Tertzakian: A Review by Dave
Posted by Prof. Goose on March 24, 2006 - 1:29pm
Topic: Supply/Production
Tags: peter tertzakian [list all tags]
Peter Tertzakian has a book entitled A Thousand Barrels A Second: The Coming Oil Break Point and the Challenges Facing an Energy Dependent World. Tertzakian attempts to stake out a position in the middle ground between "peak oil being an imminent threat and we're all going to die" and "peak oil is not going to be a problem, leave me alone."
Dave has written a really solid review of the book for Matt Savinar's blog that you should go read. The review contains all the relevant links for the book. Anyone else read this yet?
There is a global supply chain for LNG, the advantage of building LNG terminals is that we can take advantage of that, in the short term, while it lasts.
I'm sure if the NG becomes a crisis, the NIMBY crowd will be quieted!
There is nothing wrong with Leeb's book but it is not nearly as strong as Tertkazian's. However everyone should read chapter 5 about "groupthink" in markets and society in general. That chapter is worth the price of the book. Groupthink is what causes so many to avoid the Peak Oil issue. It is also what causes so many that recognize the PO issue to demand that the government do something for us.
(I should note, this doesn't necessarily mean they're wrong, but rather that this is not the best methodology to figure out if they're right. And even when they are right, it will often lead to over-confidence, a universal human failing which groupthink makes even worse.)
Everyone here should read JD's Peak Oil Debunked web site. It provides a good counterweight to the constant stream of reinforcing messages you get on the Peak Oil sites. Another couple of good sites: Lou Grinzo's The Cost of Energy; Lou is an economist who accepts the basic Peak Oil model but provides good, rational analysis of the situation; and of course James Hamilton's Econbrowser, which is often referenced around here.
The best defense against groupthink is exposing yourself regularly to people with different opinions. The truth is, that's why I'm here... ;-)
Very good point about the "Groupthink" thing.
It's a pity that economists do not expose themselves to thought process outside the framework of "the markets will provide". The real question is, what will Mother Nature provide?
JD is a total moron who argues sloppily and distorts data to fit his view. Not worth anyone's time really.
Lou is...well, lou is an economist...and a technophile...
What other sources do you have for us Halfin? I'd love to expose my self to other views, but most of them are idiots.
More from my worthless pile:
Gristmill
Treehugger
GreenCarCongress
Worldchanging
..
What I find most interesting is that a growing number of investment managers are starting to talk about peak oil in their communications with their clients. For example, Bill Miller of Legg Mason brought it up in his 2005 year-end letter to shareholders. For the most part I think the top buy-side analysts and investment managers are relatively unbiased in their assessment of peak oil.
The heart of the book is a realistic discussion of the history that put us in this place (with vast systems delivering and consuming oil resources), the limited options available (a "race to efficiency" being the only broad and powerful option available), and the forces that will make us change our lives.
We peak oilers want to get the message out there that the status quo is not an option. This book does that.
I think it is kind of a cheap shot to come back at his end notes, in which he looks back upon a successful "break point" and paint him as a Pollyanna. I think what he's really doing there is spinning the arc of his story for the populace.
I mean, if you are a real doomer you may revel in the possible destruction, but most folks kind of connect problems with actions and solutions.
Or ... what's the friggin' point of an action if it doesn't lead to solution? If you think the die-off is guaranteed, you might as well drive that Hummer ... for now.
I'm a bit confused by this remark. Would that be me that took the "cheap shot"? I didn't label Tertzakian a Pollyanna, I was trying to say that he simply didn't seem to follow his own realistic observations about Peak Oil to their logical conclusions. Hence he didn't appear (at least to me) to fully acknowledge the seriousness of our situation. Does the past predict the future? He seems to think it does but I respectfully disagree. I believe the crisis we're looking at is historically unique.
And my view is certainly different than being a real doomer who would revel in future destruction. I'll admit that a major restructuring of American culture would be a good thing IMHO. I dislike intensely the sprawl/car culture we live in, the war in Iraq, the inequity in the distribution of wealth, the increasing poverty, the unaffordable health car, outsourcing jobs, the destruction of the middle class and many other things. But that's a far cry from reveling in the collapse of modern societies which, believe me, I am not looking forward to at all. I wish we were preparing for Peak Oil now and had been since Carter warned us all in the 1970's. But we're not and the longer we do nothing, the worse it will be.
It is certainly not a message of the book that this will be a slam dunk, or that "the longer we do nothing, the [better] it will be."
As an example, the Governors' Ethanol Coalition is 15 years old. CAFE is about 30 years old. And so on.
Not only does it do a surprisingly good job covering a number of points which are often not found in a single article, it also provide a stark contrast to today's America. And notice the interplay between jobs, industries, and politics, so unlike what the Bush League seem capable of.
An America-centric bias remains one of my real problems when dealing with peak oil, even here, where a number of posters aren't American.
Essentially, the rest of the world has been quietly working at cutting itself away from America, in no small part because there seems no alternative, since the world's number 1 greatest debtor/superpower seems to feel no need for partners, junior or otherwise. Essentially, looked at from the outside, American society seems utterly incapable of changing itself. Even worse, America seems determined to block others that think and act differently.
But the world is a bigger place, and simply because America is showing signs of truly historic stupidity doesn't mean everyone else will follow its ever more evident downward spiral. That bit about lemmings was staged by Disney - at best, it is a very American metaphor, though sadly appropriate in the Hollywood world most Americans seem to believe in.
I believe the current yahoos running our government do know about the oil crisis and I also believe that invading Iraq was their idea of fixing it. Whoops!
