Reddot from the oil drum reposted this comment from an oil company insider, the original posting was in 2008. Really this says it all. The gap between what Television and the corporate media are telling us and what they are telling themselves is pretty massive.

I didn’t want this to just vanish, so I’m also reposting it here.

reddot on May 1, 2010 – 4:58pm Permalink | Subthread | Parent | [Parent subthread ] Comments top

Relayer, ex-AMOCO, posted Sept 2008 on TOD an insider’s view of the current scene and BigOil knowledge of Peak Oil:[begin quote]

“Thank you and all contributors very much for all the hard work that goes into pieces such as this.

I have been lurking almost since the inception of this site and consider it one of the best places on the web for info and informed speculation on the oil situation.
I have refrained from contributing in the past, for the most part having not much of import to add that someone else has not already said. But one detail I would like to comment on.

The MSM have been touting the current link between high gasoline prices and refining capacity. Sure, there is a short term problem here, but only short term.
I began my career with Conoco in 1971. I distinctly remember meetings in the mid 70s in which it was stated that no more new refineries were going to be built in the U.S. We had enough existing capacity along with future upgrades to existing refineries to take care of foreseeable production. Small wonder that no new refineries have been built here since 1976.

Most of the world had been well explored for quite some time already, the U.S. peak was finally accepted, and the big question was where to risk capital next? Offshore, yes, North Slope, of course. The North Sea was a pleasant surprise. Nigeria was the last place in the world Conoco wanted to go, lol. One of the countries they considered ‘relatively’ stable was Venezuela. Well, that worked out ok for some time, but now look, nationalized.
(more…)

I’ve followed PrudentBear.com for years, over a decade now I think, and I’ve always enjoyed their writing and analysis, especially now that Doug Noland has been proven to be so right about his decade long warnings about the problems inherent in credit bubble economics. As if you need to prove the notion that economic bubbles must pop.

But what caught my eye this week was not another perceptive Noland Credit Bubble Bulletin, but rather an article by his conservative side-kick, Martin Hutchinson, a guy I generally tend to ignore, since all too often he’s just repeating the same anti-regulation stuff that brought us to where we are today. His web site is called greatconservatives.com, which is an oxymoron if I’ve ever heard one.

But here we have a guy speaking from that desolate intellectual moonscape, and he’s making sense!! This is disturbing.

Two more years of 62.4% price rises would take oil prices to $215 per barrel. Given that $147 per barrel oil was a major contributor to the 2008 crisis, do we really think the U.S. economy capable of bearing $215 oil in 2012 without caving in on itself? I don’t think so. At least, not unless the dollar has collapsed and inflation has taken off to a level of perhaps 20-25% per annum, which is certainly a possibility.

Then there’s iron ore. The annual contract system appears to have broken down, with contracts settled at 100% above last year’s prices and the spot price running 50% higher still. Given the assumption of robust global growth and thus maintenance of this rate of increase, iron ore prices by April 2012 could thus be quadruple their current level, or $600 per metric tonne. Automobile production would have to shift entirely to plastic – except that being derived from petroleum, plastics prices would also have grown exponentially.

Then there’s copper. That’s also up more than 60% over the past year, and on the London Metal Exchange is closing in on its all-time record price, set in April 2008, around $9,000 per tonne. Existing copper mines deplete rapidly unless capital is invested in them, and with new investment having ceased for a year in 2008-09 there is now a serious supply shortage, not expected to be alleviated until major new capacity comes on stream in 2014-15. Again, if economic recovery is robust for the next two years, copper prices will continue rising at the same rate as in the last year, reaching $21,000 per tonne by 2012. Any bets on what that will do to the economy, or to inflation?
V-shaped explosion

No gibbering about Government policies, removing regulations, etc, none of which can actually resolve global geological production peaks of finite commodities. In other words, he’s making sense.

