[Palpatine]

That has always been the nagging doubt when reading the internet projections of the PO worst case scenarios. Why were none of those worst case scenarios coming from anywhere credible in the industry?

More Mad Max fear would likely mean higher prices and higher profits. It would seem that near term PO decline predictions would benefit the profits of oil companies. So why don't oil companies fund PO decline studies to hype up the fear so they make more money?

When compared to global warming science, you see fossil fuel interests spending huge sums of money to discredit climate change science.

Why don't we see the same in relation to oil companies hyping the fear factor of Peak Oil?

If the oil companies really want access to more public lands for oil leasing, but are being blocked by regulations or laws (like ANWR) wouldn't it make sense to hype fear of shortage, run up prices, create public pressure to allow ANWR drilling? Why don't they fund global PO decline studies to create higher prices?

If i were an oil company CEO with a financial interest in maximizing the value of my current producing fields, I would be paying for all sorts studies by pros to make it seem like shortages are just around the corner.

If you look at the American Petroleum Institutes website, they are currently hyping how spare capacity is expected to grow. Why?

http://www.api.org/policy-and-issues/po ... ng-america

Or is it in their long term interest to keep prices low because they know plenty of substitutes are viable? Therefore the goal is to maintain a price advantage as long as possible? Just my opinion.

[Paulo1]

I think you hit it with this:
"Or is it in their long term interest to keep prices low because they know plenty of substitutes are viable? Therefore the goal is to maintain a price advantage as long as possible? "

If even a whiff of real decline sets in many will decide to take a proactive approach and wean/prepare. Isn't that what many PO folks have already done? Doing?

Plus, it is hard for people who have worked all their life in an industry (with all that imples...education/relocations/ the company hype...), to reject it as now being false and wrong for the times and situatiuon. My nephew is an automotive engineer and quite successful. He dismisses the very idea the age of the automobile is over for the common man. He points to the latest Teslas for example, and then shrugs at the prices. There is a disconnect.

Paulo

[Palpatine]

My nephew is an automotive engineer and quite successful. He dismisses the very idea the age of the automobile is over for the common man. He points to the latest Teslas for example, and then shrugs at the prices. There is a disconnect.

Paulo

Well, your nephew is right in my opinion. I drive a Tesla. The age of automobiles is not even close to being over. We are just going to change the power source. I think EVs are one of the viable substitutes to gasoline consumption that oil companies want to minimize.

At the moment, gasoline has a cost advantage over batteries in certain application. Battery pack costs are falling, but it is fair to say that up front capital costs still provide the ICE with a cost advantage in certain applications. But gas at perhaps $6 per gallon would change a lot of the calculation. I suspect the Nissan Leaf would become a much more popular choice.

[ROCKMAN]

P - "If the oil companies really want access to more public lands for oil leasing, but are being blocked by regulations or laws (like ANWR) wouldn't it make sense to hype fear of shortage, run up prices, create public pressure to allow ANWR drilling?"

Easy answer: Because probably 98% of the oil companies have nether the interest or capability to drill on those lands. Me and 99% of every company in Texas we would be very pleased to not see any feds onshore lands leased. And 90% of the companies here would be pleased to see no more govt offshore leases offered. And all of us companies producing oil would be pleased as hell to not see any Canadian oil come across the border. We are not one happy band of chipmunks. We are competitors. From a personal standpoint nothing would be better for me then to see every company drilling shales or developing the Canadian oil sands to go under ASAP. And that could be said by the vast majority of US companies. Painting us with a broad brush won’t help understanding the dynamics at play.

Folks seem to still have difficulty understanding that the oil patch isn't one monolithic being with a single agenda. Until they do they'll have trouble understanding the PR pieces and the real dynamics that govern the various components of the oil patch differently.

[Palpatine]

Rockman, that is a good point. The oil patch is full of competitors where not all have the same near term or long term goals.

But enough of those competitions did seem to come together enough to fund anti-climate change studies and devote a significant amount of effort to do so. There are plenty of big money operators in the oil patch. It only takes a few to hype the price up with fear.

For example, oil companies with lots of long term, expensive to produce reserves (oil sands) would have more of an incentive to hype fear and drive up prices. Companies like Suncor in Canada need higher prices to maintain solid oil mining profit margins.

Wouldn't it be in the interest of a major company like Suncor (and many others in oil sands) to hype up Peak Oil so that the criticism of oil sand CO2 emissions would be muted and secondary by comparison?

If i were an executive in Suncor, i would have a few Peak Oil studies ready and waiting. If carbon taxes or regulations seem likely, hype the PO fear by releasing the findings that we are running out of oil. If prices of oil are too low to meet EPS estimates, release a PO study to hype the fear.

But we don't see nearly the same amount of PO research being funded by the oil patch compared to the anti-climate change studies they fund. I find that really curious.

[ROCKMAN]

P – I sell oil to refiners and marketing companies. I don’t recall one of them paying me more for my oil because the public feared anything. They paid me what they wanted to. Not once in 38 years have I never accepted the highest price I was offered.

A double edge sword: if you a CEO of a pubco that could prove, without any doubt, he’ll have lots of oil in the future he could tout PO. But to what end? IOW since we have a rather well-grounded group here that understands PO much better than the public: all those folks here who are voluntarily paying more for gasoline speak up.

OTOH if you’re a CEO of a company borrowing $billions to keep drilling the shales so you don’t have to show a decreasing reserve base do you really want to explain just how difficult it will be for your company to keep finding more oil? Simply: you own stock in Chesapeake. They put a report showing they will have a difficult time in finding more oil: are you going to increase your position because you fear higher oil prices? Or will you dump them and buy oil futures based upon you “fear” of increasing oil prices?

Futures players win/lose hundreds of $million weekly often based upon the fear factor. I don't sell oil in the futures market. I sell to refiners.

[ROCKMAN]

P – I sell oil to refiners and marketing companies. I don’t recall one of them paying me more for my oil because the public feared anything. They paid me what they wanted to. Not once in 38 years have I never accepted the highest price I was offered.

A double edge sword: if you a CEO of a pubco that could prove, without any doubt, he’ll have lots of oil in the future he could tout PO. But to what end? IOW since we have a rather well-grounded group here that understands PO much better than the public: all those folks here who are voluntarily paying more for gasoline speak up.

OTOH if you’re a CEO of a company borrowing $billions to keep drilling the shales so you don’t have to show a decreasing reserve base do you really want to explain just how difficult it will be for your company to keep finding more oil? Simply: you own stock in Chesapeake. They put a report showing they will have a difficult time in finding more oil: are you going to increase your position because you fear higher oil prices? Or will you dump them and buy oil futures based upon you “fear” of increasing oil prices?

Futures players win/lose hundreds of $million weekly often based upon the fear factor. I don't sell oil in the futures market. I sell to refiners.

[Null Hypothesis]

I think a lot of oil companies don't actually have the oil they claim to, as ROCKMAN seems to describe. They'd go under if that was generally understood by investors.

Has to do with eh low interest rate ponzi scheme holding everything together right now. When the financial system ends as we know it, oil production will drop like a tank. And I don't think oil company profits will rise as a result, generally, because production costs will also go up.

BTW, I saw 3 Tesla Model S's yesterday in Vancouver in one 8 km commute home. And a Volt, plus my Leaf, that's 5 EV's I saw. They are catching on, and at least he Leaf is dropping in price.

[ralfy]

"Hyping the fear factor of peak oil" works against them because higher prices drive up oil cost production.

Of course, if "plenty of substitutes are viable," then there is nothing to hype.

The only thing left is to show that those substitutes are "viable." That needs to be hyped.