End-time for USA upon oil collapse
Written by Jan Lundberg
Culture Change Letter #100
A scenario for a sustainable future
It is becoming clear to more and more energy analysts that the United States of America as we know it will not endure for long. However, the U.S. may not last at all, if oil collapse and the birth of a sustainable culture play out freely. Primarily considering the implications of "peak oil," let us explore key unforgiving trends, dispassionately, so as to arrive at a truthful and hopefully constructive vision for the future.
Most scenarios reflect wishful thinking or influence from the mass media, academia and industrial interests. Rather than predictions such as the promise of a technologically green consumer society -- a popular preference -- a clear analysis must include all the main elements however unpalatable. To create a better world we must first deal with hard reality. What is ahead that we cannot change? When that question is faced honestly, the possibility is greater to affect future change in a positive way. And there is hope in the resurgence of community and renewed appreciation of nature.
I am a petroleum-industry analyst, although I last saw any money from the oil industry back in 1988 when I told Exxon and Mobil I was terminating my market research business. My office then became an environmental institute, and I proceeded to get a much clearer picture of oil's place in the world than from my previous sixteen years known for publishing "the bible of the oil industry," the Lundberg Letter. My understanding of oil and energy in the economy and culture has brought me to my present analysis about the end of the United States of America.
Here are my limits on my objectivity: I have no investments other than wanting to see family and friends do especially well in terms of health and happiness in the extremely turbulent phase ahead. I am further biased in wanting the Earth to have maximum biodiversity, but either the web of life holds or it will not. I will shed no tears over the disappearance of General Motors, for example, which is teetering already. Such a corporation -- found guilty for destroying dozens of cities' electric rail trolley service -- is an enemy of the planet and of the people.
The fall of the U.S. may be the swiftest empire collapse in world history. It is obvious that the U.S. population and the nation's infrastructure is heavily petroleum dependent. The U.S. peaked in oil production (extraction) in 1971. The world may be peaking now, as some evidence indicates, or in a few short years. As a severe energy shortage is on tap as soon as the gap between supply and demand is felt by the market, and the Earth gives noticeably less oil than just recently, there will be a cascade of impacts on the economy and people's lives.
So it will not matter how much oil is still in the ground, or if other ways of obtaining and using energy are more renewable and greener: A massive shut down of petroleum supply brought about by market panic and economic collapse will terminate corporate globalism and the political landscape as well. [As discussed in this essay and in links at the end, production of other forms of energy cannot substitute for petroleum and will not be maximized for readiness anyway.] Many aspects of modern society are at a breaking point already, whether one looks at the Iraq war over oil, the housing market bubble, U.S. debt and deficits, or the prospects of damaging weather from the fast distorting of the planet's climate.
Not only will the sudden oil shortage ahead mean the Final Energy Crisis, the present economy only works on growth: so even a plateau of global petroleum extraction -- what seems to be happening now, although it is being called "insufficient refining capacity for poor quality crude oil" -- would mean the house of economic cards collapses on its own. Recovery from such an event, even if not from oil shortage, would appear impossible because supplies of oil would be among the commodities suddenly scarce, and this would have a terminal effect on much economic activity and people's lives.
With so much local business and self-sufficiency destroyed by Walmartization, costs of urban sprawl, medical costs and the drain of militarism, impacts from oil collapse will be brutally thorough in the U.S. and almost as thorough in all other industrialized societies. Security, leadership and individual self-responsibility we have almost none: "We have met the terrorist and the terrorist is us," to paraphrase Walt Kelly's Pogo.
I decided to outline my scenario of the end of the United States after co-hosting a talk show on San Francisco radio with Martin Matthews. We got a call in on the air from a lady wanting to know if there were any relevant politicians to deal with peak oil. I came close to suggesting Congressman Roscoe Bartlett, who quoted me on the effects of peak oil before Congress on C-SPAN television. But the Congressman's office had told me he would not be seeking higher office. Martin and I continued our conversation over some Arab food and I outlined my end-of-the-USA outlook. Later that same day, June 16, 2005, I conferred with Lonnie Maxfield of Jivan Institute in Olympia, Washington by telephone. He asked me if I thought the U.S.A. would survive long beyond this time in history. We agree the U.S. will not last.
The social fabric has been unraveling for several decades, and the lack of solidarity or social cohesion is one of the reasons there must be a collapse in the U.S. -- after all, do you see community-spirit on the rise and an actual transition underway to a sustainable and ecologocial society? As this series of essays has explored, people are driven apart by materialism and trying to separate themselves from nature.
Susan Meeker-Lowry, author and editorial contributor to Culture Change, points out that people are noticing climate change and the prospect of tighter energy supplies, and are seriously worried about the implications such as heating their homes and paying their taxes. "But we need to be dealing with these issues as a community, not as individual family units. We need to be creating safety nets for ourselves, preparing for the day when the bills won't get paid because there's no more money and we need to defend our homes from the wealthy who will try and take them away for nonpayment of mortgage or taxes," she says.
Energy fantasy and reality
What about a "solar economy" or "the Hydrogen Economy"? Won't technology save us, when it's so clear that SUVs are so inefficient and silly? Can't the great American public meet the challenge of dwindling energy supplies and "take back America" by electing at least another Jimmy Carter who's more reasonable about energy?
The problem with renewable energy is that it's not so renewable. The energy production ratio of non-oil energy extraction is comparatively poor. Additionally, the present infrastructure is entirely geared toward petroleum which allows for our vast, consuming population size. Renewable energy will have its niche in local applications, but it will never power a global economy. Renewable energy will not replace a fleet of vehicles, just for the reason that not enough rubber trees can meet the demand of the necessary tires. The existence and claims of renewable energy have mainly served to obscure the urgent need to simply slash consumption of energy -- whatever the production mode. It may be too late to remake the U.S. infrastructure to run commerce and transportation on, say, renewable-energy powered trains, even if they were very energy efficient and were ready to manufacture on a huge scale.
There are short-term signs and indicators that the U.S. has worn out its already slim welcome the world over. That has not stopped the U.S. rapacious military industrial complex and its financial and political juggernaut, as depicted in John Perkins' book Confessions of an Economic Hit Man. Another "intelligence" caper and bloody coup or invasion is always in the bag of tricks of the U.S., whether or not the rest of the world wants an end to the interference and rip-offs. The prestige of the U.S. may not be of much concern to the zealot U.S. neo-conservatives or greedy marketeers, but the game is certainly all too clear -- as the Downing Street Memo and other evidence reveals. Climate change is more blood on the U.S.'s hands, as the nation is the biggest greenhouse gas emitter and will not even cut back on the easy waste in energy consumption.
Yet, world opinion and a social movement much stronger than the weak anti-war movement in the U.S. do not comprise a significant opposition to the U.S. There is not even clarity on who the enemies of the U.S. really are, when Osama bin Laden and his group had been U.S. operatives and not seriously targeted by the long arm of the (U.S.) law. So, absent a huge military/terroristic attack on the U.S. that would really bring it to its knees, which may involve nuclear weapons, I examine more certain factors and outcomes: the effects of oil collapse.
An informative analysis, Last Days of America?, by Stuart Rodman, is on the Culture Change website. It is a force-of-nature kind of exploration on how today's oil-war mongering society is going to be unsuccessful in sustaining itself, rather than a political analysis of the post-oil-collapse USA. Rodman writes,
"We live in an America long since petroformed by the oil industry from a land of independent family farms and businesses, to a nation dependent like serfs on their lord, on the barons of oil for everything from fuel to fertilizer. Today as we watch without protest, a new Feudalism is being forged worldwide by their mighty armies, our indignation subdued by the prospect of fueling our SUVs with cheap ill begotten oil. And we... kill for them. " Rodman opens his essay with a quote by Jay Hanson, the creator of dieoff.org: "An 'energy-limited economy' is one where more energy cannot be had at any price. The global economy will become 'energy-limited' once global oil production peaks…."
There is no Plan B for coping with a terminal oil shock to the economy. Therefore, a breakdown of society must ensue, starting with "the trucks will not be pulling into Wal-Mart or Safeway," as I was quoted in Congress on May 12, 2005. When people cannot get transportation to their jobs, business stops. People will be panicking first about gasoline, and then about how much food and water they have -- tragically trying to protect those meager supplies in an unforgiving urban environment. Nature has been made to stop offering up the simple essentials of life, when the privatized fortress and paved-over toxic cities rely on money and cheap energy to move everything around the world. The world as we "know" it will end but we'll get to know the world as it really is a lot better.
Die off will kick in first in terms of riots and killings by armed marauders, and "the police and military will not be able to keep order more than a few days, if at all" [my statement in Congress]. Next will come starvation, and cannibalism can only get people so far -- especially with rampant disease and lack of clean water to drink. Starvation will take care of perhaps 95% (ninety-five per cent) of the petroleum-dependent populations in the U.S. and perhaps elsewhere in modern industrialized countries. Did I mention overpopulation? The simple fact is that population has far overshot the ecological carrying capacity of the whole planet, especially in the fossil fuelish/foolish U.S.A. And petroleum is how food is grown, distributed, packaged and prepared.
After two months, most of the starvation will have had its effect because only the largest and strongest men can fast 50 days perhaps (with good water supply). Malnutrition and poor water quality will take out millions of people afterwards, as was seen in Iraq after the Gulf War during U.S.-imposed U.N. sanctions.
The U.S. and the International Red Cross will be powerless to prevent the disintegration of the food system and the workings of equitable distribution -- already a major problem that undermines faith in the present system and nation. People will be looking to their own immediate geographical areas to secure survival, as travel will be limited to using one's feet, bicycles, horses, and sailboats. Some fuel will exist, but it will be hoarded and killed for (as it is now in an Iraq War). Already, we can see how the U.S. as we know it will be mostly powerless, helpless and irrelevant -- although still dangerous or helpful in its throes. Florida will keep its oranges and Maine its lobsters.
I don't foresee large populations of humans living in cities with large buildings if energy is a problem and food has to be grown by others, on land outsite the paved-over portion, and brought in. In any event, after enough time for buildings to age, decay or come down from earthquakes, I don't see the energy and materials available for keeping huge-buildinged cities humming. We are talking about scale: smaller cities with intelligent design for density could endure and thrive. We may discover the upper limit of green cities, hopefully without again going too far beyond ecological carrying capacity. But It is worth remembering that the Agricultural Revolution that led to today's monumentally unsustainable civilization involved cities that by necessity heavily exploited people and outlying land, despite "the hanging gardens of Babylon." Cities have been romanticized, but they are an abomination compared to pristine nature.
The U.S. has been based on an orgy of resource appropriation and waste, as in a party with no tomorrow. "Party's Over!" - the first two words of my review of Beyond Oil - The Threat to Food and Fuel in the Coming Decades (Gever, Kaufmann, et al) published in Population and Environment: a Journal of Interdisciplinary Studies, Spring 1990. [An excerpt of my review written in 1988-89 is at dieoff.com/page20.htm ] The party known as the U.S. is all but over except in the minds of oblivious revelers already being kicked out of the house (of nature and the world community). However, sober heads will start to prevail as the new dawn breaks.
The picture starts to brighten
Before I paint my picture of hope that I believe is based on solid analysis, let us first examine the common assumption that people are going to behave as ruthlessly as ever. Here is the reason I believe we need not expect feudalism, mafia kingdoms and the like: upon oil collapse and the passing of the era of material abundance, people will have learned a lot about the failings of the previous culture. It didn't work, and anything that wants to follow in its footsteps will probably be viewed askance and be questioned and rejected. There may even be the equivalent of a new universal religion that appreciates the Earth and the need to get along in harmony with other species and one another.
After the devastation of the petroleum-powered civilization and its broken, smoldering aftermath, there will not be any other choice than sharing the world. If not, and sustainable models do not become the rule, then humanity will not pull through to keep evolving biologically. We are flirting with extinction in several ways: climate change, nuclear holocaust, and infertility from plastics, pesticides and other threats. Only with careful, respectful "precision living" that corrects all past mistakes of significance, can the human race endure -- given we are not already too far along in bringing about extinction of other species as a prelude to our own extinction.
As soon as people try to rebuild life as working members of a community, because they found right away that they needed each other to grow, gather, hunt and prepare food, a quasi tribal social system will form that looks out for members and maintains armed defense. However, after the rediscovered practices of mutual aid and cooperation bear fruit, there is too much proof of the value of solidarity and sharing resources and skills for there to be a serious threat from the outside. Die off will have taken care of even desperados who scrounged as lone wolves for a while. Life will for a long time not be much better for members of community, as they must eat strangely such as vermin for protein, perhaps cooked over furniture fires.
There will be little threat from within the tribes and the emerging bioregional nations, when the past is rejected for its unworkable, inequitable system that brought about ruin. The excesses of the past brought about the need for a nonmaterialistic culture. Private property as we know it will cease. Those who imagine their "castles" will protect them and insulate them from the human family will find they need help from others once the hoarded supplies are gone. Survivors surrounding the "castles" may be in a position to take what they want without fear of police cars and the national guard showing up. And, with a low population, there will be plenty of land to try to work with, to derive food, shelter, clothing and warmth. New social norms and tribal law will help break from the past and possibly outlaw incipient reversion to the failed system of exploitation of people and nature. In any case, the "new" model of sharing and cooperation will outdo in productivity any vestiges of the old models of selfishness and trying to insulate oneself or one's family from the surrounding changed world.
The U.S. will thus cease to exist, except perhaps in name for a while, as some patriots cling to the dream or illusion of a romanticized nation. But in practical terms, distant capital cities and bureaucracies will have little to offer surviving towns and communes that got no help in erecting a new, workable political entity based on local land possession and utilization. The energy for military action to enforce a reunification, or to subjugate, will be missing. As the spirit of liberation spreads from those who came together as equals to reinvent human society, any hold outs of today's virtual slaves -- who are somehow still being fed -- may quickly abandon their masters in hope of survival and a better life.
The main long-term job for our collective hope for survival will be restoration of the wounded Earth, as in decommissioning roads and allowing streams to embrace spawning fish again. Communities will have to reward those workers engaging in this essential repair of nature. There is little that can undo climate change already launched by decades of emissions, but tree planting will sequester carbon. Another way to reduce atmospheric heating is to cut down on the urban heat island effect: pavement and rooftops raise city temperatures. This mistake of "development" will have to be undone, because painting these urban surfaces white (sunlight-reflective rather than heat-absorbing, as in icecaps versus asphalt) would be impractical. Any available energy will have to be used for jack-hammering roads and bulldozing away the road bed, for example, because depaving with hand tools is hard enough with thinner pavements of driveways and parking lots.
Just as important will be baby-sitting the nukes. Nuclear power stations cannot be neglected or be subject to lack of back-up electricity. An elite of sacrificing members of the human family will have to guard the weapons of mass destruction and the nuclear waste that we have all been saddled with for hundreds of thousands of years into a compromised future.
This is our world, take it or leave it. Most of us will leave it sometime soon, in any country that is heavily petroleum dependent. But the survivors may do well, as in the lower-populated aftermath of the Black Death in the 14th century.
- Love and peace, Jan
*****
Further reading:
The Nature Revolution, short story by Jan Lundberg:
http://www.culturechange.org/e-letter-6cont.html
Energy production ratio (or net energy, or return on energy invested:
http://www.eclipsenow.org/Facts/alternateenergy.htm
http://www.abelard.org/briefings/energy-economics.asp#eroe
Ted Trainer's writings, including The Simpler Way:
http://www.arts.unsw.edu.au/tsw/
and Ted Trainer's Thoughts on the Transition to a Sustainable Society
http://socialwork.arts.unsw.edu.au/tsw/D75.ThoughtsonTrans.html
Stuart Rodman's "Last Days of America?" on this website:
http://www.culturechange.org/issue20/Last%20days%20of%20America.htm
http://Dieoff.org
The Long Emergency by James Howard Kunstler, Atlantic Monthly Press, 2005, New York, NY. www.groveatlantic.com
Green Cities and the End of the Age of Oil
http://www.commongroundmag.com/2005/cg3206/greencities3206.html
Tuesday, August 23, 2005
Another article from
www.fromthewilderness.com
quote:
--------------------------------------------------------------------------------
THE PEAK OIL CRISIS: A MID-SUMMER REVIEW
The Falls Church News-Press
Serving the City of Falls Church and Northern Virginia
July 28 - August 3, 2005 VOL. XV NO. 21
By Tom Whipple
The world has never been to peak oil before so we may not immediately recognize what we are seeing. A few months back, most knowledgeable people would have said oil at $60 a barrel would have triggered an economic tsunami by now. But surprise! Here we are and it seems to be business as usual in America with company earnings doing well, the stock market setting some new highs, and thanks to great prices, SUVs and pickups are leaping off dealers' floors and onto America 's highways.
So far this summer oil prices have been jumping up and down depending on which hurricane is or isn't threatening which offshore oilfield, the weekly US oil stocks report, and a little "what is happening in China?" thrown in. The International Energy Agency (keeper of the books on the world's oil supplies and who incidentally haven't had much of a track record recently) says demand - especially from China - is not what it was supposed to be this year, so we can all relax for a while and enjoy the rest of the summer. It may not be 1914 redux after all.
