Here’s a wonderful video presentation of Billy Joel’s ‘We Didn’t Start the Fire,’ the clever reminder that problems in the world are nothing new, and really nothing to get too concerned over. I infer that this philosophy must be quite dear to him, as he expresses it in many of his songs, e.g., The Angry Young Man:

There’s always a place for the angry young man

With his fist in the air and his head in the sand

He’s never been able to learn from mistakes

So he can’t understand why his heart always breaks

His honor is pure, and his courage as well

He’s fair and he’s true, and he’s boring as hell

And he’ll go to his grave as an angry old man.

….

I do believe I’ve passed the age

Of consciousness and righteous rage

I’ve found that just surviving was a noble fight

I once believed in causes too

I had my pointless point of view

But life went on no matter who was wrong or right.

While this is brilliant stuff, and extremely musical, it’s sickeningly wrong-headed.  I know I’m decidedly unhip, but remember Margaret Mead? She left us with:  “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” And how about Edmund Burke?  He reminded us: “All that’s necessary for the forces of evil to win in the world is for enough good men to do nothing.” Ideas like these may not sell records, but there’s a lot of truth there.

In 2009 and 2010, the oil companies took $500 million, a considerable fortune, yet a tiny sliver of the profits they had retained, and invested it into lobbying Congress against climate change legislation. I don’t use the word “evil” lightly, but it’s more than appropriate here. And labeling this behavior as evil — and trying to do something about it — is not a “pointless point of view.”

I can appreciate the hedonistic viewpoint, and the rock stars who take their riches and party, well, like rock stars.  But I submit that there are other ideals worth pursuing as well.

Related posts:

Frequent commenter “Shivrat” writes:

Great that solar investment is increasing so rapidly, and agreed that many challenges lie ahead, but would you say that a paradigm shift to renewables is inevitable in the long term? After all, something like 80% of oil is produced in 6 countries, and 90% of natural gas reserves lie in 3 countries, right? Given that global energy demand is set to increase by 50% in the next few decades, wouldn’t market forces seem to make it futile for anyone to resist (fossil fuels’) decline in the long term?

This is an excellent question – one that surprisingly few people ask. The basic answer is the short-term focus of most people and entities.

I happened to ask a friend who runs a very successful hedge fund why the stock price of the oil companies doesn’t take into consideration their ultimate demise. I pointed out that a company like Chevron, for instance, has a huge market cap based on an extremely specific skill set (oil exploration, production and distribution) and will not be able to diversify into clean energy – or anything else — to any appreciable degree. He laughed out loud! “Craig,” he grinned, “the attention of the stock market is measured in minutes, hours, days and weeks, not decades. What will happen in 2030 has no relevance here at all.”

Individual people are really no different, which is why we’re having such a problem focusing on global climate change. In fact, there are a number of different psychological issues that conspire against rationality here:

1) We have a huge “discount rate,” devaluing future pain against our immediate pleasure. Like drug addicts and teenagers, many of us behave as though the future doesn’t really exist.

2) We wrongly assume that the future will be pretty similar to the past, which, in this case, is dead wrong.

3) We have a limited capacity for disaster. When the nightly news brings us tales of woe from all over the globe, we eventually go numb.

4) Extremely aggressive, professional, and super well-funded public relations campaigns (like the ones being waged by the big oil companies) are extremely effective. Note the ever-increasing number of Americans who believe global climate change is a hoax, even though this concept flies in the teeth of more than 97% of climate scientists.

That’s my viewpoint, for what it’s worth.  Thanks again for the excellent question.

Related posts:

30,000 people in Ecuador are one step closer to achieving justice in their case against Chevron. On Wednesday, an appellate court upheld the $9.5 billion judgement that would force the oil giant to pay for the clean up of a huge tract of land, damaged by Texaco, before its acquisition by Chevron. If you have a strong stomach, the talking points of the Chevron C-suite and PR team are at ChevronThinksWe’reStupid.org. And here’s a video made by Amazon Watch, a small but fierce non-profit that’s been working hard to focus world attention — and bring justice — to this horrific matter.

