The oil trader known by rivals as “God” predicts the US shale revolution will only “temporarily” boost production and oil prices will remain high, siding with Saudi Arabia and the Opec cartel in a debate gripping the energy market.
Andy Hall, whose lucrative bets on oil prices earned him a $100m salary at Citigroup in the 2000s, told investors that the rapid decline in output suffered by shale wells is “likely [to] mean that the bounty afforded by shale resources is temporary”.
Do you remember George Orwell’s invention for ‘1984’ of double-speak? The Ministry of Love was really the Ministry of Hate and so on.
There’s some loud double-speak going on at the moment to encourage shale-gas extraction. The Church of England in one quarter has rushed to suggest it will ‘help the poor’ with cheaper bills (though experts believe this is unlikely) and Cameron suggests it will usher in boom times.
But the reality seems to be the complete reverse. Read this from one of the world’s most articulate and knowledgeable commentators on environmental and energy issues, Archdruid John Michael Greer:
Big oil names Shell and BHP Billiton are writing down the value of their shale assets by billions of dollars. Meanwhile the value of oil and gas-related transactions, among the top profit centers for Wall Street every year since 2005, has dropped like a rock and, unless something changes drastically, won’t even make the top five list this year.
Nor is this happening solely on Wall Street; out in shale country, too, the boom is grinding to a halt. The pace of drilling in the Fayetteville shale has dropped precipitously this year; in Texas, meanwhile, gas production from the Barnett Shale has dropped more than a billion cubic feet a day, to levels last seen in 2009; while in the Marcellus Shale country of Pennsylvania, insurance companies are starting to cancel homeowners insurance and home mortgages are becoming unavailable as the health and environmental toll of reckless shale development piles up.
Headlines of this sort are becoming increasingly common in the financial press as one month gives way to another. With utter predictability, so have articles and essays in the mainstream media crowing about the supposed end of peak oil, and financial-advice columns urging the general public to get out there and invest their life’s savings in shale oil and gas. Those who recall the way the housing bubble played out over its last year or two will recall this same phenomenon: as the fundamentals turned sour, the chorus of pundits praising the arrival of a new age of prosperity for all got louder and louder, until the crash of collapsing prices finally drowned it out.
Exactly how long it will take for the shale bubble to tip over into full-scale bust probably can’t be known except in hindsight. The same principle probably applies just as well to another question that may be even more explosive: just how much of Wall Street and the broader US financial industry depends on income skimmed off the shale bubble for its economic survival. It’s when the tide goes out, as Warren Buffet famously said, that you find out who’s been swimming naked; when the bubble bursts and companies with heavy exposure to the fracking industry can no longer cover their day to day costs by tapping into the money flows any speculative boom attracts, the consequences could fall anywhere along the spectrum from sharp regional recessions in shale country all the way to panic selling on global markets and a reprise of 2008’s economic turmoil.
Bless air’s gift of sweetness, honey
from the bees, inspired by clover,
marigold, eucalyptus, thyme,
the hundred perfumes of the wind.
Bless the beekeeper
who chooses for her hives
a site near water, violet beds, no yew,
no echo. Let the light lilt, leak, green
or gold, pigment for queens,
and joy be inexplicable but there
in harmony of willowherb and stream,
of summer heat and breeze,
each bee’s body
at its brilliant flower, lover-stunned,
strumming on fragrance, smitten.
let gardens grow, where beelines end,
sighing in roses, saffron blooms, buddleia;
where bees pray on their knees, sing, praise
in pear trees, plum trees; bees
are the batteries of orchards, gardens, guard them.
“Virgil’s Bees” by Carol Ann Duffy, from The Bees.
I’ve just experienced this beautiful meditation with film by Claire Farman and music by record producer Youth, who has had a long association with Druidry and the Perennial Wisdom Tradition. A wonderful way to bring a sense of calm and spaciousness after a busy time at the computer screen.
But first a picture of our reviewer in Goa, ‘Before’, as it says in the caption, ‘the invention of the foot spa.’
