CERA and the Facts

This is a guest post from Hans Noeldner, a trustee in the village of Oregon, Wisconsin, a rapidly growing bedroom community of about 8,300 near Madison, Wisconsin. Hans' first piece on the rules of downtown revitalization can be found here and his Declaration of Dependence can be found here. Today's post, "CERA and the Facts" can be found under the fold.
Now that CERA has ridiculed peak oil fears and tantalized the world with its $1000-per-copy report, some peak oil believers have quickly launched vociferous counterattacks. But rather than responding in knee-jerk fashion, we would be wise to address some fundamental questions first. I pose them as a "layman" rather than an expert; it is my hope that these questions will stimulate a fruitful discussion on the Oil Drum and elicit insightful responses from the numerous more knowledgeable folks who read and post here. Here is my "baker's dozen":

(1) What is the primary mission of CERA? To fully and accurately report the facts to its clients? To act as a public propaganda arm for them? Some combination?

(2) If CERA's primary mission is to provide factual information, which is likely to be more profitable - to make that information available to the public at large (i.e. by selling it to anyone willing to shell out $1000), or to withhold the most crucial information from all but its most important clients?

(3) If CERA's primary mission is to discredit peak oil arguments even though CERA knows better, what will happen to CERA's credibility over time? Would it be better for CERA to mount a full-scale assault right now against the notion of an imminent peak and cash in before the peak unmistakably manifests itself, or to carefully spin its message, allay fears, and thus be able to bill its clients over a longer period of time?

(4) What is known about CERA's major clients? Which is better for CERA - that the full list be known to the public, or that the names of some clients remain confidential? Logically, who would number among them?

(5) Does CERA offer different levels of information and services to its clients? If so, what is publicly known about these levels? Given what is known and presumed about CERA's clients, what might characterize the various flavors of CERA's products?

(6) What are the credentials of CERA experts? Are there good reasons to believe that all of its experts are known to the public?

(7) If CERA has close links with exporters, is it possible that CERA actually DOES have solid data to back its claims that a peak is far in the future?

(8) Might CERA have more accurate information about reserves and production potential than is generally known to agencies like the EIA, USGS, etc? What about oil giants like Exxon and BP?

(9) Are there good reasons to believe oil exporters are withholding specific information about economically recoverable oil reserves in order to establish and maintain high prices?

(10) Are there good reasons to believe oil producers are withholding specific information about economically viable new technologies that will boost yields from existing reserves in order to maintain higher prices?

(11) If oil exporters and producers actually can deliver significantly more oil than they let on, how would they go about maximizing prices? Over time, how would they balance price-boosting fears of scarcity and depletion with demand-boosting assurances of adequate supply?

(12) Given the relatively unpromising EROEIs for oil alternatives like ethanol, biodiesel, and shale; given the improbability that any combination of them will substitute for conventional oil barrel-for-barrel; is it reasonable to believe that oil exporters and producers would nonetheless try to discredit and quash alternatives?

(13) Suppose for a moment that CERA really does hold key, non-publicized information about recoverable oil and new developments in technology. Why advertise it? Won't their clients already know where to go for the inside dope? And won't their clients be willing to pay REAL money for it rather than a mere $1000? If so, why publicize the $1000 report? Could it be a teaser? A ruse?

My fellow TOD readers/posters, your thoughts please!

DISCLAIMER: Although I am a Trustee for the Village of Oregon, Wisconsin, I do not claim that the views herein represent those of the Village Board.

As I have said before, as part of my "Iron Triangle" thesis, I think that CERA is a hired gun for ExxonMobil and Saudi Arabia (KSA), etc.

IMO, ExxonMobil is chiefly afraid of punitive taxation, if they admitted to the reality of Peak Oil, and I think that KSA is afraid of military takeover attempts and/or battles being fought by warring powers for their oil fields, if they admitted to the reality of Peak Oil.

I have outlined the "Assume the Opposite" theory regarding public statements by most elected officials, most CEO's and most energy analysts (e.g., CERA) regarding Peak Oil.  To get the truth, just assume the opposite of what they are saying (I borrowed this concept from Ayn Rand).  

For example, the CEO of Pemex claims that Cantarell's decline rate is 14% per year.  Out of five decline scenarios, the worst case is actually 40%.  So, to get something closer to the true decline rate, you just transpose 14% to get 41%.

>As I have said before, as part of my "Iron Triangle" thesis, I think that CERA is a hired gun for ExxonMobil and Saudi Arabia (KSA),

I suppose your theory is as good as any, but here is mine:

The reason why CERA, Exxon and others fear disclosure is that they would get kicked out of foriegn nations which still have reserves. When Castro came to power in Cuba, he nationalized all US assets in Cuba. All of the promising fields are now located in countries outside of US influence. I think we both agree that once PO is widely excepted and goes public, that major exports will cut exports to husband remaining reserves. This will be devistating for our economy and american lifestyles.

KSA or rather the royal family is probably more concerned about a revote than a military take over. KSA provides generious entitlements that are dependant on oil revenues.
When the oil revenues begin to decline, KSA will be forced to cut entitlements. Plus, there is virtually no way to invade a major exporter like KSA without substantial damage to the oil production infrastructure. Plus we can see from Iraq that it is very difficult to bring back stability once the ruling power is over thrown.

>For example, the CEO of Pemex claims that Cantarell's decline rate is 14% per year.  Out of five decline scenarios, the worst case is actually 40%.  So, to get something closer to the true decline rate, you just transpose 14% to get 41%.

FWIW: I believe the current decline rate is probably closer to 14% than 40%. 14% in my opinion is a very steep decline and its only bound to get worse since the field is now in terminal decline. Perhaps the decline in oil production in Mexico is the real driver behind the construction of the wall between Texas and Mexico. Mexico also has substantial entitlements financed with oil revenues. If Mexico's Oil production collapses, Perhaps hoards from Mexico will pressing north. Mexico is could be one of the first nations to experience a petro collapse. Its gov't is already on shakey ground and it has a substantial population.

Re:  Cantarell

The WSJ article, quoting an internal Pemex report, said that the remaining oil column was about 800' thick, and thinning at about 300' per year, which suggests a pretty steep decline rate.  Of the five decline scenarios in the Pemex report, the worst case was for a 40% per annum decline rate.

As I have also said before, Ghawar is basically in the same spot as Cantarell, with the remaining oil in a rapidly thinning oil column between an expanding gas cap and a rising water leg.  What is amazing to me is that so many people are so unconcerned about the fact that the best case for Ghawar is a one-third water cut--in a field that has already been redeveloped with horizontal wells.

>The WSJ article, quoting an internal Pemex report, said that the remaining oil column was about 800' thick, and thinning at about 300' per year, which suggests a pretty steep decline rate.  Of the five decline scenarios in the Pemex report, the worst case was for a 40% per annum decline rate.

