Pure Venom

It is disturbing to me that an industry that plays as important a role in modern life as that of the farmer is so vilified. It must be that people simply do not recognize the role the oil industry plays in their lives: From medicine to food to clothing to housing to transportation – today all are heavily dependent upon the oil industry. Yet somewhere a group got together and said “Hey, let’s slap a bunch of additional taxes and burdens on the oil industry. Surely they will bear the burden and there won’t be any impact on all of the citizens that depend upon their products”:

House slaps $16 billion in taxes on oil industry

“There’s a war going on against energy from fossil fuels,” said Rep. Ralph Hall, R-Texas. “I can’t understand the pure venom felt against the oil and gas industry.”

A lot of people immediately peg me for a Republican because of my sometimes harsh criticism of the energy policies that Democrats often embrace. I don’t see too many (any?) Republican policies that I can endorse either (Hey, let’ s just drill in ANWR!), but they aren’t the party that always vilifies the oil industry and scapegoats them as the reason for high energy prices. I think that a positive feedback loop has been set up here where the Democrats are hostile to the oil industry, which therefore sends campaign money to the Republicans, which keeps the Democrats hostile.

I actually think that of all candidates in either party, Democratic presidential candidate Bill Richardson has the most coherent energy policy, and he has a track record in New Mexico that demonstrates that the subject is very important to him. But in my opinion the Democratic Party has the more naïve view of energy. This bill is a perfect example. More from the Houston Chronicle:

House passes energy package

Swatting away objections from a cadre of energy state Democrats, the House voted 241 to 172 in favor of a 786-page energy bill and 221-189 for the companion tax package targeting the oil and gas industry.

With these votes, “the House propelled America’s energy policy into the future,” said House Speaker Nancy Pelosi, D-Calif.

Rep. Edward Markey, D-Mass., called the vote on that provision, which passed comfortably, the “energy vote of the decade.”

The tax bill slaps the oil companies with $16 billion in taxes. Among other provisions, it would exclude the companies from a scheduled rollback in the corporate tax rate for U.S. manufacturers, increase the taxes on their operations overseas and complicate their efforts to write off exploration and production expenses.

That corporate tax rate benefit, incidentally, is only being rolled back for the oil industry. Other manufacturers will continue to enjoy it. How on earth do they think the industry can plan long term projects if the rules are changed in the middle of the game ala Hugo Chavez? Oh, right. They don’t think long term projects are needed, because they have mandated that the future will be bio-powered. I wonder what happens if they are wrong?

Rep. Kevin Brady, R-The Woodlands, called the tax bill “extreme … even vindictive.”

Environmentalists, in contrast, were elated by the bill’s success. Philip E. Clapp, president of the National Environmental Trust, called the package “a substantial down-payment in reducing global warming emissions.

I beg to differ. I am an environmentalist. I am not elated. I see some good things in this bill, and a lot of very naive thinking.

While I don’t think it will ultimately be passed into law, just once I wish our political leaders could look into a crystal ball and see the consequences of their actions. I understand that they believe if they extract money from Big Oil and spread the money around, we will all enjoy a happy, green future as Big Oil goes the way of the dinosaurs. Instead, they will find themselves explaining to their constituents in 3-5 years why they are now paying $5/gal for gasoline, and yet still have no viable substitute. Or more likely their successors will. And I don’t have a problem with $5 gasoline, but I do have a problem with lost opportunities and failure to confront the real problems.

Of course the real kicker is that even when oil companies decide to produce alternative fuels and are eligible for the tax benefits, some proponents cry foul and they suddenly become “oil subsidies.” This goes to show that the mentality in many cases is not pro-biofuel, but rather anti-oil company.

91 thoughts on “Pure Venom”

  1. George Orwell, writing in the 1930s:

    “In the metabolism of the Western world the coal miner is second in importance to the man who ploughs the soil. He is a sort of grimy caryatid upon whose shoulders nearly everything that is not grimy is supported.”

    Orwell was both a socialist and an asthmatic. He understood the human suffering involved in coal mining and also the consequences of burning coal. Yet he understood the energy was necessary, and was able to feel appreciation for those who produced it.

    This sense of appreciation seems utterly missing from many of those who now call themselves “progressives.” How many of them would ever think for one moment about the bravery of those who work on offshore platforms, or the skill of those who find the oil and design the refineries?

  2. Subsidies belong to apple-cheeked Wisconsin dairy farmers, not to grubby oil boys, or, for that matter, janitors on the nightshift working for minimum wage in downtown Los Angeles.
    Of course, this could get us into a huge OT discussion, about why tax any productive behavior (including the investment of capital)? I wouldn’t. Only consumption, especially of the conspicuous variety.
    Still, at times I wonder if the oil industry, and its puppet George Bu$h jr., have the slightest patriotic streak in them. They seem happier rubbing shoulders with despotic sheiks. If oils goes to $100 a barrel, there will be no crying by Bu$h jr’s buddies.
    For six stright years (2000-2006), the R-Party controlled the House, Senate, White House and Supreme Court, and for a while had full backing of the public (after 9/11) to take any constructive course of action they wanted.
    Bu$h jr. could have mandated a very strong energy policy in the wake of 9/11. Instead he chose a futile war, and to wildly hype the threat of terrorism.
    The public may see that, and vote on it.

  3. This goes to show that the mentality in many cases is not pro-biofuel, but rather anti-oil company.

    Robert,

    Of course the solution to that would be to demand that everyone who is anti-oil (or anti-fossil fuel) immediately quit enjoying the luxuries that burning and consuming fossil fuels brings them.

    The only critics of Big Oil I care to listen to are those who have gone back to subsistence agriculture and refuse to burn gasoline or use electricity unless it is made from a generating plant that doesn’t use coal, oil, or natural gas. (Of course, that means no internal combustion engines, no plastics, and no synthetic fertilizer for their fields. Trying to grow corn and make their own ethanol for their cars and tractors without fossil fuel inputs, would really test the EROEI of corn ethanol wouldn’t it?)

    What do you want to bet that when Nancy Pelosi gets chauffeured around Washington D.C. it’s in a gasoline-burning SUV?

    Best,

    Gary

  4. The rational answer it to reduce subsidies to energy and to farmers (really farm corporations), and thereby reduce the power of those lobbies.

    Unfortunately that is the classic catch-22

    You can’t reduce the subsidies (or price-in hidden ‘externalities’) because those lobbies are too strong.

    While the Republicans play the visible ‘drill ANWR’ game, and the democrats play the visible demonization game, it is business as usual behind the scenes.

    (See also CAFE and the SUV loopholes.)

  5. benjamin cole,

    Do you have a point in all of that ad hominem or are you just blowing off steam?

    Cheers,

    TJIT

  6. I think the disdain for the oil industry comes partly out of our “drive by/phone it in media’s compulsion to focus on the short term and spectacular. Partly through this media influence, so-called “progressive” (sic) politicians jump on the bandwagon to identify scapegoats for problems that they (the politicians) have had decades of contributing to the problem.

  7. Ben – you forgot to mention Cheney, Halliburton, Diebold, Enron, “No blood for oil”, and a few other old chestnuts. So how is the Yearly Kos convention going?

  8. A point? As hominem?
    Except for the reference to Boy George, I don’t think my post had an hominem element, and President-bashing is a time-honored tradition.
    The point is that we have a disillusioned public, thanks to the extraordinarily short-sighted policies of the Bush Administration. We still have no energy policy that I can detect, while other Western nations move swiftly to post-fossil economies (economies which use less fossil oil every year).
    In terms of energy policy, we are flatfooted, standing in quicksand, and have just shot ourself in the foot.
    No, we shouldn’t tax the oil boys. But nor do they have any of the answers we need.
    I guess that is my point.

  9. Benjamin Cole,

    Believe it or not everything in existence does not collapse to a singularity with george bush at the center of it.

    Thinking that way is a clear sign that a person needs to take some time away from the tubes of the internets and get some quality outdoor time with a good beer in hand.

    TJIT

  10. Benjamin Cole,

    We have plenty of energy policy.

    Unfortunately most of it is expensive, shortsighted, and counterproductive.

    TJIT

  11. You wouldn’t have to worry about 16 billion dollar subsidies given and then taken away again Robert, if we move to that market model.

    It’s not subsidies I care about. First off, I don’t know that Big Oil is benefiting from these, other than the foreign tax exclusion. Speaking of which, any company getting taxed in a foreign country should be able to shield that income from double-taxation, in my opinion. I believe that is the case with every other industry. But now, they are going to subject the oil industry to double-taxation – overseas and in the U.S.

