The Unknown Terrorist  

Ryan McGreal has a great quote from a Toronto city councillor.

An article in today's Toronto Star on the city's burgeoning debt crisis contained the following nugget of wisdom by councillor Rob Ford of Etobicoke, which I repeat here without further comment:

I can't support bike lanes. Roads are built for buses, cars, and trucks. My heart bleeds when someone gets killed, but it's their own fault at the end of the day.

American scientists are under strict instructions not to mention the polar bears (a phenomenon known as the "Al Gore effect").

Polar bears, sea ice and global warming are taboo subjects, at least in public, for some U.S. scientists attending meetings abroad, environmental groups and a top federal wildlife official said on Thursday. Environmental activists called this scientific censorship, which they said was in line with the Bush administration's history of muzzling dissent over global climate change. ...

The matter came to light in e-mails from the Fish and Wildlife Service that were distributed by the Natural Resources Defense Council and the Center for Biological Diversity, both environmental groups.

Listed as a "new requirement" for foreign travelers on U.S. government business, the memo says that requests for foreign travel "involving or potentially involving climate change, sea ice, and/or polar bears" require special handling, including notice of who will be the official spokesman for the trip.

The Fish and Wildlife Service top officials need assurance that the spokesman, "the one responding to questions on these issues, particularly polar bears" understands the administration's position on these topics. Two accompanying memos were offered as examples of these kinds of assurance. Both included the line that the traveler "understands the administration's position on climate change, polar bears, and sea ice and will not be speaking on or responding to these issues."

Polar bears are a hot topic for the Bush administration, which decided in December to consider whether to list the white-furred behemoths as "threatened" under the Endangered Species Act, because of scientific reports that the bears' icy habitat is melting due to global warming.

Hall said a decision is expected in January 2008. A "threatened" listing would bar the government from taking any action that jeopardizes the animal's existence, and might spur debate about tougher measures to cut the greenhouse gas emissions that spur global warming.

Dan in the "Daily Recknoning" newsletter has a few words to say about Exxon's much ballyhooed plans for new oil production projects.

One area we like a lot is alternative energy, which has lost its luster and thus gained our attention. The oil price is quietly lurking at $60. Yet the big news yesterday was that Exxon Mobil plans to spend nearly US$20 billion next year on new global projects to expand its production and reserves.

--Take that peak oil!

--These plans don't really address the main thesis of peak oil, the global production of the world's easily accessible, high-grade crude oil has topped out at about 85 million barrels per day. Exxon is rather generous in what it considers "oil equivalent." It tells us that higher oil prices make the development of heavier oils like Canada's tar sands and Venezuela's heavy oil in the Orinoco region much more economic.

--Isn't that just another way of saying high oil prices (the result of greater demand) are forcing us to drill deeper and expend more energy to get the energy we need? Hmmn.

--In any event, there is also this: Exxon spent more buying back its own shares last year than it did on capital projects. Exxon is using its oil profits to buy back about $28 billion worth of its own shares each year.

--What does it tell us when the world's biggest oil company spends more money on its shares than it does on projects to find and produce more oil?

--Well, it could mean Exxon doesn't think there is much more oil to find, or that it's too expensive to find. It could also mean Exxon reckons it's better to develop its existing resources in a rising market, not going to the trouble or effort to find a lot more new oil. And it could also be that Exxon can boost per/share performance by buying up more of its own shares and taking them off the market.

--Frankly we don't know what it means. It may even be the best use of shareholder capital. But if the oil were really out there waiting to be found, why wouldn't Exxon be spending more money on it?

-Hmm. Our answer is that Exxon realizes the era of abundant energy from cheap fossil fuels is in its own blow-off phase. It will have to develop a portfolio of energy/fuel replacements to continue to grow its revenues. So it's the energy patch we're still looking right now, for the innovators, the substitutors, and the companies that will provide real energy solutions and not just pie in the sky projections.

I'm sure M King Hubbert would have a few things to say about Exxon if he was still around - such as, forget oil - solar is where our energy should be coming from - but as he's dead I'll point to this clip from 1976.