But how close are we to a resolution? Don’t hold your breath. As I’ve mentioned, Chevron’s team of attorneys is among the largest and most talented bunch of people on Earth. They’re playing for blood, and they’re licking their chops over the success that ExxonMobil enjoyed in dragging out its payment on the Valdez oil spill in Alaska for more than 25 years before agreeing to pay a small portion — over a quarter of a century later. No fewer than 8000 beneficiaries of the ExxonMobil restitution died while they were waiting for their money to come in.

This looks like a long, hard slog. 

Related posts:

2GreenEnergy financial guru Bill Paul has a natural gift for looking at the macro issues affecting renewables. Here’s a high-level summary of his thinking on clean energy vis-à-vis shale gas, in which he summarizes:

There’s a distinct possibility that Wall Street’s going to start diverting big bucks away from green tech and into shale gas, if it hasn’t already. I see the billions going into shale gas infrastructure posing a huge impediment to developing clean tech.

When companies like ExxonMobil and Chesapeake Energy are betting their futures (at least through 2025) on shale gas, it’s definitely not good for renewables. Fortunately, solar technology will keep developing no matter what. Also, the Chinese look ready to bankroll renewables because of the air and water quality problems they’ve got in spades. Still, shale gas’s ascendancy is a real problem for renewables.

As always, Bill, thanks for the astute comments.

My position is that renewable energy is essentially about pure technology, whose prices are always coming down. Now, there is plenty of technology involved in the extraction of fossil fuels from the Earth, no doubt about that, but here, they’re “impure” technologies, i.e., those that are wrestling with the issue of constant, day-to-day depletion, not to mention things like the ecological cost of extraction and carbon footprint.

Clean energy will win in the long run, if we still have a civilization here in 2050 or so.  But the big questions remain:

• Who will get rich in the process?
• How much harm will have been done?

Related posts:

Virtually no one doubts the basic concept. But how soon in our future (or how recently in our past) does that point lie? And what are its consequences?

A few weeks ago, a fine — and well-read friend told me over breakfast in New York, “Did you know that there’s enough oil under South Dakota to last 200 years?”

“That’s amazing,” I replied. “Then what’s all the fuss about?”

“Damn environmentalists.”

I’m not sure it’s that easy. The truth, which he, as an educated man should have known, is that we truly have exhausted the supply of easy-to-find oil, but that there is a huge deposit of shale/tar sands oil, whose economic and environmental costs of extraction are extreme.

Is there more oil? Yes. Does that provide us an easy answer? Not in the least.

Related posts:

Frequent commenter Phil Manke writes:

Hey Craig,

To what extent do you think retail gasoline price levels depend on these government subsidies to oil companies? Do you think gasoline prices would rise significantly if and when subsidies are cut back? Isn’t this the real reason that no politician will champion the trimming of these subsidies? Recent history shows there is significant public backlash when gasoline prices spike. Do you think the lagging development of electric autos and alternate transportation methods is throttled by the petroleum companies? If so, in what ways?

Hi, Phil. Yes, I am told that if we yank the subsidies, gasoline prices will rise somewhat; perhaps $1 – $2 from their current levels.  This would cause a significant back off in consumption, and create a real demand for electric transportation, which in my estimation is a good thing.

Regarding your question about the oil companies, I haven’t studied this thoroughly.  But look at the dynamics behind what we in California went through behind our Proposition 23 last year.  Oil giants Valero and Tesoro were the visible supporters of a bill that, if passed, would have crippled our movement for clean energy/transportation with a maelstrom of lies; they spent tens of millions of dollars in a (nearly successful) attempt to convince voters that clean energy would cause the death of our economy. 

A friend told me that ExxonMobil also funded the bill, but worked hard to remain anonymous, and make sure their name would not be associated with it.  And of course a few years earlier, Exxon admitted to (and agreed to stop) funding sham research companies whose only purpose was to discredit the theory of global warming. 

