inflation on the back of unsustainable deficits and bankrupt entitlement programs.” My remark drew murmurs of approval. Inflation is to financiers as garlic is to vampires, and books about the Weimar Republic had become de rigueur reading in the hedge-fund community. “Still, the senator raises an interesting point. We’re not really vulnerable in the sense he suggests until global demand for oil and gas has met or outstripped supply, but it’s only a matter of time until that happens.…”
“Bullshit,” someone said, repeating the coughing trick. It was an audience that turned on a dime and never cut anyone any slack, but I had too much experience with them to be intimidated by heckling.
“Bullshit yourself,” I shot back. “There’s only so much oil and gas in the world. It’s going to happen.”
“When?” Narimanov asked. There was a rustling around the table as people turned to look at him again.
“Hard to say,” I replied carefully, wondering why he’d asked the question. His company did business in dozens of different energy markets around the globe. If anything, he could probably answer the question better than I could. “Short-term, demand fluctuates with the economy, giving us the boom-and-bust cycles that make cities like Houston go broke every ten to fifteen years. Longer-term, though,demand tends to increase at something slightly greater than the population rate, which is pretty much reflective of ongoing development in the Third World. The great unknown is supply.”
“Worst case,” Walter prompted.
“Worst case …” I began. I fell silent mid-sentence, struck dumb by a sudden appreciation of an enormously unlikely coincidence. The real answer to the question lay in the supposedly unknowable Saudi data that Theresa claimed to have given me that very morning. My brain raced as I struggled to understand what the coincidence might mean. Something fishy was going on, and I didn’t like it at all. Alex rapped me on the leg beneath the table as Walter frowned.
“Worst case is that we’ve already passed global peak oil production,” I managed, regurgitating an analysis I’d expounded a hundred times before. “The Saudis claim to be able to produce another three to four million barrels a day, which represents most of the excess capacity in the world. But no one really knows, because they won’t share their production data.” I ran a hand through my hair, trying to stay focused. “There’s a school of thought that holds the Saudis are lying—to us, and maybe to themselves—and that global oil production is set to turn sharply lower in the near future. Anyone interested in the technical argument should read up on Hubbert peak theory. There’s a lot of literature.”
A number of people were taking notes on their BlackBerrys, and I paused to let them catch up, stealing a glance at Alex. He was staring down at his untouched lunch and chewing a cuticle intently. My gut told me I’d been right to suspect Theresa. She’d lied to me. About how she’d got the data, or about why she’d given it to me, or about whether it was genuine. The timing of our meeting was too great a coincidence not to have something to do with this lunch. Maybe she was secretly trying to further Simpson’s candidacy, or maybe she was trying to torpedo him. Either way, I was betting that Alex knew something was wrong. It was why he’d been avoiding me. It hurt to think he might have tried to mislead me.
“If the Hubbert theorists are correct,” I continued, “then Senator Simpson’s right to think that we’re looking at trouble. It’s going to take the United States twenty years—minimum—to transition away from our current energy paradigm, and our economy will be enormously vulnerable in the event of any shortage.”
“Relax,” the guy who’d coughed “bullshit” earlier interjected. “Energy’s a commodity. If we buy less from Nigeria, we buy more from Mexico. It’s just a matter of
“Bullshit,” someone said, repeating the coughing trick. It was an audience that turned on a dime and never cut anyone any slack, but I had too much experience with them to be intimidated by heckling.
“Bullshit yourself,” I shot back. “There’s only so much oil and gas in the world. It’s going to happen.”
“When?” Narimanov asked. There was a rustling around the table as people turned to look at him again.
“Hard to say,” I replied carefully, wondering why he’d asked the question. His company did business in dozens of different energy markets around the globe. If anything, he could probably answer the question better than I could. “Short-term, demand fluctuates with the economy, giving us the boom-and-bust cycles that make cities like Houston go broke every ten to fifteen years. Longer-term, though,demand tends to increase at something slightly greater than the population rate, which is pretty much reflective of ongoing development in the Third World. The great unknown is supply.”
“Worst case,” Walter prompted.
“Worst case …” I began. I fell silent mid-sentence, struck dumb by a sudden appreciation of an enormously unlikely coincidence. The real answer to the question lay in the supposedly unknowable Saudi data that Theresa claimed to have given me that very morning. My brain raced as I struggled to understand what the coincidence might mean. Something fishy was going on, and I didn’t like it at all. Alex rapped me on the leg beneath the table as Walter frowned.
“Worst case is that we’ve already passed global peak oil production,” I managed, regurgitating an analysis I’d expounded a hundred times before. “The Saudis claim to be able to produce another three to four million barrels a day, which represents most of the excess capacity in the world. But no one really knows, because they won’t share their production data.” I ran a hand through my hair, trying to stay focused. “There’s a school of thought that holds the Saudis are lying—to us, and maybe to themselves—and that global oil production is set to turn sharply lower in the near future. Anyone interested in the technical argument should read up on Hubbert peak theory. There’s a lot of literature.”
A number of people were taking notes on their BlackBerrys, and I paused to let them catch up, stealing a glance at Alex. He was staring down at his untouched lunch and chewing a cuticle intently. My gut told me I’d been right to suspect Theresa. She’d lied to me. About how she’d got the data, or about why she’d given it to me, or about whether it was genuine. The timing of our meeting was too great a coincidence not to have something to do with this lunch. Maybe she was secretly trying to further Simpson’s candidacy, or maybe she was trying to torpedo him. Either way, I was betting that Alex knew something was wrong. It was why he’d been avoiding me. It hurt to think he might have tried to mislead me.
“If the Hubbert theorists are correct,” I continued, “then Senator Simpson’s right to think that we’re looking at trouble. It’s going to take the United States twenty years—minimum—to transition away from our current energy paradigm, and our economy will be enormously vulnerable in the event of any shortage.”
“Relax,” the guy who’d coughed “bullshit” earlier interjected. “Energy’s a commodity. If we buy less from Nigeria, we buy more from Mexico. It’s just a matter of
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