RE: [asa] $4 gas is here to stay (fwd)

From: gordon brown <Gordon.Brown@Colorado.EDU>
Date: Sat Dec 06 2008 - 23:30:00 EST

Here is another message from Glenn Morton.

Gordon Brown (ASA member)

---------- Forwarded message ----------
Date: Sat, 6 Dec 2008 21:05:19 -0600
From: Glenn Morton <>
To: 'gordon brown' <Gordon.Brown@Colorado.EDU>
Subject: RE: [asa] $4 gas is here to stay (fwd)

Gordon, below is a reply to John Wally

You may post it if you wish

  I am not going to subscribe, I will read the thread and comment in this
fashion. If you could forward this to the ASA, and then smash it with a
brilliant reply, I would appreciate it.

You wrote:
>>> I too remember this thread and some of those tense and ominous
conversations we had with Glenn earlier this year. I am hugely relieved that
his dire predictions haven't come to pass yet and even if it is only
temporary I am thankful that we have a second chance here. <<<

In some sense it is a limited second chance. We are about to experience what
life will be like with less energy in the future because, oil and natural
gas projects are being delayed or closed-meaning less energy. Wind and solar
plans are now being shut down because they are so far under the water
economically that private enterprise doesn't want to do it. And even when
oil prices start rising, there will be a reluctance on the part of oil
company managements to invest as heavily as they should because they will
remember with great pain this present downturn.

So, by the end of next year we will see a world that uses less energy, just
as many global warming advocates want, but it will become a harsh world for
those in the developing countries who are pushed out of the 21st century and
back into the 19th. We in the smug West, won't see much of that yet, but
the construction workers in China will be living it.

You wrote:
>>I was also really shocked at just how much impact demand could have on the
price of gas or probably more accurately how much discretionary consumption
there was in the global demand. If we could cut back this much and still get
by then why didn't we do it before? Maybe we won't run out of oil as fast as
we thought. There are a lot of silver linings here. <<

We are paying for this lack of demand via loss of jobs around the world. If
you are one of the ones laid off (I have been laid off twice in my career),
you don't think it is much of a silver lining. If you are a poor chinese
construction worker, who is trying to better his children's lives by
spending months and months away from home to earn money to send them to
school, and now you lose your job, it isn't a silver lining.

I guess I am always a bit frustrated by the view that energy is a curse
rather than a blessing. That is one thing I loved about living in China.
That was a society who understood that without energy, life is awful-all
they had to do was look out the window to see guys driving donkey carts in
the middle of Beijing.

You wrote:
>>>I hope the politicians don't tax us up to $4 a gallon but if they do I
hope the do something sensible with the money. I do think it is a good thing
to have this econnomic lifestyle reset on a global scale and there a
potentially a lot of good things that come out of it. <<<

Our jobs depend upon a healthy economy. Those who lose their jobs and can't
feed and clothe their children won't see having their lifestyle reset as a
healthy thing. I must confess to liking the current lifestyle. I can't
post a picture I took when I was in Tibet of a young lady coming out of a
Tibetan tent (at 16,000 feet), with either the night soil or with bucket
full of something. See

   Their lifestyle is gloriously reset. We should all aspire to be so lucky
as to have their lifestyle.

You wrote:
>>>I know this could go either way and many Christians especially in the
conservative circles feel like we just elected the anti-christ and with the
government owning about half the mortgages in the country and bailing out
all the employers, the stage is set for unprecedented financial control of
the population by the government. But I am hopeful that God still has His
plan as well and we haven't seen all He plans to do in this.
I saw this somewhat contrarian financial analyst make his comments on the
current situation and I have to admit a lot of it made some sense. To borrow
his analogy it is hard to take our medicine but you have to get better. I
hope our new political leadership will join us in taking this medicine as

It isn't medicine. Energy is our way of life. Loss of it will mean a
substantial reduction in our standard of living.

I will throw one more worry out there. Israel and Iran.
With Iran threatening to get nukes to clobber Israel, we have a very
dangerous situation so far as oil is concerned. Israel wants the world to
stop Iran. The world is approaching the problem by flapping their yaps
rather than actually doing anything substantive. Iran is ignoring the
demands to stop making nuclear weapons. Israel now has to face a choice-try
to take out the nuclear program. This year the US told them not to do
anything. They were probably content to sit still so long as they felt the
US would protect them. But..
Now we have Obama, who went to a church that didn't particularly like
Israel. Israel has to be doing the political calculation about whether or
not they should simply go it alone without even telling the US they are
going to attack Iran. They have to know that there is some chance that the
new administration might warn Iran. But they also know that if they don't
get the entire program, a nuke will come their way and it will be very hard
for them to get the whole program.

Now, Iran for its part has said that if anyone attacks them they will shut
in the Strait of Hormuz, through which flows 20 million bbl/day. Iran can
easily do this with a few men with shoulder fired missiles sinking tanker
after tanker. We have the possibility of waking up one morning and finding
that Israel has attacked Iran, Iran has shut down the oil supply and your
local gas station has no gasoline for you. Now try to go to work or have an
economy. The reality is that this event too will gloriously reset our

Israel will not wait forever; Iran won't stop building nukes; the West is
impotent-a toothless tiger, and we are all dependent upon what comes through
that strait. Israel will no longer trust the US to protect them and will do
what they deem best for their personal survival. All of this is coming to a
head quickly. When will Iran have a nuke? By the end of 2009 according to
the estimates I have heard. I keep a 5 gallon can of gas full. Having
experienced no electricity for 4 days after Ike and knowing that without
electricity one can't get gasoline. Without gasoline, one can't go very far;
that can is my escape to the ranch.

Those into eschatology (I am not) say that the world will gather to destroy
Israel. I never could see why everyone would want to do that? If Israel
attacks Iran and Iran shuts in the strait of Hormuz but says, if you will
destroy Israel, we will let the oil flow again. The world would send all
their armies to kill Israel, China, Russia and the US and Europe. No, that
is just too wild a scenario. Even I don't believe that.

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Received on Sat Dec 6 23:31:00 2008

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