Posted by Big Gav
Dick Cheney has been motivating the troops by telling them they'll be stuck in the middle east for another three or four decades (coincidentally, around about as long as it will take to deplete the oil there), which I'm sure had most of them whooping it up as they considered what great suntans they'll have at the end of it all. No doubt recruiters in the US are fighting off all those newly eligible high school drop outs that are begging to become part of the army of freedom.
US Vice-President Dick Cheney has said that the US must be prepared to fight the war on terror for decades. Addressing US military personnel, he said that the only way terrorists would win was if the US lost its nerve and abandoned Iraq and the Middle East.
Now, you might say that Dick is just admitting they don't have a clue how this war can be won and its about time he was replaced by someone who does have a plan for getting us out of this mess (hint: ending our dependence on middle east oil could be part of it) - and I'd be hard pressed to come up with a convincing counter-argument.
Even though Dick has given up on victory, at least he isn't hearing voices like King George is - perhaps all those drinking binges are catching up with him. Is insanity grounds for impeachment ?
Obviously the average US punter is losing patience with this incompetence, as some new polls are showing. I wonder how long until the word "malaise" starts getting used again ?
The public's concerns affect their view of the state of the country. 69 percent of Americans say things in the U.S. are pretty seriously off on the wrong track — the highest number since CBS News started asking the question in 1983. Today, just 26 percent say things are going in the right direction.
Moving back from the insane asylum to the real world, bonds fund management giant Pimco is asking investors "Got Energy ?" (which I must immodestly say isn't as catchy a tagline as "War, Famine, Pestilence etc"). I always enjoy reading Bill Gross' well considered columns - but this excellent article is from Mark Kiesel.
At some point over the next several years, recognition of the coming energy crisis will reach critical mass—a "tipping point"—and when it does, the key competitive question investors will be asking countries and companies alike will be: Got energy?
That’s because energy is unlike any other commodity. Most commodities can be replaced: trees can be planted, food can be grown, consumer goods can be manufactured, and money can be printed. Those that can’t be replaced are often reusable, such as diamonds and gold. But energy is finite and irreplaceable. Once you use it, it’s gone.
So, when the tipping point comes and people fully grasp the magnitude of the impending energy crisis, those who don’t have energy will have to pay those who do. And perhaps pay dearly because, remember, there is a finite supply. Hurricanes Katrina and Rita illustrate how little room for error there is in today’s energy markets. However, the energy crisis itself is being caused by five long-term factors: (a) rising global demand, (b) changing consumer and investor preferences, (c) growing oil dependency, (d) under-investment, and (e) shrinking spare capacity.
For several years already, PIMCO has been bullish on the long-run prospects for the energy sector. Our portfolios have favored energy companies and selective emerging market countries based on our secular view that the price of energy should be supported by the factors mentioned above. Let’s examine each in turn and then consider the investment implications.
I think the graph above is worth considering - with stagnant or shrinking oil production and rising levels of wealth in China and India, how big will America's slice of the pie be in 10 years time (presuming they can't occupy all the oil producing countries and keep the oil to themselves) ? Obviously the average (err, perhaps I mean poor) American is going to be making do with a lot less oil (this applies to other large per-capita consumers like Australia and Canada too, though we have the advantage of being net energy exporters at least). So hopefully they have a government that is interested in encouraging efficiency, substitution and big changes in urban planning and public transport provision (presumably that means a change of government will be required given the lack of vision exhibited by the clowns I discussed earlier).