Below the radar of even the most attentive newspaper readers, however, the first stirrings of peak oil reality are starting to trickle in. Not surprisingly, most of these reports come from the poorer parts of the world where $60 oil is simply too much for fragile economies.
Here are a few of the items:
Last week the BBC reported that dozens were killed in fuel riots across Yemen when the government withdrew subsidies resulting in dramatic price increases.
All across Indonesia people were lining up at gas stations in response to developing fuel shortages. In one city, half the public transport was inoperable due to a lack of fuel.
In Zimbabwe , the government has moved to deregulate fuel procurement in the face of severe shortages: waits of hours for buses, gas lines that are blocks long, and a bread shortage. The black market price for gasoline is now ten times the official rate.
Nearly all the poorer countries make their electricity using diesel generators. Nicaragua , one of the poorest countries in Central America , recently started blacking out the poorer districts between 7 and 10 p.m. , the hours of peak usage.
Tanzania , with the highest gasoline taxes in East Africa and a chaotic oil marketing system, is seeing its plans for economic growth "suffocated" by high-priced oil. Tanzania also handles fuel for the landlocked states of Malawi , Rwanda , the Eastern Congo , Burundi and Uganda.
And closer to home, Maxjet put off plans to offer cheap flights from Baltimore to London until spring when the company hopes fuel prices will be cheaper.
At mid-summer, the supply-demand situation remains about the same. OPEC is supposed to be increasing its daily output by some 500K barrels a day and there is evidence from increased tanker charters that this indeed may be happening. In the meantime, production in the non-OPEC countries seems to have dropped by a collective 1.2 million barrels a day below the IEA forecasts for the first half.
Thus, we have learned that $60 oil and the ensuing $2.30 gasoline is not much of deterrent to American driving habits. It is not doing much to the economy, and certainly isn't stirring up any serious action in the Congress which continues to fuss around with a largely meaningless energy bill. With good economic growth, the US demand for oil continues to increase.
The Chinese continue to claim their economy is growing nicely, suggesting increased demand for oil in the near future.
OPEC and the Russians - the folks with some spare capacity left - seem to have at least squeezed out one last round of production increases in response to calls to stem growth-endangering higher prices. At the same time, many of the world's older non-OPEC oil fields are talking of dramatic drops in production.
If one puts all this together, it is hard to escape the conclusion we just may be very close to Hubbert's peak right now and, some day, 2005 will be declared the year of peak oil.
www.fromthewilderness.com
quote:
--------------------------------------------------------------------------------
THE PEAK OIL CRISIS: A MID-SUMMER REVIEW
The Falls Church News-Press
Serving the City of Falls Church and Northern Virginia
July 28 - August 3, 2005 VOL. XV NO. 21
By Tom Whipple
The world has never been to peak oil before so we may not immediately recognize what we are seeing. A few months back, most knowledgeable people would have said oil at $60 a barrel would have triggered an economic tsunami by now. But surprise! Here we are and it seems to be business as usual in America with company earnings doing well, the stock market setting some new highs, and thanks to great prices, SUVs and pickups are leaping off dealers' floors and onto America 's highways.
So far this summer oil prices have been jumping up and down depending on which hurricane is or isn't threatening which offshore oilfield, the weekly US oil stocks report, and a little "what is happening in China?" thrown in. The International Energy Agency (keeper of the books on the world's oil supplies and who incidentally haven't had much of a track record recently) says demand - especially from China - is not what it was supposed to be this year, so we can all relax for a while and enjoy the rest of the summer. It may not be 1914 redux after all.
Below the radar of even the most attentive newspaper readers, however, the first stirrings of peak oil reality are starting to trickle in. Not surprisingly, most of these reports come from the poorer parts of the world where $60 oil is simply too much for fragile economies.
Here are a few of the items:
Last week the BBC reported that dozens were killed in fuel riots across Yemen when the government withdrew subsidies resulting in dramatic price increases.
All across Indonesia people were lining up at gas stations in response to developing fuel shortages. In one city, half the public transport was inoperable due to a lack of fuel.
In Zimbabwe , the government has moved to deregulate fuel procurement in the face of severe shortages: waits of hours for buses, gas lines that are blocks long, and a bread shortage. The black market price for gasoline is now ten times the official rate.
Nearly all the poorer countries make their electricity using diesel generators. Nicaragua , one of the poorest countries in Central America , recently started blacking out the poorer districts between 7 and 10 p.m. , the hours of peak usage.
Tanzania , with the highest gasoline taxes in East Africa and a chaotic oil marketing system, is seeing its plans for economic growth "suffocated" by high-priced oil. Tanzania also handles fuel for the landlocked states of Malawi , Rwanda , the Eastern Congo , Burundi and Uganda.
And closer to home, Maxjet put off plans to offer cheap flights from Baltimore to London until spring when the company hopes fuel prices will be cheaper.
At mid-summer, the supply-demand situation remains about the same. OPEC is supposed to be increasing its daily output by some 500K barrels a day and there is evidence from increased tanker charters that this indeed may be happening. In the meantime, production in the non-OPEC countries seems to have dropped by a collective 1.2 million barrels a day below the IEA forecasts for the first half.
Thus, we have learned that $60 oil and the ensuing $2.30 gasoline is not much of deterrent to American driving habits. It is not doing much to the economy, and certainly isn't stirring up any serious action in the Congress which continues to fuss around with a largely meaningless energy bill. With good economic growth, the US demand for oil continues to increase.
The Chinese continue to claim their economy is growing nicely, suggesting increased demand for oil in the near future.
OPEC and the Russians - the folks with some spare capacity left - seem to have at least squeezed out one last round of production increases in response to calls to stem growth-endangering higher prices. At the same time, many of the world's older non-OPEC oil fields are talking of dramatic drops in production.
If one puts all this together, it is hard to escape the conclusion we just may be very close to Hubbert's peak right now and, some day, 2005 will be declared the year of peak oil.
PETROCOLLAPSE: CAN YOU LIVE WITHOUT INDOOR RUNNING WATER?
Written by Jan Lundberg
Culture Change Letter #101
http://culturechange.org/cms/index.php?option=com_content&task=view&id=14&
Itemid=2.html#cont
The answer to the question "Can you live without indoor running water?" is simple: you'll have to. The passing of abundant oil is not shaping up to be a soft landing for those with the fattest asses. And in this world, we all know which nation leads the way in obesity. Contrast this with the image of slender villagers carrying water casks on their heads, and how their food supply tends to be very local: this will be the envy of U.S. consumers caught short.
You can live without functional plumbing, but you cannot live without water. Some indoor plumbing may work after the energy crisis hits with all its might. But, as this report endeavors to warn, the water in your outdoor environment -- such as it is -- will be what you live on (or that doesn't allow you to live at all). What a discovery for the nature deniers to experience. Will frightened hoards be the rule in U.S. cities rather than the exception?
The average amount of water consumed per capita in the U.S. is 183 gallons a day (1990; U.S. EPA). This reflects public water supply usage, and it's twice as high in the western U.S. as in the east. One reason is that irrigation uses 81% of water in the nation. Problems with irrigation: huge energy demand for pumping; drawdowns of ancient aquifers, and salinization.
In Mesopotamia the salinization and deforestation once characterized the beginning of Western Civilization's illustrious march of degrading resources for profit and empire, culminating in today's occupation of Mesopotamia by the U.S. (The serpent is eating its tail.) Clean water is hard to come by in Iraq: 39% of the people don't have it. Deliberate bombing of water treatment and other such facilities has gone on through three U.S. presidents. Petroleum dependence for pumping, when petroleum is lacking in Iraq of all places, is another reason for poor supply. The contamination from petrochemicals and depleted uranium in Iraq is yet another matter for us water piggies in the U.S. to ignore as long as possible.
Back in the USA: picture the state of mind of ornery citizens if four in ten people had really bad or insufficient water. It will be over 9 in 10 come petrocollapse. This is because of the extreme dependence on massively complex and centralized water supply systems that are run with mainly energy or materials from oil and natural gas. Although most of the systems run on electrical energy, and coal is the largest source of electrical energy, there is still a petroleum infrastructure involved: necessary to keep coal supplies moving and for running any system in the U.S. today. Also, petrocollapse -- System Collapse -- is going to bring down the coal sector as well, although not as fast as bringing down the petroleum-supplied aspect of the grid.
Although "every effort" will be made to keep water systems pumping and purifying, when supplies of fuel run short and other systems in the economy are affected and come to a standstill, the basics of industrial progress will show their vulnerability to bad planning and overpopulation. [Community solutions, covered later in this essay, may hold some hope for water supply.]
Water "return flow" means supplies recycled, such as in grey water gathered for the garden, as opposed to lost as in irrigation. Next time you see someone using a gallon of fresh water to wash a spoon, ask the person if that water could be useful for growing tomatoes -- on the balcony if there's no garden.
The U.S. is going to have to throw certain laws and regulations out the window if people are going to use greywater and take other measures for sustainable living. If for some reason water privatization accelerates before petrocollapse, and price rates jump, the behavior of militant Bolivians could be the model in the U.S.A. The U.S. corporation in question was ejected from Bolivia by protesters, and the nation's official leadership lost almost all its clout. [Later in this column: water politics and water history.]
U.S. officials in power today will be laughed about in future, if they're lucky. One hears of future hatred for our whole generation, even of everyone alive today -- although that's going too far.
I try not to pay too much mind to the constant errors and schemes of the wealthy elite and power players. I wish I could say it's because I'm busy writing songs. My main job that I don't like to be distracted from is to point out the main runaway freight trains on the tracks: a collapsing economy and nature batting last. It sure would be nice if the little boys in DC and London (and in most capital cities) would behave themselves, but what can ya do? Vote for a different little boy? It's too late to stop the train wrecks starting to overshadow human drama of the so-called status quo.
I say "so-called" because the status quo of almost anything is going to soon become history. There's good and bad in that, but those many people and other species that don't make it are not going to appreciate the good aspects of complete collapse.
Running water will be cut off and "the pump don't work," not because, as Bob Dylan sang "the vandals took the handles." It will be because energy, usually petroleum, is used for pumping water from major sources a long way from and to the now-teeming cities and wasteful factory-farms. Meanwhile, even drawing some cold water out of one's tap means warming the globe due to pumping-energy. Oops, well at least "I turn the tap off when I'm brushing my teeth."
A more optimistic scenario would include the following techniques, contributed by a reader in rural northern California:
"People in cities and burbs will eventually turn on a tap and get nothing. But they won't panic if enough folks in the community know and teach about rainwater collection, cisterns, barrels, and tanks, bucket composting toilets, composting one's waste (including urine and shit) into fertilizer, greywater reuse, swales, pavement removal, community gardens on a massive scale. -- etc etc etc. Hell, in-depth permaculture training should be mandatory in every school (if only I were dictator, ahh!). Don't sit in the dark quaking with fear, light an olive oil lamp (I've experimented quite a lot with them, and have written an article on it--easily feasible but a bit messy). Plant olive trees now, line city streets with them, so every neighborhood has a local source of veg oil."
I did not ask if you could live without indoor lighting; most places have windows and you can go to bed when it gets dark. In the long run, really living off the "fat of the land" (Hah!) of today's stressed ecosystems may mean the lighting source is rare beeswax candles where olive oil is not handy. What's that you say, "Oh how unlikely!"?
I did not ask you if you could live without food, because you can't. Not for long anyway. You can read my fasting treatise if you like, Culture Change Letter #92 April 8, 2005. Maybe the experience of a long fast will have an unexpected advantage, that of appearing sick and emaciated to those looking for fresh food in the form of human meat. There will be cannibalism for a few months at most, I figure, as the dust settles from petrocollapse. I am not supposed to say this, many readers say, even if it appears certain.
Then we see the Long Emergency, as James Howard Kunstler calls it, although I don't share his visualizing much industrial activity and consuming based on reliance on coal for major electricity generation. Petrocollapse is going to put a massive, crippling monkeywrench into business-as-usual. The extent and degree of upheaval will be matched by its rapidity and apparent suddenness. It is too late to escape it no matter who were put in charge of economics and planning for oil-guzzling nations. Meanwhile, petrocollapse is close on the horizon but is officially ignored. Must that be the way such a watershed of humanity's experience is dealt with? We could call it The Big Oops.
"Peak oil" can almost be an interchangeable concept with peak human population. The correlations on a graph, with plummeting extraction of crude and plummeting population size, are worth contemplating. I would like to be wrong about how imminent and sweeping collapse will be. Still, even if I am a bit premature, it's not like the collapse will "just be our children's children's problem" -- that would be too optimistic as to putting the time off into the future.
As to the potential for large disruption to supply from a relatively small shortfall of petroleum, a recent simulated energy crisis found "It was striking that by taking such small amounts off the market, you could have such dramatic impact" on world oil prices, said Robbie Diamond, the president of Securing America's Future Energy. He participated in the mock crisis on June 23, 2005 in Washington, DC with two former CIA directors and several other former top policy-makers. Drawing from my work at Lundberg Survey where we predicted the Second Oil Shock in 1979, I have been saying for years that the next energy crisis will be triggered by a relatively small shortfall of petroleum.
So, what will you do about clean water? Use a plastic tarp or the asphalt-shingled roof for rainwater when the petrochemicals therein are a health hazard? Yep, you betcha. I even did it myself when I lived in my own shelter in the redwood forest. But I made sure that tarp had been pounded by the rain for a good spell before drinking out of it. Sure was handy though.
For fat-asses to get in shape for petrocollapse, they might switch from drinking soda pops with dangerous chemicals and empty calories from sugar, and instead enjoy fresh water out of the tap (a safer source than plastic bottles).
Written by Jan Lundberg
Culture Change Letter #101
http://culturechange.org/cms/index.php?option=com_content&task=view&id=14&
Itemid=2.html#cont
The answer to the question "Can you live without indoor running water?" is simple: you'll have to. The passing of abundant oil is not shaping up to be a soft landing for those with the fattest asses. And in this world, we all know which nation leads the way in obesity. Contrast this with the image of slender villagers carrying water casks on their heads, and how their food supply tends to be very local: this will be the envy of U.S. consumers caught short.
You can live without functional plumbing, but you cannot live without water. Some indoor plumbing may work after the energy crisis hits with all its might. But, as this report endeavors to warn, the water in your outdoor environment -- such as it is -- will be what you live on (or that doesn't allow you to live at all). What a discovery for the nature deniers to experience. Will frightened hoards be the rule in U.S. cities rather than the exception?
The average amount of water consumed per capita in the U.S. is 183 gallons a day (1990; U.S. EPA). This reflects public water supply usage, and it's twice as high in the western U.S. as in the east. One reason is that irrigation uses 81% of water in the nation. Problems with irrigation: huge energy demand for pumping; drawdowns of ancient aquifers, and salinization.
In Mesopotamia the salinization and deforestation once characterized the beginning of Western Civilization's illustrious march of degrading resources for profit and empire, culminating in today's occupation of Mesopotamia by the U.S. (The serpent is eating its tail.) Clean water is hard to come by in Iraq: 39% of the people don't have it. Deliberate bombing of water treatment and other such facilities has gone on through three U.S. presidents. Petroleum dependence for pumping, when petroleum is lacking in Iraq of all places, is another reason for poor supply. The contamination from petrochemicals and depleted uranium in Iraq is yet another matter for us water piggies in the U.S. to ignore as long as possible.
Back in the USA: picture the state of mind of ornery citizens if four in ten people had really bad or insufficient water. It will be over 9 in 10 come petrocollapse. This is because of the extreme dependence on massively complex and centralized water supply systems that are run with mainly energy or materials from oil and natural gas. Although most of the systems run on electrical energy, and coal is the largest source of electrical energy, there is still a petroleum infrastructure involved: necessary to keep coal supplies moving and for running any system in the U.S. today. Also, petrocollapse -- System Collapse -- is going to bring down the coal sector as well, although not as fast as bringing down the petroleum-supplied aspect of the grid.
Although "every effort" will be made to keep water systems pumping and purifying, when supplies of fuel run short and other systems in the economy are affected and come to a standstill, the basics of industrial progress will show their vulnerability to bad planning and overpopulation. [Community solutions, covered later in this essay, may hold some hope for water supply.]
Water "return flow" means supplies recycled, such as in grey water gathered for the garden, as opposed to lost as in irrigation. Next time you see someone using a gallon of fresh water to wash a spoon, ask the person if that water could be useful for growing tomatoes -- on the balcony if there's no garden.
The U.S. is going to have to throw certain laws and regulations out the window if people are going to use greywater and take other measures for sustainable living. If for some reason water privatization accelerates before petrocollapse, and price rates jump, the behavior of militant Bolivians could be the model in the U.S.A. The U.S. corporation in question was ejected from Bolivia by protesters, and the nation's official leadership lost almost all its clout. [Later in this column: water politics and water history.]
U.S. officials in power today will be laughed about in future, if they're lucky. One hears of future hatred for our whole generation, even of everyone alive today -- although that's going too far.
I try not to pay too much mind to the constant errors and schemes of the wealthy elite and power players. I wish I could say it's because I'm busy writing songs. My main job that I don't like to be distracted from is to point out the main runaway freight trains on the tracks: a collapsing economy and nature batting last. It sure would be nice if the little boys in DC and London (and in most capital cities) would behave themselves, but what can ya do? Vote for a different little boy? It's too late to stop the train wrecks starting to overshadow human drama of the so-called status quo.
