• he has a point, but
  
• this time the oil industry, not regulators or watch dogs, seem to be ringing the alarm bells as loudly as anyone.

But consider this: The world certainly will not be a worse-off place if Peak Oil is taken seriously, sooner than later, so no down side exists, in my mind, in contemplating this as a serious issue for all of humanity to face, whereas dismissing it as too-much chicken-little talk has the potential to be catastrophically dangerous to humanity.

Yergin: about 84MBD of oil already being produced, Saudis will not produce 20MBD additional but will produce 14MBD; tech will save us; we will continue going deep offshore; the digital revolution, what is "oil"? oil sands will be made affordable due to new tech on oil/tar sands; we have 5 geologists working in our CERA group to make our predictions, they are not merely "economists"; technology came through in computers, look at cost of laptop, tech did not freeze in oil either --Libya will come through

Tom Asbrook:break #1

Yergin: [Have we peaked out?] Time frame to peak about next 2.5 decades, where the "undulating plateau" will come rather than sharp peak and then new tech will come through, roughly 2030 it's hazy, ...
TA: this is huge "bet" if you turn out to be wrong
Yergin: the prize is a place in history, being right about when PO hits, conservation and efficiency are part of the mix, America discovers the hybrid, look at big picture, same chicken little in the 1970's ...

TA: how are oil companies correctly playing the game straight up?

Yergin: yes. oil co.'s are being heavily watched. we have a "demand shock" because world economy (china) has grown so much, 7% rather than 3% per year ...

TA: after $10/bbl oil prices are crawling up, don't the oil companies stand to gain a "profit" by letting prices drift up?

Yergin: No. Oil companies are judged by pension plans to do a good job ... after downsizing we have a shortage of rig people ... there has been a historical pattern, after caution, people will go out and explore again and find again, it's the investing community who is at fault because they are skittish about investing based on forecast of $100/bbl and then it doesn't make it

Jamie Court: Consumer watch dog group thinks oil price is a "myth" . Number of refineries in USA is the problem ... Mobil & Chevron manipulated the refinery market by keeping small players out

TA: do you agree, Yergin?

Yergin: No it was the government. We have refinery creep. USA imports gasoline from Europe because they use diesel. New US regulatory policies are at fault ... USA is not an island onto itself
Court: It is clear oil companies knew they could hike prices by limiting number of refineries. ... we need environmentally standard gasoline to get around balkanized US system ... 10% drop since 1981 in refinery capacity ... oil companies are not stupid ... they do it on purpose ... oil co.s refuse to sell their refineries and are shutting them down instead ...

Break
TA: turning to calls from listeners

Alex: media buys into resource depletion theory ... it's bull ... to be "rational" we need numbers in gigatons ... price of commodity ... the market will take care of it...

Yergin: definition of proven reserves keeps getting expanded by technology ... the markets are sending signals ... new interest in renewables ... we need distributed energy sources ... market is sending signals to scientists , universities to come up with new alternatives ... we deal with "unknowables"

Harry: this is 30th focus on macro-economy, why not focus on poor people?

Yergin: I am concerned about this winter 2005-2006 due to disruption of natural gas supplies ... everyone should lower their thermostats by 2-3 degrees .(If everyone lowered this much we would save more natural gas than was lost from Katrina).. this winter will cause problems

TA: what about possibility of $100 oil?

Yergin: any shock can cause prices to go up substantially ... would be a shock to the economy ... we need to reduce demand pressure ... academic studies show we can be 30% more efficient

George: our boys dying in Iraq, is it about oil?

DY: it's an integrated crisis around "energy" --geopolitical, weather, look at Prius gains, there is tech potential out there; it's not just gas, you need electricity to pump the gas, the WW II model of gas security (in book The Prize) it's the supply chain infrastructure that is not secure against disaster

TA: do your numbers depend on Iraq?

DY: [evades question] take North Africa, Middle East is less than 10%

Mel Lin: what about ethanol

DY: new energy bill subsidizes ethanol, big debate on how much farm land ... scientists are looking at new biotech production of alternate fuels ... there are big surprises coming 5 years down the road ... our oil price predictions depend on American drivers switching to hybrids, it's part of our prediction mix ... geopolitics will be more important than geology ... above ground looming crises ... Iraq will be a crisis ... a new set of realities ...

end

Education

    * Ph.D., International Relations, Cambridge University
    * Honorary doctorates from the University of Houston and the University of Missouri
from: http://www.gbn.com/PersonBioDisplayServlet.srv?pi=22060

