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>Peak Oil – The Great Tsunami

2006/03/31 1 comment

>by Michael Payne

Online Journal (February 18 2006)

A long-predicted tsunami is heading toward the shores of America, a wave of incredible proportions, gathering momentum with each passing day. America has had many, many warnings of how this giant wave would develop, but these warnings have been totally ignored. Very soon our American society will experience an extremely painful awakening to the dark specter of “Peak Oil” as it looms on our horizon and then comes crashing down upon our nation. Peak Oil will result in drastic and dramatic changes to our society and our lifestyles, the likes of which we will find extremely difficult to comprehend.

By now, most Americans know what a tsunami is. However, the vast majority of America has no clue as to what Peak Oil is. In the simplest of explanations, Peak Oil is that point when the total world production of oil and all known reserves are surpassed by the world demand. At that point the supply will be steadily reduced and the ravages of Peak Oil will begin.

The US experienced an American Peak Oil in the 1970s when, because of our lack of production capacity and reserves, we were forced to import more and more from foreign sources. Our insatiable appetite for that black gold has now increased to the point that we are now importing about two thirds of our total oil consumption from OPEC and other exporting countries.

Of the approximate 84 million barrels of oil consumed on a daily basis by the nations of this planet, the US consumes roughly 21 barrels million of that total, or about 25 percent – an astounding figure for a nation that represents about five percent of the entire world’s population. Now that the economies of China and India are growing very swiftly, they are consuming greater and greater quantities of oil. With this new sharp upward spike in world demand, the specter of Peak Oil looms over this planet more ominously with each passing day.

Is Peak Oil a solid theory? Numerous world-class scientists and petroleum experts have conducted intensive studies of this predicted happening over many years and are convinced that it will not only happen but that we are now situated at its very beginning. There are detractors, of course, who say that these scientists and other experts are practicing scare tactics just as those who have issued dire warnings about Global Warming. Even so, some of the most knowledgeable experts in this field are of the opinion that we have already entered the Peak Oil era; many others say that it will begin somewhere between 2006 and 2010.

While I am personally convinced that Peak Oil is a definite reality that America and the world cannot avoid, it seems apparent that Americans simply have no conception of this monumental problem they will soon have to face. They hear little to nothing on network or cable TV or in their newspapers or magazines. To become knowledgeable, Americans must tune in to the Internet. Websites such as peakoil.com, fromthewilderness.com are good starting points. Answers.com is a great website that identifies a wide array of other websites that concentrate on Peak Oil, as well as all sorts of references and links to essays and discussions on this subject. Googling “Peak Oil” will also bring up numerous links.

Now, let’s examine and discuss just how our lifestyles, yours, mine and those of all Americans, will be radically changed forever, and will never be the same, at least until this planet can be powered by energy other than fossil fuels. As you gain knowledge about Peak Oil, you will understand that the supposed fallback certainty of alternative energy, including hydrogen fuel cells, electric cars, windmills, et cetera is more talk than action. Our government, automakers, and corporate energy giants are doing little to nothing to promote conservation or develop new energy sources. Fossil fuel is king and those in power are more than willing to accept that sad fact.

The Four-to-Five-Car Family – One of the very first casualties of the effect of Peak Oil will be that the four-to-five-car family will disappear, as it should since it is one of the most egregious examples of how petroleum is wasted in the US. The now common practice of high school seniors being given their own vehicles, with many unnecessarily driving to high school will abruptly end. The great American dream of the automobile that has now turned into a virtual nightmare will see a drastic reduction in the number of autos in this nation. Because fuel will simply not be available for millions of America’s autos, families will be forced to share and cooperate as they have never done before. They will have no choice.

Gas Guzzling SUVs, 500-HP Pickups, Hummers – The sales of overly large, grotesque SUVs, the monster pickup trucks and the totally nonsensical Hummers will quickly tank and millions of these societal aberrations will end up in the scrap heaps long before their natural life has passed. That will be a blessing in itself. Many, many Americans will be forced to wake up and will gravitate to the high mileage hybrid autos pioneered by Toyota and Honda, now also being developed by US automakers.

Our National Trucking, Distribution System – The very lifeblood of our entire economy will be severely crippled as millions of trucks will find less and less available fuel. This, of course, will directly affect every element of our economy as noted in sections below. Years ago when railroads should have been subsidized through intelligent planning and developed into a system, such as found in Europe, our short-term thinkers in Washington poured all the monetary resources into the Interstate Highway System. The trucking industry took off like a rocket and the railroads began to die. That scenario will now be completely reversed as Peak Oil delivers our nation a terrific blow. Railroads will be one of our prime fallback positions.

The Airline Industry – Again, Peak Oil will have a devastating effect on most of the airline industry since jet fuel represents one of the greatest uses of petroleum. With several airlines now approaching potential bankruptcies, just think of what this industry will have to face in the future. The disruptive and continuing disagreements regarding wages, healthcare, and pensions between management and unions will be totally set aside as the industry frantically tries to figure out to survive. The US government will be helpless to even try to bail them out.

Millions Upon Millions of Auto Commuters – Today, in many, many cities the average number of occupants in a typical auto commuting to work is somewhere around 1.5. That will change very quickly as our oil supplies begin to dry up. What will people do? In many cases, the railroads will benefit as more and more commuters will have to choose railroads as their primary way to get to work. But the overall magnitude of this problem will be astounding because of the suburban sprawl. Those millions who typically have a 100-mile plus round trip drive to work will face a monumental problem.

Supermarkets, Wal-Mart, et al – Since the trucking industry will be severely crippled, you can be certain that those shelves containing 50-75 brands of bread, cereals, aspirins, deodorants and many other products will be greatly reduced and the products offered will be much more basic. And, when you stop to think about that, that sounds like one of the least of our problems. Wal-Mart may find itself in dire straits, indeed, since their stores are chock full of plastic products which will not be able to be transported from China and the rest of the world.

Auto, Truck Production – Because the demand for these vehicles will drop drastically, the major auto producers will find themselves at the brink of bankruptcy. Since the American Dream revolves around the automobile, this will be one of the most drastic results of the lack of oil, with the loss of thousands upon thousands of jobs in the auto industry and related suppliers.

Agriculture – The most critical of all elements of our economy and for our very survival is our food supply, including the supply chain that farms use to produce crops and the distribution of the resulting foodstuffs to the nation. Pesticides and fertilizers are largely derived from petroleum. Our farm industry will be put at risk when the supply of oil begins to dry up and our government will need to put agriculture at the very top of the list of those who will receive priority in coping with the Peak Oil crisis.

Overall, General Effects – As the Peak Oil era begins and then accelerates, Americans will be affected in many different ways. Have you noticed just how rapidly the cost of a gallon of gasoline has escalated in the past year as the price of petroleum has recently risen to some $60 barrel? That is nothing when considering that Texas oilman T Boone Pickens has predicted that the price of gas will hit $3 a gallon sometime in 2006. The housing boom will be affected in many ways, including the fact that thousands upon thousands of tons of roofing shingles will not be produced, and many other critical materials will not be able to be transported to thousands of towns and cities. The availability of tires for autos and all other vehicles will be severely diminished. Millions of asphalt streets and highways will not be repaved and others will not be constructed. The Interstate Highway System that we now enjoy and take for granted will begin a steady deterioration and will severely impact our economy. We Americans will see our travel for business and leisure reduced to a very significant degree.

To conclude, while I could go on and portray many other elements of the devastating effect that Peak Oil will have upon our society, my message to the American people is just this. To the millions upon millions of Americans who are content to be safely tucked into their protective cocoons, in a self-imposed state of apathy and disinterest relating to these massive problems that America faces, this may be the very final wake-up call. If we, as a nation do not collectively recognize the threat of this great tsunami, refuse to think more deeply or get educated and involved, we will be sealing the fate of our children, our grandchildren and those who follow. They are the ones who matter. We simply cannot refuse to address this monumental issue that threatens their very future existence!