Some other intesting graphs from Pimco:
The column even mentions the now omnipresent Michael Klare:
Because so many countries, like the U.S. and China, rely so heavily on imported oil, geo-political uncertainty and strategic factors are also affecting energy demand. Rising geo-political risk is leading to stockpiling of oil inventories as global competition to secure long-term energy resources intensifies. (This was a major theme in the book Resource Wars by Michael Klare, a PIMCO Secular Forum speaker in May 2005). As evidence of this trend, the U.S. has built-up its strategic petroleum reserves to 700 million barrels and may add up to 300 million more barrels over the next several years.11 Similarly, China and India have been stockpiling oil. However, their strategic petroleum reserves are modest in comparison to both U.S. levels and their countries’ longer-term needs. Taken together, the cumulative effect of emerging market industrialization, changing consumer and investor preferences, and strategic stockpiling has steadily increased global oil demand.
While global oil production is still rising, we are getting closer to the point where the world’s production of oil cannot keep up with this incremental demand. At some point global oil production will peak and we will start down a production decline curve where available supply shrinks over time. Rising demand and the eventual decline in global production means the price of oil should trend up over time. In addition, the price of oil should be supported in the near-term by demand from countries such as the U.S., China and India, which are in competition to secure energy sources and are increasingly reliant on foreign imports to satisfy their demand. Given these developments, combined with the fact that oil is primarily located in areas of extreme political uncertainty, it is not surprising that spot and forward energy prices are rising.
Cheap energy is a thing of the past. The world’s increasing demand for energy is now colliding with the simple reality that crude oil production is nearing capacity limits at the same time that under-investment in refining and natural gas infrastructure is leading to bottlenecks in energy supplies. This dilemma is intensified by the industrialization of China and other emerging markets, global competition to secure energy assets, rising import dependency, and geo-political uncertainty. Energy is a unique resource that causes a high degree of uncertainty worldwide, given rapidly evolving secular and economic factors. It poses to individuals, companies and countries the question, "Got Energy?"
Another graph worth considering is WHT's latest effort (clearly he is in the modelling zone this week), plotting the likely oil production curve based on historical discovery data. It ain't pretty.
Because of my use of external data for discoveries, which actually constitute someone else's estimates and therefore may turn out low, take the curve at face value. I don't know the history behind the ASPO numbers, but just as a cautionary note, I can summarize with this statement : "gulp".
I'm hoping that the data used is just for "conventional" oil (given CC's traditional segmentation of hydrocarbon types) and doesn't include deepwater, polar, tar sands etc which would flatten things out on the downslope a bit.
TomDispatch has a new dispatch from Mike Davis who is obviously a talented gloom-monger as he can talk fluent global warming disaster as well as bird flu - "the monster at the door" - this one is called "Has the Age of Chaos Begun ?".
Discussions of "tipping points" have, in recent times, largely been relegated to the war in Iraq where such moments, regularly predicted by the Bush administration, never arrive. In the meantime, an actual tipping point may have been creeping up on us on another front entirely, one that is anathema to this administration -- that of climate change.
The latest news from scientists laboring in cold climes has been startling. The expanse of Arctic sea ice has been shrinking in the summer since the late 1970s, though usually rebounding to near normal levels in the winter. Until recently. For the last few years, winter ice cover has been shrinking as well. This will be the fourth consecutive year of record, or near record, shrinkage of September sea ice in the Arctic. Scientists speculate that a threshold has been crossed.
"Experts at the U.S. National Snow and Data Center in Colorado," writes David Adam, environmental correspondent for the British Guardian, "fear the [Arctic] region is locked into a destructive cycle with warmer air melting more ice, which in turn warms the air further. Satellite pictures show that the extent of Arctic sea ice this month dipped some 20% below the long term average for September -- melting an extra 500,000 square miles, or an area twice the size of Texas. If current trends continue, the summertime Arctic Ocean will be completely ice-free well before the end of this century."
Maybe this is bad -- extinction-bad -- for the polar bear, but otherwise doesn't it open new vistas for us all? For instance, the fabled "Northwest Passage" from Europe to Asia, so energetically, if fruitlessly, searched out by early European explorers, is now almost a reality. This summer only 60 miles of scattered ice floes stood in the path of a completely open passage across the Canadian northwest.