The column may be declining at a high rate, but that does not necessary mean that production out is declining as rapidly. Since the column is shrinking fast I am inclined to believe that they haven't cut production significantly yet, although I have no what to confirm this. Its just a hunch. Of course this means much steeper declines in the near future.

>What is amazing to me is that so many people are so unconcerned about the fact that the best case for Ghawar is a one-third water cut--in a field that has already been redeveloped with horizontal wells.

I am not disagreeing with you and I do appreciate your input. I am just trying to provide you information and suggestion you might find useful.

Take Care.

The month to month information about Mexico's production has been posted previously at TOD. I can't recall where right now but I've seen it. Cantarell is the backbone of that production. That production is declining amazingly fast if you begin tracking from last year to now. If overall production is declining, and Cantarell is the largest part of Mexico's production, then there is an extremely high probability that Cantarell itself is experiencing production declines. Otherwise we must argue that the remaining 45% or so of Mexico's fields are all bearing 100% of the declines when PEMEX itself already has admitted that Cantarell is in trouble.
Here is a repost from August
If forgot to mention that this is from a public PEMEX report. I find the exploration wedge an great example of "positive thinking"
Hello Hans,

Thxs for your keypost!  If CERA, is in fact, a true clearing house of fully transparent production figures, tech advances, reserve audits, etc, for the true global insiders only--Then the $1000 report offered to the public is junk; a ruse purposely designed to mislead the unwashed masses--and TOD, ASPO, and others offer a better info alternative; mutually we are working to build a Foundation of solid, accurate info.

On the other hand: If CERA, is in fact, a true clearing house of fully transparent production figures, tech advances, reserve audits, etc, for the true global insiders only-- then this proprietary database [which we will NEVER be allowed to see], then offers the best evidence yet of the existence of an operating entity similar to Asimov's Foundation.

Recall that there were TWO Foundations working to predict collapse and direct decline to optimize the journey thru the Dieoff Bottleneck.  Life imitating Art?

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

PG...I thought you were going to give answers to all these questions...alas, no.  Only time and history books (depending on who writes them) will get at all of these some time in the future.
Ahem, I'm sure that if you want answers you may inquire at CERA.

For a thousand bucks or so, they might provide you with their answers to the questions listed in the TOD post.

It might cost more, I dunno.

What if CERA actually believes the crap they are publishing. I know many market newsletter writers often write that the market is either going to boom or crash, and give rational reasons for their belief, only to be proven very wrong later.

Likewise I think that most Saudis actually believe they have 264 billion barrels of reserves with another 200 billion just waiting to be discovered. Only a very few ARAMCO insiders know the truth and they don't dare spill the beans. Most of the people in the oil business actually buy into those vast Middle East reserves. I truly believe that all the folks at the Oil & Gas Journal, and other such orginizations, actually believe those huge reserves are real.

It is possible that the folks at CERA are just damn fools who mistake phantom reserves with actual future oil production.

Ron Patterson

The increasing divergence between CERA's minimalist pronouncements and the data seen and analysed here will likely be resolved soonish (within 5 years) if not before. CERA clearly choose not to provide any hard information to the public since everything they make available for free (press releases) is as woolly as a merino sheep. Those few I have heard from who have read their latest $1000 missive are rather dismissive and sceptical of it, though I admit they are more on the PO side, and CERA's past predictive performance has been pretty woeful in recent years.

We are left with a few probable reasons:

  1. They really do have some realistic hard data that supports their optimistic scenario

  2. They have a selfish commercial reason for lying

  3. They have a misguided public spirited reason for lying

  4. They are incompetent

I think the probability of 1. is well below 50% and shrinking rapidly. I really doubt they are that 4. to explain things, people can only be so incompetent.

I was going to hedge this post in less clear terms for legal reasons but I changed my mind: CERA I call you liars, sue me. By the time it reaches court the truth will likely have begun to materialise.

Emperor CERA you have no clothes, I and others see this.

A better guess.

CERA is full of very smart people, who work very closely with the oil industry and major energy policy formers.

So their analysis reflects that consensus.

They are not fans of the idea of 'peak oil' their experience and analysis tells them it is bunk.

They might be entirely wrong, but impugning their conscious motives doesn't get anyone anywhere.

Subconsciously, they may well be prisoners of their preconceptions (as are we all).

Look I deal all the time with people who deny man-made Global Warming.  Most of them don't do this because they are venal, or evil (certain lobbyists and 'climate scientists' take a view that there has to be a free market for ideas, and the best ideas will win out in that market, scientific truth is not their business(1)).

Most of them do this because they genuinely think the case for global warming is wrong and/or the costs of action are too great relative to the risks.

I've come to understand that viewpoints on global warming, like viewpoints on politics (or religion) are identity statements, not entirely (or indeed primarily) rationally derived.

Trying to deal with global warming denialists in any other way, other than at face value, doesn't add explanatory or persuasive power, nor give you insight.

I believe the same principles apply to the peak oil debate.

(1) there is an enormous irony in that viewpoint.  It is actually a commercialisation of French post modernist thinking.  The thinkers most despised for creating 'moral relativism' have become key to the intellectual viewpoint of a lot of 'conservative' political movements as well as numerous 'leftist' ones.

The thinkers most despised for creating 'moral relativism' have become key to the intellectual viewpoint of a lot of 'conservative' political movements as well as numerous 'leftist' ones.

Excellent observation!

I think that you can add that a second issue we are facing is the "balkanization" of knowledge. Modern society is so specialized, and people occupy such narrow occupational niches, that they have absolutely no understanding of anything outside of their immediate occupational sphere of expertise. The outcome is that you may have a population that is extremely intelligent and well educated but one which is also extremely gullible. They simply lack sufficient knowledge to challenge the most basic assertions about their world  and lack a concomitant capacity for critical thought. I believe this underlies the current problem with the main stream media and is a key reason for America becoming engaged in Iraq. We may be moving toward Peal Oil; we have already passed Peak Intellect.



The Post-Modern President
Deception, Denial, and Relativism: what the Bush administration learned from the French.

Your point on 'balkanization' is also interesting.

What I feel with the Global Warming debate is that people have become anaesthetised to seeking the truth.  The prevailing cynicism is 'it's all lies'.  Yet conversely very crude rumours have huge currency: I remember an American professor telling me in all seriousness that Hilary Clinton had invested hugely in healthcare companies when her healthcare report had led to a huge fall in the price of healthcare shares.

If you read the US popular press, you would come away convinced that there is meaningful scientific disagreement about man made global warming.  There isn't, in any practical sense (referring to peer reviewed journals).