Happy Birthday Peak Oil! Commemorating the 51st Anniversary of M. King Hubbert's Seminal Speech, the Hubbert Tribute site ( www.mkinghubbert.com) has released a 1976 video clip of Hubbert speaking about world oil depletion and explaining the concept of peak oil.

Several years after his startlingly accurate prediction that the U.S. would peak in 1970 and in the context of the 1970s energy crisis, Hubbert speaks about the theoretical Hubbert curve which suggested a worldwide peak of oil extraction in 1995. In the past several years, Hubbert and his predictive model have been roundly criticized by detractors such as CERA (Cambridge Energy Research Associates) because world oil extraction did not peak in 1995 and still has yet to peak.

Hubbert clearly articulates that the OPEC countries had already by 1976 changed their production profiles such that his world production curve would likely be shifted by about ten years. He also speculates that the growth rate at the time could also be flattened in the future which could also change the curve.

Stuart Staniford at The Oil Drum has more on the decline of Saudi oil production and why he thinks this indicates Saudi production is past peak.

In this post, I extend my analysis of Saudi Arabian production backwards four years earlier than my post of last week. I explain in detail how the evidence strongly suggests that since late 2004, the Kingdom of Saudi Arabia (KSA) has entered rapid decline of their oil production, at least for the time being.

The headline graph summarizes my conclusions, which are as follows.

* Saudi production can be divided into two eras. In the first, prior to the third quarter of 2004, KSA had spare capacity and acted as the swing producer, making large voluntary changes in their production to stabilize the market. During this era, all major features of the production graph can be well understood based on demand side needs.
* Since late 2004, KSA have entered a new era where they cannot raise production in response to demand side needs, and instead the major features of the production curve correspond to supply side events.
* During 2002, KSA was increasing production to accomodate increasing demand as the world recovered from the recession of 2001.
* In 2003, there was a major spike in oil production immediately preceding and during the US invasion of Iraq: this was a voluntary action to stabilize oil prices in the face of the loss of Iraqi production. As combat wound down, and Iraqi oil production resumed, Saudi production declined back to levels slightly higher than before the war.
* Oil prices increased due to increasing US, Chinese, etc demand in the strong economy of 2003 and early 2004. Once it became clear that oil prices had risen pronouncedly above OPECs desired $22-$28 price band, KSA initiated a large voluntary increase in production in the spring of 2004 in an attempt to bring prices back into the band. They were not able to raise production by more than 1 million barrels per day (mbpd), however, and this was not sufficient to stabilize prices, which have never returned to the price band. The band was abandoned a year later.
* After continuing to increase production very slightly for several more months, Saudi production began to decline in late 2004. This was only arrested by the arrival of the first KSA oil "megaproject", the 800 thousand barrel/day (kbpd) output from the combined Qatif/Abu Sa'fah fields (690kbpd of new crude and condensate production). This 690kbpd arrested declines during early 2005, but never sufficed to raise production above the peak achieved in 2004. There was no sign of Saudi increases in production in response to the high prices of 2005 and since, nor to the loss of production from the Gulf of Mexico hurricanes in 2005.
* Production began to decline again in 2005, and at greater rates through 2006. This was only arrested briefly by the arrival of oil from the 300kbpd Haradh III development in late spring of 2006.
* If these trends were to continue, Saudi oil production would halve over the next five years. However, it seems more likely that KSA will find ways to bring smaller fields on line and start to mitigate the decline within this time period.

Let me justify each of these points in detail....

Parting Thoughts

No-one has taken me up on my bet, but since I feel even more confident of my conclusions, I'm raising the offered stakes to $2000. I need to go find some cornucopians to take the other side of it.

Which reminds me. For those of you doomers keen to see this as the end of civilization as we know it, it's going to take more than this for me to join you. While it's certainly worrying, we need to keep some perspective: 8% of Saudi production is 1% of global production, and as long as global declines are less than a few percent a year they are well within society's proven capacity to adapt. Probably the biggest potential issue is the political stability of the Kingdom of Saudi Arabia once this news becomes clear to everyone.