    What bugs me is that people really think that this is a solution to the problem. As I said, it is stunning naivety in my opinion. We are likely to see a repeat of this every two years as legislators try to pass laws to immediately impact an industry in which policy changes can take years to be observable. It’s like a control loop with a slow response, but we keep changing the parameters to force it to do what we want, but we fail to note that the slow response is eventually going to be felt.

  12. But now, they are going to subject the oil industry to double-taxation – overseas and in the U.S.

    Well, they can try. Industry will just make adjustments to the ownership of foreign subsidiaries, or they will never repatriate profits, to avoid subjecting them to double taxation.

    Ultimately a company could follow Halliburton and just leave the US for safer tax havens, it doesn’t even neeed to affect its employees much.

  13. Did you notice that my 2003 link talked about:

    “a $16-billion package of tax breaks and production subsidies designed to further rig the market to favor well-connected energy producers (almost all of which enjoy plenty of federal handouts) at the expense of others”

    We aren’t talking about the same $16B taken away again are we?

    Regardless it seems to me a thing where “well-connected energy producers” love it when they get subsidies and squeal when they are taken away.

    The high ground is (a) a carbon tax and (b) no producer subsidies (on fossil or renewable fuels).

    I get that you are “bugged” but it seems to me what we’ll get as long as we play the political subsidy game.

  14. BTW, that “walking to the shops” thing has a glaring aspect. Beef is the most energy intensive (common) food in the markets. For an economist to dictate that we eat beef to fuel our walk, and then to calculate environmental damage on that basis is bizarre.

    Try it again with oatmeal, bread, rice, etc. and it will come quite differently.

    I mean, that famous bag of potato chips only requires 1/120th gallon of oil for its total production. You can munch it on your walk and I’m sure still put on weight.

  15. I mean, that famous bag of potato chips only requires 1/120th gallon of oil for its total production.

    I miss Walker’s crisps. I prefer them to Lays. What I really miss is English bacon.

    The point of the article was to get people to think. Towards the end they talked about how we would be better off to consume more locally grown grains and vegetables.

    The modern environmental movement is cursed with group think and symbolism over substance. Organic food is the worst – I refuse to buy anything labeled “Organic”.

  16. “The point of the article was to get people to think. Towards the end they talked about how we would be better off to consume more locally grown grains and vegetables.”

    I’m not so sure. At a minimum the people who write these stories are math impaired and should get an engineer or scientist to check their calculations, head to tail.

    Even the “locally grown” thing has its perils. A farmer moving a 1/4 ton of veg 100 miles in a beat up pickup uses more fuel than a container ship going a thousand miles. And as we discuss at that line, the average shopper drives further (and does not walk or bike) to get to that farmer’s market!

  17. Oh, do you want me to comment on “organic?”

    😉

    As a chemist I get that is abuse of a scientific term, and not that rational a collection of rules … but, despite that it might error more on the side of safety than the side of concern.

    I don’t go out of my way to buy organic, but sometimes I end up with some organic in my cart.

    There are lists out there of the most pesticide laden foods … buying ‘organic’ only there would not be a bad strategy.

  18. Bill Richardson not only has the most sensible energy policy, he seems overall to have more common sense than the rest of the candidates put together. Too bad it’s more of a personality contest these days – he’s unlikely to be the nominee. He’d make a good VP for Clinton or Obama.

  19. We aren’t talking about the same $16B taken away again are we?

    I think the $16 billion they are talking about comes from the 2005 energy bill. But I believe the beneficiaries are much the same. From your link:

    “The biggest winners will include nuclear power, small domestic oil producers (which dispense some of the highest-cost oil in the world market today), “clean coal” technology (which has yet to produce a commercially operable plant despite billions in public subsidies) and various exotic energy technologies that can’t attract much private capital from skeptical investors.”

    As I said, Big Oil is not the beneficiary for $16 billion of subsidies being discussed, but they are being vilified as if they were.

    Now, the foreign income exclusion is a different matter, as well as the manufacturing credit. Big Oil has been singled out here. Other industries will continue to enjoy those tax breaks. But now the message to oil companies is that they needn’t even attempt to plan long-term projects, because the rules can change dramatically in the middle of the game.

    I see a couple of possibilities. The bill passes, and the tax works its way down to the consumers. In 2 or 3 years, when gas is $2 or $3 higher, Big Oil is once again blamed for the results of this bill. Or, Big Oil slows down their capital spending, meaning in 2 or 3 years when gas is $2 or $3 higher, Big Oil is once again blamed for the results of this bill. Wash, rinse, and repeat until congress figures out that they don’t really understand how to control the energy markets.

  20. It must be food myth day. Here is a piece from the NY Times:

    Food that Travels Well

    On organic foods, I agree there is an extremely small risk from residual pesticides, herbacides, and bacterial contamination. So I soak my produce in an anti-bacterial soapy water solution and then rinse well. Problem solved.

    Organic foods require more land, more water, produce lower yields, for little or no health benefit. For rich Americans who can afford to shop exclusively at Whole Foods, that is great, load up the back of the Prius and feel better about yourself. Just don’t impose that view on the rest of us.

    Look at the controversy over Bovine Growh Hormone. The ersatz ban on BGH increases the cost of milk and milk products, disproportionately hurting the poor and young who depend on milk for protein. Banning BGH means more and less efficient cows, more feed, more greenhouse gases.

  21. So whaddya want Robert? Steady subsidies for big oil? 😉

    Or are you for ‘no subsidies’ but just reluctant to come out and say so?

  22. Or are you for ‘no subsidies’ but just reluctant to come out and say so?

    I am all for “no subsidies.” In fact, I am for directly increasing gas taxes, which would stem demand. But as I just wrote at TOD, everyone would understand what was going to happen in that case. What we have are policies being passed that assure consumers that all is going to be OK, while making it more difficult to increase production.

    I don’t want to decrease production when the entire world is being told that everything is going to work out just fine, and the industry is being expected to increase production. Of course the house members don’t think we will need it, as cellulosic ethanol comes to the rescue. But let cellulosic fall short, and we will be blamed for not being there with the needed production.

    The other thing is, “What is a subsidy?” Look at the things that are being called subsidies. A foreign tax exclusion is a subsidy? We also get to deduct the salaries that are paid to workers. Is that a subsidy? If I am for us being able to deduct salaries just like any other business, am I for subsidies?

  23. Robert,

    Is there anything that the general public can do to help ConocoPhillips?

    I would hate to see the oil corporations suffer. They have done so much for humankind. How could all these fat people get around without their SUVs?

    How could American bombs fall upon Iraqi children if it weren’t for cheap kerosene in those military jets?

    Let’s save ConocoPhillips. Gotta save your career, Robert!

  24. Here’s the thing: the oil industry has made a business of making people angry at them. Whether it is the willingness to allow third world governments to literally dismember their citizens or the willingness of this government (far before either Bush) to subsidize them both directly (regardless of profit margin) and indirectly (by maintianing a military that provides “energy security” to much of the world so Japan and others need not fend for themselves), they are some of the most amoral capitalists in existence- EXCEPT when the government largess of tax breaks, cheap mineral rights, etc are at stake.

    There is a reason for the venom. If the Feds would subsidize alternatives with the same level of predictability (i.e. wind gets a break this year, next year who knows?) the technology would have leapfrogged so many areas so long ago we would not be having this conversation.

    Politicans of all stripes are hooked on providing cheap energy, but rarely do we get to see the true costs. When the oil companies claim state owned companies are making gas expensive- fine. If their margin was the same, their profits would go down- supply and demand. The fact that even obvious facts escape rational discussion is very frustrating regardless of who resides in the White House.

  25. kingofkaty,

    “Organic” doesn’t minimize your risk of exposure to pesticides, it just minimizes your risk of exposure to some pesticides.

    http://en.wikipedia.org/wiki/Organic_farming

    I’m not counting on “natural” or “derived from plants” for my safety. Lots of plants will kill you if you eat them.

    Some “minerals” are also allowed to be used as pesticides in organic farming, e.g., copper sulfate.

    http://www.cgfi.org/materials/articles/2002/oct_22_02.htm

    I have no idea why some “minerals” or chemicals “derived from plants” are ok and others aren’t.

    Something to do with the lifeforce of Gaia, I guess.