When Peak Oil slams into our society with its tsunami-like force, there will be an instant negative effect on each and every one of us. The US government will have to take immediate measures to prioritize the uses of petroleum for the good of the nation in an effort to overcome the horrendous obstacles that we will face. I am sure that the military, our national police forces, energy providers, the agriculture industry, water supply sources and other critical users of gasoline and natural gas will be given the highest priorities. All other uses of petroleum will be given much lower priorities and will not be considered critical. And that is exactly why lifestyles will be altered drastically.

We simply cannot let our insatiable, our totally out-of-control thirst for oil, cripple our nation and our society as we stand in a completely docile, sheep-like state and just let it happen; just let nature take its course. Just as the Titanic went down with the loss of more than 1,500 passengers who believed she was invincible, Peak Oil will bring down America (and actually the entire world) if we, collectively, do not have the heart and the desire to get involved and demand solutions.

Copyright (c) 1998-2006 Online Journal

Peak Oil – The Great Tsunami

http://www.countercurrents.org/po-payne180206.htm

Bill Totten http://www.ashisuto.co.jp/english/index.html

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>The Clusterfuck Nation Chronicle

>Commentary on the Flux of Events

by Jim Kunstler (March 27 2006)

This is how deluded the American public is now: Various polls are showing that the war in Iraq has reached new lows of unpopularity. The dumb bunnies in the news media are implying that when the numbers get low enough, we will pull our troops out and go home.

This is not going to happen. Our inordinate hubris has led us to believe that this conflict is optional.

Notice, too, that the war-weary public has done, and continues to do, nothing to change its habits of profligate oil use which have driven us to project our military into the Middle East. We have not even begun a discussion of what we might do. We just expect to keep running American society exactly the way it has been set up to run – as a nonstop demolition derby, with hamburgers and fries between laps around the freeway.

At the highest level of public discourse, the cluelessness is shocking. The New York Times Sunday Book Review ran a front-page piece yesterday on Francis Fukuyama’s latest salvo, America at the Crossroads (Yale University Press, 2006), which is largely about our Middle East war policy, without once using the word “oil”. The reviewer, Paul Berman, is not a dummy, but he has evidently flown up the national rectum with the rest of the people who are paid to think in our society. To these guys, the whole issue is an effete argument over strategic fashions such as “realistic Wilsonianism”.

The plain truth is, if anything happens to upset the current management and allocation system of the the global oil markets, the industrial economies of the world will collapse, and America’s will collapse hardest and worst because of the way we have arranged things for ourselves. The global oil markets currently revolve around Middle East oil production. If the region is overcome by instability, than it’s simply GAME OVER.

You can spin out any number of strategic scenarios about what is liable to happen in the Middle East from here on, with or without America trying to run a police station there, and none of them are good. They range from Iran gaining control of twenty percent of the world’s remaining oil, to a free-for-all world war joined by virtually all the nations capable of projecting military power into the region. We’d be stuck with the consequences because we are otherwise too cowardly, lazy, and greedy to face our situation at home – which is simply that we cannot keep running a drive-in utopia. We have to make other arrangements and we have to make them now.

Our denial runs deep and hard. Even the educated minority (including the tech wonks) believe that we can run the freeways and the WalMarts on alternative fuels. They flatter themselves listening to the morning yammer about “renewables” on NPR as they make the daily commute from, say, the suburban asteroid belts of Northern Virginia into Washington, DC. They bethink themselves progressive, cutting edge, morally superior in their Priuses.

The major media have done a huge disservice to the public in supporting these delusions. CBS’s 60 Minutes show did it twice this year already, broadcasting one segment that flat-out stated the Alberta tar sands would solve all our problems, and then a second segment a few weeks later stating that coal liquefaction would keep everything humming indefinitely. CNN ran a prime-time Sunday show the week before last saying that we could keep running all our cars on ethanol forever. The damage that this disinformation might do is really out of this world.

What can we do? Oil man Jeffrey Brown of Dallas has made the interesting suggestion that we replace some or all of the national income tax with a substantial national gasoline tax. A congressional debate over that would be worth hearing. It would be a good start in concentrating our minds in the right direction: that is, toward the problems we have created for ourselves at home. There are many other things we could do also, from rebuilding our railroads to removing incentives for suburban development. They would all require major shifts in our behavior. We can either begin them voluntarily or wait for events to compel us to live differently. In the absence of that, our presence in Iraq is not optional.

http://www.kunstler.com/mags_diary16.html

Bill Totten http://www.ashisuto.co.jp/english/index.html

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>Nature is My God

>Mikhail Gorbachev interviewed by Fred Matser

Resurgence 184

The name of Mikhail Gorbachev, who dismantled the Communist empire, seems to have disappeared into distant memory. Yet, this is the man who still holds a dream of democracy, ecology and spirituality for Russia and for the world.

What values are important to you?

I am glad that you ask about values. The twentieth century has been one of the most tragic centuries, a century with a lot of bloodshed, domination and destruction. It is the most paradoxical century. On the one hand, we have made big breakthroughs in knowledge which has resulted in new technologies. On the other hand, because of these technological breakthroughs, for example, nuclear weapons, our very survival is in jeopardy. We are witnessing a breakdown of the proper relationship between humankind and the rest of nature.

I believe that this situation has arisen because we have retreated from the perennial values. I don’t think that we need any new values. The most important thing is to try to revive the universally known values from which we have retreated.

As a young man, I really took to heart the Communist ideals. A young soul certainly cannot reject things like justice and equality. These were the goals proclaimed by the Communists. But in reality that terrible Communist experiment brought about repression of human dignity. Violence was used in order to impose that model on society. In the name of Communism we abandoned basic human values. So when I came to power in Russia I started to restore those values; values of “openness” and freedom.

When did you understand that this model had to be rejected?

There was no “one day” when I understood. It took a whole life to draw conclusions. But when I realized what was happening and when I had the chance, I started to make changes. My philosophy is a philosophy based on common sense. Common sense refers to a sense of measure, a sense of moderation. If, for example, freedom is not linked to morality, it is not freedom. It is permissiveness. It is just self-seeking, rather than freedom.

Life has value in itself. Even if some methods are claimed to be progressive, if they result in destruction of life, then they are unacceptable. I believe that the twenty-first century must be the century of human beings living in harmony with nature, rather than being enslaved to technology.

We must encourage those who favour economic liberalism in Russia, but they must abandon the idea that they can use this ideological vacuum in order to impose Westernization as a way to solve our problems. I think that economic liberalism is no less vulnerable than Socialism or Communism. Economic prosperity must go hand in hand with social cohesion and ecological sustainability. What good is a lot of money when the social fabric is destroyed and the environment polluted?

Values such as solidarity, a socially-oriented economy, and the need to harmonize relations between humankind and the rest of nature are equally important. The future will depend on whether we will be able to find a synthesis, to find a fusion of ecological, liberal and social values. These I call “the perennial values”.

I want to put great emphasis on the intrinsic value of nature, because without nature people cannot exist. We must preserve both people and nature. If we do not respect nature, we could eventually disappear; and once again on Earth we could have nature without humankind. Humans gaining better knowledge of themselves and their role in the cosmos is of paramount importance. If we do that, then we can insure ourselves against many dangers. Humankind should become more modest in terms of its needs and more respectful of the environment of which we are just a part.

If we do not learn to live in harmony with nature, we shall make our own lives hopeless and we shall eventually jeopardize our own existence. In that sense I believe that we should go back to a new kind of renaissance. This new renaissance should be based on the idea that people should live more naturally.

How could people rebuild their self-respect whilst also respecting nature?

We need to go back to the universal values in order to gain such respect. However difficult, we should try to preserve strategies that do not abandon those most important values. We should seek to incorporate those values in practical ways. First of all, we have to abandon all kinds of violence. Secondly, to understand that we should not resort to extremism. Politicians in Russia, as elsewhere, need to understand that a free-market economy is no guarantee for safeguarding universal values. Once you have a free market you will not find overnight that you are living in a free country. A lot of experience has to be gained in how to use that freedom. So one has to be willing to go along the path step by step and incorporate other principles. If we fail to restore human dignity and ecological sustainability, the free market is of no use.

