Understanding the oil patch

The following was first posted in September at Belly of the Beast.  It has been subsequently posted here due to the much larger readership of TOD.

Many people who are interested in Peak Oil or oil and gas production in general tend to be woefully ignorant about the companies that produce much of the oil in the world and sell it back to the public as gasoline or other products. Many, if not most, people who are not involved in the industry, at least in a peripheral way, tend to ascribe all kinds of devious, conspiratorial, and unethical if not evil intentions to these companies. They treat the multi-national companies as if they were some sort of conspiracy against the earth. This may sound self-serving, but I am going to tell you the way it really is, or at least the way that I have seen it to be observing it from the inside for the past 20 years.

First of all, these companies, like all companies, are made up of people. That may sound stupid and redundant, but some individuals, based on what they write, seem to think that the Exxons of the world are organized like the Galactic Empire of Star Wars with a Sith lord at the top directing all the evil. The fact of the matter is that the people who work in these companies tend to be extremely normal. For the US-based contingent of these companies the employees probably vote Republican more frequently than the country as a whole, and they tend to be a church-going lot - to a large degree because of the concentration of these companies in the South (Houston, New Orleans, etc.), however, they are concerned with most of the same things you are.

The one thing they tend to be is rather insular. These multinationals are large bureaucracies. They are organized presumably to maximize return on investment for their investors. Like all bureaucracies, however, internal politics plays a big role in ultimately how they are organized and how effective they are as businesses. Despite aspirations to put the whole company first, many parts of these organizations look like Dilbert Comic Strips crossed with the movie Office Space.

OK, so where am I going with this? One point I want to make is that many of you reading this are far more educated about the worldwide supply and demand situation for crude oil than even a large number of middle managers at most of these companies. Until recently, if I walked up and down the hallway at my office and polled people on their opinions about Peak Oil, most of the people probably would never have heard the term. Individually these people might know about drilling horizontal wells in 2500 m of water in offshore Sabah, or about the historical geology of the Falkland Islands and how it relates to West Africa, or how to numerically simulate a steam flood of a Tar Sand deposit in Alberta, but they do not understand the global business. They are technocrats focused on their jobs. They think that oil should be at $25/bbl because corporate planning tells them that is what their company is forecasting for the future. People higher up in the organization, in corporate planning, vice presidents of E&P etc. are also focused on their jobs. Most tend to be near-term focussed. What is happening this quarter, next quarter, and next year? How do we meet the targets that we told Wall Street we would meet? How do we invest this mountain of cash coming in because we planned for $25/bbl and we are now seeing $65/bbl?

The other thing about bureaucracies, especially large ones, is that they are averse to change - any kind of change. The reason why companies go out of business is that they refuse to see the change coming until it is too late to do anything about it. Compare IBM , US Steel, Delta Airlines or AT&T to where they were in the early `80's. External forces that were clearly visible to other parties, were invisible to these companies. Or if they weren't invisible, the decision makers in those companies were deer in the headlights, frozen with fear. Those forces transformed those companies and turned them into shells of their former glorious selves.

These multi-national oil companies are a whole herd of deer grazing on a bounty of spilled corn in Interstate 10 outside of Houston at 5:00 AM. There is a giant semi-truck cresting the hill with its bright lights on called Peak Oil bearing down on this herd. Some may make it off that highway. Some definitely won't.

Regarding the "Darth Vader" angle, I think the oil industry (like the media industry) is giving their customers exactly what they want. Even the highest executives of these companies are lily white because their job is to efficiently provide the juice which makes everybody's cars run, and people LOVE their cars. If there is a conspiracy to destroy the earth, it's the conspiracy of people demanding cheap gas, i.e. the very people who are griping about the evil oil industry.
Yeah,  we are all at fault,  I have never told anyone different.  What the drivers can't see is that each gallon they buy makes the whole matter worse.  Many people have fallen pray to the greed of the "WANTS"!

 I want a better house in a nice country setting.

 I want the newest Car, Van, or SUV out there.

 I want my kids to go to better schools out of the inner city.

 I want 2 cars, a big house, and green soft lawns front and back.

 I want more and better than my parents had.

 Now everyone wants the same thing.  Everyone that wants it, is now paying for that greed of yesterday, or yesteryear, or long long ago.

We have to to convince ourselves and others that we are the problem, only then can we change.