Unfortunately, as Mike Davis explains below, the vistas opening before us are anything but pleasing. This is, in fact, a tipping point none of us will want to see -- and none of us may be able to avoid. Let's at least hope, as environmental writer Mark Hertsgaard recently suggested, that some kind of threshold or tipping point is also finally being crossed in American society.
The South Australian government is talking sense, highlighting the need for greater renewable energy targets before the MRET is saturated.
New green energy targets must be set to halt the effects of climate change and ensure South Australia maintains its lead of the nation in solar and wind energy investment.
Several of the state's leading environmentalists are calling on the state and federal governments to create new legislation to ensure the green energy industry does not come to a standstill when existing Mandatory Renewable Energy Targets - set in 2000 - are met next year.
OilsNotWell at PeakOil.com also has an interesting snippet about the most glaring example of "climate change" devastation - the port of New Orleans.
It seems that George Friedman of Stratfor is right: it is hard to operate a port without a city. The Port of New Orleans is open, but hardly operating at full capacity. From the New York Times:
"More than a month after Katrina struck New Orleans, as much as 80 percent of the port's operations remain shut. And getting them back up is in many ways out of his control: Many of the hundreds of workers needed to run the port are living in other states. Several of the rail lines into the port were torn apart by the storm; road access for tractor-trailers remains limited."
Jim at The Energy Blog has been taking a look at the power of the sea, with a pair of posts on Tidal power and Wave power - one part of the solution to the energy problem.
Unlike most kinds of renewable energy, wave power can produce power continuously. Ocean waves represent a considerable renewable energy resource. All of the energy is concentrated near the water surface with little wave action below 165 ft (50 meters) depth. This makes wave power a highly concentrated energy source with much smaller hourly and day-to-day variations. The rising and falling of the waves off shore can be captured by several devices specifically designed for this purpose.
Wave power is perhaps the least intrusive of all the renewable energy technologies. Wave power is very environmentally friendly. It does not create any waste, does not have any CO2 emissions or criteria pollutants, there is no noise pollution, no visual impact and it does not threaten marine life. Although the technology is limited to coastal locations its potential impact is large because of the large concentration of population along the coasts and the suitability of most coastal locations to the implementation of wave power. Proponents claim that the energy cost for producing electricity via wave power will be competitive with conventional power within a very short time.
And finally, here's a speech by Al Gore at the "We, The Media" conference in New York. I never thought all that much of Al when he was in power but in retrospect (after seeing just how awful the alternative is) it seems the world would be a much better place if the will of the people had prevailed in 2000 rather than the Supreme Court placing the current gang of lunatics in charge (presumably forever now the machines "count the votes" as Joe Stalin would say). It's a good speech - make sure you read it - then think, what would you prefer - Al Gore's Real Democracy or Dick Cheney's Forever War.
I came here today because I believe that American democracy is in grave danger. It is no longer possible to ignore the strangeness of our public discourse. I know that I am not the only one who feels that something has gone basically and badly wrong in the way America's fabled "marketplace of ideas" now functions.
How many of you, I wonder, have heard a friend or a family member in the last few years remark that it's almost as if America has entered "an alternate universe"?
I thought maybe it was an aberration when three-quarters of Americans said they believed that Saddam Hussein was responsible for attacking us on September 11, 2001. But more than four years later, between a third and a half still believe Saddam was personally responsible for planning and supporting the attack.
At first I thought the exhaustive, non-stop coverage of the O.J. trial was just an unfortunate excess that marked an unwelcome departure from the normal good sense and judgment of our television news media. But now we know that it was merely an early example of a new pattern of serial obsessions that periodically take over the airwaves for weeks at a time.
Are we still routinely torturing helpless prisoners, and if so, does it feel right that we as American citizens are not outraged by the practice? And does it feel right to have no ongoing discussion of whether or not this abhorrent, medieval behavior is being carried out in the name of the American people? If the gap between rich and poor is widening steadily and economic stress is mounting for low-income families, why do we seem increasingly apathetic and lethargic in our role as citizens?