  26. Just to be clear about something. The bulk of the $14 billion in “subsidies” in EPAct ’05 did not go to Big Oil.

    I believe the only thing in that package that Big Oil was eligible for was a credit or deduction (forget which) for refinery expansion projects.

    The rest went to natural gas distribution (read: utilities), small producers, and others.

    Factor in the increased oil spill trust fund taxes in EPAct ’05 and Big Oil came away a net payer under the bill.

    The manufacturing deduction that’s being discussed was included in the FSC-ETI bill a couple of years ago, and was made available to just about every manufacturing industry.

  27. Cool, I think it’s good to be up-front about ‘no subsidies’ because that is the option left out of ‘the two sides’ too often.

    (I stay away from TOD, so that crash junkies don’t get under my skin.)

  28. jon – one of the problems with “organic” is there are several standards. Atropa Belladonna comes to mind. One could use this plant to control pests, and still be 100% organic, but potentially more deadly than synthetics.

    There are parallels between organic farming and alternative energy. Organic farming islands often sit between conventional farms in the growing regions of California. The organic farms benefit indirectly from pesticide, and herbacide use nearby. Were organic farming employed on a wider scale productivity is likely to drop substantially.

    Alternative energy, particularly power generation, similarly benefits. As long as alternatives are a small fraction of the total demand we don’t have to worry about backup energy supplies, energy storage, distribution problems or other operational concerns. Should wind and solar become the dominant form of energy, a whole new set of problems emerge.

  29. “Is there anything that the general public can do to help ConocoPhillips?”

    Ha!Ha! Robert’s stalker Dave Mathews is back, sounding like a broken record.

  30. Yeah, it was Dave Mathews, who still has his man crush on me. He apparently forgot to take his meds today. Doesn’t think man deserves to live, then weeps for the bombing of the Iraqi children “courtesy of the oil industry.” Hates technology, and screams this while watching his 200 channel satellite TV. A real loon. I just wish the hypocrite would cease all usage of oil products. Poor thing says he can’t.

    Here he is ranting over on Kunstler’s blog. I almost deleted his rant above because he never adds anything of value, but there is some comedic value there.

    Psycho Rant 1

    Psycho Rant 2

    Psycho Rant 3

    Psycho Rant 4

    The guy should be in an institution. I think he has some repressed guilt over his oil usage, and it is threatening his sanity.

    Get help before you hurt yourself, or more importantly, before you hurt someone else.

  31. I don’t got to read Kunstler anymore either. His Monday rants are fun for a week or two but then you sort of notice that they don’t so much predict reality as maintain a fixed distance from it.

    Anybody in that “predictive” frame of mind should read The Black Swan and then (try to) explain why it doesn’t apply in their case.

    (I think our energy and environment issues are interesting precisely because we don’t know where they are going in the long haul.)

  32. It much easier to drill ANWR or demonise Big Oil than to do what’s really needed and tax carbon.

    Its not oil that we’re short of, its politicians with courage!

  33. TJIT:

    I probably should get out for beers more often. There is even a bar I can ride my bike to. The wife is not too impressed when I come home blasted however.

    No, George Bu$h jr. is the not the center of all energy problems. But having an oil industry puppet-troll in charge of the R-Party energy policy is probably a bad idea. You can’t say any sensible energy policies, let alone smart, have emerged in the Bu$h jr. Administration. Nada. Zip. Zilch. Zero. Do you even know who is Samuel Bodman?
    But we are stuck in Iraq.
    Let me refine this: What we have in the Bu$h jr. Administration is worse than an energy policy. It is an anti-energy policy.
    But, hey, I am no Dem-lover. Taxing the oil baddies won’t help anything, and as Rapier suggests, is rather childish. The CAFE standards are barely tolerable, if you have no cajones to tell the American people the truth: You should pay much higher gasoline taxes, ala Europe.
    After 9/11, the American people rallied to the flag, and would have backed anybody for anything: A golden moment was lost.
    Even later, if Bu$h jr. had proposed an aggessive wind-solar-conservation program, to create lots of jobs in America, and maybe even a crash program to develop a real PHEV (although I prefer a $10 billion prize to the first commercially successful producer of PHEVs) he could have sold it.
    Face it, Bu$h jr. completely flubbed everything, badly. It is like someone trying to wear a dogpoop hat and trying to pass it off as a toupe.

  34. “Doesn’t think man deserves to live, then weeps for the bombing of the Iraqi children “courtesy of the oil industry.”

    The form of humankind that is willing to kill for the sake of oil — or anything else — does not deserve to survive in this Universe.

    If humankind wants to survive humankind must live differently. But how is it possible for humankind to live differently when there are a bunch of parasitic corporations which would become unprofitable should humankind ever choose to live peacefully on the Earth and with Nature?

    What sort of world do you want your grandchildren to inhabit, Robert? Do you want them to clean up the mess that you leave?

    Do you value profits over the health & well-being of humankind?

    Tabacco companies sell tabacco, alcohol companies sell alcohol, and oil companies sell oil. None of these businesses would remain profitable except by promoting addictive and unhealthy behavior.

  35. Robert claimed that I wasn’t bold enough to sign my name to my posts over here.

    This is of course true. This is the first time you have ever done so. You come over and post a hypocritical rant, and then slink back into your hydrocarbon-fueled hole.

    And I have said again and again, that I will debate you on the issues, but I am not going to let you use this as a place to just rant. You want to discuss the issues? Go. You want to just whine and moan? Go away.

    Now, I will address your post right after I eat lunch.

  36. Now, to address the most coherent post I have ever seen Dave Mathews write. That’s not saying much, but I give him an A for effort.

    The form of humankind that is willing to kill for the sake of oil — or anything else — does not deserve to survive in this Universe.

    I agree, Dave. In fact, I argued against going to war before we ever did it – when the sentiment was very popular across the country. Did you? And let me ask you Dave – have you ever put any Iraqi-derived gasoline into your car? Make no mistake, Dave Mathews, nobody is forcing you to use oil. You chose to, because of the conveniences it provides you. Bemoaning the state of the world while you continue to use oil and say it’s not your fault, just makes you a great big hypocrite. Since the issue is important to you, move off the grid in a house built with no fossil-fuel derived materials, and live yourself a sustainable life. Once you do that, hypocrite is something I won’t call you.

    What sort of world do you want your grandchildren to inhabit, Robert?

    A world in which we have adopted sustainable living practices. These are the things I am teaching my children: Understand their carbon footprint; don’t waste energy; grow your own food; give back to the community and to the less fortunate. That’s not just the world I want them to inhabit. That is the world I am teaching them to inhabit. My children have done volunteer work with me for United Way, Habitat for Humanity, and a host of community events. So, what are you doing Dave? Are you leading by example? Or do you think whining and moaning about the world, while failing to act, is doing something about it?

    Do you want them to clean up the mess that you leave?

    As I have said before, if everyone lived as I live, there wouldn’t be much mess to clean up. But yes, I am teaching them to clean up the mess that the likes of you have made. You can’t even compute why I was annoyed about the house bill: It was because they have not yet taken seriously the need to conserve. That’s what I am upset about. But what I have learned about you is that the truth is whatever you want it to be.

    Do you value profits over the health & well-being of humankind?

    That’s a false dichotomy, Dave. How much health and well-being has been provided by fossil fuels? Do you think life was easier 300 years ago? If you woke up having a heart attack 300 years ago, there was no ambulance to come get you. If a cold spell hit, it killed many more people because they couldn’t turn their thermostats up. It’s doubtful that you would even be alive to complain about it if weren’t for the agricultural and medical revolutions that have been enabled by fossil fuels.

    What’s funny about you, though, is that you embrace Chavez as a hero of the people. He is keeping gasoline subsidized in his country, which encourages consumption, and wants the world to buy his oil. He is an oilman, Dave Mathews. Yet he is your hero. What kind of world would we live in if everyone followed Chavez’ example? A much dirtier one, that’s for sure.

  37. Hello Robert Rapier,

    Glad to see you respond to my post. Now we can debate the morality of your employment, your investments and the lifestyle which makes both possible.

    1. I argued against going to war before we ever did it – when the sentiment was very popular across the country.

    Wonderful. Where did you make these arguments, Robert?

    2. Did you? And let me ask you Dave – have you ever put any Iraqi-derived gasoline into your car?

    Undoubtedly I have. How could I possibly avoid doing so?