I say "so-called" because the status quo of almost anything is going to soon become history. There's good and bad in that, but those many people and other species that don't make it are not going to appreciate the good aspects of complete collapse.
Running water will be cut off and "the pump don't work," not because, as Bob Dylan sang "the vandals took the handles." It will be because energy, usually petroleum, is used for pumping water from major sources a long way from and to the now-teeming cities and wasteful factory-farms. Meanwhile, even drawing some cold water out of one's tap means warming the globe due to pumping-energy. Oops, well at least "I turn the tap off when I'm brushing my teeth."
A more optimistic scenario would include the following techniques, contributed by a reader in rural northern California:
"People in cities and burbs will eventually turn on a tap and get nothing. But they won't panic if enough folks in the community know and teach about rainwater collection, cisterns, barrels, and tanks, bucket composting toilets, composting one's waste (including urine and shit) into fertilizer, greywater reuse, swales, pavement removal, community gardens on a massive scale. -- etc etc etc. Hell, in-depth permaculture training should be mandatory in every school (if only I were dictator, ahh!). Don't sit in the dark quaking with fear, light an olive oil lamp (I've experimented quite a lot with them, and have written an article on it--easily feasible but a bit messy). Plant olive trees now, line city streets with them, so every neighborhood has a local source of veg oil."
I did not ask if you could live without indoor lighting; most places have windows and you can go to bed when it gets dark. In the long run, really living off the "fat of the land" (Hah!) of today's stressed ecosystems may mean the lighting source is rare beeswax candles where olive oil is not handy. What's that you say, "Oh how unlikely!"?
I did not ask you if you could live without food, because you can't. Not for long anyway. You can read my fasting treatise if you like, Culture Change Letter #92 April 8, 2005. Maybe the experience of a long fast will have an unexpected advantage, that of appearing sick and emaciated to those looking for fresh food in the form of human meat. There will be cannibalism for a few months at most, I figure, as the dust settles from petrocollapse. I am not supposed to say this, many readers say, even if it appears certain.
Then we see the Long Emergency, as James Howard Kunstler calls it, although I don't share his visualizing much industrial activity and consuming based on reliance on coal for major electricity generation. Petrocollapse is going to put a massive, crippling monkeywrench into business-as-usual. The extent and degree of upheaval will be matched by its rapidity and apparent suddenness. It is too late to escape it no matter who were put in charge of economics and planning for oil-guzzling nations. Meanwhile, petrocollapse is close on the horizon but is officially ignored. Must that be the way such a watershed of humanity's experience is dealt with? We could call it The Big Oops.
"Peak oil" can almost be an interchangeable concept with peak human population. The correlations on a graph, with plummeting extraction of crude and plummeting population size, are worth contemplating. I would like to be wrong about how imminent and sweeping collapse will be. Still, even if I am a bit premature, it's not like the collapse will "just be our children's children's problem" -- that would be too optimistic as to putting the time off into the future.
As to the potential for large disruption to supply from a relatively small shortfall of petroleum, a recent simulated energy crisis found "It was striking that by taking such small amounts off the market, you could have such dramatic impact" on world oil prices, said Robbie Diamond, the president of Securing America's Future Energy. He participated in the mock crisis on June 23, 2005 in Washington, DC with two former CIA directors and several other former top policy-makers. Drawing from my work at Lundberg Survey where we predicted the Second Oil Shock in 1979, I have been saying for years that the next energy crisis will be triggered by a relatively small shortfall of petroleum.
So, what will you do about clean water? Use a plastic tarp or the asphalt-shingled roof for rainwater when the petrochemicals therein are a health hazard? Yep, you betcha. I even did it myself when I lived in my own shelter in the redwood forest. But I made sure that tarp had been pounded by the rain for a good spell before drinking out of it. Sure was handy though.
For fat-asses to get in shape for petrocollapse, they might switch from drinking soda pops with dangerous chemicals and empty calories from sugar, and instead enjoy fresh water out of the tap (a safer source than plastic bottles).
In 1977 then US president Jimmy Carter saw this coming: Read his 1977 speech below:
quote:
--------------------------------------------------------------------------------
Jimmy Carter delivered this televised speech on April 18, 1977.
Tonight I want to have an unpleasant talk with you about a problem unprecedented in our history. With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.
It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century.
We must not be selfish or timid if we hope to have a decent world for our children and grandchildren.
We simply must balance our demand for energy with our rapidly shrinking resources. By acting now, we can control our future instead of letting the future control us.
Two days from now, I will present my energy proposals to the Congress. Its members will be my partners and they have already given me a great deal of valuable advice. Many of these proposals will be unpopular. Some will cause you to put up with inconveniences and to make sacrifices.
The most important thing about these proposals is that the alternative may be a national catastrophe. Further delay can affect our strength and our power as a nation.
Our decision about energy will test the character of the American people and the ability of the President and the Congress to govern. This difficult effort will be the "moral equivalent of war" -- except that we will be uniting our efforts to build and not destroy.
I know that some of you may doubt that we face real energy shortages. The 1973 gasoline lines are gone, and our homes are warm again. But our energy problem is worse tonight than it was in 1973 or a few weeks ago in the dead of winter. It is worse because more waste has occurred, and more time has passed by without our planning for the future. And it will get worse every day until we act.
The oil and natural gas we rely on for 75 percent of our energy are running out. In spite of increased effort, domestic production has been dropping steadily at about six percent a year. Imports have doubled in the last five years. Our nation's independence of economic and political action is becoming increasingly constrained. Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce.
The world now uses about 60 million barrels of oil a day and demand increases each year about 5 percent. This means that just to stay even we need the production of a new Texas every year, an Alaskan North Slope every nine months, or a new Saudi Arabia every three years. Obviously, this cannot continue.
We must look back in history to understand our energy problem. Twice in the last several hundred years there has been a transition in the way people use energy.
The first was about 200 years ago, away from wood -- which had provided about 90 percent of all fuel -- to coal, which was more efficient. This change became the basis of the Industrial Revolution.
The second change took place in this century, with the growing use of oil and natural gas. They were more convenient and cheaper than coal, and the supply seemed to be almost without limit. They made possible the age of automobile and airplane travel. Nearly everyone who is alive today grew up during this age and we have never known anything different.
Because we are now running out of gas and oil, we must prepare quickly for a third change, to strict conservation and to the use of coal and permanent renewable energy sources, like solar power.
The world has not prepared for the future. During the 1950s, people used twice as much oil as during the 1940s. During the 1960s, we used twice as much as during the 1950s. And in each of those decades, more oil was consumed than in all of mankind's previous history.
World consumption of oil is still going up. If it were possible to keep it rising during the 1970s and 1980s by 5 percent a year as it has in the past, we could use up all the proven reserves of oil in the entire world by the end of the next decade.
I know that many of you have suspected that some supplies of oil and gas are being withheld. You may be right, but suspicions about oil companies cannot change the fact that we are running out of petroleum.
All of us have heard about the large oil fields on Alaska's North Slope. In a few years when the North Slope is producing fully, its total output will be just about equal to two years' increase in our nation's energy demand.
Each new inventory of world oil reserves has been more disturbing than the last. World oil production can probably keep going up for another six or eight years. But some time in the 1980s it can't go up much more. Demand will overtake production. We have no choice about that.
But we do have a choice about how we will spend the next few years. Each American uses the energy equivalent of 60 barrels of oil per person each year. Ours is the most wasteful nation on earth. We waste more energy than we import. With about the same standard of living, we use twice as much energy per person as do other countries like Germany, Japan and Sweden.
One choice is to continue doing what we have been doing before. We can drift along for a few more years.
Our consumption of oil would keep going up every year. Our cars would continue to be too large and inefficient. Three-quarters of them would continue to carry only one person -- the driver -- while our public transportation system continues to decline. We can delay insulating our houses, and they will continue to lose about 50 percent of their heat in waste.
We can continue using scarce oil and natural to generate electricity, and continue wasting two-thirds of their fuel value in the process.
If we do not act, then by 1985 we will be using 33 percent more energy than we do today.
We can't substantially increase our domestic production, so we would need to import twice as much oil as we do now. Supplies will be uncertain. The cost will keep going up. Six years ago, we paid $3.7 billion for imported oil. Last year we spent $37 billion -- nearly ten times as much -- and this year we may spend over $45 billion.
Unless we act, we will spend more than $550 billion for imported oil by 1985 -- more than $2,500 a year for every man, woman, and child in America. Along with that money we will continue losing American jobs and becoming increasingly vulnerable to supply interruptions.
Now we have a choice. But if we wait, we will live in fear of embargoes. We could endanger our freedom as a sovereign nation to act in foreign affairs. Within ten years we would not be able to import enough oil -- from any country, at any acceptable price.
If we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source.
We will not be ready to keep our transportation system running with smaller, more efficient cars and a better network of buses, trains and public transportation.
We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.
If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.
But we still have another choice. We can begin to prepare right now. We can decide to act while there is time.
That is the concept of the energy policy we will present on Wednesday. Our national energy plan is based on ten fundamental principles.
The first principle is that we can have an effective and comprehensive energy policy only if the government takes responsibility for it and if the people understand the seriousness of the challenge and are willing to make sacrifices.
The second principle is that healthy economic growth must continue. Only by saving energy can we maintain our standard of living and keep our people at work. An effective conservation program will create hundreds of thousands of new jobs.
The third principle is that we must protect the environment. Our energy problems have the same cause as our environmental problems -- wasteful use of resources. Conservation helps us solve both at once.
The fourth principle is that we must reduce our vulnerability to potentially devastating embargoes. We can protect ourselves from uncertain supplies by reducing our demand for oil, making the most of our abundant resources such as coal, and developing a strategic petroleum reserve.
The fifth principle is that we must be fair. Our solutions must ask equal sacrifices from every region, every class of people, every interest group. Industry will have to do its part to conserve, just as the consumers will. The energy producers deserve fair treatment, but we will not let the oil companies profiteer.
The sixth principle, and the cornerstone of our policy, is to reduce the demand through conservation. Our emphasis on conservation is a clear difference between this plan and others which merely encouraged crash production efforts. Conservation is the quickest, cheapest, most practical source of energy. Conservation is the only way we can buy a barrel of oil for a few dollars. It costs about $13 to waste it.
The seventh principle is that prices should generally reflect the true replacement costs of energy. We are only cheating ourselves if we make energy artificially cheap and use more than we can really afford.
The eighth principle is that government policies must be predictable and certain. Both consumers and producers need policies they can count on so they can plan ahead. This is one reason I am working with the Congress to create a new Department of Energy, to replace more than 50 different agencies that now have some control over energy.
The ninth principle is that we must conserve the fuels that are scarcest and make the most of those that are more plentiful. We can't continue to use oil and gas for 75 percent of our consumption when they make up seven percent of our domestic reserves. We need to shift to plentiful coal while taking care to protect the environment, and to apply stricter safety standards to nuclear energy.
The tenth principle is that we must start now to develop the new, unconventional sources of energy we will rely on in the next century.
These ten principles have guided the development of the policy I would describe to you and the Congress on Wednesday.
Our energy plan will also include a number of specific goals, to measure our progress toward a stable energy system.
These are the goals we set for 1985:
--Reduce the annual growth rate in our energy demand to less than two percent.
--Reduce gasoline consumption by ten percent below its current level.
--Cut in half the portion of United States oil which is imported, from a potential level of 16 million barrels to six million barrels a day.
--Establish a strategic petroleum reserve of one billion barrels, more than six months' supply.
--Increase our coal production by about two thirds to more than 1 billion tons a year.
--Insulate 90 percent of American homes and all new buildings.
--Use solar energy in more than two and one-half million houses.
We will monitor our progress toward these goals year by year. Our plan will call for stricter conservation measures if we fall behind.
I cant tell you that these measures will be easy, nor will they be popular. But I think most of you realize that a policy which does not ask for changes or sacrifices would not be an effective policy.
This plan is essential to protect our jobs, our environment, our standard of living, and our future.
Whether this plan truly makes a difference will be decided not here in Washington, but in every town and every factory, in every home an don every highway and every farm.
I believe this can be a positive challenge. There is something especially American in the kinds of changes we have to make. We have been proud, through our history of being efficient people.
We have been proud of our leadership in the world. Now we have a chance again to give the world a positive example.
And we have been proud of our vision of the future. We have always wanted to give our children and grandchildren a world richer in possibilities than we've had. They are the ones we must provide for now. They are the ones who will suffer most if we don't act.
I've given you some of the principles of the plan.
I am sure each of you will find something you don't like about the specifics of our proposal. It will demand that we make sacrifices and changes in our lives. To some degree, the sacrifices will be painful -- but so is any meaningful sacrifice. It will lead to some higher costs, and to some greater inconveniences for everyone.
But the sacrifices will be gradual, realistic and necessary. Above all, they will be fair. No one will gain an unfair advantage through this plan. No one will be asked to bear an unfair burden. We will monitor the accuracy of data from the oil and natural gas companies, so that we will know their true production, supplies, reserves, and profits.
The citizens who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury.
We can be sure that all the special interest groups in the country will attack the part of this plan that affects them directly. They will say that sacrifice is fine, as long as other people do it, but that their sacrifice is unreasonable, or unfair, or harmful to the country. If they succeed, then the burden on the ordinary citizen, who is not organized into an interest group, would be crushing.
There should be only one test for this program: whether it will help our country.
Other generation of Americans have faced and mastered great challenges. I have faith that meeting this challenge will make our own lives even richer. If you will join me so that we can work together with patriotism and courage, we will again prove that our great nation can lead the world into an age of peace, independence and freedom.
quote:
--------------------------------------------------------------------------------
Jimmy Carter delivered this televised speech on April 18, 1977.
Tonight I want to have an unpleasant talk with you about a problem unprecedented in our history. With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.
It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century.
We must not be selfish or timid if we hope to have a decent world for our children and grandchildren.
We simply must balance our demand for energy with our rapidly shrinking resources. By acting now, we can control our future instead of letting the future control us.
Two days from now, I will present my energy proposals to the Congress. Its members will be my partners and they have already given me a great deal of valuable advice. Many of these proposals will be unpopular. Some will cause you to put up with inconveniences and to make sacrifices.
The most important thing about these proposals is that the alternative may be a national catastrophe. Further delay can affect our strength and our power as a nation.
Our decision about energy will test the character of the American people and the ability of the President and the Congress to govern. This difficult effort will be the "moral equivalent of war" -- except that we will be uniting our efforts to build and not destroy.
I know that some of you may doubt that we face real energy shortages. The 1973 gasoline lines are gone, and our homes are warm again. But our energy problem is worse tonight than it was in 1973 or a few weeks ago in the dead of winter. It is worse because more waste has occurred, and more time has passed by without our planning for the future. And it will get worse every day until we act.
The oil and natural gas we rely on for 75 percent of our energy are running out. In spite of increased effort, domestic production has been dropping steadily at about six percent a year. Imports have doubled in the last five years. Our nation's independence of economic and political action is becoming increasingly constrained. Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce.
The world now uses about 60 million barrels of oil a day and demand increases each year about 5 percent. This means that just to stay even we need the production of a new Texas every year, an Alaskan North Slope every nine months, or a new Saudi Arabia every three years. Obviously, this cannot continue.
We must look back in history to understand our energy problem. Twice in the last several hundred years there has been a transition in the way people use energy.
The first was about 200 years ago, away from wood -- which had provided about 90 percent of all fuel -- to coal, which was more efficient. This change became the basis of the Industrial Revolution.
The second change took place in this century, with the growing use of oil and natural gas. They were more convenient and cheaper than coal, and the supply seemed to be almost without limit. They made possible the age of automobile and airplane travel. Nearly everyone who is alive today grew up during this age and we have never known anything different.
Because we are now running out of gas and oil, we must prepare quickly for a third change, to strict conservation and to the use of coal and permanent renewable energy sources, like solar power.
The world has not prepared for the future. During the 1950s, people used twice as much oil as during the 1940s. During the 1960s, we used twice as much as during the 1950s. And in each of those decades, more oil was consumed than in all of mankind's previous history.
World consumption of oil is still going up. If it were possible to keep it rising during the 1970s and 1980s by 5 percent a year as it has in the past, we could use up all the proven reserves of oil in the entire world by the end of the next decade.
I know that many of you have suspected that some supplies of oil and gas are being withheld. You may be right, but suspicions about oil companies cannot change the fact that we are running out of petroleum.
All of us have heard about the large oil fields on Alaska's North Slope. In a few years when the North Slope is producing fully, its total output will be just about equal to two years' increase in our nation's energy demand.
Each new inventory of world oil reserves has been more disturbing than the last. World oil production can probably keep going up for another six or eight years. But some time in the 1980s it can't go up much more. Demand will overtake production. We have no choice about that.
But we do have a choice about how we will spend the next few years. Each American uses the energy equivalent of 60 barrels of oil per person each year. Ours is the most wasteful nation on earth. We waste more energy than we import. With about the same standard of living, we use twice as much energy per person as do other countries like Germany, Japan and Sweden.
One choice is to continue doing what we have been doing before. We can drift along for a few more years.
