Saturday Night Fever  

I'm a bit worn out tonight so this will just be a minimal post with no organisation or insight (no sarcastic comments please) - the links are all good though.

If you're looking for data points to try and support the collapse and dieoff school of thought, then the place to start is Africa. Energy Bulletin points to a Wall Street Journal article on the impact of high oil prices on Guinea. What about all that oil in the Gulf of Guinea you ask ? Well - I don't think much of it will make its way into the local economies - but in any case the country of Guinea isn't actually anywhere near the Gulf of Guinea (though the oil rich nation of Equatorial Guinea is - here endeth the geography lesson).

Every couple of days, nurses at the Donka Hospital here scoop up the premature babies from their incubators. They rouse their mothers from sleep, lay the infants on the women's bellies and pile blankets on mother and child.

Doctors call this the "kangaroo method" -- a way to keep the babies warm enough so that they don't die during the long blackouts that plague this rundown West African port. Soaring fuel prices have forced the government to ration power across the city, and the hospital can't afford to run its oil-fired back-up generator.

"We can't keep it fueled up," says Mamadou Baldé, director of the hospital's infant-care ward, over the wail of sick babies. "The power outages are becoming more frequent."

The impact of today's energy crunch on the poor is plain in rich nations such as America: Expensive gasoline and soaring heating bills make a hard life harder. In impoverished countries such as Guinea, where per capita income is just $370 a year and surging gasoline prices have helped spark bloody riots, the energy shock has become a matter of life and death.

My recent debate with John in the comments on the topic of how long Australia's east coast gas reserves will last focussed on coal seam methane as the deciding factor (but I haven't seen a conclusive estimate of much coal seam methane we actually have).

Orion magazine has a look at the impact of coal bed methane extraction in the US.

When the light of early morning shines on the red-ribboned mesas of western Colorado's Garfield County, and the Colorado River shimmers like a silver snake on the move, it's easy to see why the rural people who live here say they cling to this place. Then the light catches one of the hundreds of gas wells newly set upon the land, intimating a more complex story.

Deep underneath the county's dry sagebrush plateaus and irrigated farmland—and 250 miles north of Aztec, New Mexico—lies the Piceance (pronounced pee-awnce) Basin, home to an estimated 40 trillion cubic feet or more of recoverable natural gas, sandwiched between layers of sandstone and coal. Running beneath a quarter of the county's 1.9 million acres, the basin rolls west off the Rocky Mountains down to the desert country of northwestern Colorado. One of America's richest sources of natural gas, the Piceance holds enough gas to power the nation at current consumption rates for around two years. As the price of methane—a primary component of natural gas—has quadrupled in recent years, energy companies have sprinted here to drill rock and capture gas.

There are more than 3,200 gas wells in Garfield County, most drilled in the last five years; in the next eight years, gas companies pursuing coal bed methane and other forms of natural gas plan to drill 10,000 more. Drill rigs rising 75 feet into the sky dot the craggy edges of mesas and the wide valleys that ring once quiet towns with names like Rifle and Silt. Miles of new roads crisscross the land. Three-acre dirt pads that hold condensate tanks, sumps, and wells carve brown scars into the green sloping hillsides. Straight, three-hundred-foot-wide swaths cleared of juniper and aspen trees indicate where underground pipelines carry gas as far as California. Garfield County officials don't even know how many miles of new roads and gas pipeline exist in the area, so quickly have they been laid.

Garfield County is a microcosm of a natural gas boom exploding throughout the country. The Bush administration says that finding energy at home is critical to reducing foreign imports and ensuring national security; last year, state and federal agencies throughout the country issued 36,827 gas well drilling permits, a 78 percent increase from 2002. To date, drilling companies have leased 36 million acres of federal public land, encompassing 88 percent of known natural gas reserves.

The sort of industrial energy development now evident along the Colorado River isn't, however, limited to public land. Although people here may own the fee title to land where they build their homes, if a drilling company owns or leases the gas down below, it can build a road and a well pad—generally covering around five acres altogether—on that private property in order to extract the gas. Across the West, this version of property rights has come as a gut-wrenching surprise to uncounted numbers of Americans. Literally uncounted; no tallies appear to exist concerning how many people have had their lives disrupted in this manner.