Daniel Yergin is co-founder & Chairman of Cambridge Energy Research Associates, an international consulting firm. Dr. Yergin won the Pulitzer Prize for The Prize: The Epic Quest for Oil, Money and Power and recently published The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World. He is a member of the Board of the US Energy Association, the National Petroleum Council, the US Energy Secretary's Advisory Board, the Council on Foreign Relations and the Royal Institute of International Affairs. Dr. Yergin received a BA from Yale, a PhD from Cambridge (Marshall Scholar) and holds honorary degrees from the Universities of Houston and Missouri.
from: http://www.elawforum.com/about.adp#yergin

What is fascinating in reading Yergin's book is the extreme extent to which political history and wars during the 20th century have been driven by considerations of oil: attempts to grab oilfields, the Western dependence on American oil production (which oilfields are now greatly depleted).
from: http://www.abelard.org/news/review0407.php

from: http://www.jewishworldreview.com/1002/steigerwald.html
Oct. 15, 2002
The story of how the world "changed its mind" about governments and markets during the 20th century, "The Commanding Heights" also became a PBS series. ... I called Yergin at his offices in Washington, D.C.

Q: When war with Iraq comes, what will it do to the price of oil and what threat will it pose to world oil supplies?

A: Iraq has marginalized itself as an oil exporter, which means its exports have become much less significant than they were in past years. During the Gulf crisis in 1991, 5 million barrels a day of Kuwaiti and Iraqi oil needed to be replaced.

Today, only about a million barrels a day would need to be replaced. So the price would go up until the market decided that the alternatives were coming into the market, and then the price would come down again.

Q: Is Middle East oil still crucial to United States' security?

A: We get major supplies not only from the Middle East, but from Canada, Mexico, Venezuela. But at the end of the day, there's only one world oil market, and so if supplies are disrupted in one place it, it affects the whole market because oil easily moves around.

Q: I'm always amazed that so many people hate oil companies. My dad is always saying what a complete miracle it is that you can go up to the corner gas station and buy a gallon of gas for a $1.50. It seems like it's a pretty good deal for consumers. What do we have to complain about?

A: What strikes me about this is this kind of amazing engineering and logistical system that moves 77 million barrels of oil a day around the world. It extracts it from a well in some distant part of the world, moves it, refines it and it, eventually, gets it into a gas station and your gas tank so you can go and visit Aunt Millie.

The complexity of the oil industry and the scale of the engineering have always very much struck me. It ends up with a gallon of gasoline that usually costs $1.30 or $1.40.

Q: Speaking of technology, I presume that technology and good old human ingenuity are why we will never run out of oil?

A: You know, and you're there in Pennsylvania, some people thought we started running out of oil in the 1880s. One of the leading oil men of the day starting selling his stock in the old Standard Oil Trust because he was convinced that there was no oil outside Pennsylvania.

So we've gone through periods of shortage or perceived shortage and then new technologies and new terrains are opened and you end up with a kind of surplus and sometimes a glut.

These cycles have been true of the whole industry. I always find myself thinking, sure, it's a finite resource, and that at some point in the future we will really run into a supply constraint. Some will argue that they can see it 10 or 15 years down the road. ... Gosh. ... Maybe the man or woman on the street in their car doesn't realize what a technology industry it is. It's really run by engineers and scientists.

It's very intertwined with geopolitics and at the same time it is very literally and figuratively down to earth. It's about managing technology. And the complexity and scale of the technology that underpins the whole system is not well known.

For TOD readers who do not have any technology background, just realize there was a reason why the nerds in the engineering degree programs at college were studying all night instead of partying like there's no tomorrow and burning their brain cells on booze. Engineering is hard hard shit (to put it in Georgie Porky Bushie terms).

If you believe there is a real something you can call "Technology" and this "it thing" will save us, you are praying to the Tooth Fairy.

There is no Santa Claus and there is no "Technology". In each market sector there is an incredibly complex set of interlocked technology subsectors and businesses that by luck, sometimes click together. No matter who the hell they are, they all have to obey the laws of Mother Nature if they are building something real. If Mother Nature says you can't suck oil out of a conch shell, then that's the law of nature. No amount of wishfull thinking about "technology" and how "it" is going to save us will reverse the absolute rules of Mother Nature. Mother Nature does not "hear" the wish barks that come out of our pathetic oral cavities. After all, we are freak accidents of evolution and will probably obliterate ourselves fairly soon, thanks to the likes of Dan Quailbullshit Yergin and those that bow in his shadow.

Sorry for the vitriol. Shit begets more shit.

Remember, in the valley of the blind voters,
the one eyed man is ... in the minority.

I would highly recommend Yergin's "The Prize" though.  It's a fascinating account of the history of the oil industry that is worth the time of anyone interested in oil issues.