The Grand Delusion


Almost a decade after the Hurricane Katrina price-spike, Saudi exports have only increased by a million barrels per day. The “swing-producer.” The only country with plenty of shut-in, emergency capacity to spare.

The price of oil is fairly stable around $100/barrel. A decade ago Daniel Yergin and CERA were only unsure if oil would remain at $40 (“or more”) or crash down to 1998 levels. Whoops.

The Oil Drum has apparently been driven to collapse. By whom or what I am not sure. Yergin has been railing in a highly emotional manner about the fraudulent nature of “peak-oil theory.”

He published a sequel to The Prize in 2011. The Quest. I just discovered this book. (I’ve been kinda out of the loop oil-wise for a few years).

I flipped right to the chapter ‘The Demand Shock’ on page 161 of this 700 page masterpiece of obfuscation. The narrative of this chapter conveniently starts in about 2004 and runs through 2010 and 2011. In ends with a conversation with Robert Schiller. The conclusion being that the price move to roughly $150 in the summer of 2008 could be seen as a bubble that had ended by 2011. I’ll point out here that only stayed above $120 very briefly from a historical perspective and that we are currently a long-term sustained highs in the price of oil.

The Quest is not end-noted very well, Daniel Yergin apparently perceives ownership of much of this information. But in a few instances it is interesting to see that the only end-notes are for IHS CERA and the work of Peter Jackson. More interestingly there is no mention of the 2005 CERA Private Report and its predictions gone horribly wrong. More on this soon.


11 Replies to “The Grand Delusion”

  1. mahalo for taking a look at this, JR. it’s nice to know what TPTE are using to justify their continued existence. yergin is their mouthpiece, bar none.

  2. The banner is a photo of, I believe, a Peshmerga fighter protecting a length of something. I’m not sure what. Maybe a section of some type of pipeline. It looks more like a part of a hydro-electric dam. It’s pretty big. He probably thinks it’s a giant can of camel-meat.

  3. JR, maybe now that you’ve turned the lights back on, EE will comment moron often. I like this format also, but it was nice being different, too. like hanging out in some smoky lounge, the previous dark one.

  4. meanwhile, out here in paradise, some of the tourist industry folks are getting concerned about global warming’s predicted effects on sealevel rise. it’s dawned on them that toursists may no longer wish to visit waikiki when the place looks moron like venice does now. my guess is they’ll have plenty moron to worry about that the tourist trade, assuming some survivors still live here then, they figure a way to fly passenger planes without liquid fuel, etc.

  5. i get a kick out of how they (local leaders) want to prepare for more frequent and severe storms, drought, sea level rise, costs of moron repairs from beach erosion, etc., and nobody even thinks that maybe, just maybe, tourists won’t show up because of financial collapse => political collapse (governments gone).

    try flying passenger jets without underwriter’s insurance, sure to be among the first to go bye-bye, even if the airlines can still afford the pricey jet fuel. also, no FAA, no TSA, etc. oops, let’s not think about that, let’s worry about costs of beach armoring, instead, fellow ostriches.

Comments are closed.