There are considerable areas of doubt and disagreement, of course, how fast the world is warming up, the role of water vapour, the 'global dimming' of the last 100 years due to particulate pollution and SO2, etc.

Since most journalists and media people know nothing about science, there is little or no effort to discern the truth, the weight of empirical evidence and scientific thought.

Iraq was horrifying.  Going into the 2004 election, something like 60% of Americans thought tangible evidence had been found linking Saddam Hussein to 9-11.  Something like half thought Weapons of Mass Destruction had been found in Iraq.

On 'Peak Intellect', (great phrase, you should trademark it!), apparently for everyone born 1960-1980, it is likely that lead has had a huge (negative) impact on intelligence.  Particularly so amongst inner city youth (highest concentrations of automotive and industrial lead pollution).  Indeed one of the causative factors of the 'crime bust' may well have been the abolition of lead as an octane enhancer-- violent crime is the province of 15-25 year olds, and the last of those born in that era have now passed 25.

  I remember that this was felt to be a causative factor in the Fall of Rome: lead from pipes.  But we knew what harm lead could cause, the Romans did not.

I have the honor of knowing Dr. Howard Mielke, one of the major activists (on the scientific side) for removing lead from gasoline.  He did not get tenure at a Big Ten University as a result and came down to Xavier of New Orleans instead.

He was recently laid off after Katrina and the downsizing of the University (one can do this to tenured faculty) and has a temporary position at Tulane.

he may not be aware of this side effect of his work and I will pass this on to him.

Best Hopes,


Deserves a Nobel Prize in Medicine.  Like the chemistry guys who got the Nobel for the ozone layer work.

When I came to the UK in 1989, I was stunned to learn that they still sold leaded petrol (it was a big anti pollution measure that eco greenie types were switching their cars to run on unleaded petrol).  We only fully did away with the stuff in about 2000, I think.

I think the break point in North America was the California emission controls, (1978?), which required catalytic converters, and therefore wouldn't work with leaded petrol (although of course, to save a few pennies, car owners persisted in filling with leaded, thus ruining the catalytic converters).

There was huge hooting and hollering, that this was unfair to classic car owners (the valves need leaded petrol), an unjustified expense etc.  Now I think we pretty much take it as read that lead is one of the worst contaminants you can let get into your children's bloodstream.

I don't have any good references to hand, but there has been a lot of recent scientific work (and some serious criminological work) that lead poisoning, especially in young people, leads to loss of IQ, hyperactivity and other behavioural disorders.

Of course we then went to MBTE, which turns out to be a carcinogenic ground water contaminant.

Along those same lines, the ice-core-data from Greenland gives a good idea of the massive influence human activity has on the atmosphere and, by extrapolation, the biosphere in general. This particular graph also illustrates the significant effect a piece of environmental legislation like the Clean Air Act can have if it is generally complied with.
the time line runs left (now) to right (the past)!

Took me a minute to work out what was going on!

We can track man's impact on the planet quite well now, however the data is only in the last 30 years (this ice core a clear exception) so we don't always have good comparability.

Very good point about the impact of a single piece of legislation: change is possible if we want it.

... a population that is extremely intelligent and well educated but one which is also extremely gullible.

If you do a survey of TOD or other diverse populations, you will find that each of us has a "speciality" at which we believe ourselves to be very good at and very much an expert on, be it that we label ourselves as one or another of the following:

    * Accountant
    * Acoustical Scientist
    * Actor
    * Actuary
    * Administrator
    * Advocate
    * Aerospace engineer
    * more here

So when some stranger shows up and claims to be an "expert" in some other esoteric field of knowledge, we take them at their word. After all, as an "expert" and a gentleman or gentlewoman ourselves, who are we to doubt the word of another "expert" (i.e., English major Daniel Yergin or no-background man Peter M Jackson of CERA)?

If we question them, do we not question ourselves?

And is not our own expertise beyond reproach?

Balkanisation of knowledge:
Whenever I read articles even in respected news magazine articles on subjects I have deeper knowledge in, I find they miss the point, leave out important aspects or just write plain bullshit.

How can I assume it's different with all the other subjects I have no deeper knowledge in? It is probably wiser to assume that the average accuracy of any press release is less than 50%.

But they can get away with this because of the balkanisation effect you describe.



One exception to that rule, the Wall Street Journal (news not editorial, there is a strong firewall between unlike NYT, WP).

They can miss nuances but tend to get the major issues right IMHO.

Note WSJ reporter at ASPO conference in Boston.

Best Hopes for better reporting,


i dunno why was kkkarl rove saying right up until the last minute before nov 7 that he had polls that said the repukes would win   and the befuddled one said " we are closing fast"    (not fast enough for me)
"In the end the Party would announce that two and two made five, and you would have to believe it.  It was inevitable that they should make that claim sooner or later:  the logic of their position demanded it.  Not merely the validity of experience, but the very existence of external reality was tacitly denied by their philosophy.  The heresy of heresies was common sense.  And what was terrifying was not that they would kill you for thinking otherwise, but that they might be right.  For, after all, how do me know that two and two make four?  Or that the force of gravity works?  Or that the past is unchangeable?  If both the past and the external world exist only in the mind, and if the mind itself is controllable -- what then? ...
     The Party told you to reject the evidence of your eyes and ears.  It was their final, most essential command.  His heart sank as he thought of the enormous power arrayed against him, the ease with which any Party intellectual would overthrow him in debate, the subtle arguments which he would not be able to understand, much less answer.  And yet he was in the right!  They were wrong and he was right.  The obvious, the silly, and the true had got to be defended.  Truisms are true, hold on to that!  The solid world exists, its laws do not change.  Stones are hard, water is wet, objects unsupported fall toward the earth's center.  With the feeling that he was speaking to O'Brien, and also that he was setting forth an important axiom, he wrote:
     Freedom is the freedom to say that two plus two make four. If that is granted, all else follows."
          George Orwell, Nineteen eighty-four (1949)

Clearly, our current big brothers would have to try it on a simpler formula.  

Having discussed peak oil with various oil experts I think they believe their own propaganda.  I have discussed with senior staff at Heriot Watt University Department of Petroleum Engineering.  Academic staff there talk about vast unconventional oil including using nuclear power to run the tar sands extraction process, and extracting oil shale by processing in-situ (heating the rock till the kerogen flows-no I don't believe it myself).  I think it is difficult when the whole dept is funded by the oil industry for people to speak out, and they tend to try and support those who pay their wages.  It is difficult for amateurs to overturn professional enthusiasm for techno-fixes when the issues of net energy etc. are far from certain. CERA I expect is similar to these petroleum academics.  