If the social cost and environmental cost of the free market are not taken into account, trust will evaporate. People today are disenchanted with politics. They do not trust politicians and feel that politicians just regard them as the means to power.

When people want change, it is very important that they get inspiration from the “leaders”.

There is no doubt about it. Without inspiration, all attempts at reform would fail. Human beings are not just dust in the air; they want to be involved in changing life for the better. Today, people with power in Russia are incapable of being in touch with the people who initially trusted them. The result is that the people have lost their inspiration, they live in a survival mode. This again cultivates the old mindset, dependent on having a good tsar or general secretary. But in a country where many nations and ethnic groups live, you can only achieve your goals when the entire society is involved.

Can you speak about your personal life? For example, what did you learn from your parents?

Firstly, I learned common sense from my parents, which is so typical of rural people. They have a feeling for nature, for the cosmos, for the world, for real life. They are born on the land and they live on the land. They have a feeling for that land and they know that land. Often they raise their heads to look at the sky, not just to see the clouds that bring the rain, but they look at the stars. People who are associated with the land interact with the stars. This association with nature gives people a very good hold on common sense.

I also learned modesty and humility. In rural communities there is a lot of very hard work which brings tolerance and solidarity and this is something I saw in my family and in my village. This has remained with me throughout my life. I have never forgotten where I come from. Sometimes people whose roots are from peasant stock, whose family is barely literate, are embarrassed by it. But I am never embarrassed by it; in fact, I am proud of my rural roots.

The wife of the president of Finland once asked me how I endured difficult times. I said, “I have to thank my parents who were peasants and who really put a solid foundation in me, who gave me fortitude, who gave me stamina and a kind of wisdom.”

I also said that I was grateful to my wife. She is not just a wife, but she is a true friend. She has shared my life in good times and in bad. She is a great source of strength to me.

What are your spiritual beliefs?

Well, I believe in the cosmos. All of us are linked to the cosmos. Look at the sun. If there is no sun, then we cannot exist. So nature is my god. To me, nature is sacred. Trees are my temples and forests are my cathedrals.

If you knew you were to die soon, what would be your message to the world?

I am not afraid of death. Which does not mean I am indifferent to life: I like living. I am very curious and life is interesting. I am not a nihilist. We come to the world, we will leave the world, but I do not think that it will be without trace. Death is not the end.

Were I to know I was going to die, I would not make a big fuss about it. I would be living naturally as before. I would not want to use the remaining time to send any particular message. I would use all the remaining days to communicate and to be in contact with nature. Being at one with nature. I remember when we went to our village. Wheat was growing. We saw a field of wheat and in the evening we heard quails singing. It was like a symphony, a concert. Then, during the night, I saw all those stars in the sky and my feeling was that I was being supported by nature and that I was dissolving into nature. So the remaining days I would just leave for this kind of communication with nature. I would not want to trouble the living with any message.

What does the word “love” mean to you?

Love is a mystery of nature. I think it is good that it will remain a mystery. Of course, there has been a lot of comment on love. First of all, love for me is what unites man and woman. Love also unites humans and nature. I believe that we are dealing here with a mystery that is too big for us. Once you try to define it, it is the end of love. It dies once you think you know its secret.

Fred Matser has initiated many environmental projects in The Netherlands.

Resurgence Online

http://www.resurgence.org/resurgence/184/gorbachev.htm

Bill Totten http://www.ashisuto.co.jp/english/index.html

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>Lady Tonge – an Apology

>I was wrong. She is not a bully, a fool or a stooge. She is a comedian.

by George Monbiot

The Guardian, Comment is Free blog (March 24 2006)

I now realise that I have misunderstood Baroness Tonge. When she stood up in the House of Lords last week and accused the Gana and Gwi Bushmen of trying to stay in the Stone Age and of holding the Botswanan government to ransom by resisting eviction from their lands, I thought she was a bully, using her unelected position to attack some of the most vulnerable people on earth.

When she appeared on the Today programme two days later and – having found herself in a hole – started digging a mineshaft, I thought she was a fool.

When I started reading her Response column in the Guardian today, and read her angry reply to allegations which had not been made – that she has been bribed and that her integrity is in question – I began to wonder whether there might be more to this story than I first supposed.

But when I reached the bottom of her column, and read that she, like me, wishes to see the closure of the House of Lords, all became clear. I owe Lady Tonge an apology. She is not a bully, a fool or a stooge. She is a brave and brilliant political campaigner. She is trying to abolish the Upper House, and the method she has chosen is satire.

Her strategy works like this. First she accepts a peerage, styles herself “Baroness Tonge of Kew in the London Borough of Richmond upon Thames” and adopts the airs and graces appropriate to that station. Then she selects the traditional topic of conversation in the House of Lords – evicting impoverished people from their lands – and hams it up magnificently. Then, in perfect mimicry of the peers who for centuries have claimed from those benches that they know what is best for the poor, she hilariously pretends that a land-grabbing exercise is in fact a social welfare programme.

She plays all this with a perfectly straight face, until her listeners are gasping with rage and incredulity, and demanding that she and all the other barons and baronesses are flung out on their arses and replaced with elected representatives.

Greater love hath no baroness than this, that a baroness lay down her credibility for her subjects. Instead of attacking her, as I have done, we should offer our gratitude for this extraordinary act of self-sacrifice. She has shown us what we must do. We must call for that which she most desires: her expulsion from the legislature, along with all the other unelected halfwits in the House of Lords.

www.monbiot.com

http://www.monbiot.com/archives/2006/03/24/lady-tonge-an-apology/

Bill Totten http://www.ashisuto.co.jp/english/index.html

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>US Army: Peak Oil and the Army’s future

>by Adam Fenderson and Bart Anderson

Energy Bulletin (March 13 2006)

http://www.energybulletin.net/13737.html

“The days of inexpensive, convenient, abundant energy sources are quickly drawing to a close”, according to a recently released US Army strategic report. The report posits that a peak in global oil production looks likely to be imminent, with wide reaching implications for the US Army and society in general.

The report was sent to Energy Bulletin by a reader, and does not appear to be available elsewhere on the internet. However it is marked as unclassified and approved for public release.

[Update: Since we wrote those words several hours ago we’ve been informed that a reference to the document now appears on a Google search, including a link to the full PDF on a .mil server {1}. “Somebody must be watching you guys!” writes reader SG. Before we wrote this report we sent out copies of the abbreviated report to several associates including PeakOil.net who published it on their website. So who knows? I’ve updated the links to the report in this article to the location on the government servers. – Adam Fenderson]

The report, Energy Trends and Their Implications for US Army Installations (PDF – 1.2 mb) {2}, was conducted by the US Army Engineer Research and Development Center (ERDC), US Army Corps of Engineers and is dated September 2005.

Author Eileen Westervelt, PE, CEM, is a mechanical engineer at the Engineer Research and Development Center (US Army Corps of Engineers) in Champaign, Illinois. Author Donald Fournier is a senior research specialist at the University of Illinois’ Building Research Council and has worked with the Corps in the past {3}.

Westervelt and Fournier give special credence to the work of independent energy experts, such as the Association for the Study of Peak Oil and Gas (ASPO) and the Oil Depletion Analysis Center (ODAC). They seem to place very little credibility on the more optimistic oil production forecasts of the international energy agencies. They reproduce ASPO graphs and quote ASPO member Jean Laherrere on why the US Geological Survey (USGS) future oil availability estimates are clearly overly optimistic:

“The USGS estimate implies a five-fold increase in discovery rate and reserve addition, for which no evidence is presented. Such an improvement in performance is in fact utterly implausible, given the great technological achievements of the industry over the past twenty years, the worldwide search, and the deliberate effort to find the largest remaining prospects.”

The authors warn that in order to sustain its mission, “the Army must insulate itself from the economic and logistical energy-related problems coming in the near to mid future. This requires a transition to modern, secure, and efficient energy systems, and to building technologies that are safe and environmental friendly.” The best energy options they conclude are “energy efficiency and renewable sources”. However, “currently, there is no viable substitute for petroleum”.