Bubba: I couldn't agree more !  You would make a damn good sociologist .  
The company I used to work for. Was a 3,000 to 5,000 employee company in the 80's.  When I joined them they were a shell trying to rebuild former glory.  They did for a while!  Now they are turning into a shell again, just getting smaller and smaller,  They used to have major contracts with the US gov't,  but better companies who changed faster, got leaner and meaner better, now hold hold those contracts.  

 I know oceans and mapping them.  

 But which companies do we see out for sale at the local meat market in a few years?

 And how many cities out there hunting for a hunk of that meat to feed their populations?  

Great post Bubba. Actually we are all deers in the coming energy crisis... We've got too much to lose and I expect that we will start fighting to keep it individually, instead of making voluntary sacrifices in order to mitigate it collectively.
Excellent post, Bubba.  Reflects my experience

I have long had an interest in energy and alternative/ renewable fuels, and went so far as to read Oil and Gas journal purely out of interest.  (I read a lot of journals outside of energy too.  I am alleged to be a biochemical engineeer and physicist)

Years ago I went to work in a biomass fuels group (alas, only briefly in existence) at Exxon and was surprised that I was the only person among the oil people in the building who read Oil and Gas Journal. In general the people were not looking at a whole lot of the wider picture.  (One exception:  Bob Hirsch was there) I think one problem wth oil companies and people in general is their tendency to be parochial and to ignore the bigger pictures that surround them.  And when most of those around are engaging in a kind of group think, looking at limited pictures and immediate concerns, it is easiest to think the same way.

Rosy projections are comfortable.  They occur for understandable reason but get in the way of progress.  Very often, by projecting rosy long-term outcomes to the powers that be, you can keep a good job at increasing salary for several years--until the "swept under the rug" problems you should not have ignored, and realities you should have seen, result in failure.   The situations have seemed pretty similar to me in biofuels (lots of dreamers and rosy projections and then failures, for decades) and the oil industry's projections of new finds and denial of peak oil.

Buuba wrote:
They are technocrats focused on their jobs

pomona96 wrote:
... [and] by projecting rosy long-term outcomes to the powers that be, [they] keep a good job at increasing salary for several years--until the "swept under the rug" problems [hit the fan]

Bubba & Pomona96,
These are excellent observations.
Many of us work in Dilbert-like workplaces and see the very same phenomenon unfolding under our very own noses.
We are each told to keep our nose to the grindstone. Everything will be fine if you just do our job.
Don't make waves, don't question stuff outside your field of speciality.

Meanwhile the Titanic ship we call our "Civilization" continues to plow forward into choppier seas and with no one in the steering house.

Ya the men who own these companies, like the Rockefellers, are really nice guys like you and me.  The never all meet up and decide to start wars where thousands of innocent people are slaughtered just to keep expanding.  Great people...

Document Says Oil Chiefs Met With Cheney

If anyone wants to get a real look at how the world runs instead, of the "Bambi" version, check out "Confessions of an Economic Hit Man".  You won't be disappointed.  He explains exactly how "people who work in these companies tend to be extremely normal" are manipulated by incentives to expand these international companies at all cost.  And yes we are all to blame...



I am not saying that I understand the whole truth.  I am only trying to give the readers of TOD a peek from inside these companies.  I know some of the people who are at the top of these companies.  They are insecure, very fallible, and not in control of a whole lot.  The vast majority of these people started out as technocrats (geoscientists or petroleum engineers).  I guess it is conceivable that as some point in their rise through the bureaucracy they were given the key to the inner sanctum and taught the secret handshake.  It just seems implausible to me.  

If they were in more control, then they wouldn't have gone through the last 20 years canabalizing themselves.  In the 1960's the major multinational oil companies controlled upwards of 50% of the world's oil production.  Now, depending upon how many companies you include, they control 10% to 16% of this production.

I am reminded of a quote that Lee Iacocca made after he left Chrysler.  I don't have the exact quote but I will try to paraphrase:

"Picture an ant on the top of a log racing down a flooded river.  That ant thinks he is steering that log.  Now replace your visual image of the ant and the log with a bean counter trying to manage a company like Chrysler."

Great topic. Why would we think the overpaid ceo's of the oil companies are any smarter than their counterparts running the US auto companies for the last 30 years? What did they learn from the last oil crisis in the seventies, when gm tanked, and ford very nearly went under, with their stock falling to $1? If you're too dumb to see the future, why can't you at least see the past?
I especially liked the deer munching corn as the semi crests the rise.
"Picture an ant on the top of a log racing down a flooded river.  That ant thinks he is steering that log.

