Oil bigs to Obama: Get real

http://brainstormtech.blogs.fortune...il-bigs-to-obama-get-real/?source=yahoo_quote

Notable quotes from the article:

"...though the recession certainly had crimped energy demand in developed countries, BP is forecasting a 40% increase in energy consumption among non-OECD nations over the next 20 years"

"Even in the most aggressive climate change legislation perceived, hydrocarbons will represent 80% of energy consumption over next 20 years"

"Overall, Hayward predicted Iraq will be producing 10 million barrels a day in 10 years. That would be a five-fold increase and a gigantic accomplishment"

-Tony Hayward, group chief executive of BP


"Change in the energy industry doesn’t work like an on-off switch. It takes 25 to 30 years to gain 1% of global market share from the moment we start investing in a major project."

-Peter Voser, CEO of Royal Dutch Shell


"Liveris said he supports neither a carbon tax, which merely would be passed on to consumers, nor cap and trade, which would reward speculators"

-Andrew Liveris, chairman and CEO of Dow Chemical


"He believes the “peak oil” debate is dead, though it caused damage in the form of price increases and volatility"

- Al Falih The CEO of Saudi Aramco

 

But we’re dealing with a clueless idealist, who pays little attention to hard data and cold facts. He thinks he can create a “green job” revolution (on par with the invention of the automobile or tech/internet revolution). That kind of thing is never created top-down by central planners, especially when the technologies (solar, wind, etc.) are ions away from fulfilling global energy demands.

 

You nailed it.

 

Ditto except for the ions.

 

Here's the problem:

Do you really think that alternative energy could replace oil via the free market? I agree that the current internal cumbustion engine/gasoline powered system evolved first, and then planners got involved and took it to the next level.

But here's the issue with just waiting for a free market solution to "evolve." Energy is strategic and ubiquitous and heavily reliant on logistics. It's not like, say chicken. If there were a mad chicken type disease and nobody could eat chicken, society would be fine - they would eat turkey, pork, beef, etc... Replacing that kind of commodity is easily done by the market.

But someday oil will get very expensive - prohibitively so. I'm not saying it will happen next week, or the next decade - I don't want to argue timing... but let's assume that yes, eventually, oil costs go through the roof.

Then what? What will the new technology be? Who determines it? What will car manufacturers use? Which current gas stations convert to the new fuel? In what timeframe? Which gas stations continue selling only gas? Who keeps the old gas run car, who gets the new fuel driven car?

My issue is that yes, we evolved over time, to rely on the ICE. Allowing it to fade and be replaced easily by the "Free Market" is nonsense. There are a lot more issues involved then replacing any other commodity, like say, chicken. I'm not saying I agree with Obama - but some form of planning will be required. We can't assume that we leave oil on our own schedule. Oil may leave us on it's own schedule.

 

But when oil becomes prohibitively expensive, that is when the free market really comes into action with all kinds of people coming up with new and exciting ideas for alternative energy. Think about the oil spike of 2008. All you heard in the media was about alternative energy, ethanol, solar power, etc. etc. I am all for government providing incentives for alternative energy R&D, innovation, etc. but am totally against restrictive policies such as cap & trade.

Also, Obama is speaking of these reforms as if somehow this is a near term possiblity. Just read some of the comments from the major oil players and use common sense. It will take many decades to get off foreign oil addiction. Does this mean that we shouldn't be thinking of alternatives? No. But it does mean that there are more pressing and urgent issues to deal with besides how to fuck oil companies with restrictive policies that actually do nothing to advance the progress of alternative energy solutions.

 

Exactly. And if we do get into another triple-digit price oil crisis, the worst scenario would be an existing government-run system for alternative energy. If they get heavily involved, there will be non-productive politics, favored companies, pay-offs, lobbying, excessive regulations, etc. It will be stifling for truly innovative alt energy firms that are outside the government's interests.

 

Oops, those i's and e's look so much alike on my keyboard.