Friday, 8 October 2010

A Peak Oil Primer - Part One


It's been a while since I added anything to the blog, for which I have no convincing excuses. What follows is part one of an essay on Peak Oil and its implications. Part two has yet to be written.


INTRODUCTION
The subject of ‘Peak Oil’ is one that gets far less serious attention than it deserves. If a person were to say the words ‘Climate Change’ they would find few who would not be familiar with the concept or have an opinion based on the large amount of propaganda that has been issued from both sides of the debate. On the other hand, when I say the words Peak Oil, I tend to observe puzzled frowns or glazed expressions. Even for those who have heard the term, there is a large misconception of what the concept actually means and it’s relationship to our daily lives and businesses. I hope in this essay to explain the subject by demonstrating the relationships between energy and it’s siamese twins: money, environment and the laws of physics and thermodynamics.

This is not an easy subject to accept at first hearing, since its implications are those of an imminent and profound change, which flies in the face of recent decades of continued economic growth and general prosperity that we in the developed world have enjoyed, not to mention the ideology of ‘Infinite Growth’ espoused by vested corporate interests and governments. The following chapters will be an attempt to explain how the preceding decades of unprecedented economic, industrial and population growth, have been fundamentally underpinned and fuelled by a corresponding growth in the extraction and expenditure of fossil fuels. I will also be making the case that this growth in production of those fossil fuels has come to an end, and that in the absence of an increase in supply, the global economy and industrial activity will inevitably plateau then decline as those same energy sources also plateau and decline.

When this subject is raised, a usual reaction is to claim that the problem will be solved by “Market Forces” or “Nuclear Power” or other such arguments. However, as I hope to demonstrate, these viewpoints suffer from not only a lack of understanding of Energy and Money relationships, but also from belief in some flawed assumptions that are deeply embedded in our society as a result of our unprecedented period of growth, fuelled by the gift of fossil fuels bestowed upon us by nature. All I can ask is that the reader or listener keep an open mind and take the subject as seriously as it demands.

One more thought: Peak Oil is a subject that I used to view as a “standalone” problem. I did not realise at that stage, the fundamental underpinning of our Industrial, Consumer Society by this substance and the interconnectedness of this subject and a host of other issues now converging in a worldwide, globalised crisis. I'm no longer suffering from that myopic view. The big picture is now clear and I hope to be able to communicate it to the reader.

KEY CONCEPTS
I will be introducing certain concepts into this essay, some of which may be new to you, or at least a new angle of observation on how the world works. In the case of some, you may notice that a re-evaluation of certain components of our society that we currently take for granted may be necessary. I will place these Key Concepts under subheadings and explain them as I progress. These Concepts will be related to how certain things work in our economy and society and the relationships between them. Peak Oil itself, is naturally one of these Key Concepts, as are several of the Chapter Headings.

THE EXPONENTIAL FUNCTION
This is the first Key Concept and one little understood. Mathemetician, Doctor Albert Bartlett said that Man’s greatest failure is an inability to understand the exponential function. An understanding of the monetary system and Peak Oil, as we shall examine later, relate directly to this concept.

The Exponential Function is essentially the effect of Compound Interest, and how quickly this compounding can increase an amount. This compounding can be applied to anything to which there is a rate of increase - Money, Population, Resource Demand, etc.

To roughly calculate compound interest, we can use a natural logarithm called the rule of seventy. By using this rule, we can calculate the approximate period of time it will take for an amount to double, with a fixed rate of interest.

For example: imagine an island with a population of 1 million people, which is growing at a rate of 1% a year. If we divide 70 (the rule of 70) by our rate of 1% we can see that it will take 70 years for the population to double. However at the same rate of increase, it will take only another 70 years for the population to double again to 4 million people and another 70 years to double again to 8 million. We can see that the length of time it takes to add another million in population decreases every time. This is why the earth’s population has increased so dramatically in the last century and a half. The current global population is about 6.5 billion people. In a mere 14 years there would be another billion people on the planet at this 1% rate of increase, yet the current statistics for global population growth stand at 1.5%.

As we shall see, the exponential function is even more worrying when we examine our global monetary debt and resource consumption. Consider China, whose current growth rate of (conservatively) 7% a year, means that it is doubling every ten years. This is indeed showing up in statistics - China’s Coal consumption has doubled in the last ten years.

Naturally, it doesn’t take much analysis to realise that these kinds of growth rates are unsustainable bubbles - the housing market crash and the derivatives and banking crashes showed yet again the lunacy of such bubbles.

It is also worth mentioning that the Exponential Function works in reverse. Think of the consequences of a 5% decrease in tax revenues due to a combination of unemployment and stagnating wages and imagine what effect that would have on Public Services.

WHAT IS MONEY?
It might seem strange that I am beginning a discussion of Peak Oil by talking about the concept of Money, but in order to understand our current unfolding predicament, it is necessary to explain one of the major factors behind the model of Economic Growth which has brought us there. The very nature of our monetary system is one in which Perpetual Growth is not only desired, but is a fundamental requirement for the system to work. I will attempt to explain the inherent flaws in this system.

Key Concept: FIAT CURRENCY
Fiat Currency is paper money, or nowadays more often than not, electronically exchanged figures moving between banks and businesses via computers and communication lines. Fiat Currency is simply a note with a government guarantee behind it, which declares that it is ‘Legal Tender’ to exchange for goods and services. Although our currencies were at one time directly underwritten by Gold and Silver reserves in 100% deposit “Giro” Banks, this is no longer the case. A currency is now generally valued by the economic status of the issuing country and by speculative trading of it on the worlds markets. Naturally this makes it potentially unstable and there have been a number of occasions where currencies have collapsed in value in the last 100 years - e.g. the Weimar Republic of Germany in the 1930’s, Yugoslavia in the 1990’s, Argentina in 1999 to 2001 and Zimbabwe over the last few years. Money is issued into the ‘Money Supply’ by Central Banks such as the Bank of England and the US Federal Reserve, who also control interest rates in an attempt to keep the currency stable. However, as we shall see, the very nature of Fiat Currency is inflationary and this causes all such ‘Notional’ currencies to eventually return to their default value of Zero.

Key Concept: ALL MONEY IS LOANED INTO EXISTENCE
This is the first concept that might raise a few eyebrows. The Manufacturer Henry T. Ford is reputed to have said the gist of: “If people understood how money was created, there would be a Revolution tomorrow”, and the legendary Economist John Kenneth Galbraith said “The creation of Money is so simple, it repels the mind”. The modern economy, as I will demonstrate, is underpinned by a fundamentally debt-based, inflationary system.

So how does it work? It is a common misconception that the Central Banks such as the US Federal Reserve and The Bank of England are ‘State’ owned Establishments and therefore, essentially owned by the taxpayer. However, this is not the case. In reality, each of these institutions is a privately owned cartel, controlled by some of the largest Banking Families in the world. In the US, this is families such as the Rockefeller and Morgan families and in the UK and Europe, families such as the Rothschilds. There are more owners than those few I mentioned but the actual list of shareholders in these cartels is not fully known by the general public. Through political manoevering, bribery and economic coercion these banking families were able to institute legislation via their political servants which empowered them with the monopoly of issuing and controlling the money supply.

These Central Banks have created what is probably the biggest swindle in the history of mankind by creating their respective currencies, literally out of thin air, and exchanging the money at interest for Government Bonds, which are a promise of future ‘repayment’ of this ‘debt’ from tax revenues. The currency, is then released into the money supply. Of course since the money supply has a debt attached to it with interest, it means that the debt in the system is always greater than the money supply and in order that this debt can be serviced, the economy must continue to grow thereafter. This brings us to another key concept:

Key Concept: FRACTIONAL RESERVE BANKING
This is the next stage of the creation of money by loaning it into existence and another part of the great swindle of modern banking. As the name implies, only a fraction of the money the bank has on deposit is required to back up loans. For instance, if a Commercial bank receives a deposit of £10,000 in savings from a customer, it can use that amount to create a loan of £100,000 of which the £10,000 is the ‘Principal’. In reality, with the deregulation of banking in recent years, lobbied for by the industry, this same Principal is probably creating loans of £200,000 and even greater. When the bank does this, it is literally creating money out of thin air, for which only the debt, guaranteed by your house for instance, actually exists. Don’t forget also, that there is an interest payment attached to this non-existent money, and you end up paying back much more than the original ‘loan’. Clever eh?

What this means, is that we have an ever increasing set of concentric circles: the first is the money loaned into existence by the Central Banks via government bonds. The second is the Fractional Reserve banking of Commercial banks that individuals and businesses rely on for credit. The third is the interest payments on all of the above. Then, there are Derivatives, Credit Default Swaps and other complex and convoluted financial instruments that make up a sizeable chunk of this tertiary ‘economy’. The result, is that the amount of money in the system that was actually issued by the Central Banks in the first place, only makes up about 3% of the total which should bring you to conclude the next Key Concept of this equation: Debt = Money.

You might be thinking at this point that this system sounds rather like a pyramid scheme. That’s because it is. You might also be thinking that pyramid schemes are inherently unstable and at some point, they always implode. You’d be right about that as well. So far I have not explained the relevance of this issue to Peak Oil, but for now, bear in mind that the underlying driving force behind all this creation of debt/money is economic activity such as retail consumer spending and the expansion of businesses, all which requires large amounts of credit and large amounts of energy.

I’m going to bring two more Key Concepts into the mix now which I will come back to later:

1. ENERGY = MONEY
2. ENERGY AND MONEY ARE SIAMESE TWINS


ENERGY AND PEOPLE
Humans have existed on this planet for many thousands of years without needing money, and still do to some extent in certain societies, but they cannot exist without energy. Aside from the small amount of energy provided to our surface environment by the superheated core of the planet itself, almost all of the energy on this planet is directly or indirectly derived from the sun. At the beginning of this relationship, plant life converts the sun’s energy via photosynthesis in order to grow, with the help of water and the earths natural minerals. This energy is converted by herbivores through consumption and digestion of that plant life, then again by the predators of those species, with omnivores such as humans benefiting from both methods of acquring the necessary energy to survive and reproduce.

Essentially, Energy is the means ‘to do work’. In the case of hunter gatherer societies, the energy to survive is mostly obtained by gathering food, with some domestication of animals to exploit their energy and the use of simple methods of creating and using fire. Societies are able to become more complex in the presence of a SURPLUS of energy. Without this surplus, there is little energy available to do much other than gather more food and perform the other tasks of creating clothing and shelter and the tools to enable these tasks. Although there is a distinction between food energy and fuel energy, as we will see later, there is also a close relationship between the two - especially in our modern civilisation.

One point that we can deduce from this is our next Key Concept: IT TAKES ENERGY TO GET ENERGY

This is implicit in the above reference to hunter gatherer societies, where a certain amount of energy - in this case food energy - must be expended to gather more food energy. The amount of energy that is gathered must be substantially greater than the energy expended to obtain it, or there will not be enough energy left over for other essential activities. Due to this small surplus of available energy, such societies tend to remain simple unless conditions prevail which enables the easy acquisition of food and other energy sources. As humans, one of our first developments was to use a little of our surplus energy to develop simple tools and weapons, which were then employed to acquire even more surplus energy. We also discovered how to domesticate animals and employ their energy - e.g. dogs to assist in hunting and oxen to assist in agriculture - and we learnt how to use fire to generate enough heat to work metals, thereby creating even more complex tools. We should also not forget the exploitation of people. Slavery was (and still is unofficially), the foundation of most Empires. The Roman Empire for instance, acquired slaves as an energy resource in the same way we now gather fossil fuels.

Initially, the greatest source of fuel, particularly throughout Europe, was wood. Coal was used to some extent, in the few places it was found at the surface, but was considered to be a poor substitute until the decimation of our forests made the mining of coal a necessity. Steam engines were invented which exploited coal as a fuel and the technique of ‘Coking’ was used to make coal into a more refined and effective fuel which we were then able to combine with the new invention of dynamos to generate electricity. Gas was also exploited and was initially used for home and domestic lighting and only later employed as a fuel to turn generators in power stations or cook with, as electricity became the power of choice for lighting.

During this period, populations grew and ‘prosperity’ increased (at least for a privileged few). It should be understood that these increases in population and economic wealth occurred as a direct result of this newly exploited surplus of energy, which enabled the creation of ever more sophisticated machines, tools and manufacturing, around which sprung a complex set of new professions to service and market these products and the emergence of the tertiary culture of the economy which is now known by names such as ‘The Service Industry’ or ‘The City’. The discovery and exploitation of oil, initially as a replacement for depleting Whale Oil production, took this growth and progress up to a new gear. Notice that this increase in the use of energy also required an increase in the expenditure of that same energy to mine or drill for more.

The above Key Concept: It takes energy to get energy, is related to an important Key Concept known as NET ENERGY or EROEI (Energy Return On Energy Investment). This will be discussed along with Oil and Alternative Energy issues, as it is key in understanding the viability of an energy source.


WHAT IS PEAK OIL?
So far we have established that our monetary system is a debt based, inflationary system for which perpetual growth is a requirement, and that this growth is dependent on a corresponding growth in the production (extraction) and burning of fossil fuels.

First it should be emphasised that Peak Oil is not synonymous with ‘running out of oil’, but rather, is the point which is reached when about half of the world’s oil has been ‘produced’ - that is, extracted, refined and burned (or converted to other uses - such as chemicals). The estimated Peak of Production can be calculated if we have a fairly accurate estimate of existing reserves (plus those which we expect to be discovered), the figures for production to date, and an average percentage figure for the growth rate in demand. Also useful in this calculation is the Peak of Discovery which just happens to have been in 1964-5 for Global Oil Reserves.

There is a historical precedent for this. The Oil Geologist Marion King Hubbert is the ‘father’ of the Thesis of Peak Oil, after he accurately predicted the Peak of domestic US oil production would occur in 1970. When Hubbert made this prediction in 1949, he was ostracised by the Oil industry but his calculations proved to be extremely accurate, because he was blessed with an accurate data set from which to make his calculations. Hubbert realised that the Peak of Discovery in the Continental United States had been in about 1930. He then factored in production/consumption to date, and projected ahead with an average percentage of growth in demand, based on previous years. Since 1970, US oil production has been in terminal decline and is now down to about 10% of recoverable reserves. A short blip in this trend occurred when Alaskan oil came on line but then decline continued.

Hubbert also attempted to make a calculation of Global Peak Production, but although the methodology had proven to be sound, he did not have an accurate set of data for the world’s reserves and was unable to factor in unforseeable events such as the Political/Economic crises of the 70’s which precipitated the Oil Shocks which threw the Globe into recession. It was at this point in the 70’s that US President Jimmy Carter, having understood the Domestic Peak of Oil production, realised that the US was over-dependent on Oil and at some point soon, must begin to wean itself off hydrocarbons gradually, to prepare for a future global decline. However, as more recently with Climate Change, the sober facts were obscured by some alarmist scaremongering against which the public and industry reacted with denialism.

After Jimmy Carter lost the presidency to Ronald Reagan, the new occupant of the Oval Office reversed most of Carter’s moves towards alternative energy, including scrapping Carter’s installation of a Solar Powered hot water system from the roof of the White House. This squandered the only opportunity the United States, and by definition most of the world had, to make a smooth transition from exponential fossil fuel use, to a more efficient and lower energy intensive economy.

In recent years, the mantle of Peak Oil research has been taken up by others, in particular, Professor Colin J. Campbell a retired Petroleum Geologist, and Jean Laherrère, a Petroleum engineer who together co-authored the 1998 article “The End of Cheap Oil” in the influential “Scientific American” journal. They were joined by other notable individuals such as Kjell Aleklett, a professor of Uppsala University of Sweden where he teaches physics and Global Energy Research, and the late Matthew Simmons, one of the world’s most prominent Oil investment bankers, the author of the book “Twilight in the Desert” and advisor to the Bush Administration’s National Energy Policy Development Group of early 2001.

Campbell, who now lives in the Republic of Ireland, concluded from years of studying industry data and Oil Producing country Reserve figure ‘creativity’ that the Global Peak of Conventional Oil Production would occur by 2010. The evidence is becoming clear that this is an accurate estimate. In fact it would appear that production plateaued in 2005, which together with market speculation, caused the price spikes in energy that resulted in higher prices at the petrol pumps and corresponding hikes on gas prices. We all felt these price rises in our energy costs and the knock-on effect to food prices and other essentials during the period between 2000 and 2008 as demand began to exceed production, which made for volatile Oil prices and economic instability. Production has remained static at these levels and the Peak Oil community do not now expect production to exceed 95 million barrels a day, and even this figure is thought to be optimistic in the light of the recession which resulted in a price crash and the cancellation of billions of dollars worth of new oil projects due to the withdrawal of Capital Investment. In any case, geological limits could prevent this even if the capital was available.

SOME FACTS ON OIL

Global demand up to the economic crash in 2008 was an average of approx 87 million barrels per day (a barrel is 42 US Gallons)

85% of this figure was made up of ‘Sweet Crude’ also known as ‘Conventional Oil’

Conventional Oil is the highest quality with the best concentration of energy and the simplest to refine

Conventional Oil use annually, equals 1.02 Cubic Miles

Total Global liquid fuels consumption is approx 31 billion barrels per year

Discovery currently only averages 6-7 billion barrels annually

Saudi Arabia produces about 9.5 to 10.5 million barrels a day or about 12% of global demand

Global Oil Discovery peaked in 1964-5

Global Oil consumption rates exceeded discovery rates in 1980-81

The world now uses around 5 barrels of oil for every 1 new barrel discovered

100 millilitres of oil equals 1 Kilowatt hour of energy

Most of the major Oil producers are either about to Peak, or are already in decline

The United States uses 20-22 million barrels of Oil a day

Oil provides the world with the equivalent of 22 Billion Slaves with an average of 150 slaves per person in the developed world

World reserves (including estimates of oil yet to be found) are thought to be between 1.8 and 2.4 Trillion barrels, including the oil already produced (used)

As of the beginning of the 21st century, the world had used about 1 trillion barrels

The world relies for 60% of daily production on about 300 super and megafields or ‘elephants’ most of which are now in decline (the ‘low hanging fruit’)

The quality of oil extracted is declining as the ‘Sweet Crude’ which we have relied on diminishes, leaving heavier oils

The world’s refineries are mostly geared to ‘Sweet Crude’ and conversion to Heavy oil capability will require substantial energy/money input

More recent discoveries tend to be in smaller quantities, in more remote locations, more difficult conditions (e.g. deep water) and lower quality, sulphurous, heavy oil

We have established then, that Peak Oil, is not synonymous with ‘running out’ and is not a result of economics (although this is a factor as we shall see later). Rather, it is a Geological phenomenon. It is a feature of the laws of physics which govern all finite, non-renewable resources in that once half of the total amount is consumed, the rate of extraction will fall very soon after. Another point to be made at this stage is one inferred above, which is that we have already used most of the ‘low hanging fruit’ - the ‘Easy and Cheap Oil’ and that from here onwards, the ‘bottom half of the barrel’ will be more difficult to locate, extract, transport and refine and will be more expensive both in terms of Capital Investment and in terms of the aforementioned EROEI a.k.a. Net Energy. This latter fact means that since we are expending more energy simply getting our energy, we therefore have less and less surplus energy year on year to do other vital things. The conclusion that is unavoidable here, is that if Peak really has been reached, then economic growth is no longer possible because economic activity must decline in the absence of the available energy to fuel it, especially when that economy depends on a growth in surplus energy due to it’s inflationary nature.

WHAT IS EXERGY?
Whereas Energy can be defined as “The Means To Do Work”, Exergy, is about the concentration of such energy, in amounts that enable such useful work. In this context, it is a more specific definition of our predicament. Here are a couple of simple explanations of what Exergy means:

Most people would probably realise that the Sun outputs enormous amounts of energy, and it is widely known that more Solar Energy hits the earth in one day, than the equivalent in fossil fuels we use in an entire year. The problem though, is one of concentration. Even after a billion or so years of evolution, plants have only adapted to process about 1% of the Sun’s energy via photosynthesis. The Sun’s rays hit the earths atmosphere, but much is repelled or deflected and what remains is dissipated by the atmosphere, the oceans, the air and so forth. It is therefore difficult to harness because it is not concentrated enough.

Bear in mind also, that the distance travelled from Sun to Earth also serves to spread the Suns rays over a wider area, in much the same way as the curved surface of the spray of a watering can widens the spray of water while reducing its concentration. Therefore, the Planet Mercury has a very high concentration of sunlight per square metre, whereas a planet like Neptune a very low concentration.

A second example: You make a cup of tea. This contains energy in the form of heat which you can use to do the work of warming up your insides for a cold day for instance. However if you let the tea go cold, the energy is lost from the tea and therefore its ability to do said warming work. The heat has dissipated around the room where it still exists, but in too low a concentration to do anything useful. There will be an almost undetectable rise in the temperature of the room, but otherwise, the energy is lost and has therefore lost its Exergy.

Conversely, due to the millions of years it took to accumulate and ‘cook’, fossil fuel has an extremely high Exergy. Unfortunately, our use of this high concentration of millions of years of stored sunlight energy is not very efficient. Consider for instance the waste when sitting in a traffic jam with your engine running as millions of us do every day. Consider the heat that comes from your engine, most of which is wasted even on a cold day, and serves no purpose in transportation.

So this is the predicament of our modern society. Many of the tasks we take for granted require an energy source with an extremely high Exergy. Especially since many of those tasks are so Energy-Inefficient. Those alternative energies we would hope to replace fossil fuels, by contrast, largely have a much lower Exergy. This means they will be inadequate to supply our future needs unless we learn to live on much less energy and a vastly more efficient use of the energy we do have.

ENERGY AND THE ECONOMY
Earlier, I discussed the monetary system, at the end of which I introduced two new Key Concepts:

ENERGY = MONEY
ENERGY AND MONEY ARE SIAMESE TWINS

Energy = Money
When we really stop to think about it, energy is the only real currency there is. All economic activity is merely an exchange of energy in some form or another. When you and I go to work, whether it be a ‘Blue Collar’ or ‘White Collar’ job, we are giving of our energy in order to do so. The manufacture, supply and distribution of goods all requires vast amounts of energy. The mining and extracting of the natural resources used to make these things also depends on a massive fossil fuel input. Try sitting on a bench in a shopping precinct and consider just how much energy was and is being expended on everything around you. The glass in the shop windows, the dressed paving stones, the buildings, the clothes and mobile phones of the passers by, the products in the shops, the air conditioning and lighting, the cars and buses and trucks. Can you think of anything or see anything that did not require some kind of energy input? Even the bench you’re sitting on was manufactured, transported and fixed in place, directly or indirectly by fossil fuels.

It is the endowment of fossil fuels which have underpinned our entire modern civilisation. Because of the existence of these substances, most of us have been able to eschew the natural tasks of finding or growing our own food and making our own clothing and shelter because these tasks have been assigned to a minority of specialists armed with mechanised devices and vehicles to make the job easy and do the work of many people. It is no misrepresentation to say that Oil is our Slave. In fact it has been estimated in studies that Oil provides the equivalent of 22 billion slaves, with the average in the western world being 150 slaves per person - due to the fact that many third world people use none or almost no oil and therefore have no slaves.

So for most of us in the developed world, a removal has taken place between ourselves and the natural world and the everyday necessities of survival. A complexity of society has arisen which could not possibly have done so either on such scale or rate of consumption without the aforementioned endowment of fossil fuels. One of these complexities, and the most abstract, has been the emergence of the Financial or Tertiary economy - a leveraged and illusory bubble of vast proportions whose notional and unsustainable ‘value’ is many times that of the resources on which it is based. This tertiary economy has seen exponential growth in the past 100 years and cannot possibly continue, especially when the very substance that created and supports it, has reached the limits of it’s own potential to grow in supply.

Energy and Money are Siamese Twins
Now is where we come to a major paradox of this system. Although energy creates money (rather than the other way around as economists would have you believe), it is also true that money (as well as energy) is a requirement to obtain energy. Here’s an example:

The few years prior to the Economic Crash of 2008 saw an unprecedented rise in the cost of our energy. Some will remember the trips that Gordon Brown undertook to Saudi Arabia, ostensibly to persuade OPEC to increase production in order to stifle this dangerous price rise. However, the price rose to $147 a barrel in July of 2008 and soon after, the economy collapsed. With the plethora of stories in the media about Subprime Mortgages, Credit Default Swaps and Mortgage-Backed Derivatives etc, the price spike in energy was all but forgotten, and it’s underlying blame for the toppling of a fragile economy, dependent on perpetual growth and cheap energy to fuel it were essentially missed by the mainstream media.

Of course the crash immediately entailed a rapid fall in Oil prices as demand plummeted. This is where the conjoining of Money and Energy become obvious. The price for a barrel of oil dropped to less than $30 a barrel. Due partly to this and also due to the lack of available credit from banks, the Investment Capital which had been earmarked for various vital new or refurbishing energy projects vanished, with billions of dollars worth of contracts cancelled or mothballed. At such low prices and with such little spare capital available, it was not commercially viable to invest in such ventures. Oil companies and Investors simply stopped spending money. Of course this had two main effects. The first, was that much needed replacement production capacity due to come online over the next few years will not now do so, which means that capacity will be lower than before the crash so that any ‘recovery’ will hit the ceiling of supply even sooner. The second was that realising this, Oil prices soon went up - more than doubling in 12 months to around $80 a barrel - a price that could be close to another tipping point for the fragile world economy.

On this basis, we are now, as of 2010, in a possible catch-22 situation where if demand increases and the Oil price rises, then the price will be unaffordable even sooner than before the 2008 crash and the economy will once again shut down; or the demand will fall, perhaps due to another fiscal crisis and the price will again fall below the threshold of profitability and viability to develop the required energy resources for the next few years. Either way, the result is the same: a declining economy with depleting resources and a continuing reduction in our ability to offset the decline of existing production with the development of new production.

ENERGY AND FOOD
This subject, is without a doubt the single most important aspect of Peak Oil, and unfortunately, one of the least understood, although the concept is simple enough.

Key Concept: OIL IS FOOD
As was indicated earlier, modern food production is heavily mechanised, which has caused agriculture to be the province of a very small number of specialists. In the UK, only about 150,000 farmers are still working the land, and those numbers are still declining. The average age of farmers is 60 years old. Aside from the heavy mechanisation of modern agriculture, it is also dependent on huge amounts of oil and natural gas based chemicals and fertilisers.

As we have moved from a small scale, more natural crop rotation and human labour intensive agricultural model, to a large scale mono-cropping fossil fuel/chemical intensive model over the last 100 years, we have progressively (and exponentially) destroyed the natural ecology of the land and soil to a point where it is infertile, polluted and eroding and can no longer produce our increasing demand for food without a parallel increase in the amount of fuel and chemicals that we throw at it.
Studies have shown that it takes an average of 10-12 hydrocarbon (fossil fuel) calories of energy to create one calorie of food energy in our modern industrialised agriculture. To demonstrate this let’s lay out the general process of how food gets onto your plate:

The soil is ploughed using a fossil fuel powered vehicle and seed sown also using a vehicle. Irrigation is done by electric or diesel pumps and fertilisers, pesticides, fungicides etc (all based on oil or natural gas) are sprayed on, again using another fossil fuel powered vehicle. Harvesting either directly or indirectly involves more mechanisation after which the produce is packed or processed by more mechanisation then transported, often in refrigerated trucks to food processing plants or supermarket distribution centres, from which it is re-distributed to your local food outlet where it is lit and refrigerated until you arrive in your fossil fuel powered vehicle to do your shopping and pack it into oil-based plastic bags and pay for it with your oil-based credit card. Then of course you refrigerate and cook it. It is not an exaggeration to say that our food is literally dripping with oil.

Two obvious consequences of depleting fossil fuels on this fragile and complex system are rising prices and shortages. Most will have noticed how the prices for the basic food commodities have increased in recent years (not all due to energy costs). It makes sense to conclude that the current system is unsustainable and that a more resilient model, dependent on a less destructive and much lower chemical/energy input is required. Likely, more of us will be reacquainting ourselves with the source of our food over the coming years, either by growing some ourselves and/or buying/bartering from local farmers and allotment growers. Organic and Permaculture methods are not only more environmentally friendly and in harmony with nature, they also require a lower fuel input.

A further point should be made, that even if energy depletion was not an issue, the current industrialised agricultural model would not be sustainable because of the over exploitation and destruction of topsoil and water sources that it causes. Transition to a sustainable model is not just an option - it is a pre-requisite of society avoiding food shortages and in extreme cases, starvation.

Part Two to follow.

Sunday, 23 May 2010

Is there any place for ethics in sport?


Breaking away from my usual subject matter on this blog, below is an article I wrote in 2007 concerning my other passion, professional cycling and its devastating drug problem. Since writing it, I have concluded that in the big scheme of things, a few athletes boosting their performances is a fairly minor offence compared to the crimes of the State.

I revisited this article, which was published on a now defunct website and which I unsuccessfully attempted to get published in some popular cycling magazines, because of the unfolding drama of the allegations and confession of Floyd Landis involving Lance Armstrong and other top riders. I'm publishing it here, because I think there are parallels to be drawn from the corruption in cycling and that of the world in general. As retired Scottish Climber Robert Millar is quoted in the article:

"Being an athlete doesn't turn you into some kind of morally superior being - it's all a reflection of the society we live in".

Quite.

IS THERE ANY PLACE FOR ETHICS IN SPORT? Part One.

Like many cycling fans I have been disheartened by the constant cloud of doping hanging over our sport and the implications of such problems for its future. As time has gone on though, I've begun to wonder whether it's all so black and white, and have begun to question much of the accepted reasoning on the subject, due to it's inconsistency and lack of logic.

Recently I wrote a letter to a cycling magazine on the subject of Ivan Basso and his ‘attempted doping claim’. Like many others I dare say, I was irritated to say the least by the way his so called confession insulted my intelligence as a fan. The letter was good enough to win the star prize that month (an as yet unreceived pair of Rudys), however on reading my published letter, something began to bother me.

Re-reading my original letter and comparing it with the published version, I found it to be, not only heavily edited, but subtly changed in meaning. Naturally my approval for these editorial changes had not been sought for such a minor thing as a readers letters page - Publications probably universally reserve the right to do so - but this slight distortion of my personal thoughts got me thinking about how journalistic licence can affect the nature of a story by deviating from fact and truth for commercial or perhaps other more insidious reasons, and how that conflicts with the duty of journalsim - to inform the public.

Just this week I've finished reading a new book ‘In Search of Robert Millar’ and was intrigued by some of Millars opinions. in an email to the books author Richard Moore, Millar articulated that sport mirrors real life and "Being an athlete doesn't turn you into some kind of morally superior being - it's all a reflection of the society we live in". Millar was pointing out that cheating and dishonesty occurs in all walks of life and the fact that we expect a high level of integrity from our athletic heroes is something of a paradox.

One of my heroes of cycling besides Millar, when I first took an interest in the sport was Sean Kelly. I still consider him to be a great champion, but guess what, he tested positive during his career and this coupled with the likelihood that he was the ‘strong man of the classics’ referred to in Willy Voets ‘Breaking the Chain’, causes me to wonder about my comparative judgement on todays stars and their misdemeanors - are they after all, not simply reacting to the environment they are in?

Consider David Walsh’s sustained campaign against Lance Armstrong. It bothered me how he singled out one rider (albeit the most famous one in the world at the time), especially in the light of recent events surrounding his closest rivals for Tour de France victory - is that fair or ethical? Consider also the reaction of Christian Prudhomme, the Director of the Tour, to Bjarne Riis’s recent confession. It doesn’t seem to have occurred to Prudhomme that the next 3 riders on General Classification in ‘96 (Ullrich, Virenque, Dufaux) have all been subsequently implicated in doping scandals. Probably we would have to award the Yellow Jersey to the Lanterne Rouge that year to find a worthy champion (and even then I wouldn’t be sure). Are we going to strip Virenque of his Polka Dots too?

I don't know about you, but I would not believe for one minute that Prudhomme's mentor, and Director of the Tour at the time, Jean Marie Leblanc had no knowledge of the rampant EPO abuse in the peloton - no he simply turned a blind eye and ironically, rather like the riders, only took action when his back was to the wall. In the same way that the guilty athlete only feels sorry because he (or she) has been caught, Leblanc only chose to become righteous when other parties uncovered the dark underbelly of cycling that he and so many others had been trying to hide for years.

Paul Kimmage, the well known sportswriter and infamous whistle-blowing former pro found UCI Chief Pat McQuaid’s recent change of attitude astounding considering McQuaid had labeled Kimmage ‘Bad for Cycling’ and attempted to deny the existence of systematic doping within the sport. Of course I have a bit of a problem with Kimmage too these days. The reason for this is that I find his cynicism a little too embittered. I wonder at his motives - does he actually want cycling to clean up its act and survive? Personally I wonder if deep down he may get some form of satisfaction if this sport he once loved which discarded him so brutally, finally self destructs.

This year is the 40th anniversary of the death of Tom Simpson. There is little need for me to go into detail regarding the circumstances surrounding this tragic event, but suffice it to say that I’m sure cycling magazines will be happy to print a memorial article over several pages praising him as a hero of British Cycling, yet these would be the same publications which are coming down so hard on todays stars when they are caught or confess.

Which brings me back to Ivan Basso and my own discomfiture on the subject. What may raise a few eyebrows is the fact that I was more bothered by this particularly likeable riders insult to my intelligence (I only attempted to dope - my Giro win was clean - honest guv) than with his likely having doped. Maybe I'm like Jean Marie Leblanc or Pat McQuaid in that I'm only concerned about doping because its embarrassing my beloved sport. Am I a hypocrite too? I have to ask myself the question that had I been a talented rider who had given his youth in the pursuit of his dream and been confronted with the reality of being unable to keep up with the rest of the peloton, would I have doped too? My answer is that I think I almost certainly would.

That's not to say I'm not anti doping because indeed I am. It's just that I'm prepared to admit that it may not be totally for the ethical reasons that others claim to champion. We all have an agenda. Prudhomme and Leblanc's is to protect the reputation of Le Tour. A magazine editors agenda is to sell more copies of his publication. Perhaps Walsh and Kimmages agenda is to help keep themselves in a job, writing books and articles about doping scandals. What's mine? Perhaps it's so that my sport will survive and not degenerate into a farcical and parochial affair that I will be too embarrassed to be associated with.

In part two I will consider how we define sport in todays society, whether ethics have any place in a commercial world, and what are the nature of the pressures forced on todays athletes.

Martin Larner.

IS THERE ANY PLACE FOR ETHICS IN SPORT? Part Two.

Note: this article was originally written and intended for online publication prior to the news of Vinokourov's positive doping test. I've decided against adding any more to the article as I think it is more interesting to see how it now stands in light of Tuesdays events.

With a little luck and timing, you should be reading this as we reach the 2nd rest day of the the Tour De France. By now we should all have a better idea of who the winner, or at least the 3 podium places will be, and although the Tour may not yet be won, for some it will certainly already be lost, with the heartbreak of those whose tour dreams were shattered by a crash or a bad day creating much of this years drama. For those of us watching though, will there be doubts about the veracity of the stage winners and GC contenders? Will their performances be believable examples of athletic performance and strength of character, or will we be eyeing these riders with suspicion in the wake of the 'epic' stage 17 of last years Tour?

In part one I wrote about my own feelings of ambiguity regarding drug taking, the double standards and hypocrisy in the sport and questioned the agendas of all concerned, even those who are whistleblowing on the cheating, ostensibly in the name of an ethical and clean sport. This time I want to widen the lens a little, and examine the commercial pressures on today's sportsmen and women.

It's no secret that sport is big money both in terms of what it generates for those who are directly involved, and for those whose business is to sell it. Top sports stars are as glamourous as movie and pop stars with not only their professional salary, but also product endorsements and even their wedding photos adding to earning potential. Sport is big money for big business too. From Managers and Agents to Corporate sponsors, the urge to tap into the enormous river of money flowing from the pockets of an eager public is too tempting to resist. Most sports rely on major corporate sponsorship to maintain them at a high level. Without this sponsorship and the cycle of TV coverage and advertising, any sport would soon shrink to a fraction of its popularity.

The recent scandals surrounding former members of the Deutsche Telekom Team have made daily headlines in the German press. The show of ethical stance by the current incarnation T-Mobile, while laudable, is perhaps a little ironic in light of recent scandals regarding corruption in Germanys Corporate Sector and the complicity of the teams management during the period in question. Any sponsors considering choosing a sport with a cleaner reputation (on the surface at least) must be wondering in the back of their minds who the owners of the remaining 142 bags of blood found in Spains Operation Puerto belong to, and whether it will come back to haunt them. Drug scandals in Baseball and American Football in the USA, not to mention the bans on athletes such as Tim Montgomery, have revealed that drug abuse and cheating is rife in other sports too. It is however conspicuous that the European press, while very active on doping in cycling, have been so silent regarding the other sports listed by the notorious Doctor Fuentes.

One of my arguments in the first article was that the organiser of the Tour de France at the time of the Festina affair, Jean Marie Leblanc, could not possibly have failed to realise what was happening in the peloton and equally, I find it impossible to believe that Corporate sponsors have no idea about whether their athletes may be doping. Back in 1999, François Migraine the CEO of Cofidis Insurance, backer of the French Cycling team of the same name commissioned a study of drug taking among his own riders. Although the results were disturbing and alarming - a culture of both performance enhancing and recreational drug use was discovered in the team - at the time nothing was done. Why did Migraine turn a blind eye? Was he thinking about his profits and share values? Or perhaps the resulting fewer victories and reduced publicity if he were to quietly clean the team up? A study made in Italy by anti-doping proponent Sandro Donati concerning EPO and other drug abuse in the Peloton (at least 80% of riders were estimated to be doping with EPO) was also shelved by the Authorities at the time who considered it too provocative. These are the same Authorities now sanctioning the likes of Basso, Mazzoleni, Scarponi et al.

Pressure on athletes to perform filters down from Corporate sponsors to Team managers and Coaches, concerned about future financial stability and continuation of sponsorship. During his period of sanction, former Cofidis rider David Millar talked of having to fake illness in order to abandon races simply so he could get some rest. Prior to his failed attempt to win the Tour de France prologue for a second year (2001), Millar called his sister (who was also his agent) to confess he was utterly exhausted and low on form. In desperation, Millar took two many risks in the Prologue and crashed badly, subsequently abandoning the Tour. It was at this point he reports that he was first lured by the habitual dopers within his team.

What are athletes to do when faced with corporate pressure to win at all costs? When their own single mindedness and ambition, (a requirement of any top athlete), comes into conflict with the rules of their chosen sport? When everyone else around us is breaking the speed limit do we obey it or do we do what everyone else is doing? Former Tour podium rider Alex Zülle certainly saw it that way. So did disgraced Canadian Olympic sprinter Ben Johnson. It was either that or throw over a decade of commitment away and return home to nothing, these athletes felt. Some of course decide that the time has come to retire: 'when I saw guys with fat arses flying up the mountains I realised it was time to quit' said Luis Herrera of Columbia. Americans Andy Hamptsten and Greg Lemond are also reputed to have left the sport earlier than planned due to finding that they could no longer compete with riders using EPO.

However the reaction to riders now confessing to being involved in this almost ubiquitous state of affairs has been disingenuous. the likes of Bjarne Riis and Erik Zabel have been unofficially at least, stripped of their respective Yellow and Green jerseys from 1996. By scapegoating 1 or 2 riders who have had the courage to break the sports Omerta - the law of silence - while disregarding the fact that their colleagues were also doping (some proven in court), seems like a cynical exercise of Public Relations damage control rather than an ethical stance. It also has the likely effect of dissuading other riders from coming forward and surely negates attempts to reconcile the sports protaganists with the necessary cultural change required for it to survive.

We are often reminded of the 'Olympic Spirit', but I sometimes wonder if it ever existed. One wonders if somewhere down the line, a decision will be made that the tide of doping in professional sports can no longer be resisted, and that athletes will simply be permitted to take whatever they wish. There are some who are already speaking in favour of such a stance. Perhaps it all depends on whether we wish sport to be inspiring or merely a spectacle à la Reality TV. With Genetic Malipulation methods of performance enhancement probably just around the corner, how long can WADA and other anti-doping authorities guarantee any level of effectiveness in dope controls? Time will tell if ethics and fairness win out over the tide of commercial pragmatism, but knowing a little of human nature and history, I can't say that I'm particularly optimistic. As I write this, a scandal is building around the Tour leader Michael Rasmussen concerning missed doping controls and a rumour of his connection with a story concerning shoeboxes and Bovine Hemaglobin. Watch this space.

© Martin Larner.

Thursday, 4 February 2010

Haiti - another vassal for the Empire


Haiti, under the guise of humanitarian relief is to be given another lesson in Imperialist exploitation and Disaster Capitalism, by it's neighbour-from-hell, the United States of America.

Not for the first time, the US intends to burden this already impoverished country with "Free Trade Liberalisation" at the hands of the IMF and World Bank. These US controlled institutions, along with the World Trade Organisation, are responsible for some of the worst exploitation on the planet through imposed debt slavery. They are controlled by the world's most powerful Banking interests such as the Rothschilds and Rockefellers.

The model works something like this:

The US installs a Dictatorship or corrupts the incumbent Monarch/President of a third world country, who in return signs "Free Trade Agreements" in return for "Loans" for "Development". Of course the "Free Trade Agreements" have been specifically designed to favour powerful multinational corporations - in the case of Haiti this meant subsidized US Rice being dumped on the Haiti market, thereby bankrupting the local farmers who couldn't compete with the price and were forced out of business and into the sweat-shop shanty towns, after which the price of the imported rice was heavily increased.

The "Loans" of course are essentially little more than subsidies for giant multinationals to build factories, the interest payment of which is enforced onto the impoverished populace. Some of the money ends up in the pockets of the Oligarchies the US is supporting and some usually goes to fund a Secret Police/Military infrastructure to oppress the populace, with the usual "El Salvador" Torture and Vaporizing methods added to the mix. The debts are invariably unrepayable and are designed that way. Sooner or later, the country will default on the "interest" payments of this giant loan sharking scheme and the cycle starts again. Each time, more draconian measures are imposed.

As a token, in order that the Clintons and Bush's of this world can claim to be interested in human rights, and democracy, some of the money from the loan or "aid" will probably find its way into education or health programs, or perhaps to "promote democracy". But not much. In the meantime, the country will find itself being looted for every natural resource available, with routine disregard for the environment and indigenous population.

Woe betide the leader of such a country (e.g. Aristide) if he has the temerity to attempt to give his people some relief from this systemised debt and corporate slavery. He will find himself being declared "Unreliable", "Controversial", "Anti-American", "A Threat to Regional Stability" or possibly "Part of an Axis of Evil". A coup d'etat and exile will soon follow, perhaps followed eventually by a "return to power" under "US Protection". Nelson Mandela was released from prison and allowed the presidency of SA under such draconian terms.

The West, led by the US has used this model in almost every third world and middle eastern country on the globe. Keep that in mind the next time the G8 countries pretend to "Cancel Third World Debt" as though they are being magnanimous and benevolent, when in reality, further IMF/WTO "Liberalisation" is enforced.

In addition to this, Haiti is the latest pawn in a US policy of "Roll-Back" in the region - a strategy of undermining the progress made by countries such as Venezuela, Bolivia and Brazil to free themselves of the Imperial Yoke. Hugo Chavez, democratically elected President of Venezuela, has long been a thorn in the side of the rapacious gangster elites that control US foreign policy, having survived a coup attempt in 2002. Haiti, will among other things, provide an additional staging post from which to intimidate South and Central American countries, provide support to puppet governments such as Alvaro Uribe's Columbian Junta and control sea lanes and trade routes.

There's also the matter of Haiti's mineral wealth including Oil. America's recent "Lesson" to illegally ousted Honduran President Manuel Zelaya via a US backed coup, should serve as a warning for the region as a whole and what the US has in store for the regions "unruly" leaders. Given the speed that the domestic US economy is breaking down, the American Public could soon be learning this same "Lesson" too. The "Legalities" and resources to impose martial law are already in place.

Watch this space.

Wednesday, 20 January 2010

There's no such thing as "Al Qaeda"


...now let me qualify that.

There are in my view, basically two "Al Qaedas".

The first is the mythical one our so called 'News' services barrage us with on a daily basis - you know, the one that 'hates us because of our freedoms' - that International, organised and monolithic force of 'evil extremists' that just happens to pop up where the oil is; the massively hyped and propagandised threat used to justify worldwide militarism and a huge increase in domestic civil liberties restrictions; the catch-all phrase used to describe anyone NATO wants to bomb - 'Taliban' and 'Vietcong' being similar phrases.

The second "Al Qaeda" - the one behind the myth and hype, is little more than a Western Database of expendable Intelligence Assets, recruited by the US through it's proxies such as Pakistan, Saudi Arabia, Egypt, and many other countries - anywhere there is a muslim population and US backed regimes. The use of this database as a tool of Statecraft has been widely documented in the Balkans, Kosovo, Chechnya, Algeria and many other places. It began in the 80's during the Soviet-Afghan war and continues to this day. Most of these individuals probably believe they are genuinely fighting a 'jihad', but some are double agents.

Most of the time, the individual groups the US wants to bomb, are not "Al Qaeda" at all - e.g. the Houthi fighters in the Yemen, a Shi'a group likely backed by Iran and opposed to the US client state government of President Saleh.

Thursday, 7 January 2010

A Tale of Two Triangles


From the cradle, we are born into a system of institutionalised indoctrination and 'education' that moulds the way in which we perceive the world and how we believe it works.

The mainstream 'News' of television and printed media feeds us with a constant diet of this received ideology - a black and white world in which our governments are always benevolent and well intentioned and any anomalies are due to 'mistakes' or 'systemic failures' and 'a few bad apples'. Meanwhile, offically designated 'enemies' such as 'Al Qaeda' and 'Taliban' provide a catch-all soundbite to describe anyone the United States and its Nato 'partners' want to kill or have killed, at which point these labels are retrospectively applied in order to normalize such murders, especially when it becomes clear that the victims were civilian men, women and children.

Because of these basic assumptions, which are seldom challenged, the true motives of our presence in Afghanistan and Iraq, and more recently in the Yemen, remain safe from widespread scrutiny. As a result the narrative of propaganda about 'keeping the streets of Britain safe' and 'spreading democracy', while occasionally receiving criticism, is still assumed to be the genuine policy and at worst is viewed as 'misguided'. The real motives of Realpolitik however, are never even allowed to enter the debate.

Dissident writers and commentators who have either stepped outside of, or never entered the mainstream of 'allowed' thought realise that the world seldom works in the manner of this generally unquestioned orthodoxy. Rather, the world works in a very different way, which can only be glimpsed by dismantling the propaganda and spin surrounding the shallow narrative presented to us by the spokesman of corporate government and media, or by examining independent sources, not subject to the corporate establishment and its pervasive interests.

It is at this point that we come to the latest US military escapade in the Yemen, with its accompanying deceptive government narrative and my hypothesis of the 'Two Triangles'.

On December 17th 2009, US Warplanes bombed camps in the northern part of Sana'a, the Yemeni capital killing dozens of civilians including children. The bombings went almost unreported in the Western Media, but when they were mentioned, official claims that the dead were 'Al Qaeda' or 'Militants' were regurgitated without question.

Then on Christmas Day, a young Nigerian, Umar Farouk Abdul Mutallab was the alleged perpetrator of a botched attempt to bring down Northwest Airlines Flight 253 over Detroit. The mainstream News and Press having virtually ignored the reports of US military action in the Yemen, jumped gleefully on this story and it's 'Yemen' connection, universally approving this incident as 'justification' for military action in the Yemen against 'Al Qaeda'. Again however, things are perhaps not as they seem.

Although Anti-War Activists seem to be flagged as 'no fly' listees by security services at airports with regularity, Mutallab had no such difficulties in boarding his flight. Even a lack of luggage and passport didn't appear to trigger any alarm bells.

But this should come as no surprise. In October of last year, Analyst and Researcher Nafeez Ahmed wrote in The New Internationalist:

"Islamist terrorism cannot be understood without acknowledging the extent to which its networks are being used by Western military intelligence services, both to control strategic energy resources and to counter their geopolitical rivals. Even now, nearly a decade after 9/11, covert sponsorship of al-Qaeda networks continues."

So what was the purpose of this apparently staged 'underwear bomber' incident?

In the same article, Ahmed notes that:
"In recent dispatches for the New Yorker, investigative journalist Seymour Hersh cites US Government and intelligence officials’ confirmation that the CIA and the Pentagon have funnelled millions of dollars via Saudi Arabia to al-Qaeda affiliated Sunni extremist groups, across the Middle East and Central Asia. The policy, which Hersh says began in 2003, has spilled over into regions like Iraq and Lebanon, fuelling Sunni-Shi’a sectarian conflict."

This is interesting, because in the earlier linked Presstv article that detailed the 17th December US bombings in Yemen, it is also apparent that the Houthi fighters whom the US is joining the Saudi and Yemen governments in bombing, are a Shi’a group. Typically, the targets of US bombs will likely be labelled 'Al Qaeda' as Washington once again ramps up the generic '9/11' related 'threat' of the no longer so described, yet still active 'Global War on Terror'. Ironically then, this could be a case of the US using its expendable 'Al Qaeda' assets to engage in sectarian violence against Shi’a groups, then labelling Shi’a groups as 'Al Qaeda'. In any case, we have two US client states engaged with their Imperial Overlord against ethnic Shi’a groups probably backed reservedly by Iran, who feels increasingly threatened by the buildup in both rhetoric and militarism toward it.

The Geopolitics of Yemen have shifted significantly in the last year. As detailed by F. William Engdahl, the situation in Yemen is one of a desperate US backed Dictator, President Ali Abdullah Saleh, losing control due to a split with former ally Tariq al Fadhli, a former Jihadist leader, who has joined a coalition known as the 'Southern Movement' in its opposition to the two decades long regime of Saleh. The stability of this amalgamated country also took a turn for the worst when the worldwide crash in Oil prices in 2008 vastly reduced the income on which the Yemen relies for 70% of its GDP.

Hopefully now, I can attempt to come around to explaining the 'Two Triangles' of this article's title. The first is a 'Golden Triangle' of the Middle East, encompassing an area from Mosul in Northern Iraq, to the Straits of Hormuz, across to the Saudi Arabian Superfields some 75 miles from the coast, and back up to Mosul - essentially the area surrounding the Persian Gulf. This is the region containing approximately 60% of the worlds oil - maps of which, after numerous court cases, were released among 7 pages from the hundreds if not thousands of documents in Dick Cheney's secretive NEPDG report.

So now we know where most of the oil lies, what of the 2nd Triangle?

Around the Arabian peninsula are 3 chokepoints of importance to nautical trading and transit. The first is the Straits of Hormuz, the only opening to the dead end of the Persian Gulf and one of the busiest departure routes in the world for Oil Exports. The second is the Suez canal, shortcut to the Mediterranean from the Red Sea and essential to Saudi Arabia's Western Coastal ports of Jeddah and Yanbu al Bahr, the latter of which is the offloading point for a dual Oil and Gas pipeline that transits all the way across from Al Ghawar, the worlds largest oil field.

The United States has substantial control of both these chokepoints of world Oil Trade; via its client States of Oman and the United Arab Emirates in the case of Hormuz; and Egypt in the case of Suez, watched over no doubt by Israel. To complete the Triangle, Washington is now attempting to militarize the final chokepoint of Bab al Mandab at the Gulf of Aden. It's no coincidence that the worlds major powers have been patrolling here for some time under the pretext of Somali Piracy from across the water.

There is one anomaly in the earlier linked Engdahl analysis: the failure to recognise and understand Peak Oil. Engdahl quotes an unnamed source telling him at a private meeting 15 years ago:

"[there is] enough undeveloped oil [in the Yemen] to fill the oil demand of the entire world for the next 50 years."

Anyone who understands oil consumption and production will realise that this cannot be accurate. The world currently uses over 80 million barrels a day and even back in the 90's was using 70 mbpd. The world's biggest producer, Saudi Arabia currently supplies about 9.5 mbpd or about 12% of Global demand. It is simply not possible to have such high rates of production from a single country that would satisfy all daily world demand.

Even if it were, the reserves would have to be equivalent to all the current known consumed and remaining reserves on the planet - i.e. some 2 Trillion barrels - in order to supply the world for 50 years when growth in demand is taken into consideration. Even if we interpret the statement to mean satisfying an increase in demand in view of a peaking of other sources, this is still a tremendous amount of oil when we consider declining production of major fields set against rising demand.

That said however, there are substantial reserves to be exploited and since the world's 'Giant' fields are peaking or in decline, diversification of supply is becoming rapidly critical. The Gulf of Aden and the straits of Bab al Mandab are intricately related to, not only these new Yemeni Oil prospects, but Middle Eastern Oil trade and shipping as a whole. In addition, exploitation of the energy reserves of the Eastern African states such as the Sudan are dependent on this vital shipping thoroughfare, and US control of both ends of the Red Sea would seriously threaten China's interests there.

So we can see the ever more clearly emerging strategy of the US led Empire in the Middle East. A series of Military occupations, destabilisations and escalations to control the Nations in which the oil resides, and the chokepoints of supply upon which trade and delivery of this oil depends. Together with the quest for Hegemony being played out in Central Asia, these two triangles represent part of the large picture of Zbigniew Brzezinski's 'Grand Chessboard'.

The United States is an insolvent and overstretched, failing Empire. The other Nations of the world are sensing weakness and are beginning to make their own moves in this 'Great Game'. With the worlds major and regional powers massing around Hormuz and Aden, and the volatility of the situation in Israel how long can it be before demand for declining energy reserves leads the world into a wider war in this region?

Wednesday, 6 January 2010

Icelanders petition against paying off debts of failed banks


Icelanders, it seems, have shown more backbone than the rest of us by refusing to resign to bailing out the debts and liabilities of irresponsible failed banks without at least some say in the matter.

We can only wonder why the same resistance has not materialised here in the UK or elsewhere.

The reason of course is that the bankers have got us all locked into a system of their creation - you know - the one where the privately owned central banks create money out of thin air and lend it to us at interest and the commercial banks create even more money out of thin air with Fractional Reserve Banking, thereby creating a system where the existing debt is always greater than the actual money supply.

It's designed to crash when too much bad debt builds up so that the 2nd half of the equation - wealth transfer - can take place as the government robs us to bail the mess out so the bankers can buy up all the real assets at fire sale prices, and carry on paying themselves huge bonuses based on this extortion.

You've got to admire the genius:

The bankers say: "We're insolvent due to the Derivatives and Sub-Prime Mortgage crash - you'll have to bail us out"

The government says: "But where can we borrow so much money?"

Bankers: "Don't worry, we'll lend you the money at interest, through our Central Banking System."

Government: "That's really generous of you Mr Rothschild, Mr Rockefeller and Mr's Barclay (et al)!"

Bankers: "Yes, we only have the interests of the public in mind."

Government: "Us too. Don't forget those consultancies you promised us."