Oil Expert See Oil Instability Continuing

One of the things that's particularly annoying about George W. Bush and Dick Cheney is that both are basically fakes. Both avoided serving in Vietnam but they'll smear people who have served. Cheney engages in canned hunts where the prey are virtually brought to him. Bush struts on board the Abraham Lincoln as though he really was the pilot and he really is a 'warrior' president who knows what he's doing.

I've never met Henry Groppe Jr. but I have a hunch he doesn't have much in common with Cheney or Bush despite being an oil man. Here's a story by David Kaplan of the Houston Chronicle:

Houston was rocking and rolling in 1980, with oil at $40 a barrel and some people in the industry predicting it would soar to $100.

One of the few dissenting voices, Henry Groppe Jr., forecasted that by 1985 oil would fall to $15.

"This guy's a nut," Houston energy analyst Matt Simmons recalled an oil executive telling him then. "He ought to be locked up in a straitjacket."

The comment made Simmons laugh because, he said, Groppe is exceptionally calm and gracious.

After oil plunged to $14 in 1986, Groppe was "treated like a prophet with a crystal ball," Simmons recalled.

(snip)

"We are entering an unprecedented event in world economic history," [Groppe] said. Oil production is straining to meet demand at a time when China and India are developing huge consumer classes relatively overnight, and hundreds of millions more people will have vastly increased demands for energy.

In the future, he said, "perhaps the biggest geopolitical conflicts will involve the U.S. against the rest of the developing world, including China and India, over oil."

Groppe sees oil hovering in a range of no less than $55 to $65 a barrel for the next 10 years and likely much more because unforeseeable political unrest and weather will drive prices up.

(snip)

His energy views are not shared by the U.S. Department of Energy, which forecasts that production will continue to rise during the next 24 years.

To avoid a global crisis, Groppe thinks that Americans should use the next 10 years, a time in which production output is expected to peak, to transition into new energy-usage habits.

"We must rely more on nuclear power and alternative energy supplies and use all energy more efficiently," he said.

He is no fan of ethanol, which he calls "pure farm-bloc subsidy." The energy spent on producing it is greater than the output, he said, "not to mention depletion of the topsoil."

I like clear thinkers. Too bad people like him don't work in the White House.