Exxon Mobil

By Steve Coll
December 11, 2016

What’s Good for Exxon Is Bad for the Country
Does Rex Tillerson know the difference between corporate imperatives and national interests?
By Fred Kaplan

Is is stupefying how none of these guys understands just how important oil is on a geopolitical level. And yet this is a no-brainer for Trump. I would assume Tillerson is fairly expert in what’s important about Russia, China, Saudi Arabia, Iraq, and Iran – the only countries that matter when you are Secretary of State. I could be wrong, but even a casual glance suggests he may be the most qualified when both knowledge and experience are counted. And Fred Kaplan is an idiot.

Trumpxuberance… Until It’s Not

American oil companies can no longer make a buck doing their thing. Exxon-Mobil’s U.S. production business lost $477 million in the third quarter, the seventh straight quarter in the red. Why? Because it costs a lot more to get the stuff out of the ground than it did ten years ago, and that high cost is bankrupting oil companies and industrial economies. That is the stealth action of Peak Oil that so many people pretend is not happening. It will ultimately destroy the banking system.

Explanation for What?

Vox.com’s capture of the know-it-all demographic
David V. Johnson

Take Vox sponsors Goldman Sachs and JPMorgan Chase, persistent targets of populist rage for their exorbitant profits and their role in the wave of fraud that contributed to the financial crisis. Yes, Vox explains that breaking up the big banks—a policy senators Bernie Sanders and Elizabeth Warren supported and Hillary Clinton opposed—is a bad idea. I’m sure this position had nothing to do with the influence of money, or Klein’s niggling worries about biases that make us stupid. Like good high-achieving students, Vox writers give their reasons and show their work. Nor does Goldman’s sponsorship of Yglesias’s podcast influence his conclusion in one of those podcasts that raising taxes on the superwealthy doesn’t actually do much to reduce inequality. (“I think it is not a great idea to have adopted this entire inequality focus,” he said.)


Some good comments on this one:
Gun Control: Hawglegs and Hawgwash
• DECEMBER 1, 2016

Daddies, “Dates,” and the Girlfriend Experience: Welcome to the New Prostitution Economy

A growing number of young people are selling their bodies online to pay student loans, make the rent, or afford designer labels. Is it just an unorthodox way to make ends meet or a new kind of exploitation? Nancy Jo Sales investigates.

As the debate over whether the United States should decriminalize sex work intensifies, prostitution has quietly gone mainstream among many young people, seen as a viable option in an impossible economy and legitimized by a wave of feminism that interprets sexualization as empowering. “People don’t call it ‘prostitution’ anymore,” says Caitlin, 20, a college student in Montreal. “That sounds like slut-shaming. Some girls get very rigid about it, like ‘This is a woman’s choice.’ ”

Not that interesting an article. No insights into men or women that we didn’t already know. Mildly titillating. In the print edition it is followed by the bikini pics of Margot Robbie (as close as Vanity Fair gets to a centerfold). I think that if all these twenty-something “women” are unclear on the difference between feminism and prostitution, then Hillary Clinton hasn’t achieved much and the battle is probably lost forever.

The best book review ever written:

6 Replies to “Exxon Mobil”

  1. We should all get down on our knees and thank de Lord for Trump and his vision. The Obama dems and their masters were taking us into a nuclear war with Russia. Hillary would have got the job done for them. Now, we see an abrupt policy reversal from Trump with Tillerson, a smart oil businessman and friend to Russia, nominated for State. Signals are being sent out, mostly by tweets.

    I trust Trump knows the people he is dealing with and will take precautions, as they are notorious sore losers. If he pulls the US military out of the Middle East and begins to downsize, these people will really begin to howl.

  2. good post on Gail’s blog today:

    JT Roberts says:
    December 16, 2016 at 7:55 am
    Nice text end almost here.

    A lot of people aren’t getting thermodynamic collapse in oil means so to illustrate in 1965 the world was producing 30million barrels a day today the world is producing 90million barrels a day. However the net energy that is left over after production has declined from 50% to 18% so in 1965 we had 15million barrels of usable energy and today we have 16.2million barrels. This is less than 10% gain on a 300% increase in effort. 2017 is projected to increase the decline to 14% net energy for us to just stay flat global production will need to increase by 25million barrels a day that is not going to happen.

