Most Helpful Customer Reviews
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20 of 20 people found the following review helpful:
3.0 out of 5 stars
Limited Value, 7 April 2006
A welcome addition to anyone's Peak Oil library, but depending on the reader's knowledge, the book may only be of limited value. Althought the subtitle 'how you can thrive when oil costs $200 a barrel' is really catchy, Leeb does not actually give any specific financial advise until the last 3 chapters. And once he does get to this part, there were no real surprises; avoid cash, bonds and stocks in vulnerable sectors and concentrate on precious metals, oil companies & services and real estate. The other 12 chapters are well written, structured and researched but a lot of information is fairly irrelevant and not very to the point. One of the better chapters discusses the underlying psychological reasons / blind spots (Groupthink, Authority and Conformity) for the imminent crisis, and help to explain why Peak Oil is still invisible in Wall Street and the media, and may help anyone to emerge from denial. A weak point in the book is how the author keeps mentioning that he would not be writing the book unless he thought the crisis be avoided. However, he fails to provide any feasible or realistic solutions, as there really aren't any. He mentions in one of the chapters how wind energy may save the world, quoting an estimate of how 40,000 windmills could replace 5% of the USA electricity supplies. In other words, it would take 800.000 windmills to replace all of it, and that is only at current electricty production rates, whose share of fossil fuel consumption is almost negligible anyway (<10%). The author does not take into account the huge amounts of power needed if we wanted to convert, like he suggests, the 200 million car fleet to hydrogen or similar fuel. We would need many millions of windmills, requiring massive amounts of oil and other scarce resources to locate and mine the raw materials necessary - some which have already entered permanent states of scarcity - to build them and even more oil to distribute them, maintain them, and adapt current infrastructure. In my opinion, there's no readily available source of energy that can replace oil as it steadily declines over the coming decades. In their present form, alternative energies are simply not capable to replace fossil fuels at the scale, rate and manner at which the world currently consumes them. And I think the author knows this, but is reluctant to admit to this.
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12 of 12 people found the following review helpful:
5.0 out of 5 stars
Worse case scenario or most likely?, 29 Dec 2006
There are two aspects to this book, or perhaps I should say two parts. Part one is a warning about the energy crisis to come. Leeb feels that unless we do something quickly in terms of building an infrastructure for a new source of energy not based on fossil fuels and certainly not based on oil, which is at or near its half-life, we may face the collapse of civilization. That's the worse case scenario. Part two is advice to investors on where they should put their money as the oil patch runs dry.
In a sense this is an update of The Oil Factor: Protect Yourself--and Profit--from the Coming Energy Crisis (2005) which Leeb wrote with Donna Leeb. The message is the same although his projected price of oil has gone up from $100 a barrel to $200 a barrel. With oil topping $65 a barrel in the interim, it looks as though Leeb may very well be right in his prognosis.
I did not note this in my review of The Oil Factor, but Leeb's PhD is in psychology. He edits a newsletter "The Complete Investor" and is obviously an expert on matters financial. I think the combination of hard-headed economic insight that he brings to the subject and his understanding of human psychology, especially the psychology of the herd, is part of what makes this and his previous book so interesting and valuable. Furthermore, Leeb is an unusually lucid writer (with help here from Glen Strathy). His clear prose makes the pages turn easily and he leaves no doubt about where he stands on the energy issues.
However, where he stands politically is deliberately unclear. He makes a point of not getting political in this book. Although it must be the case that he has little patience with the energy policies of the present administration, he never really directly says anything bad about George W. Bush, at least not by name or title. However, a question like this from page 38 gives us a hint: "Why do societies not replace shortsighted, closed-minded leaders with others who are willing to make tough decisions for the greater good?" On page 62 he makes this comment: "...we believe the coming oil crisis will be the biggest test our civilization has ever faced, thanks to a shortsighted leadership that has taken few steps to prevent it."
Leeb believes that bad decisions made by our leaders both governmental and corporate stem from what he calls "groupthink"; that is, the human propensity to go along with the majority opinion. He recalls some rather infamous psychological experiments that show people will actually inflict torture on others if they think that's what an authority figure wants, or will disbelieve their eyes if their eyes go against the majority opinion. His central message is that we have to look at the facts and see the long run if we are going to make the transistion from an oil rich economy to an economy without oil.
He believes it can be done, but that it will be difficult. It estimates that the cost of retooling our energy infrastructure to live without oil will cost in the neighborhood of one trillion dollars. He calls this an investment on the scale of the cost of World War II (p. 141), and he believes it is just as necessary. He warns that the coming oil shortage could lead to nuclear war as the various countries become desperate for energy. (p. 128)
His investment choices are much the same as in "The Oil Factor": buy energy stocks, buy gold, and prepare for double-digit inflation, perhaps on the scale of what we had in the seventies and early eighties. I did a quick check of six specific stocks he recommended (MMM, KO, INTC, PG, TXN, and GE) and three are up and three down since the book was published. Gold however is up 20% and the oil company stocks up almost as much.
Bottom line: very much worth reading and digesting and comparing to other points of view.
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5 of 7 people found the following review helpful:
3.0 out of 5 stars
Hmmm....., 5 May 2006
I don't know why I thought that this 'how to' title might be different from all the others, but I did. Perhaps its the weight of the subject matter.
I've just finished the book and am left feeling ambivalent about it. However, for me, it was worth the read, and has done something to give perspective to my panic about the coming shortages. I've not read anything else by Leeb, and i'm not an investor, however, it seems reasonably plausible.
That said, for all his talk of 'groupthink', i'm not convinced that he's entirely free of bias, and it bothers me slightly that he doesn't really acknowledge this, at least not enough to make me think that he has the self doubt that, in my opinion marks a wise man.
All this aside, i'd recommend you to read it, if only for the staggering importance of the messages, especially if the subject is just dawning on you....
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