I haven't included one of Tom Whipple's peak oil columns for a while - here's the latest.

Last week I discussed how the great crisis could be thought of as four interrelated sub crises: peak oil production, peak oil exports, climate change, and economic decline. Each of these will have an impact on the others and the order in which they arrive and interact with each other is likely to have a lot to do with our lifestyles in decades to come.

Until last week, a good guess would have been that shortages in oil available for export would impact us first. This would be followed by economic decline, peak oil production, and finally a meaningful reduction in the burning of fossil fuel in response to global warming. News from the last few weeks, however, makes it look like more of a horse race.

Until very recently economic growth always trumped the need to curb fossil fuel consumption whenever the latter was considered. In America, the global warming discussion has always been rather theoretical. Yes, there were pictures of melting ice caps and stranded polar bears, but so far the direct impact of global warming has been limited— unless you happened to live in New Orleans or along the Gulf Coast. Last week there was news that might just bring the timetable for doing something about fossil fuel emissions back a little.

It seems the hurricane-suppressing El Nino in the Pacific has subsided, thus increasing the risk for another bang-up hurricane season this year. If America ever does something to make major reductions in fossil fuel emissions, it is a good bet that an endless succession of hurricanes tearing up our southern and eastern coast lines just might be the catalyst for change.

In China, the emissions-causing global warming crisis is shaping up as far more serious than in the Western Hemisphere. In large parts of China the air should not be breathed and the water not drunk or even put on the crops. To make matters worse, the air is getting dirtier and dirtier and the water available to the Chinese people is disappearing at an alarming rate. The melting of the Himalayan glaciers and persistent droughts are already causing such problems that even the growth-at-any-price Chinese government is starting to take notice. Alarming stories appear frequently in China’s press. The balance in Beijing is clearly beginning to tip in favor of reducing emissions even if economic growth has to be sacrificed.

Last week we saw new evidence of possible economic trouble when the world’s stock markets took a five day dive. Whether we are looking at the beginnings of serious economic problems or a “minor correction” somebody else can say. What is known, however, is that a lot of bad economic numbers have been emerging in recent months leading to the suspicion that more than a minor correction might not be too far ahead— peak oil or not. It is interesting to note that as the markets tumbled, oil prices did some tumbling on the theory that less economic growth will mean less demand for oil – not a bad idea....

The New York Times is blaming Pemex, unions and the Mexican government for Mexico's declining oil production and recommending the country be opened up to outside capital and expertise. I wonder who is to blame for decling US oil production and what the solution is for that ?

The KU-S oil production platform off the coast of Ciudad del Carmen, with its 10,000-ton tangle of yellow and red tanks and pipes, would seem the natural product of three years of soaring energy prices. The newly installed platform certainly is the face that Mexico’s state oil monopoly, Pemex, would like to show off.

But Pemex is in trouble. Its production and proven reserves are falling, and it has no money to reverse the slide. Mexico is the second-largest supplier of imported oil to the United States, after Canada, but its total exports are slipping. If the company continues on its current course, Mexico may one day have trouble just keeping up with rising demand at home.

The evidence of its predicament is clear not far from the KU-S platform. On the horizon, some 50 to 60 miles into the southern Gulf of Mexico, aging rigs billow flames and black smoke over the waters as they burn off the natural gas they are unable to process. ...

President Bush is scheduled to visit Mexico Monday and Tuesday, and oil is likely to be on the agenda. In comments to Latin American reporters this week, Mr. Bush mused that Mexico’s president, Felipe Calderón, should consider private capital to expand Pemex production. The comments ruffled Mexican sensitivities over national sovereignty of its oil resources.

Over the last five years, Pemex has spent about $50 billion, mostly borrowed, to pump more and more oil and gas. “It should have spent much more on exploration so that it wouldn’t be in the situation it is in today,” said Adrian Lajous, who led Pemex in the 1990s. “It was a drive to generate short-term revenue for the government.”