ANT1: What's this noise I hear about Peak River?
ANT2: Relax, Chicken Little was always wrong so far.

This is a blinding glimpse of the obvious to anyone that has worked at a large corporation in any sector.  However, as you say, there is a lot of web chatter with a very simplistic view of these companies as monolithic evil empires.  Nice contribution.  
Bubba -

Very nicely done post, and an excellent thumbnail sketch of what life is like in a major corporation.

Some people function well in such an envirnoment and some can't stand it (I include myself in the latter category).

I agree that the people at the upper levels of these organizations are not evil monsters, but by the same token, I also believe that the character of a  large organization is much more than the collective qualitities the individuals who comprise that organization. Large organizations tend to take on a life and a mentality all of their own.

The same is true of governments. The vast majority of the people in any organization (be it the Third Reich, Exxon, or the Vatican), are good, moral, upstanding people just trying to do their jobs and get along.  Yet, evil things often happen as the result of the organization's actions, and all those good people unconsciously function as the cogs that enable the machine to
continue what it's doing. I am reminded of that movie, 'Brazil', where all these nice little bureaucrats are blithly going about their day-to-day jobs in a nightmarish totalitarian police state.

To do well in one of these large organizations requires one to submit to group think and conformity. One has to not only conform to the party line, but one must actually make oneself believe it.

Thanks Bubba.  You and other posters here have put a human face on the oil industry.  I have a hard time demonizing people that are struggling to keep jobs the same as the rest of us!

It does raise some questions however about allowing the market and oil companies to move us away from fossil liquids.  It is the goal of oil companies to make a profit extracting oil.  Expecting them to put themselves out of business by not extracting oil or doing it at a loss (before they absolutely have to) is not thinking rationally.

If the country wants sustainable, clean energy than the transition has to be legislated into the business climate.  And that transition is going to take years, regardless if we are proactive or reactive.  Call me utopian but I think a concerted push for non fossil fuels in concert with maintaining a viable oil industry is the only way to make the switch.  

Granted some inneficient oil people will go under even then.   Waiting for the peak to hammer us might be worse, however, from an oil industry perspective.  We all need to be thinking about how to manage this transition from a work force perspective.

And as a last comment I do tend to agree with some posters that there is no need to worry about the owners, senior executives in oil.  They will have money no matter what happens.  It is the people that work for a living that have no fall back position when jobs are cut.

Nobody's job in the energy business is going to be cut. The problem right now is we can't find enough people to man the rigs we also don't have. Ever higher prices and profits will suck investment and people into the oil patch world wide. The post peak years will probably see an ever growing number of workers building rigs and other infrstucture as fast as possible because extracting oil and other energy will become much less efficient (ever less production/well), while fewer people will be working those industries that we will collectively decide we don't need as much (cruise ships, other resorts, air travel, second homes; and, car pooling will reduce the need for cars of all types, not just suv's.)
Possibly.  OTOH, higher oil prices will shortly lead to higher investment costs to do anything.  And I have yet to see any corporation that increased its workforce when their returns started dropping.
I won't rehash how Auto companies and Oil destroyed the U.S. street car mass transportation system earlier in the past century so they might sell more internal combustion engines. Yes every single one of us is at fault for being lead by the nose and going along with the illusionary freedom car culture. The alternatives to which are few.

If we don't drive and are not to walk the 20-30 miles to work every day, we must live closer to work. Yet it may be too expensive to live closer to work or the only option might be to live in dangerous areas. So the choice is danger, hardship or unemployment if we are unwilling or able to drive. We all are co-opted, but who set it up in the first place? Who controls the political system? (Hint: it really isn't us). Who sets the legislative gravy train, where alternatives to the existing arrangements get just enough funds and lip-service to b.s. anyone who asks about them into silence again?

The questions are turned into "why won't those greedy workers accept less?" Change is discouraged/prevented. We did this to ourselves but there really are Darth Vader types out there who benefit from the way it is.

We did this to ourselves but there really are Darth Vader types out there who benefit from the way it is.

No doubt!!  If you would like to read a book that explains how oil politics and the "Seven Sisters" oil cartels have shaped this world since WWI read: "A Century of War: Anglo-American Oil Politics" by William Engdahl.