    3. Make no mistake, Dave Mathews, nobody is forcing you to use oil. You chose to, because of the conveniences it provides you. Bemoaning the state of the world while you continue to use oil and say it’s not your fault, just makes you a great big hypocrite.

    The drug dealer’s only defense. A weak one, too. This world was created without my permission by venal people such as yourself who profited handsomely from their own bloody crimes.

    4. Since the issue is important to you, move off the grid in a house built with no fossil-fuel derived materials, and live yourself a sustainable life. Once you do that, hypocrite is something I won’t call you.

    The last person that I would ever want to receive praise from: Robert Rapier. You probably already know that such a lifestyle as your describe above is absolutely above. It existed in the United States once but our own nation exterminated it for resources, land and profit.

    5. A world in which we have adopted sustainable living practices.

    Are you serious? I think that you are lying so I will call you a liar. Your business wouldn’t exist if humans actually lived in a sustainable manner.

    6. These are the things I am teaching my children: Understand their carbon footprint; don’t waste energy; grow your own food; give back to the community and to the less fortunate. That’s not just the world I want them to inhabit. That is the world I am teaching them to inhabit. My children have done volunteer work with me for United Way, Habitat for Humanity, and a host of community events.

    Your children are saints. They must get it from their mother because they cannot possibly learn this lesson from you.

    7. So, what are you doing Dave? Are you leading by example? Or do you think whining and moaning about the world, while failing to act, is doing something about it?

    I am praying to God that Peak Oil occurs soon because otherwise Homo sapiens will accelerate along the path to extinction at light speed. But these prayers are in vain because our species is governed by people such as yourself, Robert.

    8. As I have said before, if everyone lived as I live, there wouldn’t be much mess to clean up.

    How about if everyone lived as your employer lived? If so, the world would pretty much turn into the sewer that it has already become because of the profitable crimes of the oil industry.

    9. But yes, I am teaching them to clean up the mess that the likes of you have made. You can’t even compute why I was annoyed about the house bill: It was because they have not yet taken seriously the need to conserve. That’s what I am upset about.

    You are not a skilled liar, Robert. Either you are a saint or you are an oil industry employee, but you cannot possibly be both.

    10. How much health and well-being has been provided by fossil fuels? Do you think life was easier 300 years ago?

    The Earth was much healthier three hundred years ago. This brief moment of humankind’s exuberance will end in a horrendous manner, though. If things look good to you that is only because you are intoxicated by oil and technology.

    11. If you woke up having a heart attack 300 years ago, there was no ambulance to come get you. If a cold spell hit, it killed many more people because they couldn’t turn their thermostats up. It’s doubtful that you would even be alive to complain about it if weren’t for the agricultural and medical revolutions that have been enabled by fossil fuels.

    The fossil fuel age — and all of its benefits — are transient events in the history of humankind. How does five hundred years of technology stack up against the apocalypse which humankind’s pollution and overpopulation are generating.

    What is life going to be like in 300 years, Robert? Let’s hear your vision of the future. Perhaps you are a techno-utopian. Do you dream of a Star Trek-type future for humankind on the Earth?

    12. What’s funny about you, though, is that you embrace Chavez as a hero of the people. He is keeping gasoline subsidized in his country, which encourages consumption, and wants the world to buy his oil. He is an oilman, Dave Mathews. Yet he is your hero. What kind of world would we live in if everyone followed Chavez’ example? A much dirtier one, that’s for sure.

    Hugo Chavez is a hero because he stood up against American corporate and diplomatic imperialism and survived. As far as criminality goes, George W. Bush is a mass murderer compared to Hugo Chavez. As for as pollution goes, Hugo Chavez is Robert Kennedy compared to the oil corporations.

    David Mathews
    David Mathews’ Home Page

  38. A correction.

    The sentence: “You probably already know that such a lifestyle as your describe above is absolutely above.”

    Should read:

    “You probably already know that such a lifestyle as your describe above is absolutely impossible.”

    ***

    The oil corproations have killed how many people in the wars which were (and are being) fought on their behalf?

    The oil corporations have killed how many people with the pollution generated by their activities?

    What value do the oil corporations place in the survival of Homo sapiens upon the Earth? I expect … absolutely nothing.

    The world that humans have created is a sewer which is quickly transorming into hell. Ask the people of Iraq how much the Western oil corporations care for them. Ask the people of Nigeria. Ask the people of Venezuela.

    Robert Rapier’s wealth is generated by their oppression, their suffering and their blood. Enjoy the wealth now, Robert, while it is still possible.

    Because when things get bad in the West it will become really bad. Western civilization has earned all of the sufferings which it shall receive.

    But the stock market is up and the price of oil is down, so it appears like evil world-destroying parasitic capitalism will endure for at least five more years.

    David Mathews

  39. Whoa, that is a lot to digest. Won’t even try.

    Chavez isn’t much of an oil man. Most analysts predict that production will continue to fall as Chavez and his cronies bungle managing the oil fields.

    But while we are talking about Venezuela, you may have missed this: Gov’t takes over Caracas Cable Car
    The Avila Magica is a cable car that goes from Caracas to the top of Mt. Avila. The concession was sold to private investors in the early 1990’s. It was owned, operated, and financed by Venezuelans. The Ministry of Tourism presented “fines” to the operators, demaning payment and refusing to extend their license. The government has now seized the asset.

    Sound familiar? Or how about this story:

    Cement Factory Expropriated Here the Gov’t owned a 40% stake with the other 60% owned by a Venezuelan.

    This isn’t the “hero” Chavez standing up against foreign imperialists, this is an autocratic, tinpot, socialist dictator consolidating all political and economic power.

    Like President Bush or not, he leaves office in January 2009. Chavez is trying to manipulate the constitution to make himself “President for Life”.

  40. Yeah, I think we all see now, Dave. You enjoy the conveniences of oil, but you just can’t help yourself. You are merely a poor victim of circumstances. And oilman Hugo Chavez is your hero – even though he is going out of his way to encourage the very things that you claim to abhor.

    Well Dave, you are an unapolgetic hypocrite. Perhaps when oil peaks, and you are on your deathbed because the medicine you needed couldn’t get to you, you will finally be happy: The world will be on the path to recovery.

  41. Hello Anonymous,

    > “Chavez isn’t much of an oil man. Most analysts predict that production will continue to fall as Chavez and his cronies bungle managing the oil fields.”

    Wonderful. This is exactly what I would want to occur. Hopefully Venezuela’s oil will stay in the ground where it belongs.

    Too bad that Nigeria lacks strong leadership. The Nigerians really need to free itself from the tyranny of the oil corporations.

    Too bad that the Muslims remain addicted to wealth against their own self-interest. They sell oil to America and power the military which is murdering Muslim civilians on a daily basis.

    > “This isn’t the “hero” Chavez standing up against foreign imperialists, this is an autocratic, tinpot, socialist dictator consolidating all political and economic power.”

    If you say so. Do you want to kill him? Do you want to invade his country and give “Freedom & Democracy” to the Venezuelans?

    How many people do you want to murder for the sake of capitalism, sir?

    Look at your bloody hands. May God have mercy on your soul.

    > “Like President Bush or not, he leaves office in January 2009.”

    Thank God. President Bush should stand trail for all the war crimes committed by the United States since 9/11. President Bush should also stand trial for violating the constitution and trampling upon the civil rights of American citizens.

    President Bush has murdered 250,000 Iraqis for the sake of oil and cheap gasoline. The oil corporations got what they wished, didn’t they?

    David Mathews
    http://www.geocities.com/dmathew1

  42. Hello Robert Rapier,

    > Perhaps when oil peaks, and you are on your deathbed because the medicine you needed couldn’t get to you, you will finally be happy: The world will be on the path to recovery.

    Indeed. Unlike most atheists, I have no fear of death nor any fear of humankind’s extinction.

    Nature will take care of humankind’s mess. Nature will clean this sewer of a planet and life will flourish again on the eroded ruins of technological civilization.

    I hope you are paid a lot for your service to the oil industry, Robert. This is the “blood fee” which is your reward for driving humankind to extinction and leaving a hellish mess for your grandchildren to inherit.

    Look at the blood which covers your hands, Robert. Do you really think that is ink on your paycheck? No, its the blood of the people who are suffering, dying and will die because of the crimes against humanity which profit your industry so very much.

  43. The world that humans have created is a sewer which is quickly transorming into hell.
    That’s your opinion, Dave. You are entitled to it. We are also entitled to disagree.