They do not expect that any transition will be easy: “energy consumption is indispensable to our standard of living and a necessity for the Army to carry out its mission. However, current trends are not sustainable. The impact of excessive, unsustainable energy consumption may undermine the very culture and activities it supports. There is no perfect energy source; all are used at a cost.””

The report includes what looks like a solid overview of the pros and cons of all major renewable and non-renewable energy options. They consider problems associated with hydrogen, shale oil, biofuels and tar sands. On nuclear energy they note that “our current throw-away nuclear cycle uses up the world reserve of low-cost uranium in about twenty years”. They hold more hope for certain solar technologies and wind turbines, however, “renewables tend to be a more local or regional commodity and except for a few instances, not necessarily a global resource that is traded between nations”.

Overall this is surprisingly green sounding advice, and one might think out of left field for one of the most environmentally destructive and energy consuming institutions on the planet {4}. And yet the report does not seem to be at odds with the Army’s new Energy Strategy which sets out five major initiatives:

1. Eliminate energy waste in existing facilities

2. Increase energy efficiency in new construction and renovations

3. Reduce dependence on fossil fuels

4. Conserve water resources

5. Improve energy security

(See: hqda-energypolicy.pnl.gov/programs/plan.asp)

Westervelt and Fournier assert that changes must be made with urgency. However they express concerns that “we have a large and robust energy system with tremendous inertia, both from a policy perspective and a great resistance to change”. In light of this, “the Army needs to present its perspective to higher authorities and be prepared to proceed regardless of the national measures that are taken”.”

Westervelt and Fournier suggest “it is time to think strategically about energy and how the Army should respond to the global and national energy picture. A path of enlightened self-interest is encouraged.” As we approach Peak Oil, what is ecologically sound and what is perceived to be to in an institution’s practical benefit might tend to converge, at least in some respects – even those of an institution such as the US Army.

LINKS

An eight-page summary of the report (PDF – 75 kb)
http://www.energybulletin.net/docs/EnergyTrendsUSArmySummary.pdf

Energy Trends and Their Implications for US Army Installations – full report (PDF -1.2 mb)
http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTRDoc.pdf

A related powerpoint presentation by Donald Fournier (PDF – 1 mb)
http://hqda-energypolicy.pnl.gov/docs/energy_trends_and_implications.pdf

Sustainable energy demands decisions that look beyond cost (one-page commentary by Westervelt and Fournier in Public Works Digest, page 16; PDF 723 kb)
http://www.ima.army.mil/sites/pw/digest/PWD_SepOct.pdf

A Candidate Army Energy and Water Management Strategy by Westervelt and Fournier (118 pages, PDF – 2 mb)
http://owww.cecer.army.mil/techreports/Westervelt_EnergyWaterStrategy__TR/Westervelt_EnergyWaterStrategy__TR.pdf

SOME EXTENDED QUOTATIONS FROM THE DOCUMENT

Energy Implications for Army Installations

The days of inexpensive, convenient, abundant energy sources are quickly drawing to a close. Domestic natural gas production peaked in 1973. The proved domestic reserve lifetime for natural gas at current consumption rates is about 8.4 yrs. The proved world reserve lifetime for natural gas is about forty years, but will follow a traditional rise to a peak and then a rapid decline. Domestic oil production peaked in 1970 and continues to decline. Proved domestic reserve lifetime for oil is about 3.4 yrs. World oil production is at or near its peak and current world demand exceeds the supply. Saudi Arabia is considered the bellwether nation for oil production and has not increased production since April 2003. After peak production, supply no longer meets demand, prices and competition increase. World proved reserve lifetime for oil is about 41 years, most of this at a declining availability. Our current throw-away nuclear cycle will consume the world reserve of low-cost uranium in about twenty years. Unless we dramatically change our consumption practices, the Earth’s finite resources of petroleum and natural gas will become depleted in this century. Coal supplies may last into the next century depending on technology and consumption trends as it starts to replace oil and natural gas.

We must act now to develop the technology and infrastructure necessary to transition to other energy sources. Policy changes, leap ahead technology breakthroughs, cultural changes, and significant investment is requisite for this new energy future. Time is essential to enact these changes. The process should begin now.

Our best options for meeting future energy requirements are energy efficiency and renewable sources. Energy efficiency is the least expensive, most readily available, and environmentally friendly way to stretch our current energy supplies … For efficiency and renewables, the intangible and hard to quantify benefits – such as reduced pollution and increased security – yield indisputable economic value.

Many of the issues in the energy arena are outside the control of the Army. Several actions are in the purview of the national government to foster the ability of all groups, including the Army, to optimize their natural resource management. The Army needs to present its perspective to higher authorities and be prepared to proceed regardless of the national measures that are taken.

Petroleum

Historically, no other energy source equals oil’s intrinsic qualities of extractability, transportability, versatility, and cost. The qualities that enabled oil to take over from coal as the front-line energy source for the industrialized world in the middle of the 20th century are as relevant today as they were then. Oil’s many advantages provide 1.3 to 2.45 times more economic value per MBtu than coal (Gever, Kaufman et al, 1991). Currently, there is no viable substitute for petroleum.

In summary, the outlook for petroleum is not good. This especially applies to conventional oil, which has been the lowest cost resource. Production peaks for non-OPEC conventional oil are at hand; many nations have already past their peak, or are now producing at peak capacity.

Conventional Oil Resources

In general, all nonrenewable resources follow a natural supply curve. Production increases rapidly, slows, reaches a peak, and then declines (at a rapid pace, similar to its initial increase). The major question for petroleum is not whether production will peak, but when. There are many estimates of recoverable petroleum reserves giving rise to many estimates of when peak oil will occur and how high the peak will be. A careful review of all the estimates leads to the conclusion that world oil production may peak within a few short years, after which it will decline (Campbell and Laherrere 1998; Deffeyes 2001; Laherrere 2003). Once peak oil occurs, then the historic patterns of world oil demand and price cycles will cease.

NOTES FROM BART ANDERSON

The military’s commitment to energy policy

A notice in the report says, “The findings of this report are not to be construed as an official Department of the Army position unless so designated by other authorized documents”. However, as AF notes, other US Army planning documents seem to share the concern about energy supply. And as USA TODAY reports: Spurred by a 57% increase in fuel costs, the Pentagon is speeding up its efforts to save energy and develop new sources of power … All military bases and facilities have been ordered to cut energy use by two percent per year and pursue alternative energy sources, such as solar and wind. {5}

The recent spate of articles about the military and energy policy bespeaks a more comprehensive outlook than either that of the Democratic or Republican parties, or most environmental organizations. For example, see: “America’s strategic imperative: a ‘Manhattan Project’ for energy” (Joint Forces Quarterly) {6} and “Toward a Long-Range Energy Security Policy – Parameters” (US Army War College) {7}.

Energy efficiency

The report only surveys energy sources, and does not cover efficiency or conservation. Nonetheless, the report notes that energy efficiency is “the cheapest, fastest, cleanest source of new energy”. (page 58). In other publications, the authors do cover energy efficiency in detail, for example in “A Candidate Army Energy and Water Management Strategy (118 pages, PDF – 2 mb) {8}.

Many of the projects pursued by author Fournier are related to sustainability and energy efficiency {9}. Also see article in Green Biz {10}.

Online accessibility

The fact that the document does not seem to be online is puzzling. Searching with Google yielded no results. According to a note on page 4 of the report, the report should be available at http://www.cecer.army.mil/, a URL which seems to be obsolete or inaccessible.

Possibility for an alliance

I’m more sanguine about the role of the military than (co-author) Adam Fenderson. Within the
military and intelligence communities, there seems to be a lack of enthusiasm for unproductive resource wars. See the talks by Ex-CIA directors James R Schlesinger {11} and James Woolsey {12} as well as the work of Gal Luft at the Institute for the Analysis of Global Security (IAGS) {13}.

Is the unlikely alliance described in the following article {14} more widely possible?-

You wouldn’t have thought it possible: a former director of the Central Intelligence Agency drawing a standing ovation from a room full of left-leaning environmentalists right here in Eugene.