From his review:
...There’s also a nice chunk on psychedelic art where he delves into the visionary art of Alex Grey. I remember DJing at an amazing party for Alex in San Fran in the late 90′s with all his art on the walls and naked waiters in bow ties serving cocktails. There’s also a good section on Kesey and his Merry Pranksters who again I met in the 1990′s when he toured the UK in a revamped bus with some of the original pranksters and a Channel 4 daily TV update on his exploits.
I had invited him to a Society for the Reformation of Ancient Enchantment event in the Boscawen stone circle in Cornwall (I was a co-founder of the group). The Society was honouring him as an honorary bard for services to enchantment. It was amazing, with 200 freaks and King Arthur (check CJ Stone’s fantastic book on this ex-Hells Angel and eco warrior, who believes he is the reincarnated future king!) putting various people under his sword to initiate into his war band. Then Kesey turned up with bus and new wife in tow. A druid ceremony was performed and he was presented with a crystal while his wife was presented with an English rose as a welcome by my young daughter. His wife steadfastly raised her palm in refusal stating she was a born-again Christian and couldn’t accept a ‘Pagan’ gift. There was a low mooing moan from the assembled freaks shocked at such outright rudeness and ignorance, Kesey turned beetroot red with embarrassment and we swiftly moved the ceremony on. Afterwards I invited them to a proper acid trance party organised by legendary party innovators Ahimsa that was up the road, it was hilarious.
The bus followed us as we drove into this field where about 200 freaks, tripping off their nuts, gawped as the ‘Further’ Bus circled the field like something from a surrealist dream, the freaks barely blinked and just carried on dancing, probably dismissing it as an hallucination. The bus didn’t stop and the Keseys wanted out of there fast. I could understand their trepidation; these cats were in their 70′s now and they weren’t going back into ‘the field’ again. Not now anyway. However the most hilarious Monty Python-esque moment occurred as they left. Since they’d appealed to the public on TV to join them in a convoy on their journey, there were about thirty cars and vans following them. Suddenly the bus stopped and Kesey’s wife stepped out onto the rear platform, held her palm aloft and stated to the assembled convoy (who were by now all out of their cars): “Stop! Do not follow us, leave us alone!” Then one lone hippy voice piped up from a young student-type, who said: “But, you said on TV yesterday to follow the bus? We’ve driven 400 miles to be here for you.” She curtly replied: “Well, we have changed our minds… Please just go away” and swiftly turned her back on us, and them, and went back into the bus! The convoy turned around and went back to Ahimsa where a wonderful time was had by all.
There were some lovely people on board that bus that, I realise now, I was very fortunate and privileged to meet, not least Kesey but at that moment I was thinking, ‘Who was it who said “never meet your heroes’”? Classic…Youth
I was going to mail this letter today privately, in the remote hope that the message actually might get through to our PM who would then have a sort of ‘Road to Damascus’ moment! Reading his article in the Telegraph yesterday I now doubt this very much, so I’m still posting it, but I’ve also posted it as a comment on his article. (You can ‘like’ the comment by clicking to show the PM’s press people who read these things that others agree – if you do of course!)
I can quite understand the apparent advantages of encouraging fracking, but I do urge you to consider the following points:
1. Your government seriously misjudged the concern people have for their environment when the public woodlands sale was mooted. It was very wise to back off from that project quickly.
2. The same story is repeating itself with fracking. Although people like money, when the chips are down they don’t want their countryside ruined, their roads clogged with lorries, their water and air risking pollution. They want to protect their country – if necessary from the government who promised to be the ‘greenest ever’. Remember your party has 130-177,000 members, the National Trust has 3.8 million. People really care about the countryside.
3. Offers of a million, or more correctly a hundred thousand pounds, do not seem attractive to most people. They smack of desperation, and the need to bribe a community. If you will forgive the image, it looks like a man offering sweets to children while his friends nip round the back and tip chemicals in the soil.
4. The tax breaks for fracking companies – from a PR point of view this is a disaster. The public associates tax breaks with attempts to shore up ailing industries. It gives the wrong signal, and people are starting to realise that this highlights the investment risks – that profitability is not guaranteed. Its timing is also disastrous – just as people are becoming aware of the tax-dodging by big corporations, they see that the tax payer will be effectively funding the degradation of their environment.