Goralski's "Oil and War" covers the military consequences of control of oil during WWII, without the conspiracy theories. Recommended.
Coincidence theory is the flip side of conspiracy theory.
Coincidence ... is the flip side of conspiracy

No it is not.

Random stuff happens all the time.
Containment of a secret almost never happens.
Successful conspiracy is a rare bird.
Tom-foolery is a pigeon on every door step.

We as humans are wired to see "patterns" in the chaos. We are predisposed to believe in Intelligent Design. If something happened, then there has to be a "reason" for it, a conspiracy, a cabal. Surely a bunch of evil, evil demons gathered in a smoke-filled room and planned this all out. ["This" being: Iraq, Peak Oil, Bird Flu, 9/11, Assassination of JFK, ..., you name it.]

In truth, much of what we see in the world is a tangled web that "evolves" itself from randomness. It seems like a pattern. In fact it is simply a byproduct of our many thoughtless and foolish mis-steps; our inability to see beyond the horizon of our own selfish and immediate desires.

Do you honestly think Cheney & boy blunder "planned" the Iraq fiasco? More likely than not, they came into office as such simpletons that they did not realize they had to plan and coordinate against an Iraq happening.

This was not "the gang that couldn't shoot straight".
This was the gang that didn't know to keep a fire extiguisher near the fireplace. Now the whole house is burning down. And all they wanted was to make things a little warmer and comfier for their ideaological leanings. Do you know how to spell "backfire"?

Peak Oil is kind of the same thing.
No one "planned" for it to happen.
But then again, no one is bringing the fire extiguisher over to our party house to help us put our own fossil fuelish fire out. You know, the one that is burning down our whole planet. (Can you spell "Global Warming"? Shrub Wonder (aka Boy Blunder) can't. His Intelligently Designed brain does not allow for such hard hard thoughts.)

Coincidence ... is the flip side of conspiracy
No it is not.

Yes it is when used by talking heads in a `marketing' way to obscure the inconvenient facts of a particular story; which is very often how it is derisively used.

That off my chest, Life is all random coincidence, and we pay selective attention.

Regarding underestimating Cheney & boy blunder I defer to:
"'White House in Chaos' & Other Utter Horseshit"

Do you honestly think Cheney & boy blunder "planned" the Iraq fiasco?

Well, they didn't expect it to be a fiasco, but they did plan it.  Hell, they published the plan.  Maybe it's just a coincidence that what they've done and what was published in the PNAC document match so completely.  Personally, when someone says they're gonna do something, and then they do, it's more than a coincidence.  I'm hoping that we'll get to find out at least some of what happened in Cheney's energy task force, and then we'll be better able to judge conspiracy from collusion from coincidence.  

Also, I believe that information abhors a vacuum, and nothing creates a vacuum better than a really unbelievable official story (single bullet theory anyone?), and a lack of trust in those dishing out the BS.  If you know you're being lied to, then you have to try to figure out your own explanation.

"But it was shocking to me that the secretary of defense would tell the Army how to fight. He doesn't know how to fight; he has no business telling them. It's completely within civilian authority to tell you where to fight, what our major objective is, but it is absolutely no one's business but uniformed military to tell you how to do the job. To me, it was astonishing that Rumsfeld would presume to tell four-star generals, in the Army thirty-five years, how to do their jobs.

Now here's another thing that Rumsfeld did. As he was being briefed on the war plan, he was cherry-picking the units to go. In other words, he didn't just approve the deployment list, he went down the list and skipped certain units that were at a higher degree of readiness to go and picked units that were lower on the list -- for reasons we don't know."
~Lt. Gen. Claudia Kennedy

When I was commander of CENTCOM, we had a plan for an invasion of Iraq, and it had specific numbers in it. We wanted to go in there with 350,000 to 380,000 troops. You didn't need that many people to defeat the Republican Guard, but you needed them for the aftermath. We knew that we would find ourselves in a situation where we had completely uprooted an authoritarian government and would need to freeze the situation: retain control, retain order, provide security, seal the borders to keep terrorists from coming in.

