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9 juillet 2008 3 09 /07 /juillet /2008 08:23
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9 juillet 2008 3 09 /07 /juillet /2008 08:21



As losses mount, US banks cut thousands of jobs

By David Walsh
19 April 2008

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Banking and other financial firms in the US continue to report enormous financial losses, inevitably accompanied by mass layoffs. While present and former executives of these companies are well insulated from the disaster over which they have presided, tens of thousands of their employees are not so fortunate.

A number of major US banks reported first-quarter earnings this week, and more will do so next week.

On April 17, investment bank and the world’s largest brokerage Merrill Lynch announced a loss of $1.96 billion in the first three months of 2008, a turnaround of more than $4 billion from the same period a year ago (when it made a profit of $2.11 billion).

Merrill Lynch announced it was eliminating another 2,900 jobs, bringing the total of its proposed job losses for 2008 to 4,000.

The following day, banking giant Citigroup reported a $5.1 billion loss in the first quarter, a change in fortune of $10 billion from the first three months of 2007 (when its profits amounted to $5 billion). Forbes.com remarked that the earnings “were even more dreadful than the miserable results investors had expected.”

Citigroup has said it will lay off some 9,000 employees in the next 12 months. This comes on top of 4,000 cuts announced in January.

This is unlikely to be the end of the firm’s layoffs. Vikram Pandit, Citi’s chief executive, indicated Thursday that the bank would be seeking to slash costs by as much as 20 percent. The comment, noted the Financial Times, had the effect of “deepening fears that Wall Street and the City of London are about to be hit by tens of thousands of additional job losses.”

The business paper suggested that analysts are anticipating the elimination of some 25,000 jobs “in the next few months” at Citigroup.

The bank is not out of the woods yet. Moody’s Investors Service warned that because of “Citigroup’s complexity, its significant exposure to the global capital markets, and current illiquidity and volatility of some of those markets, additional marks in its investment bank cannot be ruled out.”

JPMorgan Chase announced April 16 that its earnings had been cut in half in 2008’s first quarter due to problems with mortgages and other bad loans. JPMorgan’s recent purchase of bankrupt Bear Stearns will undoubtedly lead to slashing the latter’s workforce of 14,000. The Wall Street Journal reported April 12 that the “emergency takeover” is expected to cost at least half of the jobs at Bear Stearns.

Other large US banking firms, such as Washington Mutual (a $1.14 billion loss and 3,000 layoffs), Wachovia (a $393 million loss and hundreds of layoffs) and Wells Fargo (a decline of 11 percent in profits), have also reported grim first quarter earnings. Bank of America is not expected to have anything good to report next week.

There is no end in sight to the financial and employment bloodletting. Financial firms globally have taken some $200 billion in write-downs (reductions in the book value of assets because they are overvalued compared to their market value) since the middle of 2007. Citigroup alone has now taken write-downs totaling nearly $39 billion since the crisis began; JPMorgan has taken about $10 billion.

After the announcement of Merrill Lynch’s most recent earnings, John Thain, its new chairman and chief executive, called the first three months of 2008 “as difficult a quarter as I’ve seen in my 30 years on Wall Street.” Merrill Lynch executives indicated that March was “a significantly more difficult month” than January or February.

In an interview with the New York Times April 17, Thain sounded “a more negative note than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.”

Thain told the Times that thus far “the slowdown has been finance-driven. ... What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”

Floyd Norris, the Times’ chief financial correspondent, writes April 18 that “Since the big banks first realized last fall that their capital situations were perilous, more than $100 billion has been poured into them. Without all that cash, the system would be in horrid shape, and there would be a lot more blood on the Street.”

Norris takes note that bank chief executives “now profess to see light at the end of the tunnel, and they may be right. ... The trouble with such assurances is that the bosses of Wall Street have been repeatedly blindsided by newly discovered risks that their firms—and others—had taken.”

Norris ends on a pessimistic note: “With credit hard to come by, the real economy may be in for rough times, creating more loan losses. Wall Street may not need to beg for any more capital, but it is a good bet that its layoffs are only starting. There is not much need for the people who put together securitizations when there is virtually no market for such deals.”

The estimates on potential job losses in the banking and wider financial arena vary, but they are all substantial.

On April 1 financial research firm Celent LLC issued a report suggesting that some 200,000 of the US commercial banking industry’s 2 million jobs could be lost over the next 12 to 18 months. That would be an unprecedented number. But Octavio Marenzi, the head of New York-based Celent’s financial consultancy unit, argued that the economic situation was without precedent.

“The banking industry over the past 40 years has never seen a downturn in its revenue growth,” Marenzi told the Associated Press. “In 2008, it looks like it will decrease for the first time in living memory. They’re going to have to respond with severe cost cutting. It’s not an environment they’re entirely used to.”

In addition, global securities firms have announced 20,000 job cuts, 6,000 of them in New York.

Financial companies in total have slashed at least 70,000 positions in the US and Europe. Data provider Experian estimates the final number by the end of 2008 could be 240,000.

A recent headline in BusinessWeek asked, “How Deep Will Wall Street Cut?” It reported that Wall Street has announced plans to slash 34,000 positions over the past nine months, but noted that the number of layoffs might not be as great as in recent recessions due to the fact that “after the dot-com debacle,” only 74 percent of the jobs that had been lost were filled.

Precisely because “There is not a lot of fat to cut,” as one economist puts it, the upcoming job slashing will be more damaging. “What’s worrisome,” writes BusinessWeek, “is that companies may have to cut into the meat of their operations.” Many positions have been eliminated permanently with improvements in technology, “helping to keep a lid on costs and head counts in recent years. Since those ranks remain relatively thin, firms now may have to whack analysts, traders, and dealmakers. That’s not good for the island of Manhattan, where many of these high-paid employees work; banks and brokerages account for 35 percent of the city’s wages.”

While workers in the industry suffer the consequences of the economic slump, their employers face no such prospect. Apparently whether their firms prosper or not, or even go under, banking executives have organized things so they will be paid fabulous amounts.

Citigroup’s Charles Prince and Merrill Lynch’s Stanley O’Neal, who stood at the helm of their companies as they lost billions on risky investments in mortgage-backed securities, made off with $68 million and $161 million, respectively, when they resigned or were forced out. Former Bear Stearns chairman James Cayne dumped his entire stake in the failed bank for a mere $61 million in late March, a fraction of what his stake in the company had once been worth. We needn’t worry too much about Mr. Cayne. He made $38.31 million in 2006 in total compensation and $155.26 million over five years. There are no indications that he plans to give any of it back.

BusinessWeek last November took note of some of the fantastic “exit packages” that CEOs have organized for themselves. Richard Fuld Jr., for example, CEO of Lehman Brothers, “has nothing to worry about—his exit package is valued at $299 million, putting him close to the record for any such package.” Bank of America’s chairman and CEO, Kenneth D. Lewis, stands to walk away with $120 million, down from an estimated value of $136 million at the end of 2006.

While much of the country is suffering from some combination of job losses, gas and food prices, disappearing benefits and pensions, soaring medical costs and declining house prices, the super-rich are doing quite nicely. The BBC headlined a recent piece “Manhattan property defies gravity,” and pointed out that property prices in New York’s wealthiest borough had soared 41 percent over the course of the past year.

On average a Manhattan home costs $1.6 million, an increase from $1.1 million a year ago. Prices in primarily working class Queens and Staten Island dropped by 5 percent and in the Bronx by 1 percent. In Brooklyn, which has seen its share of ‘gentrification’ and housing speculation, prices rose by 3 percent.

The Real Estate Board’s Steven Spinola commented, “Manhattan’s luxury market for high-end properties continues to remain untouched by the slowing economy.” In fact, Spinola suggested that several luxury developments had just become available to meet the “pent-up demand.”

For the working population, the situation continues to deteriorate rapidly. Mass layoffs have been announced in recent days, in addition to those at Merrill Lynch and Citigroup, at AT&T (5,000 jobs), Volvo Trucks (1,100), Asahi Glass (900 in the US and Canada), Harley-Davison (730), Lehman Brothers (600), Siemens Energy and Automation (477), AMD (420), Valley Health System (396), Newark Morning Ledger (367), Skybus Airlines (365), Greenville Hospital in Jersey City, New Jersey (356), Aramark Sports and Entertainments (303), Baja Marine Corp (283), Dutch Housing (250) and Summit Production Systems (200), among other firms.

Meanwhile, paychecks of those who have a job are getting smaller as hours and overtime decline. The New York Times reported April 18 that “the reduction of wages and working hours ... has become a primary cause of distress, pushing many more Americans into a downward spiral.”

From March 2007 to March this year, the average workweek fell slightly from 33.9 hours to 33.8, with the slippage greater in manufacturing. Nearly 5 million workers were working part-time at the end of March “because their companies had cut hours in the face of slack business.” That number had jumped 400,000 since November.

Average income declined in March, after accounting for rising prices, the sixth consecutive month “that pay failed to keep pace with inflation.” While the increase in average hourly earnings from February to September 2007 barely kept pace with inflation, that is no longer the case. From November through March 2008, as employers began to reduce their operations, “wage growth fell below the pace of inflation, meaning that paychecks were effectively shrinking.”

