Rational Oil Prices

June 13th, 2008

It seems that Arnold Kling has been in Afghan cave during the past six months. He does not seem to think that there has been any bad news on oil supply over the last six months.

The recent run-up in oil prices represents a similar puzzle. I think that it’s difficult to tell a story for the rise in crude prices for the last six months that is based on the rational digestion of news. Either six months ago folks were overly optimistic about long-term supply and demand conditions or now they are overly pessimistic about those conditions. I don’t think that what changed in the last six months was the ews about supply and demand.

I have been watching the news, and over the past few months it has been quite horrifying, particular with the Democrats and both major party presidential candidates shooting down Shell’s plan to develop shale oil, which pretty much guarantees extraordinarily high oil prices for at least the next two decades. Indeed, the political majority in most of the developed world seem to intend to block all carbon extraction.

There can be no peace with dar al Islam

June 9th, 2008

There can be no peace with dar al-Islam.  In the long run, dar al-Harb must conquer or be conquered – and if dar al-Islam is to be the conquered, the conquered have to be colonized and displaced, as in the early days of Algeria and Israel.

The problem, the reason there can never be peace, is lucidly explained by Dhimmi Watch

Will DME save us from the oil crisis?

June 7th, 2008

To satisfy world demand, as former third worlders become first worlders, and want cars and air conditioning, the world needs to increase production of oil and oil substitutes about three million barrels per day each year. Equivalently, the world needs to increase production one hundred and fifty million tonnes per year per year. Read the rest of this entry »

Europe can’t stop anything

June 5th, 2008

Michael Totten quotes a Serb:

“If Americans said they were no longer interested in Europe, it would be a catastrophe here.”

“You think?” Sean said.

“Yes,” David said, “because Europe can’t stop anything.”

The military weakness and incapacity of Europe in Serbia startled the Serbs, even more than America’s capacity stunned them. Since then, Europe’s martial weakness has been on display in one humiliating debacle after another. Recall Britain’s startling display of fear, weakness, cowardice, and dhimmitude in the Persian gulf.

All that wealth, and no capacity to defend it. The vultures are circling.

For a state to exist, it has to be able to destroy those that oppose it, or might oppose it, to inflict famine and ruin on hostile populations, has to be able burn the crops and flatten the cities, after the manner of General Sherman, and has to have confident belief, a belief shared by officers and men, that it is right to do so.

To do this, it needs some source of cohesion. It cannot provide its own cohesion. Pay and threats will not work to motivate soldiers, for when things go bad, when your soldiers most need motivation, these motivations cannot function, for nothing will motivate people impose the discipline.

The usual source or cohesion is ethnic identity: the nation state. Other sources of cohesion are religion, as for example the various theocratic states, such as the caliphate, and ideology, as for example the American revolution and the various communist coups.

So if a state’s cohesion came from ethnicity, then when it goes multicultural, then its soldiers and police are fighting for pay and pension and nothing more, and then it is are doomed. Similarly, when the last shreds of liberty are crushed out in the US, when the second amendment is utterly gone, and little left of the first amendment, US troops will be fighting for pay and pension and nothing more and then the US will be doomed.

Global Guerrilas reports that Mexico and Nigeria are falling, as bandits, revolutionaries, and suchlike take possession of the Mexican drug trade, and bandits, revolutionaries, Islamists, and suchlike take possession of Nigeria’s oil. But there is a lot more available for the stealing in Europe.

If the Nigerian or Mexican government goes, the Pentagon should secure the oil, but will not be able to do so without will and belief that it is right to do so. That would require an ideology that it reasonable to protect the private property rights of American and allied businessmen – which argument will not fly when they threw them to the wolves long ago, when long ago they allowed the oil and the oil rigs to be stolen by governments that are now failing.

Winning in Iraq

June 2nd, 2008

It is now apparent that the US is winning in Iraq. It is so apparent that even the Washington Post reports it – to the considerable surprise of both myself and others

What then is winning? What does victory mean? Read the rest of this entry »

Predicting housing prices

May 28th, 2008

Since I think I am smart, going to make prediction. Read the rest of this entry »

How to do health care right

May 28th, 2008

The American health care system is socialism without a central plan, and capitalism without markets or prices. Read the rest of this entry »

More maths on oil

May 28th, 2008

Econbrowser publishes oil price estimates in more detail

Bottom line:  Demand is going to rise one hell of a lot.  Supply for that demand just is not there.

This paper does not review supply from coal to liquids or gas to liquids.  The only way to meet demand is to generate liquids from coal by underground gasification followed by gas to liquids conversion.  This will require many, many quite gigantic projects, but at present we have only a small number of small exploratory projects, most them scheduled to start producing around 2015 or so.  So the price of oil will have to rise to quite astonishing levels, at least for a couple of decades.   We have only seen the beginning.

Terror works

May 23rd, 2008

Before the twentieth century, the usual method for suppressing guerrilla war was artificial famine, state sponsored mass rape, and mass murder. During the twentieth century the communists used these methods heavily to quell not only resistance, but to quell resentment, to quell suspected politically incorrect thoughts. These methods generated curiously little resentment. Indeed, it seems that the greater the injury, the less the hostility. Certainly that is how things worked out for the communists. Read the rest of this entry »

Finally, some one else does the maths on oil

May 22nd, 2008

I am continually puzzled by the world’s chronic inability to do basic arithmetic, but I see that econbrowser has done the maths on oil.

There are a lot of people in China.  There are no longer large political obstacles to competent and industrious people in China making money.  Therefore, very soon, a lot of Chinese will be making a lot of money.  Therefore China will soon be consuming an enormous amount of oil.  Econbrowser concludes China will soon be consuming a lot more oil than is ever likely to come out of the ground.

Therefore the price of oil will rise without limit until coal to oil and nuclear to hydrogen fills the gap.  And right now, coal to oil projects are insignificant, and nuclear to hydrogen is not even on the drawing board.  Therefore in the next decade or so, oil will rise to astonishing heights, far above present prices.