When I left in 2000, General Franks took over. Franks was my ground-component commander, so he was well aware of the plan. He had participated in it; those were the numbers he wanted. So what happened between him and Rumsfeld and why those numbers got altered, I don't know, because when we went in we used only 140,000 troops, even though General Eric Shinseki, the army commander, asked for the original number.
~Gen. Anthony Zinni

"Well, they didn't expect it to be a fiasco"

I wouldn't be so sure of that.  They deliberately sent 1/3 the troops that was needed to do the job and picked units that had lower degrees of readiness, "for reasons we don't know."  Well if you understand the globalist you can understand the game.  If they would have sent 400,000 troops toppled Saddam in a week and stabilized the country in a year or so what would be our options?   We would force to leave the country just like his NWO father 15 years ago.  What better way to maintain a permanent presence in Iraq and plunder their resources under the guise of "incompetence".  Bush is expendable to the globalist.  When he is done he will be replaced by another cast of characters that will follow the same game plan.  All that matters is we keep a permanent troop presence in the heart of the golden triangle.

The military plans "crazy" things all the time:

Bush is there for a reason.  He is the "incompetent dope" so it seems plausible that we could screw up this bad in Iraq while Cheney sits in his bunker and carries out the globalist plan with the real powers that be.

Regarding the information from the link: let me just express my doubts that this plans finally got implemented in newer times. Who knows probably we'll find out in another 40 years... but of course nobody will care then as nobody cares now.
I guess today's news story blows the "there are no conspiracies" theory out of the water:

Moreover, I think this one involves environmental groups and Indian tribes who gave donations for environmental causes

The individuals participating at TOD seems to consist of a group of rather educated people.  PhDs, engineers, heads of industry and such.  Let's call them "smart" people.  There is nothing wrong with this, of course, especially when the purpose of this site is for ANALYZING energy issues.  But there is a small problem here.  As soon as somebody brings up a topic that doesn't quite fit in the established view of events it is immediately labeled "CONSPIRACY".  These "smart" people should realize that the world "conspiracy" is a FRAME (http://tinyurl.com/sm0y).  Someone has already preprogrammed a conceptual picture with a word.  That is why as soon as somebody mentions "conspiracy" most peoples minds shut it out as "silliness" or just random coincidence.  They do not have the "wiring' to understand the bigger picture.

Another thing that interests me about "smart" people is that scam and con artists around the world agree the easiest target for their scams are "smart" people.  The more educated the better.  The reason being they think they are too smart to be scammed so they find it IMPOSSIBLE that they could be taken without their knowledge.  That is why the word "conspiracy" does not settle well with so called "smart" people.  If there was an actual world wide conspiracy going on, that they themselves knew absolutely nothing about, they would have to admit to themselves that they are not as smart as they think they are. After all the "official" story line on 9/11 is just a "conspiracy" theory put forth by the government except they can ignore the laws of physics when they explain how three steel framed structures collapsed into their own footprints that day from "fire".  http://tinyurl.com/7zf9o

IMHO you should not be shooting things down as "conspiracy" unless you at least read Carroll Quigley's "Tragedy & Hope: A History of the World in Our Time".  Of course we are the Tragedy and the intellectual elite are the hope for mankind from Quigley's elitist perspective.  If you read it and still think there is no "conspiracy" by the banks and oil companies I salute you.



The general understanding of "conspiracy" is a smoke filled room with all the players being there and expressly mouthing off the duties of each member in the conspiracy.

I think the words you are looking for are more along the line of "tacit collusion". That's where there are winks and nods between various people, but nothing is expressed out loud.

If you and I own gas stations across the street from each other and one day I see you raising prices and looking for a wink and nod from me -well we haven't said anything, but there was collusion.

None of the "smart" people are saying collusions don't happen. I think they are saying it would be kind of dumb to involve yourself in an outright "conspiracy" when you can achieve similar results with silent collusions.

Keeping a "secret" is hard hard work.
Hell, look at Plame-gate (the White House CIA outing for you nonAmerican readers of TOD).
Look at Cheney's problem with keeping his 2001 energy meeting under wraps.

It is so much easier to do stuff if there is no "secret" and you simply nod and wink in response to the nods and winks from other members of your industry.

No No No.  I'm thinking of real conspiracies. Like for example the fact that the VAST MAJORITY of the country BELIEVES the Federal Reserve is actually part of the federal government and is controlled by the federal government. In actuality it was a coup by international bankers to wrestle control of the government's ability to print money away from the "people" and place it into the hands of a private banking cartel.  In turn, handing over control of the country's economy to a private group of international banking families.  Now that's conspiracy!!  Come to think of it, they may have been smoking cigars when Morgan and his friends hatched the plot at Jekyll Island.  I'll have to look it up ;-)


History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance."
- James Madison, 4th US President

"Whoever controls the volume of money in any country is absolute master of all industry and commerce."
- James A. Garfield, 20th US President

A great industrial Nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the world - no longer a Government of free opinion, no longer a Government by conviction and vote of the majority, but a Government by the opinion and duress of small groups of dominant men".
- Woodrow Wilson, 28th US President

After some time you'd probably get to know your neighbour and there will not be a need for nods and winks.

