Updates
July 26, 2013: perhaps it's not so difficult to argue with Mr Munger. A reader suggests that Mr Munger is "dead wrong." Consider:
If you think the unemployment sucks now, take about 1.5 to 2
million more people and add them to the unemployment lines if you stop drilling for oil in the United States: the WB,
Niobrara, Permian, the Eagle Ford, Mississippi Lime, Utica, Marcelllus -- all
keeping America going.
And these are not minimum wage, services jobs: they are high-paying jobs for white collar and blue collar.
Also, look at the royalty split. In North Dakota alone: 800 thousand bopd. At a royalty rate of 12.5 % that works out to about $3.1 billion/year. Again, $3 billion in royalties just for one year.
Original Post
SeekingAlpha interview with Charlie Munger.
Munger believes oil and gas supplies will become "incredibly short and very high priced." As a result, he believes:
- Foreign oil is your friend.
- You want to produce domestic energy assets as slowly as possible.
- The oil you leave in the ground is a national treasure.
- Every
barrel that you use up that comes from somebody else is a barrel of
your precious oil, which you're going to need to feed your people and
maintain your civilization.
- There is no substitute for
hydrocarbons: drugs, fertilizers, fungicides, etc. -- all of which China
needs to feed its population -- they all come from hydrocarbons.
- The U.S. has a problem, but China has a bigger problem.
His views echo those of ExxonMobil CEO Rex Tillerson, who also believes energy independence is a bad idea.
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Note To The Granddaughters
I arrived safely back home, the Dallas area, tonight at 6:28 pm. I left south Los Angeles (San Pedro harbor area) Tuesday night, at 10:00 pm -- almost exactly two hours before midnight. I generally start all long trips late in the evening. I prefer to drive at night. The best driving for me: 8:00 pm to 2:00 a.m; then 8:00 a.m. to 2:00 pm. I get drowsy 2:00 a.m. to 6:00 a.m. and almost always sleep those hours. I can get drowsy in the early afternoon, but generally not a big deal.
I drove the whole way by myself taking cat naps (and some of them were pretty long) along the way, stopping frequently, and driving very, very slowly, generally about 55 to 60 mph. I only got up to 65 to 70 when getting out of the way of truckers. The most commonly seen branded truck, again, was FedEx. They were also the most courteous of drivers.
I stopped at McDonald's to blog. McDonald's has a corporate policy, apparently, to remove all electric outlets. At one McDonald's, the outlet was still there, but the wires had been disconnected. In the larger cities, I might find a Starbucks which are absolutely the best place to connect. They almost always have enough outlets. There is one notable exception: Starbucks inside Barnes and Noble: no electrical outlets. And they don't accept Starbucks cards which, of course, makes no sense to me. In addition, the food selection at Starbucks inside Barnes and Nobel is much, much more limited than in free standing Starbucks, and it appears the B&N/Starbux are much more expensive. I highly recommend not using B&N/Starbux if you don't have to. I was not impressed.
But again, stand-alone Starbux restaurants are incredible. My favorite place to blog even when I am home and have internet. (I don't have internet or cable at my new apartment in Dallas, after moving up from San Antonio. Not sure when I will get it. Hardly need it with a Starbucks across the street and a Sports Bar within walking distance -- 20-minute walk.)
It was a wonderful, leisurely trip. I passed within 60 or 70 miles of the Grand Canyon (going both to and from California) but did not visit. I will save that for the trip we all make together, hopefully next summer.
This is an incredibly beautiful and vibrant country. The highways were wonderful. When I got back into Texas with its wonderful highways I wondered why Texas highways were in such good condition compared to the highways on the east coast where population density is so much higher and one wold expect more money available for highway maintenance. Per capita, I can't imagine a state with more highway miles to maintain than Texas, except perhaps Alaska.
I'm also trying to figure out what the average Texan is missing despite no state income taxes, compared to citizens of other states with state income tax. California has both: state income tax PLUS property taxes. Talk radio says that up to half of Detroit homeowners do not pay property taxes because they are unable to pay the tax. The city / state apparently does not go after delinquent property tax payers in Detroit. I don't know. Something I heard on talk radio.
But I digress. It was a great trip. This is now the third long-distance trip in the last few weeks: first, from Boston area to Dallas; the back and forth Los Angeles to Dallas. I enjoy it so much I plan to drive to Williston (from Dallas) and back later this autumn.
Short anecdote about the trip. There's always an agricultural inspection stop on roads leading into California. I looked for one going into California on I-40 but never passed through any inspection going out to Los Angeles this time. Then, returning back to Dallas, I saw the inspection stop on I-40 as I passed it: I honestly do not recall going through this inspection when I drove out to California but I was on the I-40 at that time, and had to have passed through it. The road is very, very straight, and maybe I was sleeping as I passed through, but that seems rather impossible, doesn't it? I can't explain it.
