rational," economic "theory" and not according to human depravity, selfishness and fear.
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Donal on November 8, 2005 - 11:42am Permalink | Subthread | Parent | Comments top
I suspect that many insiders "know about PO" and understand that oil depletion is inevitable. But what do they or we really know? Though I see it coming, I don't know how this depletion is going to play out. When will oil peak? Will we have a steep decline or less painful plateaus? Will there be unrest, disorder, (more) rioting, (more) war or (more) economic collapse? Will there be a meaningful shift to alternative energies?

I'd expect that there is a wide range of beliefs and probably some skepticism among futures traders, and from what I've read, many of them aren't as inside as they think.

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