After a well is drilled, an oil service company may inject—under great pressure—water, sand, and a mixture of chemicals that include carcinogens such as benzene, arsenic, and lead into the well. This "hydraulic fracturing," or "frac'ing," cracks the rock in which the gas is trapped in small pockets, and allows the gas to flow toward the well and to the surface. Up to 30 percent of fracturing fluids remain underground, according to studies conducted by the Environmental Protection Agency and by the oil and gas industry. How much "30 percent" is remains a mystery, as does the injection fluid's exact recipe—all that information is proprietary to the gas companies. These residual toxic fluids may then seep into the surrounding soil, groundwater, and water wells. Industry spokespeople consistently say there's no proof such pollution has ever occurred, an assertion based on the fact that no state oil and gas commission has ever found a definitive example of frac'ing impacting public health—but then, none of these state agencies nor the EPA has ever directly studied the connection. No evidence has been found, but no one has looked.

Orion also has an article on a serious problem facing our society - righteousness.

AS A SOBER ADDICT and addictions therapist, I understand addiction as a likely outcome of the intersection of human nature and human cleverness. We are filled with longings and ingenious at devising shortcuts. These attributes have contributed to our spectacular evolutionary prominence—and have set us up to become a plague species. Intoxicated with our seemingly boundless powers, humans are "drunk behind the wheel," endangering ourselves, and large sections of our intricately interwoven biosphere, as we willfully careen along. At bottom, addiction is the mistaken conviction that we can fulfill our longings—that, in the language of the heroin addict, we can "fix" ourselves—through some form of control, through willful manipulation. This belief system not only saturates our personal lives and behaviors; it is the defining orientation of our present-day culture.

Because addiction is so ubiquitous, the path of sobriety can evoke the circus VW that endlessly produces clowns. You stop drinking alcohol only to find that you're addicted to marijuana. Or sex. Or food. Or anger. Or nicotine. Or work. Or all of the above, and more. So what is a poor addict to do? You can't realistically address all of these at once. The standard pithy advice from those experienced in sobriety goes like this: deal with the addiction that's killing you the fastest.

From a global perspective, then, the question is, which addiction is setting us up for disaster fastest? There are plenty of candidates, some glaringly obvious, like weapons of war. Or nationalism. Or oil—even George W. Bush vaguely glimpses that one. But my nominee, hands down, is the feeling of righteousness.

Like alcohol, which is the most epidemic of the chemical addictions, the sense of righteousness is endlessly versatile. It can become fuel for a rapacious crusade, or a comforting wrap into which we snuggle for affirmation and reassurance. This emotional fix is endlessly enticing, insidiously corrupting, and charged with such compelling authority that we can become willing to die—or kill—in its thrall.

At this point you may conjure images of terrorists piloting planes into skyscrapers or blowing up buses—rabid fanatics bent on vengeance. Or the Timothy McVeighs and Theodore Kaczynskis: alienated, forlorn figures stewing grimly in righteous vitriol. As with addiction in general, people prefer to think of the problem as involving others—not themselves.

William Grieder has a look at Milton Friedman's "cruel legacy".

Now that the economists and their camp followers have mourned and celebrated the life of Milton Friedman, allow me to kick a little dirt on the icon. Without question, Friedman was the most influential economist of the second half of the twentieth century, as his admirers claim. What they do not say is that he was also the most destructive public intellectual of our time.

Friedman actually failed as a scientific economist but succeeded as a moral philosopher. His greatest scholarly accomplishment -- his monetarist theory of how to regulate money and credit -- was intellectually flawed at its core and collapsed when the Federal Reserve tried to follow it. The central bank wisely discarded Friedman's money-supply approach before it did more damage. It is now a forgotten relic at the Fed.

Friedman's broader argument--that a society should be governed by self-regulating markets instead of big government--did better but also did not lead to the utopia he promoted. His "free market" faith has produced instead the very thing Friedman regularly denounced: a bastardized system of interest-group politics that serves favored sectors of citizens at the expense of many others. Enterprise and markets were indeed set "free" of government regulation, but big government did not go away (it grew bigger). Only now government acts mainly as patron and protector for the largest, most powerful interests--the same ones that demanded their liberation.

Instead of serving the broad general welfare, government enables capital and corporations to feed off the taxpayers' money and convert public assets into private profit centers, shielded from the wrath of any citizens trying to object. If that is what Friedman really had in mind, he should have said so.

His most profound damage, however, was as a moral philosopher. He championed an ethic of unrelenting, unapologetic self-interest that effectively pushed aside human sympathy. In fact, humans' responsibility to one another has been delegitimized--portrayed as an obstacle to the hardheaded analysis that maximizes returns. Friedman explained: "So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no, they do not."