I have to admit, this, more than anything else, worries me, and I’ll tell you why. When reality has become so obvious that so-called ‘conservative’ anti-government types actually recognize it for what it is, it means reality is just about to slap us all in the face, and hard.
(more…)

There was a nice article on Bakhtiari in whiskeyandgunpowder.com, as you’ll note if you read the article, times are very close, close enough where we can see the iceberg approaching the prow of the Titanic, yet we are still tuning in to various radio broadcasts about things unrelated. Too bad.

ALI SAMSAM BAKHTIARI is a retired “senior energy expert,” formerly employed by the National Iranian Oil Co. (NIOC) of Tehran, Iran. He has held a number of important positions with NIOC since 1971. He is currently attached to the director’s office in the Corporate Planning Directorate of NIOC, and specializes in questions related to the global oil, gas and petrochemical industries.
Nothing Like Business as Usual

But the really good part was in his concrete advice on how to proceed with this problem:
(more…)

William Black, for those of you who don’t follow such things, is the guy who salvaged the Savings and Loan debacle way back there in the 90s.

He’s also the guy who was NOT hired by Obama, which was the exact moment we were told that in fact, yes, accepting campaign contributions from Wall Street does hopelessly compromise your integrity, left or right, makes no difference.

But it’s still good to know there are some reasonably competent and honest individuals out there.

Mr. Black, you are a white-collar criminologist. Can you describe for us these “certain patterns of behaviour, which are relatively standard in criminal financial activity” and explain why they occurred?

The fuller question is why we have recurrent, intensifying crises in so many nations. The principal cause is epidemics of “control fraud.” “Control frauds” are seemingly legitimate entities controlled by persons that use them as a fraud “weapon.” (The person that controls the firm is typically the CEO, so that term is used in this article.) A single control fraud can cause greater losses than all other forms of property crime combined. Neo-classical economic theory, methodology, and praxis is optimizing criminogenic environments that hyper-inflate financial bubbles and produce recurrent, intensifying financial crises. Financial control frauds’ “weapon of choice” is accounting. Neo-classical theory, which dominates law & economics, is criminogenic because it assumes that control fraud cannot exist while recommending legal policies that optimize an industry for control fraud. Its hostility to regulation, endorsement of opaque assets that lack readily verifiable market values, and support for executive compensation that creates perverse incentives to engage in accounting control fraud and optimizes fraudulent CEOs’ ability to convert firm assets to the CEO’s personal benefit have created a nearly perfect crime.
Interview with Bill Black: The Great Global Bank Robbery, Part 1

And make sure not to miss the recent article Spitzer and Black cowrote:

For those who have spent years investigating fraud, it was no surprise to hear that Goldman Sachs, the (self-described) jewel of Wall Street, is the latest firm to emerge from the financial crisis with tarnished reputation. According to a lawsuit brought by the Securities and Exchange Commission, Goldman misrepresented to its customers the quality of the toxic assets underlying a complex financial derivative known as a “synthetic collateralized debt obligation (CDO).”
Spitzer & Black: Questions from the Goldman Scandal

But read this stuff yourselves, these guys are good.
(more…)

Here’s a useful tool for re-evaluating the actual costs of the US military.

So what does this mean? Well, it’s pretty simple – next time you hear a politician say we can’t afford X or Y, or we need to cut A or B, keep always in your head, that we can afford these things, if, but only if, we slash back our military industrial complex, and our foreign bases. In other words, if we return to having a purely defensive military, one without the current revolving chairs taking Pentagon officials straight from military service to high paying jobs with defense contractors.

Such a slimmed down military would look a lot like the militaries of other countries that engage in largely defensive military development and funding. In other words, it would cost probably only 10% of what we currently spend. So that’s a good place to start when looking where to cut the budgets.

It’s really not complicated, all it takes is the willingness to demand change, and to vote for candidates who will actually promote change. This, of course, won’t happen until we simply cannot afford our current corrupt system.