See Also:
In midst of recession, multi-billion-dollar paydays for US hedge fund managers
[17 April 2008]
A faltering economy hasn’t slowed American CEOs’ pursuit of wealth
[16 April 2008]
Shades of 1929: the global implications of the US banking collapse
[16 April 2008]



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9 juillet 2008 3 09 /07 /juillet /2008 08:17




L'Iran tire des missiles en pleine crise sur le nucléaire

Les Gardiens de la révolution, l'armée d'élite du régime islamique iranien, ont tiré mercredi des missiles à moyenne et longue portée, dont un missile capable d'atteindre Israël, au moment où Américains et Israéliens n'écartent pas l'option militaire dans la crise du nucléaire iranien.

AFP/Archives :: Des iraniens regardent le lancement d'un missile Shahab 3 dans le désert, en novembre 2006
photo 1/2

La chaîne de télévision en arabe Al-Alam a affirmé que neuf missiles ont été lancés dans le cadre de manoeuvres, notamment un "Shahab 3 équipé d'une charge conventionnelle, d'un poids d'une tonne et d'une portée de 2.000 km". Quelque 1.000 km séparent la frontière ouest de l'Iran d'Israel.

Ces tests interviennent dans une période de tension croissante avec l'Occident autour du programme nucléaire iranien, alors que Téhéran refuse de suspendre son programme d'enrichissement d'uranium.

Les Gardiens de la révolution ont commencé lundi des manoeuvres navales et balistiques, intitulées Grand Prophète III, avec pour objectif d'améliorer leurs "capacités de combat".

"Le but de ces exercices est de montrer que nous sommes prêts à défendre l'intégrité de la nation iranienne", a déclaré mercredi le commandant des forces aériennes des Gardiens de la révolution Hossein Salami, cité par Al-Alam.

"Nos missiles sont prêt à être lancés n'importe où, n'importe quand, vite et avec précision", a-t-il dit. "L'ennemi ne doit pas répéter ses erreurs. Ses cibles sont sous notre surveillance", a-t-il ajouté.

Outre le Shahab 3, des missiles Zelzal, d'une portée de 400 km, et Fateh, d'une portée d'environ 170 km, ont également été lancés, a précisé la chaîne en langue anglaise Press-TV. Elle a montré des images du Shahab 3 au moment de son lancement dans une zone désertique non identifiée d'Iran.

Le chef de la marine des Gardiens de la révolution, l'amiral Morteza Safari, a affirmé que ses forces "voulaient montrer leur capacité à faire face à tout aventurisme" des ennemis de l'Iran, a rapporté mercredi l'agence Fars.

Des navires britanniques et américains ont de leur coté achevé mardi cinq jours de manoeuvres dans le Golfe visant à la protection des installations pétrolières, selon la 5e flotte américaine basée à Bahreïn.

Le chef d'état-major de l'armée iranienne avait averti samedi que son pays fermerait le détroit stratégique d'Ormuz, dans le Golfe, par où transite environ 40% du pétrole mondial, si ses intérêts étaient en jeu.

Mardi, l'Iran avait menacé de "mettre le feu" à Tel-Aviv et à la flotte militaire américaine dans le Golfe en cas d'attaque contre ses installations nucléaires, au moment où des grandes puissances l'exhortent à suspendre toute activité liée à l'enrichissement d'uranium.

"Le régime sioniste fait actuellement pression sur les dirigeants de la Maison Blanche pour préparer une attaque contre l'Iran. S'ils commettent une telle stupidité, la première réponse de l'Iran sera de mettre le feu à Tel-Aviv et à la flotte américaine dans le Golfe Persique", avait averti l'hodjatolislam Ali Shirazi, représentant du guide suprême Ali Khamenei au sein des forces navales des Gardiens de la révolution.

Washington a minimisé les menaces iraniennes et répété mardi vouloir régler le conflit sur le nucléaire avec Téhéran par la voie diplomatique. Mais les Etats-Unis, comme Israël, n'ont pas exclu un recours à la force pour stopper un programme nucléaire soupçonné d'avoir un objectif militaire.

Mardi, les chefs d'Etat et de gouvernement du G8, réunis à Toyako (Japon) ont de nouveau exhorté l'Iran "à suspendre toute activité liée à l'enrichissement d'uranium" et coopérer avec l'Agence internationale de l'énergie atomique (AIEA).

Mais l'ambassadeur d'Iran à Londres, Rassoul Movahedian, a déclaré le même jour que l'Occident "perdait son temps" en demandant la suspension de l'enrichissement d'uranium.


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6 juillet 2008 7 06 /07 /juillet /2008 21:24


Bien content que terredebrut recommence à publier.
commentaire n° : 1 posté par : 1x le: 28/06/2008 22:24:16
Merci d'être revenu , les informations sont devenues rares sur le pic pétrolier et la "vraie" production , les menteurs et manipulateurs professionnels se déchainent . Je remarque une nouvelle entourloupe , les biocarburants considérés comme production pétrolière , pour noyer le poisson c'est remarquable !
commentaire n° : 2 posté par : D.Cotten (site web) le: 28/06/2008 23:05:45

Ahhh quel plaisir de relire Terre de brut.

"les cours mondiaux évoluent selon une courbe exponentielle. [...] Il faut bien vous dire que ce n'est toujours que le début..."

J'ai le sentiment qu'un autre scénario est possible.
Le krach boursier annoncé pour la fin de l'été (voir lien 1 & 2) pourrait faire chuter à terme la consommation et donc les prix. Bref, je rejoins ceux qui pensent qu'il y a actuellement une bulle spéculative sur le pétrole.
En cas de baisse des prix, la possible capacité de réserve de l'Arabie Saoudite serait alors perçue comme un signal ralentissant les investissements vers les énérgies renouvelables notamment...

lien 1 : http://contreinfo.info/article.php3?id_article=2077
lien 2 : http://contreinfo.info/article.php3?id_article=2104

commentaire n° : 3 posté par : boris le: 28/06/2008 23:34:03
Bravo pour cette analyse intéressante.

Effectivement, il semble y avoir une tension particulièrement marquée sur le gazole, tension dont on parle finalement assez peu.

Pour abonder dans le sens de Boris, nous avons aussi l'intuition d'un scénario "touch and go" : http://aerobarfilms.over-blog.com/article-20821112.html
commentaire n° : 4 posté par : Aerobar (site web) le: 29/06/2008 09:00:46
J'ai donc lu vos analyses sur aerobarfilms. Il est vrai que l'inflation monte, que la FED fait marcher la planche à billet et que les spéculateurs effarouchés par la crise financière se tournent vers des valeurs plus sures comme le marché des matières premières.
Vous faites une prévision très risquée de voir le baril à 75$ fin 2008 et le pic pétrolier en 2014 (?? pourquoi en 2014 et pas en 2016 ou 2022 ou 2011?).

Vous semblez très sur de vous dans vos prévisions et raillez un peu facilement ceux qui essayent de faire des prévisions le plus sérieusement possible (cf Campbell) malgré les difficultés à obtenir des données techniques.
Dans votre modèle économique basé principalement sur l'effet de l'inflation, vous attachez trop d'importance au facteur économique et pas assez au facteur géologique, écologique, au processus de montée des couts d'investissements entrainant l'accélération de l'affaiblissement des retours sur investissements ainsi que le décrochage de l'énergie net par rapport à l'énergie brut et enfin au déclin plus rapide des capacités d'exportations.

Le modèle économique libéral est basé sur la loi de l'offre et de la demande. Certes, la montée des prix entraine la  baisse de la demande (baisse de la prévision de la demande en 2008 passant de 8802 à 86,8 mb/j entre juillet 2007 et juin 2008 par l'AIE), mais il faut regarder aussi du côté de l'offre car celle-ci baisse aussi.
Aussi, l'équation doit toujours être regardé avec tous ses paramètres et pas seulement avec un de ses paramètres si l'on veut s'engager dans la difficile voie de la prévision...

Savez vous que les stocks de produits pétroliers baissent dans le sud des USA à cause de la baisse des approvisionnements provenant du Vénézuela et du Mexique?

Emmanuel Broto.
réponse de : Emmanuel Broto (site web) le: 29/06/2008 15:10:56
Que pensez-vous des spécialistes qui affirment que l’arctique contiendrait 25 % des ressources énergétiques de la planète?
Félicitation pour votre site.
commentaire n° : 5 posté par : Richard le: 30/06/2008 00:24:02
2 remarques :

1. - concernant la spéculation : on ne spécule que sur des produits qui le permettent. C'est à dire qui ont un potentiel de pénurie. Il ne viendrait à l'idée de personne de spéculer sur des cailloux ...

2. - Au sujet des pics qui auraient été dépassés : J'ai bien l'impression que l'automne et l'hiver dernier, nous avons assisté à une formidable tentative pour éviter le désastre. Les shadocks se sont mis à pomper, à pomper comme des fous. Résultat : les records de production (brut et liquide) ont été dépassés. Cependant, ce pompage fou a du être accompagné d'une utilisation d'énergie faramineuse. Si l'on compare les bilans nets, je ne suis pas certain que les records ait été battus. Mais ceci est plus du domaine du subjectif et je suis preneur de toute analyse sur les bilans nets.
commentaire n° : 6 posté par : Rasalhague (site web) le: 30/06/2008 08:21:08

Merci, Emmanuel, pour cette remarquable analyse.


