And so it begins, the unraveling of 'concerted ignorance' by random pulses of reality.
Two interesting articles appeared in the online edition of The Economist last week. The first, Why Don't Americans Believe in Global Warming? sought to understand why the U.S. is persistent in failing to come to grips with the reality of Climate Change.
The second, Are Economists Erring on Climate Change? ,explored the discomfort of economists in coming to grips with an issue that defies the logic and comfort of their statistical foxholes.
Meanwhile, another article on coal explores the dilemma of coal's continued growth in meeting energy demands in less affluent nations while compounding the environmental problems that will affect the globe, but the less affluent more acutely. Still other reports suggest the long term demise of coal due to escalating costs of meeting environmental requirements, and even a 'peaking' of its economic mining in many areas that otherwise are believed to have boutiful reserves.
For the past week the Schork Report has tried to make sense of divergent numbers for oil and gas prices that seem to defy cause and effect.
However, today's show-stopper was provided by the Wall Street Journal, reporting that Exxon-Mobil exploration efforts are having difficulties replacing reserves at current depletion rates. It notes Exxon's recent venture into natural gas, along with other majors, as a way to hedge its bet on future oil reserves.
When The Guardian released the Wikileaks cable speculating that the Saudi oil reserves may be overstated, it was hyped as a revelation, and equally dismissed as yesterday's news, as the late Matt Simmons had been issuing such warnings since 2004. Yet there is no definitive proof, one way or another. We won't know for sure until oil prices escalate sufficiently and the Saudis are unable to ride to the rescue by releasing their hypothetical reserves.
The Saudis argue, with some justification, that there is no need to release reserves while there is an excess of supplies in Cushing keeping US prices low. But that ignores the more subtle issue that Cushing inventories may reflect the underlying weakness in the US economy.
Still, Brent is detaching from the NYMEX quotes, suggesting that world demand in the emerging economies continues apace, irrespective (or is that irrespectful) of the US, as China is annointed the Number 2 economy, surpassing Japan. And its lower than expected rate of inflation gives momentary hope to the speculators that the Chinese authorities will not need to clamp down on growth to fight inflation, and the good times can continue to role, even as more voices murmur the fears that the Chinese will catch the American disease of 'irrational exhuberance" as the Japanese did in the eighties.
Then, again, Leah McGrath Goodman's just-released book, The Asylum, regarding excesses in the oil commodity markets may feed the same cynicism regarding Peak OIl that Climate-gate created on Climate Change.
So what's the truth? About Energy? Climate? The Economy? We have facts without context; fragmented and often contradictory data; professional manipulators and manipulative professionals plying their own personal agendas in the public bazaar. And trusted leadership, nowhere to be found.
I think we're screwed.
Onward.
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