RE: Energy Policy / Junk Science Environmentalism

Hi Don,

Of what value is there for a politician to tell the electorate bad news?
Are they going to like him better for it? No. So interacting with government
is useless because look what happened to Jimmie Carter when he told the US
citizens to wear sweaters.

Secondly, I have studied the issue extensively but I don't know what to do
about it. I don't really know anyone who knows what to do. The higher ups
are more concerned with stock prices than they are with global issues.
Business is not a think tank afterall. But, there is no conspiracy. There
are those who seem to think that if the price rises new supplies will come
along (I don't believe it because it didn't happen in the US when prices
went from $2 to $32 in 10 years). There are those who don't know. There are
those who don't care, thinking that they will be retired long before the
worst happens. There are those who know but don't know what to do. There are
all sorts of people in the oil industry. I do know that eventually
alternatives will come to play but our energy usage will have to be much
less. We could replace oil in the electrical generation area with solar,
but transportation is the place where the problem really lies.

As to government officials, don't count someone like me out. I personally
know the deputy commerce minister of the country in which I currently spend
most of my time, as we;; as the deputy director of the land ministry, the
director of strategic planning, a deputy foreign minister etc. They don't
forget me because I speak their language (poorly, but still I can
communicate with them). I have been in small helicopters with several high
ranking government officials and was asked to give a speech in Chinese in
front of them (I said in Chinese to the person who told me to speak Chinese,
that if I spoke it, she would have to translate my Chinese. They all
laughed). I was at a dinner a week ago where the Minister of Commerce gave a
major speech on US Chinese trade relations. I have been at dinners where
George Bush (the old president) gave a speech and then walked within 6 feet
of me. So we smaller (not small) companies do have the type of interactions
you are thinking about, you just aren't aware of them. I do know that
certain governments are concerned even if ours isn't. And I have had
conversations with several senior officials on this precise issue of oil
running out. I hate bragging like that, but don't be so quick to dismiss
someone like me because you have a false impression of what I do.

The biggest risk to energy investment is political. And I am aware of that.

By the way, I am beginning to read Chinese geology books now. Very very
hard and it takes much work, but I will learn their language if I am capable
and able.

  _____

From: asa-owner@lists.calvin.edu [mailto:asa-owner@lists.calvin.edu] On
Behalf Of Don Winterstein
Sent: Sunday, December 18, 2005 1:18 AM
To: glennmorton@entouch.net; asa@lists.calvin.edu
Subject: Re: Energy Policy / Junk Science Environmentalism

By "inside information" I was thinking more of the kinds of things one might
learn from interacting with entities such as governments, which the really
large companies (Exxon, Shell, BP and Chevron) are sometimes able to do at a
higher level than smaller companies. These executives (Don Paul, at least)
are not unaware of what's been written about peak oil, but for some reason
they seem wholly unperturbed if not dismissive. You write that executives
of smaller companies are behaving similarly. They aren't stupid, but are
they foolish? Is there a blind spot? Is there a conspiracy? In any case,
in public they seem to have confidence that any crisis over oil production,
if one is to come, is not imminent but maybe will come 10-30 years down the
road.

You make quite a persuasive case for a sooner arrival, but it's hard to
digest this and the apparent complacency of oil company executives at the
same time. That's why I wonder whether they may know things not available
to the public. If your scenario holds, I'd anticipate severe shortages and
rationing within a decade or so. Such developments would drastically affect
all oil companies, so if they're going to happen, companies had better be
preparing now. I've heard about ramping up hiring, exploration, research
and ventures into alternatives. Maybe this is all they can do. Along with
buying up other companies!

Incidentally, rationing is not so far-fetched. Southern Californians
experienced a form of it two years ago when electric utilities rotated power
cuts. If there's not enough essential stuff for people to have all they
want, then some higher authority is going to dole it out in such a way as to
make sure everybody gets at least some of it. Have you figured effects of
rationing into your investments? : ) Remember that price controls come
with it.

Don

 
Received on Sun Dec 18 09:36:12 2005