Our consumption of oil would keep going up every year. Our cars would continue to be too large and inefficient. Three-quarters of them would continue to carry only one person -- the driver -- while our public transportation system continues to decline. We can delay insulating our houses, and they will continue to lose about 50 percent of their heat in waste.
We can continue using scarce oil and natural to generate electricity, and continue wasting two-thirds of their fuel value in the process.
If we do not act, then by 1985 we will be using 33 percent more energy than we do today.
We can't substantially increase our domestic production, so we would need to import twice as much oil as we do now. Supplies will be uncertain. The cost will keep going up. Six years ago, we paid $3.7 billion for imported oil. Last year we spent $37 billion -- nearly ten times as much -- and this year we may spend over $45 billion.
Unless we act, we will spend more than $550 billion for imported oil by 1985 -- more than $2,500 a year for every man, woman, and child in America. Along with that money we will continue losing American jobs and becoming increasingly vulnerable to supply interruptions.
Now we have a choice. But if we wait, we will live in fear of embargoes. We could endanger our freedom as a sovereign nation to act in foreign affairs. Within ten years we would not be able to import enough oil -- from any country, at any acceptable price.
If we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source.
We will not be ready to keep our transportation system running with smaller, more efficient cars and a better network of buses, trains and public transportation.
We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.
If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.
But we still have another choice. We can begin to prepare right now. We can decide to act while there is time.
That is the concept of the energy policy we will present on Wednesday. Our national energy plan is based on ten fundamental principles.
The first principle is that we can have an effective and comprehensive energy policy only if the government takes responsibility for it and if the people understand the seriousness of the challenge and are willing to make sacrifices.
The second principle is that healthy economic growth must continue. Only by saving energy can we maintain our standard of living and keep our people at work. An effective conservation program will create hundreds of thousands of new jobs.
The third principle is that we must protect the environment. Our energy problems have the same cause as our environmental problems -- wasteful use of resources. Conservation helps us solve both at once.
The fourth principle is that we must reduce our vulnerability to potentially devastating embargoes. We can protect ourselves from uncertain supplies by reducing our demand for oil, making the most of our abundant resources such as coal, and developing a strategic petroleum reserve.
The fifth principle is that we must be fair. Our solutions must ask equal sacrifices from every region, every class of people, every interest group. Industry will have to do its part to conserve, just as the consumers will. The energy producers deserve fair treatment, but we will not let the oil companies profiteer.
The sixth principle, and the cornerstone of our policy, is to reduce the demand through conservation. Our emphasis on conservation is a clear difference between this plan and others which merely encouraged crash production efforts. Conservation is the quickest, cheapest, most practical source of energy. Conservation is the only way we can buy a barrel of oil for a few dollars. It costs about $13 to waste it.
The seventh principle is that prices should generally reflect the true replacement costs of energy. We are only cheating ourselves if we make energy artificially cheap and use more than we can really afford.
The eighth principle is that government policies must be predictable and certain. Both consumers and producers need policies they can count on so they can plan ahead. This is one reason I am working with the Congress to create a new Department of Energy, to replace more than 50 different agencies that now have some control over energy.
The ninth principle is that we must conserve the fuels that are scarcest and make the most of those that are more plentiful. We can't continue to use oil and gas for 75 percent of our consumption when they make up seven percent of our domestic reserves. We need to shift to plentiful coal while taking care to protect the environment, and to apply stricter safety standards to nuclear energy.
The tenth principle is that we must start now to develop the new, unconventional sources of energy we will rely on in the next century.
These ten principles have guided the development of the policy I would describe to you and the Congress on Wednesday.
Our energy plan will also include a number of specific goals, to measure our progress toward a stable energy system.
These are the goals we set for 1985:
--Reduce the annual growth rate in our energy demand to less than two percent.
--Reduce gasoline consumption by ten percent below its current level.
--Cut in half the portion of United States oil which is imported, from a potential level of 16 million barrels to six million barrels a day.
--Establish a strategic petroleum reserve of one billion barrels, more than six months' supply.
--Increase our coal production by about two thirds to more than 1 billion tons a year.
--Insulate 90 percent of American homes and all new buildings.
--Use solar energy in more than two and one-half million houses.
We will monitor our progress toward these goals year by year. Our plan will call for stricter conservation measures if we fall behind.
I cant tell you that these measures will be easy, nor will they be popular. But I think most of you realize that a policy which does not ask for changes or sacrifices would not be an effective policy.
This plan is essential to protect our jobs, our environment, our standard of living, and our future.
Whether this plan truly makes a difference will be decided not here in Washington, but in every town and every factory, in every home an don every highway and every farm.
I believe this can be a positive challenge. There is something especially American in the kinds of changes we have to make. We have been proud, through our history of being efficient people.
We have been proud of our leadership in the world. Now we have a chance again to give the world a positive example.
And we have been proud of our vision of the future. We have always wanted to give our children and grandchildren a world richer in possibilities than we've had. They are the ones we must provide for now. They are the ones who will suffer most if we don't act.
I've given you some of the principles of the plan.
I am sure each of you will find something you don't like about the specifics of our proposal. It will demand that we make sacrifices and changes in our lives. To some degree, the sacrifices will be painful -- but so is any meaningful sacrifice. It will lead to some higher costs, and to some greater inconveniences for everyone.
But the sacrifices will be gradual, realistic and necessary. Above all, they will be fair. No one will gain an unfair advantage through this plan. No one will be asked to bear an unfair burden. We will monitor the accuracy of data from the oil and natural gas companies, so that we will know their true production, supplies, reserves, and profits.
The citizens who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury.
We can be sure that all the special interest groups in the country will attack the part of this plan that affects them directly. They will say that sacrifice is fine, as long as other people do it, but that their sacrifice is unreasonable, or unfair, or harmful to the country. If they succeed, then the burden on the ordinary citizen, who is not organized into an interest group, would be crushing.
There should be only one test for this program: whether it will help our country.
Other generation of Americans have faced and mastered great challenges. I have faith that meeting this challenge will make our own lives even richer. If you will join me so that we can work together with patriotism and courage, we will again prove that our great nation can lead the world into an age of peace, independence and freedom.
Creepy...
War Games by Libby Post
There’s a war going on and I’m not talking about Iraq.
If you listen to the Christian Right, they’ll tell you there’s a war against Christianity in this country. Maintaining a separation of church and state is seen as a full frontal assault on their version of Christianity. Removing the Ten Commandments from a court room or banning the use of a cross on public property or a city’s seal or no prayer in public schools is interpreted as hostile to Christians.
Never mind that all of our presidents have been Christians. Never mind that our founding fathers who wrote the original rules described themselves the same way. And, never mind that the Christian faith, in all its permutations, is the dominant religion in our country.
To listen to them, the entire fate of our country and their right to worship are at stake.
If you happened into an evangelical church this past Sunday, you just might have had a chance to listen to their version of the truth. Reaching 2,200 mostly white people at the Two Rivers Baptist Church in Nashville and millions more via SkyAngel, a Christ-centered satellite network, and Trinity Broadcasting Network, which considers itself “America’s most watched faith channel,” the Family Research Council presented Justice Sunday II.
The message of the day was simple and direct-the need to shape the Supreme Court so that Christian values are protected. The themes were homophobia and pure disdain for our third branch of government, the judiciary. Folks like Zell Miller, the former Democratic Senator from Georgia who showed his true colors at the 2004 Republican convention, House Majority Leader Tom DeLay, Focus on the Family’s James Dobson and that old tried and true right-wing standard bearer, Phyllis Schlafly, spoke fire and brimstone about the evils of homosexuality and the insidiousness of “activist judges.”
Even Robert “I coulda been one of the Supremes” Bork got into the act. He told the crowd and all those in TV land that the Supreme Court has already defined homosexuality as “a constitutional right . . . and once homosexuality is defined as a constitutional right, there is nothing the states can do about it, nothing the people can do about it.”
DeLay skewered recent Supreme Court rulings saying “Rights are invented out of whole cloth. Longstanding traditions are found to be unconstitutional.” He assailed “activist courts” who he contends are inflicting his nation with “state-sanctioned same-sex marriage” and “partial birth abortion” and are “ridding the public square of any mention of our nation’s religious heritage.” In his view, the actions of the Supreme Court are really acts of “judicial supremacy, judicial autocracy.”
Focus on the Family’s Dobson called the justices “unelected, unaccountable and arrogant” and continued with “These activist, unelected judges believe they know better than the American people about the direction the country should go.” Schlafly, of course, tried to rewrite the constitution by asking “How do the judges get away with such outrageous decisions? By asserting that Supreme Court decisions are the supreme law of the land. But you know that is not true. That is a terrible heresy.”
We’re in the middle of a war all right but it’s not a Christian nation that’s at stake. What’s at risk is the constitution and the very fabric of our democracy. In this war the aggressor has framed himself as the victim, the basher is pretending to be the bashee and any tactics he uses to protect his Christian right is fundamentally sound since, after all, God is on his side. He wraps himself in the flag, claims to speak for moral and family values out of one side of his mouth and then trashes the Constitution and destroys its democratic ideals with a voice rife with hate and homophobia.
Gays and lesbians are portrayed as the devil. Judges and elected officials who believe in an independent, impartial judiciary are seen as infidels. Every day citizens who stand up for the Bill of Rights are seen as godless heathens. The rest of us are lumped together by the Christian right’s media handlers as the lion who is eating all the innocents.
If that were the case, we would be the ones with the resources to beam our message into millions of households across the country, pay our way for unprecedented entre to the White House and build campaign war chests so large that buying elections is a fait accompli.
There’s a war going on all right and we’re the ones fighting for our rights.
War Games by Libby Post
There’s a war going on and I’m not talking about Iraq.
If you listen to the Christian Right, they’ll tell you there’s a war against Christianity in this country. Maintaining a separation of church and state is seen as a full frontal assault on their version of Christianity. Removing the Ten Commandments from a court room or banning the use of a cross on public property or a city’s seal or no prayer in public schools is interpreted as hostile to Christians.
Never mind that all of our presidents have been Christians. Never mind that our founding fathers who wrote the original rules described themselves the same way. And, never mind that the Christian faith, in all its permutations, is the dominant religion in our country.
To listen to them, the entire fate of our country and their right to worship are at stake.
If you happened into an evangelical church this past Sunday, you just might have had a chance to listen to their version of the truth. Reaching 2,200 mostly white people at the Two Rivers Baptist Church in Nashville and millions more via SkyAngel, a Christ-centered satellite network, and Trinity Broadcasting Network, which considers itself “America’s most watched faith channel,” the Family Research Council presented Justice Sunday II.
The message of the day was simple and direct-the need to shape the Supreme Court so that Christian values are protected. The themes were homophobia and pure disdain for our third branch of government, the judiciary. Folks like Zell Miller, the former Democratic Senator from Georgia who showed his true colors at the 2004 Republican convention, House Majority Leader Tom DeLay, Focus on the Family’s James Dobson and that old tried and true right-wing standard bearer, Phyllis Schlafly, spoke fire and brimstone about the evils of homosexuality and the insidiousness of “activist judges.”
Even Robert “I coulda been one of the Supremes” Bork got into the act. He told the crowd and all those in TV land that the Supreme Court has already defined homosexuality as “a constitutional right . . . and once homosexuality is defined as a constitutional right, there is nothing the states can do about it, nothing the people can do about it.”
DeLay skewered recent Supreme Court rulings saying “Rights are invented out of whole cloth. Longstanding traditions are found to be unconstitutional.” He assailed “activist courts” who he contends are inflicting his nation with “state-sanctioned same-sex marriage” and “partial birth abortion” and are “ridding the public square of any mention of our nation’s religious heritage.” In his view, the actions of the Supreme Court are really acts of “judicial supremacy, judicial autocracy.”
Focus on the Family’s Dobson called the justices “unelected, unaccountable and arrogant” and continued with “These activist, unelected judges believe they know better than the American people about the direction the country should go.” Schlafly, of course, tried to rewrite the constitution by asking “How do the judges get away with such outrageous decisions? By asserting that Supreme Court decisions are the supreme law of the land. But you know that is not true. That is a terrible heresy.”
We’re in the middle of a war all right but it’s not a Christian nation that’s at stake. What’s at risk is the constitution and the very fabric of our democracy. In this war the aggressor has framed himself as the victim, the basher is pretending to be the bashee and any tactics he uses to protect his Christian right is fundamentally sound since, after all, God is on his side. He wraps himself in the flag, claims to speak for moral and family values out of one side of his mouth and then trashes the Constitution and destroys its democratic ideals with a voice rife with hate and homophobia.
Gays and lesbians are portrayed as the devil. Judges and elected officials who believe in an independent, impartial judiciary are seen as infidels. Every day citizens who stand up for the Bill of Rights are seen as godless heathens. The rest of us are lumped together by the Christian right’s media handlers as the lion who is eating all the innocents.
If that were the case, we would be the ones with the resources to beam our message into millions of households across the country, pay our way for unprecedented entre to the White House and build campaign war chests so large that buying elections is a fait accompli.
There’s a war going on all right and we’re the ones fighting for our rights.
Monday, August 22, 2005
Oil bubble hits China extra hard (e)
Column -- Everyone may be marvelling at how well the US economy is handling US$60 oil, but it is China we should be worried about. In recent weeks, the strain on the Chinese economy has begun to show. Stories have emerged of massive queues, rationing and fraying tempers at police-guarded gasoline stations. The planning wizards at central command must be really starting to sweat as they try to figure out how to make the 60% rise in crude since the beginning of the year fit into their economic strategy without creating dreaded social unrest. It is really no surprise the US and Canada have been able to weather the energy storm so far. About 70% of North American economic activity is generated by the consumer and only 15% by manufacturing. It is true North American consumers may be starting to balk at cost of gasoline at the pumps and economic activity may fade further in the months ahead. But in China, where industrial production still makes up half its gross domestic product, the high price of oil must be really starting to pinch. Much of that industrial production is devoted to producing manufactured goods for us, its own emerging middle class and all the heavy equipment and machinery required to upgrade cities for a few hundred million people. The official inflation statistics show hardly a whimper, however. The rising price of fuel has driven up every consumer price index across the West, but the oil component in China's CPI is registering a laughable 7.7% decline, according to Stefane Marion, assistant chief economist at National Bank in Montreal. It's not because of your typical Chinese fudging of the figures. It's because China sets the price of oil. "Think of it this way," Marion said. "You've outsourced production to a country that is less oil efficient than you are and they have price controls at the retail level. To me it says they're subsidizing us for the manufacturing products we buy." The folly of this centrally planned throwback in a country slowly opening to free-market economics is starting to take its toll. Newspapers reported China's oil refiners posted losses totalling 6.09-billion yuan ($910-million) in the first half of the year, unable to pass the high price of crude to consumers. The refiners have reacted by holding back supply, creating the shortages China is now witnessing. The policy mandarins are waking up. Reuters news service reported last week the country's top planners at the National Development and Reform Commission have called in oil firm executives and other top officials to discuss its pricing system. Analysts don't expect a major revamp however, only more frequent price adjustments.
Andy Xie, China specialist at Morgan Stanley in Hong Kong, said in an e-mail interview that high property prices are offsetting high oil prices for now, much as they are in North America. And with factories running full tilt, some of the shock can be absorbed. As in Canada, soaring oil prices are also creating winners and losers. "One of the big group [of winners] is the owners of small coal mines who have seen the value of their mining rights triple in the past three years," Xie said. "Seventy percent of the 2-billion ton coal production is from this group." But Marion figures something has to give soon. He expects higher prices will eventually get passed on to both Chinese and North American consumers. Pass on the rise too rapidly, however, and you risk social unrest. Past it on too slowly and you risk further shortages and social unrest. The solution? Marion says watch out for a further revaluation of the yuan, which would make those imports of oil cheaper.
(National Post 050822)
Column -- Everyone may be marvelling at how well the US economy is handling US$60 oil, but it is China we should be worried about. In recent weeks, the strain on the Chinese economy has begun to show. Stories have emerged of massive queues, rationing and fraying tempers at police-guarded gasoline stations. The planning wizards at central command must be really starting to sweat as they try to figure out how to make the 60% rise in crude since the beginning of the year fit into their economic strategy without creating dreaded social unrest. It is really no surprise the US and Canada have been able to weather the energy storm so far. About 70% of North American economic activity is generated by the consumer and only 15% by manufacturing. It is true North American consumers may be starting to balk at cost of gasoline at the pumps and economic activity may fade further in the months ahead. But in China, where industrial production still makes up half its gross domestic product, the high price of oil must be really starting to pinch. Much of that industrial production is devoted to producing manufactured goods for us, its own emerging middle class and all the heavy equipment and machinery required to upgrade cities for a few hundred million people. The official inflation statistics show hardly a whimper, however. The rising price of fuel has driven up every consumer price index across the West, but the oil component in China's CPI is registering a laughable 7.7% decline, according to Stefane Marion, assistant chief economist at National Bank in Montreal. It's not because of your typical Chinese fudging of the figures. It's because China sets the price of oil. "Think of it this way," Marion said. "You've outsourced production to a country that is less oil efficient than you are and they have price controls at the retail level. To me it says they're subsidizing us for the manufacturing products we buy." The folly of this centrally planned throwback in a country slowly opening to free-market economics is starting to take its toll. Newspapers reported China's oil refiners posted losses totalling 6.09-billion yuan ($910-million) in the first half of the year, unable to pass the high price of crude to consumers. The refiners have reacted by holding back supply, creating the shortages China is now witnessing. The policy mandarins are waking up. Reuters news service reported last week the country's top planners at the National Development and Reform Commission have called in oil firm executives and other top officials to discuss its pricing system. Analysts don't expect a major revamp however, only more frequent price adjustments.