Pay no attention to the collateral consequences. Your only obligation is to the bottom line. Friedman's message was highly appealing--he promised people a path to freedom--but it triumphed, ultimately, because it served the powerful forces of capital over labor, economic wealth over social concerns. Government was indeed failing on many fronts, especially inflation, and liberalism had no answer.

Friedman's answer was alluringly simple. Get rid of government.

The Washington Post has an article on Japan's declining population - which will be an interesting case study for those who think that human population growth is bound to continue exponentially upwards forever, thus causing collapse (and also for those who think that capitalism can't survive in the absence of economic growth).

Japan has embarked on a path no developed nation has ever followed -- of sustained and inexorable population decline.

Japan won't be alone, of course. Italy, Russia, South Korea and many others also will get smaller. The United States is the exception among advanced nations, and not only thanks to immigration; its overall birth rate is higher, too.

But Japan, which shrank by about 21,000 last year, is in the forefront, and so everyone else will be watching. Does population decline inevitably sap vitality and doom a country to genteel poverty? Or is there some way out?

"Japan is the leader, so it's important for Japan to show success," says Hitoshi Suzuki, a cheerful senior researcher at Daiwa Institute of Research, who pronounces himself "not so worried" -- so not worried, in fact, that last year he wrote "Population Decline is Not Something We Need to Fear."

But why not? For a population to hold steady, every woman must give birth on average to 2.1 children. When the birthrate drops below 1.5 and stays there for any time, it's almost impossible to recover, given the momentum of demographics. Below 1.3 is considered "lowest-low." China is at 1.7 and dropping. Japan last year clocked in at 1.25.

As a result, Japan's population, now about 128 million, is expected to fall to about 100 million by mid-century. Big deal, you might say. Wasn't Japan happy enough 50 years ago, when it blew through the 100 million mark on the way up?

Yes, but it was a very different 100 million then. In 1965 there were 25 million children in Japan, 67 million people of working age and 6 million senior citizens. In 2050 there will be 11 million children, 54 million potential workers and 36 million people 65 and over. No one knows whether such a society can maintain a spirit of innovation, or how its capitalists will adapt to a shrinking market. There will potentially be a lot more dependents for every productive worker.

Jeff Vail has a post on the ongoing march of energy mercantilism.

Just over a year ago I wrote about the New Energy Mercantilism, the set of geopolitical phenomena emerging as nations realize that, in the future, there will not be enough energy to go around to sustain projected demand. A market-economy solves this problem by increasing the price of energy until demand inelasticity is overcome and the energy is allocated to where the market says it is most valuable. Mercantilism, rather than trying to distribute shares of the pie more efficiently, aims to lock down as large a share of the pie as possible for your own needs.

A year later, it is clear that mercantilism is on the march.

Joseph Stroupe has written a fascinating article in Asia Times Online about the rise of energy mercantilism. Specifically, he outlines the mechanism by which nations like China, Russian, and India are embracing the mercantilist approach. All three nations are rapidly moving toward an energy market dominated by long-term, bi-lateral supply contracts. This might not sound like a major change, but consider that today energy is supplied to high-liquidity trading bourses where the person willing to pay the most gets the energy.

This is significant for two reasons: 1) it ensures that everyone around the world pays roughly the same price for energy (after transport costs are accounted for), and 2) it reduces the ease for deploying the "oil weapon" through an embargo because such action has very dispersed effect--holding 4 million barrels of Iranian oil per day off the free markets increases the price for everyone, forcing your enemies and allies to bear the diminished effects. Long-term, bi-lateral supply contracts (where, for example, Angola commits to supply China with 200,000 barrels per day of crude oil at $60/barrel for the next 10 years) fundamentally alter this dynamic. First, by locking in future energy prices (at quantities far higher than can be achieved on the futures exchanges), everyone will not pay the same price for oil in the future. Second, by exiting the open market through such contracts, the precsion-targeting of future oil embargos increases dramatically. Increasingly, significant portions of China and India's energy supplies are being locked into such long-term, bi-lateral contracts, as are the majority of Russian gas shipments to Western Europe.

As a result, much less of the world's energy needs are being met through freely-traded market instruments. It is especially significant when we consider who remains primarily dependent on the free market for their energy supplies: the US, Western Europe, and Japan. As traditional and swing producers (who's production is expected to decline rapidly over the coming years) begin to export less oil to the open exchanges, the price impact on the "West" will be diproportionate. Similarly, the "West's" vulnerability to oil embargos will increase dramatically. Participants in bi-lateral agreements will not be exposed to the same risks to their supplies--they can always resort to the market exchanges to make up for shortfalls (though at higher prices), but the reverse is not true--the "West" cannot quickly resort to bi-lateral agreements to guarantee supplies in times of crisis.