I also expect peak oil to be blamed on the emerging recession.  Oil production will decline and blame will be placed on falling demand rather than falling supply.  Cause and effect being reversed. Blame for falling production may also be placed onto tax policy, or environmental regulations.  CERA and others (especially economists) will use this to defend their poor forecasting.

I have two colleagues, one an expert on China-US trade relations and the WTO and the other a world-class China energy scholar.  (The latter knows Dan Yergin and claims he is a very nice man!).  Both think the CERA type analysis is the one to go with and are utterly dismissive of any near-peak concerns.  Both believe that technology will always guarantee growing energy supplies and look to unconventional sources as the next great frontier post-peak in conventional oil.

As a side note, the cultural model or script that underlies the reasoning employed here has a long history in Western thought.  I call it worship of the god Technus (cribbing Neil Postman).  Technus will always provide for growing and insatiable human need so long as the faithful remain true in their belief and pursuits of the powr of newer and better technology.  It's a sort of miracle of the lamps sort of thing, but with high-tech gadgetry.

This faith is very powerful stuff (how many of us share at least some if it?) and hard to argue against with hard data.  

IHS's Dr. Kenneth Chew, speaking at the Oil Depletion Conference on 7 November, put 2P global reserves at (I think) 1,250 gB. CERA's oil left to be found is 3,720 gB, leaving room for world production to ramp to their anticipated 100 mbpd in the 2030s. Since IHS owns CERA one assumes they are both working from the same "proprietary data base." The difference in the two numbers is 2,470 gB - the amount above 2P yet to be discovered. Since the five year moving average of new discoveries has been running at (eyeballed number only) 10gB per year since 1990, it would take 270 years to discover the missing fraction, not the few decades implicit in the CERA forecast. Does CERA, like the EIA, assume some (totally counter intuitive) major increase in the finding rate?
If one looks at the five main estimates for URR, the avg of their totals is growing at 113-Gb/yr incl the components of reserve growth, discoveries and probable discoveries.  Even BP has acknowledged that their production plateau forecast is conditional on atleast 200-Gb of future additions to its ultimate URR.  As long as URR continues to increase at 113-Gb/yr while annual consumption is only 31-Gb, there is no threat to the optimistic medium term projections by ASPO, Laherrere, CERA, Koppelaar & Skrebowski.

CERA's commercially available country-by-country or field analysis has stood the test of time as have the others.  There has not been a single challenge to their 2006 data to this point that significantly debases their projections of ultimate URR or max production rates.

Probably true, given a fistful of preconditions. $100+ oil should improve the probability. Now let us see them produce it, and keep the FIP decline rate below 5% so we can live the delusion a while longer.

So, technology, economics, exploration can 'find' 113 Gb a year while we 'only' consume 30 Gb/yr, heck let's go for it, we are immortal. Maybe my head is screwed the wrong way, maybe yours is, Freddy, we'll see soon enough, I am patient and think you are. Blessedbe

First, CERA's & IHS's (High Estimate) URRs differ by 853-Gb.  IHS annually published a Low Estimate as well.  Second, CERA's "to be found" is 660-Gb ... not 3720-Gb.  There are currently five URR estimates above 4-Tb.  IHS 3.965-Tb is not one of them.
should we call this technofaith ?    faith in "new and improved" technology and a belief in a god given right to cheap energy perhaps ?
I argue time scale against the "followers of the God technus".  

I point out the stages that new technologies follow, and the time required to gather operating experience with prototypes.  I point out that wind turbines are just about to exit the last development stage "Design refinement based on Large Scale Operational testing in a variety of environments".  It took over 30 years to get this far.

I point out that no brand new technology can be widely implemented in a dozen years, and even twenty years is VERY optimistic.  I agree that 50 years is long enough for almost anything, especially for a society under stress (fusion anyone ?).

OTOH, I point out what the US did with Urban Rail from 1897-1916 (with primitive technology !) and even 1/4th of that effort would make a difference in the next two decades, and start making a difference in a half dozen years.

Oil will be a problem.  Despite my inclination towards WesTexas & Deffrey's POV (Peak NOW) I quote Stuart from Boston.  2012 + or - 4.5 years for Peak Oil with Peak Exports before then.  (The half year is somehow reassuring).

I then point out that the time to new technologies is too long.

They get the idea that Technus 'will provide", but decades too late (which I do not disagree with BTW) and something with mature technology (electrified rail example) needs to be started NOW !  As well as more research on longer term solutions (I do NOT oppose more research).

Best Hopes,


Has anyone here read the updated Limits to Growth?

They point out that even if we were able to instantly figure out the problems with fusion and implement it worldwide, the population would crash by 2100. Why? Because there are other factors that speak directly to our tenure on this planet. I'm sure everyone saw the recent news about major fish populations disappearing in 50 years. We all know about global warming and its effect on not just our agriculture, but on wild flora and fauna. Most people here know about water shortages, desertification, increasing pollution, runaway population growth, increasing chances of disease.

The main difference between those technoworshippers who magically believe that technology will save their comfy lives and invisible sky-being worshippers who believe that some super event or being will come along and make it all better, is that the super event or being is more likely.

If we continue this insane pursuit of growth through technology, it will only mean that more people will suffer at the end of the century rather than fewer.

We know what needs to be done. Unfortunately, even the scientifically inclined are acting as if their particular technofix will somehow solve all problems, or worse, they state that their particular technofix will only solve one problem, not cause any other problems, and they are not responsible for the rest of the problem. Of course, we all know that we live in an energy field that affects everything. You cannot erect a giant windmill without disrupting wind flow patterns. You cannot trawl the seabed for methane hydrate without increasing the amount of carbon in the air. You cannot erect nuclear power plants without dealing with the radioactivity.

None of these things exist in a vacuum. The hubristic sin is that engineers believe that they can know EVERYTHING that can go wrong, or even worse, they absolve themselves from responsibility for future disasters by saying that they made a "reasonable" attempt to figure out what may happen in the future.

Time is growing short people. We need to admit to the basic underlying truth and all that emerges from that admission.

We are too many.

Unlimited growth is not only impossible, it is insane.

Any attempt to extend the technofest will cause more misery long term than it will prevent short term.

Anyone who claims that their technology is exempt from simple physics, is not intelligent enough nor informed enough to be making any decisions for anyone about our future.

We live on a sphere. There is no more earth to subjugate. The number of natural peoples left that we can kill have diminished to the point of no return.

We are about to enter the final stages of our dreamworld. Soon begins the nightmare.

You waste your breath, Cherenkov. There is no way they can understand what you are saying, their first realisation is likely to be 'oh dear, I am dead' though for some it will be painfully slower, but still too late.

You / I / we cannot radically change the current dynamics, they are set and will likely change not much before things break down. Incidentally, I think we'll see the first serious cracks in US stocks towards the end of this coming week, as we sawin the US$ last week.