Basicly I think you are both right (and both wrong)... There are numbers of more or less strongly coupled circles which make more or less good plans to protect their collective interests. Whether you call these plans conspiracies is just a matter of taste; personally I object the predefined negative load of this word. When you think of it any enterprise (legal or not) started in some room full of smoke. Of course on a larger scale conspiracies that are against the rules of life are doomed in the long term... But look at the Russian revolution - their long term turned to be 70 years and maybe 70 more for the country to recover from it.

I need to calibrate my work sphere against yours. What percentage of your co-workers go crazy over spectator sports? What percentage obsess over the perfect lawn? With that in mind, what percentage carve out enough time to expand their understanding of the global reality around them?

Oh, I forgot about hunting, fishing, bowling, and golfing.


I'm not sure where you are going with this or what this has to do with my post, but since you and I go back pre-TOD I will tell you that I am personally kind of a sports nut - both playing and spectating.  I also love the outdoors (but do not hunt at all or fish much).  On the other hand I am involved locally in political organizations and spend a ridiculous amount of time doing this blogging thing. The people I work with have highly varied lives outside of their work.  The ones that are the shallowest, however, are not those who spend their weekends watching football, but at the office trying to get noticed by the corporation.

I don't know where I was going either, other than to understand how our co-workers consider the deeper ramifications of their jobs.  Invariably, I can't penetrate beyond the happy-talk and if I do, most haven't an idea about global warming, peak oil, or regular politics for that matter.

On a sliding scale, I'd consider my co-workers less enlightened than yours.

And I do weird sports so that's a non-starter in getting any conversation going.

Thanks, Bubba. I agree with you. I am also a 20+ veteran of a major multinational oil company. I spent many years on the ground in operations, i.e. production as well as reserves engineering. Up to a point, I had a pretty good big picture view.

Since the reserves are the actual value of the company(other than PPE), this is the heart of the planning for exploration, drilling and forecasts. Each project/field is evaluated for profitability at different price levels. If the project doesn't return a certain ROI, it's tabled until the price makes it profitable. Or it's sold off. In the early 90's many companies dumped all their stripper fields and anything that didn't have big potential. In hindsight, they may wish they had kept these fields, since by themselves they made great profits, even at cheaper oil. However, when you factor in the overhead of a company headquarters, regional, division and district office, the profitability is diminished. The small independents were great benefactors of this misguided policy.

Sorry, I didn't mean to go into this much detail but I do want to say that I agree that many employees don't have a clue about Peak Oil. However, I do know that many employees, including myself, often wondered how any projects could be profitable any more since all the easy oil/gas had been recovered. Even in the early 90's, we struggled mightily to manipulate the financial cases to show a profit on a field that needed EOR(enhanced oil recovery such as steam, waterflood, etc.) These types of secondary/tertiary projects are so expensive because of energy requirements, water disposal, equipment costs, etc.

Also, when I worked in producing operations, I remember bringing on new fields, new wells drilled into promising zones. They came on like gangbusters. It was thrilling to see some beautiful light crude flowing into a tank with no artificial lift. Unfortunately, none of these promising wells flowed more than a couple of weeks. The decline was immediate and we had to implement artificial lift. Brilliant engineers devised expensive fracing, acidizing, perforating programs that produced minor benefit. This is the picture for all domestic production that I know of. Including offshore wells.

So, I think a lot of employees have a slight clue but the corporate structure is almost military sometimes and if your manager...on up to the CEO is feeding you the line that "we have lots of reserves", well, they are writing the checks...

One other observation, albeit on a different tack, is my increasing suspicion that there was a "collusion" if not something more, during the 80's and 90's between oil, auto, aviation to increase profits by moving people around via transfers, reorgs, etc. Somehow it seems like a lot of corporations jumped on this bandwagon. I know it's a stretch but how else to explain some of the boneheaded moves that I have seen in corporate life. Now, so many families are separated from loved ones. Hence the growth in travel during holidays, etc. Just a thought.

my increasing suspicion that there was a "collusion" if not something more, during the 80's and 90's between oil, auto, aviation to increase profits by moving people around via transfers, reorgs, etc. Somehow it seems like a lot of corporations jumped on this bandwagon.