On the eve of the nation's decision to invade Iraq, our longest serving senator, Robert Byrd of West Virginia, stood on the Senate floor asked: "Why is this chamber empty? Why are these halls silent?"
The decision that was then being considered by the Senate with virtually no meaningful debate turned out to be a fateful one. A few days ago, the former head of the National Security Agency, Retired Lt. General William Odom, said, "The invasion of Iraq, I believe, will turn out to be the greatest strategic disaster in U.S. history."
It is important to note that the absence of a two-way conversation in American television also means that there is no "meritocracy of ideas" on television. To the extent that there is a "marketplace" of any kind for ideas on television, it is a rigged market, an oligopoly, with imposing barriers to entry that exclude the average citizen.
The German philosopher, Jurgen Habermas, describes what has happened as "the refeudalization of the public sphere." That may sound like gobbledygook, but it's a phrase that packs a lot of meaning. The feudal system which thrived before the printing press democratized knowledge and made the idea of America thinkable, was a system in which wealth and power were intimately intertwined, and where knowledge played no mediating role whatsoever. The great mass of the people were ignorant. And their powerlessness was born of their ignorance.
It did not come as a surprise that the concentration of control over this powerful one-way medium carries with it the potential for damaging the operations of our democracy. As early as the 1920s, when the predecessor of television, radio, first debuted in the United States, there was immediate apprehension about its potential impact on democracy. One early American student of the medium wrote that if control of radio were concentrated in the hands of a few, "no nation can be free."
As a result of these fears, safeguards were enacted in the U.S. -- including the Public Interest Standard, the Equal Time Provision, and the Fairness Doctrine - though a half century later, in 1987, they were effectively repealed. And then immediately afterwards, Rush Limbaugh and other hate-mongers began to fill the airwaves.
And radio is not the only place where big changes have taken place. Television news has undergone a series of dramatic changes. The movie "Network," which won the Best Picture Oscar in 1976, was presented as a farce but was actually a prophecy. The journalism profession morphed into the news business, which became the media industry and is now completely owned by conglomerates.
The news divisions - which used to be seen as serving a public interest and were subsidized by the rest of the network - are now seen as profit centers designed to generate revenue and, more importantly, to advance the larger agenda of the corporation of which they are a small part. They have fewer reporters, fewer stories, smaller budgets, less travel, fewer bureaus, less independent judgment, more vulnerability to influence by management, and more dependence on government sources and canned public relations hand-outs. This tragedy is compounded by the ironic fact that this generation of journalists is the best trained and most highly skilled in the history of their profession. But they are usually not allowed to do the job they have been trained to do.
The present executive branch has made it a practice to try and control and intimidate news organizations: from PBS to CBS to Newsweek. They placed a former male escort in the White House press pool to pose as a reporter - and then called upon him to give the president a hand at crucial moments. They paid actors to make phony video press releases and paid cash to some reporters who were willing to take it in return for positive stories. And every day they unleash squadrons of digital brownshirts to harass and hector any journalist who is critical of the President.
For these and other reasons, The US Press was recently found in a comprehensive international study to be only the 27th freest press in the world. And that too seems strange to me.
In fact, one of the few things that Red state and Blue state America agree on is that they don't trust the news media anymore.
Clearly, the purpose of television news is no longer to inform the American people or serve the public interest. It is to "glue eyeballs to the screen" in order to build ratings and sell advertising. If you have any doubt, just look at what's on: The Robert Blake trial. The Laci Peterson tragedy. The Michael Jackson trial. The Runaway Bride. The search in Aruba. The latest twist in various celebrity couplings, and on and on and on.
And more importantly, notice what is not on: the global climate crisis, the nation's fiscal catastrophe, the hollowing out of America's industrial base, and a long list of other serious public questions that need to be addressed by the American people.