Il y a lieu de se poser des questions sur les capacités de l’Arabie Saoudite à augmenter sa production afin d’équilibrer l’offre de brut par rapport à une demande encore fortement croissante en dépit du fait qu’elle devient de plus en plus bridée par les prix de vente de plus en plus élevés.


Jusqu’en 2005 environ, ce pays avait joué le rôle de « swing producer » (producteur élastique), ajustant sa production par rapport à la demande, de telle sorte que le cours du brut soit maintenu à un prix de vente modéré. Mais pour quelle raison a-t-elle ensuite cessé de jouer ce rôle ? Incapacité à cause du déclin de ses champs pétroliers, ou politique délibérée afin de contribuer à faire grimper les cours pour retirer de plus grands bénéfices et prolonger la durée d’exploitation de sa ressource ?


Il est possible que ces deux raisons aient joué simultanément. Les dirigeants du Royaume ont pu estimer, d’une part, qu’ils n’auraient plus pendant très longtemps la capacité d’ajuster leur production par rapport à une demande débridée croissant trop rapidement ; et, d’autre part, que des bénéfices plus importants provenant de prix de vente élevés leur permettraient de faire face temporairement à de sérieux problèmes internes résultant en grande partie d’une forte croissance de leur population (notamment celle de la famille régnante, s’élevant aujourd’hui à quelques milliers, et dont les membres exigent des revenus « décents » conformes à leur statut princier …).


Au cours des trois dernières années écoulées, les cours de plus en plus élevés du brut ont contraint la croissance économique mondiale à recourir de plus en plus massivement au charbon et aux autres énergies ; et la demande pétrolière s’est à présent ralentie (bien que demeurant croissante), au détriment des populations les plus pauvres du monde entier. Dans ce contexte, les élites dirigeantes de l’Arabie Saoudite estiment-elles qu’elles ont à nouveau les moyens (au moins pendant quelque temps) de rejouer leur rôle stabilisateur ou, du moins, modérateur des futures augmentations ? et qu’il est prudent d’agir dans ce sens afin de ne pas casser prématurément les rouages de plus en plus fragilisés de la machine économique mondiale dont ils dépendent et au sein de laquelle elles détiennent du capital ?


« Mon grand-père voyageait à chameau, mon père roulait en voiture, je vole en avion et mon petit-fils voyagera à chameau », dit-on couramment en Arabie Saoudite. Si Dieu le veut, le retour sur le dos du chameau sera retardé d’une ou deux générations … à condition toutefois de prendre les décisions qui faciliteront le bon vouloir divin …


Du côté des pays développés occidentaux, il y a lieu de se poser des questions sur la capacité de résistance de nombreux secteurs d’économies face à la montée des cours de l’énergie. Assistons-nous au début de la chute du premier monde ?


André Sautou
commentaire n° : 7 posté par : Peak Energy News (site web) le: 30/06/2008 11:38:52
Merci pour l'article,
J'hésitais à faire certains investissements dans les EnR pour soulager mon chauffage au fioul, mais maintenant je sais ce qu'il me reste à faire.

Je trouve que Rasalhague fait quelques bonnes remarques, tout d'abord qu'on ne spécule que sur les produits qui ont un potentiel de pénurie. C'est la petite phrase que je cherchais pour calmer ceux qui m'annoncent que 70% du prix est du à la spéculation.
Puis au sujet des bilans nets d'énergie, là on touche au "graal" des piquistes: le calcul des bilans nets et aussi de la qualité d'énergie. Mais comme tout bon graal, il est quasiment insaisissable, il y a encore du travail pour les "chevaliers du PO".
commentaire n° : 8 posté par : Imago le: 30/06/2008 11:47:38
Votre site est une référence, merci de nous procurer de telles informations

j'ai fait un copier collé de cet article récupéré sur voursorama dans la file petrole et matières premières.
Est-ce pertinent comme argumentaire ?

USA : Le + beau coup de l'histoire
    14:57 29/06/08
moderne se profile. Avec un baril à 140 dollars, l'exploitation des schistes bitumeux commence à devenir très rentable.

Tout a été orchestré depuis 2 décennies. Economiser ses propres ressources en attendant le moment propice pour agir ... Le chantage des pays exportateurs de pétrole touche à sa fin, et on assitera à un retour en force des USA sur la scène énergétique mondiale. Un véritable boom économique se prépare aux USA.

Cachée à 300 mètres sous terre dans les Rocheuses, s'étend la plus grande réserve de pétrole du monde: plus de 2 trillions de barils sous forme de schistes bitumeux . Le 8 août 2005, Le président Bush a ordonné son extraction. 3 sociétés ont été choisies pour initier le projet. Les tests de forage ont commencé. et sont très prometteurs.
Les Etats-Unis ont attendu que le pétrole se raréfie à l'étranger pour bouger. Imaginez les conséquences: le monde ne va plus dépendre des pays musulmans dont les réserves tiendront jusqu'en 2050. Les Etats-Unis vont prendre la relève. Ce sera le plus gros boom économique sans aucun précédent que les USA vont connaître dans la prochaine génération.
Je n'indiquerai pas le nom des 3 sociétés afin que les profiteurs n'en profitent pas en bourse.

Les réserves prouvées aux USA sont largement supérieures à toutes les réserves prouvées du reste du monde.

8 fois plus qu'en Arabie Saoudite
18 fois plus qu'en Irak
22 fois plus qu'en Iran
500 fois plus qu'au Yemen

Ennemis des USA, vous pouvez trembler de peur. Vous allez être détruits à long terme.
Et en plus, le terrain appartient au gouvernement américain et non pas à des particuliers !!!
Le chantage des pays musulmans sur les pays occidentaux va bientôt prendre fin. Les nouveaux pays qui les remplaceront seront en plus des USA, l'Australie, le Canada, la Chine, le Brésil, l'Estonie et le Maroc c'est tout !

Dans les medias, on entend souvent que le schiste bitumleux du Canada (le seul pays qui a rendu la chose officielle) n'est pas rentable. C'est totalement faux, mais c'est rassurant de le dire; car une révolution énergétique se prépare.Ce sera le Grand retour des Etats Unis. Les dernières technologies ont permis de faire baisser le coût d'extraction de façon considérable.Le coût d'extraction par baril du schiste bitumeux est maintenant de 10 Dollars.

La Chine (pays des secrets) utilise secrètement le schiste bitumeux depuis 1929 et prévoit un doublement de la production de pétrole sur son sol .90 % de l'électricité estonienne est produite par le pétrole des schistes bitumeux. Le Brésil s'y met.La Jordanie et le Maroc commencent. Mais les réserves bitumeuses de ces pays sont infimes comparée à celles des USA. Trois états américains vont connaître une richesse sans précédent dans les décennies à venir grâce au schiste bitumeux: le Colorado, l'Utah et le Wyoming.

A chaque fois que vous faîtes le plein, vous subventionnez le terrorisme. Bientôt, en faisant le plein, vous subventionnerez les plus riches Américains. Super, non ?

commentaire n° : 9 posté par : brunoetz le: 30/06/2008 12:35:21
Bon modérons le commentaire précédent

Il y a beaucoup d'erreurs et de méconnaissance dans cet article.

Bien évidemment, le coût d'extraction du pétrole contenu dans les schistes bitumineux est bien supérieur à 10$.

D'ailleurs, il y a confusion entre schistes bitumineux et sables bitumineux. Les sables, c'est ce qu'on exploite au canada. Les schistes, c'est encore plus difficile à extraire, le pétrole n'est pas dans du sable, mais dans de la roche.

Ensuite, pour pouvoir extraire ce pétrole, il faut le chauffer à très haute température. Cela consomme presque autant d'énergie qu'on peut en extraire. Mais en plus de ça, le goudron issu de ces schistes, comme celui des sables bitumineux, doit être hydrogéné pour être utilisable. Cela peut se faire avec du méthane, ou de l'hydrogène. Or, le marché du gaz naturel est un marché essentiellement continental, et l'Amérique du nord possède l'un des plus mauvais ratios production / réserves de la planète. Quant à l'hydrogène...
Le facteur limitant suivant est l'eau, dont il faut de très grandes quantités pour extraire le goudron.

La seule utilisation qui semble fonctionner, c'est la production d'électricité (on fractionne la roche et on la brûle directement, sans extraire ni raffiner le pétrole), mais de nombreuses tentatives ont échoué pour cause de rentabilité désastreuse. Cela peut changer avec la hausse générale des prix de l'énergie. Mais le rendement est moins bon que celui du charbon, dont on possède aussi de grosses réserves.

Seule l'Estonie semble effectivement persévérer, mais, la population de l'estonie, c'est l'équivalent de la Sardaigne, c'est peanuts. Et avec un PIB bien plus faible. La consommation électrique n'y représente pas grand-chose. La produire avec des schistes bitumineux n'est en rien significatif.

Malgré cela, effectivement, des compagnies risquent de s'en mettre plein les poches. Une compagnie qui sortirait un million de barils par jour dans 10 ans ne changerait rien au problème de pénurie, mais pourrait avec cela faire des milliards de bénéfices si le prix du pétrole est très élevé.

