Another Pulitzer?
Daniel Yergin won a Pulitzer for his book "The Prize: The Epic Quest for Oil, Money, and Power" in 1991. The Oil Drum gang has a discussion going on Yergin's energy consultancy CERA, which provided background information for a Yahoo AP story on Peak Oil. Now, this would not normally raise any eyebrows but for the fact that CERA predicts a later peak and significant excess global oil supply for the near term. And because of the "fair and balanced" media, we see this point of view getting press.
I conjecture that the particular framing of excess supply may become more prevalent as a kind of neocon strategy of the oiligarchy. From a 2002 BuzzFlash article Yergin said:
"Some people say the Iraq crisis has been manufactured to cloak an 'oil grab' by the United States and the American oil industry. Others believe that a liberated Iraq will flood the world market with cheap oil and provide a quick fix for concerns about our energy security."
The author points out that few besides Yergin at the time strenuously denied linkages between Iraq and oil.
However, he continues, "it requires several leaps of logic . . . to conclude that the current Iraq crisis is all about oil. No U.S. administration would launch so momentous a campaign just to facilitate a handful of oil development contracts and a moderate increase in supply -- half a decade from now."
Interesting, many predict that the Iraq conflict will last a few more years, making it a half-decade in the unraveling. Just in the nick of time, Mr. Yergin; quite an accurate prediction you made there.
posted by @whut at June 21, 2005
6 Comments:
since a good fraction of the oil market is based on psychology, I think that you are going to see a good deal of push back as things begin to go south.
The technique is to take all of the uncertainty, beginning with the real state of the reserves in the OPEC states, throw in the potential for unconventional sources like shale and sand, plus deep water and polar stuff roll it all together into a big lump sum. Make this as big and as expeditious as your imagination and the gullibility of your audience will allow and viola, problem solved.
I'm not sure if they really believe this or not. I rather doubt it. My sense is that it is felt that this counter narrative needs to be put out there as a counter weight to the impending peak narrative to prevent panic in the markets. The idea is that because of the herd mentality, if the idea sets in that we really have reached the peak, that the Saudis are blowing smoke, that there is no way that we will meet demand, etc, there may be a sort of meltdown of the markets. Sort of a runnaway effect like avalanche breakdown of a diode.
So, I think we are going to see a lot of this counter narrative stuff put out there by apparently authorative sources. There is a lot going on behind the scenes. I think that arms are being twisted. Not that Yergin's needed to be.
SW:
So what do you estimate as the Zener voltage for countervailing wisdom to take hold?
I think that physical shortages will represent the "breakdown voltage" for public opinion. We will probably see releases from the SPR even though we have been sternly told that it is strictly for a national emergency. National emergencies will quickly be redefined as anytime we have to close the gas stations. But I think that once that happens there will be an abrupt shift in public opinion and it will become much harder to bullshit people on this issue. I expect that within a year to 18 months.
Isn't the SPR likely to be required for military use (on the assumption that things could get uglier once the peak is clear to all) ? Or do they have a reserve of their own ?
I think they do have their own reserve. Either that, or the SPR allows the military priority over use.
I think this just makes matters worse, as we would enter a martial law situation in that case.
If it comes to tapping the SPR I expect we'll already be experincing gasoline shortages and the shit will already have hit the fan.
Remember (if you were around that is) what happened after OPEC shut-off the pumps in the 70's. Odd-even gas rationing, 10 gallon purchase limits, long lines, and really short tempers. Nothing set folks off more than finding that their local station was sucked dry while hearing that other areas had "plenty". I mean really fighting-mad pissed. Intermittent and unequal distribution of gasoline alone will bring social turmoil out of proportion to an economist's y/y plot of oil production declines. People also are unlikely to respond in a way that can be described by a smooth curve of increasing dissatisfaction. People will be pissed, mad as hell, and they'll be looking for a fix and someone to blame. Really pissed people tend not to think too clearly but it remains to be seen just how long BushCo (or whoever happens to be CEO of AmeriCO when it begins) can manipulate the public into thinking everything is peachy as they wait 3 hours for gas.
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