But that’s exactly what happened at the University of Oregon’s Public Interest Environmental Law Conference Saturday afternoon as R James Woolsey – the nation’s chief “spook” under President Bill Clinton from 1993-1995 – spoke passionately about the need to reduce America’s
dependence on foreign oil.

“There is a moral dimension to this”, Woolsey said. “We should be good custodians of the Earth.

“And if that means creating an unlikely alliance between national security hawks, American farmers, Christian evangelicals, liberal do-gooders and tree-hugging environmentalists, Woolsey said, that’s just fine with him.

“All these groups are starting to come around on this set of issues”, he said …

UPDATES

(March 16) As noted in the article, this long withheld report, dated September 2005, was released online the same day we wrote this article. Obviously more than a coincidence! We sent out copies of the abbreviated report to several associates including ASPO (PeakOil.net) on March 11th. ASPO published the abbreviated report on their website the next day. It now appears that US Congressman Roscoe Bartlett requested a copy of the full report, perhaps along with others, which we assume stimulated its release. Bartlett gives a great deal of significance to and a very good summary of the report in his excellent recent congressional speech. {15}

After the release of the report I updated the links to it in this article to the government server rather than our own.

(March 14) Sohbet Karbuz points out this much earlier discussion of Peak Oil in military circles from 2002: “From Petro to Agro: Seeds of a New Economy”, by Robert E Armstrong
www.ndu.edu/inss/DefHor/DH20/DH_20.htm

He also notes that “The DoD Energy consumption was 961 trillion Btu in 2004. (Annual Energy Review 2004 Table 1.13) and army consumes only 1/10th of it. The Air Force is the biggest consumer.”

See also Sohbet’s recent article, The US military oil consumption. {16}

NOTES

{1} http://stinet.dtic.mil/oai/oai&verb=getRecord&metadataPrefix=html&identifier=ADA440265

{2} http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTRDoc.pdf

{3} http://www.arch.uiuc.edu/people/faculty/dfournie/

{4} http://www.energybulletin.net/13199.html

{5} http://www.usatoday.com/news/nation/2006-03-08-military-alternate-fuel_x.htm

{6} http://energybulletin.net/13461.html

{7} http://energybulletin.net/13481.html

{8}
http://owww.cecer.army.mil/techreports/Westervelt_EnergyWaterStrategy__TR/Westervelt_EnergyWaterStrategy__TR.pdf

{9} http://www.arch.uiuc.edu/events/news/2004/11_01_04/

{10} http://www.greenbiz.com/news/news_third.cfm?NewsID=20133

{11} http://www.energybulletin.net/11014.html

{12} http://www.energybulletin.net/11013.html

{13} http://www.iags.org/

{14} “Speaker inspires no-oil thinking”, Eugene Register Guard (March 05 2006)
http://www.registerguard.com/news/2006/03/05/c1.cr.woolsey.0305.p1.php?section=cityregion

{15} http://www.energybulletin.net/13881.html

{16} http://www.energybulletin.net/13199.html

The URL for this article is http://www.energybulletin.net/13737.html

Bill Totten http://www.ashisuto.co.jp/english/index.html

Categories: Uncategorized

>The End of Oil

>by Robert B Semple, Jr

New York Times (March 01 2006)

When President Bush declared in his 2006 State of the Union address that America must cure its “addiction to oil”, he framed his case largely in terms of national security – the need to liberate the country from its dependence on volatile and in some cases hostile nations for much of its energy. He failed to mention two other good reasons to sober up. Both are at least as pressing as national security.

One is global warming. This is not an issue Mr Bush cares much about. Yet there is no longer any doubt among mainstream scientists that the earth is warming up, that increasing atmospheric temperatures have already damaged fragile ecosystems and that our only real defense against even graver consequences is to burn less fossil fuel – which means, among other things, using less oil.

The second reason is just as unsettling, and is only starting to get the attention it deserves. The Age of Oil – 100-plus years of astonishing economic growth made possible by cheap, abundant oil – could be ending without our really being aware of it. Oil is a finite commodity. At some point even the vast reservoirs of Saudi Arabia will run dry. But before that happens there will come a day when oil production “peaks”, when demand overtakes supply (and never looks back), resulting in large and possibly catastrophic price increases that could make today’s $60-a-barrel oil look like chump change. Unless, of course, we begin to develop substitutes for oil. Or begin to live more abstemiously. Or both. The concept of peak oil has not been widely written about. But people are talking about it now. It deserves a careful look – largely because it is almost certainly correct.

I. Peak Oil

In oil-patch lingo, “peak oil” refers to the point at which a given oil reservoir reaches peak production, after which it yields steadily declining amounts, no matter how many new wells are drilled. As Robert L Hirsch, an expert on energy issues told Congress last December, the life span of individual oil fields is measured in decades. Peak production typically occurs ten years or so after discovery, or when the reservoir is about half full. An oil field may have large estimated reserves. But a well-managed field that has reached its peak (as most American fields have) has also reached a point of no return, no matter how much new technology is applied. And what’s happening in individual fields will be reflected on a global scale, because world production is by definition the sum of its individual parts.

When will oil peak? At least one maverick geologist says it already has. Others say ten years from now. A few actually say never. The latest official projections from the Energy Information Administration put the peak at 2037, or 2047 – depending, of course, on how much of the stuff is out there and how fast we intend to use it up. But even that relatively late date does not give us much time to adjust to a world without cheap, abundant oil.

II. Hubbertians vs. Cornucopians

Let’s start with the true pessimists, proudly known as Hubbertians after the legendary Shell Oil Company geophysicist, M King Hubbert. In the 1950’s, Mr Hubbert collected a wealth of historical data on oil discoveries and production, developed some complex mathematical formulas, and produced a bell-shaped curve showing that the rate at which oil could be extracted from wells in the United States would peak around 1970 and then begin to decline. Though perhaps not the most popular guy at Shell headquarters, he turned out to be right. US oil extraction peaked at about nine million barrels a day in 1970, and is now below six million a day. His basic methodology has been used ever since.

Various economists and geologists have applied the Hubbert technique to the world oil supply. Among the more readable and entertaining of Mr Hubbert’s disciples is another Shell alumnus, Kenneth S Deffeyes, who is now a professor emeritus at Princeton. Mr Deffeyes holds that nature’s original oil bequest amounted to about two trillion barrels, of which nearly half has already been consumed. Armed with Mr Hubbert’s bell curve, and incorporating all sorts of up-to-date data, Mr Deffeyes concludes with playful certainty that the apocalypse is not only upon us but has in fact occurred. “I nominate Thanksgiving Day, November 24 2005, as World Oil Peak Day”, he says at the outset of his latest Hubbert-related book, Beyond Oil: The View From Hubbert’s Peak (Hill and Wang, 2005). “There is a reason for selecting Thanksgiving. We can pause and give thanks for the years from 1901 to 2005 when abundant oil and natural gas fueled enormous changes in our society. At the same time, we have to face up to reality: World oil production is going to decline, at first slowly, and then more rapidly.”

Other prognosticators – Mr Deffeyes dismisses them as “cornucopians” – paint a much cheerier picture. The most authoritative of these is not one person but forty – the number of geologists and physicists the US Geological Survey assigned to carry out the most comprehensive study ever conducted of the oil resources outside the United States. The study was done between 1995 and 2000. When combined with the results of an earlier survey of US resources, it suggested that earth’s original oil endowment was three trillion barrels, not two trillion as supposed by Mr Hubbert and his followers. It also suggested that the remaining inventory was more than twice Mr Hubbert’s – 2. 3 trillion barrels, consisting (in very round figures) of 900 billion in proven reserves, 700 billion in “reserve growth” (additional barrels that can be retrieved through advanced technology) and 700 billion in “undiscovered” reserves, meaning oil the USGS experts think we can find given what we know about geological formations. These figures, admittedly speculative, are undeniably more upbeat than anything the Hubbertians have to offer (Mr Deffeyes, for instance, puts the “undiscovered reserves” figure at 100 billion barrels, max). And, of course, these rosier official calculations yield a much later oil peak – 2037, assuming a steady annual increase of two percent in worldwide demand, and maybe later, if another mammoth oilfield kicks in somewhere on earth. No reason yet to abandon the family SUV.