I read the original "Limits to Growth" within months of it's publication as a callow 17 year old, and foolishly thought humans are smart enough to solve these problems. Probably time I read the new version but I doubt it will say anything I don't know already. I'm older and probably wiser now, and know how really stupid humans are. I've already concluded that the monkeys have blown it.

Your mention of Club of Rome led to this old piece (year 2000) by Matt Simmons: PDF paper on Limits to Growth
In my opinion the updated Limits to Growth is far too optimistic.
The main difference between those technoworshippers who magically believe that technology will save their comfy lives

The evidence for this is clear. Yesterday we had the iPod. Today we have the video iPod. Who can tell what tomorrow will bring? The enviroPod?

We do know that the past 200 years of stored energy utilization have seen the continued development of a way of life completely at odds with the last 10,000 years of human development. So clearly we are onto something that our ancestors didn't understand or know how to cope with. They were clearly too stupid to invent smart technology like the iPod.

Most of the issues you raise are "backstage" problems and are the responsibility of somebody else. The reason I paid for a first class seat is so that I don't have to deal with those issues. Next you will be demanding I understand what happens after I flush the toilet.

If what you say is true, then marketing would have brought it to my attention. And I already donate big bucks to the Sierra Club and National Geographic to handle all these issues.

Gotta run. My Sierra Latte Grande is getting cold.


You know, I don't actually know people like this.

I know people who deny that climate change is a problem (and far more who don't even know what Peak Oil is).  I know people who think it is a problem 'for someone else'.

But the latte swelling liberals of Islington ('Chardonnay Socialists' as the right wing papers call them) are more worried about environmental and energy issues, and more concerned about doing something about them, than any group I know.  We drive more Priuses, more of us don't have a car, more of us bicycle, recycle, etc. than any other group of upper middle class professionals, or the truly rich, or the working class, all of whom I interact with through my work and family background.

And I think it would be fair to say this is also the case on the other side of the Atlantic, in analagous neighbourhoods: the Upper West Side of Manhattan, Cambridge Massachussets or Berkely California.

For the record, I also worry about nuclear terrorism (I had family on the Tube during the July 7th bombings, whom I was not able to contact for hours), about geopolitical instability in the Middle East, about our exhausted and overstretched military forces.

I suspect BOP was just doing a total sarcasm thing. You know, something to gulp down and flush away with our super egos.

The world's wind patterns exist in a layer about 30,000 feet thick. The largest wind turbines are 1% of that height. All the world's energy needs could be supplied by wind turbines with no effect on wind patterns.  Displacing all the fossil fuel use would return the global climate to preindustrial behavior.
A reading of John Perkins' "Confessions of an Economic Hitman" is interesting in this context.

John's story is that he was recruited by US spy agencies, e.g., NSA, to work for a private corporation to overbuild infrastructure in foreign countries, putting them in unrecoverable debt so they would be subservient to their banker/corporate/government masters in the US.  John knew his job was a lie.

However, John goes on to say that the institution he helped create continued to recruit young people but eventually no longer had to let them know they were part of the lie. The lie had become institutionalized and a widely accepted part of how "development" is done through the World Bank, WTO, USAID, etc.  

The best liars don't even know they are lying, you see.

He did a very good interview on FSO, you'll have to dig out the link, it was near a year ago, here's their main page:

Utterly true, the best liars are those that believe they speak the truth.

Some background information. It's very common for investment and industry advisory newsletters like CERA's to be available only to subscribers and only for large sums of money. You can find these in every area of investment, not just oil. There is nothing at all unusual about it.

Whether the information provided is worth the money is questionable. Generally the providers claim to have some inside information which gives them a unique perspective. However most subscribers are large institutions or very rich investors who, I think, often subscribe on the principle that even if the information provided is not too useful most of the time, occasionally there might be a gem which they can't afford to overlook. For these subscribers, subscriptions are a form of cheap insurance (yes, $1000 a year is cheap to them).

I don't see CERA as part of some great Peak Oil denying conspiracy. This is paranoia on the part of true believers and is a common perception among groups which feel themselves to be isolated and alienated from the larger part of society. The fact that society continues to fail to see the Great Truth is disturbing to the True Believer's faith, so they invent enemies and conspiracies which are blinding the public's eye to what would otherwise seem obvious.

IMO the situation with regard to near-term Peak Oil remains uncertain; the data is not there to know how things will go over the next few years. We don't know what will happen with supply, because the main oil exporting countries are tightly controlled with little transparency. We have to resort to what is essentially tea leaf reading, scratching for the slightest clues and building huge structures of conjecture atop a flimsy base of facts.

Similarly no one knows what will happen with demand, given the tremendous uncertainty and potential instability in the current international financial regime. We could see a major global recession or we could see robust growth in demand. It is simply impossible to predict at present.

These two uncertainties are magnified when we try to think about whether oil supplies will be adequate, since what matters is whether supply or demand will grow faster. Since we don't know what will happen with either one, we are even more uncertain about what will happen with the difference between them. That's the situation we face.

Given this reality, this tendency on the part of true believers to divide the world into enemies and allies is a vast oversimplification. It provides emotional comfort to think of yourself as a warrior for truth fighting the good fight against evil agents of falsehood who are attempting to mislead and manipulate the rest of the world. But the reality is that we are in a position of uncertainty and it's natural that different people will disagree about the likelihood that things could go one way or the other.

Halfin, I agree with you 100% on this, we can't afford a simplistic right or wrong position. Its important that we work with everyone to get the real facts and start changing our behaviours. Even CERA thinks peak oil will happen in 45 years.
They don't deny the reality of a peak, they just hink its going to be 44 years in the future which isn't very long by my standards. And they don't deny that production costs are rising-we are obviously at the end of the era of cheap oil.
  I think it is of the utmost importance to begin work now on substitutes for fossil fuel for a number of reasons. But we need to reach an agreement to start to work now. If WT is wrong and we havent reached peak it won't do anything but good for the world to begin earnestly to work on a solution. Don't kid yourself, the US can't afford to import 14 mmbpd at any price from hostile regions. But if we let our society dilly-dally around because we have 44 years we'll be trapped. Its just that simple. Letting people try to type-cast us as cultists, or our type-casting them as corporate sell-outs just raises antagonism and risks the whole fucking planet. Excuse my french. So lets all grow up!
I agree...but the tendency to see oneself as part of some cosmic battle between good and evil is in no  way limited to those on the margins.  My contention is that this sort of thinking is endemic to the whole modern debate over resource use and the future of humanity (as it has been for most of the modern era -- i.e., 300 years or so).  

