Energy Diversification

Analyst: Oil Prices Inflated by 50%

Why is it that none of the oil Bears, who claim that this is all "speculation", seem to be able to offer any substantive, fundamental arguments either? Come on -- Is a boat analogy supposed to be a compelling argument about oil supply and demand?

This is all testament to the rarely-discussed fact that we know very little about oil reserves and production, particularly in Saudi Arabia. We can listen to Hard Assets Investor and Jim Cramer tell us every day that its "not about supply disruptions, its about demand"... but the 1970s proved that supply disruptions can cause HUGE problems.

To deny that we face the same risks in the oil supply chain - or worse risks - as we did in the 1970s, is simply ignoring reality.

One terrorist attack on Saudi oil production will show the world how much at-risk our oil supplies are.

In this environment, as long as nothing goes wrong - a huge assumption - sure, oil prices may moderate. But then when a "surprise" event occurs - an act of war, terrorism, or God - all the oil Bears will say "well, no one could have predicted THAT!" But of course, its funny how unpredictable things always seem to happen.

And when those things do happen - Democrats will lament their opposition to coal and nuclear, Republicans will lament their opposition to longer-term alternative energy sources, and the country will lament its fixation on electric cars without any concern for how that electricity can be produced over the next ten years. And Vinod Khosla's utterly fraudulent claims about "cellulosic ethanol for $1 a gallon" will be revealed for the self-serving hype that they are.

Analyst: Oil Prices Inflated by 50%

Why is it that none of the oil Bears, who claim that this is all "speculation", seem to be able to offer any substantive, fundamental arguments either? Come on -- Is a boat analogy supposed to be a compelling argument about oil supply and demand?

This is all testament to the rarely-discussed fact that we know very little about oil reserves and production, particularly in Saudi Arabia. We can listen to Hard Assets Investor and Jim Cramer tell us every day that its "not about supply disruptions, its about demand"... but the 1970s proved that supply disruptions can cause HUGE problems.

To deny that we face the same risks in the oil supply chain - or worse risks - as we did in the 1970s, is simply ignoring reality.

One terrorist attack on Saudi oil production will show the world how much at-risk our oil supplies are.

In this environment, as long as nothing goes wrong - a huge assumption - sure, oil prices may moderate. But then when a "surprise" event occurs - an act of war, terrorism, or God - all the oil Bears will say "well, no one could have predicted THAT!" But of course, its funny how unpredictable things always seem to happen.

And when those things do happen - Democrats will lament their opposition to coal and nuclear, Republicans will lament their opposition to longer-term alternative energy sources, and the country will lament its fixation on electric cars without any concern for how that electricity can be produced over the next ten years. And Vinod Khosla's utterly fraudulent claims about "cellulosic ethanol for $1 a gallon" will be revealed for the self-serving hype that they are.

The New Energy Cold War: The Warsaw-Tehran Connection

Europe is the real mystery here. For a continent supposedly scarred by World War II, it seems oblivious to the Russian situation. Poland and the Baltics realize quite well that, as the author points out, only America has the determination and capability of defending democracies in Europe.

Many argue that Obama will have greater clout in Europe, but has shown no interest in using that prestige to get the Europeans to step up to defend themselves proactively.

After so much time and effort in building the "European Union", its surprising how quickly Europe is ready to define itself down, & let countries on the Eastern periphery fend for themselves.

This is quite serious - more serious than Iraq, in fact. Unfortunately neither Europeans nor Americans seem to agree on any of the lessons of the events leading to World War II. We are going to pay the price for the uncritical glorification of "multilateralism", as we eventually realize that Putin doesn't factor global disapproval (even if it existed) in to his plans.

A long range energy plan promoting natural gas, oil drilling, nuclear and solar power -- which would have an impact chronologically in the order I listed them -- would help America, Europe and the world resist the influence of the Russia - Iran - Venezuela axis. We seem to be moving very slowly in that direction. But quite frankly, as long as Western academics continue to ignore the need for reliable energy sources and a strong military alliance with Europe, we will become progressively more vulnerable.

The New Energy Cold War: The Warsaw-Tehran Connection

Europe is the real mystery here. For a continent supposedly scarred by World War II, it seems oblivious to the Russian situation. Poland and the Baltics realize quite well that, as the author points out, only America has the determination and capability of defending democracies in Europe.

Many argue that Obama will have greater clout in Europe, but has shown no interest in using that prestige to get the Europeans to step up to defend themselves proactively.

After so much time and effort in building the "European Union", its surprising how quickly Europe is ready to define itself down, & let countries on the Eastern periphery fend for themselves.

This is quite serious - more serious than Iraq, in fact. Unfortunately neither Europeans nor Americans seem to agree on any of the lessons of the events leading to World War II. We are going to pay the price for the uncritical glorification of "multilateralism", as we eventually realize that Putin doesn't factor global disapproval (even if it existed) in to his plans.

A long range energy plan promoting natural gas, oil drilling, nuclear and solar power -- which would have an impact chronologically in the order I listed them -- would help America, Europe and the world resist the influence of the Russia - Iran - Venezuela axis. We seem to be moving very slowly in that direction. But quite frankly, as long as Western academics continue to ignore the need for reliable energy sources and a strong military alliance with Europe, we will become progressively more vulnerable.

5 Must Read Articles in Oil and Alternative Energy

The range of ideas and views about energy sources on this board reflects the diversified and/or scattershot approach to energy in this country. That may be good or bad. However, as long as there is such a divergence of views, we need to hold off on the calls to just "do something!"

The reality - as reflected above - is that a lot of alternatives are being pursued. Very smart people cannot all agree on the answer, so rather than having the government just "do something" and push one solution, perhaps we ought to accept that this is a long process.

The reality is that nuclear power works, and works on a large scale. If we had to just "do something" right now, nuclear power would be the safest bet. There are risks and problems with it, which justify a more diversified approach. But with that in mind, I think you have to step back and respect that this is not an immediate process.

If anyone thinks we're just going to stick a new President in there, slap some solar panels on our roofs, and stop using oil -- good luck.

The problem is not lack of imagination. Its too much imagination without real consideration of what can actually work. I've heard solar fairy tales for 30 years. "We'll be all solar by 1990." I'm not anti-solar now, but you sure have to keep things in perspective. There are always Pollyannas with big promises -- who stand to make a lot of money by selling out.

Why is it that all of these great, cheap, large scale solutions always demand government subsidies? There are so many cellulosic ethanol players out there now promising that $1 production costs are *already* achievable with their technology. Then why do we need subsidies? Actions speak louder than words.

We are still in the R&D phase -- let's accept that and acknowledge that these are venture-stage investments in most cases.