III. Consequences

Or is there? Think about it: the year 2037 is a mere half-generation away. Despite their differences, neither Mr Hubbert’s disciples nor the optimists showed the least interest in doing a straight-line calculation to figure out when earth will yield its last drop of oil (a calculation easily done, by the way – dividing USGS’s 2.3 trillion by today’s average annual consumption of thirty-plus billion gives us about eighty years until the fat lady sings). But that’s not the important date. The important date is the point at which demand zips past supply.

In the past several years, the gap between demand and supply, once considerable, has steadily narrowed, and today is almost in balance. Oil at $60 a barrel oil may be one manifestation. Another is the worried looks on the faces of people who fret about national security. In early 2005, for instance, the National Commission on Energy Policy and another group called Securing America’s Future Energy (SAFE) convened a bunch of Washington heavyweights at a symposium called, alarmingly, Oil ShockWave, and asked them to imagine what it would take to drive oil prices into the stratosphere and send shockwaves reverberating through America and the rest of the western world.

It wouldn’t take much – a terrorist attack on Alaska’s Port of Valdez would reduce global oil supply by 900,000 barrels a day; unrest in Nigeria, 600,000 barrels; an attack on Saudi Arabia processing facilities at Haradh, 250,000. Throw in an unseasonable cold snap across the Northern Hemisphere, boosting demand by 800,000 barrels, and before long you’re staring at a net shortfall of almost three million barrels, or about four per cent of normal daily supply. This, in turn, is enough to drive oil prices from about $60 to $161 a barrel. The cost of fuel at the pump – indeed, the cost of most petrochemical-based products – rises dramatically. The US economy slides into recession. Millions are thrown out of work. More broadly, the quintessentially American lifestyle – two-car suburban families commuting endlessly to office, school and mall – suddenly becomes unsustainable. But what the peak oil experts are saying is that we don’t need terrorists to make this happen. Essentially the same scenario is unfolding now, right before our eyes, without benefit of bombings or cold snaps, simply through the normal laws of supply and demand.

The 2005 International Energy Outlook from the government’s Energy Information Administration is instructive on this point. Over the next two decades, global oil consumption is expected to increase by more than half, from about 84 million barrels per day now to nearly 119 million barrels by 2025. US consumption alone is expected to jump from twenty 20 million to thirty millions barrels a day, one fourth the world’s total. But the thirstiest consumers of all will be the emerging giants of Asia, particularly China, which is expected to quadruple the number of cars on its roads in the next twenty years and whose oil needs are expected to grow by a minimum of 3.5 per cent every year, well above the worldwide norm. Can supply keep pace? Put differently: Can Saudi Arabia bail us out?

IV. The Mysterious Saudis

Conservative projections and simple arithmetic tell us that the world will need at least 35 million more barrels a day in 2025 than it needs now. The Energy Information Administration is cautiously optimistic that those barrels can be found. It foresees steady production increases in the old Soviet Union, Africa and the Caribbean. It hopes that Iraq’s oil industry will survive the war and return to its old self. It does not even mention the possibility of blackmail by Iran. And it sees no reason why Saudi Arabia – the elephant in the oil patch, the country whose 260-plus billion barrels in proven reserves is one-quarter of the world’s total, twice Iran’s and ten times the US’s – shouldn’t be able to keep the oil flowing our way. Forecasters at the EIA and elsewhere assume that the Saudis will be able to make a contribution commensurate with the overall fifty percent rise in production the world will need to produce those extra 35 million barrels, jacking up output from 10.5 million barrels a day now to 12.5 in 2009 to 15 million after that. But there are some people who seriously doubt whether Saudi Arabia can turn on the spigot as it’s always done before.

Matthew Simmons is one of them. Indeed, Mr Simmons is not sure that Saudi Arabia can do much of anything. Mr Simmons is a Texas businessman and oil expert who runs a consulting firm in Texas, making good money advising energy companies. Like Mr Deffeyes, he is seen as a maverick. His other trademark is pessimism – a pessimism nourished, he told Peter Maass of the New York Times Sunday Magazine, by months of poking around in obscure data about Saudi oil fields that left him with deep doubts about Saudi Arabia’s ability to deliver the oil the world will ultimately need. His studies of Saudi Arabia’s huge Ghawar field, which has produced an astonishing 55 billion barrels in the last half-century, left him particularly wide-eyed. “Twilight at Ghawar is fast approaching”, he says in a new book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Wiley, 2005). “Saudi Arabia clearly seems to be nearing or at its peak output”. Or as he told Mr Maass: “The odds of the Saudis sustaining [even] 12.5 million barrels a day is very low. The odds of them getting to fifteen million for fifty years – there’s a better chance of me having Bill Gates’s net worth.”

Publicly, Saudi officials and many American experts scoff at Mr Simmons the way official Washington scoffs at Mr Deffeyes. Other industry consultants, including the much-admired author Daniel Yergin, believe that Mr Simmons and Mr Deffeyes and “peakists” in general are being much too gloomy. “This is not the first time the world has run out of oil”, Mr Yergin wrote last year. “It’s more like the fifth. Cycles of shortage and surplus characterize the entire history of the oil industry.” Privately, however, a few well-placed Saudis share Simmons’s doubts, and for one obvious reason: Hitting the Energy Information Administration’s targets will require the Saudis to extract increasing amounts of oil from fields that may already be past their prime.

V. What Now?

There are many economists who believe that a nasty oil-price shock might not be such a bad thing, just as a big fat increase in gas taxes might not be such a bad thing. Sharply higher price increases might force us to conserve in ways we never have before, and lead also to a public outcry for fuel-efficient cars that neither Detroit nor the Japanese have been willing to build on a large scale. Higher prices for conventional oil could also make other sources of energy more attractive, including unconventional forms of oil. These include the heavy oil lodged in the Canadian tar sands, where there are thought to be many billions of barrels and where companies like Exxon are poking around. There are also the billions of barrels of unconventional oil trapped in shale formations out West. In the 1970s, during Jimmy Carter’s synthetic fuels craze, a lot of people lost their shirts on shale oil, which needs to be heated and basically boiled out of the rock. Getting at tar and shale oil require heavy, energy-intensive mining operations. And despite the serious bets being placed on the tar sands, unconventional oil won’t be available in large enough quantities to make a real difference until well down the road.

The same can be said of the hydrogen power President Bush has been touting ever since he came to office; the National Academy of Sciences says we won’t see affordable hydrogen-powered cars in meaningful numbers for thirty years, if that. This does not mean that we shouldn’t keep trying – future generations will not forgive us if we don’t. What it does mean is that we need to look quickly for near and medium-term solutions that can help us cushion the shock when we hit the peak, assuming we haven’t hit it already.

There is no shortage of ideas about what to do to reduce the demand for oil. In the last two years, there have been three major reports remarkable for their clarity and for their convergence on near-term strategies – from the Energy Future Coalition, consisting of officials from the Clinton and first Bush administrations; from the Rocky Mountain Institute in Aspen, which concerns itself with energy efficiency; and from the above-mentioned National Commission on Energy Policy, a collection of experts from academia, business and labor. All three groups call for much stronger fuel economy standards, beginning very soon. All three call for major tax subsidies and loan guarantees to help the carmakers develop and market these more efficient cars on a massive scale without going bankrupt. And all three call for an aggressive program to develop gasoline substitutes from starch and sugars, known loosely as cellulosic fuels. These strategies would not only help reduce oil dependency but, in the bargain, greatly reduce greenhouse gas emissions, forty percent of which come from vehicles. They would not threaten economic growth, especially if Washington stood ready to ease Detroit’s transition from the SUV’s and light trucks they depend on for their profits (such as they are) to a new generation of cars and trucks. And they are not pie-in-the sky. Off-the-shelf technology can boost our average fuel economy from 26 to 45 miles a gallon in a decade. Brazil already has its cars running on cellulosic fuels. What these groups are talking about – and what distinguishes them from the administration’s rather more passive approach – is not more research but getting good ideas into commercial production in a hurry. This is going to take serious investment. It will also take real leadership, which may be the biggest missing ingredient of all.