    Ask the people of Iraq how much the Western oil corporations care for them.
    The main oppressor in the recent history of Iraq, was an Iraqi, by the name of Saddam Hussein. Remember him? I never supported the war in Iraq – but getting rid of Hussein was the one good thing it did achieve.

    Given a choice between the murderous Hussein and the merely exploitive Western oil corporations, I think it is quite obvious who most Iraqis would choose.

    Ask the people of Nigeria.
    Nigerians are oppressed by corrupt Nigerian leaders. Let me ask this: How is it possible for any country to be a major oil exporter with oil at $70-80/bbl, and stay poor? As I see it, it is only possible if you have a stunning level of incompetence and corruption in your government. Question for Dave: How much money are Nigerian politicians funneling into Swiss bank accounts?

    Ask the people of Venezuela.
    The people of Venezuela (unlike the people of Nigeria) are enjoying a great boom of handouts from the government, funded mainly by Western oil corporations and all the infrastructure they set up in that country.

    Perhaps you should move to Venezuela for a few years, and experience utopia. Maybe you can share the recipe for success with US leaders when you return.

    I am praying to God that Peak Oil occurs soon because otherwise Homo sapiens will accelerate along the path to extinction at light speed. But these prayers are in vain because our species is governed by people such as yourself, Robert.
    That’s all you’re doing? To quote Buzz Lightyear: “You are a sad little man, sheriff, and you have my sympathies”.

    What are you asking God to do? Destroy us, before we destroy ourselves? Are you trying to put God on the spot? I guess you are going to be extremely disappointed when God saves us, but then I don’t think you can be pleased, can you, Dave?

  44. I hope you are paid a lot for your service to the oil industry, Robert. This is the “blood fee” which is your reward for driving humankind to extinction and leaving a hellish mess for your grandchildren to inherit.

    Right now my job is exclusively supporting natural gas projects in the North Sea. I keep old people from freezing to death, and I keep young people warm so they can have children and grandchildren to inherit the earth.

    Look at the blood which covers your hands, Robert. Do you really think that is ink on your paycheck? No, its the blood of the people who are suffering, dying and will die because of the crimes against humanity which profit your industry so very much.

    Dave, really, I have to insist that you stop using oil. It is obviously a very emotional issue, and is causing you much grief. So please, end your grief and cease your consumption. Your life will be a lot tougher, I admit. But since you don’t fear death, you won’t miss those extra years that oil would have provided for you.

  45. Hello Optimist,

    > The main oppressor in the recent history of Iraq, was an Iraqi, by the name of Saddam Hussein. Remember him?

    Saddam Hussein was an ally of the USA until he threatened Saudi Arabia. Then he became the great monster which “provoked” two aggressive wars by America in order to regain Western control over the Middle East.

    > Given a choice between the murderous Hussein and the merely exploitive Western oil corporations, I think it is quite obvious who most Iraqis would choose.

    Ha! I am certain that the Muslims would welcome exploitation by the Western oil corporations once America has gotten finished murdering them into submission. Remember Iraq? It is happening right now.

    > Nigerians are oppressed by corrupt Nigerian leaders. Let me ask this: How is it possible for any country to be a major oil exporter with oil at $70-80/bbl, and stay poor? As I see it, it is only possible if you have a stunning level of incompetence and corruption in your government. Question for Dave: How much money are Nigerian politicians funneling into Swiss bank accounts?

    The corruption of the Nigerian government is exploited very well by the West and the oil corporations in particular. The Nigerians would be much better off if their oil had remained in the ground where it belongs.

    > The people of Venezuela (unlike the people of Nigeria) are enjoying a great boom of handouts from the government, funded mainly by Western oil corporations and all the infrastructure they set up in that country.

    Ha! You really are living in some sort of fantasy-land fueled by your own greedy, violent hatred of Venezuela. Hugo Chavez doesn’t owe the oil corporations anything. If he has “stolen” anything from the oil corporations, good for him.

    I wish the Nigerians would follow Hugo Chavez’s example. Nigerians should drive out the oil corporations and bring an end to the oil industry in the Niger delta. That’s what Nigeria needs more than anything else.

    > What are you asking God to do? Destroy us, before we destroy ourselves? Are you trying to put God on the spot? I guess you are going to be extremely disappointed when God saves us, but then I don’t think you can be pleased, can you, Dave?

    You shouldn’t ask God to save you because such a request is blasphemy when coming from an evil man. Instead you should continue to dream of technology saving your civilization from the horrors which are certainly approaching.

    Can technology save you? Will technology save you? Pray to technology, sir.

  46. Hello Robert,

    > Right now my job is exclusively supporting natural gas projects in the North Sea. I keep old people from freezing to death, and I keep young people warm so they can have children and grandchildren to inherit the earth.

    You are a real saint. God bless you and your natural gas.

    > Dave, really, I have to insist that you stop using oil. It is obviously a very emotional issue, and is causing you much grief. So please, end your grief and cease your consumption. Your life will be a lot tougher, I admit. But since you don’t fear death, you won’t miss those extra years that oil would have provided for you.

    I’d love to stop using oil but humankind has destroyed and nearly eradicated the natural environment which made life possible in the pre-fossil fuel age.

    I suppose that, more than anything else, this is the reason why humankind will suffer an apocalypse at some point this century.

    9,000,000,000 humans and nothing to eat, oh my!

    David Mathews
    David Mathews’ Home Page

  47. Now I am really confused. Is Dave an atheist or is there another atheist poster here?

    If he is an atheist then why is he invoking God into the discussion? He said:
    Look at your bloody hands. May God have mercy on your soul.

    and: Thank God. President Bush should stand trail for all the war crimes committed by the United States since 9/11.

    Anyway, no I don’t want anyone murdered for capitalism or anything else. I hope that either Mr. Chavez comes to his senses and steers away from socialism or the people of Venezuela vote him out. It is entirely up to them.

    Dave conveniently forgets that the Venezuelans invited international oil companies into Venezuela in the 1990s.

    Communism/socialism killed tens of millions of people in the 20th century. It is that path which Mr. Chavez has set his country.

  48. Hello Anonymous,

    > Anyway, no I don’t want anyone murdered for capitalism or anything else. I hope that either Mr. Chavez comes to his senses and steers away from socialism or the people of Venezuela vote him out. It is entirely up to them.

    That’s very good of you, sir. But if he does not would you consider killing him an option? The United States could invade Venezuela just as it invaded Iraq.

    > Dave conveniently forgets that the Venezuelans invited international oil companies into Venezuela in the 1990s.

    Venezuela likely didn’t have much of a choice. A nuclear armed Superpower was eyeing its natural resources and America does has a history of committing bloody crimes against the weak nations of the Western hemisphere.

    > Communism/socialism killed tens of millions of people in the 20th century. It is that path which Mr. Chavez has set his country.

    When all is said and done, capitalism will be responsible for killing billions of humans. Placing greater value in today’s profits over the planet’s health has that sort of impact upon a living planet.

    The oil corporations and other industries are killing the Earth for the sake of their own profits. They will earn $trillions for exterminating humankind from the Universe.

    That’s the price which Nature is willing to pay in order to eradicate the primate plague. Nature can spend millions of years cleaning this mess & repairing the damage as it returns the Earth back to a state of health.

    So, in a sense, capitalism is doing Nature’s dirty work. Capitalism is humankind’s extremely successful method of profitable suicide.

    Extinction is the price that humankind will pay for all of its crimes against Nature. But don’t concern yourself with the future. You should concern yourself with more important matters: Money, wealth, investments, your career and retirement plans.

    When you grow old you will learn to regret the evils of capitalism, but until then … keeping on working!

    David Mathews

  49. That’s very good of you, sir. But if he does not would you consider killing him an option? No. As long as Chavez doesn’t threaten the US or his neighbors. If he were to invade an ally or acquire strategic weapons with which to threaten his neighbors, then perhaps.

    Venezuela likely didn’t have much of a choice. A nuclear armed Superpower was eyeing its natural resources and America does has a history of committing bloody crimes against the weak nations of the Western hemisphere.

    OK, but that doesn’t explain Shell, BP, Total-Fina-Elf, Eni Agip, Petrobras, Repsol (Spain), Inelectra (a Venezuelan company), Lasmo (British), and a number of other non-US companies who also invested in Venezuela. If the US government was protecting US oil interests, how come we never went to war with countries who nationalized US oil interests? (Mexico, Saudi Arabia, Venezuela- 2 times, Libya, Iran).