    Its likely no coincidence that Trump chose Rex Tillerson as Secretary of State. In order the keep the bus on the road more high value net energy has to be brought into the market. US frack oil is 5:1 at the well head where as Middle East is 20-30:1 that oil has to be in the market to slow the net energy decline. Some wrongly conclude supply demand principals will correct the situation with higher prices.
    Oil is not likely to increase in price. The net value is the energy it supplies. So each barrel is less valuable then the one the preceded it as the vast majority is consumed by the Oil Industry. The only thing keeping the industry alive is a dramatic build up of debt. Chevron borrowed 18billion last year Exxon 8billion. At the same time they cut all E&P exploration and production. If the price per barrel increases it will gut the global economy.

    Another way to look at it is this. At the pump the end user must bear all the cost of the product. So if a producers cost has increased 300% the end user has to pay that increase. The problem is he can’t because the net value is too low to produce profits from the use of it.

    For example right now jet fuel is running around $2:50 a gallon. It needs to be $7:50 a gallon to maintain the production. If it was what would happen to air travel? That’s the conundrum. It’s the same with us would we commute 1hr each way to work at $7:50 a gallon. At some point you just quit. This is particularly true for low wage jobs who still make up the vast majority of wage earners.

    So the collapse in oil prices is a collapse in business activity that preceded it. Look at all the macro indicators they’re all down. The “glut” is purely a function of the industry to keep cash flow. 1/3 of the frack oil is in bankruptcy but the creditors are making them pump like crazy hoping for a ROI.

    Why it’s so hard to understand is because we’ve been lied to our whole life about how economies really work. We’ve been taught that it is all supply and demand. This is a lie. The true pricing mechanism is the cost of production. The cost of production determines if a product can be affordably brought to market. Not demand. If you don’t believe that then why don’t we have super sonic passenger jets anymore? Because no one wants to fly at the speed of sound? Is it because we don’t know how to produce the planes anymore? Or is it that the cost of production of the service exceeded the net value to the customer?

    The same will happen to oil.

    Here’s the most fascinating bit. The US hit this net energy crises in 1970 when domestic production peaked at 10 million barrels a day. We never recovered. Nixon however did 4 things. One he took the US off the gold standard. By making the US dollar fiat he could increase debt exponentially. This allowed the US to continue to grow without real growth. This is an absolute requirement for Capital economies. Second he opened China for manufacturing. China had untapped energy reserves and abundant labor. In essence the off shoring of manufacturing preserved vital US resources and reduced domestic pollution. Third he created the EPA this imposed a great deal of pressure on industry to produce there products elsewhere like China. As I’ve explained before manufacturing is a lead loss industry so it sells its product at the cost of production or even a loss but the true profits are made by the Banking and Transportation sectors including wholesale retail distribution. Fourth he convinced the Saudis to sell their oil only in US dollars for unlimited military protection. This expanded to the rest of the OPEC nations. This move created the Petro dollar system that artificially created demand for US dollars. Like economic extortion the oil hungry world had no choice but acquire US dollars with real goods and services so they could buy oil. The price of the real goods and services were the cost of production. So incredibly cheap products flooded into the US with absolutely no cost because the US dollar was now a fiat currency. All you had to do is allow your currency to inflate at the same rate as your import export imbalances. So free stuff is flooding in to support this New Consumer Based economy. Americans start believing the more they consume the more there will be to consume. Absolute break from reality.

    Here’s the question do we think Nixon was bright enough to have figured all that out? I don’t think so. Trump is at the same inflection point. He has no idea why he is making the decisions he is. But this is the set up for the end. As one geologist states unlike 1970 the world can’t import oil. No one can Make America Great Again. But many will fall for his plan.

    This is in today’s headlines about Trump policy.

    The main thrust of his approach couldn’t be clearer: abolish all regulations and presidential directives that stand in the way of unrestrained fossil fuel extraction, including commitments made by President Obama in December 2015 under the Paris Climate Agreement.

    He has to reverse the decline in EROEI. A way to increase net energy is to remove all pollution controls.

  3. I was at a client’s house the other day. Won’t say what he does for which government but you won’t see a white guy with so many copies of the Quran. On his coffee table was a book about (essentially) what a diplomatic train wreck Hillary and Obama were in Libya. I suppose there’s a sequel to that coming soon.

  4. Live and let live. That is what I will continue to do with the well-fed woodchuck hibernating under my shed.
    Winter Solstice can’t come soon enough though…

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