As I wrote here:

‘ExxonMobil has manufactured uncertainty about the human causes of global warming just as tobacco companies denied their product caused lung cancer,” said Alden Meyer, the Union of Concerned Scientists’ Director of Strategy & Policy. “A modest but effective investment has allowed the oil giant to fuel doubt about global warming to delay government action just as Big Tobacco did for over 40 years.’

If you Google the subject, you’ll find tons of material on it.

Working with the oil companies is often referred to as “going to the dark side.”  Looks like there’s a good reason for that….

Thanks for your excellent questions, Phil.

Related posts:

All Americans should be aware of what’s happening in Washington in this critically important area that affects every one of us. Earlier this week, 48 Senators, including three Democrats and all but two Senate Republicans voted to defeat a bill that would have ended tax breaks for the five biggest oil companies.

What could cause such outrageous behavior? How about the $39.5 million that the oil and gas companies spent lobbying Congress in the first quarter of this year alone? Or might it be the fact that the industry donated nearly $18 million directly to the political campaigns of Senators who voted against ending these subsidies — five times more than to Senators who supported ending them?

Yet the measure to end these handouts to the oil industry came fairly close to passing (we needed 60 votes, and got 52). The message: if you care about things like this (and I have to think that most readers here do indeed), I urge you to exercise your rights as a citizen and let your elected leaders know where you stand on this.

Related posts:

Related posts:

I often think about how the energy industry’s financial analysts view the fundamentals that apply to market valuations. Just now, I was reading some of the discussion at SeekingAlpha.com on ExxonMobil that attempts to get to the underlying buy/sell recommendations, and I note that the conversation is fairly bullish across the board.

In particular, though there is widespread agreement that the “easy oil is gone,” there is almost no recognition of a concerted move to get off of oil as a civilization. Moreover, the concept of “peak oil” (i.e., that the supply of oil will soon start to diminish) means that the price will soar, and that only companies with the scale of ExxonMobil (vs. the wildcatters of yore) will have the capability to play effectively. But there is precious little talk of the impact of electric transportation, or renewable energy in any of its forms.

I’m trying to figure out what that means. Here are a few points of speculation:

*  Clearly, the oil industry has done a good job at convincing both the legislators and the voting populace that a steady-as-she-goes approach is appropriate for the energy industry.

*  Though renewables continues to make inroads, relatively few people challenge the legitimacy of fossil fuels as the predominant source of energy.

*  The subsidies that are in place (12 times the size of those given to renewables) are clearly not going away; that discussion is not even on the table. This, of course, creates an environment of cheap oil and coal — thus affordable gasoline, thus no real demand for a replacement.

*  The US foreign policy of protecting the incoming flow of oil from the Middle East – even at the expense of ongoing military conflicts (not to mention sending them $1billion per day of US wealth) – raises the eyebrows of only a few, who are quickly written off as weirdos.

*  As we saw in our midterm elections, the conservative faction has successful convinced voters that progressive views in this space are radical — frighteningly out of touch and recklessly extravagant, that global climate change is a back-burner issue, and that rightwing politics is the best medicine for the country’s ailments.

I suppose all we can do is continue to tell the story.  We need to hope that masses of people realize the imperative to migrate to clean energy, and lean on their elected representatives to help great an environment in which this can happen. 

Looking for an effective starting point?  Pull all the energy-related subsidies and force all producers and consumers of energy to pay the comprehensive costs.  You’ll have renewable energy in a wicked hurry.

Related posts:

While clean energy may be the way of the future, if you’re an oil company, it’s certainly the enemy of the present. Even the most aggressive repositioning of the oil companies as “energy companies” (BP as “beyond petroleum,” Chevron as “part of the solution” etc.) is such obvious PR fluff that it leaves most people with a very bad taste in their mouths about these entities’ sincerity and their status as corporate citizens.

On another line, from the standpoint of internal capital allocation, the return on asset stats associated with oil exploration beats the pants off the development of renewables. Thus prudent and responsible managers, who themselves are managed according to the short-term profits they drive, have only disincentive to push investments in renewables.

At the end of the day, we see a great ebb and flow, as internal arguments play themselves out.

Related posts: