Folks,

Five stars! After the shock and horror of oil crash had set in, and the rest of the horrors of politics had become crushing, this article was the balm. Or should I say, Da Bomb. When I finished it, I got up, shouted “Yeah!” and did a touchdown dance across my living room floor. Had I been able to moonwalk, I would have done that too.

This is the article I would have written, were I a greater man of greater knowledge and skill. It’s utterly brilliant.

This is it, the key to the mystery, the backstory behind the story, the conspiracy to end all conspiracies, and our marching orders for the near future. This is the glass that dissipates all obfuscations and brings clarity and focus to the whole picture.

Robert Freeman, whoever you are, my hat is off to you. You Da Man.

[For another excellent article by Robert Freeman, see How Will Bush Deal With the Deficits? Connecting the Dots to Iraq.]

–C

 

In Zen and the Art of Motorcycle Maintenance, Robert
Pirsig tells the story of a South American Indian
tribe that has devised an ingenious monkey trap. The
Indians cut off the small end of a coconut and stuff
it with sweetmeats and rice. They tether the other
end to a stake and place it in a clearing.

Soon, a monkey smells the treats inside and comes to
see what it is. It can just barely get its hand into
the coconut but, stuffed with booty, it cannot pull
the hand back out. The Indians easily walk up to the
monkey and capture it. Even as the Indians approach,
the monkey screams in horror, not only in fear of its
captors, but equally as much, one imagines, in
recognition of the tragedy of its own lethal but still
unalterable greed.

Pirsig uses the story to illustrate the problem of
value rigidity. The monkey cannot properly evaluate
the relative worth of a handful of food compared to
its life. It chooses wrongly, catastrophically so,
dooming itself by its own short-term fixation on a
relatively paltry pleasure.

America has its own hand in a coconut, one that may
doom it just as surely as the monkey. That coconut is
its dependence on cheap oil in a world where oil will
soon come to an end. The choice we face (whether to
let the food go or hold onto it) is whether to wean
ourselves off of oil—to quickly evolve a new economy
and a new basis for civilization—or to continue to
secure stable supplies from the rest of the world by
force.

As with Pirsig’s monkey, the alternative consequences
of each choice could not be more dramatic. Weaning
ourselves off of cheap oil, while not easy, will help
ensure the vitality of the American economy and the
survival of its political system. Choosing the route
of force will almost certainly destroy the economy and
doom America’s short experiment in democracy.

To date, we have chosen the second alternative: to
secure oil by force. The evidence of its consequences
are all around us. They include the titanic US budget
and trade deficits funding a gargantuan,
globally-deployed military and the Patriot Act and its
starkly anti-democratic rescissions of civil
liberties. There is little time left to change this
choice before its consequences become irreversible.

The world is quickly running out of oil. In the year
2000, global production stood at 76 Million Barrels
per Day (MBD). By 2020, demand is forecast to reach
112 MBD, an increase of 47%. But additions to proven
reserves have virtually stopped and it is clear that
pumping at present rates is unsustainable. Estimates
of the date of “peak global production” vary with some
experts saying it already may have occurred as early
as the year 2000. New Scientist magazine recently
placed the year of peak production in 2004. Virtually
all experts believe it will almost certainly occur
before the end of this decade.

And the rate of depletion is accelerating. Imagine a production curve that rises slowly over 145 years—the time since oil was discovered in Pennsylvania in 1859. Over this time, the entire world shifted to oil as the foundation of industrial civilization. It invested over one hundreds trillion dollars in a physical infrastructure and an economic system run entirely on oil. But oil production is now at its peak and the right hand side of the curve is a virtual drop off. Known reserves are being drawn down at 4 times the rate of new discoveries.

The reason for the drop off is that not only have all
the “big” discoveries already been made, the rate of consumption is increasing dramatically. Annual world energy use is up five times since 1945. Increases are now driven by massive developing countries—China, India, Brazil—growing and emulating first or at least second world consumption standards. Fixed supply.
Stalled discoveries. Sharply increased consumption.
This is the formula for global oil depletion within
the next few decades.

The situation is especially critical in the US. With
barely 4% of the world’s population, the US consumes
26% of the world’s energy. But the US produced only 9
MBD in 2000 while consuming 19 MBD. It made up the
difference by importing 10 MBD, or 53% of its needs.
By 2020, the US Department of Energy forecasts
domestic demand will grow to 25 MBD but production
will be down to 7 MBD. The daily shortfall of 18 MBD
or 72% of needs, will all need to be imported.

Perhaps it goes without saying but it deserves
repeating anyway: oil is the sine qua non of
“industrial” civilization—the one thing without which
such civilization cannot exist. All of the world’s
600 million automobiles depend on oil. So do
virtually all other commodities and critical
processes: airlines, chemicals, plastics, medicines, agriculture, heating, etc. Almost all of the increase in world food productivity over the past 50 years is attributable to increases in the use of oil-derived
additives: pesticides; herbicides; fungicides;
fertilizers; and machinery.

When oil is gone, civilization will be stupendously
different. The onset of rapid depletion will trigger convulsions on a global scale, including, likely, global pandemics and die-offs of significant portions of the world’s human population. The “have” countries will face the necessity kicking the “have-nots” out of the global lifeboat in order to assure their own survival. Even before such conditions are reached, inelastic supply interacting with inelastic demand will drive the price of oil and oil-derived commodities through the stratosphere, effecting by market forces alone massive shifts in the current distribution of global wealth.

If the US economy is not to grind to a halt under
these circumstances it must choose one of three
alternate strategies: dramatically lower its living
standards (something it is not willing to do);
substantially increase the energy efficiency of its
economy; or make up the shortfall by securing supplies
from other countries. President Bush’s National
Energy Policy published in March 2001 explicitly
commits the US to the third choice: Grab the Oil. It
is this choice that is now driving US military and
national security policy. And, in fact, the past 60
years of US policy in the Middle East can only be
understood as the effort to control access to the
world’s largest supply of oil.

Witness, for example, the deep US embrace of Saudi
Arabia since World War II. One quarter of all US
weapons sales between 1950 and 2000 went to Saudi
Arabia despite its horrifically repressive, literally
medieval tribal nature. The CIA’s overthrow of
Mohamed Mosadegh in Iran in 1953 after he nationalized
his country’s oil is another example. So, too, was
the US strategic embrace of Israel during the 1967 Six
Day War. The US was deeply mired in Vietnam but
needed a “cop on the beat” to challenge Arab
states—Egypt, Iraq, Syria, Yemen—that were “going
Soviet.” It has stuck with that relationship ever
since.

More recent examples of national strategy in bondage
to the compulsion for oil include US support for
Saddam Hussein in the Iran/Iraq War; its support for
Osama bin Laden in the Afghanistan War against the
Soviet Union; and, of course, the most recent invasion
of Iraq to seize its oilfields and forward position US
forces for an invasion of neighboring Saudi Arabia
when it is inevitably destroyed by internal civil war.
And under a Grab the Oil strategy, militarization of
US society will only deepen.

The reason is that a very major portion of the world’s
oil is, by accident of geology, in the hands of states
hostile to the US. Fully 60% percent of the world’s
proven reserves of oil are in the Persian Gulf. They
lie beneath Muslim countries undergoing a religious
revolution that wants to return the industrial world
to a pre-modern order governed by a fundamentalist
Islamic theocracy. Saudi Arabia alone controls 25% of
all the world’s oil, more than that of North America,
South America, Europe and Africa combined. Kuwait,
Iran and Iraq, each control approximately 10% of the
world’s oil.

Another 15% of the world’s oil lies in the Caspian Sea
region, also a dominantly Muslim region. It includes
a group of post-Soviet, satellite and buffer states
that lack any semblance of legal or market systems.
They are extraordinarily corrupt, really just
Gangster Thugocracies masquerading as countries.
Think Afghanistan. Both Russia and China consider
this region part of their “sphere of strategic
influence” portending significant clashes for the US
over coming decades.

As long as the US chooses the Grab the Oil
alternative, the implications for national policy are inescapable. The combination of all these facts—fixed supply, rapid depletion, lack of alternatives, severity of consequences, and hostility of current stockholding countries—drive the US to HAVE to adopt an aggressive (pre-emptive) military posture and to carry out a nakedly colonial expropriation of resources from weaker countries around the world.

This is why the US operates some 700 military bases
around the world and spends over half a trillion
dollars per year on military affairs, more than all
the rest of the world—its “allies” included—combined.
This is why the Defense Department’s latest
Quadrennial Review stated, “The US must retain the
capability to send well-armed and logistically
supported forces to critical points around the globe,
even in the face of enemy opposition.” This is why
Pentagon brass say internally that current force
levels are inadequate to the strategic challenges they
face and that they will have to re-instate the draft
after the 2004 elections.

But the provocation occasioned by grabbing the oil,
especially from nations ideologically hostile to the
US, means that military attacks on the US and the
recourse to military responses will only intensify
until the US is embroiled in unending global conflict.
This is the perverse genius of the Grab the Oil
strategy: it comes with its own built-in escalation,
its own justification for ever more
militarization—without limit. It will blithely
consume the entire US economy, the entire society,
without being sated. It is, in homage to Orwell,
Perpetual War for Perpetual Grease.

In his first released tape after 9/11, Osama bin Laden
stated that he carried out the attacks for three
reasons: 1) to drive US military forces from Saudi
Arabia, the most sacred place of Islam; 2) to avenge
the deaths of over half a million Iraqi children
killed, according to UNICEF, as a result of the
US-sponsored embargo of the 1990s; and, 3) to punish
US sponsorship of Israeli oppression against the
Palestinian people. Oil and the need to control it
are critically implicated in all three reasons.

But now comes the sobering part. In response to the
9/11 attacks, Secretary of Defense Donald Rumsfeld
stated that the US was engaged in “…a thirty to forty
year war (!) against fundamentalist Islam.” It is
the fever of War, of course, that becomes the
all-purpose justification for the rollback of civil
liberties. Lincoln used the Civil War to justify the
suspension of habeas corpus. Roosevelt used the
cover of World War II to inter hundreds of thousands
of Japanese Americans. And now Bush is using the
self-ratcheting “War on Terror” to effect even more
sweeping, perhaps permanent rescissions of civil
liberties.

Under the Patriot Act, a person can be arrested
without probable cause, held indefinitely without
being charged, tried without a lawyer or a jury,
sentenced without the opportunity to appeal, and put
to death—all without notification of…anybody. This is
simply a Soviet Gulag and it has been rationalized by
the hysterical over-hyping of the War on Terror. The
fact that it is not yet widespread does not diminish
the more important fact that it has been put in place
precisely in anticipation of such procedures needing
to be being carried out on a mass scale in the future.

The broader implications of the Patriot Acts go far
beyond the abusive treatment of criminals or
terrorists. Their portent can be glimpsed in the
language used to justify them. When Attorney General
John Ashcroft testified on behalf of the Act, he
stated, “…those who oppose us are providing aid and
comfort to the enemy.” These are carefully chosen
words. “Aid and comfort to the enemy” are the words
used in the Constitution to define Treason, the most
fateful of crimes against the state. In other words,
protest against the government—the singular right
without which America would not even exist—is now
being defined as trying to overthrow the government.

And by the internal logic of a global Oil Empire, this
is entirely reasonable. The needs of the people of
any one country must be subordinated to the larger
agenda of Empire itself. This is what the Romans
learned in 27 B.C. when Augustus proclaimed himself
Emperor. It was the end of the Roman Republic and the disappearance of representative government on earth for almost 1,700 years, until the English Civil Wars in the 1600s. That is the reality we are confronting today—offering up our democracy in propitiation to an Empire for Oil. It will be a fateful, irreversible decision.

Returning to Pirsig’s metaphor, the choice of a Grab
the Oil strategy is the equivalent of the monkey
holding onto the handful of food, remaining trapped by
the coconut. It is an ironclad guarantee of
escalating global conflict, isolation of the US in the
world, unremitting attacks on the US by those whose
oil is being expropriated and whose societies are
being dominated, the militarization of the US economy,
the irreversible rescission of civil liberties, and
the eventual extinguishment of American democracy
itself. It is the conscious, self-inflicted
consignment to political and economic death.

But the coconut metaphor, remember, involves a
choice—food or freedom. What, then, is the
alternative, the letting go of the paltry handful of
food in conscious preference for the life of continued
freedom?

The alternative to Grab the Oil is to dispense with
the hobbling dependency on oil itself and to quickly
wean the country off of it. Call it the path of
Energy Reconfiguration. It is to declare a modern day Manhattan Project aimed at minimizing the draw down in the world’s finite stocks of oil, extending their life, and mitigating the calamity inherent in their rapid exhaustion. It means building a physical infrastructure to the economy that is based on an alternative to oil. And it means doing this, not unilaterally or militarily as the US is doing now, but in peaceful partnership with other countries of the world, the other counties in our shared global lifeboat that are also threatened by the end of oil.

In more specific terms, energy reconfiguration means retrofitting all of the nation’s buildings, both commercial and residential, to double their energy efficiency. It means a crash program to shift the transportation system—cars, trucks—to a basis that uses perhaps half as much oil per year. This is well within reach of current technology. Energy Reconfiguration means using biotechnology to develop crops that require much less fertilizers, pesticides, herbicides and machinery to harvest. It means refitting industrial and commercial processes—lighting, heating, appliances, automation, etc.—so that they, too, consume far less energy than they do today. It means increasing efficiency, reducing consumption, and building sustainable, long-term alternatives in every arena in which the economy uses oil.

Such a program would return incalculable benefits to
national security, the economy, and to the
environment.

In terms of national security, Energy Reconfiguration
greatly reduces the county’s susceptibility to oil
blackmail. It reduces the need for provocative
adventurism into foreign countries in pursuit of oil.
As such, it reduces the incentive for terrorism
against the US. And by reducing such threats, it
reduces the need for a sprawling, expensive military
abroad and a repressive police state at home. Savings
in military costs—perhaps on the order of hundreds of
billions of dollars a year—could well pay for such a
program. The saving of democracy, of course, is
priceless.

The economic benefits are at least equally impressive.
By reducing energy imports, the US would reduce its hemorrhaging trade deficit and the mortgaging of the nation’s future that such borrowing implies. A national corps of workers set to retrofitting the nation’s homes and businesses for energy efficiency would address employment problems for decades in a way that could not be outsourced to Mexico or India or China. And a more efficient industrial infrastructure would make all goods made in America more competitive with those made abroad. In all of these ways, Energy Reconfiguration raises, not lowers, the average standard of living while increasing the resilience of the economy as a whole.

Energy Reconfiguration also delivers enormous—perhaps incalculable—benefits to the environment. By reducing energy intensity, it reduces the impact on the biotic carrying systems of any level of economic activity.
Global warming may be the single most potent threat to
global stability today. A recently leaked Pentagon
report predicted that rapid climate change may well
set off global competition for food and water supplies
and, in the worst scenarios, spark nuclear war. If
the US did no more than change from being the most
energy inefficient economy in the industrial world to
being of only average efficiency, it would
dramatically slow the environmental destruction that
hangs like a sword over the entire world.

Are there any precedents for such an ambitious vision?
In the 1980s China adopted a nationwide energy
efficiency program. Within a decade, overall energy
intensity fell by 50% while economic growth led the
developing world. Also in the 1980s, Denmark began a
crash program in wind-generated electricity. Today,
wind provides 10% of Denmark’s electricity while
Denmark makes 60% of all the wind turbines sold in the
world. India’s Renewable Energy Development Agency
used a similar set of programs beginning in 1987 to
reduce oil based electricity usage. Today, India is
the largest user of photovoltaic systems in the world.

Even within the US there are ample precedents for
optimism. The US economy was 42% more energy
efficient in 2000 than it was in the 1970s when the
Arab oil embargoes shocked the country into action.
Corporate Average Fuel Economy (CAFÉ) standards more
than doubled the average mileage of US automobiles
between 1975 and 1985 before being effectively
abandoned in the late 1980s. The National Research
Council has reported that efficiency programs
sponsored by the Department of Energy returned $20 for
every $1 invested, making them arguably one of the
best investments in the economy even before a change
in national energy strategy.

We should harbor no illusions, however, that adopting
such a strategy will be easy. The military and energy industries in which the Bush family is so heavily invested will vigorously resist such a policy. And the energy bill now making its way through Congress is nothing so much as a testament to the death grip the energy industry holds on the American people. It provides tens of billions of dollars of subsidies and giveaways to energy companies while actually encouraging more intensive energy use. As the poster boy of these leviathans, President Bush expressed their sentiments best: “We need an energy policy that encourages consumption.” What more need be said?

In the end, the choice of these two alternatives—Grab
the Oil or Energy Reconfiguration—is much bigger than
oil alone. It is a choice about the fundamental
ethos and, in fact, the very nature of the country.
Most immediately, it is about democracy versus empire.
In economic terms, it is about prosperity or poverty.
In engineering terms, it is a matter of efficiency
over waste. In moral terms this is the choice of
sufficiency or gluttony. From the standpoint of the environment, it is a preference for stewardship over continued predation. In the ways the US deals with other countries it is the choice of co-operation versus dominance. And in spiritual terms, it is the choice of hope, freedom and purpose over fear, dependency and despair. In this sense, this is truly the decision that will define the future of America and perhaps the world.

A final word on Pirsig’s monkey. The monkey is doomed
but not tragic. For the monkey cannot really
comprehend the fateful implications of its choice:
that its greed assures its doom. In the case of
people and a country, however, that is not the case.
It is no accident that President Bush has not asked
any sacrifices of the country for his War on Terror.
That is part of the seduction, like the candy a drug
pusher uses to lure an unsuspecting child.

But we cannot, like the monkey, claim to be unaware of
the choice we are making. Awareness of such choices
is part of the burden of mature citizenship. Nor can
we feign ignorance of the consequences. Simply put,
our present course will cost us our country. And our
doom will be compounded by incalculable tragedy and
what Lincoln once called “the last best hope for
mankind” will, indeed, perish from this earth.
Unless, that is, we find the vision, the wisdom and
the courage to let go that handful of paltry treats
and choose freedom instead.

Robert Freeman writes about economics and education.
He can be reached at robertfreeman10@yahoo.com.

Folks,

Today’s been a banner day for energy articles. So here are some of my final thoughts for the day, cribbed from a discussion with an alert reader about how, and why, government and big energy companies might not actually have the problem and its solution in hand.

---

Folks,

Here’s another interesting little tidbit from our Energy Secretary that reveals what the Administration’s grand energy plan is:
“Demand in the developing world is going to keep growing. We believe we need transformational technology,” he told reporters after a meeting here.

A “transformational technology.” Reminds me of the answer I got from a member of the UK’s House of Lords when I asked him what he thought would be our way out of oil and gas dependence. His answer? Cold fusion.

Abraham also had this to say:
“The best way to put ourselves in a long-term position of stability and independence is to develop motor vehicles that operate on hydrogen fuel cells with the hydrogen production coming from stocks that are available here at home.”

Well, as I’ve explained in a previous article (What’s Wrong with the Hydrogen Economy?), I think it’s pretty clear that hydrogen cars are no solution. Notice too that whenever they talk about hydrogen coming from domestic stocks, they never mention how they intend to produce it!

Now, I know that many of you have a huge amount of faith in our leaders, and in science, to dream us a way out of this mess. But I don’t. I believe it’s madness to create nuclear waste that you have no idea what to do with. I believe it’s wrong-headed to continue to rely on non-renewable energy sources. And I believe it’s insanity to bank the entire energy future of a country–actually, the world–on a future innovation that doesn’t even exist, after at least 20 years of experimenting and trying to find other solutions.

It’s worse than that, actually. It’s a cop-out, and a lie. And these lies are only depriving us of precious time, and precious resources, that should be invested in renewable generation.

These energy company dinosaurs, and these energy executives that populate the Bush Administration, must go. They’re benighted, short-sighted, and wrong, and they’re leading us straight off a cliff.

One more thought for Sec. Abraham, as he points the finger at Congress. Maybe if Congress, and the White House, would actually try to craft a sensible and sustainable energy policy for the future, instead of just pleasing their business constituents and covering their own asses for once, we might be able to actually pass an energy bill.

–CUS Won’t ‘Beg OPEC’

By Nigel Hunt

1/3/2004

© Reuters News Service 2003

LOS ANGELES – Energy Secretary Spencer Abraham said last week that the U.S. is not going to “beg OPEC for oil” and was instead developing “game-changing technologies” to counter its dependence on imports.

He noted that a huge rise in Asian demand and a recovery in the U.S. economy had contributed to the recent rise in oil, gasoline and other energy prices.

“The president has expressed very clearly his concern about OPEC decisions not hurting the economy… At the time we have also made it clear we are not going to beg OPEC for oil,” Abraham said, noting the current rise in prices underscored the need for U.S. energy independence.

“Demand in the developing world is going to keep growing. We believe we need transformational technology,” he told reporters after a meeting here.

Abraham was in Los Angeles to meet with potential suppliers and consumers of liquefied natural gas, a commodity he believes will help meet an anticipated sharp rise in demand over the next 20 years.

For the longer term, he cited the development of clean operating coal-fired power plants, new “meltdown-proof and proliferation-resistant” nuclear plants and hydrogen-related technologies as key to meet growing demand for energy.

Abraham said the United States has made it “very clear we are not going to beg OPEC for oil,” in response to the current run-up in crude oil, gasoline and other energy prices.

“When you limit your ability to produce your own supply … you are going to face these kind of challenges. It underscores the need to work toward energy independence,” Abraham said.

“We want to transcend this debate. The best way to put ourselves in a long-term position of stability and independence is to develop motor vehicles that operate on hydrogen fuel cells with the hydrogen production coming from stocks that are available here at home,” he added.

LNG ROLE

Abraham said LNG has an important role while other technologies were developed. The U.S. currently has four terminals for importing LNG but may be required to build another nine to meet anticipated demand, he added.

He noted there were big concerns about safety. Thirty workers were killed in January after an explosion ripped apart Algeria’s LNG complex.

“We are hopeful that we will be able to obtain enough accurate information about the situation to make sure it isn’t replicated,” he said, noting the technology used in Algeria was more than 30 years old and “not the way you do it anymore” and it was also a sending not receiving terminal.

“We want to make sure if there are safety challenges we preemptively and proactively address them and at the same time build public confidence in this option,” he said.

Abraham reiterated previous statement that strategic reserves will not be used to control rising prices.

“We have made it clear that the strategic reserve is to be used for serious and significant supply disruptions as could conceivably have happened when the Iraq conflict was going on, things of that sort,” he said.

“We don’t see it as a price control mechanism. We view it as a national security reserve to make sure America has oil in the event our access to world oil is somehow significantly reduced,” Abraham added.

Abraham also expressed his frustration with the failure of Congress to pass an energy bill.

“It is very frustrating to see the Congress now in its third year of deliberation on an energy bill… It is time for people to stop this impasse and get it done,” he said.

Folks,
If you’ve been paying attention to the Bush administration’s plans for our energy future, you know that they plan to invest heavily in nuclear, coal, and other forms of low-grade fossil fuel as our domestic production of crude oil and natural gas declines, and imports continue to increase. It’s now starting to become a reality.

At least 94 new coal-fired electric power plants, 62 gigawatts’ worth, are being planned in the US, despite recent science indicating that the mercury emissions are very harmful to our health, and that the CO2 exhaust will contribute dramatically to our global warming problem.

This coincides with the Bush Adminstrations’ recent actions to remove CO2 and mercury from the list of exhaust components controlled under the Clean Air Act and the EPA. Just another big sacrifice of your health for the benefit of unconstrained energy consumption and big energy projects for big energy companies.

Of course, the Bush Administration knows that you wouldn’t go for it, not at the expense of your health. That’s why they do it, as you will see in this article, quietly, secretly, and then refuse to answer questions about it.

Once again, you might ask yourself, why invest in big, filthy, environment-destroying, strip-mining intensive, coal-fired power generation, when we have yet to get renewable energy generation from solar or wind over the 1% mark? And then you should answer yourself: because it doesn’t create an industry of consumption that would allow today’s big energy businesses to continue to make buckets of money on it. Sustainability (or your health) is not their goal. Profit is.

(more…)

Folks,

This may be the first major article about Peak Oil that I have seen in any major US newspaper, let alone the “newspaper of record.” In it, senior Saudi and US oil experts admit that production from the major Saudi fields is falling, that it’s getting more difficult and expensive to extract what’s left, and that their fallback plans–reviving dormant fields and trying to increase production from existing fields–really can’t compensate for the loss in production now, or ever.

The numbers are a little different from some of the previous articles on Peak Oil I have forwarded–saying that global markets will be in short supply by 2015 instead of 2007-9, for example–but the dynamics are the same, and unmistakeable.

This is real, folks. The sooner we acknowledge it, the better.

–CForecast of Rising Oil Demand Challenges Tired Saudi Fields

By JEFF GERTH

February 24, 2004

The New York Times

When visitors tour the headquarters of Saudi Arabia’s oil empire — a sleek glass building rising from the desert in Dhahran near the Persian Gulf — they are reminded of its mission in a film projected on a giant screen. “We supply what the world demands every day,” it declares.

For decades, that has largely been true. Ever since its rich reserves were discovered more than a half-century ago, Saudi Arabia has pumped the oil needed to keep pace with rising needs, becoming the mainstay of the global energy markets.

But the country’s oil fields now are in decline, prompting industry and government officials to raise serious questions about whether the kingdom will be able to satisfy the world’s thirst for oil in coming years.

Energy forecasts call for Saudi Arabia to almost double its output in the next decade and after. Oil executives and government officials in the United States and Saudi Arabia, however, say capacity will probably stall near current levels, potentially creating a significant gap in the global energy supply.

Outsiders have not had access to detailed production data from Saudi Aramco, the state-owned oil company, for more than 20 years. But interviews in recent months with experts on Saudi oil fields provided a rare look inside the business and suggested looming problems.

An internal Saudi Aramco plan, the experts said, estimates total production capacity in 2011 at 10.15 million barrels a day, about the current capacity. But to meet expected world demand, the United States Department of Energy’s research arm says Saudi Arabia will need to produce 13.6 million barrels a day by 2010 and 19.5 million barrels a day by 2020.

“In the past, the world has counted on Saudi Arabia,” one senior Saudi oil executive said. “Now I don’t see how long it can be maintained.”

Saudi Arabia, the leading exporter for three decades, is not running out of oil. Industry officials are finding, however, that it is becoming more difficult or expensive to extract it. Today, the country produces about eight million barrels a day, roughly one-tenth of the world’s needs. It is the top foreign supplier to the United States, the world’s leading energy consumer.

Fears of a future energy gap could, of course, turn out to be unfounded. Predictions of oil market behavior have often proved wrong.

But if Saudi production falls short, industry experts say the consequences could be significant. Other large producers, like Russia and Iraq, do not have Saudi Aramco’s huge reserves or excess oil capacity to export, and promising new fields elsewhere are not expected to deliver enough oil to make up the difference.

As a result, supplies could tighten and oil prices could increase. The global economy could feel the ripples; previous spikes in oil prices have helped cause recessions, though high oil prices in the last year or so have not slowed strong growth.

Saudi Aramco says its dominance in world oil markets will grow because, “if required,” it can expand its capacity to 12 million barrels a day or more by “making necessary investments,” according to written responses to questions submitted by The New York Times.

But some experts are skeptical. Edward O. Price Jr., a former top Saudi Aramco and Chevron executive and a leading United States government adviser, says he believes that Saudi Arabia can pump up to 12 million barrels a day “for a few years.” But “the world should not expect more from the Saudis,” he said. He expects global oil markets to be in short supply by 2015.

Fatih Birol, the chief economist for the International Energy Agency, said the Saudis would not be able to increase production enough for future needs without large-scale foreign investment.

The I.E.A., an independent agency founded by energy-consuming nations, and Washington see investment in energy exploration and field maintenance as vital, but such proposals face strong opposition inside Saudi Arabia. Tensions with the West, particularly the United States, make such investment politically difficult for Saudi society. For example, an effort by Crown Prince Abdullah, the kingdom’s de facto ruler, to encourage Western companies to invest $25 billion in his country’s natural gas industry essentially collapsed last year.

“Access to Persian Gulf oil reserves, especially Saudi Arabia’s, is the key question for the whole world,” Dr. Birol said.

President Bush has said he wants to make the United States less reliant on oil-producing countries that “don’t like America” by diversifying suppliers and financing research into hydrogen fuel cells, but achieving that remains far off.

His administration backs foreign investment initiatives in the gulf region, including Saudi Arabia, and his energy policies rely on Energy Department projections showing the world even more dependent on Arabian oil in 20 years. That may be enough time for governments to find alternatives, but oil field development requires years of planning and work.

Publicly, Saudi oil executives express optimism about the future of their industry. Some economists are equally optimistic that if oil prices rise high enough, advanced recovery techniques will be applied, averting supply problems.

But privately, some Saudi oil officials are less sanguine.

“We don’t see us as the ones making sure the oil is there for the rest of the world,” one senior executive said in an interview. A Saudi Aramco official cautioned that even the attempt to get up to 12 million barrels a day would “wreak havoc within a decade,” by causing damage to the oil fields.

In an unusual public statement, Sadad al-Husseini, Saudi Aramco’s second-ranking executive and its leading geologist, warned at an oil conference in Jakarta in 2002 that global “natural declines in existing capacity are real and must be replaced.”

Dr. al-Husseini, one Western oil expert said, has been “the brains of Saudi Aramco’s exploration and production.” But he has told associates that he plans to resign soon, and his departure, government oil experts in the United States and Saudi Arabia say, could hinder Saudi efforts to bolster production or entice foreign investment.

Saudi Arabia’s reported proven reserves, more than 250 billion barrels, are one-fourth of the world’s total. The most significant is Ghawar. Discovered in 1948, the 300-mile-long sliver near the Persian Gulf is the world’s largest oil field and accounts for more than half of the kingdom’s production.

The company told The New York Times that its field production practices, including those at Ghawar, were “at optimum levels” and the risk of steep declines was negligible. But Mr. Price, the former vice president for exploration and production at Saudi Aramco, says that North Ghawar, the most valuable section of the field, was pushed too hard in the past.

“Instead of spreading the production to other fields or areas,” Mr. Price said, the Saudis concentrated on North Ghawar. That “accelerated the depletion rate and the time to uncontrolled decline,” or the point where the field’s production drops dramatically, he said.

In Saudi Arabia, seawater is injected into the giant fields to help move the oil toward the top of the reservoir. But over time, the volume of water that is lifted along with the oil increases, and the volume of oil declines proportionally. Eventually, it becomes uneconomical to extract the oil. There is also a risk that the field can become unstable and collapse.

Ghawar is still far too productive to abandon. But because of increasing problems with managing the water, one Saudi oil executive said, “Ghawar is becoming very costly to maintain.”

The average decline rate in Saudi Aramco’s mature fields — Ghawar and a few others — “is in the range of 8 percent per year,” without additional remediation, according to the company’s statement. This means several hundred thousand barrels of daily oil production would have to be added every year just to make up for the diminished output.