C'est la même chose pour le Canada. On estime qu'ils peuvent produire à terme 3 millions de barils par jour avec leurs sables bitumineux, ce qui ne remplacera pas la chute de production du Mexique, par exemple, mais qui en revanche, si on a un bénéfice de 100$ par baril à terme, mettrait beaucoup de beurre dans les épinards des 30 ou 40 millions de Canadiens qu'on aura alors. On peut très bien avoir une industrie marginale au niveau mondial, mais très rentable, ce n'est pas incompatible.

Et ces schistes, et le charbon, pourront effectivement permettre aux Etats-Unis d'amortir la crise. Mais de là à les rendre plus puissants, vu les difficultés de production, il y a un pas.
commentaire n° : 10 posté par : brunoetz le: 30/06/2008 12:40:33


Pourquoi ne peut-on pas spéculer sur des cailloux en dehors de pénurie ? Dans mon esprit c'est tout à fait possible (en même temps dans mon esprit y'a un paquet de trucs possibles, par exemple un autre monde...). Voilà ce que j'ai compris :

J'ai 100 cailloux à 10$ et on vient d'annoncer la découverte d'un nouveau gisement de cailloux (ou bien je suis convaincu qu'on n'achète pas des cailloux à 10$). Je parie donc que le cours du caillou va baisser. Je les vends (1000$) et je les rachète quand le caillou en vaut 5. J'ai toujours mes 100 cailloux et j'ai gagné 500$. Si j'achète des plus grandes quantités et parie sur des baisses plus petites je peux "jouer" à ce "jeu" tous les jours, vendre à 140$ le baril de cailloux et racheter dès que c'est à 139$... Demain je vendrai à 137 et racheterai à 136 et encore le lendemain à 143 pour racheter à 142,80. Non ?
L'important n'est plus d'acheter pour vendre cher (spéculation à la hausse), mais vendre pour racheter moins cher (à la baisse).

C'est en ce sens que je parle de spéculation, elle ne se justifie pas par une pénurie mais elle a pour "terrain de jeu" un marché tendu qui permet la spéculation à la hausse et à la baisse. Ainsi une certaine part du prix du baril ne reflète plus la consommation. Au moment où les bourses se cassent la gueule, c'est un "terrain de jeu" idéal, non ?

Bref, c'est la perspective d'une envolée sans limite qui me semble déconnectée justement du modèle offre/demande. J'ai sûrement tort mais ça me fait penser au ratio "Réserves/Production = 40 ans de pétrole, et la consommation va croître sans cesse". Un prix du baril qui croît sans cesse pour une demande constante y'a quelque chose qui cloche, non ? D'où ma question : jusqu'à quand ? Et qu'est-ce qui va arrêter cette spirale ?

Je ne cherche pas à avoir raison, je partage juste un sentiment d'incompréhension, un doute, pas une analyse.
N'hésitez pas à me dire où je me trompe.

commentaire n° : 11 posté par : Boris le: 30/06/2008 12:51:55
Encore un détail pour modérer l'enthousiasme des schistes bitumineux américains: la lenteur du flux de production.

@Boris: le problème de la spéculation sur les cailloux, c'est que les cailloux à 10$ c'est du gravier, et pour l'instant on en a bien assez. (quoique...la construction en consomme tant que les prix vont finir par monter)
commentaire n° : 12 posté par : Imago le: 01/07/2008 09:50:14
Je me félicité de pouvoir relire ce blog. Félicitation pour le travail accompli.
Un point m'intrigue: Quelle est la raison de la différence de valeurs annoncées par l"USEIA et AIE?
commentaire n° : 13 posté par : Beurk (site web) le: 03/07/2008 14:28:10
Vendre à 140 et racheter à 139, tu me fais bien rire, essaie toi en vrai et tu verras que ce n'est pas aussi simple, quand au cailloux tu devrais essayer également de spéculer dessus juste pour voir si c'est aussi simple que tu le dit.
commentaire n° : 14 posté par : Carlos le: 03/07/2008 21:01:40

Effectivement l'exemple des cailloux est bien foireux, on me l'avait expliqué avec des pains au chocolat c'était plus sympa. Bon avant la lapidation, je reviens sur mes propos parce qu'ils ne sont pas clairs, c'est vrai.

1. Le premier argument avec lequel je ne suis pas d'accord est "La spéculation ne se fait qu'à la hausse".
C'était la seule intention de mes barils de cailloux : on peut spéculer à la baisse. Je rejoins donc Rasalhague "on ne spécule que sur des produits qui le permettent" mais j'ajoute sur des marchés haussiers et baissiers.

Est-il possible de trader short (à la baisse) sur le baril ? Regardez cet exemple du 29 mai en faisant abstraction des analyses  : http://www.edito-matieres-premieres.fr/0414/energies/petrole/petrole-brut-lacher-prise.html

Lisez ce torchon qu'est l'Édito des matières premières, sous-titré "Les ressources naturelles enfin à la portée des investisseurs individuels !" ( http://www.edito-matieres-premieres.fr/thematiques/energies/petrole/ ) et assurez moi après que le prix du baril n'est que le reflet de l'offre et la demande et que les prix actuels sont une prise de conscience du déclin à venir...

Et que dire de cette intro de boursier.com ? http://www.boursier.com/vals/ALL/petrole-cher-pas-une-mauvaise-nouvelle-pour-tout-le-monde-news-291027.htm

Attention, je ne crois pas non plus à l'argument "70% du prix est dû à la spéculation".
L'info initiale est d'ailleurs "71% des échanges de pétrole sont dûs à la spéculation" selon une étude de parlementaires américains. 71% des échanges ne signifie pas 71% des volumes. Le Figaro a tenté le même exercice de style avec le bouclier fiscal. "74% des bénéficiaires du bouclier fiscal ont un revenu inférieur à 3750€ par an".
Lisez Superno si vous doutez de la supercherie ( http://www.superno.com/blog/?p=347 ).

2. Le deuxième argument qui me pose problème est "ce n'est que le début" d'une évolution exponentielle.
D'accord le cours est haussier du fait de l'offre et la demande. Mais il y a des avis de mauvais temps sur les autres bourses ( http://www.pauljorion.com/blog/?p=650 ). Et je me demande, quelle influence sur le prix du baril ?

Tout cela me rappelle un document lu ailleurs ( http://mail.materianova.be/pub/Pic_du_Petrole_BrocorensP_Fevrier_2007.pdf ). Dans la partie "Après Pic", l'auteur défini différentes phases, il dit (page 53) :
"Une des caractéristiques principales des premières années de l’après-pic pétrolier sera donc la volatilité des prix. Et cette volatilité retardera d’autant la prise de conscience du problème. Des prix bas succèderont à des prix élevés et donneront l’illusion que le problème n’est que temporaire. Or, les problèmes d’approvisionnement ne feront que s’aggraver, en passant par différentes phases que nous avons définies en fonction du gradient du déclin de la production : la phase I de formation du Pic pétrolier où la production n’augmente que difficilement ou même plus du tout, la phase II de déclin lent
(~2%/an), et la phase 3 de déclin rapide (>5%/an). Tout retard mis à mettre en place des solutions en phase I et II se paiera lourdement en termes économiques et sociaux en phase III, là où la production de pétrole sera en chute incontrôlée. Ni la longueur de ces phases, ni le moment où la transition s’effectuera d’une phase à l’autre ne peuvent être connus à l’avance. L’histoire nous le dira."

Bon, je cite le Figaro, j'ai des exemple foireux, des arguments contradictoires, je vais finir par croire que j'ai de l'avenir à l'UMP.

- - - - - - - - - - - -

Une info pour Emmanuel, Paul Jorion rencontre lui aussi des difficultés financières. Il continue à publier (sous "presslib" comme il dit) et se lance dans la donation via Paypal... A suivre ? http://www.pauljorion.com/blog/?p=649

commentaire n° : 15 posté par : Boris le: 04/07/2008 18:57:57
c'est la technique également utilisée par dedefensa.org, avec un relatif succès...
commentaire n° : 16 posté par : tolosa le: 05/07/2008 12:32:33
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6 juillet 2008 7 06 /07 /juillet /2008 21:13

Minnesotans For Sustainability©



Sustainable:  A society that balances the environment, other life forms, and human interactions over an indefinite time period.





"The Party's Over"


Interview: Richard Heinberg, Author


Jim Puplava
March 22, 2003


[Captions for convenience]
Economists, Environmentalists, Geologists, & Politicians
Laws of thermodynamics
Energy & Carrying Capacity
Resource Depletion & Prosperity
Energy Policy Drives Economic & Other Policies
Industry Changes
Informing the Public
Alternative Energies
Looking Ahead


JP:      Welcome back, everyone.  It’s time to introduce this week’s guest on the program.  Joining me is Richard Heinberg.  He’s the author of a new book called The Party’s Over.  He has been writing about energy resources issues and the dynamics of cultural change for many years now.  He’s a member of the faculty of the new college of California.  He is also an award-winning author of three previous books.  His Museletter was nominated by the Utne Reader in 1993 as the best alternative newsletter.  According to Richard, the world is about to run out of cheap oil and change dramatically.  We’re here to talk about it with his new book, The Party’s Over.

