Big Oil Warns Of Coming Energy Crunch  

The FT notes that oil company advertising campaigns warning about the looming oil supply crunch are at odds with the message they are delivering to investors. I wonder when oil companies will start getting valued based on existing reserves rather than the assumption that they will continue producing forever at the current rate ?

One senior executive at an oil company not involved in the advertising campaigns speculated that his counterparts were attempting to buy themselves some slack to go after the messier, more expensive, dirty oil. Another executive said it may buy some sympathy for the difficulty many companies are having in growing developing their production and reserves.

Total, the French oil company, this week made the latest acquisition in theCanada's vast Athabasca oil sands, where companies are extracting extra tar-like bitumen from sand in an expensive and environmentally tricky mining operation.

Yves-Marie Dilibard, Total's director of communications, explaining the logic behind its campaign, said: “Tomorrow's energy needs mean developing new energy techniques, going further and deeper in the search of oil and gas. That's at the heart of Total's work today.”

Royal Dutch Shell and BP, Europe's biggest energy groups, have recently felt the effects of venturing into more difficult frontiers. Shell was forced by environmentalists to reroute a pipeline that threatened rare whales in Russia's arctic and last month warned of a $10bn (€8bn, £5.6bn) cost overrun at its Sakhalin project there. Meanwhile, BP battled with a platform in the deep waters of the US Gulf of Mexico that was severely bent by hurricane Dennis.

In its advertisements BP touts new energy alternatives, while ExxonMobil, which has unapologetically abandoned alternatives that have not been profitable, says in one advertisement: “Wishful thinking must not cloud real thinking.”

But answering the concerns of the consumer, even about the possible shortage of oil, is not the primary job of an oil company. Its most important stakeholders are its stock shareholders, some of whom have been left perplexed by the advertisements after hearing a very n altogether different message at last week's earnings conferences.

Neil McMahon, analyst at Sanford Bernstein, said: “We think these messages are at odds with the comments normally made to investors regarding future oil prices and the ability of producers to meet demand, and we wonder if perhaps those messages are actually a better indicator of the companies' thinking.”

Big Oil tells us this now, when they are sitting – and I mean sitting – on mountains of cash that could actually be saving lives. It was Big Oil that lobbied to have American mass transit systems ripped up and destroyed in the 1950s. It was Big Oil and chemical companies like Monsanto that laid waste our farmland and our seed stock. Monsanto and other large corporations have actually patented living things. It was Big Oil that took away the American people’s basic knowledge of farming and gave us unfarmable pavement. It was Big Oil that unleashed a global warming which now breathes down our necks like a hungry Saber-toothed tiger.

Noticed any hurricanes lately? Been a little warm this summer? Heard of any blackouts anywhere? If this winter is cold you’d better know something about cold weather survival and candle making. Global warming does that by the way. It starts Ice Ages that spread rapidly. FTW will soon be offering a book for sale that shows that one ice age cold snap enveloped Europe in less than a year about 11,000 years ago. The book is dramatically understated about “anthropogenic” tinkering with the environment. Mankind is, at minimum, accelerating a mechanism that was already in place.

My fiancée, who is finishing a Master’s degree in Ecological Agriculture, casually said something to me yesterday, almost in passing. It was profound:

“Isn’t it possible that Mother Earth is developing a fever to rid herself of an infection?”