Andy Xie, China specialist at Morgan Stanley in Hong Kong, said in an e-mail interview that high property prices are offsetting high oil prices for now, much as they are in North America. And with factories running full tilt, some of the shock can be absorbed. As in Canada, soaring oil prices are also creating winners and losers. "One of the big group [of winners] is the owners of small coal mines who have seen the value of their mining rights triple in the past three years," Xie said. "Seventy percent of the 2-billion ton coal production is from this group." But Marion figures something has to give soon. He expects higher prices will eventually get passed on to both Chinese and North American consumers. Pass on the rise too rapidly, however, and you risk social unrest. Past it on too slowly and you risk further shortages and social unrest. The solution? Marion says watch out for a further revaluation of the yuan, which would make those imports of oil cheaper.
(National Post 050822)
Trading with the 'schoolyard bully' (e)
They were present at the creation. And they feel betrayed. Derek Burney, Pat Carney, Allan Gotlieb, Simon Reisman and Gordon Ritchie were key members of the negotiating team that forged the 1988 free-trade agreement between Canada and the US. Last week, the US government reneged on that agreement, and its successor, the 1993 North American free-trade agreement, by declaring that it would simply ignore the unanimous ruling of the ultimate free trade tribunal - a ruling that said the Americans had no right to impose tariffs on the import of Canadian softwood lumber. The Americans' refusal to respect the tribunal's decision represents “an egregious, shocking, dishonourable breach of their obligations,” says Ritchie, who was deputy chief negotiator during the original negotiations. “It's the tactic of the schoolyard bully,” declares Derek Burney, who was chief of staff to then-prime minister Brian Mulroney, and a key player in the talks, “which was exactly what we were trying to prevent when we negotiated the free-trade agreement . . . it's beyond the pale.” Those who were most responsible for establishing the rules that the Americans are now flouting have chosen to ignore the pleas of David Wilkins, American ambassador to Canada, who has warned Canadians of the “responsibility of keeping the rhetoric down.” Senator Pat Carney, who was trade minister at the time, believes the cause of free trade has suffered a major failure. “We will have to see now whether it unravels totally after this.” Gotlieb, who was Canada's ambassador to the US during the talks, also believes that the very foundations of the North American free-trade agreement have been undermined. “It is profound,” he argues. “There is a risk that you're putting NAFTA at risk.” If both sides agree to a dispute resolution process, and then one side flouts the rulings that come out of the process, Gotlieb argues, “then it goes to the very heart of the Grand Bargain.” He notes that the Americans insist they are not in violation, although all of those interviewed found the reasoning of Rob Portman, the US trade representative, ludicrous and incomprehensible.
Language this strong usually comes from opponents of the FTA, NAFTA and the globalization movement. That the very architects of free trade between Canada and the US should be speaking in such terms is, frankly, shocking. Even more shocking is that, to a man and woman, they believe Canada should impose retaliatory tariffs, or other restrictive measures, unless the Americans are prepared to negotiate a new softwood lumber agreement that accommodates Canadian, and not just US, concerns, even though such a move could lead to a trade war between the two countries. “I would sit them down and I would say to them, ‘All right. Enough of this. You are out of line, and you know that you are out of line,' ” says Reisman, who was chief negotiator of the original free trade pact. “Set a deadline. And if they cannot meet that deadline, and if they persist in this, then there might be no choice but to act in retaliation.”
Meanwhile, despite its inability to resolve the current softwood lumber dispute with the US, the North American Free Trade Agreement remains vital to Canada's prosperity, the majority of business leaders say in a Financial Post survey. In an online poll of senior business executives by COMPAS completed last week, more than 80% of respondents said Canada should be strongly committed to the preservation of NAFTA. Conrad Winn, COMPAS president, said Canadian business leaders remain overwhelmingly in support of the trade agreement. "They see it as essential to Canada over the long term," Winn said. He noted that the majority of respondents were staunch defenders of NAFTA, but the opinions of the vocal minority on the other side of the spectrum were just as passionate. Respondents' suggestions of how Canada should react were equally varied. Roughly three quarters of respondents were in favour of Canada strengthening its anti-terrorist efforts and boosting defence spending as a way of settling the current dispute but also as a way to improve relations in general with the US. But more than a third suggested that Canada should consider taking tough action using oil and gas as a reprisal.
(Globe and Mail 050820, National Post 050822)
They were present at the creation. And they feel betrayed. Derek Burney, Pat Carney, Allan Gotlieb, Simon Reisman and Gordon Ritchie were key members of the negotiating team that forged the 1988 free-trade agreement between Canada and the US. Last week, the US government reneged on that agreement, and its successor, the 1993 North American free-trade agreement, by declaring that it would simply ignore the unanimous ruling of the ultimate free trade tribunal - a ruling that said the Americans had no right to impose tariffs on the import of Canadian softwood lumber. The Americans' refusal to respect the tribunal's decision represents “an egregious, shocking, dishonourable breach of their obligations,” says Ritchie, who was deputy chief negotiator during the original negotiations. “It's the tactic of the schoolyard bully,” declares Derek Burney, who was chief of staff to then-prime minister Brian Mulroney, and a key player in the talks, “which was exactly what we were trying to prevent when we negotiated the free-trade agreement . . . it's beyond the pale.” Those who were most responsible for establishing the rules that the Americans are now flouting have chosen to ignore the pleas of David Wilkins, American ambassador to Canada, who has warned Canadians of the “responsibility of keeping the rhetoric down.” Senator Pat Carney, who was trade minister at the time, believes the cause of free trade has suffered a major failure. “We will have to see now whether it unravels totally after this.” Gotlieb, who was Canada's ambassador to the US during the talks, also believes that the very foundations of the North American free-trade agreement have been undermined. “It is profound,” he argues. “There is a risk that you're putting NAFTA at risk.” If both sides agree to a dispute resolution process, and then one side flouts the rulings that come out of the process, Gotlieb argues, “then it goes to the very heart of the Grand Bargain.” He notes that the Americans insist they are not in violation, although all of those interviewed found the reasoning of Rob Portman, the US trade representative, ludicrous and incomprehensible.
Language this strong usually comes from opponents of the FTA, NAFTA and the globalization movement. That the very architects of free trade between Canada and the US should be speaking in such terms is, frankly, shocking. Even more shocking is that, to a man and woman, they believe Canada should impose retaliatory tariffs, or other restrictive measures, unless the Americans are prepared to negotiate a new softwood lumber agreement that accommodates Canadian, and not just US, concerns, even though such a move could lead to a trade war between the two countries. “I would sit them down and I would say to them, ‘All right. Enough of this. You are out of line, and you know that you are out of line,' ” says Reisman, who was chief negotiator of the original free trade pact. “Set a deadline. And if they cannot meet that deadline, and if they persist in this, then there might be no choice but to act in retaliation.”
Meanwhile, despite its inability to resolve the current softwood lumber dispute with the US, the North American Free Trade Agreement remains vital to Canada's prosperity, the majority of business leaders say in a Financial Post survey. In an online poll of senior business executives by COMPAS completed last week, more than 80% of respondents said Canada should be strongly committed to the preservation of NAFTA. Conrad Winn, COMPAS president, said Canadian business leaders remain overwhelmingly in support of the trade agreement. "They see it as essential to Canada over the long term," Winn said. He noted that the majority of respondents were staunch defenders of NAFTA, but the opinions of the vocal minority on the other side of the spectrum were just as passionate. Respondents' suggestions of how Canada should react were equally varied. Roughly three quarters of respondents were in favour of Canada strengthening its anti-terrorist efforts and boosting defence spending as a way of settling the current dispute but also as a way to improve relations in general with the US. But more than a third suggested that Canada should consider taking tough action using oil and gas as a reprisal.
(Globe and Mail 050820, National Post 050822)
Wednesday, August 17, 2005
Reid Dalgleish - 2005 Synergy Racing Results
Canmore Road Weekend (Canmore, AB): ITT (Cat 1/2) – 8th (0:57:58.8)
Bikes On Broadway Stage Race (Saskatoon, SK): ITT (Cat 1/2) – 9th (0:11:25)
Pigeon Lake Road Race (Mulhurst, AB): (Cat 1/2) – 9th (3h40m19s)
Kivehsekib Track Klassic (Calgary, AB): (Cat 1/2) – 3rd in Omnium
Devon Northern ITT (Devon, AB): (Cat 1/2) – 9th (1:01:37)
Track National Championships (Calgary, AB): (Master A)
– 3000m Pursuit – 1st (0:03:46.5)
– Scratch Race – 2nd
– Kilo – 4th (0:01:14.3)
Road National Championships (Kamloops, BC): (Master A) – Road ITT – 8th (0:38:06.28)
World Masters Games (Edmonton, AB): (Mens 30-34)
- Road ITT – 3rd (0:25:51.0)
- Track 3000m Pursuit – 1st (0:03:48.2)
- Track Scratch Race – 3rd
- Track Kilo TT – 2nd (0:01:13.99)
- Road Criterium – 4th
Ride For the Wild Roses (Cochrane, AB): ITT (Cat 1/2) – 10th
Alberta Track Provincials (Calgary, AB): (Master A) – 1st in Omnium
- Track 3000m Pursuit – 1st (0:03:47.4)
- Track Scratch Race – 2nd
- Track Kilo TT – 2nd (0:01:12.4)
- Track Points Race - 1st
- Track Match Sprint - 4th
- Track Keirin - 2nd
Canmore Road Weekend (Canmore, AB): ITT (Cat 1/2) – 8th (0:57:58.8)
Bikes On Broadway Stage Race (Saskatoon, SK): ITT (Cat 1/2) – 9th (0:11:25)
Pigeon Lake Road Race (Mulhurst, AB): (Cat 1/2) – 9th (3h40m19s)
Kivehsekib Track Klassic (Calgary, AB): (Cat 1/2) – 3rd in Omnium
Devon Northern ITT (Devon, AB): (Cat 1/2) – 9th (1:01:37)
Track National Championships (Calgary, AB): (Master A)
– 3000m Pursuit – 1st (0:03:46.5)
– Scratch Race – 2nd
– Kilo – 4th (0:01:14.3)
Road National Championships (Kamloops, BC): (Master A) – Road ITT – 8th (0:38:06.28)
World Masters Games (Edmonton, AB): (Mens 30-34)
- Road ITT – 3rd (0:25:51.0)
- Track 3000m Pursuit – 1st (0:03:48.2)
- Track Scratch Race – 3rd
- Track Kilo TT – 2nd (0:01:13.99)
- Road Criterium – 4th
Ride For the Wild Roses (Cochrane, AB): ITT (Cat 1/2) – 10th
Alberta Track Provincials (Calgary, AB): (Master A) – 1st in Omnium
- Track 3000m Pursuit – 1st (0:03:47.4)
- Track Scratch Race – 2nd
- Track Kilo TT – 2nd (0:01:12.4)
- Track Points Race - 1st
- Track Match Sprint - 4th
- Track Keirin - 2nd
One Happy Big-Box Wasteland Oh my yes, there is indeed one force that is eating away the American soul like a cancer
By Mark Morford, SF Gate Columnist
Wednesday, August 17, 2005
Do you want to feel like you might as well be in Tucson or Boise or Modesto or Wichita or Muncie and it no longer freakin' matters, because we as a nation have lost all sense of community and place? Why, just pull over, baby. Take the next exit. Right here, this very one.
Ah, there it is, yet another massive big-box mega-strip mall, a giant beacon of glorious community decay, a wilted exclamation point of consumerism gone wild. This is America. You have arrived. You are home. Eat it and smile.
There is the Target. There is the Wal-Mart and there is the Home Depot and the Kmart, the Borders and the Staples and the Sam's Club and the Office Depot and the Costco and the Toys "R" Us and of course the mandatory Container Store so you may buy more enormous plastic tubs in which to dump all your new sweatshop-made crap.
What else do you need? Ah yes, food. Or something vaguely approximating it. There is the Wendy's and the Burger King and the Taco Bell/KFC hybrid (ewww) and there is the Mickey D's and the Subway and the Starbucks and the dozen other garbage-food fiends lined up down the road like toxic dominoes, all lying in wait to maul your arteries and poison your heart make you think about hospitals.
And here's the beautiful part: This snapshot, it's the same as it was 10 miles back, same as it will be 10 miles ahead, the exact same massive cluster of insidious development as you will find in roughly 10,000 noncommunities around the nation and each and every one making you feel about as connected to the town you're in and the body you inhabit as a fish feels on Saturn. In the dark. In a hole. Dead.
You have seen the plague. I have seen the plague. Anyone over 30 has seen the plague evolve from a mere germ of disease in the late '80s to a full-blown pestilence of big-box shopping hell. I was recently up in northern Idaho, where my family has owned a beautiful house on a lake in a tiny burg near the Canadian border for 40 years, and to get to this region you must pass through the explosively grown resort town of Coeur d'Alene, and the plague is there perhaps worse than anywhere within a 75-mile radius.
I am officially old enough to remember when passing through Coeur d'Alene meant stopping at exactly one -- one -- traffic light on Highway 95 on the way north, surrounded by roughly one million pine trees and breathtaking mountain vistas and vast, calming open spaces, farms and fields and sawmills and funky roadside shops and gorgeous lakes for miles.
There are now about 20 traffic lights added in as many years, scattered down a 10-mile stretch of highway and each and every one demarcates a turnoff into a massive low-lying horribly designed strip mall, tacky and cheaply built and utterly heartless, and clearly zero planning went into any of these megashops, except to space them so obnoxiously that you have to get back in your goddamn car to drive the eighth of a mile to get to the Target to the Best Buy to the Wal-Mart to the Super Foods and back to your freakin' sanity.
Do you want to know what depresses the American spirit? Do you want to know why it feels like the center cannot hold and the tyranny of mediocrity has been loosed upon our world? Do you want to know what instills more thoughts of suicide and creates a desperate, low-level rage the source of which we cannot quite identify but which we know is right under our noses and which we now inhale Prozac and Xanax and Paxil by the truckload to attempt to mollify?
I have your answer. Here it is. Look. It is the appalling spread of big-box strip malls, tract homes like a cancer, metadevelopments paving over the American landscape, all creating a bizarre sense of copious loss, empty excess, heartless glut, forcing us to ask, once again, the Great All-American Question: How can we have so damned much but still feel like we have almost nothing at all?
Oh and by the way, Coeur d'Alene has a distinct central portion of town, well off the toxic highway. It is calm and tree lined and emptily pretty and it is packed with, well, restaurants and art galleries. And real estate offices. For yuppies. Because, of course, there are no local shops left. No mom-and-pops, few unique small businesses of any kind. No charm. No real community per se. Just well-manicured food and mediocre art no true local can actually afford and business parks where the heart used to be.
I have little real clue as to what children growing up in this sort of bizarre megaconsumerist dystopia will face as they age, what sort of warped perspective and decimated sense of place and community and home. But if you think meth addiction and teen pregnancy and wicked religious homogeny and a frightening addiction to blowing s-- up in violent video games isn't a direct reaction to it, you're not paying close enough attention.
This is the new America. Our crazed sense of entitlement, our nearly rabid desire for easy access to mountains of bargain-basement junk has led to the upsurge of soulless big-box shops which has, in turn, led to a deadly sense of prefabricated, vacuous sameness wherever we go. And here's the kicker: We think it's good. We think it helps, brings jobs, tax money, affordable goods. We call it progress. We call it choice. It is the exact opposite.
Result No. 1: Towns no longer have personality, individuality, heart. Community drags. Environment suffers. Our once diverse and quirky and idiosyncratic landscape becomes ugly and bland and vacuous and cheap.
Result No. 2: a false sense of safety, of comfort, wrought of empty sameness. We want all our goods to be antiseptic and sanitized and brightly lit and clean. In a nation that has lost all sense of direction and all sense of pride and whose dollar is a global joke and whose economy is running on fumes and whose goods are all made overseas and whose incompetent warmongering leader makes the world gag, that toxic sameness is, paradoxically, reassuring.
Result No. 3: We are trained, once again, to fear the different, the Other, That Which Does Not Conform. We learn to dislike the unique, the foreign, foreigners. We lose any sense of personal connection to what we create and what we buy and I do not care how cheap that jute rug from Ikea was: When they are mass-produced in 100,000 chunks in a factory in Malaysia, it ain't quirky.
Sameness is in. Sameness is the new black. It is no different than preplanned Disney World vacations or organized religion or preplanned cruises or themed restaurants where all edges have been filed off and every experience has been predigested and sanitized for your protection because, God forbid, you have an authentic experience or nurture genuine individual perspective or dare to question the bland norm lest your poor addled soul shudder and recoil and the Powers That Be look at you as a serious threat.
I have seen the plague and so have you. Hell, you're probably shopping in it. After all, what choice do you have?
By Mark Morford, SF Gate Columnist
Wednesday, August 17, 2005
Do you want to feel like you might as well be in Tucson or Boise or Modesto or Wichita or Muncie and it no longer freakin' matters, because we as a nation have lost all sense of community and place? Why, just pull over, baby. Take the next exit. Right here, this very one.