Listening in to the debate over peak oil and global warming for the past three or four years, all sorts of modern gods are advocated: Markets, Technology, and Mother Nature all vie for our attention, fealty, and pious devotion.  What is common to all advocates is that, given the incredible uncertainty surrounding the "hard facts," certain "hard facts" are selected and advanced in the service of one particular god or another, the process giving an air of certainty in an otherwise uncertain, impossibly uncertain, world.

This sort of human thinking is old, really, really, old...it's just that we moderns feel we left the mythic behind in the "pre-enlightenment."  It might be helpful if we admitted that we have never really been "enlightened."  And move on to more productive, and honest, self-assessments.

Very well said, Halfin, as always.

I would add that an exacerbating issue is the urgency of the situation--we all know how incredibly serious it would be if we hit peak and a steep decline very soon--so we're all determined to find the underlying truth, no matter how little hard data we have to work with.

When dealing with such weighty issues it can be incredibly difficult to say, "We just don't know the answer, and there's no way to figure it out."

Personally, I side with Skrebowski and a worldwide peak around 2010/2011.  But a hell of a lot could happen between now and then, some good, some bad, and maybe a horse will learn to sing.

(Those of you who know the singing horse story, please fill in the others.)

Where an actual conspiracy ends and a collective recognition of mutual self interest begins can be hard to find sometimes. I submit CERA's report and the whoring of it by the "iron triangle" is one of these instances. Did "EvilDoer #1" call up Daniel Yergin and say "Minion Yergin, we need some propaganda. why don't you put together a report that states there is 4.82 billllllion barrels left" while petting a cat and letting out some ghoulish laugh? Quite possibly.

I do think it possible that some folks in KSA, in Exxon, at a couple of the big banks have thought, "damn we need to put something out there to keep the markets afloat" and then they find somebody who is spewing the appropriate bullshit. They then give this person/group lots of funding.

Is that a conspiracy? Or is just somebody in KSA saying "mmm . . . I like what CERA has to say, I think I will give them some money."

A combination, see my earlier comment which clarifies. The motive could be a combination of #2 and #3. All other possibilities are beginning to get vanishingly small. I might need a lawyer, can't pay, try to function mostly outside the money economy. Interested?
Ironically, I finished the last parts of my "Sustainability" piece while petting a cat.

Perhaps symbolically, a black cat.

Maybe it's time to change my ID here to "Dr. Yes"....

I don't see CERA as part of some great Peak Oil denying conspiracy.

What is infuriating about CERA is not that they are part of a Peak Oil denying conspiracy. CERA freely projects an oil peak in the future; in this regard, they are not operating in some alternative reality.

CERA's unconscionable crime is that they actively encourage everyone sitting on their asses doing nothing about it. Rep. Bartlett's response to the CERA report was right on: CERA says we have 30 years or whatever left to address this problem, we better get started now or we're up shit creek.

I've said this before and I really believe it still holds true: if the masses perceived Peak Oil as a real problem, people everywhere would start to power down their individual lives, pay off debt, sell their McMansions, stop buying Hummers. It would be a textbook market response to new information, and the entire industrial infrastructure built upon petroleum consumption would shift, including global finance. That means CERA's clients would lose tens, if not hundreds, of billions of dollars, and CERA would go out of business in short order... what use is there for CERA if petroleum markets (not petroleum itself, I mean petroleum markets that rely on information like CERA's) start an irreversible decline?

As long as no one does anything about Peak Oil, CERA and their clients will continue raking in unfathomable wealth. It is in CERA's immediate financial interest to discourage powerdown. This is called a "conflict of interest," and it casts extreme doubt on anything they have to say.

When the chips are down they'll be rich and the rest of us will be f---ed hard, to put it mildly. Most of the world's population will be thrown into suffering unparalleled in history, possibly even a true apocalypse, for no reason other than that a few people can become obscenely rich, with riches that will be worthless once the crash happens anyway.

That is what is infuriating about CERA.

riches that will be worthless once the crash happens anyway.

Spot on.
How many "executives" out there understand that their rich and famous life style depends on the cleaning lady being able to drive to the office at midnight?

Perhaps future corporate headquarters will include several floors of small apartments for cleaning staff just like the way Victorian mansions had servants quarters.
Somehow I just can't buy the basically relativistic argument that since there is all this uncertainty, virtually any point of view is reasonable. There is plenty of data and well done research that is scientifically solid but is blandly denied by folks like CERA. They are what I call 'arm wavers' who rely on assertions that tend to be very general -- 'the vast progress of technology' -- and very short on specifics.

I do agree that it is 'natural' for people to disagree about these things, but I do not agree that all viewpoints on the PO situation are in any way reasonable or in any way equal.

Many questions are unanswerable, without inside knowledge of CERA, but I detect a note of skepticism in the questions. The implicit message is that there is no reason to suppose that CERA would lie, so let's treat their word as the truth. Unfortunately, this also means that we must treat counter predictions as lies, then wonder why they lied to us.

Some questions are phrased with assumptions that may not be valid. Such as question 9. Might there be other reasons for countries to wihhold information other than to maintain high prices? In fact, publicly overstating reserves is unlikely to boost prices, I would have thought. It is more likely to ensure that oil users don't try to wean themselves off oil.

"In fact, publicly overstating reserves is unlikely to boost prices, I would have thought. It is more likely to ensure that oil users don't try to wean themselves off oil."

The price is controlled via production, but the long-term profit is controlled by a combination of the price and maintaining demand by not losing customers to alternative fuels and conservation.  Inflating reserves is a critical part of maximizing the dollar value of the remaining reserves, no matter what their size.

Reposted from Nov 21.
If CERA and others really want to reassure their customers and the general population about oil peaking then they should not even use the expression "peak oil".  Many people, including top managers tend to get their detailed knowledge of a subject from the headline.  The more you repeat "peak oil, peak oil, peak oil" the more you plant a disquiet in people's minds.  If they really wanted to reassure and down play the concept, they should use every synonym and baffle word they can find to lable it.  Better still always refer to gushing supplies and only to the non-believers as heretics.
However I think there is another angle to be considered.  CERA is a "consultant" in the business of advising well healed clients.  At the moment their paying customers will be certain governments, oil companies and various investment advisers as well as the odd individual.  These customers want to hear that peak is not a problem and like CERA propagandizing on their behalf.  From CERA's point of view they are only doing what their customers are paying them to do.  Let us assume that the folks at CERA are not as stupid as they seem to be.  Also my cynical view of corporations is that they don't really care about their customers or the public or anything but their IBIT and keeping the share holders happy so they can pull in the big pay cheque.  They must be asking themselves: "What if we see the peak soon and things start to fall apart?"  After all they have real data we would think.  Next they ask: "How can we keep CERA going, still getting rich and keep our jobs?" Well once peaking is obvious and having an impact they will conclude they will still want to advise governments, investment types and maybe non-petrolium industry.  If they are actually selling the advice that their press release is hinting at then they have written off big oil as a customer down the road. Perhaps they are actually telling them "the peak is coming sooner, we are holding the public and governments at bay to give you time to adjust.  So get moving into non-conventional hydro-carbons and diversify into things like renewables".  In any event, by mentioning "peak oil" they can say in the future that they were the first to talk about the peak or some other spin and they should be trusted for more advice on the down slope.  I know this is just ignorant speculation but consultants, like lawyers, always believe they are smarter than everyone else, including their customers.  
consulting, the second oldest profession ?
I guess the first question ever asked a consultant was "How much do YOU charge?"
yes probably  i was a consultant once    but i pissed off all my "clients"
I was once part of a "Total Quality Management" task force .. we worked with consultants and were totally pushed into the "correct" conclusions .. I even did guest presentations to other clients they had until I talked too near the truth and was not offered any more gigs
Follow the money.  CERA clients (ExxonMobil) want to reassure the politicians - "don't worry, be happy".  The goal is to put off nationalization of the oil industry as long as possible.  Don't help congress get educated and get a head start.  President Clinton and congress might upset the apple cart in 2009.
As many have pointed out, the CERA synopsis of their report does not so much deny Peak Oil as declare it irrelevant.