For all that spending, said George Baker, a Houston analyst who publishes a newsletter covering the Mexican oil industry, Pemex did not get much. “In the end, the results were very weak. You didn’t build a new refinery. You didn’t find more oil.”

Mexico, the fifth-largest oil producer in the world in 2005, is sitting on tens of billions of barrels of untapped oil reserves. But much of that is in the deep waters of the gulf, not far from where American companies have announced discoveries. Pemex has neither the money nor the expertise to get at the oil.

Its biggest field, Cantarell, in the shallow waters of the gulf, is one of the world’s richest. That field used to account for about 60 percent of Mexico’s oil production, but has gone into a sharp decline. Production at Cantarell fell 13.5 percent last year, and it will fall another 15 percent this year, Mr. Reyes Heróles said recently. The decline at Cantarell pushed Pemex’s output down from its peak of 3.4 million barrels a day in 2004 to 3.26 million last year.

At the same time, Pemex’s proven reserves of crude oil have fallen to 11.8 billion barrels at the end of 2005 from 15.1 billion barrels at the end of 2002.

Also from the NYT, it appears Alberto "The Torturer" Gonzales may be in a spot of bother after a spate of firings of prosecutors investigating Republican crimes. I reckon a couple of days of waterboarding should get the truth out of him...

Americans often suspect that their political leaders are arrogant and out of touch. But even then it is nearly impossible to fathom what self-delusion could have convinced Senator Pete Domenici of New Mexico that he had a right to call a federal prosecutor at home and question him about a politically sensitive investigation.

That disturbing tale is one of several revealed this week in Congressional hearings called to look into the firing of eight United States attorneys. The hearings left little doubt that the Bush administration had all eight — an unprecedented number — ousted for political reasons. But it points to even wider abuse; prosecutors suggest that three Republican members of Congress may have tried to pressure the attorneys into doing their political bidding.

It already seemed clear that the Bush administration’s purge had trampled on prosecutorial independence. Now Congress and the Justice Department need to investigate possible ethics violations, and perhaps illegality. Two of the fired prosecutors testified that they had been dismissed after resisting what they suspected were importunings to use their offices to help Republicans win elections. A third described what may have been a threat of retaliation if he talked publicly about his firing.

Apparently the Democrats would like to re-introduce the idea of habeas corpus in the US (another thing which will have Alberto gnashing his fangs).

Powerful House Democrats have introduced legislation intended to restore the right of habeas corpus.

Rep. Jane Harman (D-CA), who chairs the Homeland Security Subcommitee on Intelligence, and Rep. Jerrold Nadler (D-NY), chair of the Judiciary Subcommittee on the Constitution, Civil Rights and Civil Liberties, announced today the presentation of bills that would reverse "problematic parts of the Military Commissions Act," according to a statement released by Harman's office.

"Both the 'Restoring the Constitution Act' and the 'Habeas Corpus Restoration Act' will bring credibility to the process of detaining terrorist suspects by placing it within a legal framework," the statement begins. "This includes: restoring habeas corpus, narrowing the definition of 'unlawful enemy combatant' as defined in the Military Commissions Act, prohibiting evidence obtained under coercion, and affirming the Geneva Conventions."

Harman herself says in the release, "The Administration has never completely found its way out of the 'fog of law' that set in after September 11."

Bruce Schneier notes that the Canadians are taking the lead in the Anglo-Saxon world in rolling back over-the-top anti-terror laws.

Big news:

The court said the men, who are accused of having ties to al-Qaeda, have the right to see and respond to evidence against them. It pointed to a law in Britain that allows special advocates or lawyers to see sensitive intelligence material, but not share details with their clients.

In its ruling, the court said while it's important to protect Canada's national security, the government can do more to protect individual rights.

But the court suspended the judgment from taking legal effect for a year, giving Parliament time to write a new law complying with constitutional principles.

Critics have long denounced the certificates, which can lead to deportation of non-citizens on the basis of secret intelligence presented to a Federal Court judge at closed-door hearings.

