Oil Lessons With Miss J

A gallon of gas can’t be purchased anywhere for any amount of cash

A couple weeks after American bombs started dropping on Iran, I received a text from a long ago colleague and old friend, Miss J. She wrote, “I think you should dust off that Energy/Oil slide deck, update it—tho probably will not take much updating—and then do a YouTube video and send it out.”

As well intentioned and even more greatly personally appreciated as the request was, after trying for over four decades, I find talking oil with Americans an impossibility, though most likely not for much longer. Cheap and abundant oil was always held as a God given American right, even though Allah seemed to have plopped the biggest reservoir of global oil supply around the Persian Gulf. Miss J's above mentioned slide deck was something I put together twenty years ago at her request for her high school classes in Sacramento. A little backstory is appropriate here.

My energy perspective was shaped early by oil. My conclusion, the US needed to use less. I was twelve in 1973 when the first “Oil Shock” made a life defining impression on me. I witnessed physical life in America change, the only thing since comparable was when the economy closed for COVID. My first campaign in 1980 saw oil, inflation, and funnily enough Iran as the top issues. In his final State of the Union, Democratic president Jimmy Carter announced the Persian Gulf was now an American protectorate to be militarily secured. Nine months later, Carter decisively lost reelection gaining only 41% of the vote.

After a brief rehab flirtation, the US chose to do nothing about our oil addiction. The brief rise of renewables and just as importantly efficiency were quashed by the Reagan Revolution. Instead, over four decades, trillions of dollars would be spent on the military, offering an excruciatingly brutal and false sense of energy security. In 1991, H.W. Bush launched what history will call the first Oil War. Depending on how you’re counting, we are now in the third oil war, but if we add “excursions” like Obama’s into Libya and Syria, the count goes up. One thing all had in common, they were sold to the American people as being about freedom, democracy, dictators, and WMDs, never ever about oil, you were an unpatriotic sod suggesting such.

In 1992, I helped put together a presidential run with the former and future Governor of California. The campaign’s message was simple. American politics were broken and if we, the American people, with purposeful intent and effort, didn’t revive, reform, and evolve our politics, the system would only become more corrupt and dysfunctional. Greed and blood drenched militarism was no oil solution. Here we are 34 years later, thank you very much.

After 92, I left campaigning looking to get into either the burgeoning internet or energy business. California put forth the idea of restructuring the electricity system. At that point, it was clear to all, or should have been, the regulatory system birthed with the utilities, that bestowed state granted monopolies wasn’t functioning well. The utilities completely dominated the process. Restructuring a good and necessary idea I supported as a way to help give a charge to renewables, particularly solar. However, because politics was ever more dysfunctional and corrupt, the restructuring process resulted in a financial fiasco of historical proportions. A fiasco no one remembers today.

I met Miss J in ‘94 or ‘95. She was working for the renewable lobbying group in Sacramento, a stereotypical liberal Democratic bunch, who I liked a lot. As all good liberal Democrats of the time, they were knee-jerk opposed to restructuring in any form. I first had a phone conversation with Miss J’s boss, Mr. White, a very politically astute guy. He had come to Sacramento in 1975 with the first renewable push. I remember very specifically advising in our first call, “These are the Clinton Capitulation years, everything’s for sale, you will not stop this (restructuring). Best to get in there now and push whatever can be levered out of it.”

He listened, not convinced, then had me talk to Miss J. She will tell you, her first impression of me was “he’s crazy.” Nonetheless, she kept in touch.

Some months later, she came down San Diego way and we had lunch at a little cafe, where they play guitars all night and all day. She was in town organizing for an upcoming hearing on SONGS (San Onofre Nuclear Generating Station). It had opened in 1968 on the northern most beach of San Diego county, at the top of the Camp Pendleton Marine Base. Nukes were the American electricity future of the Ike coined “Military Industrial Complex.” “Too cheap to meter,” they said.

In the mid-90s, for Sacramento Democrats, San Diego was considered a Republican backwater. Miss J asked me who to call to get people to the SONGS hearing. She probed for the usual Democratic suspects. I replied, “No. No. The environmentalists in San Diego are not south of the 8. They’re all up in the North County, a lot of them are Republicans.” Peter Navarro was a perfect example of a North County environmentalist. I gave her some names, including Peter’s, she called and filled her hearing.

After the hearing, she figured I was not completely crazy, maybe. A year or so later, Miss J was the first person to hire me to do energy work. I did her firm’s website. That’s right kids, in the mid-90s, old Joe was HTML fluent, even a little Java, but coding as work? No thanks. It reminded me too much of working on what would be my last car, a fuel injected, four cylinder ‘74 Volvo I had kept running for eight years, “God damn it, this part is supposed to fit here!”

