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In the same category
Unthinkable
Published : April 02nd, 2012
830 words - Reading time : 2 - 3 minutes
( 24 votes, 4.3/5 ) , 4 commentaries Print article
 
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Keywords :   Central Bank | Citigroup | Etc | Ethanol |

 

 

 

 

In the drunken, drug-crazed twilight of its run as Leader of the Free World, America's collective imagination swerves from one breakdown lane to the other while the highway patrol throws a donuts-and-porn party down at headquarters and the news media searches the gutter on hands-and-knees looking for the spot where it dropped its brains.

 

The other day, Larry Kudlow, the king popinjay at CNBC, told viewers that the US has over a trillion barrels of oil waiting to be drill-drill-drilled on our way to "energy independence." This is the kind of malarkey that America thrives on these days, the way yeasts thrive on sugary mash. It's a complete falsehood, of course, but the working dead over at The New York Times said substantially the same thing in a front-page story the week before. The Timespersons have only one source for their stories: Daniel Yergin, chief public relations pimp for the oil industry, because he makes it so easy for them by providing all the information they will ever need. The oil and gas companies would like to direct the fire-hose of loose and easy money out there into their stock prices - building to the magic moment when, Mozillo-like, the executives can dump shares, cut, and run for the far hills where no SEC officer or DOJ attorney will ever think to look. This is just another racket in an all-rackets society.

 

The fantasy of energy independence therefore takes shape as a "settled matter" as we lurch toward elections. The arch-moron Mitt Romney will inveigh against Obama for holding the oil dogs back while Obama pretends to spank the oil companies for gouging the public on that alleged Niagara flow of new oil. None of them understands the true situation, which is that the USA is enjoying one last gulp of a very expensive oil cocktail with the last few dollars it can prestidigitate out of the central bank's magic box, and then there is no more even notional surplus wealth to blow on more drinks.

 

And it isn't even much of a gulp. US production of "all liquids" - which includes methane gas drippings, ethanol, etc - went from 7.2 million barrels a day in 2004 to about 7.7 in 2011. We use about 19 million barrels a day, down about a million from peak US consumption before the financial crash of 2008. The reason it's down: Americans are going broke, one household and one small business at a time. Shale oil production is approaching half a million barrels a day. That's about 45 minutes of daily go-power. It might go up to an hour-and-a-half before production of shale oil permanently crashes on the combination of fast-depleting wells and a lack of capital to keep drilling new ones at $8 million per well.

 

The story for shale gas is similar, except that initial production was so exorbitant that it drove the price down to nearly nothing (the $2 range), and the bust from that Ponzi will be even more spectacular than the shale oil. Everyone from Mr. Obama to the chiselers who run Citigroup maintain that there is a one hundred year supply of gas in the USA. They are going to be very disappointed. The public, on the other hand, will not even remember what they said as they burn down the cornfields in anguish.

 

I met a guy at the pumps last week who was filling up a pickup truck at least twice the size of mine a few yards away. I asked him how things were going fuel-wise with that monster Ram-Charger he was feeding. At more than $100 a fill-up, it was killing him he said. His line-of-work required him to drive all over the county incessantly. His reality was a bit different from the oil company execs promising limitless horizons of oil to CNBC-watching retirees desperate for some "yield" on investment in the face of ZIRP bond rates. The price of oil (and gasoline) may well crash again, but when it does, there will be fewer business reasons for anyone to drive around the county all the live-long day, and that guy's Ram-Charger could fall into the hands of the re-po goon squad. He may never be able to get another one, either. No more money for truck loans. Capital shortage. Sorry.

 

This oil and gas thing cuts so many ways that the public will feel like it is gargling Gillette blue blades. Just add up the total tonnage of steel necessary to keep this Ponzi going and you would reach a discouraging conclusion: this thing has nowhere to go but swift and implacable contraction. The ultimate destination of "energy independence" will be a nation with no cars and trucks to run. We'll get there, you'll see. But that is speaking the unthinkable.

 

 

 

*

 

 

 

Thanks to all readers for sending many kind and thoughtful letters about cholesterol, diet, statins, doctors, and the medical racket in response to my two previous blogs on those subjects.

 

 

 

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Even Jim C. would have to admit that reading JHK's work has added a delightful lilt to his responses; ("There is an air of panic in today's screed"). And his spelling is getting much better, he must have discovered spell-check! Read more
prblmsolved - 4/3/2012 at 8:03 PM GMT
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James Howard Kunstler

James Howard Kunstler has worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone Magazine. In 1975, he dropped out to write books on a full-time basis. His nonfiction book, "The Long Emergency," describes the changes that American society faces in the 21st century. Discerning an imminent future of protracted socioeconomic crisis, Kunstler foresees the progressive dilapidation of subdivisions and strip malls, the depopulation of the American Southwest, and, amid a world at war over oil, military invasions of the West Coast; when the convulsion subsides, Americans will live in smaller places and eat locally grown food.
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Even Jim C. would have to admit that reading JHK's work has added a delightful lilt to his responses; ("There is an air of panic in today's screed"). And his spelling is getting much better, he must have discovered spell-check!
Rate :   2  0Rating :   2
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Kunstler, apparently recovered or at least stablized from his health issues (of which he bored us with), is back on the howl with another rant against oil.

His ire this week is aimed at Larry Kudlow. "The other day, Larry Kudlow, the king popinjay at CNBC, told viewers that the US has over a trillion barrels of oil waiting to be drill-drill-drilled on our way to "energy independence."

There is an air of panic in today's screed - perhaps because he fears Kudlow is right (which he is). Even with Obama's vendetta against oil, today's oil producers predict oil discoverinces and production well into the next century. This bodes ill for Kunstler and the return to earthers, those who would have us wrap our wounds in fig leaves, live in thatched huts, and howl under the moon with the denizens of the woods.

Alas, no. Once we kick Obama out of office and free ourselves from the environmentalists and their groupies, return to a metals based currency, progress will truely rachet up and the future will again appear golden -- even for Kunstler.
Rate :   14  10Rating :   4
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Appear... ?
So it appears ! Apparently.
JHK didn't bore me with his health issues. So you are not entitled to talk about "us".
You talk for yourself ! Thank you.
Who is "us" by the way ?
...
Fear reigns the world ! Let me tell you that I told you.
"The anatomy of human destructiveness." Erich Fromm
"The sane society." Erich Fromm
"Zen and the West." Erich Fromm
"Fear of Freedom." Erich Fromm
"Marx , Freud and Freedom." Erich Fromm
... etc... etc... 30 years old knowledge. A visionary. We are all retards !
You won't make any money though reading his works. Sorry.

Rate :   4  7Rating :   -3
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You must be tired of clean water and air. I grew up in oil country in Texas and I can assure you the oil companies don't give a shit about anything but $$$$$$$$$. Wake up!~!
If you want to try it out go to Odessa or Midland and take a very deep breath. Year round stink and pollution.
Rate :   8  5Rating :   3
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