Those who fight the allegations can spend years in jail while the case works its way through the legal system. In the end, they can sometimes face removal to countries with a track record of torture, say critics.

And that's not the only piece of good news from Canada. Two provisions from an anti-terrorism law passed at the end of 2001 were due to expire at the end of February. The House of Commons has voted against extending them:

One of the anti-terrorism measures allows police to arrest suspects without a warrant and detain them for three days without charges, provided police believe a terrorist act may be committed. The other measure allows judges to compel witnesses to testify in secret about past associations or pending acts. The witnesses could go to jail if they don't comply.

The two measures, introduced by a previous Liberal government in 2001, have never been used.

"These two provisions especially have done nothing to fight against terrorism," Dion said Tuesday. "[They] have not been helpful and have continued to create some risk for civil liberties."

Bruce also notes the cost effectiveness of sky marshals in Australia is under scrutiny.

Their cost-effectiveness is being debated:

They've cost the taxpayer $106 million so far, they travel in business class, and over the past four years Australia's armed air marshals have had to act only once — subduing a 68-year-old man who produced a small knife on a flight from Sydney to Cairns in 2003.

I have not seen any similar cost analysis from the United States.

With headlines like "Terror gang hell-bent on attack" and "Sydney Bomb Plot" on the front page of The Australian and The Daily Terror in recent days, the newstands have taken on a retro "war on terror" circa 2003 look this week.

NINE terrorism suspects allegedly planning an attack in Sydney were so hell-bent on carrying out their jihad they pushed ahead with their plans even though they knew the authorities were watching them, the nation's biggest terrorism case was told yesterday.


Opening the committal hearing yesterday for the men who are accused of conspiring to construct explosive devices in preparation for a terrorist act, Crown prosecutor Wendy Abraham QC told Penrith Local Court the men egged each other on towards an act capable of causing death and severe injury.

Ms Abraham said all of the men held extremist views and were motivated by their conviction that their religion was under attack and they must carry out a jihad to protect Islam. "Violence was the primary tool," she said. Ms Abraham told magistrate Michael Price that the men were prepared to coerce and intimidate the Australian Government and the public with violent acts of terror. ...


Outlining the evidence to be put before the hearing, which could last for three months, Ms Abraham said the men set about planning and researching the attack in June 2004 and that involved gathering extensive extremist material on jihad and bomb-making.

She said that during raids on the homes of the men, police allegedly discovered numerous documents and step-by-step instruction manuals on how to build explosive devices.

Written in Arabic, some of them had titles such as "Come In and Learn Bombing, Security and Intelligence", while others canvassed the selection of targets, including embassies, the placement of explosive devices in restaurants and government buildings, and the selection of targets for car bombs.

Another document, which was found inside a children's book titled Choice Islamic Stories, canvassed the finer points of kidnappings and assaults.

There were also allegedly recipes for making bombs such as with TATP, which is so unstable it is known as the Mother of Satan.

The court was told that as the group of men went about their covert activities they concocted numerous false names and stories to buy mobile phones and chemicals.

They obtained firearms, ammunition and underwent military-style training while communicating with each other in coded text messages saying things such as "Babe I need to see you now" and "Sandra, I want to see you tonight".

I read Richard Flanagan's most recent book "The Unknown Terrorist" this week, which was an apt companion to the news flow. While it's not in the same league as "Gould's Book Of Fish", it is an entertaining (albeit depressing) look at the bogus war on terror and the creatures who feed off the power of nightmares.

KERRY O’BRIEN: Tasmanian writer Richard Flanagan has to be Australia's most unlikely Rhodes Scholar and looking at his life before and after Oxford, it is no surprise that he hated the experience. Something of an iconoclast, whose award winning books have the opportunity to polarise critics but nonetheless win him awards, Flanagan started his adult life as a daredevil kayaker who has survived near-death experiences on previously unexplored rapids and trying to row Bass Strait to become one of his country's most celebrated authors. He also wrote and directed the film version of his early book 'The Sound of One Hand Clapping'. A subsequent novel, 'Gould's Book of Fish' won the 2002 Commonwealth Writers Prize for what the judges described as "a touch of genius". His work has been published in 25 countries and he is currently working on a script for Baz Luhrmann's latest film on Australia. But 'The Unknown Terrorist' could be the most contentious for his harsh critique of what he believes modern Australia has become. I spoke with Flanagan in Sydney.

