As the world oil futures markets bubble and broil, the media has one hysterical headline after another. "Oil drops $1!" headlines alternating with "Prices inch up" as disappointment rages. In November, the rulers and the media told us all that world prices were not only going to fall but fall so drastically the oil companies would need protection so they don't go bankrupt with low prices!
This fantasy was broken by events. Unlike the GOP/media projections of oil at $25 a barrel by April, the price went up. So every couple of months, rituallistically, the Saudi owners of America would trot over here, get kissed and coddled by Bush personally and the running dog press would bow deeply and cringe and whine, begging for bones, and then our overlords would return home and the price of fuel would go up yet again.
Oh, those poor Texan oil men! So much money and so many things to spend it on!
Well, alarm is rising. The legion of internet writers who talk about the World Hubbert Oil Peak are now becoming rather famous. I talk to people on the street who now have heard of this thing even though the NYT and WP and all the major TV stations have mentioned it collectively maybe five times? Well!
From the Albany Time's Union:
Global oil production is not likely to peak anytime soon, contrary to talk that has helped propel prices close to $60 a barrel, although lower prices may still be a few years away, a prominent energy consultancy said Tuesday.Incredible. Hilarious. So the "cheap oil" goal posts have snuck upwards silently. Six months ago, it was going to be ridiculously cheap. Now we should expect $40 a barrel just before the next election.
Cambridge Energy Research Associates said that, instead of a crest being reached sometime this decade, an inflection point in world oil output will occur sometime beyond 2020, after which production will plateau for several more decades.
In a report that builds upon earlier analyses by the Cambridge, Mass.-based consultancy, CERA said it believes that between now and 2010 there will be a substantial increase in worldwide oil production capacity, providing a supply cushion of 6 million to 7.5 million barrels per day that could cause oil prices to "slip well below $40 a barrel as 2007-08 nears."
The debate about whether global output is on the cusp of an irreversible decline is not new -- petroleum engineers and executives have been hashing it out for decades. But it has garnered extra attention amid soaring prices, a flurry of books about the oil industry and the revelation last year that Royal Dutch/Shell Group overstated its reserves, a key measurement of an oil company's future profit potential.
"It's certainly being taken more seriously, but it's not a more serious topic than it's ever been," said Lawrence J. Goldstein, president of PIRA Energy Group in New York.
Because of surprisingly rapid demand growth, especially in China, the global oil supply cushion right now is only about 1.5 million barrels per day. That has markets extremely nervous about the possibility of an output disruption. Oil prices are up more than 55 percent over the past year, in part because of the threat of hurricanes, terrorist attacks and labor strife in key oil production regions, such as the Gulf of Mexico, Iraq and Nigeria.
Of couse, the analysist assume we will have magically set up cheaper transportation systems, et al, which will reduce the demand for oil. How this will be achieved isn't mentioned. I see this AP article as yet another attempt at lulling Americans to sleep. To put off to day after tomorrow what we should have done yesterday. This is going to end badly. Why our rulers are doing this freaks me out because the only solution left will be world war. And I don't want this to happen and I seriously doubt most Americans want this to happen just like most Germans didn't want WWII. Which is why Hitler had to sneak them into it. Even after two years at war, he couldn't ask the hausfraus to do their duties because then support would have collapsed. So they had to use slave labor and give slaves to the German women to keep them happy. Ecch.
From the Guardian in England:
Gordon Brown will tonight press the case for radical EU economic reform in his annual Mansion House speech.China isn't the world's fourth largest economy. If you gage only industrial output, they are number two, rapidly becoming number one. Probably by 2010.
It is one of the chancellor's pet subjects as he believes that the Europe must be nimbler economically to confront the rising challenge from Asia, particularly China.
Where Britain is concerned, he has banged the drum on the importance of education and training in order for the country to be able to compete with China, which recently overtook the UK as the world's fourth largest economy.
Hoover could be the next big US brand to be acquired by a Chinese company, if Haier, the top Chinese appliance maker steps in. Haier would be following in the footsteps of Lenovo, which recently bought IBM's personal computer business with ambitions to become the world's biggest PC maker, leapfrogging Dell and Hewlett-Packard.What is this leading up to, concerning oil? Easy to spot: From the BBC:
China was once an economic superpower. In 1830, its economy constituted 30% of world GDP. It now accounts for a mere 4%, despite a population of over 1 billion people, but has ambitions to reach that 30% figure again.
China National Offshore Oil Corporation (CNOOC) has bid $18.5bn (£9.8bn) in cash for Unocal, which has large production operations in Asia. It is the biggest takeover offer by a Chinese firm and comes a day after Haier's bid for Hoover maker Maytag. Unocal has said it will consider the bid but remains committed to an agreed $18bn merger with Chevron.This isn't just a take down, this is a hostile offer. This is the Chinese playing Chainsaw Al. They are no longer just buying up factory equipment from bankrupt American companies, they are now taking over living companies, to use for their own ends (making us happy isn't one of their world goals). Worse, they have the money and power to now do hostile take overs despite our corporate rulers.
You see, our owners thought they controlled the Chinese just like they control most other nations which we occupy militarily. Our might war machine works exclusively for these people which is why our country is laughably easy to attack...all our energy and tools are overseas, holding down the fort for corporate America. So as we played footsie with the communist leaders of China, we assumed, because they let us into their country, we run China.
Most emphatically, we do not. We don't have the ghost of a chance of running them. And they know this. This is why political threats from our end are laughed off by the Chinese. The Americans want to own Chinese businesses. I have warned them over and over (no one listens to me) that the Chinese will allow some ownership only because they know they can seize property and factories in a split second without warning. No elections or speeches. Nothing. Just one fine day, bingo, all gone. Every last bit.
They know that power grows out of the energy of workers. Oil isn't the only energy. It is a great tool that magnifies the energy of the workers. But in the bitter end, human labor is what counts. The whole key to wealth is to make workers wealthy enough to have leisure and excess capital to put back into the system. The miser approach to workers always kills the capitalist Golden Goose.
Where the profits flows matters, too. The Chinese are heavily investing in capitalist ventures while America is putting all the money into property where it produces little value which is why we are going to have a Japanese-style depression very soon.
Analysts have raised concerns about CNOOC's bid, however, pointing to the fact that it may face hostility in the US and that it will have to take on billions of dollars in debt to finance it.The Saudis own our government. So do gambling operators. And so do the Chinese communists. They obviously feel they have us by the balls and despite all the anti-Chinese rhetoric from our rulers, they will kow tow to the Chinese because we are no longer a functional capitalist system. The rich just want to be richer. They don't really care if this means dessicating America. They don't live here anymore, anyway. This is why they don't care about us losing our Constitutional rights or us dying in foreign lands, fighting so the rich can soak the tax payers.
They also said that Chevron's bid has already won the approval of the US Federal Trade Commission, the main anti-monopoly regulator, leaving few remaining obstacles.
In an interview with the Reuters news agency, CNOOC chief executive and chairman Fu Chengyu said he was "quite confident" that his firm's offer would be accepted, adding that the move for Unocal was friendly.
"We believe the US government will approve the deal," he said.
The company's chief financial officer Yang Hua told Dow Jones Newswires that CNOOC is "prepared to closely cooperate to get US approval for this deal".
"We believe the offer will be very good for America as we are going to protect US jobs while continuously marketing [Unocal's] products in the US," Mr Yang was reported as saying.
If the Chinese don't get Unocal, expect fiscal fireworks at the next sale of American government bonds.