Richard, the core message in your book is industrial civilization has been based on the consumption of energy resources.  These resources, however, are inherently limited in terms of quantity and are about to become scarcer.  I wonder if you might explain that.

RH:     Sure, Jim.  My background, as you mentioned, is in human ecology.  For many years I’ve been interested in trying to understand what makes humans societies change over time.  The one constant factor that not only I but many other human ecologists have been able to identify, is the factor of energy.  From hunting and gathering to agriculture, to industrialism, the main factor that has changed, really, is the amount of energy harvested from the environment per capita.

Now that really began to change a couple of hundred years ago with the beginning of the Industrial Revolution.  What the Industrial Revolution was really all about fundamentally was substituting the work of fuels in the economy for work previously done by animal and muscle power.

In the U.S., for example, in 1850 something like 65% of all the work that got done in the economy was done by animal and muscle-power.  Something like 15% of the work done in the economy was through human muscle-power.  By 1970 the amount of work done in the U.S. economy by animal and muscle-power had reduced to virtually zero and everything was being done by fuels.  Meanwhile, the total amount of work done in society per capita had increased dramatically.  We’re at the point now where if all of the work done for us as average Americans each day by fuel-fed machines had to be done by humans, using the equivalent human muscle power, each of us would have something like 150 energy slaves taking care of our every need, getting us to where we want to go, cleaning our clothes, and doing all the other things that machines do for us.

The Industrial Revolution sure was about invention of machines, but those machines were running overwhelmingly on fossil energy resources leftover from earlier times in geological history.  Of course, we should have known from the very beginning that those fossil energy resources were limited in extent and sooner or later we’d begin to run out.  We should have planned for that event.  But, in fact, what’s actually happened is that our whole society has been running on the assumption that they’ll continue forever.  I think we’re just about to wake up to the awful truth that in fact fossil energy resources are limited and that’s going to have a terrible impact on our economies.


Economists, Environmentalists, Geologists, & Politicians

JP:      Now there’s different groups that you list in your book that view this problem from a different perspective.  For example, we have the economist, we have the environmentalist, we have the geologist, and we have the politicians.  Why don’t you explain the positions that each group takes towards energy.

RH:     Sure.  The economists typically view energy resources as being inherently limitless.  By that I mean they believe that the market will magically come up with a substitute when any given resource becomes scarce.  And in a certain way, they are right in that yes, when any resource becomes scarce the price goes up and therefore there’s more of an incentive to look for an alternative.  However, in this particular case, there really may not be an alternative readily available for fossil fuels because oil, in particular, is extremely energy dense and the energy return on the energy invested in obtaining oil is extremely high.  That’s really not true in any of the possible alternative energy sources.  Also, price signals that come to the economy from resources beginning to grow scare, those price signals could come way too late because the price signal is only going to come when oil actually begins to become scarce.  In fact, we need decades in order to prepare our industrial infrastructure to operate on alternate energy sources so the price signal is going to come several decades too late to be of any real use.  So there’s the economists’ point of view.

The environmentalists seem to be fixated on the matter of global warming, which is, I believe, a very serious problem.  But the environmentalists tend, I think, actually to believe the economists who tell them there is plenty of oil and that’s not the problem – running out of oil is not a problem.  And so the environmentalists rather than calling attention to inherent limitations in fossil fuels really keep the discussion in the area of we should limit our use of fossil fuels because of environmental effects like the greenhouse effect in global warming.  So it’s primarily a moral message that the environmentalists are giving us.

Then there’s the message of the petroleum geologists.  Most of the ones that I’ve been in touch with are independent and retired petroleum geologists who don’t have any personal economic stake in this one way or the other.  They have no personal ax to grind.  These are people like Colin Campbell who have worked for Exxon and Texaco and other major oil companies through a long career in over 20 different countries; and Walter Youngquist and Jean Laherrere, a French petroleum geologist ―a whole roster of them that I list in my book.  These are all people who have devoted their lives to this industry and now that they’re retired they just want to really get out the information that they have accumulated during these long careers, which is that in fact, the resource is limited and we are about to run out.  It’s not that we are literally going to run out of oil in five or ten years, what they’re saying is that we’re reaching the halfway mark.  And that halfway mark is extremely significant.  Yes, there’s about a trillion barrels of oil still left in the ground.  That’s a huge amount, but the problem is that we’ve already skimmed off the stuff that’s cheap and easy to extract.  So the message of the petroleum geologists is one that is informed by knowledge of what’s really going on in the ground and in industry.  Those are the people that I really listened to most when I was preparing the material for the book.

Finally, as you mentioned, there are the politicians.  Theirs is the voice that really counts, because they’re the ones who set policy.  The politicians overwhelmingly listen to, I think, the economists and assume the resources are limitless.  They have an excellent motivation for doing so which is getting re-elected.

For any politician to mention that there are resource limitations and that therefore we need to as a society conserve and possibly even do something that might restrict economic growth or result in reduced standard of living, that would be political suicide, so no one’s going to do that.  Rather than going down that path, I think virtually all politicians, whether from the right or the left of the political spectrum would rather give out the happy news that there’s plenty to go around.  Maybe we need to adjust this way or that.  The left has a different prescription for how we should deal with resource issues than the right does, but the basic assumption that there’s plenty to go around isn’t questioned by anyone.

JP:      Now you have come from an environmental background but from reading your book you tend to side with the geologists.  Explain why.

RH:     I think the geologists are just giving some really important practical information.  As I said, I think most of the environmental community is just fixated on this one problem of global warming and as a human ecologist, I’m more interested in human society and how human societies work over time, which is again, based entirely on energy and energy resources.  Even if global warming turns out to be not much of a problem, we will in any case, inevitably, from what I can see, be facing the problem of oil depletion and the effects of oil depletion on our societies, both in terms of the industrial infrastructure and in terms of the geopolitics and war and peace could end up being far more consequential than global warming.


Laws of thermodynamics

JP:      Before we get into some of the specific issues in your book, if you were to explain the laws of thermodynamics and their importance for understanding energy.

RH:     Yes, great question.  The laws of thermodynamics were worked out in the 19th century and basically there are two:  The first is that you can’t create energy from nothing.  There’s a certain amount of energy in the universe – nobody knows exactly what energy is but we know that that’s what makes things work.  If you as a physicist what energy is, he or she would say, it’s the capacity to do work.  Nothing happens without energy.  And the amount of energy in any given system ―if it’s a closed upper isolated system, is fixed.

The other law of thermodynamics is that even though the amount of energy is fixed, it will tend over time inevitably to degrade so that it becomes less concentrated and available and usable.  This is the law of entropy.

Anybody who’s tried to keep an old car on the road or tried to keep a house clean knows about the law of entropy.  Things tend to gradually fall apart unless you expend energy in putting them back together or keeping them together.  So what this tells us is there’s basically no free lunch in life.

In ancient times, in the ancient agricultural civilizations of Rome or Egypt or whatever, if the wealthy elites wanted to improve their standard of living, it was at the expense of the lower classes who had to work harder and extract more resources and so on.

We’ve had a very unusual situation in the last couple of hundred years with industrial societies.  Industrial societies have been able to access more energy per capita without anybody really having to pay the price for that because there was this huge bounty of fossil fuels leftover from early geological times.  And so the ruling classes, if you will, the wealthy elites were able to vastly improve their standard of living.  Meanwhile the lower classes, middle classes, and producing classes, were also able to maintain or raise their standards of living at the same time.

This is a unique situation in the history of human societies and it has resulted in the calming of class conflicts that have torn many previous societies apart.  But it looks like we’re getting a free lunch.  It looks like we can always expect more of the same in the future.  You and I and everyone who’s listening to this program have grown up in a society that was constantly growing, where we could always expect a higher standard of living from one year to the next because there was more energy available per capita each year.  We’re coming to the end of that time, not because anybody wants it to be that way, but just because of the basic laws of physics.

The seemingly free lunch that we got from nature’s bounty’s past is just about eaten up.  We’re not going to be able to make up for that shortfall through any kind of magic wand like nuclear fusion or anything like that.  We’re just going to have to face the fact that from now on we’re going to have to live much more on the basis of yearly solar income like people did for thousands of years up until the Industrial Revolution, rather than relying on this finite supply of exhaustible fossil fuels.


Energy & Carrying Capacity

JP:      Let’s move on in terms of the role of energy in terms of how it is important in determining, let’s say, the earth or economic carrying capacity, because one aspect of the Industrial Revolution is more people moved off the farm, they moved into the city.  It took less of the population to farm, more people were able to go and work in other jobs.   Not only that, life spans have expanded throughout the last 100 years.  There’s a whole host of issues that have come up.  Explain the role of energy in this carrying capacity.

RH:     Right.  Up until the Industrial Revolution the population of humans on planet earth had never exceeded 1 billion.  In fact, for most of our several million years on earth we humans have numbered even less than 100 million.  Between 1800 and 1820 our numbers surpassed 1 billion for the first time.  Now we’re up to 6.3 billion humans, and that’s just over the course of 200 years.  It took us hundreds of thousands of years to get up to 1 billion and 200 years to move from 1 billion to 6.3 billion.