Ah, there it is, yet another massive big-box mega-strip mall, a giant beacon of glorious community decay, a wilted exclamation point of consumerism gone wild. This is America. You have arrived. You are home. Eat it and smile.
There is the Target. There is the Wal-Mart and there is the Home Depot and the Kmart, the Borders and the Staples and the Sam's Club and the Office Depot and the Costco and the Toys "R" Us and of course the mandatory Container Store so you may buy more enormous plastic tubs in which to dump all your new sweatshop-made crap.
What else do you need? Ah yes, food. Or something vaguely approximating it. There is the Wendy's and the Burger King and the Taco Bell/KFC hybrid (ewww) and there is the Mickey D's and the Subway and the Starbucks and the dozen other garbage-food fiends lined up down the road like toxic dominoes, all lying in wait to maul your arteries and poison your heart make you think about hospitals.
And here's the beautiful part: This snapshot, it's the same as it was 10 miles back, same as it will be 10 miles ahead, the exact same massive cluster of insidious development as you will find in roughly 10,000 noncommunities around the nation and each and every one making you feel about as connected to the town you're in and the body you inhabit as a fish feels on Saturn. In the dark. In a hole. Dead.
You have seen the plague. I have seen the plague. Anyone over 30 has seen the plague evolve from a mere germ of disease in the late '80s to a full-blown pestilence of big-box shopping hell. I was recently up in northern Idaho, where my family has owned a beautiful house on a lake in a tiny burg near the Canadian border for 40 years, and to get to this region you must pass through the explosively grown resort town of Coeur d'Alene, and the plague is there perhaps worse than anywhere within a 75-mile radius.
I am officially old enough to remember when passing through Coeur d'Alene meant stopping at exactly one -- one -- traffic light on Highway 95 on the way north, surrounded by roughly one million pine trees and breathtaking mountain vistas and vast, calming open spaces, farms and fields and sawmills and funky roadside shops and gorgeous lakes for miles.
There are now about 20 traffic lights added in as many years, scattered down a 10-mile stretch of highway and each and every one demarcates a turnoff into a massive low-lying horribly designed strip mall, tacky and cheaply built and utterly heartless, and clearly zero planning went into any of these megashops, except to space them so obnoxiously that you have to get back in your goddamn car to drive the eighth of a mile to get to the Target to the Best Buy to the Wal-Mart to the Super Foods and back to your freakin' sanity.
Do you want to know what depresses the American spirit? Do you want to know why it feels like the center cannot hold and the tyranny of mediocrity has been loosed upon our world? Do you want to know what instills more thoughts of suicide and creates a desperate, low-level rage the source of which we cannot quite identify but which we know is right under our noses and which we now inhale Prozac and Xanax and Paxil by the truckload to attempt to mollify?
I have your answer. Here it is. Look. It is the appalling spread of big-box strip malls, tract homes like a cancer, metadevelopments paving over the American landscape, all creating a bizarre sense of copious loss, empty excess, heartless glut, forcing us to ask, once again, the Great All-American Question: How can we have so damned much but still feel like we have almost nothing at all?
Oh and by the way, Coeur d'Alene has a distinct central portion of town, well off the toxic highway. It is calm and tree lined and emptily pretty and it is packed with, well, restaurants and art galleries. And real estate offices. For yuppies. Because, of course, there are no local shops left. No mom-and-pops, few unique small businesses of any kind. No charm. No real community per se. Just well-manicured food and mediocre art no true local can actually afford and business parks where the heart used to be.
I have little real clue as to what children growing up in this sort of bizarre megaconsumerist dystopia will face as they age, what sort of warped perspective and decimated sense of place and community and home. But if you think meth addiction and teen pregnancy and wicked religious homogeny and a frightening addiction to blowing s-- up in violent video games isn't a direct reaction to it, you're not paying close enough attention.
This is the new America. Our crazed sense of entitlement, our nearly rabid desire for easy access to mountains of bargain-basement junk has led to the upsurge of soulless big-box shops which has, in turn, led to a deadly sense of prefabricated, vacuous sameness wherever we go. And here's the kicker: We think it's good. We think it helps, brings jobs, tax money, affordable goods. We call it progress. We call it choice. It is the exact opposite.
Result No. 1: Towns no longer have personality, individuality, heart. Community drags. Environment suffers. Our once diverse and quirky and idiosyncratic landscape becomes ugly and bland and vacuous and cheap.
Result No. 2: a false sense of safety, of comfort, wrought of empty sameness. We want all our goods to be antiseptic and sanitized and brightly lit and clean. In a nation that has lost all sense of direction and all sense of pride and whose dollar is a global joke and whose economy is running on fumes and whose goods are all made overseas and whose incompetent warmongering leader makes the world gag, that toxic sameness is, paradoxically, reassuring.
Result No. 3: We are trained, once again, to fear the different, the Other, That Which Does Not Conform. We learn to dislike the unique, the foreign, foreigners. We lose any sense of personal connection to what we create and what we buy and I do not care how cheap that jute rug from Ikea was: When they are mass-produced in 100,000 chunks in a factory in Malaysia, it ain't quirky.
Sameness is in. Sameness is the new black. It is no different than preplanned Disney World vacations or organized religion or preplanned cruises or themed restaurants where all edges have been filed off and every experience has been predigested and sanitized for your protection because, God forbid, you have an authentic experience or nurture genuine individual perspective or dare to question the bland norm lest your poor addled soul shudder and recoil and the Powers That Be look at you as a serious threat.
I have seen the plague and so have you. Hell, you're probably shopping in it. After all, what choice do you have?
Tuesday, August 16, 2005
How to Avoid Oil Wars, Terrorism, and Economic Collapse
By now most well-informed people are aware that global oil production may soon reach its all-time peak, and that the consequences will likely be severe.
Already many important oil-producing nations (such as the United States, Indonesia, and Iran) and some whole regions (such as the North Sea) are past their production maximums. With nearly every passing year another country reaches a production plateau or begins its terminal decline.
Meanwhile global rates of oil discovery have been falling since the early 1960s, as has been confirmed by ExxonMobil. All of the 100 or so supergiant fields that are collectively responsible for about half of current world production were discovered in the 1940s, '50s, '60s, and '70s. No fields of comparable size have been found since then; instead, exploration during recent years has turned up only much smaller fields that deplete relatively quickly. The result is that today only one new barrel of oil is being discovered for every four that are extracted and used.
World leaders are hampered in their ability to assess the situation by a lack of consistent data. Proven petroleum reserve figures look reassuring: the world has roughly a trillion barrels yet to produce, perhaps more; indeed, official reserves figures have never been higher. However, circumstantial evidence suggests that some of the largest producing nations have inflated their reserves figures for political reasons. Meanwhile oil companies routinely (and legitimately) report reserve growth for fields discovered decades ago. In addition, reserves figures are often muddied by the inclusion of non-conventional petroleum resources, such oil sands - which do need to be taken into account, but in a separate category, as their rates of extraction are limited by factors different from those that constrain the production of conventional crude. As a consequence of all of these practices, oil reserves data tend to give an impression of expansion and plenty, while discovery and depletion data do the opposite.
This apparent conflict in the data invites dispute among experts as to when the global oil peak is likely to occur. Some analysts say that the world is virtually at its peak of production now; others contend that the event can be delayed for two decades or more through enhanced investment in exploration, the adoption of new extraction technologies, and the substitution of non-conventional petroleum sources (oil sands, natural gas condensates, and heavy oil) for conventional crude.
However, there is little or no disagreement that a series of production peaks is now within sight - first, for conventional non-OPEC oil; then for conventional oil globally; and finally for all global conventional and non-conventional petroleum sources combined.
Moreover, even though there may be dispute as to the timing of these events, it is becoming widely acknowledged that the world peak in all combined petroleum sources will have significant global economic consequences. Mitigation efforts will require many years of work and trillions of dollars in investment. Even if optimistic forecasts of the timing of the global production peak turn out to be accurate, the world is facing an historic change that is unprecedented in scope and depth of impact.
Due to systemic dependence on oil for transportation, agriculture, and the production of plastics and chemicals, every sector of every society will be affected. Efforts will be needed to create alternative sources of energy, to reduce demand for oil through heightened energy efficiency, and to redesign entire systems (including cities) to operate with less petroleum.
These efforts will be challenging enough in the context of a stable economic environment. However, if prices for oil become extremely volatile, mitigation programs could be undermined. While high but stable prices would encourage conservation and investment in alternatives, prices that repeatedly skyrocket and then plummet could devastate entire economies and discourage long-term investment. Actual shortages of oil - of which price shocks would be only a symptom - would be even more devastating. The worst impacts would be suffered by those nations, and those aspects of national economies, that could not obtain oil at any price affordable to them. Supply interruptions would likely occur with greater frequency and for increasing lengths of time as global oil production gradually waned.
Efforts to plan a long-term energy transition would be frustrated, in both importing and exporting countries. Meanwhile the perception among importers that exporting nations were profiteering would foment animosities and an escalating likelihood of international conflict.
In short, the global peak in oil production is likely to lead to economic chaos and extreme geopolitical tensions, raising the spectres of war, revolution, terrorism, and even famine, unless nations adopt some method of cooperatively reducing their reliance on oil.
A Plan for Global Powerdown
The Oil Depletion Protocol provides a way forward (the text appears at the end of this article). It was drafted by the Association for the Study of Peak Oil; however, the source of the document is of little importance - only its substance is of interest. While it is merely a suggested outline and will require fleshing out and detailed negotiation, the Protocol is inherently simple. As will be clear from the Discussion below, it would be unnecessary for all nations to ratify the Protocol in order for it to have a beneficial effect; if even one nation adopts it, that nation will be benefited. However, if a substantial number of nations sign on this will create a platform for international economic stability and cooperation.
The Protocol will be presented at several important international conferences attended by world leaders in late 2005. Efforts will also be made to publicize and communicate it to the general public. It is hoped that a few courageous politicians in each country will understand its importance and bring it before their governing bodies for consideration and adoption.
How Would It Work?
The idea of the Protocol is inherently straightforward: oil importing nations would agree to reduce their imports by an agreed-upon yearly percentage (the World Oil Depletion Rate), while exporting countries would agree to reduce their rate of exports by their national Depletion Rate.
The concept of the Depletion Rate is perhaps the most challenging technical aspect of the Protocol, yet even it is easy to grasp given a little thought. Clearly, each country has a finite endowment of oil from nature; thus, when the first barrel has been extracted, there is accordingly one less left for the future. What is left for the future consists of two elements: first, how much remains in known oilfields, termed Remaining Reserves; and second, how much remains to be found in the future (termed Yet-to-Find). How much is Yet-to-Find may be reasonably estimated by extrapolating the discovery trend of the past. The Depletion Rate equals the total yet-to-produce divided by the yearly amount currently being extracted.
Let us explore a few examples:
Norway is a country that reports exceptionally accurate reserve estimates. The total produced to-date is 18.5 billion barrels (Gb), and 11.3 Gb remain in known fields, with about 2 left to find, giving a rounded total of 32 Gb. It follows that 13.5 Gb are left to produce. In 2004, 1.07 Gb were extracted, giving a Depletion Rate of 7.4 percent (1.07/13.5). This is a comparatively high rate, typical of an offshore environment.
In the case of the US (considering only the lower 48 states and excluding deepwater), the corresponding numbers are: produced to-date, 173 Gb; Remaining Reserves, 24 Gb; Yet-to-Find, 2 Gb - meaning that there are 27 Gb left. Annual production in 2004 was 1.3 Gb, giving a Depletion Rate of 4.6 percent (1.3/27).
For the world as a whole, 944 Gb have been produced; 772 remain in known fields; and an estimated 134 Gb is Yet-to-Find, meaning that 906 Gb are left. Production of conventional oil in 2004 was 24 Gb, so the Depletion Rate is 2.59 percent (24/906).
These estimates exclude non-conventional oil - oil shales, bitumen (oil sands), extra-heavy oil, heavy oil, deepwater oil, polar oil, and liquids from gasfield plants. Most oil produced to date has been of the conventional variety, which will dominate all supply far into the future, so it makes sense to concentrate on this category.
It must be stressed that current Reserves estimates in the public domain are grossly unreliable, and one of the purposes of the Protocol is to secure better information. The assessed Depletion Rate for each country, and eventually for the World as whole, is subject to revision when better information becomes available, but the resulting correction of the Depletion Rate will not be large, probably causing it to vary by less than one percent.
The Depletion Protocol would require importers to reduce their imports by the World Depletion Rate (i.e., 2.5 percent) each year in order to put demand into balance with world supply. As stated earlier, exporters would reduce their production according to their national Depletion Rate. Thus Norway would reduce its production by 7.4 percent each year (that country's production is already declining at an even higher rate).
The imposition on the producing countries represents no great burden, since few can now increase their rate of production in any case, and many are experiencing declining production for purely geological reasons, as is the case with Norway and the US. Agreeing to produce less oil would not inhibit exploration because new finds would lower the national Depletion Rate, and thus permit a higher rate of export than would otherwise be the case. The main thrust of the Protocol would be to require importers to cut imports, but the inclusion of producers in the provisions would stimulate greater cooperation between the two factions. Any indigenous production in a country that was a net importer would not be likely to provide that country with an unfair advantage, as production within most importing countries is already declining at a rate higher than the World Depletion Rate.
How importers dealt internally with the import restriction would be up to them (though strategies both to obtain supplies of alternative fuels and to reduce demand for oil would doubtless be required). Some might wish to introduce an energy allowance as a form of tradable ration (as will be discussed in more detail below).
Discussion of the Protocol
Questions and Possible Objections
The Protocol may at first look like merely a good idea with no real chance of implementation. However, closer inspection suggests that its implementation will benefit nearly all important global stakeholders and that objections likely to be raised to it are easily countered.
What if forecasts of a near-term peak in global oil production are wrong? Won't there be a cost to preparing for the oil peak too early? In practical terms, won't this mean voluntarily choking off economic growth?
Because so much is at stake, it is important that these vital questions be addressed not just by partisan participants in the debate over the timing of the oil-production peak (the so-called "oil optimists" and the "oil pessimists"); some independent assessment is required of the costs of preparing too soon versus the costs of preparing too late.
Fortunately, such an assessment has already been undertaken - "Peaking of World Oil Production: Impacts, Mitigation, & Risk Management," a Report prepared by Science Applications International Corporation (SAIC) for the US Department of Energy, released in February 2005, and authored principally by Robert L. Hirsch (hereinafter referred to as "the SAIC Report").
The SAIC Report concludes that substantial mitigation of the economic, social, and political impacts of Peak Oil can come only from efforts both to increase energy supplies from alternative sources and to reduce demand for oil. With regard to the claim that efficiency measures will be enough to forestall dire impacts, Hirsch et al. note that, "While greater end-use efficiency is essential, increased efficiency alone will be neither sufficient nor timely enough to solve the problem. Production of large amounts of substitute liquid fuels will be required." Further, "Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large." Hirsch, et al., also point out that "The problems associated with world oil production peaking will not be temporary, and past 'energy crisis' experience will provide relatively little guidance."
The SAIC Report agrees that mitigation efforts undertaken too soon would exact a cost on society. However, it concludes that, "If peaking is imminent, failure to initiate timely mitigation could be extremely damaging. Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive than delayed mitigation."
What if the pessimists are right and the world is at its peak of oil production now? In that case, is it too late to implement the Depletion Protocol?
If the world reaches the peak of production within the next two years there will be too little time to undertake major mitigation efforts prior to the event, and therefore there are likely to be severe economic, social, and political impacts, as outlined in the SAIC Report.
However, in that case the need for the Protocol should quickly and widely become apparent. While all nations will suffer from higher prices and shortages, only a cooperative system of national and international quotas will avert the even more extreme economic and geopolitical crises that would otherwise ensue.
Why can't the market take care of the problem? Won't high prices stimulate more exploration and the development of alternatives? Wouldn't interference with market mechanisms be harmful?
The SAIC Report's authors dismiss the claim that the market will solve any shortage problems arising from global oil production peak, with higher oil prices stimulating investments in alternative energy sources, more efficient cars, and so on. Price signals warn only of immediate scarcity. However, the mitigation efforts needed in order to prepare for the global oil production peak and thus to head off shortages and price spikes must be undertaken many years in advance of the event. Hirsch, et al., maintain that, "Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important guides as to government actions that are desirable and those that are undesirable, but the process will not be easy."
Historically, oil production has often been managed by governments or by cartels. In petroleum's early days, free-market boom-and-bust cycles bankrupted many players (including the "father" of the oil industry, Edwin Drake). Soon John D. Rockefeller brought a certain order to the situation through the creation of the Standard Oil Trust (in doing so he squeezed out many competitors and personally profited to an extraordinary degree). This regime came to an end in 1911, when the US Government broke up Standard Oil after prosecution for violation of anti-trust laws. Starting in the 1930s, with the US in position to control global oil prices, the Texas Railroad Commission capped production levels in order to stabilize the market. After US oil production peaked in 1971 and that nation lost its ability to control global prices, petroleum's center of gravity shifted to the Middle East, and OPEC began mandating production quotas for its members in order to keep prices within a desirable band.
