The Weekly Oil & Gas Follies

Apr 20 2014, 10:53am CDT | by

The Weekly Oil and Gas Follies – Volume 42, April 21, 2014

In which we drill down into the @GDBlackmon Twitter feed to briefly chronicle the week’s silliness, shenanigans, fake news and real news related to the oil and natural gas industry.

 

The radical anti-fracking advocates at the Post Carbon Institute took over leadership on the whole “Peak Oil” argument a few years ago.  Since doing so, they have turned what was at one time a somewhat misguided and short-sighted mathematical endeavor into a full-blown religious cult, in which every data point, regardless of its nature, becomes twisted into a support point for the argument that the dreaded “Peak Oil” – and/or “Peak Gas” depending on what day it is and which side of the bed these activists wake up on – is just around the corner, and nations that depend upon petroleum products for much of their energy mix, i.e., pretty much every nation on the face of the earth, are DOOOOOOMED!

These people are quite verbose, able to whip out 3,000 word diatribes with the snap of a finger.  Here is their latest spin on the same lyrics and tune:  The Gross Society:  Entering an age of Energy Impoverishment.

Note that the Cult’s entire argument in this piece (assuming you have the patience and lack of anything better to do to actually read the whole thing) hinges on acceptance of the assertion that oil prices are somehow today at historic highs.  Think about that for a second:  That assertion is not remotely true in absolute terms, much less in inflation-adjusted terms.

In absolute terms, the price of oil exceeded the current price for WTI by 50% in 2008, rising as high as $147/bbl before suffering a steep decline at the advent of the Great Recession.  But in inflation adjusted terms, there have been many times in the past when the real price of crude oil exceeded the current prices for WTI or Brent crude.  Just off the top of our melon-like head we can tick off 2011 and 1980, to name just a couple of years in addition to 2008.

More to the point, the price of gasoline is really the key statistic that indicates the true cost of petroleum to any country’s economy, and there is literally no case to be made that current gasoline prices are at historically high levels on an inflation-adjusted basis.

Look, nobody with any sense or knowledge on the subject argues with the proposition that oil is a finite resource.  We will indeed reach a “peak” and even run out of recoverable crude oil resources at some point in the distant future.  The question at hand here is when will that point in time take place?  The Peak Oil cult alternately argues that we are on the verge of reaching the “peak”, or have indeed already reached it.  Meanwhile, global crude oil reserves and production continue to steadily rise, and every real expert understands that we are just at the tip of an enormous underground iceberg when it comes to identifying and producing global shale oil reserves.

As for the whole “Energy Impoverishment” argument, it is crucial to remember that the goal of the radical environmentalist movement personified by the Post Carbon Institute activists is to deny nations access to abundant, affordable energy that oil and natural gas provide every day.  Energy impoverishment is in fact what we will all experience if these people ever do achieve their ultimate goal in life.

At the end of the day, “Peak Oil” theory has become nothing but a religious exercise engaged in by environmental radicals, designed solely as an effort to create alarm in the public’s collective mind about continued reliance on crude oil and natural gas as our main source of energy. 

That’s what it is, and if you fall for it, well, shame on you.

 

The Oil Patch Photo of the Week, Courtesy of @GDBlackmon:  Lunch at The Wellhead Café in Artesia NM

 

Noooo…you think?:  Oil Trains Run Because Pipelines Don’t – Some politicians in California, and people like me who live near railroad tracks, are waking up to the fact that four times as much oil was shipped to California by train over the last year than the previous year. Most of it was heading to refineries here in Southern California. As the oil trains have increased, so have complaints and environmental concerns about them.
What is subsidizing Corn Ethanol, Alex?:   The Dumbest Federal Policy You Will Read About Today – If you are like most people, you probably spend a lot of time wondering, “What is the absolutely worst environmental policy on the planet?” And if you are like most people, you probably think it is America’s ethanol policy. So Virginia’s recent decision to subsidize what will be the largest ethanol plant on the East Coast might strike you as doubling down on the dubious./>

Now for Our Totally, Completely, 100% Shamelessly Self-Serving Link of the Week!:  “King Coal” is Dying – Prince Oil & Gas is Next – Several years ago, during a period of time when some in the oil and natural gas industry were engaging various environmentalist organizations in discussions on how to promote and better regulate natural gas as a fuel for power generation, a very wise man took me aside and said, “Don’t kid yourself.  These groups are focused on killing coal right now, but once they’re done with them, they’re coming after us.”  Now that the environmentalist lobby, working in concert with the Environmental Protection Agency – which is largely populated by folks who came out of these same environmental organizations – has almost succeeded in killing the nation’s coal industry for all intents and purposes, it is obvious that truer words were never spoken.  Anyone paying attention to what is happening today in the U.S. energy space can clearly see that the focus of the radical environmental movement is indeed turning very quickly to efforts to do the same with oil and gas.

Count us in:  Why I’m Cheering for Fossil Fuels on Earth Day – On my TV show this week, statistician Bjorn Lomborg points out that “air pollution kills 4.3 million people each year … We need to get a sense of priority.” That deadly air pollution happens because, to keep warm, poor people burn dung in their huts.  Yet, time and again, environmentalists oppose the energy production most likely to make the world cleaner and safer. Instead, they persuade politicians to spend billions of your dollars on symbolism like “renewable” energy.

Our Money’s on Chuck:  Chuck Norris, Jared Leto Battle Over Keystone – “On one side you have people whose living is made from notoriety and on the other you have supporters of KXL who have taken a stand because they believe it is the right thing to do for their labor union or their constituents or the community,” said R.C. Hammond, a spokesman for the Consumer Energy Alliance, an industry-backed group whose members include Exxon Mobil Corp. Asked to name celebrities on his side, Hammond said in an e-mail that investors Warren Buffett and T. Boone Pickens favor Keystone, as does action-movie star Chuck Norris.

Biofuels are the “Fuel of the Future”….and always will be:  Dual Turning Points for Biofuels – But even as Abengoa and other companies prepare to produce significant amounts of cellulosic ethanol, using corn stalks and wheat straw as opposed to corn itself, the appetite for such fuels seems to be diminishing.  The market is saturated with ethanol from corn. The automobile and oil industries are resisting efforts to increase the amount of ethanol blended into gasoline. And now the Environmental Protection Agency is considering reducing the amount of advanced biofuels required for blending into vehicle fuels this year by more than 40 percent below the original target in the Energy Independence and Security Act of 2007.

Some Quick Hits:

True:  Global Warming’s Upside Down Narrative

Cool:  Marcus Hook Refinery Gets Makeover as Natural Gas Hub

Obviously:  Proof that the Feds are Stalling Oil & Gas on Federal Lands

 

That’s it for now – Have a Happy Easter!

Follow me on Twitter at @GDBlackmon

 
 
 

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