That’s an extraordinary rate of increase.  If we saw this in any other life form, we would call that a population bloom.  That’s an ecologist’s term.  You can see a population bloom, for example, if you put some yeast in a vat of wine or grape juice.  The yeast will wildly proliferate.  Of course, the waste product of the yeast, one of them, is alcohol.  That’s how you make wine.  But eventually the waste products of the yeast begin to smother the yeast themselves and the microorganisms themselves die off.

Typically in ecological situations where you have population bloom, it’s followed by population using up whatever temporary resource abundance has caused the population bloom and the population begins to die off.  With human beings, what caused our population bloom, without a doubt, was the access to fossil fuels and this huge energy input into our societies.  We were able to, for example, fuel tractors to run instead of farm animals.  Now farm animals had to be fed and so any given amount of cropland, something like a quarter to one third to one half of it had to be set aside to feed horses and mules and oxen and so on, to pull the plows.

Well, we don’t need that anymore because the fuel to farm all that land comes now from underground, from fossil fuel reservoirs.  So that increased the amount of arable land by one quarter to a third to a half right there.

Then food distribution increased dramatically; whereas before food had to be grown locally, now food can be transported long distances.  The average plate of food the American sits down to these days has traveled something like 1,300 miles.  So it’s perfectly practical to put 10-15 million people in Los Angeles where the available land and water couldn’t possibly grow food for that many people, or Phoenix, Arizona, cities like this where if the people in those cities had to rely upon local resources, they wouldn’t be able to sustain themselves.  But we’re able to transport those resources to them, and thereby increase the human carrying capacity of those regions dramatically.

Also, the Haber Bosh process was invented in the early 20th Century.  The Haber Bosh process uses fossil fuels, initially coal but now natural gas, to make nitrogen fertilizers.  With the Haber Bosh process human societies have been able to make nitrogen fertilizers that are equivalent to the amount of nitrogen produced by all of green nature and lightening strokes and all the other natural sources of usable nitrogen.  In other words, we’ve doubled the amount of usable nitrogen in the biosphere through the Haber Bosh process.  So that has extraordinarily expanded agricultural productivity.  Altogether, we have created the means for subsistence for well over 5 billion people who otherwise would not be able to exist today, and all dependent upon fossil fuels.


Resource Depletion & Prosperity

JP:      Explain the costs of the drawdown in the danger that we now find ourselves in.

RH:     Drawdown is the strategy of using an inherently exhaustible energy resource and it’s a strategy that we human beings have only hit upon in the last couple of hundred years.  Prior to that time we were using inherently renewable resources like wood, like animal and human muscle.  Once we discovered first coal and then oil and natural gas, we found resources that were vast, incredibly useful and seemingly extraordinarily abundant, that enabled our populations to expand dramatically as I was just describing a moment ago.  But those resources are being drawn down.  In other words, we actually started running out of oil with the very first barrel pumped.  We started running out of coal with the very first coal that was mined.  These are resources that cannot be replaced in any time scale that is meaningful to human beings.  So we’re basing our population and our social and economic activity these days on the drawdown of non-renewable resources and that’s extraordinarily perilous and meaningful.

JP:      I wonder if you would might explain or give a brief history of how energy played a key role in bringing about American’s prosperity and success.  I’m watching a documentary series on World War II and it was hard to believe that during World War II the U.S. had so much oil that we were actually supplying all of our Allies with oil and that were indeed the world’s largest exporter.  Now we’re the world’s largest importer of oil.

RH:     That’s right.  And that’s the story of America’s rise to power and it’s likely to be also the story of American’s fall from power, I hate to say.  The United States was in a very advantageous position throughout the 19th and 20th Centuries with regard to energy resources.  During the early part of the 19th century, America largely grew rich on an agricultural base using muscle power from imported African slaves and also the U.S. had immense tracts of forests that could be used for wood.  Up until the 1880’s locomotives were running on wood, riverboats were running on wood, and most of our energy budget was coming from either wood or overwhelmingly from, as I said earlier, from human and animal muscle power.

In the 1880’s, coal began to take over and lo and behold, the U.S. had huge coal deposits as well, rivaling and exceeding those of any European country.  In 1859, oil was discovered in Pennsylvania.  The U.S. very quickly became the world’s leading producer of oil – Standard Oil Company was founded very soon after that and became the world’s leading oil company.  The U.S. was not only the world’s leading oil producer, but also the world’s leading oil exporter for decades after that.

Oil had been a number of advantages over coal.  Oil was easier to transport, it was more energy dense, and cheaper, and more convenient to use.  So as industry gradually began to take advantage of oil, we saw the U.S. really becoming the world’s foremost industrial nation.

The automobile industry took hold and grew in this country far more rapidly than in any other country in the world.  The airline industry began here and again spread to the rest of the world, but always with its center, its hub, in the United States.

In World War I, it was just discovered what an important substance oil was.  For the first time battleships were running on oil, tanks were invented, aircraft played a role in warfare for the first time.  The U.S. was supplying oil to the Allies and Germany essentially lost the war because it ran out of gas.  The Germans were seeking oilfields in Rumania and were cut off from those and from that point on it was just a question of time before they ran out of oil with which to pursue that war.  From that time onward, countries around the world, U.S., Germany, Britain, Japan, have all regarded oil as the primary geo strategic resource.

So that being the case, the U.S. was sitting pretty, because we had the world’s largest supplies at that time and more oil wells were drilled in the United States during that time than in the whole rest of the world put together.  Now oil discovery in the United States peaked in the 1930s and oil production peaked in 1970.  This was a truly momentous event because very few people were prepared for it.  There were only a few petroleum geologists, principally M. King Hubbard, who foresaw the U.S. oil peak, and perhaps we can talk more about him later.  Virtually everyone else was caught by surprise by this.  From 1970 onward, the U.S. has had to import more and more and more of its oil until now we’re importing 60% of our oil.

From being the world’s foremost creditor nation, from exporting much more than we imported, from lending money to other nations, the U.S. is now in the position of being the world’s foremost debtor nation.  We import much more than we export.  Our balance of trade is overwhelming negative.  This is not entirely due to, but it’s very closely related to the fact that we have peaked in our own oil production and we will never see those days again.


Energy Policy Drives Economic & Other Policy

JP:      I wonder if you might explain how this decline in our oil capacity or production capacity and the increase in imports is now driving…. Let’s say how energy policy is driving U.S. economic, political, and perhaps military policy.

RH:     In 1973 there was a politically motivated oil embargo against the U.S. organized by the Middle Eastern countries of OPEC.  This was the first time that oil had been used essentially as a weapon.

This I think was a tremendous wakeup call to the geopolitical strategists in Washington.  From that time onward, the Middle East has been a place of extreme interest to U.S. policy planners.  It had been before that, of course, too, ever since 1945 when Franklin Delano Roosevelt met with King Ibin Saud and hammered out an agreement whereby the U.S. would maintain the House of Saud in power in Saudi Arabia in return for Saudi Arabia’s maintenance of U.S. dollar as their currency of account in return for selling their oil on world market only for U.S. dollars.  Ever since then in 1945, there’s been recognition of the geopolitical importance of the Middle East.

Since 1973 that recognition has become very much sharpened.  The first Gulf War in 1991 was very much about asserting U.S. power and dominance in the Middle East.  The current war is really, I think, from an historical standpoint, we’ll see the 1991 Gulf War and the current invasion of Iraq as one historical continuum as two phases of a single war.  The objective this time, unquestionably is again, to do with the geopolitical control of the resources in that region.  It is not to make U.S. oil companies rich as some people on the left have said.  I think that’s ridiculous because most of the executives in major oil companies actually are not pretty excited about the invasion at all.  They rather not see it happen because they would prefer to see stable oil prices and political stability in the Middle East.

But I think the people with the longer view see that instability in that region is inevitable in any case, and in order for the United States to maintain its way of life and its disproportionate share of global resources, the economic card that the U.S. has relied on up to this time is growing weaker by the day.  The U.S. economy is inherently very weak for a number of reasons and other powers in the world, particularly Europe and China, have also very powerful and growing resource needs.  So I think many of the geopolitical strategists in Washington see it as in the long-term interest of the U.S. to project its dominance in the region now militarily because the economic dominance is no longer the case.  I think personally that it’s exactly the wrong approach and it’s likely to have horrific consequences in the long run.  But it appears to me that oil geopolitics is what’s driving the decisions in the White House right now.

JP:      I wonder if you might explain why we did not learn, for example, from the crises that we faced in the 70s.  During the 70s it was a political crisis but it was a warning.  But we downsized, Detroit started making more gas efficient cars, we started using insulation in the homes, and so we started being more energy conscious.  Now, a lot of people drive SUV’s – it’s the most popular selling vehicle, we have cars that consume and burn more gasoline – fewer miles to the gallon.  Why didn’t we learn from that crisis, because we had an energy crisis in 2000-2001, and here we are in 2003 with gas prices here in California at some pumps at almost $2.50 for premium?