Every oil field is unique, and experts cannot predict how long each might last. For its part, Saudi Aramco is counting on Ghawar for years to come.

The company projects that Ghawar will continue to produce more than half its oil. One internal company estimate from 2002 puts Ghawar’s production at 5.25 million barrels a day in 2011, more than half the total expected crude oil capacity of 10.15 million, according to United States government officials and oil executives.

“The big risk in Saudi Arabia is that Ghawar’s rate of decline increases to an alarming point,” said Ali Morteza Samsam Bakhtiari, a senior official with the National Iranian Oil Company. “That will set bells ringing all over the oil world because Ghawar underpins Saudi output and Saudi undergirds worldwide production.”

The I.E.A. warned in November that huge investments would be needed to offset the decline rates in mature Middle Eastern oil fields — it put the average at 5 percent — and the increasing costs of oil and gas production. The agency, based in Paris, forecasts that Saudi production will need to reach 20 million barrels a day by 2020. (I.E.A. and other research estimates say that more than 90 percent of that would be crude oil; the rest would be liquid products like natural gas liquids that result from the processing of crude oil.)

In his speech in Jakarta, Dr. al-Husseini noted the need for exploration, pointing out that colleagues at Exxon Mobil predict that more than 50 percent of oil and gas consumption in 2010 must come from new fields and reservoirs.

Harry A. Longwell, the executive vice president of Exxon Mobil, says finding new sources of oil is crucial. Mr. Longwell, in an interview, said that increasing demand and declining production were not new problems, but they were “much larger now because of the world’s demand for energy and the magnitude of the numbers now are much larger.”

To offset its declines, Saudi Aramco is bringing back into production one idle field, Qatif, and is enhancing production at a nearby offshore field, Abu Safah. The company says that with expert management, these fields will produce about 800,000 barrels a day.

But current and former Saudi Aramco executives question those expectations, contending that the goal of 500,000 barrels a day for Qatif is unrealistic and that development costs are higher than anticipated.

Qatif poses real difficulties. It is near housing for Saudi Arabia’s minority Shiite population and contains high concentrations of hydrogen sulfide, a highly toxic gas. Its development is “particularly challenging,” according to a technical paper by Saudi Aramco engineers presented last year in Bahrain, which said that 45 percent of potential drilling sites “were rejected due to safety concerns.”

At Abu Safah, Saudi Aramco has experienced increasing water problems as it has turned to submersible pumps to extract oil. Experts, including American and Saudi government officials, say the technique is ill advised. Saudi Aramco, in its written response to questions, defended the use of the pumps at Abu Safah and its ability to manage the water after 37 years of production.

One United Sates government energy expert noted that “submersible pumps is what the Soviets went to on an indiscriminate basis in West Siberia and it went south.” Samotlor, a huge field in Siberia, once produced more than three million barrels a day, but it declined sharply in the 1980′s after the Soviets pushed it too hard. Today it produces only a few hundred thousand barrels a day.

Copyright 2004 The New York Times Company |

I’m not sure if you all saw this as it was buried at the bottom of the 2/27 Progress Report. Kudos to Pat Buchanan for taking a very accurate shot across the Neo-Con bow. His review of the Perle-Frum book, An End of Evil, points out a wealth of flaws in their strategies, tactics, and logic as it pertains to the “war on terror”. This is an extremely cogent analysis of both the book and the entire Neo-Con movement.

[For an earlier GRL article on this book, see "Perle and Frum's New Neo-Con Manifesto" And kudos to Cirrito for finding a brilliant Buchanan critique of the neo-cons in a conservative publication! --CN]

–Cirrito
(more…)

Folks,

I knew Ahnold’s energy plan for California was going to be a rich source of amusement, but I never thought it was going to be this good.

–COfficial: ‘Hydrogen Highway’ Realistic

By THE ASSOCIATED PRESS

February 26, 2004

Filed at 5:04 a.m. ET

SACRAMENTO, Calif. (AP) — Gov. Arnold Schwarzenegger’s top environmental aide told state lawmakers the governor’s vision of a “hydrogen highway” that would usher in an age of cleaner cars is realistic by 2010, and won’t even cost the state much money.

Schwarzenegger pledged to build hydrogen fueling stations every 20 miles along major highways, allowing motorists to buy clean-burning hydrogen-fueled vehicles without fear they will run out of gas.

He chose 2010 because that’s when automakers have said such vehicles will be affordable and readily available, said Environmental Protection Secretary Terry Tamminen.

“California does invent the future,” Tamminen said. Though there are plenty of unknowns, “there are no show-stoppers. The only area where some of us disagree is on timing.”

California Energy Commission member Jim Boyd warned that the cost is too high. And Toyota Motor Co.’s Bill Reinert said that despite a decade of research and development, any promises are premature.

The automotive industry still is years away from developing the smaller, cheaper, more efficient and longer-lasting fuel cells that are needed before consumers will buy many hydrogen-fueled vehicles, Reinert said.

“We’re not even close to solving storage technology issues yet,” Reinert said. Though he expects technology will develop “dramatically” over the next few years, “we still have significant challenges along the way.”

Other witnesses before the Assembly Select Committee on Air and Water Quality said a strong push by the state and federal governments is needed.