KERRY O’BRIEN: When you started 'The Unknown Terrorist', did you really intend to write such a bleak book?

RICHARD FLANAGAN: I wanted to write a book that was a mirror to these times and a book that I hoped might be a warning to people about what I feel are a series of frightening tendencies in our society.

KERRY O’BRIEN: You describe two thugs beating up an old vagrant in Sydney's King's Cross, "They kept on for a few minutes more, kicking him as if he were to blame for everything in that dirty, dead decade their were all condemned to live through. A sack of shit that had once been a man in a place that had once been a community in a country that had once been a society." Is that what Australia has become for you?

RICHARD FLANAGAN: I think it's become that for many people. We are more frightened, we are more frightening, we are less free, we are more unjust, we are more callous, there's a greater divide of wealth and power and the truth gets ever harder to get out. So, that was very much how I felt and that story sort of captured it in a few sentences.

KERRY O’BRIEN: That's a pretty grim view.

RICHARD FLANAGAN: It is, but it is hard to have any other view at this point in time. But I think there are always sources for hope and I try and take my compass from the hope, but this book, there's been too much faked jubilation about our prosperity and I'm tired of hearing about how to invest our super and about rising property prices. There is something else that's going on in Australia, a sort of spiritual malaise that I find sickening, in a word. At the end of the day it is our Australia, too, and a lot of people want it back. They want a gentler, more generous, kinder Australia, not the kind of Australia they are getting presented with every day at the moment.

KERRY O’BRIEN: Not possible to have both, your Australia and an Australia where people do care about super for retirement and do care about a comfortable lifestyle?

RICHARD FLANAGAN: Of course it is possible to have both, but I think when this period is judged by historians it will be seen that we had a moment of great prosperity when we could have done so much to build a better, stronger, more democratic society and, because of fear, we went the other way.

KERRY O’BRIEN: Your book has a drug mule named Tariq who is mistaken for a terrorist and a rather sad pole dancer who couldn't be further from the terrorist stereotype but who gets sucked into the vortex anyway. What are you saying? That the whole terrorist fear in Australia is a myth, that there is no real threat of terrorism?

RICHARD FLANAGAN: There is a threat of terrorism. There is obviously a very real threat of terrorism, but I think as a society we ought be fearful when that is used to attack our freedoms and to attack the truth and really we've got from reds under the bed to tea towels under the table and it's been used to subvert our democracy and that frightens me just as much as a terrorist attack, because we now have a society that's capable of doing quite horrific things to innocent people and it is very difficult for those people to get justice.

KERRY O’BRIEN: And, yet, I mean, that's a subjective view and I know it is shared by some others, but government in these circumstances does find itself having to walk a fine line, doesn't it, between protecting its citizens and going a step too far?

RICHARD FLANAGAN: Of course it does, but I don't think we achieve it by constantly using fear to subvert what we ought be defending, our principles of freedom and truth telling.

KERRY O’BRIEN: But when you talk about a lack of freedom of expression these days, what do you mean?

RICHARD FLANAGAN: There are a lot of disturbing tendencies in Australian public life. We have this language which I haven't heard used since the Stalinist era of elites, a word that was first used by Stalin when he wanted to attack Jewish intellectuals in 1948, the use of the idea that there are things that matter more than individual freedom. Again, that's a Stalinistic argument. We have the rise of hit men in the media who are there to do the Government's bidding and seem to have no conscience or scruple in attacking any individual who has a position different than that of the Government or is questioning government policy. We have an ever more conformist society. We have an ever more cowed media and we see daily anybody who rightly questions or simply interrogates the process of government or government policy being destroyed. Those sort of things, when people who are simply seeking the truth have to put their reputations on the line, when that starts happening, I become very frightened.