While the management of oil prices globally thus has precedents, the situation in the future will be fundamentally different than heretofore, in that previously the problem was too much oil and collapsing prices that offered little incentive for exploration. The situation the world will soon face is that of insufficient supply leading to extreme price shocks, price volatility, and acute shortages. Thus a new kind of management scheme will be required.
How will adoption of the Protocol affect importers and exporters differently?
Importers: No one doubts that industrial nations will find it difficult to sustain economic growth while using less oil on a yearly basis. Thus the voluntary adoption of the Protocol by importers would seem disadvantageous - a "tough sell."
However, it must be recognized that a decline in the availability of oil is inevitable in any case; only the timing of the onset of decline is uncertain. Without a structured agreement in place to limit imports, nations will be inclined to put off preparations for the energy transition until prices soar, at which time such a transition will become far more difficult because of the ensuing chaotic economic conditions. With the Protocol in place, importers will be able to count on stable prices and can then more easily undertake the difficult but necessary process of planning for a future with less oil.
Poor importing countries may object that by using less petroleum they will have to forego conventional economic development. However, further development that is based on the use of petroleum will merely create structural dependency on a depleting resource. Without the Protocol, these nations will be financially bled by high and volatile prices. With the Protocol in place and with prices stabilized, these nations will be able to afford to import the oil they absolutely need; meanwhile they will have every incentive to develop their economies in a way that is not petroleum-dependent.
Exporters: Economies that are based primarily on income from the extraction and export of natural resources often tend to give rise to governments that are more responsive to the interests of powerful foreign resource buyers than they are to the needs of their own citizens. Thus it is in the interest of resource-exporting countries to develop indigenous industries in order to diversify their economies.
Countries that depend primarily on income from oil exports will need to wean themselves from this dependence eventually in any case, as their oilfields are depleted; the Protocol provides them a means of making the transition in a way that will allow for long-term planning.
Without the Protocol, smaller exporting nations will likely be at the mercy of militarily powerful importers. The Protocol will provide a means of minimizing external political interference in these nations' affairs. As a result, much international tension and conflict, including the threat of terrorism, can be minimized - which will be a help also to the wealthy importers.
How will the oil companies be affected?
Without the Protocol, the oil companies may enjoy record revenues - for a time. But they will be demonized for profiting from the misery of the rest of society; meanwhile, they will be hampered in their operations by the destabilization of national economies resulting from wildly gyrating oil prices. As noted earlier, the Standard Oil Trust, the Texas Railroad Commission, and OPEC all provided production-rationing mechanisms that brought order out of what would otherwise have been chaotic situations. The oil companies (sometimes reluctantly) accepted these mechanisms, recognizing that a stable economic environment was more important to them in the long run than the opportunity to make momentary windfall profits.
With the Protocol, the oil companies will remain profitable, they will have the incentive to undertake further exploration, and they will be able to plan for decades ahead. They will also be motivated to become more generalized energy companies (rather than remaining merely oil companies) and thus to invest in the development of alternative energy sources.
There is already evidence that the oil companies are concerned about a public backlash as gasoline prices soar: ChevronTexaco has initiated an expensive public-relations campaign titled "Will You Join Us?", featuring a web site (www.willyoujoinus.com) and expensive newspaper ads informing readers that "the era of easy oil is over" and asking for public discussion on the issue. The Oil Depletion Protocol will provide more long-term security for the petroleum industry than any PR campaign ever could, and at no cost.
Won't both importers and exporters be tempted to cheat? How would the Protocol be enforced?
The Protocol will require a system for monitoring production, exports, and imports - which cannot be hidden to a large degree in any case. Enforcement will require the establishment of a Secretariat for adjudication of disputes and claims, and a system of economic penalties to be negotiated by the agreeing nations.
How can nations adjust internally to having less oil?
Withdrawal from oil dependency will be an immense challenge that will require cooperation and compromise on everyone's part. Efforts will be needed both to create supplies of alternative fuels and to reduce the demand for oil.
The latter task will be much easier if systems are designed to make it in individuals' interest not only to reduce their own oil dependency but also to persuade others to reduce theirs. One such system for creating collective motivation and cooperation consists of Domestic Tradable Quotas, or DTQs.
DTQs can be used to ration all hydrocarbon energy sources (in order to reduce greenhouse gas emissions) or specific fuels such as oil. For the sake of discussion, let us assume the use of DTQs for petroleum only, as a way of implementing the Depletion Protocol within nations.
First, a national Petroleum Budget would be drawn up, based on the nation's indigenous production and oil imports as mandated by the Oil Depletion Protocol. A segment of the Petroleum Budget would then be issued as an unconditional entitlement to all adults and divided equally among them; the remainder would be auctioned to industry, commercial users, and government. The units could then be bought and sold, so that users unable to cope with their ration could increase it, while others who kept their fuel consumption low could sell and trade their Petro-units on the national market. All transactions would be carried out electronically, using technologies and systems already in place for direct debit systems and credit cards.
When consumers (citizens, businesses, or the government) made purchases of fuel, they would surrender their quota to the energy retailer, accessing their quota account by (for instance) using their Petro-card or direct debit. The retailer would then surrender the carbon units when buying energy from the wholesaler. Finally, the primary energy provider would surrender units back to the National Register when the company pumped or imported the oil. This closes the loop.
All purchases of petroleum would be made with Petro-units, whether the oil were used as fuel or as feedstock for plastics or chemicals. So long as the petroleum remained fuel, Petro-units would have to be passed back up the line, starting with the end user. However, if the petroleum were incorporated as feedstock into the manufacturing of a product (e.g., plastics), the manufacturer would simply add the cost of the Petro-units into the cost of the product. Thus, in the case of feedstocks, the manufacturer of goods would be the presumed end user.
Purchasers not having any Petro-units to offer at point of sale - foreign visitors, people who had forgotten their card or cashed-in all their quota as soon as they received it - would buy a quota at point of purchase, then immediately surrender it in exchange for fuel, but would pay a cost penalty for this (i.e., the bid-and-offer spread quoted by the market).
DTQs place everyone in the same boat: households, industry, and government would have to work together, facing the same Petroleum Budget, and trading on the same market for Petro-units. Everyone would have a stake in the system. All would have the sense that their own efforts at conservation were not being wasted by the energy profligacy of others, and that the system was fair.
Moreover, DTQs are guaranteed to be effective, because the only fuel that could be purchased would be fuel within the Budget. The Budget would set a long time-horizon so that people would have the motivation and information they needed to take action in the present to achieve drastic reductions in oil use over a 20-year timeframe.
What if only a few nations sign on? Won't the Protocol be ineffectual if a few large exporters or importers refuse to do so?
At first it might seem that those nations not adopting the Protocol would achieve an advantage. However, any temporary benefit would be purchased at the expense of later economic calamity. As discussed in the SAIC Report, nations that embark on the energy transition sooner will be much better off than those procrastinating.
What about natural gas and coal - should there be similar protocols for these? Might countries simply burn more coal to make up for having less oil?
The Oil Depletion Protocol will not preclude other agreements aimed at reducing fossil fuel usage in order to avoid impacts to the global climate, but it will be more ambitious in its reduction trajectory than the Kyoto Protocol or the Asia Pacific Partnership on Clean Development and Climate. If nations' experience with the Oil Depletion Protocol is positive, this will provide motivation for the forging of similar agreements covering these other fossil fuels.
How can the process of adopting the Oil Depletion Protocol begin?
A program to win implementation of the Protocol must focus on educating both the general public and top-level decision-makers.
Adoption of the Protocol will require that a few policy makers champion it and bring it before their national parliament or congress. If even one country adopts the Protocol, this will help to open a global discussion.
At the same time, it is important that citizens understand the issues and what is at stake, as pressure on elected officials from below will help focus the latter's attention on the matter.
In the near future, a program will be underway to obtain endorsements of the Protocol from prominent organizations and individuals. This article is part of a preliminary effort to inform the public of both the Peak Oil issue and the Oil Depletion Protocol. Please help by copying this article and sending it to family, friends, colleagues, the media, and elected officials. This may be our last, best opportunity to avert resource wars, terrorism, and economic collapse as we enter the second half of the Age of Oil.
THE OIL DEPLETION PROTOCOL
WHEREAS the passage of history has recorded an increasing pace of change, such that the demand for energy has grown rapidly in parallel with the world population over the past two hundred years since the Industrial Revolution;
WHEREAS the energy supply required by the population has come mainly from coal and petroleum, having been formed but rarely in the geological past, such resources being inevitably subject to depletion;
WHEREAS oil provides ninety percent of transport fuel, essential to trade, and plays a critical role in agriculture, needed to feed the expanding population;
WHEREAS oil is unevenly distributed on the Planet for well-understood geological reasons, with much being concentrated in five countries, bordering the Persian Gulf;
WHEREAS all the major productive provinces of the World have been identified with the help of advanced technology and growing geological knowledge, it being now evident that discovery reached a peak in the 1960s, despite technological progress, and a diligent search;
WHEREAS the past peak of discovery inevitably leads to a corresponding peak in production during the first decade of the 21st Century, assuming no radical decline in demand;
WHEREAS the onset of the decline of this critical resource affects all aspects of modern life, such having grave political and geopolitical implications;
WHEREAS it is expedient to plan an orderly transition to the new World environment of reduced energy supply, making early provisions to avoid the waste of energy, stimulate the entry of substitute energies, and extend the life of the remaining oil;
WHEREAS it is desirable to meet the challenges so arising in a co-operative and equitable manner, such to address related climate change concerns, economic and financial stability and the threats of conflicts for access to critical resources.
NOW IT IS PROPOSED THAT
1. A convention of nations shall be called to consider the issue with a view to agreeing an Accord with the following objectives:
to avoid profiteering from shortage, such that oil prices may remain in reasonable relationship with production cost;
to allow poor countries to afford their imports;
to avoid destabilising financial flows arising from excessive oil prices;
to encourage consumers to avoid waste;
to stimulate the development of alternative energies.
2. Such an Accord shall have the following outline provisions:
No country shall produce oil at above its current Depletion Rate, such being defined as annual production as a percentage of the estimated amount left to produce;
Each importing country shall reduce its imports to match the current World Depletion Rate, deducting any indigenous production.
3. Detailed provisions shall cover the definition of the several categories of oil, exemptions and qualifications, and the scientific procedures for the estimation of Depletion Rate.
4. The signatory countries shall cooperate in providing information on their reserves, allowing full technical audit, such that the Depletion Rate may be accurately determined.
5. The signatory countries shall have the right to appeal their assessed Depletion Rate in the event of changed circumstances.
(Note: the Oil Depletion Protocol has elsewhere been published as "The Rimini Protocol" and "The Uppsala Protocol." All of these documents are essentially identical.)
Sources of further information
On Oil Depletion:
www.globalpublicmedia.com
www.energybulletin.net
www.peakoil.net
www.odac-info.org
On Domestic Tradable Quotas (DTQs):
www.dtqs.org
On the SAIC Report:
www.cge.uevora.pt/aspo2005/ abscom/Abstract_Lisbon_Hirsch.pdf
www.hilltoplancers.org/stories/hirsch0502.pdf
Richard Heinberg is the author of Powerdown - Options and Actions for a Post-Carbon World. He is a journalist, educator, editor, and lecturer, and a Core Faculty member of New College of California, where he teaches courses on "Energy and Society" and "Culture, Ecology and Sustainable Community."
If you wish to republish any of these essays or post them on a web site, please contact rheinberg@museletter.com for permission.
By now most well-informed people are aware that global oil production may soon reach its all-time peak, and that the consequences will likely be severe.
Already many important oil-producing nations (such as the United States, Indonesia, and Iran) and some whole regions (such as the North Sea) are past their production maximums. With nearly every passing year another country reaches a production plateau or begins its terminal decline.
Meanwhile global rates of oil discovery have been falling since the early 1960s, as has been confirmed by ExxonMobil. All of the 100 or so supergiant fields that are collectively responsible for about half of current world production were discovered in the 1940s, '50s, '60s, and '70s. No fields of comparable size have been found since then; instead, exploration during recent years has turned up only much smaller fields that deplete relatively quickly. The result is that today only one new barrel of oil is being discovered for every four that are extracted and used.
World leaders are hampered in their ability to assess the situation by a lack of consistent data. Proven petroleum reserve figures look reassuring: the world has roughly a trillion barrels yet to produce, perhaps more; indeed, official reserves figures have never been higher. However, circumstantial evidence suggests that some of the largest producing nations have inflated their reserves figures for political reasons. Meanwhile oil companies routinely (and legitimately) report reserve growth for fields discovered decades ago. In addition, reserves figures are often muddied by the inclusion of non-conventional petroleum resources, such oil sands - which do need to be taken into account, but in a separate category, as their rates of extraction are limited by factors different from those that constrain the production of conventional crude. As a consequence of all of these practices, oil reserves data tend to give an impression of expansion and plenty, while discovery and depletion data do the opposite.
This apparent conflict in the data invites dispute among experts as to when the global oil peak is likely to occur. Some analysts say that the world is virtually at its peak of production now; others contend that the event can be delayed for two decades or more through enhanced investment in exploration, the adoption of new extraction technologies, and the substitution of non-conventional petroleum sources (oil sands, natural gas condensates, and heavy oil) for conventional crude.
However, there is little or no disagreement that a series of production peaks is now within sight - first, for conventional non-OPEC oil; then for conventional oil globally; and finally for all global conventional and non-conventional petroleum sources combined.
Moreover, even though there may be dispute as to the timing of these events, it is becoming widely acknowledged that the world peak in all combined petroleum sources will have significant global economic consequences. Mitigation efforts will require many years of work and trillions of dollars in investment. Even if optimistic forecasts of the timing of the global production peak turn out to be accurate, the world is facing an historic change that is unprecedented in scope and depth of impact.
Due to systemic dependence on oil for transportation, agriculture, and the production of plastics and chemicals, every sector of every society will be affected. Efforts will be needed to create alternative sources of energy, to reduce demand for oil through heightened energy efficiency, and to redesign entire systems (including cities) to operate with less petroleum.
These efforts will be challenging enough in the context of a stable economic environment. However, if prices for oil become extremely volatile, mitigation programs could be undermined. While high but stable prices would encourage conservation and investment in alternatives, prices that repeatedly skyrocket and then plummet could devastate entire economies and discourage long-term investment. Actual shortages of oil - of which price shocks would be only a symptom - would be even more devastating. The worst impacts would be suffered by those nations, and those aspects of national economies, that could not obtain oil at any price affordable to them. Supply interruptions would likely occur with greater frequency and for increasing lengths of time as global oil production gradually waned.
Efforts to plan a long-term energy transition would be frustrated, in both importing and exporting countries. Meanwhile the perception among importers that exporting nations were profiteering would foment animosities and an escalating likelihood of international conflict.
In short, the global peak in oil production is likely to lead to economic chaos and extreme geopolitical tensions, raising the spectres of war, revolution, terrorism, and even famine, unless nations adopt some method of cooperatively reducing their reliance on oil.
A Plan for Global Powerdown
The Oil Depletion Protocol provides a way forward (the text appears at the end of this article). It was drafted by the Association for the Study of Peak Oil; however, the source of the document is of little importance - only its substance is of interest. While it is merely a suggested outline and will require fleshing out and detailed negotiation, the Protocol is inherently simple. As will be clear from the Discussion below, it would be unnecessary for all nations to ratify the Protocol in order for it to have a beneficial effect; if even one nation adopts it, that nation will be benefited. However, if a substantial number of nations sign on this will create a platform for international economic stability and cooperation.
The Protocol will be presented at several important international conferences attended by world leaders in late 2005. Efforts will also be made to publicize and communicate it to the general public. It is hoped that a few courageous politicians in each country will understand its importance and bring it before their governing bodies for consideration and adoption.
How Would It Work?
The idea of the Protocol is inherently straightforward: oil importing nations would agree to reduce their imports by an agreed-upon yearly percentage (the World Oil Depletion Rate), while exporting countries would agree to reduce their rate of exports by their national Depletion Rate.
The concept of the Depletion Rate is perhaps the most challenging technical aspect of the Protocol, yet even it is easy to grasp given a little thought. Clearly, each country has a finite endowment of oil from nature; thus, when the first barrel has been extracted, there is accordingly one less left for the future. What is left for the future consists of two elements: first, how much remains in known oilfields, termed Remaining Reserves; and second, how much remains to be found in the future (termed Yet-to-Find). How much is Yet-to-Find may be reasonably estimated by extrapolating the discovery trend of the past. The Depletion Rate equals the total yet-to-produce divided by the yearly amount currently being extracted.
Let us explore a few examples:
Norway is a country that reports exceptionally accurate reserve estimates. The total produced to-date is 18.5 billion barrels (Gb), and 11.3 Gb remain in known fields, with about 2 left to find, giving a rounded total of 32 Gb. It follows that 13.5 Gb are left to produce. In 2004, 1.07 Gb were extracted, giving a Depletion Rate of 7.4 percent (1.07/13.5). This is a comparatively high rate, typical of an offshore environment.
In the case of the US (considering only the lower 48 states and excluding deepwater), the corresponding numbers are: produced to-date, 173 Gb; Remaining Reserves, 24 Gb; Yet-to-Find, 2 Gb - meaning that there are 27 Gb left. Annual production in 2004 was 1.3 Gb, giving a Depletion Rate of 4.6 percent (1.3/27).
