Category: Other

Assuming the Bubble Next Time thesis is correct, where does that leave us? We will eventually get inflation rates over and above the 1-2% currently priced in. Burgeoning consumption in emerging economies will cause commodity prices will soar again as they did in the period 2003-2008:H1. The sky will be the limit for a barrel of oil. The United States economy will remain in the doldrums for many years. This is a worst of both worlds scenario. We hope for the best but in 2009, why shouldn’t we expect the worst?

This outlook might fly in Disney World, but it is clearly impossible in the Real World. This leaves CERA with a public relations problem. Not only must they disavow their fantasy forecasts, but they must also explain away the fact that world oil production will probably never exceed its July, 2008 peak.

The first step would be to acknowledge what a sorry state we’re in. Speaking with Bill Moyers back in September, Kevin Phillips didn’t think soon-to-be President Barack Obama would level with the American people about how bad things are. If the President indeed understands the depths to which we’ve sunk, he has not come clean with us—you don’t rock that boat.

Natural gas prices increased 39 percent from a 6 ½ -year low of $3.19/MMBtu on April 27 to $4.42 on May 13, 2009. Some think that the worst of the price collapse that began in July 2008 is over, and that gas prices will return to normal. I do not believe that is the case, though I certainly hope that I am wrong. Chesapeake Energy proclaimed in a recent investor presentation that “the fix is under way”, and that natural gas prices will soon return to $7-8/Mcf. Chesapeake and other companies make the case that prices will rebound because of the drastic decrease in drilling.

Today I’ll try to explain President Obama’s policy for decreasing oil consumption in the United States. Right now the administration has so many balls in the air that it is impossible to make a definite statement about what the effects of their initiatives will be, but a coherent policy is emerging if you gather all the pieces together. I compile a list Obama’s policies at the end of 2nd section below.

Oil prices had a bullish week, increasing steadily from $57 a barrel, at one point Continue Reading

The nation’s capital had the activity of a three-ring circus last week, with a challenge Continue Reading

[Note: a true story from the oil fields. You may have burned some of the Continue Reading

Physical traders storing oil will start dumping it back on the market. They will need to dump it all or pile up losses leasing supertankers. The ensuing snowball will cause the oil price to crash. Oil may fall below its February low as today’s distorted $62 price becomes tomorrow’s distorted $25 price. I could be wrong of course. Mr. Market may experience another drug-induced mood swing which reflates the oil price. Naturally it is hard to predict Mr. Market’s future emotional state.

Prices and production Crude closed on Wednesday at $62.05 a barrel, the highest level in Continue Reading

After rising by $10 a barrel since mid-April, oil prices continued to increase early last Continue Reading

I would be crazy to get involved in this dispute, so I won’t, and besides 1) I’m not up on these issues; and 2) I don’t think Cap & Trade as opposed to a Carbon Tax matters one bit, which is why I’m not up on these issues. However, the Romm versus Hansen dispute does deserve comment because it directly addresses the question of how much CO2 in the atmosphere constitutes dangerous human interference with the Earth’s benign Holocene climate. But first I need to explain why Cap & Trade doesn’t matter.

1. Last Week 2. Some Economic Implications of Peak Oil 3. Quote of the Week Continue Reading

         Chevron Corp. said its $4.7 billion Tahiti field in the Gulf of Continue Reading

I’ll talk about the baseload issue, but once again we must confront the difference between talking the talk and walking the walk. Actions speak louder than words. Why do we require 3 to 5 years of planning to modify the grid to integrate renewables? Haven’t the Danes already done this? What’s the hold-up?

The allure of easy wealth glitters very brightly if your wages have not kept up with inflation for over two decades while two principal wage earners struggle to support the household where once—a long time ago in a galaxy far, far away—one would do. The bubbly asset inflation created by the FIRE economy gave Americans the illusion of increased wealth, which spurred unsustainable levels of consumption in the period 1995-present.

Prices started last week above $52 a barrel, then fell sharply in sympathy with a Continue Reading

US natural gas prices fell again last week to their lowest point in more than Continue Reading

The petroleum industry is saying that the new standards will cost consumers billions of dollars Continue Reading

Saudi Arabia will pump about the same amount of crude in May as in April, Continue Reading

Maybe I’ve been wrong all along—maybe just believing is enough. Maybe we don’t have to actually use less oil now or ever. Maybe all we have to do is imagine we’re using less oil.

Oil prices started last Monday at $52 a barrel, quickly fell to circa $50, and Continue Reading

US Interior Secretary Salazar has been traveling around the country conducting hearings on whether to Continue Reading

Last week the White House reversed long-standing policy and permitted the EPA to issue a Continue Reading

“We are witnessing a collapse in oilsands-related construction. As far as we can tell, as Continue Reading