This is why people prefer to believe in Intelligent Design.
It boggles the mind to believe that a pattern can emerge out of random chaos. But it does when there is a Darwinian force that selectively causes some (those who show short term "profits") to continue and procreate their way of life.

I have a friend working as a product manager for a big multinational oil company. He's world-class smart, and has published several academic papers in his (non-oil) field. On peak oil, our conversations have been short. His company circulates the CERA newsletter internally, and he accepts that as authoritative, as do his colleagues.
I work for a very large service company. No we are not in Iraq and working for the Pentagon. :>)

With regard to whether top managment knows. From my experience not so long ago we the little people were asked to give our input on Peak Oil issue. This was 2 1/2 years ago. So I think the top was hungry to know the opinion of us people close to the fields. In the big majors I am sure that the top CEO see the numbers for reserve replacement and must quize his geology heads what the explorations trends are. This should give them a BIG clue that all is not well.

With regard to Andrew Gould comments, I would take that public statement with a grain of salt. First of all he is not going to come out we have a problem. He works for the Majors. If they are not singing this tune HE WILL NOT.

Likewise he will say everything possible to imply that companies SHOULD SPEND MORE. This will give him what he wants, PROFITS.

I agree that the "little soldiers" in the oil companies are not fretting about the PO. They just want to keep their jobs and retire. Not like the folks from ENRON who got shafted. :>((

The problem is the proverbial tail wagging the dog. And the name of that tail is profits. The unholy, blind pursuit of profits, no matter the cost, is the driving force that causes people, who seem nice, who watch the same television programs, attend the same sporting events, and who shop for the latest Prada handbag elbow to elbow with the rest of humanity, to make decisions that have immoral consequences.

Remember Nuremberg -- we were only following orders? The incremental decision tree, driven by profits, has resulted in untold thousands of product liability lawsuits; millions, if not billions, of acres of land and water, and the entire atmosphere, being polluted beyond a reasonably healthy standard; and it has ruined the lives of millions who perform drudge work that is the ultimate source of the destruction of their health and spirit.

Yes, there are dark lords out there conspiring. The natural sorting process that is the corporate ladder promotes those managers who can best navigate the backstabbing, ass-kissing, rumor-mongering, step-on-your-coworker's-back to get ahead hell the go-getters impose on themselves. This process automatically leads to leaders who have all the qualities of Pol Pot -- with better coporate art in the lobby. And it will lead to a society with a corporate overlord who whips the oil consumption society like a frothing horse to run faster and faster in order that that top of the dung-hill leader can get one more crumb, one more rich boy toy, one more trophy wife, one more ear of government.

Yes, Virginia. There is evil in this world, and it wears an Armani suit.

There is evil in this world, and it wears an Armani suit.


I agree with much of what you say,
but I would not put it out so stridently
and so viciously.

Most of the people who wear your "Armani suit" do not see it in that color.

And they are just people. People can change their clothes.
People can have bad thoughts one day and a change of heart the next.

There is nothing evil in the idea of "profits" per se.
The capitalist system has been tremendously successful in some areas and a complete failure in others (just as has the Communist system).

"Profit" is a random noise that we human critters make. It results from the mathematical subtraction of the "Costs" noise from the "Revenues" noise. Many a time we fail to bark out the full Costs noise. We fool ourselves into thinking costs can be contained. What is the full "cost" of driving your car 2 blocks down to the supermarket? That is a hard hard question to answer because it is so convoluted in our e-value-ations about having privately owned cars, having roadways, having "super" markets and accounting for all externalities.

You are right though about the corporate structure promoting the most vicious dogs to the head of the pack. Runts in the litter finish last and dead --having been trampled into that sedate state by their more "humane", ladder-climbing brothers.

Step Back,

In a country where amazing strides towards fascism as embodied in the Homeland Security Act and the vote rigging in Ohio go largely ignored or actually supported by the lap-dog media, a little stridency is called for. In a country where poor people are blamed for the credit card companies' greedy and bad decisions, where the debtor's prison is now a few steps closer, a little stridency may be needed. In a country that is actively gutting the environmental laws while also gutting the health care system, such as it is, a little stridency is called for.