For the next four years, I worked closely with Miss J and a coalition of enviros, politicals, businesses, and citizens. The one good thing that came out of the AB 1890 restructuring bill, and remember it passed both California chambers unanimously, was homeowners, businesses, municipalities, et al. could buy electricity directly from renewable providers, bypassing the very anti-renewable utilities. We ran the program to educate the public about the ability to now switch away from the utilities and we helped them switch. We were very successful in our efforts. People, businesses, the City of Santa Monica, Oakland, a number of other local governments, with many more lining up, were switching to renewables, directing their monthly electricity payments to build more.

There’s no failure like success. The utilities and their minions in Sacramento hated us. So, in 2000, when the lights literally started going out with one of America’s greatest ever swindles, our program was the first canceled. Money cut off. The utilities’ monopolies restored. After 7 years, half of them not paid as I pushed to get into the energy world, I was out of a job. Did I mention Miss J’s a lot smarter than me? She got out right before the collapse, which is ironic, or maybe not. While I was neck deep in the whole thing as it collapsed on my head, she had been fully submerged, ten feet under. The stories she can tell, the bodies, bodies everywhere.

Despite costing Californians some 80 billion dollars in pure fraud, corruption, dysfunction, no one went to jail. Although it did end the political careers of both Gray Davis and Steve Peace, so maybe California got off cheap? One thing confirmed certain for me, American politics were broke.

I need to stress it’s a very small group of people that know much of anything about energy in America and this was the late 90s – dotcom mania, blowjobs in the Oval Office, and $10 a barrel oil – Oh Bubba! No one talked about oil except Secretary of State Madeline Albright, who acknowledged though a hard decision, it was worth killing all those Iraqi kids.

Miss J went off to teach high school. After a few years at high school and with the new American occupation of Iraq, she asked me to do an oil presentation to her students. She had heard earfuls from me about oil when we worked together. So, for a couple years, I presented the “Energy/Oil slide deck” to two or three of her classes. Before she texted me, I had recently thought about those classes, thinking if any of those kids had listened, there’s a couple of millennials running around California who understand the present Iran travesty.

Miss J is right, the slides wouldn’t take much updating. Using the most recent EIA numbers, 3 countries – US, Russia, and the Sauds – produce 42% of global oil supply. Only 9 countries produce 72% of total global oil supply. In the 20 years since, 9 other countries’ production decreased over 30%, over 8 million barrels a day (mbd). How much any given barrel costs to get out of the ground at this point? To use the mathematical vernacular of innumerate America, “a lot” more than it cost twenty years ago. Also, much less new oil has since been discovered and whatever is found is a lot more expensive to get out of the ground.

In the last 20 years, the real global wild card in new oil was the Obama Shale Revolution, beginning in 2008, when oil last hit a $150 a barrel. Everyone who knew anything about oil understood the oil was there, but no one, and I mean no one, would tell you then that by the end of Obama’s presidency, they’d be horizontally pumping-out 7 million barrels a day. However, the biggest difference wasn’t the horizontal wells, it was the debt that funded it. For a 150 years previous, pumping oil had been printing money.

In regards to our present quagmire, shale allowed a propagandizing that the US was energy independent, despite the fact we still import 6-7 mbd. Although four million of that is from Canada, so maybe it’s in part how you regard Canada’s claims to sovereignty. Shale paved the way for our 80 year old, enfant terrible president to delusionally disregard the fact 20% of global oil supply, including refined products like diesel and jet fuel, not to mention a lot of LNG, fertilizer, go down the petro-product list, all still comes out of the Persian Gulf. Even if America “get’s no oil from the Gulf,” which isn’t true, all that oil leaving the Gulf and going elsewhere is essential to keep the corporate global order spinning. There’s no ability to replace it, anywhere.

It was not just the president’s mind suffering from shale delusion, it is a national affliction. However, now two months in, even the NYT’s shale fog seems to be lifting, The Forces of Scarcity Hitting Asia May Soon Spread Across the World:

“The impacts are so rapid and deep,” said Phillip Cornell, a senior fellow at the Atlantic Council’s Global Energy Center who is based in Sri Lanka. “Just from a magnitude perspective, this is really very, very, very large.”

Africa is facing increasing shortages and the pinch on Europe grows. The longer the Strait stays closed, whether by Iran, USA, or both, the worse it gets for everybody.

Already, the US has experienced the fastest, steepest increase in cost to fill-up their car tanks in history. The US Farm Bureau warns most farmers can’t afford fertilizer. I could go down a long list, but have no desire. What’s coming, will come. The impact of America’s half-century blatant refusal to do anything about our oil addiction except build more bombs will be unavoidable for all.

Miss J ended her request to update my 20 year-old oil presentation with, “At least folks will know what they’re missing in NOT hiring you” – funny, funny stuff. She always had a good sense of humor. If you're politically astute, humor is essential. Now, forced to confront reality in regards to our oil abuse, keep in mind America, no one is innocent, though certainly some are more culpable.