    You are very sad little person who really needs some kind of help.

  50. You are very sad little person who really needs some kind of help.

    I have been trying to tell people that. He was kicked off The Oil Drum for this sort of odd behavior. I know he thinks I got him kicked off, but I had nothing to do with the decision. But he certainly makes some comments that lead me to believe that he is either 1). Imitating a crazy person; or 2). He needs to be committed.

    I had toyed around with pulling out his post and posting it as a stand alone essay to show that there are actually people like him out there. But, I finally decided it would be cruel.

  51. Yeah, well I got kicked off the Oil Drum too, which should probably be renamed the Long on Oil Society of Eccentrics and RecluseS.
    I posted no hate messages. I stayed on point, which is that fossil oil consumption is barely growing, alternative fuels are growing rapidly, and conservation is just getting traction now. I don’t see a disaster brewing – indeed, I think we can work our way to a cleaner, more prosperous world, and oil prices may crack again.
    That message got me kicked off the Oil Drum.
    Plus I wondered why their editors post under assumed names, and who finances the Oil Drum (directly or indirectly), are there any conflicts of interest which should be published, and what, if any connections they had to the long-on-oil hedge community.
    That will really get you kicked off The Oil Drum.

  52. Yeah, well I got kicked off the Oil Drum too

    Your booting never came up, and there was nothing communicated when it happened. So I don’t know the exact reason, nor who made the decision. I do know specifically why Dave was booted, and who made the decision. I didn’t ask for him to be kicked off, but I thought he was very disruptive without actually contributing anything.

    As I have said many times, I encourage a debate of differing viewpoints. But that’s not what Dave brought to the table.

  53. You shouldn’t ask God to save you because such a request is blasphemy when coming from an evil man. Instead you should continue to dream of technology saving your civilization from the horrors which are certainly approaching.
    You crack me up, Dave. I am an “evil man” because I don’t kiss Hugo’s feet (BTW I don’t hate Mr. Chavez or his country, I barely know them). You, OTOH, are a good guy who prays to God for the destruction of mankind.

    Is your God powerless, unable to destroy mankind? Or is he a loving God, looking to save mankind (and disappointed in Dave’s inability to show any love or compassion for his neighbors)?

  54. I think we can work our way to a cleaner, more prosperous world, and oil prices may crack again.

    I am very optimistic too. As Robert’s thought experiment on solar showed, we are not too far from alternatives being competitive. OPEC and the little Venezuelan dicatator have overplayed their hand and allowed prices to stay high for too long.

    My concern is that hedge funds are going to pull out of their long positions and the $30 risk premium in crude will evaporate overnight. Consumers will too soon forget the recent high prices and we will backslide on conservation and alternatives.

    I would favor a US sliding oil import fee that set a floor price of maybe $40/barrel. That would ensure that companies investing in alternatives wouldn’t be slammed when OPEC increases production (or when demand drops) and prices collapse. I think we will se $30 crude long before we will have $100.

  55. I think we will se $30 crude long before we will have $100.
    You really think so? I don’t think there is a $30/bbl risk premium – prices have been this high for too long. I think the role of hedge funds is overestimated. I think, as Robert illustrated before, it has everything to do with a disappearing supply cushion.

    Do you have any solid information to indicate a $30/bbl risk premium?

  56. Speaking of what’s wrong with TOD ;-), Robert would you like me to send you my copy of The Black Swan?

    I finished it last week on my camping trip.

  57. (Interestingly a chapter or two are explicitly about why “r-squared” normal distributions are rare (or non-existent) in the real world.)

  58. Hello anonymous,

    > OK, but that doesn’t explain Shell, BP, Total-Fina-Elf, Eni Agip, Petrobras, Repsol (Spain), Inelectra (a Venezuelan company), Lasmo (British), and a number of other non-US companies who also invested in Venezuela. If the US government was protecting US oil interests, how come we never went to war with countries who nationalized US oil interests? (Mexico, Saudi Arabia, Venezuela- 2 times, Libya, Iran).

    Let’s see … why would America not go to war with these countries?

    Have you considered that perhaps America has already gone to war with some of these countries covertly and that it has also threatened some with military action?

    For example, Iran. The “nuclear monster” of the Middle East which certain administration officials hinted would suffer an American nuclear attack should the need arise?

    Venezuela … are you aware that the CIA attempted a coup against Hugo Chavez and nearly killed him?

    Iran, again. Don’t you remember what the CIA did to Iran in 1953?

    Saudi Arabia. Do you mean our protectorate in the Middle East? Why wouldn’t we go to war against our puppet?

    Mexico. America already fought a war against Mexico. An act of naked aggression against Mexico at this time is politically impossible for a number of reasons.

    Libya. America attacked Libya while Ronald Reagan was president. But there is not much to be gained by an invasion of Libya.

    ***

    How about Iraq, anonymous? Do you have something to say about Iraq?

    David Mathews

  59. Hello Robert Rapier,

    > I had toyed around with pulling out his post and posting it as a stand alone essay to show that there are actually people like him out there. But, I finally decided it would be cruel.

    You can do whatever you wish. I am certain that you will impress your own self with your efforts.

    The Oil Drum (and other Peak Oil activists) are entirely responsible for the lies which portray Peak Oil as the civilization-ending catastrophe which it is most evidently not.

    I wonder why Matt Simmons and The Oil Drum have lied so egregiously about the (nonexistent) threat of Peak Oil?

    Either these people are excessively dramatic or there is some other motivation for their lies. Is it possible that Peak Oil is a useful propaganda for the oil industry which is used to extract subsidies, environmental exemptions and ecologically protected sites from the government?

    Well, Robert, you could do all of us a favor by explaining why the Peak Oil movement has lied to the American public about the catastrophic threat of Peak Oil.

    Since Peak Oil is a non-event, Climate Change + Pollution + Overpopulation must constitute the major threat confronting humankind in the 21st century.

    Needless to say, by hyping the threat of Peak Oil you oil industry types can fight against the much larger threats (such as taxation and environmental regulations) which might serve to fight against the pollution generated by your bloody industry.

    Peak Oil might also serve another useful purpose. If Peak Oil is a mortal threat to civilization Americans can become so scared that they give the American government permission to engage in aggressive wars in order to secure the world’s fossil fuel resources for the International Oil Corporations.

    Peak Oil is a non-event. Climate Change is the real threat to humankind’s survival on the Earth.

    David Mathews

  60. Hello optimist,

    > Is your God powerless, unable to destroy mankind? Or is he a loving God, looking to save mankind (and disappointed in Dave’s inability to show any love or compassion for his neighbors)?

    God views humankind with the same sort of unemotional detachment as He viewed the dinosaurs.

    Remember, the dinosaurs survived for millions of years. Yet God allowed them to go extinct.

    Homo sapiens, on the other hand, have only existed for a little longer than 100,000 years. I doubt that God very much cares about transient phenomena of such short duration.

    God is under no obligation to save humankind from extinction.

    Since humankind is so devoted to self-destruction I expect that God will accommodate that desire.

    ***

    How would humankind behave if our species really wanted to survive?

    David Mathews

  61. God views humankind with the same sort of unemotional detachment as He viewed the dinosaurs.
    Man, you have a strange God! My God is nothing like that, thank God.

    How would humankind behave if our species really wanted to survive?
    Uhm…You seem to have missed some details, such as the fact that we are not dead, just yet.

    I know, catastrophy is coming, next year, as it has been doing for the last fifty years.

    Since Peak Oil is a non-event, Climate Change + Pollution + Overpopulation must constitute the major threat confronting humankind in the 21st century.
    Not sure that qualifies as a logical statement, but there it is.

    Technology is going to save us from all of the above. More people = more technology, as the history of mankind proves. As earth’s population grows, we need better technology to supply everyone with their daily essentials. Better technology also allows us to manage the increased threat of pollution. Add climate change to the list. We’ll figure it out.

    Things are going to get very interesting in the near future. This is no time to be heading for the caves.

    Are you going to be part of the solution, or are you hellbent on hoping for our mutual destruction?

  62. Hello optimist,

    > Man, you have a strange God! My God is nothing like that, thank God.

    Are you suggesting that your God has not already allowed billions of species to go extinct, including all of Homo sapiens closest relatives?

    > Technology is going to save us from all of the above. More people = more technology, as the history of mankind proves. As earth’s population grows, we need better technology to supply everyone with their daily essentials. Better technology also allows us to manage the increased threat of pollution. Add climate change to the list. We’ll figure it out.