That there is not more stridency is the crime. That there is not more stridency is our shame. If there ever was an issue that needed to be proclaimed from the rooftops, it is peak oil. No other man-made disaster will affect more lives. And, we can see it coming. WE CAN SEE IT COMING!!!!

As peak oil unfolds, you will see more inept cronies like Michael "Heckuva Job" Brown, Stewart Simonson, William DeWitt, and Kenneth Tomlinson end up in positions of power. We will see the "elite" rise to the top through the process I described in the earlier post and they will do all they can to profit themselves and their buds maximally from the unfolding disaster.

To find out more about these elite "regular guys," go to
http://www.alternet.org/columnists/story/28482/ . Molly Ivins does a spectacular job explaining the crony train. If you think I'm a bit strident, you better watch out for Molly. She's had it with the soft-talk designed to defer change, to soft-pedal the truth. You may also want to read Bill Moyer's latest.

Let me offer a quote from his article, "As Ronnie Dugger reminds us in his epilogue to Fifty Years of The Texas Observer, there was silence in Texas in those days about racism, poverty and corporate power."

I will not be silent, nor will I be gentle. The truth is the truth, and tip-toeing around the truth in order to preserve the self-esteem of the culpable, is not only doing a disservice to those who will be affected by peak oil, it makes one complicit, a collaborator, a member of the Vichy government.

As for viscous, no, I'm not viscous. Compared to the Dobermans that lope down the halls of the White House, I am a paragon of kindly portent, a gentle grandfatherly figure who whispers sweet, and not so sweet truths, to those with ears to hear.

The current administration has sent two thousand Americans to their deaths for a lie. It has outted a CIA agent. It wants to destroy the EPA, Dept. of Education, neuter welfare, and eliminate social security.

For God's sake, they TORTURE people. And each of these "regular guys" are former or current members of the oil industry elite. Just following orders, eh?

So....Me? Viscous? Lord.

No. I -- with my little words, my insignificant power, my sad truths -- I am a soft bunny hopping down the trail squeaking out a few warnings to the world, hoping that the Doberman doesn't come for me next.

Peak Oil is coming and patting the elites who are responsible on the back and reassuring them that we see them as just like us even as they do things we would never do -- is, well, insane.

I harbor no malice towards those who try to get out the truth of peak oil. They are saints. They are doing work that will probably be ineffective, unrewarded, and largely ignored, but at least they try. I applaud them.


I am reminded of a TV documentary that I saw some years ago about psychology.  In it they talked about a basic human instinct which is very similar to the 'herding' instinct in other animals.

In the programme they did an experiment where they had a roomful of 10 people doing a written exam. Except that 9 of the 10 people were actors. Part-way through the test smoke started to eminate from the corner of the room, but the actors had been told to ignore the smoke. However, the 10th person (the subject of the experiment) did not know what was happening. They tried this experiment with 6 different people and only one of them 'broke ranks' to investigate the smoke (even then he didn't say anything and eventually just sat down and got on with the exam). The other five 'real' subjects just sat there nervously looking between the smoke and the other examinees.

I think a lot of us see the 'smoke' but because we see everyone else carrying on their daily lives as if nothing is happening, we think there must be a reason for the smoke's existence that is normal, so we just ignore it.

I feel like this at the moment. We're busy getting a wood kitchen stove, solar panels and radiators installed in our house, but part of me still worries about the fact that I am breaking away from 'the herd'.

I commend the people who are standing up and pointing at the smoke and shouting "Fire!", because without them we'll still be going through the motions when our trousers catch alight!

Only cowards "cut and run".
Real men stay with the herd as we march to the ledge.
Real Marines take that fateful plunge towards destiny.
It is a noble cause.

Peak oil phooey.
Real men don't sissy up in the face of little scarcity. We rev up our Hummers and drive em right to the edge.
You oilers are party foilers.

They should be shouting not only PO but Climate Destruction !!!
  1. Peak Oil
  2. Global warming
  3. Population bomb,
  4.  ....

Problem is every 20 years a new wave of ignorant humans are birthed into this world ready for molding by Madison Avenue. We call them the Next Generation. Each wave that washes onto the beach is bigger, brasher, than the one before.

The older, knowledgeable waves collapse with age and wither back to wence they came, silenced by the roar of the new younger waves making their splashy, crash arrivals onto the beach.

That is the "circle of life".
And the spiral of overshoot.