A couple of years ago, David Goodstein, vice provost of the California Institute of Technology, published a slim, intelligent, and spry little book called Out of Gas: The End of the Age of Oil (W W Norton, 2004). A Hubbertian at heart, he nevertheless thinks we have time to avoid the worst, but only if we stop deluding ourselves. He also knows, though, that human nature does not easily leap to a challenge that seems always to be receding, and for that reason he does not think that we will really act until the wave crashes down upon us. “Our present national and international leadership is reluctant even to acknowledge that there is a problem”, he writes. “The crisis will occur, and it will be painful. The best we can realistically hope for is that when it happens, it will serve as a wakeup call, and will not so badly undermine our strength that we are unable to take the giant steps that are needed.”

Correction

An earlier version of this article misstated some numbers in estimates of world’s oil reserves. The figures from the US Geological Survey are 900 billion in proven reserves, 700 billion in “reserve growth” and 700 billion in “undiscovered” reserves, not trillions. Kenneth S Deffeyes’s estimate of undiscovered reserves is 100 billion barrels. The estimated shortfall that could be caused by unrest and terror attacks is three million barrels per day.

The author of the piece is an eminent New York Times editorial page staffer:

Robert B Semple, Jr since 1988 has been Associate Editor of the Editorial Page for The New York Times. Between 1982 and 1988 he had been Editor of that newspaper’s Op-Ed page. Semple started with The Times in 1963 in its Washington bureau and was a political reporter and White House correspondent during President Richard M Nixon’s first term. He has worked for The Times as a Deputy National Editor in New York and as London bureau chief. Semple in 1996 won the Pulitzer Prize for editorial writing on environmental issues.
www.environmentwriter.org/resources/articles/1105_semple.htm

Lela Moore contributed research for this article.

Copyright 2006 The New York Times Company

http://www.mtholyoke.edu/acad/intrel/Petroleum/peak.htm

Bill Totten http://www.ashisuto.co.jp/english/index.html

Categories: Uncategorized

>The Clusterfuck Nation Chronicle

>Commentary on the Flux of Events

by Jim Kunstler

March 20 2006

An acquaintance told me a weird story yesterday. Let’s call him “E”. He runs an Internet consulting company here in Saratoga Springs. It employs about twenty-five people in a downtown building E put up a few years ago.

Last month a freak windstorm ripped through here and took down the electric power for three days. E lost communication with the payroll service (a separate company) that issues his employee’s salaries. The storm happened in the middle of the day, Friday, payday.

The power came back on Sunday night, and on Monday two of E’s employees each asked for private meetings with the boss. Because of the storm, they said, the payroll company had failed to make electronic salary deposits in their checking accounts. They were concerned because they were late on their mortgage payments and without the past week’s electronic paycheck, they couldn’t pay their mortgages.

E told me that these were “high-level employees” with substantial salaries who were both living in “very high-end homes”, which around here would mean around a half-million dollars (and I know that in some parts of the US, like Washington, DC, or San Francisco, a half-million barely gets you a “pre-owned” raised ranch). He said he was shocked to discover that his executives were living from paycheck to paycheck, in houses that by normal criteria (this is, pre-bubble standards) they probably couldn’t afford.

“What if something happened to me?” E said. “What if I was hit by a bus? That would be it for the company. That would be the end of their paychecks, and what if they didn’t find another job almost immediately? I don’t want to interfere in their personal affairs, but I can’t help feeling that I really need to talk to them about this.”

Meanwhile, our cretinous, pandering local newspaper, the Saratogian, published a special real estate section on Sunday under the banner “Progress 2006”. The headline under the banner said, “If You Build It They Will Come”, and the accompanying photo showed a rank of beige McHouses in a new subdivision. The sub-head said “Growth is the name of the game across the county”.

Spring here in the North Country brings with it a ripe expectation that the winter real estate doldrums will soon yield to raptures of zippy sales. Of course this is based on the assumption that the year ahead will be like the recent years just past, only better! The sense of momentum in the real estate markets is reinforced by the fact that so much stuff has worked through the arduous permitting process and is just now coming up for sale, with even more stuff behind it moving through the cloacal pipeline, so to speak – so therefore the buyers will automatically appear drooling into their checkbooks.

I don’t think so. I think that what we are getting here is stupendously delusional behavior. The ebullience in the newspaper only tells me how much unexpressed subconscious terror lurks just below the surface of wished-for “normality”. For one thing, anybody who walks around this town can hardly fail to notice how the realtor’s signs are accumulating in the front yards. Nothing’s moving. Outside of town, in the suburban asteroid belts that only ten years ago were cornfields and cow pastures, there’s a much more lavish supply of new houses. I detect an odor of bloodshed.

This has been a hot market for a while, because Saratoga is an historic “main street” town in pretty good condition with a high level of cultural amenity, close to the gigantic Adirondack Park. The three old cities nearby which comprise the employment centers of the Capital District – Albany, Schenectady, and Troy – are in such a state of squalid decrepitude that practically anyone gainfully employed has fled shrieking lately, and Saratoga has attracted many willing to tolerate a thirty-plus mile commute.

For years following the two oil crises of the 1970s, the real estate market in Saratoga fell stone dead because the fear of rising gasoline prices and long lines at the filling stations remained so vivid. We’re headed back to scary gasoline prices again, only this time it will not be a temporary crisis. And this time, there will be a huge surplus of unsold houses. There will also be a substantial number of house owners getting in trouble with their mortgage payments, and one way or another their houses may end up adding to the supply of available houses. There is also very likely to be trouble in the financial markets, with dark implications for the value of the US dollar, for the movement of interest rates, and for the availability of further credit.

It makes my head hurt to imagine the coming carnage on the real estate scene here. Nation-wide, the latest figures are not reassuring. Even hot markets cool off when evil economic winds blow. According to the California Association of Realtors, sales of existing, single-family detached homes were down 24.1 percent, the highest year-on-year decline since December 1990 when sales dropped 25.2 percent. The National Association of Realtors reports Massachusetts home sales are down 21 percent and listings up 41 percent. In Florida existing home sales are down nineteen percent. In Alabama existing home sales down 21 percent and listings up seventeen percent. Pennsylvania sales down seventeen percent. Minnesota sales down seven percent and inventory up 35 percent.

Meanwhile housing “starts” (under construction) jumped 14.5 percent in January of 2006. Permit approvals were up 6.8 percent. That old dawg, momentum.

House “affordability” reached a fourteen-year low according the US Department of Commerce. Foreclosures were up 27 percent so far in 2006.

You wonder, finally, how many current homeowners will lose their houses? How many developers will lose the shirts off their backs? How many banks will get stuck with foreclosed property? And how will the United States economy function without a phony-balony real estate bubble market driving it?

March 13 2006

Not included here. See http://www.kunstler.com/mags_diary16.html

March 06 2006

You’ve heard of “Pimp My Ride”. Well, the New York Times is running a new joint called “Pimp My Read”. This week’s Sunday Time Magazine devoted itself to the idea that housing bubble is (in Martha Stewart’s words) a good thing. In fact, Martha herself is getting into the racket, lending her name to a 650-unit (they’re just units) suburban subdivision outside of Raleigh, North Carolina. If she was shrewd about the deal (could it be otherwise?) then Martha will get paid whether the project tanks or not.

Really, the whole issue of the Mag was just an opportunity for the financially-strapped Times to sell a shitload of advertising to the real estate investment trusts, the luxury condo hucksters, and the home furnishing industry. It will probably go down in history, along with Yale economist Irving Fisher’s 1929 proclamation that the US had achieved “permanent prosperity”, as one of the seminal documents of societal cluelessness in the face of obvious calamity.