S. David Freeman, a top energy aide to former Gov. Gray Davis who now heads a company involved in hydrogen-powered vehicles, said the state should consider floating more long-term debt to pay for the project. But Tamminen said the cost to the state could be minimal.

Schwarzenegger’s proposed network amounts to about 200 fueling stations, a fraction of California’s 10,000 retail gasoline stations, Tamminen said.

Twenty-five of those stations will soon be available, and Tamminen projected more can be built by universities, waste conversion stations and automakers at little cost to the state.

Copyright 2004 The Associated Press

Folks,

This is one of the most frightening, incredible, scholarly articles I have ever read about George Bush and the Dominionist religious movement to which he and much of the GOP apparently belong. If you’re not entirely clear on why this administration seems so bent on destroying the walls between church and state, or how “compassionate conservatism” should look so much like Machiavellianism in practice, you should definitely read this article. It explains so much of the underlying motivations of the whole religious right, in fact, that I’d go so far as to call it required reading.

Here’s a small excerpt:

Dominionists have gained extensive control of the Republican Party and the apparatus of government throughout the United States; they continue to operate secretly. Their agenda to undermine all government social programs that assist the poor, the sick, and the elderly is ingeniously disguised under false labels that confuse voters. Nevertheless, as we shall see, Dominionism maintains the necessity of laissez-faire economics, requiring that people “look to God and not to government for help.”[13]

It is estimated that thirty-five million Americans who call themselves Christian, adhere to Dominionism in the United States, but most of these people appear to be ignorant of the heretical nature of their beliefs and the seditious nature of their political goals. So successfully have the televangelists and churches inculcated the idea of the existence of an outside “enemy,” which is attacking Christianity, that millions of people have perceived themselves rightfully overthrowing an imaginary evil anti-Christian conspiratorial secular society.

When one examines the progress of its agenda, one sees that Dominionism has met its time table: the complete takeover of the American government was predicted to occur by 2004.[14] Unless the American people reject the GOP’s control of the government, Americans may find themselves living in a theocracy that has already spelled out its intentions to change every aspect of American life including its cultural life, its Constitution and its laws.

And this quote, taken from Machiavelli himself, is chilling:

“Let a prince therefore aim at conquering and maintaining the state, and the means will always be judged honourable and praised by every one, for the vulgar is always taken by appearances and the issue of the event; and the world consists only of the vulgar, and the few who are not vulgar are isolated when the many have a rallying point in the prince.”

The Despoiling of America


How George W. Bush became the head of the new American Dominionist Church/State


By Katherine Yurica

February 11, 2004

-C

Folks,

After a
week of taking a break from GRL, I’m ready to bring you up to date. But it’s not
like the world has been standing still. Indeed, the news of the last week has
been breathtakingly, crushingly bad, from every direction, and that’s in part
why I haven’t written about it. It’s very demoralizing. Still, I wish I had the
energy to bring you the key points of all that I have read about it, but it’s
just not feasible for one guy, with no budget, no staff, a life to lead and an
income to make. I know that some of you rely on GRL for most of your world news (gulp!),
but I can’t promise you that it will be a reliable source. You should subscribe
to Truthout, the Progress Report, From the Wilderness, MoveOn, The Daily
Misleader, and a few other sites that can do that for you (I read all of those
and more, myself). See a list of great newsletters sites here.

But I
can try to bring you up to date on the most important story of all: the
impending oil crash. AKA, the end of the world as we know it. This is the story
that renders all else–including all the politics that I have written about in
GRL–utterly trivial.

Lately, I can think about little but the oil crash. It’s putting every future plan, and every conception I had about my life, in a
new light. I’m looking at everything
differently now. I look around at new cars, computers, everything that runs on electricity, and think:
all of this could be pointless and useless in 10 years. Imagine not being able to afford to board an airplane,
watch TV, buy fresh fruit, or drive to the store. Imagine everything that you
take for granted about life to be about to vanish. Imagine violent and hungry
hordes evacuating the major cities. Imagine yourself trying to eke out a living
in subsistence farming, and living like the Amish. Imagine your children growing
up in a world with precious little energy. Imagine 5 billion of the world’s 6
billion people dying off in the next 70 years or so. Because that could be
exactly what we’re headed for. In fact, it seems unavoidable.

I wonder every day how, and where, I
would try to make my last stand. And it’s
driving me absolutely crazy
that I can’t get more people to wake up and look at this problem! A friend recently described it as “a planeload of people on steep crash descent, with nobody in the cockpit, and a cocktail party going on in the cabin.”

I know
what you want now. You want me to digest this mass of information and just lay
it out for you with dates and milestones. But I’m not going to attempt that,
because for one, it’s a complex assessment, and a success of approximation, so
the task just isn’t that easy. But for another, I think it’s important that
everyone understand the dynamics of the problem and get a grasp of the possible
solutions and their various limitations, so that you can argue it out for
yourself. You won’t be able to nitpick one assertion and go to bed with sweet
dreams. No, this is one case where you really don’t want the Cliff Notes; you
want the whole semester of classes.

Here is
a compilation of some of the best material I have found on the subject. I have
read much more on it than this, as I suggest you do, and there is much more to
be found beyond these articles. But this is a good collection to get you
started.

First, here’s one resource that gives you the basics, cheat-sheet style. This is as close to the Cliff Notes version as you’re going
to find.
Running on
Empty