    Ha! Technology is going to save us! More people = more technology!

    Oh my, you are going to be disappointed, aren’t you?

    Okay, okay, okay. Technology is going to save us. God doesn’t need to save us, then, does He?

    > Are you going to be part of the solution, or are you hellbent on hoping for our mutual destruction?

    Your “solution” is the problem, optimist. You have a blind faith in technology which is not supported by the present evidence. Aren’t you aware of billions of humans suffering right at this very moment?

    Technology isn’t saving them. Technology ain’t going to save us.

    “Mutual Self Destruction” is a proper description of what corporations (such as Robert’s employer) and politicians are accomplishing right now. Have you noticed that the Earth isn’t exactly utopia?

    Haven’t you noticed the mess that humans have generated?

    Don’t you see all of the suffering which is occurring even right here in the United States?

    If you cannot see these things you cannot see anything. Humankind won’t notice the existence of insoluble problems until our species is nearly extinct.

    David Mathews

  63. David, the word “lies” means not just error, but intent.

    I think the people who most talk (or write) about “civilization-ending catastrophe” believe it. They are just in error, as they assert a certainty about what are actually uncertain probabilities.

    Oh, a few might have a profit model built around catastrophe, but they are actually very rare (and are probably true believers even as (especially because?) they cash their checks.)

    No, I think the thing you really learn, if you study Peak Oil hard and with an open mind … is that is an uncertain risk. It is something we should take out insurance for, but that’s true of many other uncertain risks as well.

    And (while I’m pontificating) we’d probably all be better keeping a closer eye on day-to-day risks, diet and exercise, that spending too much concentration or remote and uncertain problems.

  64. Hello odograph,

    > I think the people who most talk (or write) about “civilization-ending catastrophe” believe it. They are just in error, as they assert a certainty about what are actually uncertain probabilities.

    Matt Simmons must know that he is spreading irrational fear in his presentations about the great danger of “Peak Oil”.

    Does he believe it or is he another lying oil executive exploiting the public’s fear for the benefit of the oil industry?

    The Oil Drum has a mixed message regarding Peak Oil. When threatened by environmental legislation or taxation Peak Oil is represented as a civilization-ending catastrophe. Yet when threatened by an alternative, Peak Oil is represented as easily alleviated without the alternative.

    Someone’s gotta by lying. Who? Why?

    ***

    As to the fate of civilization, I can assure you that technological civilization will end. Such is the inevitable fate of all civilizations, including our own.

    Homo sapiens, likewise, is fated to suffer the same fate as the dinosaurs and the saber tooth tigers.

    There is nothing whatsoever immortal in this world. Our civilizations will end, our technologies will cease functioning forever, and our species will go extinct.

    If anyone tells you anything different than the above you can know for certain that he/she is lying.

    Nothing lasts forever. All these things will come to an end.

    David Mathews

  65. I didn’t think Simmons was a crash monkey 😉

    I just thought he saw … essentially business and economic turmoil. We’ve had turmoil (note: when we did not expect it).

    Indeed if you are unfortunate enough to live in some places on our planet you are experiencing business and economic turmoil (or worse) even now.

    Now on “we will crash” I’m not sure if you are retreating into long timescales or making one of those predictions that suffer from false certainty.

    Longer timescales than … ten years(?) are unpredictable, and nothing more than science fiction. You can write science fiction with our without extinction, but it is still science fiction.

  66. There is nothing whatsoever immortal in this world. Our civilizations will end, our technologies will cease functioning forever, and our species will go extinct.
    LOL! The best part is that you seem to actually believe this hogwash.

    Don’t you see all of the suffering which is occurring even right here in the United States?
    Suffering in the US? You’re kidding, right? 😉

    Suffering, here and everywhere else, is caused by failed leadership (Hurricane Katrina comes to mind), not failed technology.

    It may shock you, Dave, but there are certified examples in history where Americans have been guilty of bad leadership. That did not mean the end of America, anymore than the current challenges we face.

  67. Do you have any solid information to indicate a $30/bbl risk premium?

    I saw an analysis by our chief economist about a year ago. I’m going off memory. There is no doubt that big brokerage firms and hedge funds were playing in the energy markets. The capital markets are so much larger that even if just a little of the money was traded on the energy market we would see the effect. Some of them may have played in the fixed income markets and will be unwinding their positions to raise cash.

    Remember it was less than 10 years ago that crude was trading in the single digits. That was when there was just an extra 2 million barrels per day floating around the market.

    The clueless Venezuelans may have squandered most of that excess capacity in the system. Iraq is nearly back to it’s pre-war production.

    We aren’t running out of oil just yet, but if Robert’s peak demand theory is right, at some point supply outruns demand and prices go down. That is why I argue for a price floor. Don’t allow the exporting countries to undercut alternatives – again.

  68. Hello odograph,

    > BTW, some species rack up amazing spans without extinction.

    True, but not so of all of our immediately ancestors. Nor of us, either.

    Homo sapiens are an evolutionary dead end, a Darwinian debacle, and God’s most embarrassing mistake.

    The animal which I observe dominating this Earth couldn’t possibly survive for a million years.

    Humans really are a lost cause from the standpoint of evolution. This short era of exuberance won’t amount to anything from a geological standpoint.

    David Mathews

  69. Hello optimist,

    > Suffering, here and everywhere else, is caused by failed leadership (Hurricane Katrina comes to mind), not failed technology.

    Is that so? Technology never fails?

    I can see why you are an optimist, optimist. The sheer magnitude of your blind faith in technology would put any fundamentalist to shame.

    “God will save us!” has become replaced by “Technology will save us!”

    You know that faith in God endures only until God fails?

    Faith in technology will suffer the same fate. Our technological civilization is going to die in the most horrendous manner possible. Once it is finished dying no human will ever again entertain the delusion that a techno-utopia is awaiting in the future.

    Until then, keep on dreaming!

    David Mathews

  70. Hello odograph,

    > Now on “we will crash” I’m not sure if you are retreating into long timescales or making one of those predictions that suffer from false certainty.

    When you say, “long time scales” exactly what do you have in mind?

    From a geological standpoint, humankind’s evolution and extinction occur within an instant of time. From a human standpoint, ten minutes waiting in line at McDonald’s seems very much like an eternity.

    So what sort of time span do you have in mind?

    ***

    As to the extinction question, I am not speculating nor engaging in science fiction. Humankind’s extinction is guaranteed. The primate plague cannot possibly survive on this Earth for very long.

    If there are Homo sapiens still surviving on this Earth 100,000 years from now I would consider that a miracle on the same order as raising a man from the dead.

    The forces of Nature and natural selection are arrayed against humankind. God’s patience with the self-destructive ape is eroding away, too, at an alarming rate.

    But tell me, odograph, what difference does it make to you whether Homo sapiens survive or go extinct?

    Do you really want to believe that Homo sapiens is an immortal species with an immortal technological civilization?

    You are a religious man, Odograph. You have the sort of blind faith which puts a Baptist to shame!

    David Mathews

  71. You’ve made a lot of assumptions there David, both about the future and about me.

    The oddest thing is that you state things that are predictions, about the far future, as if they were verified facts from history.

    Either you are a time traveler or you are not embracing uncertainty the way you (as a fallible human) should.

    The thing about The Black Swan (and interestingly at the same time, Gilbert’s Stumbling on Happiness) is the way they drive home how bad we humans are at prediction … and yet how attached to our predictions we are.

  72. Hello Odograph,

    > The oddest thing is that you state things that are predictions, about the far future, as if they were verified facts from history.

    Have you considered that I might have a more reliable source of information about the future?

    But we don’t need to argue about this subject. Watch and wait.

    David Mathews

  73. We aren’t running out of oil just yet, but if Robert’s peak demand theory is right, at some point supply outruns demand and prices go down. That is why I argue for a price floor. Don’t allow the exporting countries to undercut alternatives – again.
    I believe that’s Ben Cole’s theory of Peak Demand, and I don’t see it. For all the moaning and groaning about gas prices, demand is still flat (actually still edging up). As I said before, IMHO, it will take $5/gal or more to put a damper on demand.

    You also refer to the last time (70s) that there was a spike in oil prices, and the aftermath of that. I think there are some notable differences between then and now: Then the supply was artificially lowered, and the potential to bounce back to meet demand was always there. This time supply is really stretching to meet demand. I don’t see the potential for supply to get ahead of demand enough to allow a significant drop in oil prices. The only way oil prices are coming down, is if demand drops and for that to happen, something catastrophic needs to occur such as the Chinese economy melts down (think Asian Tigers and most likely taking the US economy with it).