The Peak Oil position that has PO bringing about vast, mostly negative, social and economic changes is the easiest to develop arguments against. The biggest reason to disbelieve is simply history. It is hard to argue with an historical trajectory that has virtually always been upward with increasing resource and energy availability. Why should such an unbroken chain of success quit now, especially when our technology is better than ever?

This reminds me of the scene from Star Wars, where the General in command of the Death Star is informed by his Lieutenant : "We've analyzed their attack, sir, and there is a danger. Should I have your ship standing by?"

To which the General replies: "Evacuate? In our moment of triumph? I think you overestimate their chances!"

"Don't be too proud of this technological terror you've constructed. The ability to destroy a planet is insignificant next to the power of the Force."
"Who are those guys?"

That's the question asked again and again in "Butch Cassidy and the Sundance Kid" (movie).

When it comes to CERA, that is an allusive answer to grasp hold of.

This is not Peter Jackson of CERA!

Finding Peter Jackson is harder than that. You won't find much here except a pretyy picture. Look here (maybe) instead. Or here (2007 CERA speakers)

This is however Daniel Yergin of CERA. Here is his CV:

University: BA English, Yale University (1968)
    University: PhD International Relations, Cambridge University (1974)

    Cambridge Energy Research Associates Co-Founder
    Brookings Institution Trustee
    Council on Foreign Relations Committee of Studies
    Bilderberg Group
    National Petroleum Council
    New America Foundation Board of Directors
    Pulitzer Prize for Nonfiction 1992 for The Prize

Author of books:
The Prize: The Epic Quest for Oil, Money and Power (1991, nonfiction)
Shattered Peace: The Origins of the Cold War and the National Security State (1977, history)
Russia 2010 and What It Means for the World (1993, nonfiction,with Thane Gustafson)
The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (1998, nonfiction)

P.S. ASPO-USA takes on CERA here.
P.s.2 Dave Cohen's Gold Post here
P.s.3 Einstein's analysis here

your post of yergin's "resume" probably offers the best explaination of CERA's motives..........   council on foreign relations    they dont want the russians knowing they have our consumer cult economy  balls in a vise ...........

David Gold
What, me worry?

What does it mean to be a "CERA Director"?

I don't know.

These may be clues:

"The Role of Alternative Energy Resources in Electric Power Generation"

Steven Taub, PhD
Director, Emerging Generation Technologies
Cambridge Energy Research Associates (CERA)

Steven Taub, CERA Director, Emerging Generation Technologies, is an expert in electric power generation, including technology, markets, government policies, and corporate strategies. He is Research Director for CERA's Distributed Energy Advisory Service in addition to his roles in CERA's Retail Energy and North American Electric Power services.

Mr. Taub is the author of the CERA Private Report The Challenge of Reducing PEM Fuel Cell Costs, and the CERA Decision Brief Downdraft for Wind Energy: The Production Tax Credit Expires Again. His recent CERA research also includes reports on the economic landscape of power generation technologies, global distributed generation markets, renewable portfolio strategies for electric utilities, and the prospects for a hydrogen economy. He was also co-Director of CERA's Multiclient Study Renewables: Challenging the Energy Mix-Winds of Change, Rays of Hope. Prior to joining CERA, Mr. Taub worked for the US Department of Energy.

Mr. Taub holds a BS from Columbia University and two MS degrees from the Massachusetts Institute of Technology.

from: here

Mark Morey
Mark Morey, CERA Director, North American Power, has over 25 years of energy industry
experience. Mr. Morey specializes in the analysis of coal markets in North America and
overseas, with a focus on price and demand forecasts, contract negotiation, asset valuation, and
environmental compliance review. He also has expertise in coal, transportation, and electric
power industry issues. Prior to joining CERA, he was managing director of the coal practice for
Platts Research & Consulting/RDI. Previously, Mr. Morey held executive posts at CONSOL
Energy and AMVEST Coal Sales, Inc., major coal producers, where he was engaged in
marketing activities related to coal and in the evaluation of mining properties for purchase and
sale. Mr. Morey has authored numerous articles on coal-related matters and spoken at many
conferences on the production, transportation, and use of coal.
Mr. Morey holds a B.A. from the College of Wooster (Ohio) and an M.S. from Pennsylvania
State University.

CERA's recent study, Tackling Aboveground Risks: The Tale of Three Pipelines, ... here


In a legal sense, a member of a company board.

However, in many organisations (such as a British Bank) there are many levels of 'director' which don't correspond to board seats but simply to senior professional service roles.

For example, the US investment bank Goldman Sachs has several hundred 'Managing Directors' who actually run the bank day to day.  Each would be on total compensation from $150k to $several millions, depending on whether they were a Managing Director responsible for credit derivatives or cleaning and supply services.

All well and good.
But what does it take to become a "CERA Director"?
For example, Robert Esser in his testimony to Congrees says that he
... holds two degrees in geology, a BS from Yale University and an MS from Stanford University.

Additionally he says:
Mr. Esser is the author of many CERA studies. His current reports include: World Liquids Capacity Outlook to 2010: Tight Supply or Excess of Riches? (with Peter Jackson) and The North American Gas Supply Challenge-The Role of the Gulf of Mexico. Other recent studies include The Capacity Race: The Future of World Oil Supply; Western Canada's Oil Sands-Promise Fulfilled at Last?; and The Flexure Trend in the Gulf of Mexico: A Panacea for Future US Oil and Gas Production?; among others.