For the world as a whole, 944 Gb have been produced; 772 remain in known fields; and an estimated 134 Gb is Yet-to-Find, meaning that 906 Gb are left. Production of conventional oil in 2004 was 24 Gb, so the Depletion Rate is 2.59 percent (24/906).
These estimates exclude non-conventional oil - oil shales, bitumen (oil sands), extra-heavy oil, heavy oil, deepwater oil, polar oil, and liquids from gasfield plants. Most oil produced to date has been of the conventional variety, which will dominate all supply far into the future, so it makes sense to concentrate on this category.
It must be stressed that current Reserves estimates in the public domain are grossly unreliable, and one of the purposes of the Protocol is to secure better information. The assessed Depletion Rate for each country, and eventually for the World as whole, is subject to revision when better information becomes available, but the resulting correction of the Depletion Rate will not be large, probably causing it to vary by less than one percent.
The Depletion Protocol would require importers to reduce their imports by the World Depletion Rate (i.e., 2.5 percent) each year in order to put demand into balance with world supply. As stated earlier, exporters would reduce their production according to their national Depletion Rate. Thus Norway would reduce its production by 7.4 percent each year (that country's production is already declining at an even higher rate).
The imposition on the producing countries represents no great burden, since few can now increase their rate of production in any case, and many are experiencing declining production for purely geological reasons, as is the case with Norway and the US. Agreeing to produce less oil would not inhibit exploration because new finds would lower the national Depletion Rate, and thus permit a higher rate of export than would otherwise be the case. The main thrust of the Protocol would be to require importers to cut imports, but the inclusion of producers in the provisions would stimulate greater cooperation between the two factions. Any indigenous production in a country that was a net importer would not be likely to provide that country with an unfair advantage, as production within most importing countries is already declining at a rate higher than the World Depletion Rate.
How importers dealt internally with the import restriction would be up to them (though strategies both to obtain supplies of alternative fuels and to reduce demand for oil would doubtless be required). Some might wish to introduce an energy allowance as a form of tradable ration (as will be discussed in more detail below).
Discussion of the Protocol
Questions and Possible Objections
The Protocol may at first look like merely a good idea with no real chance of implementation. However, closer inspection suggests that its implementation will benefit nearly all important global stakeholders and that objections likely to be raised to it are easily countered.
What if forecasts of a near-term peak in global oil production are wrong? Won't there be a cost to preparing for the oil peak too early? In practical terms, won't this mean voluntarily choking off economic growth?
Because so much is at stake, it is important that these vital questions be addressed not just by partisan participants in the debate over the timing of the oil-production peak (the so-called "oil optimists" and the "oil pessimists"); some independent assessment is required of the costs of preparing too soon versus the costs of preparing too late.
Fortunately, such an assessment has already been undertaken - "Peaking of World Oil Production: Impacts, Mitigation, & Risk Management," a Report prepared by Science Applications International Corporation (SAIC) for the US Department of Energy, released in February 2005, and authored principally by Robert L. Hirsch (hereinafter referred to as "the SAIC Report").
The SAIC Report concludes that substantial mitigation of the economic, social, and political impacts of Peak Oil can come only from efforts both to increase energy supplies from alternative sources and to reduce demand for oil. With regard to the claim that efficiency measures will be enough to forestall dire impacts, Hirsch et al. note that, "While greater end-use efficiency is essential, increased efficiency alone will be neither sufficient nor timely enough to solve the problem. Production of large amounts of substitute liquid fuels will be required." Further, "Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large." Hirsch, et al., also point out that "The problems associated with world oil production peaking will not be temporary, and past 'energy crisis' experience will provide relatively little guidance."
The SAIC Report agrees that mitigation efforts undertaken too soon would exact a cost on society. However, it concludes that, "If peaking is imminent, failure to initiate timely mitigation could be extremely damaging. Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive than delayed mitigation."
What if the pessimists are right and the world is at its peak of oil production now? In that case, is it too late to implement the Depletion Protocol?
If the world reaches the peak of production within the next two years there will be too little time to undertake major mitigation efforts prior to the event, and therefore there are likely to be severe economic, social, and political impacts, as outlined in the SAIC Report.
However, in that case the need for the Protocol should quickly and widely become apparent. While all nations will suffer from higher prices and shortages, only a cooperative system of national and international quotas will avert the even more extreme economic and geopolitical crises that would otherwise ensue.
Why can't the market take care of the problem? Won't high prices stimulate more exploration and the development of alternatives? Wouldn't interference with market mechanisms be harmful?
The SAIC Report's authors dismiss the claim that the market will solve any shortage problems arising from global oil production peak, with higher oil prices stimulating investments in alternative energy sources, more efficient cars, and so on. Price signals warn only of immediate scarcity. However, the mitigation efforts needed in order to prepare for the global oil production peak and thus to head off shortages and price spikes must be undertaken many years in advance of the event. Hirsch, et al., maintain that, "Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important guides as to government actions that are desirable and those that are undesirable, but the process will not be easy."
Historically, oil production has often been managed by governments or by cartels. In petroleum's early days, free-market boom-and-bust cycles bankrupted many players (including the "father" of the oil industry, Edwin Drake). Soon John D. Rockefeller brought a certain order to the situation through the creation of the Standard Oil Trust (in doing so he squeezed out many competitors and personally profited to an extraordinary degree). This regime came to an end in 1911, when the US Government broke up Standard Oil after prosecution for violation of anti-trust laws. Starting in the 1930s, with the US in position to control global oil prices, the Texas Railroad Commission capped production levels in order to stabilize the market. After US oil production peaked in 1971 and that nation lost its ability to control global prices, petroleum's center of gravity shifted to the Middle East, and OPEC began mandating production quotas for its members in order to keep prices within a desirable band.
While the management of oil prices globally thus has precedents, the situation in the future will be fundamentally different than heretofore, in that previously the problem was too much oil and collapsing prices that offered little incentive for exploration. The situation the world will soon face is that of insufficient supply leading to extreme price shocks, price volatility, and acute shortages. Thus a new kind of management scheme will be required.
How will adoption of the Protocol affect importers and exporters differently?
Importers: No one doubts that industrial nations will find it difficult to sustain economic growth while using less oil on a yearly basis. Thus the voluntary adoption of the Protocol by importers would seem disadvantageous - a "tough sell."
However, it must be recognized that a decline in the availability of oil is inevitable in any case; only the timing of the onset of decline is uncertain. Without a structured agreement in place to limit imports, nations will be inclined to put off preparations for the energy transition until prices soar, at which time such a transition will become far more difficult because of the ensuing chaotic economic conditions. With the Protocol in place, importers will be able to count on stable prices and can then more easily undertake the difficult but necessary process of planning for a future with less oil.
Poor importing countries may object that by using less petroleum they will have to forego conventional economic development. However, further development that is based on the use of petroleum will merely create structural dependency on a depleting resource. Without the Protocol, these nations will be financially bled by high and volatile prices. With the Protocol in place and with prices stabilized, these nations will be able to afford to import the oil they absolutely need; meanwhile they will have every incentive to develop their economies in a way that is not petroleum-dependent.
Exporters: Economies that are based primarily on income from the extraction and export of natural resources often tend to give rise to governments that are more responsive to the interests of powerful foreign resource buyers than they are to the needs of their own citizens. Thus it is in the interest of resource-exporting countries to develop indigenous industries in order to diversify their economies.
Countries that depend primarily on income from oil exports will need to wean themselves from this dependence eventually in any case, as their oilfields are depleted; the Protocol provides them a means of making the transition in a way that will allow for long-term planning.
Without the Protocol, smaller exporting nations will likely be at the mercy of militarily powerful importers. The Protocol will provide a means of minimizing external political interference in these nations' affairs. As a result, much international tension and conflict, including the threat of terrorism, can be minimized - which will be a help also to the wealthy importers.
How will the oil companies be affected?
Without the Protocol, the oil companies may enjoy record revenues - for a time. But they will be demonized for profiting from the misery of the rest of society; meanwhile, they will be hampered in their operations by the destabilization of national economies resulting from wildly gyrating oil prices. As noted earlier, the Standard Oil Trust, the Texas Railroad Commission, and OPEC all provided production-rationing mechanisms that brought order out of what would otherwise have been chaotic situations. The oil companies (sometimes reluctantly) accepted these mechanisms, recognizing that a stable economic environment was more important to them in the long run than the opportunity to make momentary windfall profits.
With the Protocol, the oil companies will remain profitable, they will have the incentive to undertake further exploration, and they will be able to plan for decades ahead. They will also be motivated to become more generalized energy companies (rather than remaining merely oil companies) and thus to invest in the development of alternative energy sources.
There is already evidence that the oil companies are concerned about a public backlash as gasoline prices soar: ChevronTexaco has initiated an expensive public-relations campaign titled "Will You Join Us?", featuring a web site (www.willyoujoinus.com) and expensive newspaper ads informing readers that "the era of easy oil is over" and asking for public discussion on the issue. The Oil Depletion Protocol will provide more long-term security for the petroleum industry than any PR campaign ever could, and at no cost.
Won't both importers and exporters be tempted to cheat? How would the Protocol be enforced?
The Protocol will require a system for monitoring production, exports, and imports - which cannot be hidden to a large degree in any case. Enforcement will require the establishment of a Secretariat for adjudication of disputes and claims, and a system of economic penalties to be negotiated by the agreeing nations.
How can nations adjust internally to having less oil?
Withdrawal from oil dependency will be an immense challenge that will require cooperation and compromise on everyone's part. Efforts will be needed both to create supplies of alternative fuels and to reduce the demand for oil.
The latter task will be much easier if systems are designed to make it in individuals' interest not only to reduce their own oil dependency but also to persuade others to reduce theirs. One such system for creating collective motivation and cooperation consists of Domestic Tradable Quotas, or DTQs.
DTQs can be used to ration all hydrocarbon energy sources (in order to reduce greenhouse gas emissions) or specific fuels such as oil. For the sake of discussion, let us assume the use of DTQs for petroleum only, as a way of implementing the Depletion Protocol within nations.
First, a national Petroleum Budget would be drawn up, based on the nation's indigenous production and oil imports as mandated by the Oil Depletion Protocol. A segment of the Petroleum Budget would then be issued as an unconditional entitlement to all adults and divided equally among them; the remainder would be auctioned to industry, commercial users, and government. The units could then be bought and sold, so that users unable to cope with their ration could increase it, while others who kept their fuel consumption low could sell and trade their Petro-units on the national market. All transactions would be carried out electronically, using technologies and systems already in place for direct debit systems and credit cards.
When consumers (citizens, businesses, or the government) made purchases of fuel, they would surrender their quota to the energy retailer, accessing their quota account by (for instance) using their Petro-card or direct debit. The retailer would then surrender the carbon units when buying energy from the wholesaler. Finally, the primary energy provider would surrender units back to the National Register when the company pumped or imported the oil. This closes the loop.
All purchases of petroleum would be made with Petro-units, whether the oil were used as fuel or as feedstock for plastics or chemicals. So long as the petroleum remained fuel, Petro-units would have to be passed back up the line, starting with the end user. However, if the petroleum were incorporated as feedstock into the manufacturing of a product (e.g., plastics), the manufacturer would simply add the cost of the Petro-units into the cost of the product. Thus, in the case of feedstocks, the manufacturer of goods would be the presumed end user.
Purchasers not having any Petro-units to offer at point of sale - foreign visitors, people who had forgotten their card or cashed-in all their quota as soon as they received it - would buy a quota at point of purchase, then immediately surrender it in exchange for fuel, but would pay a cost penalty for this (i.e., the bid-and-offer spread quoted by the market).
DTQs place everyone in the same boat: households, industry, and government would have to work together, facing the same Petroleum Budget, and trading on the same market for Petro-units. Everyone would have a stake in the system. All would have the sense that their own efforts at conservation were not being wasted by the energy profligacy of others, and that the system was fair.
Moreover, DTQs are guaranteed to be effective, because the only fuel that could be purchased would be fuel within the Budget. The Budget would set a long time-horizon so that people would have the motivation and information they needed to take action in the present to achieve drastic reductions in oil use over a 20-year timeframe.
What if only a few nations sign on? Won't the Protocol be ineffectual if a few large exporters or importers refuse to do so?
At first it might seem that those nations not adopting the Protocol would achieve an advantage. However, any temporary benefit would be purchased at the expense of later economic calamity. As discussed in the SAIC Report, nations that embark on the energy transition sooner will be much better off than those procrastinating.
What about natural gas and coal - should there be similar protocols for these? Might countries simply burn more coal to make up for having less oil?
The Oil Depletion Protocol will not preclude other agreements aimed at reducing fossil fuel usage in order to avoid impacts to the global climate, but it will be more ambitious in its reduction trajectory than the Kyoto Protocol or the Asia Pacific Partnership on Clean Development and Climate. If nations' experience with the Oil Depletion Protocol is positive, this will provide motivation for the forging of similar agreements covering these other fossil fuels.
How can the process of adopting the Oil Depletion Protocol begin?
A program to win implementation of the Protocol must focus on educating both the general public and top-level decision-makers.
Adoption of the Protocol will require that a few policy makers champion it and bring it before their national parliament or congress. If even one country adopts the Protocol, this will help to open a global discussion.
At the same time, it is important that citizens understand the issues and what is at stake, as pressure on elected officials from below will help focus the latter's attention on the matter.
In the near future, a program will be underway to obtain endorsements of the Protocol from prominent organizations and individuals. This article is part of a preliminary effort to inform the public of both the Peak Oil issue and the Oil Depletion Protocol. Please help by copying this article and sending it to family, friends, colleagues, the media, and elected officials. This may be our last, best opportunity to avert resource wars, terrorism, and economic collapse as we enter the second half of the Age of Oil.
THE OIL DEPLETION PROTOCOL
WHEREAS the passage of history has recorded an increasing pace of change, such that the demand for energy has grown rapidly in parallel with the world population over the past two hundred years since the Industrial Revolution;
WHEREAS the energy supply required by the population has come mainly from coal and petroleum, having been formed but rarely in the geological past, such resources being inevitably subject to depletion;
WHEREAS oil provides ninety percent of transport fuel, essential to trade, and plays a critical role in agriculture, needed to feed the expanding population;
WHEREAS oil is unevenly distributed on the Planet for well-understood geological reasons, with much being concentrated in five countries, bordering the Persian Gulf;
WHEREAS all the major productive provinces of the World have been identified with the help of advanced technology and growing geological knowledge, it being now evident that discovery reached a peak in the 1960s, despite technological progress, and a diligent search;
WHEREAS the past peak of discovery inevitably leads to a corresponding peak in production during the first decade of the 21st Century, assuming no radical decline in demand;
WHEREAS the onset of the decline of this critical resource affects all aspects of modern life, such having grave political and geopolitical implications;
WHEREAS it is expedient to plan an orderly transition to the new World environment of reduced energy supply, making early provisions to avoid the waste of energy, stimulate the entry of substitute energies, and extend the life of the remaining oil;
WHEREAS it is desirable to meet the challenges so arising in a co-operative and equitable manner, such to address related climate change concerns, economic and financial stability and the threats of conflicts for access to critical resources.
NOW IT IS PROPOSED THAT
1. A convention of nations shall be called to consider the issue with a view to agreeing an Accord with the following objectives:
to avoid profiteering from shortage, such that oil prices may remain in reasonable relationship with production cost;
to allow poor countries to afford their imports;
to avoid destabilising financial flows arising from excessive oil prices;
to encourage consumers to avoid waste;
to stimulate the development of alternative energies.
2. Such an Accord shall have the following outline provisions:
No country shall produce oil at above its current Depletion Rate, such being defined as annual production as a percentage of the estimated amount left to produce;
Each importing country shall reduce its imports to match the current World Depletion Rate, deducting any indigenous production.
3. Detailed provisions shall cover the definition of the several categories of oil, exemptions and qualifications, and the scientific procedures for the estimation of Depletion Rate.
4. The signatory countries shall cooperate in providing information on their reserves, allowing full technical audit, such that the Depletion Rate may be accurately determined.
5. The signatory countries shall have the right to appeal their assessed Depletion Rate in the event of changed circumstances.
(Note: the Oil Depletion Protocol has elsewhere been published as "The Rimini Protocol" and "The Uppsala Protocol." All of these documents are essentially identical.)
Sources of further information
On Oil Depletion:
www.globalpublicmedia.com
www.energybulletin.net
www.peakoil.net
www.odac-info.org
On Domestic Tradable Quotas (DTQs):
www.dtqs.org
On the SAIC Report:
www.cge.uevora.pt/aspo2005/ abscom/Abstract_Lisbon_Hirsch.pdf
www.hilltoplancers.org/stories/hirsch0502.pdf
Richard Heinberg is the author of Powerdown - Options and Actions for a Post-Carbon World. He is a journalist, educator, editor, and lecturer, and a Core Faculty member of New College of California, where he teaches courses on "Energy and Society" and "Culture, Ecology and Sustainable Community."
If you wish to republish any of these essays or post them on a web site, please contact rheinberg@museletter.com for permission.
Subscribe to:
Posts (Atom)