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Jeff Vail also has some notes on Robert Harris talking about Rome's 9/11 and then moves on to analysis of James Bond as a jihadi trying to resurrect the British Empire. I also noted an article about the Rome vs the pirates episode in the New York Times a few months ago.

I heard a fascinating interview this morning on NPR with Robert Harris, author of "Imperium: A Novel of Ancient Rome." You can listen to it online here. Harris talks about his new book, Imperium, which is a work of historical fiction set amidst the developing Empire in Rome. Most fascinating was the historical research that Harris discussed. Did you know that one of the key events in the fall of the Republic was a pirate attack against the Roman port of Ostia? These stateless groups had the gaul (no pun intended!) to do what no organized state could and attack Rome right at its heart. The smoke rising from the flaming port of Ostia could be seen from the hills of Rome. Roman citizens, shocked that they could be attacked right at the heart of their realm, were easy pickings for opportunistic politicians. Records suggest that one speach actually included the phrase (in the context of convincint other nations to assist in combating the threat from pirates) "either you are with us or you are our enemy." General Pompey exploited this environment of fear to ram through the Senate new laws essentially stripping the populace of many of their substantive rights and paving the way to Empire. By the time Julius Caesar gained power (asserting dictatorial powers to save the Republic for the people, despite the common assumption to the contrary), momentum was too great to reverse the slide to Empire.

Harris also talks about the historical importance of the study of the Fall of the Roman Republic from the perspective of the leadership of the British Empire at its zenith. Which brings me to something of a tangent: James Bond. Ian Flemming's famous spy was, essentially, a literary reaction to the decline of the British Empire (Query: what was the cultural/literary/spiritual reaction to the fall of the Roman Empire, or the transition from Republic to Empire?? Christianity?). James Bond was someone who's very existence countered the gathering impotence of Britania. And after the Suez Crisis, when it was blatantly clear to all that the British Empire was not merely teetering on the brink, but that it was actively spiraling downward, Flemming's plots became more and more unbelievably fantastical.

TreeHugger wonders if the solar industry can revive the US manfacturing sector. This is one of the big positives of the clean energy model - lots of relatively high tech industries are required everywhere - rather than simply transporting energy from far flung locations to pollute your local environment.

Perhaps not all by itself, but, according to the Washington Post, the production of solar panels for homes and businesses has proven itself a job-creator. BP Solar, for instance, plans to double capacity in its Frederick, Maryland, plant, which will mean the creation of 70 new jobs. In the three years since launching the solar service company SunEdison in Washington, DC, owner Jigar Shah has hired 150 people. While neither of these examples illustrate a widespread rebirth of some American manufacturing industries, the ongoing market demand for solar panels could mean expanding opportunities for workers who've had to trade high-paying jobs for less appealing (and worse paying) employment in the service sector.

If the death squads roaming Baghdad are still part of the Salvador Option then this latest report is even more stomach churning than usual. But as someone (perhaps John Robb) once said, the doors of controlled chaos may now be shut and we're into uncontrolled chaos...

Revenge-seeking militiamen seized six Sunnis as they left Friday prayers and burned them alive with kerosene in a savage new twist to the brutality shaking the Iraqi capital a day after suspected Sunni insurgents killed 215 people in Baghdad's main Shiite district.

Iraqi soldiers at a nearby army post failed to intervene in Friday's assault by suspected members of the Shiite Mahdi Army militia or subsequent attacks that killed at least 19 other Sunnis, including women and children, in the same neighborhood, the volatile Hurriyah district in northwest Baghdad, said police Capt. Jamil Hussein.

Most of the thousands of dead bodies that have been found dumped across Baghdad and other cities in central Iraq in recent months have been of victims who were tortured and then shot to death, according to police. The suspected militia killers often have used electric drills on their captives' bodies before killing them. The bodies are frequently decapitated.

But burning victims alive introduced a new method of brutality that was likely to be reciprocated by the other sect as the Shiites and Sunnis continue killing one another in unprecedented numbers. The gruesome attack, which came despite a curfew in Baghdad, capped a day in which at least 87 people were killed or found dead in sectarian violence across Iraq.

In Hurriyah, the rampaging militiamen also burned and blew up four mosques and torched several homes in the district, Hussein said.

Residents of the troubled district claim the Mahdi Army has begun kidnapping and holding Sunni hostages to use in ritual slaughter at the funerals of Shiite victims of Baghdad's raging sectarian war.