    In other words, I think oil prices are effectively out of OPEC’s hands. Of course, they’d be loathe to admit it. But notice how their target price range seems to keep creeping up and up. They are no longer setting the price. Just responding to it. With their best poker faces.

  74. “In other words, I think oil prices are effectively out of OPEC’s hands. Of course, they’d be loathe to admit it. But notice how their target price range seems to keep creeping up and up. They are no longer setting the price. Just responding to it. With their best poker faces.”

    That’s the way it looks to me.

    (Even when you don’t invest in predictions, or especially when you don’t, it’s important to look around for what seems to be happening in current time. That way you stay in sync with reality 😉

  75. Have you considered that I might have a more reliable source of information about the future?
    Just when you think you’ve heard it all, the guy tops himself. Ever considered a career as a comedian, Dave? Jerry Seinfeld has noting on this: more reliable source of information about the future! LOL!

    Wait! Don’t tell me! You know the source to be true and reliable but you are not allowed to tell us anything about it, for fear of being denied future access.

    Perhaps I was wrong: you are more witch doctor than comedian.

  76. Hello optimist,

    > Just when you think you’ve heard it all, the guy tops himself. Ever considered a career as a comedian, Dave?

    You should ask me my source, optimist.

    But that is a lot to ask a person — such as yourself — who dreams of technology saving humankind. Those who imagine that they are immortal are more humorous than those who are realistic about human nature.

    Have you looked at this world, optimist?

    Do you like what you see?

    The evidence of history indicates that things can get a whole lot worse, and that this outcome is about a billion times more likely than that technology will lead to any sort of utopia.

    But you need not trust me. Wait patiently and you will verify my predictions with your own eyes.

    Watch and see.

    David Mathews

  77. In other words, I think oil prices are effectively out of OPEC’s hands.

    I don’t. Check the international rig count. Where is all the new drilling? (The answer is not OPEC.)

    Some of the OPEC nations are no doubt maxed out (Indonesia, Qatar, Algeria, Libya). Iran is limited by sanctions and their nut job president. Others are choosing to spend money on domestic programs rather than reinvest in oil and gas production. (Iran is trying to acquire nuclear capability – with the 2nd largest gas reserves in the world!) Venezuela is producing at 2.3 million barrels per day, about 1 million below their last quota. The Chavez government has chosen to increase social spending and nationalization rather than reinvest in its oil and gas sector. There are maybe 50-60 drilling rigs working Venezuela and 1,800 working in the US. Same is true in Saudi Arabia, hardly any drilling. Ditto, Mexico. They seem to have no interest in increasing production. Who can blame them? They are chosing to maximize profits now at the risk of destroying demand later.

    So, I think that OPEC likes the current situation and is just choosing not to develop more oil. Just as the US is choosing moratria on drilling offshore CA, FL, and East Coast US and in the 1002 area in Alaska.

    But if consumers invest in more efficient autos, hybrids, and PHEVs then demand will peak and you will see prices collapse pretty quickly.

    Also, NYMEX Brent is selling for about $71 with 1.38 Euros/$. Some of the current high price is reflected in a weak dollar. That accounts for $10-15 in inflated price.

    I stick my prediction. $30 oil before we see $100. Well maybe I’ll adjust to $40.

  78. I stick my prediction. $30 oil before we see $100. Well maybe I’ll adjust to $40.
    Well, that’s interesting, not to mention brave. Can’t say I agree, but we’ll see.

    But if consumers invest in more efficient autos, hybrids, and PHEVs then demand will peak and you will see prices collapse pretty quickly.
    This is where you argument comes unhinged, IMHO. The sky high gas prices ($3/gal) has had a moderate effect on the type of auto people buy. The Prius for example is setting records as Toyota offers more incentives, not really as a reflection of a long term paradigm shift.

    Here’s how I see it play out: Ultimately, it has to hurt a lot more, before conservation becomes a widely accepted strategy. Hence my notion that it would take $5/gal or more. And even then, conservation will only help to maintain a certain price range. I don’t see the kind of conservation that would drop oil prices happening – it is just too inconvenient.

    So I’d say $100/bbl some time near summer 2009…

  79. “‘In other words, I think oil prices are effectively out of OPEC’s hands.’

    I don’t. Check the international rig count. Where is all the new drilling? (The answer is not OPEC.)”

    If you are saying it would take extraordinary effort (a lot of drilling) to put control back in OPEC’s hands … aren’t you saying the same thing?

    When Optimist says they are:

    “Just responding to it. With their best poker faces”

    I take that to mean they could perhaps change the situation, but they do not have motivation (or ?) to do so.

    As far as predictions of “$30 oil before we see $100” etc. … just predictions, and (as is typical) made without a percentage probability & etc.

    Even more disturbing is that if a probability were asserted for that prediction, it would be untestable. We cannot run human history 1000 times to see how often the result was above $100 or below $30.

  80. So I’d say $100/bbl some time near summer 2009…

    I am not even re-upping my $1000 bet for 2008. Inventories are being pulled down, and if OPEC doesn’t or can’t respond, we will be off to the races.

  81. Odograph,
    I think King’s point was that the high rig count outside OPEC would eventually lead to higher production outside OPEC, i.e. out of their control. It might. But, in a best case scenario that is going to take a while (5 years min?).

    My point about OPEC and their poker faces, was that they have lost control of the ceiling price. They certainly aren’t pumping more oil. If they were honest, they would come out and say: “Sorry guys, it’s out of our hands. We can do nothing to bring prices down.” This would obviously cause a run on prices that would make $100/bbl look like a bargain.

    So what OPEC does instead is to claim that they are monitoring the situation, and that everyone should stay calm and act normal. Kinda sounds like the White House, doesn’t it?

  82. I’ve seen the $100 oil predictions my entire working career. It hasn’t happened yet. But we have seen prices collapse a couple of times.

    Drilling is NOT an extraordinary effort. On the back side of the decline curve it is normal to drill many wells. OPEC isn’t even close to that yet. They haven’t even started really looking around.

    When Venezuela looks like this:

    RRC of Texas Map

    you can’t say that OPEC is unable to produce more crude if they wanted to. They just don’t want to.

  83. Didn’t we hear stories about the Saudis bidding up (and reserving) a bunch of offshore equipment a year or two ago?

    I think that was extraordinary, and once the have them, it would be more extraordinary to drive a lot of new equipment manufacture.

    I don’t know, maybe I agree with pieces of both your arguments. In this last round I feel more in line with King, but I have different expectations based on the same data, if you get what I mean.

  84. Didn’t we hear stories about the Saudis bidding up (and reserving) a bunch of offshore equipment a year or two ago?

    I hadn’t heard that. Kind of doubt it. At the offshore rig rates even the Saudis probably wouldn’t let equipment sitting idle.

    Economic theory says that you maximize profit when the cost of the last unit of production equals the selling price. Most of the production on the margin in the non-OPEC world is probably getting pretty close to $70. (think 20,000ft wells in 10,000 feet of water 500 miles offshore or Canadian Tar sands)

    When people say that OPEC is producing all they can, it implies that OPEC’s marginal cost of new production is nearing $70. Probably not. As I’ve told Robert before, I’ve been to the KSA. It hardly looks like my map of Texas. The heavy oil projects in Venezuela were all justified on prices below $30. The Orinoco has the largest reserves in the world.

    The OPEC countries have hundreds of years of reserves, so that isn’t the problem. Their marginal cost isn’t the problem. SO it must be that they choose to produce less than they could.

    Again, look at the worldwide rig count. Where are 2/3 of the oil rigs in the world drilling? (US and Canada.) Why? Because those governments allow private development and don’t artificially hold back production. Well, other than restrict access to some areas like the 1002 area, likely the largest undeveloped field in North America.

    The threat of OPEC ramping up production keeps the IOCs from investing too heavily in alternatives. A floor price for crude would greatly reduce risk. If the Dems wanted to do something useful set an oil import fee to establish an absolute US floor price. Make it $40 or $50. Something that seems ridiculuously low right now.

  85. I’ve seen the $100 oil predictions my entire working career. It hasn’t happened yet. But we have seen prices collapse a couple of times.
    I hear you.

    We’ll see. With all the action on the lending front, we may see US oil demand take a dive before anything of note happens in China.

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