RH:     That’s a great question.  I wish I had a rational answer for you.  I think this whole period of history is going to be seen in retrospect, the last 30 years, as a period of lost opportunities.  In 1973 we became aware of the finite supply of oil in the world and we became aware also that supplies in the U.S. in particular, were limited and we are dependent, therefore, on the rest of the world for our energy resources.

And as you say, there were tremendous efforts put forward then toward energy efficiency.  Jimmy Carter actually made some remarkable statements in those days about how dependent we are and how important it is, therefore, to conserve.  Here Jimmy Carter from 1976 says, “We must face the prospect of changing our basic ways of living.  This change with either be made on our own initiative in a planned way or forced on us with chaos and suffering by the exorable laws of nature.”  That’s an extraordinary thing for an American president to have written.

I think he hit the nail absolutely right on the head and he was voted out of office because another politician had a more palatable message, which was that it’s morning in America – we don’t have to worry about resource shortages – there’s always going to be enough.  We’re Americans, after all, and we deserve this amazingly fast pace, wealthy way of life.  Just because we’re smart and good and God is with us.

That was a popular message, an easy message to sell, but it’s absolutely a deadly message for us now, and for our children and grandchildren because we’re going to be living with the results of that change that was made in 1980.  Whether you’re a Democrat or a Republican, the fact that we have turned away from energy efficiency and are gobbling up these limited resources and undermining the ability of our children and grandchildren, even to survive.  I don’t think we’re going to win any popularity contests with our descendents on that basis.


Industry Changes

JP:      I wonder if you might relate this to the financial markets today where we see in the oil industry itself where the majors investing less money.  They’re sitting on large amounts of cash from Exxon Mobil to BP, Amoco, to Royal Dutch Petroleum, and we’ve seen this merger wave sweeping the industry, where Exxon bought Mobil, BP bought Amoco, and then Atlantic Richfield.  You have Total Fina buy… you just see one company after another gobbling up other companies.

What does that tell us?  It tells me that the industry’s contracting.

RH:     That’s exactly right.  Rex Tillerson, who’s the senior vice president of Exxon Mobil which is the world’s largest oil company, just a few weeks ago told a gathering at the Institute of Petroleum that the oil industry will have to invest something like 100 billion dollars a year in exploration in order to meet demands for oil product for the coming decade.  Now that’s a rate of investment that’s something like 10 times the current rate.  And he didn’t even speculate where that kind of investment capital might come from.  Tillerson of course didn’t use the word “peak”, peak oil, peak production, but what he’s talking about is exactly that.  You can only boil down to peak and global oil production.  I think there’s some interest in the oil companies to establishing some rights to some of the R & D money that’s inevitably going to be spent in production of renewables but mostly what they’re doing right now is, as you say, just consolidating the resources that they already have ―the bigger companies buying out the small ones and buying up the reserves because they can see the end of the road in sight.


Informing the Public

JP:      There have been a number of Cassandras, but there was one individual in particular, a petroleum geologist, King Hubbard, who predicted the decline in U.S. production in 1970.  He hit the nail on the head.

RH:     Right.

JP:      There have been others that have followed in his wake.  Why is it that, for example, we still have today the politicians and many others ignoring the Cassandras and yet here we are today, in March 2003, finding ourselves in another energy crisis?  We’ve got motorists screaming at paying over $2 at the pump, we’ve got rising utility bills, rising heating bills; everywhere you look we’ve got this problem.

RH:     Right.  Well, the people who are giving us the straight information are generally not the ones who are associated with large institutions that have a financial stake in the outcome.  These are the independent petroleum geologists like Colin Campbell, Jean Laherrere, Walt Youngquist, and Rich Duncan and so on.

The people who actually in the industry or in the government, the United States Geological Survey, Department of Energy, and so on, all pretty much have to keep their mouths shut.  The USGS, for example, has given out official projections of global oil supply for the next 25 years that are really absurdly optimistic.  And of course, that’s an official government agency so naturally, when congress people or the President makes policy, who do they look to?  Well, they look to the Department of Energy and the USGS.  But it’s a circular situation, you know.  It’s like the emperor hires the spies to go out and find the information and the ones that come back with bad news get killed and so all the emperor ever gets is good news.  That’s exactly the situation we’re in.  The USGS failed to foresee the 1970 peak in U.S. oil production and it’s utterly failing to see the global peak in production that’s within the next 5-12 years. 

JP:      Now we’ve got a lot of other voices concerning energy and you address some of these in your book that take less of an apocalyptic view towards energy.  You’ve got Peter Huber, Bjorn Lomberg, that are skeptical of this oil depletion or running out of energy.  You did take on each one of their issues.  Why, in your opinion, do you feel these people are wrong?

RH:     These folks have a number of different arguments.  I can just address some of them here – it would take too long, probably, to go through all of them.  But let’s look at what some of them are

First of all, they tend to take the reserve increase announcements of different oil companies and exporting countries at face value.  That’s kind of dangerous, actually, because many of these reserve reports are politically motivated.  For example, back in 1987 OPEC changed the rule to say that each OPEC country’s market share would depend upon its reported reserves.  So the OPEC countries were motivated at that point to increase their reserves.  Well, in actual fact, not that much new discovery was taking place but nobody was looking over their shoulders either, so all of the OPEC countries within two years showed dramatic increases in reserves, something like 50 to over 100 percent increases in their oil reserves.  That was without much discovery taking place.  How could that happen?  Well, it was all on paper.  But the oil optimists just take that at face value and say, “Well, yes, that oil is in the ground.”

Another thing they say is that there are huge amounts of unconventional oil, what’s called shale oil and heavy oil, and they’re absolutely right.  There are huge amounts of the stuff in Alberta, so called oil shale.  There’s enough to power industrial societies for at least a couple hundred years in the future ―theoretically.   But that theoretically is pretty significant in this case, because it turns out that shale oil is extremely difficult and costly to extract.  Even with all of the technological improvements that can be imagined, it’s going to cost something like a barrel’s worth of oil to produce a barrel’s worth of oil.  And also, production of shale oil uses huge amount of fresh water so it’s an environmental catastrophe.  And it also uses a lot of natural gas and natural gas is becoming more scarce in Alberta and Canada in general.

So are we going to see 200 years’ worth of cheap oil from shale oil in Alberta?  Very, very unlikely.  The same thing with the other unconventional energy sources that the energy optimists like to trot out.

The reason we’re using conventional oil right now overwhelmingly, is because that’s the stuff that’s cheap and easy to get at. We’re at about half way through nature’s endowment.  We’ve used about a trillion barrels and there’s about a trillion barrels left to use.  It sort of makes sense.  If you’re exploring for and pumping oil, you’re going to want to get at the stuff that’s easiest to get and that’s of highest quality first.  That’s the stuff you’re going to look for first.  And it’s only when that stuff is gone that you’re going to go after the stuff that’s kind of nasty and difficult and expensive to get out.  That’s the situation we’re in, the light sweet crude, the stuff that’s under pressure under ground, so all you have to do is stick in a pipe and it just comes to the surface by itself.  That stuff is getting harder and harder to find and more and more what’s leftover is stuff that is good for making asphalt roads, basically.  It’s not quite to that point yet but within the continental United States, for example, it costs about a barrel of oil to explore for and drill a new oil well.  It costs a barrel of oil’s worth of energy for the energy that will come from such an enterprise.  In other words, it’s not worth doing.  And we’re going to be approaching that same situation in many other oil provinces around the world.


Alternative Energies

JP:      What about some of the alternatives to solving the energy crisis?  You mention natural gas, and even that has gone into decline, but let’s take windpower, nuclear power, solar energy, hydrogen, geothermal power.  Do we have enough alternative sources, and is there any one that’s in abundance that can replace, let’s say, the energy we get from fossil fuels?

RH:     In a word, no.  Let me go into a little bit more detail about that, though.  I’m a big advocate of solar and wind.  I have photovoltaic panels on my roof right now that are generating energy even as we speak.  I drive my car which is a diesel Mercedes on stuff called biodiesel which is made out of vegetable oil so I don’t actually use petroleum to get myself around, at least not directly.

But I’m a realist about these things.  The fact of the matter is that solar and solar photovoltaics and wind account for a tiny fraction of one percent of our national energy budget right now.  So that means in order to ramp up production of energy from those sources to meet the shortfall from fossil fuel as those peak in production, will take immense amounts of research, development, manufacturing of infrastructure and so on and that’s not happening.

President Bush said he was going to devote 1.2 billion dollars to hydrogen research in his State of the Union Address, but most of that will go to hydrogen made from nuclear electricity and from hydrocarbons.  Most hydrogen made right now, actually virtually all commercial hydrogen is made from natural gas.  So the development of renewable alternatives simply isn’t taking place at nearly the rate that will be necessary in order to make up for the shortfalls.

Nuclear has the unsolved problem of storage and elimination of nuclear waste.  Also, nuclear plants are extremely vulnerable to terrorist attack and the whole nuclear industry has just been an environmental catastrophe on a number of fronts.  Mining of uranium in Native lands in this country is just a history of atrocity after atrocity.  So I personally think that nuclear would be absolutely the wrong way to go.

There’s also the question of net energy analysis which not many people know much about but is extraordinarily important for answering the question of what alternatives we should be going toward.