And based on that he tells the US Congress:

THE SPECTER OF PEAK OIL: WHAT PEAK? The question of a worldwide peak in oil production continues to stimulate debate. Our outlook shows no evidence of a peak in worldwide oil production before 2020. It is true that total annual global production has not been replaced by exploration success in recent years, but production has been more than replaced by exploration plus field reserve upgrades. In 1995-2003 global production of 236 billion barrels was more than compensated by exploration success and field upgrades that collectively added 144 billion barrels and up to 175 billion barrels, respectively. Although oil is a finite resource, we still do not have an exact estimate of total reserves; meanwhile global resources should continue to expand. Many basins, even those producing significant volumes of oil, remain underexplored.

I rather like Michael Nystrom's blog (your PS3 above), a few interesting folks there. It's where I called the DJIA top on Friday 17th Nov, lol, post #72 here:
I like to be deliberately inconsistent about where I say important things, after all I don't charge for people to watch my lunacy.

Disclaimer: I am mad as perceived from your reality

I was wondering if you actually bought the report for $1000.00 do you have to sign a non-disclosure agreement or something?

If not then perhaps the readers of TOD could contribute a small amount each and buy the report so it can be properly pulled apart.

As a former client, a few years ago, here are the kinds of serivces you can get from CERA:

  • you can subscribe to specialised services which will give you the right to read their reports on the topic, as well as regular updates on the markets. Topics can be "global LNG", "Caspian oil" "European gas" "Russian oil", "US power", etc... they have plenty and each one is pretty expensive on its own

  • you can join in "multiclient studies", i.e. a big comprehensive report on a given topic, that they pre-launch and market and actually perform only if they have enough clients. Topics vary, but there is a lot of forecasting in there.

  • then they provide workshops (open only to members, or sometimes to others for a fee) and conferences (open to all, but usually cheaper for clients), as well as regular conference calls on various topics.

Generally, their reports are quite well done, with a lot of statistics, interesting analysis and sexy-christened forecasts (see the "Asian phenix" thingy in their peak oil graph). Back in the late 90s, they burst onto the scene (in Europe anyway) and became THE consultancy to follow, with a lot of smart people (they hired the best specialists in each subsector) and excellent conferences (they are really good at that).

As with all these consultancies, you buy the service as much for the information as for the networking opportunities, so being the top dog matters, as they can claim to have high level clients which are then happy to meet one another in friendly settings - and even occasionally learn something. But the networking is fundamental there. Show that you have the right clients, and others will want to join in to participate to the exclusive gatherings.

From what I saw of their reports back then, I don't think much of it was coming from outside of public sources - but they'd make a good effort at collecting these and putting them in usable shape (I was following Russian stuff mostly - their reports were useful but not necessarily the one thing only to read).

In terms of why they are denying peak oil, I think it's their smart way to be a contrarian today (which helps sell their wares) when peak oil is suddenly fashoionable, and it reflects conventional thinking and "common wisdom" in the sector, with a hint of 'who are these upstarts who claim to know more about the oil world than us - let's show them who's the boss'.

Thanks, Jerome, much as my other sources think. Their access to power brokers matters, too, as does herd mentality. Too many bosses are really fools.

Interested in your point: "From what I saw of their reports back then, I don't think much of it was coming from outside of public sources". That kinda bursts my reason #1 here:

Once upon a time back in the early 1960's there was a UK children's TV program 'Bill and Ben, flowerpot men', pretty surreal. Often it degenerated into who'd been naughty: was it Bill or was it Ben? For CERA I think it is: was it #2 or was it #3

You ain't kidding about the herd mentality and bosses being fools. There is no other explanation for prices for leases going to $10,000 per acre in the Barnett Shale play. Chesapeake just had to have the DFW Airport whether the costs justified the wells or not, because Devon and XTO had done so well buying reasonable leases in Johnson, Wise and Tarrant Counties. Why would anyone keep building house during the last six months? Why does every bank want to give out cheap credit when its obvious most Americans are overstretched and the economy may be tanking?
  I'm not convinced that CERA is spreading purposeful disinformation, I believe they may only gather and read facts that reenforce their preconcieved notions. And we peak oil cultists may be guilty of the same thing. And thats the cold, hard truth. People believe what they want to beleive, and the history will be written by the victors.
  I still think they are being intellectually dishonest. Kerogen is not oil, bitumen is not oil. Oil is a liquid  hydrocarbon. They (tar and oil shale) can with heat and natural gas for hydrogen be processed into an extremely expensive synthetic oil. By that standard horseshit is oil. It can be processed into methane which can be turned into liquids at a refinery. And since we have plenty of politicians, consultants and energy consultants providing an infinite source of horsemanure we will always have oil, no matter the cost.  
Best we not start on the economy, OMB, cos I could spend all night on it ($ going south, hope it bounces soon a bit, or before 80% on the quoted index, or it's oh f*ck; watch DJIA bounce a tad next week then go to hell (15%+ drop) by yearend). The explanation - for the delusional behavior - is liquidity, and the pumping thereof.

I would have, previously, shared your perception of CERA, and the reasoned similar perceptions in this thread but reality can only stretch so far, CERA have tried to stretch it beyond sane comprehension and must be called on that. Once one has discarded the probable, the improbable...

Does 'intellectually dishonest' = lie?

No, we will not, for certain, always have oil; if the infrastructure breaks down far enough low tech biomass and coal conversion may be the best options we have. Currently I put this probability (of decline) around 20% but moving up fast.

  • dollar going down is a good thing for the US economy (unless the Fed raises interest rates in response).  It has been waiting to happen for at least 3 years.  Exports will increase, imports will decrease.  Gradual adjustment is good, however a very rapid adjustment could be bad (inflation leading to Fed tightening)

  • housing market crash has been long, and well, heralded.  No one should be surprised (but of course we are).  It could be really painful for the economy (the last peak, residential housing construction was 4.5% of GDP, this time, it is 6.5%)

  • debt load of US consumer is a real concern

  • stock market is not on an excessive multiple.  In particular the 'ultra large caps' are as cheap as they have been in 15 years.  Small caps look very expensive by comparison

  • there is a lot of risk buried in the corporate debt market (even more in Europe) around LBO lending

I wouldn't get overly depressed about the current state of the US economy.  The US has the most dynamic, flexible economy in the world, and its productivity growth has been way above that of other nations in the last few years.  Also the US has population growth whereas many (most) other developed nations don't.

There might be a recession in 2007, but the odds are the US will muddle through.

I would worry about US action on global warming (absence thereof) and by default, lack of attention to the questions of energy conservation and peak oil.

Sounds like your position on Global Warming is 'an identity statement'...;)
Hi Nate,

 Thanks. Could you please explain what this means?  (I'm naive on some things.) What's an "identity statement"?