or Powell's or me• • •
"Mike and Jon, Jon and Mike—I've known them both for years, and, clearly, one of them is very funny. As for the other: truly one of the great hangers-on of our time."—Steve Bodow, head writer, The Daily Show
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"Who can really judge what's funny? If humor is a subjective medium, then can there be something that is really and truly hilarious? Me. This book."—Daniel Handler, author, Adverbs, and personal representative of Lemony Snicket
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"The good news: I thought Our Kampf was consistently hilarious. The bad news: I’m the guy who wrote Monkeybone."—Sam Hamm, screenwriter, Batman, Batman Returns, and Homecoming
March 11, 2008
New TomDispatch
The Bad News at the Pump
The $100-plus Barrel of Oil and What It Means
By Michael T. KlareOn Monday March 3, the price of crude oil reached $103.95 per barrel on the New York Mercantile Exchange, surpassing the record set nearly 30 years ago during another moment of chaos in the Middle East. Will that new mark prove distinctive in the annals of world history or will it be forgotten as energy prices drop, just as they did following their April 1980 peak?
When oil costs are plotted over time, the 1980 oil crisis -- prompted by Ayatollah Khomeini's Iranian revolution -- stands out as a sharp spike on that price curve. Both before and after that moment, however, oil supplies proved largely sufficient to meet rising global demand, in part because the Saudis and other major producers were capable of compensating for declining Iranian production. They simply increased their output substantially, dumping a surplus of oil onto the global market. Aided by the development of new fields in Alaska and the North Sea, prices dropped precipitously and stayed low through the 1990s (except for a brief spike following the Iraqi invasion of Kuwait in August 1990).
Nothing similar is likely to happen now. For the present surge in prices -- crude oil costs have risen by 74% over the past year -- no such easy solution is in sight. To begin with, we face not a sudden spike, but the results of a steady, relentless climb that began in 2002 and shows no signs of abating; nor can this rise be attributed to a single, chaos-causing factor in the energy business or in global politics. It is instead the product of multiple factors endemic to energy production and characteristic of the current era. There is no prospect of their vanishing any time soon.
—Jonathan Schwarz
Posted at March 11, 2008 10:06 AMTo begin with, we face not a sudden spike, but the results of a steady, relentless climb that began in 2002 and shows no signs of abating; nor can this rise be attributed to a single, chaos-causing factor in the energy business or in global politics.
Does this mean we can't blame George W. Bush for $100 a barrel oil?
Because I really, really want to.
Posted by: SteveB at March 11, 2008 11:00 AMI hope that the public realizes that higher energy prices are the result of geological problems, instead of continuing to blame everything on Bush or greedy oil companies or some kind of conspiracy. The problem is, as long as people think it's just Exxon that's the problem, there is no incentive for conservation or the structural changes needed to move us away from oil dependence (i.e. denser cities, better public transportation, higher mileage cars, etc).
Posted by: David Grenier at March 11, 2008 12:06 PMIt costs me about $200.00 a month just to go to work.
Posted by: merlallen at March 11, 2008 12:13 PMoh, more squawking and bleating. actually, oil just hit 109. it's not such a problem no because energy intensity is far lower than in 70s, and unless President O decides that taxing more heavily our good friends who produce oil i.e. Exxon et al is good policy, the market will find a balance. higer prices will encourage more production, and will cool marginally Chinese demand. and a gradual increase is far to be preferred than a supply shock and a spike in prices. as usual you fools have no idea of which you speak. meanwhile I am waiting for my little firecracker to come pick me up for a nice romantic georgian dinner at U Pirosmani.
Posted by: xyz at March 11, 2008 12:16 PM...nor can this rise be attributed to a single, chaos-causing factor in the energy business or in global politics.Does this mean we can't blame George W. Bush for $100 a barrel oil?
Actually, it doesn't rule Bush out unless you consider him a "single chaos-causing factor". If you take the view that a guy from an oil family with many connections in the oil business worldwide might have a vested interest in a steady climb in crude prices, it doesn't qualify as "chaos"
Posted by: at March 11, 2008 12:42 PMxyz, you're apparently not reading the article. Higher prices can't encourage more production, because there's nowhere to produce from. You can't manufacture more petroleum, so production can only increase with new discoveries, which aren't happening (and while higher prices allow oil sands to be used, those aren't easy to produce, and ramping them up to fill the demand gap is not possible). So the prices won't come down.
Posted by: saurabh at March 11, 2008 12:44 PMoh, it's called reservoir management, babe. alternately, hydraulic management and uplife, enhanced recovery. That's the problem with you clowns, no specific knowledge of anything. A lot of fields are going to come online, or back online, if the price stays above 100.
Posted by: xyz at March 11, 2008 12:56 PMexxon etc. are booking record profits.
only a sucker wouldn't tax them more now.
Posted by: almostinfamous at March 11, 2008 01:25 PMEnhanced recovery is on the order of a few percentage points - it isn't going to dramatically increase the amount of reserves, and it certainly isn't going to increase the rate of extraction. And anyway, none of these options are going to *reduce the price of oil*, because they're only viable when the oil price is high to begin with.
Posted by: saurabh at March 11, 2008 02:11 PMTHROUGH JUDICIOUS USE OF THE PATRIOT ACT A WILLING President could effectively nationalize exxon or others and control price and production. (CEO bonuses??)
Posted by: Mike Meyer at March 11, 2008 03:46 PMGot some echoes of the storm-crow of Peak Oil, James Howard Kunstler, in there - but I'd rather read Kunstler himself than Michael Klare. Should I prefer Klare? Why ?
Posted by: Krinn DNZ at March 11, 2008 04:14 PMFallon resigned as I wrote the last post. But it's not the man that counts; it's the mission. And it will continue.
Posted by: angryman@24:10 at March 11, 2008 04:20 PMmy prediction is that oil will hit $200/barrel before 2008 is done.
Posted by: karen marie at March 11, 2008 07:41 PMangryman: I didn't write THE PATRIOT ACT, but I have read it, perhaps YOU should too. You will see that it is a 'laundry list' of changes in the letter and intent of MANY laws. (and yes, it IS intended for just such occasions as I have described above.
Posted by: Mike Meyer at March 11, 2008 08:51 PMKrinn, why do you prefer Kunstler?
Posted by: Nell at March 11, 2008 09:14 PM"it's 'peak oil' to my chums, 'peak opportunity' to my chumps"
Posted by: hapa at March 12, 2008 12:06 AMwe. are. death.
Posted by: hapa at March 12, 2008 12:55 AMKlare had an earlier article called "The Pentagon as Global Gas Guzzler":
http://www.tomdispatch.com/post/174810/
Posted by: BaronMarius at March 14, 2008 11:48 AM