My favorite story in the joint was “Home Economics” about Harvard whiz Edward L. Glaeser, 38, “a genius” urban theorist, who sports bespoke English suits (with watch-fobs!) and who has managed to construct a comprehensive view of how we live in America without factoring in the global energy predicament. Apparently Glaeser’s major contribution to the field is the arresting idea that whatever has been happening out there in America will certainly continue to happen – exactly in the Irving Fisher tradition. For instance, people have been moving to the Sunbelt for sixty years because there’s no winter there to hassle with, so that trend will continue. Also, suburban sprawl is just fine, no problem, let’s get more of it up-and-running. (Glaeser’s theory is related to Times columnist David Brooks’s incisive formulation that suburbia must be okay because the public seems to like it.)

What these pimps and geniuses don’t get is that America’s future is all about discontinuity. Virtually everything you see out there will not keep going. We will discontinue granting interest only, adjustable rate mortgage loans for half-million-dollar McHouses to schlemiels one paycheck away from bankruptcy – because the practice will prove to be reckless and ruinous not only for the schlemiels, but for the financial system as a whole. Americans will stop moving to the Sunbelt when they discover what life is really like in Phoenix and Houston without cheap air conditioning. After the suburbs implode financially from a pandemic of defaulted mortgages, we will see how well they operate on $5-a-gallon gasoline (or higher), and how carefree it is to heat a 4000-square-foot McHouse in a permanent natural gas crisis. We’ll also discover that telecommuting over the Internet is not so “cool” in brownout nation.

Obviously these clowns are whistling past the graveyard as the air audibly hisses out of the housing bubble, and the very appearance of these fatuous reassurances in America’s chief enabling organ of popular delusion ought to be a signal to the still-alert out there to run shrieking for safety. It’s interesting to note, by the way, that the New York Times ran an editorial last week titled “The End of Oil”, by Robert B Semple, stating starkly that the global oil production peak was for real. The catch was that the chickenshit Times editors only ran the piece on their Web edition, not in the printed newspaper. The next day, in the print edition, they ran a big display ad from Exxon-Mobil saying that peak oil was just a shuck-and-jive by a claque of alarmists. Of course, one of the wonderful things about democracy is that people are free to believe whatever they like.

February 27 2006

Not included here. See http://www.kunstler.com/mags_diary16.html

February 20, 2006

Not included here. See http://www.kunstler.com/mags_diary16.html

February 13 2006

The failure to lead in this country now includes all the major fields of enterprise and resolves into a general and total failure of authority that threatens to drag us into darkness. Leaders in politics, business, the news media, science, medicine, education, and the organized religions have all failed to prepare the public for the hardships that will attend a global energy crisis supercharged by climate change, disorder in the financial markets, and almost certainly more war.

President Bush’s failure to lead was obvious in his state of the union speech, and in actions that followed – such as signing on with the continued starvation of Amtrak last week. If Mr Bush doesn’t like that crypto-private company, he could start an initiative of his own to reform and reorganize the railroad system we desperately need. So too, by the way, could Hillary Clinton or John Kerry, or any other putative Democratic leader. But they’re too busy grubbing around the contribution circuits to fatten their campaign war chests.

The major news media’s failure is near total, especially at the highest level of the New York Times, which gives more ink to narcissistic blather about gender identity than to the issue of how industrial civilization is going to carry on without its primary resources. The cable news networks have sunk into such mires of craven whorishness that they don’t even pretend to broadcast news between eight o’clock and midnight anymore, just tabloid crime spectacles and celebutante melodramas. The Wall Street Journal has resigned from reality in order to DJ the financial sector’s dangerous game of musical chairs.

I haven’t heard one college president address the question of how we are going to reform education when it ceases to be a mass consumer activity and the giant campuses of the land-grant diploma mills enter their own waiting crisis of scale.

Where are the doctors speaking out about the nightmarish swindle that corporate medicine has become? The most conspicuous public doctor, Senate majority leader Bill Frist of Tennessee, is under investigation precisely for working one angle of that swindle – insider trading of medical services stock. Isn’t it bad enough that hardworking people have to face cancer and mutilating injuries from auto accidents without also shoving them into personal bankruptcy?

Business leadership in America has become nothing less than a transparent wholesale shift of wealth by irresponsible boards of directors from the pension funds of longtime employees to the pockets of grifting CEOs – or the outright looting of supersized enterprises such as Enron. Here’s an interesting question-of-the-day for those of you who ponder over business matters: how does a person really improve his standard of living after the first $10 million? Give that some thought, because a few years hence a furious public is going to be asking that very question of fattened corporate executives as they prepare to roast them on spits over the flames of discarded automobile tires.

Where are the clergymen in America who are willing to tell their congregations that casino gambling is a moral fiasco and that the worship of unearned riches is an offense in the sight of God?

Where are the scientists who will inform the public and its political leaders that we really are in trouble with oil and natural gas, that markets do not magically deliver rescue remedies on demand, that technology and energy are not interchangeable and mutually substitutable, and that our nation is about five years from falling into a condition of energy starvation that will bring down all our complex systems of daily life?

When the public finally discovers how they have been let down or played by these leaders, there will be a convulsion more severe than the one that tore this country apart in 1861.

February 06 2006

By now, President Bush’s wildly irresponsible remarks on energy in his state of the union speech may have already vanished down the memory hole, but the damage will linger on. “America is addicted to oil”, Mr Bush began, failing to mention that underlying this addiction was a living arrangement that required people to drive their cars incessantly. A clueless public will continue to believe that “the best way to break this addiction is through technology …” and that “we must also change how we power our automobiles”.

Mr Bush recommended ethanol. As one wag put it after the speech: “America’s heroin is oil, and ethanol will be our methadone”. The expectation will still be that everybody must drive incessantly.

It is hard to believe that Mr Bush does not know the truth of the situation, or that some of the clever people around him who run his brain do not know it, namely that ethanol and all other bio-fuels are net energy losers, that they require more energy to grow and process them than they produce in the end, and that the energy “inputs” required to do this are none other than oil and natural gas, the same fuels we already run engines on.

The president also said that “breakthroughs on this and other new technologies will help us reach another great goal, to replace more than 75 percent of our oil imports from the Middle East by 2025”.

In point of fact, our oil imports from anywhere on the planet will be reduced by more than 75 percent because by that time worldwide oil depletion will be advanced to its terminal stage, and nobody will have any oil left to export – assuming that the industrial nations have not ravaged each other by then in a war to control the diminishing supply of oil.

The key to the stupidity evinced by Mr Bush’s speech is the assumption that we ought to keep living the way we do in America, that we can keep running the interstate highway system, WalMart, and Walt Disney World on some other basis besides fossil fuels. The public probably wishes that this were so, but it isn’t a service to pander to their wishes instead of addressing the mandates of reality. And reality is telling us something very different. Reality is saying that the life of incessant motoring is a suicidal fiasco, and if we don’t learn to inhabit the terrain of North America differently, a lot of us are going die, either in war, or by starvation when oil-and-gas-based farming craps out, or in civil violence proceeding from failed economic expectations.

I hate to keep harping on this, but Mr Bush could have announced a major effort to restore the American railroad system. It would have been a major political coup. It would have a huge impact on our oil use. The public would benefit from it tremendously. And it would have put thousands of people to work on something really meaningful. Unlike trips to Mars and experiments in cold fusion, railroads are something we already know how to do, and the tracks are lying out there waiting to be fixed. But the reigning delusions of Hollywood and Las Vegas prevent us from thinking realistically about these things. We’re only into wishing for grand slam home runs and five-hundred-million-dollar lottery jackpots. Anything less than that makes us feel like losers.

Meanwhile, the official Democratic Party response to Mr Bush’s fucking nonsense was the stupendous fatuousness of newly-elected Virginia Governor Tim Kaine’s rebuttal, a saccharine gruel of platitudes and panderings that made me want to shoot members of my own party on sight.

History will look back in wonder and nausea at the twitterings of these idiots as the world they pretended to run lurched into darkness.

http://www.kunstler.com/mags_diary16.html

Bill Totten http://www.ashisuto.co.jp/english/index.html

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