Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports. LINK A National Enquirer the paper is not. It is one of China’s leading business newspapers, with a daily readership over three million]. This newspaper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?
Until recently, the IEA’s forecasts have been based on the premise that there was plenty of oil or equivalent hydrocarbons left to extract. Forecasting future production was simply a function of extrapolating demand. However much oil the world needed and was ready to pay for, the oil industry would provide. This premise of course undercuts the notion of world oil production peaking anytime soon. As long as there is plenty of oil to extract in the foreseeable future, world production should not peak. It was this premise and associated judgments that serve as the basis for most of the world’s governments denying or at least avoiding discussing very loudly the idea that world oil production will soon be going into decline.
In recent years however, as world oil production stagnated, and as more attention was focused on rates of oil depletion vs. the likelihood of offsetting new production, the IEA’s basic premise became more and more untenable. This year the Agency succumbed to reality and addressed the issue of stagnating oil production head-on with detailed discussions of oil depletion around the world.
As one cynic put it, the IEA was given the job of forecasting enough energy production to allow the world’s economy to continue to grow for the next 20 years, and then set about constructing a scenario, however implausible, of how this might happen.
“The competition for capital will become an important topic of debate before long. Precious funds are already being wasted on failed Wall Street firms, and on undeserved executive bonuses. Deaths for companies are being decided, not by the marketplace, but by a czar. Where will money come from to fund vast wind farms, or new gasoline refineries, or the infrastructure projects once promoted? Where will money come from to fund hybrid vehicle ownership? Too much money is now chasing failure so that jobs are preserved. Too much money is now redeeming failed financial vehicles, giving their elite owners a second chance…”