It’s not too late to back away from this. If you do, saving face by saying ‘We have listened to concerns’, setting up enquiries etc., and then ensuring it never happens, the British people, and history, will perceive you not as weak, but as a champion, a defender, of the landscape of Britain. If you continue to support fracking, your popularity will wane, at the first sign of problems – earth tremors, chemical spills, damage of any kind – you will lose support massively, will lose the next election, and be remembered as the man who was so weak he gave in to financial interests and the man who didn’t care about the land he was supposed to be governing.
Do please assure me that you will be taking the former rather than the latter course.
Formby Beach, owned for the nation by the National Trust
‘We have a presumption against fracking on National Trust land because natural gas is a fossil gas. The mining process also gives rise to potential environmental and landscape impacts.
Fossil gas is a finite resource that can only be mined and not harvested – it is not renewable. Its combustion produces greenhouse gases which we believe contribute to climate change. Climate change has a significant adverse impact on our core purpose of looking after special places, for ever for everyone.’
The most extraordinary thing happened a few days ago. David Cameron, Britain’s Prime Minister, announced that local communities with a nearby fracking site would be rewarded immediately with a million pounds. Aides hastily scrambled to explain that the figure was actually £100,000.
Well that’s marvellous – I’d put up with the sound of drilling 24/7, the disappearance of my local dawn chorus (which has now happened in Balcombe) and the possibility that my water or air might be contaminated for a share of a million, oh I mean £100,000.
Air pollution – you don’t see that mentioned much in the debate on fracking – but Sir David King, the government’s former Chief Scientific Adviser, spoke on the Today programme (BBC Radio 4) this morning, and said that gas leakage into the atmosphere was a real risk – that it happens in the US, and that this contributes to green house gas levels. He believes fracking should only be considered if regulatory processes to cover the risks of water and air pollution are in place. They are not.
Still, a bit of cash…who cares? And maybe I’ll buy some shares in the fracking companies. It’s a poor investment, but… David King again:
Sir David King, former chief UK government scientist, “noted that production at wells drops off by as much as 60-90% within the first year”. To deflect attention from that rapid decline of profitability, the big US companies involved (eg, Eagle Fox in Texas) are having to drill “almost 1,000 wells in the Eagle Fox shale site every year, just to keep production flat”. In consequence, huge losses are being made in the borrowings of such companies, losses from which the companies and banks involved are making great efforts to deflect attention. (From ‘The Environmental Realities of Fracking’)
It’s a bad investment decision, but look – the UK government is giving the companies massive tax breaks so that means they’ll make money! The tax-payer’s money of course, because the profit will come from this licensed tax dodging, but who cares? It’s cash! Usually governments give tax breaks to ailing industries to stop them from dying.
So here’s a prediction: the financial underpinning of this whole fiasco will become more and more known, more and more discussed, and then the industry will have fracked itself. The cracks will become visible, the shaking will be heard – first in the City and in the boardrooms of banks like HSBC who have invested in fracking companies – and then the pollution of corruption and greed will seep to the surface and will become obvious to even the most cynical ‘person-in-the-street’.
A graduate address given by the American writer George Saunders has gone viral on the internet, and despite being very short – you can read it in a few minutes – will soon be published as a book by Random House.
Why? Because of the value of its central message, and because its down to earth and witty language belies a beauty that you can glimpse in this quote from towards the end here:
“Do those things that incline you toward the big questions, and avoid the things that would reduce you and make you trivial. That luminous part of you that exists beyond personality — your soul, if you will — is as bright and shining as any that has ever been. Bright as Shakespeare’s, bright as Gandhi’s, bright as Mother Theresa’s. Clear away everything that keeps you separate from this secret luminous place. Believe it exists, come to know it better, nurture it, share its fruits tirelessly.”
That sounds wonderful doesn’t it? But see how he begins:
“Down through the ages, a traditional form has evolved for this type of speech, which is: Some old fart, his best years behind him, who, over the course of his life, has made a series of dreadful mistakes (that would be me), gives heartfelt advice to a group of shining, energetic young people, with all of their best years ahead of them (that would be you). And I intend to respect that tradition.”
Saunder’s writing is deeply human, an absolute triumph.