executive shows that the executive trusts the reporter, but he wouldn’t be
giving his time to a scoundrel bent on making things tough for him.
Meanwhile, I started to do more research on the issue, asking hard
questions, and privately investigating what industry leaders knew, when
they knew it, and what they intend to do. It didn’t take long before I
found out part of the answer.
A senior editor told me about a meeting he had with oil executives
where that topic was discussed, and their consensus was that global oil
output would soon be peaking. The meeting was private and no one
wrote about it, but it showed rare candor by the industry executives.
On hearing that, I immediately became skeptical of anything oil executives
said. Their primary goal is to protect themselves and their shareholders.
This book is a product of my eight-year experience covering and
talking to some of the industry’s leaders and experts, among them: British
Petroleum chairman and chief executive John Browne; Royal Dutch
Shell chairman and chief executive Jeroen van der Veer; Premcor chairman
and chief executive Tom O’Malley; and former Halliburton chief
executive and current U.S. vice-president Dick Cheney.
While shedding some light on the prospects for global oil peak, in this
book I have devoted more time to discussing the consequences to our lifestyle
and what we could do to prepare ourselves. In addition, I have discussed some
investment choices for investors to investigate in the wake of the oil boom.
Anyone who follows Wall Street (even a little) knows that oil and refinery
stocks have been rising like there’s no tomorrow. Even the worst
performers among oil stocks are making huge profits. Oil companies
now occupy a lofty perch that would have been impossible just a few
years ago. If the 1990s was the decade of technology, the first decade of
the new century is one of oil boom.
Major oil companies such as Exxon Mobil, BP, and Valero have displaced
Microsoft, AOL Time Warner, and General Electric from the
high table of capitalism. For instance, Valero’s outlook for 2005 was even
better than the previous year, when many refiners posted record profits.
Valero’s stock price increased by more than 50 percent in 2005 to $80 per
share. Like other refiners, Valero’s earnings have exceeded expectations
every quarter for the past two years. “The best is yet to come,” is how
Valero’s senior vice-president for refining operations put it.
You already know that the oil boom coicides with debate about “oil
peak oil,” but my view is that instead of mourning the impending tight
market, investors like you and me should actually embrace it, at least for
INTRODUCTION 13