And it might even be for the best in the long run. Not because it spares us pain, but because it might save the environment...which the free market cannot do. Free market capitalism is a great way to exploit natural resources as quickly as possible, but it does a lousy job of avoiding the Tragedy of the Commons.
i am posting the whole article because it's a short three paragraphs but i will post a source link.
here is the link.
http://www.indystar.com/apps/pbcs.dll/article?AID=/20060324/NEWS06/603240464/1012
basicly all that he needs to do to make this place a dictatorship is desolve congrass and the senate.
No where in my post do i say the senate is a separate branch of government. I only state that they both need to be dissolved.
The judiciary branch is more easily controlled, and because of that does not need to be removed.
Are you really serious? Do you really believe that a dictatorship is something that we as Americans should be worrying about right now? That 200 years of stability and precedent might not have just a wee bit of influence in stopping something like that from happening.
as for the population, i don't really think the majority will care that much anyway. as long as they can continue to do more or less what they are doing now they won't stop him. even less will care if he times it right to some world event.
I'm doubtful that the Bush/Blair moves towards authoritarianism are due to PO, rather I see it as the natural tendency of government to grab more power for itself whenever possible, and The War Against Terror is providing legitimation for the current moves. Of course, if/when the effects of PO start to hit then this provides another excuse for the erosion of liberty ("what is more important, the freedom to be a traitor to our country or the freedom to have food on the table?", that kind of thing).
There is really no need to abolish Congress, the public stays under better control with it. The last fair presidential election may have already been in our nation's past.
Corporations are driven by profit and growth. They scour the world for resources to deplete. You cannot name a corporation which promotes sustainable practices or has sustainable objectives.
Without conservation or sustainable objectives we are back to square one. So how is the free market going to work?
I could probably name one every minute for the next 10 or twelve hours. What industry did you want to start in? Maybe we should narrow it down. How about you pick a minimum market cap?
By sustainable I mean capable of recycling their production, both product and waste, capable of no-growth scenarios, capable of improving capital assets without subsidies...
My cynical side is dismissive of "Green" coroporate claims.
And yet individual leaders and corporations do actually make some changes.
The book "The Corporation" (and movie of the same title) features at least one executive of a major corporation who had an "epiphany" about the environmment and went on to begin a program at his company to make very big changes to stop pollution and waste. I've loaned the book out, and so do not have the name of CEO and Company at hand, but it is one of the largest carpet manufacturers in the world.
(The company is not "there yet" but has made great strides.)
The tough part is that there is just so far to go in making changes.
I suspect that the system will disintegrate given the ecological pressures we exert on the planet, but I do hold out some hope that we can make changes to let another generation or two live and have whack at making it possible for the next generation or two to live, and so on.
The generational relay may go for awhile yet.
It is tough to face any issues on the macro level because the complexities of issues and possibilities tend to isolate us from those we already feel suspicious of -- whether we are CEO's or "beggars."
Our current models of business may have to change very fast to adapt to the changing energy and environmental context. I wonder if we can navigate the tremendous changes we'll need to make.
Corporations are nothing more than a contractually organized legal entity to create standing as a "person" under the law. As a form of organization it is owned by shareholders who elect a board of directors to oversee their interests. The board in turn selects officers to run the business. The corporation is a powerful way to combine capital from many shareholders to undertake major captial investments. These investments may be such things as cutting down rainforests with all the environmental devastation that may entail or it may be building an agricultural infrastructure that feeds millions that would otherwise starve. Corporations are not good or evil.
Corporations may become evil when mangement begins acting in their personal self interest at the expense of the shareholders. As the number and diversity of shareholders grow this becomes more likely. It is the Board's responsibility to see that this does not happen. Some boards have done a very poor job of this but it cannot be blamed on the corporate form of organization.
Corporations may become evil when they take something that is part of the "commonwealth" as their own. By "commonwealth" I mean resources whose use or extraction impacts others besides the owners. For example clean air, water, mineral extraction that results in downstream pollution, etc. As one who believes in a very limited role for government, I do consider protection of the commonwealth an important governmental role. When a corporation "robs" from the commonwealth the government is not doing its job. But again it cannot be blamed on the corporate form of organization.
My point is that it is a mistake to talk about good and bad corporations - there are plenty of each (Patagonia and Clif Bar being a couple of good ones that Will might recognize).
I expect Oil CEO will find much to agree with here, I am particularly interested in your thoughts on the "commonwealth" concept. I expect I share some of Will's concerns for the environment but certainly not his dislike of free markets. The earth has some characteristics of a self-healing system. As the free market drives the price of scarcer oil up we will see solar, wind and other alternative energy sources become attractive to the free market. Not because they are environmentally responsible but because they make economic sense. Long live the free market so long as the commonwealth is respected and protected.
I think the free market is an interesting concept that is mostly theoretical. No one would suggest that agriculture in the U.S. represents a free market. There are billions of dollars of subsidies that skew it. No one would suggest the oil services businesses represent free marketing either. We see billions in no bid/cost plus contracts for military work now. The industries that supply the military: shipyards, aircraft manufacturers and so forth appear to be highly dependent on political lobbying activities. I would not call the playing field for the pharmacuetical and insurance industries a free market.
Consumer retailing apppear to be a free market. Walmart, the department store chains, the grocery chains prosper or fail with management talent and efficiency.
From his firm's website:
Tertzakian, Peter
"Peter began his career as a geophysicist with the Chevron Corporation in 1982 where he spent eight years working in field operations, seismic data processing and geophysical software development. In 1990, Peter left the oil and gas business and entered the financial services industry.
Peter has an undergraduate degree in Geophysics from the University of Alberta, and a graduate degree in Econometrics from the University of Southampton, U.K. He also holds a Mas