The Big Store Con

But today, to justify multibillion-dollar investments in politically or technologically risky fields, companies have become much more aggressive, he said.

... thus quoting Matt Simmons. Subjectively, we wonder what this statement really means. Technically speaking, being aggressive would involve taking more chances on unknown-quantity drilling locations. Ok, I can understand that. But political risk? Short of risking war, I have no idea. So what exactly were the secret energy task force meetings all about? Maybe meetings on how to con or not be conned?

Spam con. Internet denizens routinely get hit by spam. We can try to fight this with things like Bayes filtering techniques. Bayes applied to the oil business means constantly updating new predictions with current data. Oil spam is the consistent noise about greater volume of reserves, mixed in with lower production amounts and refinery limitations. Applying Bayes, production decreases have to be mixed in with legacy predictions. Perhaps the decrease may mean that we can no longer extract the oil as easily as before.
Lesson: put your filters on.
Dumb Guy con. The people of the Middle East have had centuries of experience dealing with politics. Despite their seeming lack of technical infrastructure (in comparison to western nations), they can make up for it in political savvy. I recently overheard somebody (Tony Judt?) say, in comparison, ancient Middle Eastern societies make the U.S. look like amateurs in wheeling-dealing. Next time, look at stated national oil reserve estimates from Saudi Arabia, et al, with a jaundiced eye.
Lesson: don't be taken as a rube.
Double Talk con. What is the difference between proven, probable, and possible oil reserves.
Lesson: listen carefully.
The Big Store con. Recall the movie The Sting. Create a realistic book-making operation (i.e. a war, battlefield, Chalabic two-timers, backroom neo-cons), set up elaborate stage directions, and then have a quick exit strategy (???). We will call this particular instance, the Neo con.
Lesson: enjoy the movie and wait for the climax.
Enron con. The big store with computers, kind of like the movie, Trading Places.
Lesson: Say no more, we'd be had.

"One unusual attendee was Fatih Birol, the chief economist of the International Energy Agency, who gave a speech saying that everything is fine, before admitting afterwards to a BBC reporter that everything is not. "This is not for the press," he said, after blurting out that the Saudis need to increase supply by 3m barrels a day to avert an oil crisis by the end of the year."

FINI