[Marxism] Re: "THE END OF OIL" CU Lecture 6/24
DLVinvest at cs.com
DLVinvest at cs.com
Tue Jun 22 21:42:13 MDT 2004
In a message dated 6/22/04 7:45:03 PM Mountain Daylight Time,
Lillian.Valenzuela at colorado.edu writes:
> I assumed they meant oil reserves within the US--does that include oil
They're probably talking "world proven reserves" but that's one of the
trickier points in how they define "resreves" anywhere:
there's what's been established by geology, then there's what's been imputed
or extrapolated to exist by extension or projection from known data, then
there's what they could bring "to market" in reasonable expectation of selling it
and by-products at at a certain price, provided certain conditions and
assuming certain variables as constant ("all other things being equal" -- which they
never are). Generally the oil companies like to talk about "proven" reserves
in any given place or time, which usually means those that can be produced for
profit given certain assumptions and conditions about demand..
What launched the first oil-shale boom in 1915 was a panic over rapidly
increased demand with stable domestic (US continental) supplies ( rather, the
"reserves" that had so far been "proved" to be available at the then-prevailing
price, which itself weas a function of supply an ddeman, and therefore also of
monopoly pricing, imperial policy and a host of "externalities'". Then National
Geoghraphic ran an article declaring "not to woory, we have mountains of oil"
in the kerogen-laced deposits of marlstone ("shale") of the Piceance Basin.
But that speculative bubble ( oil-shale leases were sold off by the government
to insiders for pennies an acre) burst on the discovery of Spindle Top in east
Texas, which launched the Rockefeller-dominated Standard Oil Trust to
diversify its sources. The governmenmt bailed out the shale speculators by
establishing the Naval Oil Shale Reserve when no one else was fool enough to be the next
fool. This was a short-cut to the Tepapot Dome scandal, but suffice to say
that the only way kerogen can be extracted and refined and transported is at a
huge disadvantage in terms of actual cost per thermal unit or any other measure
compared to crude petroleum extracted almost anywhere including under the
ocean floor and the tundra. (I wrote extensively on this for trade journals in
the late 1970s until the last bubble burst in 1984-86 thanks to the Iran-Iraq
war, which forced both regimes to pump frantically to pay for weapons from the
US, UK, France, Germany and USSR.)
So, every time prices increase, you'll hear some hysterical account about how
"we" are running out of oil, with the unstated premise: at the current price,
and with the current structure of oligopoly among producing countries'
state-owned and joint venture operations with the oligopoly of
refining-transporting-marketing companies based in the US-UK (Five forrmerly Seven Sisters).
subsisidized by all manner of tax breaks ("incentives" going back to the
panic-induced "depletion allowance"), subsidies of every description including R&D for
"alternatives" they also control (including coal, natural gas, wind, solar,
"renewable" technologies and fuels which are very capital-intensive because of the
components and inputs they require-- such as turbines, fuel-cells, new
battery storage devices, solar collection panels, all of which use high-priced
materials that must be fabricated), plus the costs of pollution and clean-up
usually absorbed by taxpayers, and especially the Pentagon budget, which is the
tax-subsidized state-sponsored military control over supply and transport in the
name of "national security" that began as a lifeline to US-national capital
industry dependent on such fuel and feedstock and now is one of the few means
available to the US-UK ruling class for extracting economic rent and
super-profits for this commodity, at the expense of other national-industrial capitals.
Or,as the tragicomic poster asked, "How did our oil get under their sand?
Add up all the "externalities" shoved off the balance sheet of "free-market"
enterprise and the real cost of oil is probably closer to $100 a barrel than
the $35 the same companies paid at the wellhead or on the spot market in
And only then do the "alteratives" including shale-oil become near
competitive with crude. At that price point on the margin of this supply-demand curve,
assuming people are willing to transfer those costs from one ledger to another
(the oil companies mastered the creative accounting tehcniques of "transfer
pricing" to shuffle profits from high tax to low-tax areas and post the expenses
in the high-tax zones, but now you can pay a tax to the Pentagon and at the
pump, too), anything is possible, including "renewables'" but also exploration,
discovery and "proving" of more oil from other sources such as the AMWR in
Alaska or its Siberian analog, or Alberta's tar-sands, or deeper-sea instead of
off-shore sources, etc.
Why not the moon? That depends on whether oil is in fact a product of biotic
metabolism, a "fossil" fuel, rather tha the result of other geological
processes. But in all of this the critical stochastic variable is political, while
the assumed constant is production for profit of and by and for the owners of
capital, rather than by the social determination of "need"..
Crude petroleum is certainly a finite resource, but Hubbard's Peak is a
> "THE END OF OIL," AUTHOR PAUL ROBERTS TO SPEAK AT CU ON JUNE 24
> Paul Roberts, the acclaimed journalist and author of "The End of
> Oil," will speak at CU, in Old Main, Thursday June 24, at 5:30 pm. By
> even conservative estimates, we will begin to run out of our oil
> reserves in the next thirty years. What happens when oil runs out? In
> his book, Roberts describes the catastrophic consequences of our
> addiction to oil, and provides an outline for breaking our dependence
> on this quickly dissipating resource.
Douglas L. Vaughan, Jr.
for Print, Film & Electronic Media
3140 W. 32nd Ave.
Denver CO 80211
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