It costs energy to get energy.  In other words, in order to explore for or drill for oil, you have to expend energy.  But in the case of oil, the amount of energy you get back from the oil that you find and pump, is vastly greater, typically, than the energy it costs you to find it.  With many of the alternatives, the energy profit is not nearly as high.  With photovoltaics, for example, it costs energy to manufacture photovoltaic panels and the amount of energy payback from the photovoltaic panels once they’re manufactured, even over the years and years that they’re going to be sitting on somebody’s roof, is not nearly as great as the energy payback that we’re accustomed to from fossil fuels.  And in the case of nuclear, that energy payback is not very great considering the immense energy outlay in first of all, building nuclear plants, mining and purifying uranium, then decommissioning plants and storing radioactive waste for decades, centuries, and possibly millennia.  It turns out that windpower has pretty good energy return on energy invested so windpower is probably one of our best alternatives.  But again, we’re so far behind in implementing windpower that it would literally take hundreds of billions of dollars in investment to ramp up windpower to meet the energy shortfall that we’re going to be seeing from oil and natural gas and nobody is contemplating that level of investment.


Looking Ahead

JP:      Does it take actually, Professor, a crisis?  I mean, we had an energy crisis in 2000, here we are in 2003 with another energy crisis facing us, maybe not in the power sense but certainly motorists and those paying their heating bills on the East Coast are seeing that.  Does it take a crisis where you actually have market mechanisms that move into place with rising prices that it suddenly dawns on them that perhaps there’s an incentive here to go out and do something.

RH:     Unfortunately, I think so.  We’re seeing a natural gas crisis unfold before our very eyes right now.  U.S. natural gas production is down; we’re importing something like 16% of our natural gas from Canada.  And now the Canadians are finding it more and more difficult to maintain natural gas extraction at a rate sufficient to supply their own needs plus those of the U.S.  Natural gas prices are near record levels right now and natural gas in storage is at near record low levels.

Now the situation with natural gas is that it is difficult to transport natural gas safe from the Middle East to the U.S.  There’s lots of natural gas in the Middle East.  There’s a fair amount in the North Sea, and so on.  But it’s very difficult and expensive to get it here.  So we’re largely limited to supplies that are available in North America.

As the natural gas in storage reaches very low levels, what happens is the pressure within storage caverns and the distribution lines begins to decrease.  If the natural gas pressure levels decrease significantly, then the whole system goes down.  So in order to keep that from happening, the administrators of the natural gas system systematically cut off some of their large industrial users and the industries they cut off first are the fertilizer manufacturers.  Already, right now most of the fertilizer manufacturing companies in North America are sitting idle or operating at a fraction of their production capacity and this will have impact on agriculture for the coming growing season and therefore on food prices.

We’re really at the early stages of this natural gas crisis right now because everything depends on whether storage during the summer season can be brought up to normal levels as we go into the drawdown season of the winter where a lot of natural gas is used for home heating.  If those storage levels can’t be brought up to somewhere near normal levels then next winter we may actually see real natural gas shortages that would result in power outages, brownouts, blackouts, and so on.  Does it have to get this way before people wake up and realize what is going on?  Unfortunately, that’s what I see happening.

JP:      So basically, we’re going to have to have another energy crisis?  Perhaps this summer we’ll see gasoline prices approach levels that maybe what others in the rest of the world such as in Europe or maybe in Asia are paying for gasoline, before we wake up.  Don’t you feel, Professor, that eventually politicians run out of excuses?  You can’t just blame it on the greedy oil companies anytime there’s an energy crisis.  I mean, you start running out of scapegoats.

RH:     Yes, absolutely.  And I’m just waiting for some politician to step forward and first of all, educate him or herself as to what’s actually going on here, and then tell the public.  So far, I don’t see any indication of any politician from either party being willing to do so.  You know, it’s actually pretty hard to run out of scapegoats, whether it’s the oil companies or the terrorists or the Middle Eastern countries, or you name it.  I think we’re going to run through a long list of scapegoats before the chickens come home to roost on this one and somebody stands up and says, “Hey, look folks, the party’s over.”

JP:      I just wonder, I guess, does the public finally wake up?  I can recall it was the late ‘60s, ‘70s, as a student, getting gas at 12:00 at night because of the gas rationing during the oil embargo.  But there was a period of time where people just got tired of it, they got sick of it, we had brownouts back east.  Finally, the market mechanism began to move.  Detroit got the message that people wanted more gas-efficient cars, home builders began to put more insulation, we began to conserve.  People got tired and the markets responded. Could we perhaps have the general public get tired of excuses from politicians and perhaps encourage somebody like a politician to take the kind of response?

RH:     Right.  That’s what I’m hoping for.  That’s what I’m trying to provoke by putting out this book.  I think it’s hugely important that the general public becomes aware of these issues because if the leaders aren’t going to lead, then I think the people need to lead and maybe then the leaders will follow.

I’m hoping that it will become an open secret that in fact, fossil energy resources are becoming scarce because it’s got to result, first of all, in changes in individual choices.  People deciding on an energy-conserving way of life and demanding recognition from officials that this is what’s happening and that we need to engage in coordinated social response.  Even if all of the individuals in the country were to start to undertake more conservative energy choices, that would be great but the fact is that our whole industrial infrastructure is incredibly inefficient right now, and based on the assumption of limitless fossil fuels.  Individuals have limited ability to make the policy decisions that go into designing the future industrial infrastructure of our society.  So there are some decisions that can only be made by people at the top of the power pyramid and so we have to get to them.  But I think the way we’ll get to them is first by changing millions of individual minds.

JP:      A couple of final questions:  If you were to have one concept that you would like to deliver to readers of your book, what would you want them to extract from it?

RH:     I would hope that they would understand that the increasing scarcity of fossil fuels will have an impact on our way of life whether we like it or not, and that blaming other countries or the oil companies is futile.

We are at an historical juncture right now that none of us have ever seen before.  We’ve all lived and grown up in a period of industrial growth based on expanding fossil fuel availability.  Now as fossil fuels begin to become less available that way of life is gradually going to come to an end and we are going to have to scale back our way of life commensurately.

We have basically two options ahead of us for the coming century:  On one hand, we could decide as a people that our American way of life is non-negotiable as some of our political leaders have been telling us and it’s our God-given birthright to drive SUV’s and so on and therefore if our oil happens to be under somebody else’s sand, that’s too bad – we have the biggest guns and the biggest bombs and therefore it’s up to us to take what is ours from whoever has it.  I think if we follow that path to its logical conclusion the end result will be universal destruction.

On the other hand is the possibility that we could recognize the situation we’re in, choose to join with other countries in a voluntary process of resource conservation and sharing and in a deliberately coordinated way, power down our industrial way of life, find more efficient and more local ways of meeting basic human needs.  That’s going to be painful too.  There’s no easy way out of this situation in which nobody is going to feel any pain.  But over the long run, that at least has the possibility of peace and survivability, whereas the “winner take all” solution might buy us another 5-10 maybe at the outside 20 years of our precious American way of life, but in the long run, I just fear for future generations, if there even are going to be future generations if we take that path.

JP:      Are you optimistic or pessimistic as you have done the research for this and coming from more the environmental side, is it somewhat strange to find yourself siding with the geologists?

RH:     With petroleum geologists?  Yes.  It’s been very interesting, you know, because I meet and I talk with these people and they are people, as I said earlier, who spent there entire careers working for the oil companies.  You know, these are some of the nicest people I have ever met.  They are extraordinarily generous with their time and I think it’s because they realize what’s at stake.  They have a better idea than virtually anybody else where we are and what’s really at stake right now.

Am I optimistic?  I think optimism is the only functional attitude to have in life and pessimism will never really get you anywhere.  If I had to bet on which way things will go, I would have to bet that the next century is going to be a very difficult time to live through.  As many challenges that we’ve had during the 20th Century with two world wars and the Cold War and so on, I think the 21st Century is going to hold far, far more challenges.  But I believe we have to maintain an optimistic and a hopeful attitude in order to get ourselves through this.  And I think with a proper frame of mind and the willingness to change, we could arrive a century from now in a situation where human beings are happier, and the environment is better off than in the situation we’re in right now.

I think human need are pretty universally the same.  We want to live in safety and in relative comfort but wealth is not so much important to us as the qualities of our relationships and our ability to feel secure in our relationship with the world and natural environment.  Those kinds of needs I think can be met on the basis of a much lower material throughput in society and they will have to be.  I think if we keep cool heads, remain optimistic and make good choices, our grandchildren could be living in a very beautiful world, and I hope we make it there.

JP:      All right, Professor.  I want to thank you as always, for joining us on the Financial Sense New Hours.  A very thought-provoking book.  I have to admit, when I first heard about it I thought about somebody writing about oil as an environmentalist – do I really need to read that?  But once I got into your book, going through and taking a look at the bases for many of your arguments I found myself agreeing with you on so much of what you’ve written.

RH:     Well, thank you.

JP:      I want to thank you for joining us.  The name of the book is called, “The Party’s Over”.  It’s by Richard Heinberg, “The Party’s Over: Oil, War and the Fate of Industrial Societies”.
Used with permission of the author and Financial Sense News Hour.
Please see the original interview recording at < www.netcastdaily.com/1experts/2003/exp032203.ram >.



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